spring 2011 - Çgie 398 - lecture 81 lecture 8: soft or, soft st an example characteristics of soft...

Spring 2011 - ÇG IE 398 - lecture 8 1

lecture 8: soft OR, soft ST

• an example

• characteristics of soft systems problems

• terminology

• a list of soft methodologies

• Checkland’s SSM: “soft systems methodology”

• other methodologies


hard/soft distinction is not so clear and exact:• soft aspects are almost always present in any

problem situation, and hard thinking can be useful even in pluralistic or coercive situations

• the soft perspective should not be neglected altogether when doing hard OR and vice-versa

• and, most importantly, problem situations that look suited to hard OR at first sight, are often more complex than they appear

• consider the BAKÜ-CEYHAN example [adapted from “Tools for Thinking” by M Pidd, Wiley 2003]


the “BAKÜ-CEYHAN” example:

• oil from Bakü is piped by BOTAS to tanks in Ceyhan where it is then pumped into waiting tankers and shipped to consumption points

• technology used involves flexible hoses about one metre in diameter that connect the oil tanks, via pumping stations, to the tankers in the harbour

• hoses are subject to twisting forces and this sometimes causes failures in service; when this happens there is a large spillage of crude oil until the pumps are switched to auxiliary hose lines

• until recently, the hoses have been bought from ABC, a supplier who was the original manufacturer of these hoses; the same company has provided replacements as necessary

• over the last two years, two new suppliers – TUV and XYZ - have appeared in the hose market both claiming that their hoses are at least as good, though they can undercut ABC prices by up to 40%

• the BOTAS Port Manager (PM) is very keen to reduce his costs and has insisted that one of the pumping stations is switched to XYZ Hose for a trial period

• there have been problems during this trial and the BOTAS Pumping Officer (PO) is unhappy about what he feels is a much higher rate of hose failure than was the case with ABC products

• the PM, the PO, the BOTAS Maintenance Manager (MM) and you (a BOTAS IE) discuss the situation and the conversation goes something like this:



– PM: ... Yes, I know that the hoses seem to fail more often, but look at the price; we save 40% on the prices charged by ABC. I'm not bothered about shorter service lives with that reduction.

– PO: Even if the life is only 50% of ABC Hose?– PM: Come on! It's much higher than that.– MM: Well, I'm not too sure about that. But I don't really know what

the failure rates are. I'm sure that we could improve things by better maintenance.

– PM: But if we stop the pumping just for preventive maintenance then it costs money. There will be penalty to pay to the tanker owners for a start.

– MM: It's still cheaper than having a hose blow oil all over the harbour when it fails. Then we still have to stop pumping, but we also have to replace the hose section. Then we have to clean up the harbour. We also have the Greens on our backs about pollution. I'm sure that better maintenance is the answer.

– PM: But it all costs money. There must be some way to work out what to do. Don’t you have any ideas in the IE Department?


• this problem situation appears to be suitable for a hard-OR approach:

• controllable variables seem to be:1. the type of hose selected - ABCHose, XYZHose or TUVHose

2. the maintenance policies applied to the hoses once they are in use

• uncontrollable variables:– the expected life of the different types of hose - this may be expressed in terms

of a probability distribution– the likely purchase price of the hoses– the likely costs of spillages, should they occur - this may also be expressed in

terms of a probability distribution– the costs of the different maintenance policies

• decision criterion:– minimise Expected (total cost) =

∑ [ E ( purchase price ) + E ( maintenance costs ) + E (spillage costs ) ]

• data requirements:– hose prices: there may be no "price list" for such expensive items and,

instead, the prices may be negotiated between BOTAS and the hose supplier; thus it may be better to think of Expected ( prices )


– expected maintenance costs: first, are there any proper records of the cost of existing maintenance policies? If so, they may be used to estimate the likely cost of applying similar policies. The complications then begin. Is it reasonable to assume that similar policies will be needed for any type of hose? Probably not if we take seriously the views of the MM: "I'm sure that we could improve things by better maintenance." This means that the apparently simple decision model based on cost minimization may depend on at least one other model that attempts to show the costs of different maintenance policies

– expected spillage costs: this will have at least two components. First, some estimate of the likely costs of a spillage and the number of spillages likely to occur. That is, some estimate of the life/failure distribution is needed for each of the three hose types. A further complication is that the service lives will depend on the maintenance policies, otherwise there is no point in having a maintenance policy. Thus, some model showing the link between maintenance and hose life will be needed.

• thus, an apparently simple situation involving a choice among only three known alternatives can turn out to be more complicated than it would seem at first sight

• this is much more than a simple minimisation problem since lifetime distributions for all hoses are hard to estimate, as are the effects of maintenance policies

• suitable data will most probably be not be available such as hose prices and cost of maintenance etc.

• if reliable data will not be available it will not be possible to compute the cost minimising solution and decide the best hose type and the best maintenance policy that goes with it

• these difficulties will complicate the problem situation even more; there will probably be a divergence from the unitary purpose of cost minimisation because different stakeholders will have different purposes:



– the PM was identified as the problem owner but there are other stakeholders:

– for the PO, continuous and safe flow of oil may be more important than costs, so the most reliable hose would be the best

– for the MM, an opportunity to show how effective maintenance is, could be the most important concern

– therefore if these two internal stakeholders are not consulted and decisions are not taken jointly, any proposed solution is likely to fail

– there are also external stakeholders to consider:• tanker operators expect fast and reliable service irrespective of

cost• politicians can have their own views about hose suppliers, hose

failures and service quality• environmentalist groups will put all emphasis on reliability of

pumping• local residents.. • hose suppliers..• etc.


• conclusion:– the problem was described as a problem of hose choice, but we

know little or nothing about the history of the issue; we do not know why this group, led by the PM, has decided to search for a possible new supplier of these expensive hoses; it could be pressure from one of the external stakeholders; it might be dissatisfaction with the existing ABC hose; it might be that other pressures within BOTAS make it important that something is seen to be done at Ceyhan;

– there are many such possibilities and the careful analyst cannot afford to either ignore or accept them; they all form part of the mess with which she has to work

– problems do not exist in a vacuum, they exist in people's minds and relate to their experience of the world and to their expectations

– a purely functional hard-OR approach no longer appears to be sufficient in this problem situation

soft systems thinking/soft OR• Churchman in 1960, then Ackoff, Checkland and others, rather

than accepting the narrow rationality of economic thought, recognized that human decision making is more complex and varied and is also governed by other than economic values

• they discovered that the process of decision making greatly affects whether or not a 'solution' is accepted

• they expanded the narrow quantitative optimization focus to include ideas from other disciplines, primarily critical philosophy, sociology, and organizational behaviour

• this mixing of boundaries between disciplines can be seen as part of the awareness that problems do not respect discipline boundaries, that a narrow economic focus alone is insufficient, and that human striving for quality of life, happiness, aesthetics, equality, and justice is equally valid and legitimate



• the proponents of soft OR/soft systems approaches point out that the majority of real-life problem situations in business, industry, and government violate most of the assumptions underlying hard OR

• furthermore, the human aspects inherent in the problem situation and the intervention process used should not be treated as separate unrelated issues

• soft systems approaches were designed to deal with complex problem situations, which are messy, ill-structured, ill-defined, and not independent of people

• in other words, where different stakeholders with different world views have different, possibly conflicting perceptions about the problem situation and about the appropriate objectives


characteristics of soft systems approaches:1. These are problem structuring methods (PSM), structuring the

issues in a problem situation, rather than narrowly focussed problem solving.

2. Facilitating dialogue between the various stakeholders with the aim of achieving a greater degree of shared perceptions of the problem situation, rather than providing a decision aid to decision makers.

3. Addressing “what" questions first, and “how" questions afterwards, i.e.

• What is the nature of the issue?• What are appropriate objectives, given the various world views

of the stakeholders?• What is the appropriate definition of the system for the issue

considered? • Which changes are systemically desirable and culturally

feasible?• How are these changes best realised?

4. Eliciting the resolution of the problem from the stakeholders themselves, rather than from the analyst.

5. Changing the role of the problem solver to one of becoming a facilitator and resource person who relies on the technical subject expertise of the stakeholders.

• note that 'how' questions, i.e. which means are the best for achieving the desired objectives, must ultimately also be addressed by soft systems approaches; but they are often almost obvious, rather than being centre-stage as in most hard OR projects.



• there are several soft systems methodologies devised since 1950’s:

– Gaming (The Rand Corporation)

– Metagame analysis (US Arms Control and Disarmament Agency)

– Strategic choice approach (J. Friend, A. Hickling)

– Strategic assumption surfacing and testing (R.O. Mason, I.I. Mitroff)

– Social systems design (C.W. Churchman)

– Social systems sciences, also as Interactive Planning (R.L.Ackoff)

– SSM (P. Checkland)

– Strategic option development and analysis (C. Eden)

– Hypergame analysis (P.G. Bennett)

– Robustness analysis (J. Rosenhead)

– Theory of constraints (E. Goldratt)

– Critical systems heuristics (W. Ulrich)

– Drama theory (P.G. Bennett. M. Bradley, J. Bryant, N. Howard)

– Total systems intervention (R.L. Flood, M.C. Jackson)

– Multimethodology (J. Brocklesby, J. Mingers)

• Checkland's SSM, Churchman's social system design, and Ulrich's critical systems heuristics, are firmly based on philosophical foundations and systems theory

• gaming, metagame and hypergame analysis, and drama theory originate in the ideas of game theory, without the formalism of game theory

• SODA and drama theory have psychological roots

• total systems intervention and multimethodology are meta-methodologies that help analysts determine which paradigm and method or combination of methods is most suitable for a given problem situation



• several of these approaches were developed through action research, often within a practical consulting context

• “action research originated in the work of Kurt Lewin who, in the late 1940s, recognised the problems inherent in the study of complex social and psychological processes by breaking them apart (reductionism) and taking them into the laboratory; he advocated instead testing theory in action, in the process of implementation

• action research contributes both to the practical concerns of people in an immediate problematic situation and to the goals of social science [“Systems Approaches

to Management”, MC Jackson, Kluwer 2000]


• they all have one thing in common, while hard OR deals mainly with the 'content' of the problem, giving only limited concern to 'process', soft approaches put equal emphasis on both content and process

• at the very start of an intervention, process is used for extracting content and the underlying value systems

• the methods seek to attain a reasonably comprehensive view of the issues within their wider context, although they recognize that true comprehensiveness is impossible, nor may it be needed to get to a workable solution or resolution of the problem

• the main aim is to gain a shared understanding and mutual appreciations about values, interests, objectives, choices for action

• boundary choices are subjected to critical assessment and evaluation

• they also recognise that a resolution of a problem does not necessarily require a full convergence (ie. consensus) of views, and that a mutual appreciation of views (ie. an accomodation) may be sufficient to bring about an acceptable compromise and commitment for common action


• few users are familiar with more than one approach, although this is changing with several universities offering courses and intensive workshops

• the consultant also needs to have good skills in interpersonal relations, in facilitating and negotiation

• none of the soft systems approaches explicitly address the various issues of implementation

• active participation of many stakeholders in the project will hopefully help implementation of the commitment package or recommendations made, since the stakeholders are more likely to own the solution


• however, owning the solution is only a beginning; planning for the actual process of change and monitoring implementation and the performance of the new system need to be dealt with

• the structure diagram for PSM is given in Figure 7-11

• in contrast to hard OR, this is not a sequence of systems whose outputs become the input into the next system

• system S is 'created' or defined within system M; note again how boundary judgements affect all aspects.


spring 2011 - Çgie 398 - lecture 81 lecture 8: soft or, soft st an example characteristics of soft...

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