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Organization Viewed as a System

All organizations are made up of various departments and positions. These functional areas must be integrated effectively if high performance levels are to be attained.

Viewing the organization as a system identifies the many dependencies and interactions that exist. This allows managers to recognize how their departmental decisions impact others. In doing so, managers can weigh the impact of a decision on the entire organization rather than just their own department. For example, the purchasing department, in order to cut costs, purchases the identical products they were buying at a lower price. But, at the lower price, the new company could not provide the level of technical service required by the engineering and production departments. This resulted in significantly increased setup costs and production delays. Although the purchasing department saved money on the purchased parts, the net result was not a savings, but an increase in total cost and customer dissatisfaction due to delays.

MLD has developed an adaptation of Dr. Deming's 1993 model of "Production Viewed as a System." With this model, MLD has created a view the entire organization as a system and illustrates how various functional aspects of the company must interact for the organization to be effective.

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