Variation, Buffers and How We Think

Abstract

To design organizations as Systems we must understand what kind of variation our processes are affected by as all managerial decisions should be informed by this knowledge. This is important as it is cognitively challenging for decision-makers to deal with probabilistic uncertainty. We look at how to distinguish special causes of variation from common causes of variation and the reasoning that underpins Process Behaviour Charts. We introduce a new method for monitoring the consumption of project buffers as a more rigorous alternative to the three-zone method in the Theory of Constraints. We outline the Network of Projects as an organizational design that involves an oriented network and the effect of complexity on a Network of Projects organization.