Designing Organizations, Businesses, Companies, ...

Axel J. Papendieck

- The System Approach -

Part 1: Definitions

- Part 2
- Part 3
- Part 4
- Part 5
- Productivity
- History
- About

The key structures of organizations are a very logical system. For creating new or changing existing organizations it is highly useful to harness the basic mechanisms of the system organization. The definitions of its elements: - workplaces, - products, - bill of materials, - components and - production processes will enable handling and changing organizations as a logical procedure.

Most organizations are the result of historical developments, all elements of the organization change over time, thus all organizations have to be adjusted continuously.

Each organization consists of a set-up of workplaces and of at least one product flow.

Set-up: An organization is a set-up of two - or many more - workplaces. - (If there's only one workplace no organization is needed).

The goal of every organization is manufacturing one - or many - products by divided labor.

A workplace is made up of one person and one or more (machine-) tools. A site or a place must also be assigned - it may be moving (e. g. airline pilot).

Product flow: inside the organization is the product flow, being forwarded from workplace to workplace. The product flow starts at the input to the system and ends at the output of the system.

The product of an organization is the object, component or the service delivered
- to persons, companies or groups - customers outside the organization or
- to workplaces inside the organization - e.g. tools, staff, material etc. That are internal products.

Products can be one piece or an assembly of many components. Products can be
1 physical, tangible objects
2 services or
3 information (in any form)!

The bill of materials delineates the structures of products with all its components and assembly levels.

An operation is the work accomplished in one workplace by one person with its tools. An operation may consist of one or many steps. Each operation changes the object/ component/ product and enhances its value. There are operations executed consecutively and others executed concurrently.

For each operation a specific amount of time is necessary. Each accomplished operation can deliver information as by-product about the status of the object.

The production process is the chain of operations to manufacture the component or the product. The production process is laid down in work plans. - The typical production process of a product starts in research & development, continues in manufacturing (where a certain number of operations is repeated a multitude of times) and ends in sales workplaces. History shows operations in research & development and sales are increasing substantially in volume since the beginning of the industrial revolution.

Increasing numbers of manufactured products reduces costs (economy of scale), doubling the number of altogether manufactured products reduces costs by 20 % (rule of thumb). At the same time in general division of labor is increased too, clearly to be seen at assembly lines.

Figure 1