Saturday, April 11, 2009

System Thinking in Asset Management

What is a system?

The late Austrian Biologist Ludwig von Bertalanffy wrote “A system is an entity which maintains its existence through the mutual interaction of its parts”.
Therefore, a system is an interconnected items or dynamic activities performing as a single unit or entity whereas system thinking is simply the art of organizing the interactions between the interconnected and interdependent activities or items. In the case of a building, every item in the building contributes to a proper functioning and the building is a system. As such, every item is interconnected and interdependent of each other.

We have to look at building as system rather than as a rigid object. The item in a building is a subsystem of the building system and that building is a sub-system of a complex of buildings, and that building complex is a sub-system of a commercial hub, and so forth. If any of the sub-system failed, it will create a chain reaction to the sub-system and the system as a whole.

Furthermore, the earth is a system by itself and therefore we must look at system. To do that, we must possess system thinking. Fritjof Capra said that "the property of network is its nonlinearity as it goes in all directions. It may travel along a cyclical path and becomes a feedback loop".

The important concept of system thinking is that system thinking looks at multiple perspectives and emphasizing on the behavior as a whole not the parts, focusing on goals and performance not the output.

In asset management, we have to look at the asset as a whole and also, as a system. Every major activity in an asset life cycle is a system and it becomes a sub-system to the asset. We look at all angles, crossing disciplines and knowledge and we look beyond the fundamentals. Furthermore, community is a living system and assets are a sub-system to the living system.

As such, system thinking is fundamental and important ingredient to an excellent asset management.

How do we use system thinking approach in asset management?
    1. Firstly, we must look at the asset as a system or maybe a sub-system to a bigger system
    2. Then, develop a pattern of behavior for the asset, which is basically the asset life cycle (never use a single perspective of the asset, look at multiple perspective crossing boundaries and discipline)
    3. Develop a model behavior of the asset
    4. Simulate the behavior of the model
    5. Develop an alternative approach
    6. Simulate the alternative approach
    7. Develop feedback loop

By simulating, we are asking questions about its behavior as a whole and we are looking beyond the fundamentals, and that is the beauty of system thinking.

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