Understanding and working with projective dynamics in the value chain helps to reduce blame, time, waste (inventory) and cost.
Most studies of production-distribution systems and the drive to achieve improvements in the value chain, concentrate on cognitive, intellectual, rational problem-solving approaches characteristic of the science-based professions and disciplines working in organisations in the value chain. While many studies concentrate on trust, dependence and social exchange theory, little attention is given to knowledge derived from systems psychodynamic theory, complexity theory and group relations theory that possibly are better suited to explaining the fissile nature of human systems that are dominated by centrifugal forces that are often outside the comprehension of people leading and managing organisations in the value chain.
Mannie Sher and Eliat Aram consult to large, often global, enterprises, on their supply chain dilemmas and address the systemic forces that undermine good coordination and collaboration by working with the fragmenting dynamics of large systems – at organisational and inter-organisational levels – and addressing the presence of natural projective and introjective processes that threaten the stability of the value chain. The use of systems psychodynamic thinking helps provide qualitative forecasts of performance improvement of the value chain and enables the identification of blocking mechanisms that interfere with achieving this objective. Demand amplification is influenced by communications and interactions as much as by unconscious dynamics of competition and rivalry within and between businesses and services in the value chain. Through integrating decision-making mechanisms, integrating resulting information flows throughout the chain and attending to organisational defences against anxiety, substantial improvements to both order amplification peaks and stock-level swings can be achieved.
The views on the systems dynamics of the value chain are derived from material drawn from ten action research-based organisational development consultancy assignments with large complex organisations – three manufacturing companies (chemicals, vehicle and High-Tec), one finance institution (bank), one construction firm and five service-providing organisations (local government, police, social care, illegal immigration and health). The organisations called for assistance with challenges in areas like cross-organisational development, systems reviews, leadership development or culture change, but soon after starting work with them, it emerged that the organisations were also experiencing challenging relationships with their suppliers and customers or users. The organisations, despite having invested time, money and human resource to improving relationships with their supply chains, continued experiencing bottle-necks. Solutions to order amplification peaks and stock-level swings, fluctuating service droughts and floods, remained permanently just out of reach. Improvements that had been achieved frequently unraveled, inter-organisational relationships deteriorated and initial enthusiasms for collaborative partnership working with suppliers and customers or users diminished.
Relationships in the value chain emphasize the importance of defined boundaries and of boundary control functions. Any transaction across enterprise boundaries, an essential process for any living system, involves the drawing, temporarily at least, of new boundaries. And the drawing of new boundaries contains the possibility that these will prove stronger than the old. Such transactions therefore have in them the elements of threats to relationships, in which essential tasks may be undone and sentient systems destroyed. Long-term solutions to the problem of maintaining adaptiveness to change cannot therefore depend on manipulative techniques. They must depend on helping all actors in the value chain to develop greater maturity in controlling the boundary between their own inner organisational world and the realities of the external environment.