Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

19.1.3 The Problem Solving Cycle

Intended learning outcomes: Identify the problem-solving cycle. Present in detail situational analysis, formulation of objectives, synthesis of solutions, analysis of solutions, evaluation of solutions, and decision in the problem-solving cycle.



As seen in Figure 19.1.0.1, the three concept phases (during system development) stand alongside the problem-solving cycle.

The problem-solving cycle is defined as the six steps described in the following, which are conducted during the three concept phases of system development.

The importance of each step is indicated in Figure 19.1.0.1 by small versus large circles, and the required expense and effort is indicated by single versus triple arrows.

Step 1: Situational analysis aims to understand the situation and identify the problem and its causes and consequences. Situational analysis distinguishes among at least four aspects:

  • System-related: Determination of the system and subsystems, with their elements and interactions
  • Diagnostic: Determination of the symptoms of the unsatisfactory solution, derivation of the causes
  • Therapeutic: Finding of possible corrections and applying corrections to the relevant elements
  • Time-related: Does the situation develop on the time axis with / without correction?

During situational analysis, the bounds and constraints for a possible solution have to be defined, such as:

  • Bounds and constraints arising from the system environment (social, technological, regulatory, and so on)
  • Bounds and constraints stemming from decisions made earlier, which cannot be modified at present
  • Bounds and constraints coming from fixed parts of the situa­tion, that is, parts that for some reason must remain as they are

It is advantageous to summarize the situational analysis in an analysis of strengths, weaknesses, opportunities, and threats, often abbreviated as SWOT analysis. The analysis of strengths and weaknesses refers to the system under review at the present time. The analysis of opportunities and threats refers to the system environment: How will changes in the environment expected in the future impact the system, if it is left unchanged?

Step 2: Formulation of objectives generally comprises functional, commercial, and time-related objectives. The objectives must be solution-neutral, complete, precise, understand­able, and realistic. They must relate to the elements in the SWOT analysis; that is, they must be coherent with the system analysis. Generally, two classes of objectives are distinguished:

  • Mandatory objectives, that is, objectives that must be achieved in any case to solve the problem (“need to have”).
  • Preferred objectives, that is, objectives that are to be achieved if possible (“nice to have”). These goals will eventually serve as a catalog of criteria for decision making among several acceptable variants.
  • In the end, the client has to approve the formulation of objectives. This is because unanticipated factors may make it necessary to change the formulation of objectives.

Step 3: Synthesis of solutions is conception of the possible solutions. Synthesis has to be sufficiently precise to allow comparison of the various variants. All required functions and available resources have to be taken into account. Synthesis is the creative part of the work, and therefore it is usually also the most difficult part of the problem-solving cycle.

Step 4: The analysis of solutions is a kind of test of the synthesis. Is the solu­tion concept comprehensive (that is, does it meet all objectives)? Is it realizable (that is, have all conditions and constraints been complied with)? It is sometimes difficult to differentiate between the two steps of synthesis and analysis in the problem-solving cycle. That is because analysis often already has begun at the birth of an idea for a solution concept.

Step 5: Evaluation of solutions select quantitative methods for measuring the efficiency or quality of a possible solution per se and as compared to other variants. The methods are usually similar to those other­wise used for a cost-benefit analysis, such as factor rating. The criteria come from the catalog of objectives, possibly enhanced by detailed technical criteria.

Step 6: The decision in the problem-solving cycle step refers to both selection of the variants and the decision to repeat this or a preceding concept phase. The decision is made jointly by specialists, the people responsible for the system, and the client. Reasons for repeating a concept phase are, among others:

  • The situational analysis is not precise enough for derivation of a solution.
  • The results of the analysis show that the concept does not in all parts meet the need and the constraints.
  • New objectives are added.
  • The objectives are changed, as no solution is possible.
  • New variants should be developed for evaluation.
  • New weightings are given to the criteria used for evaluation of the variants.


Course section 19.1: Subsections and their intended learning outcomes

  • 19.1 Systems Engineering

    Intended learning outcomes: Explain systems thinking and the top-down approach. Describe phases of life of a system and the system life cycle. Present in detail the problem solving cycle. Disclose the differences between software engineering and classical systems engineering.

  • 19.1.1 Systems Thinking and the Top-Down Approach

    Intended learning outcomes: Describe systems thinking and the proceeding from the general to the particular (top-down approach). Produce an overview on creating and evaluating variants at each level of the system.

  • 19.1.2 Phases of Life of a System and System Life Cycle

    Intended learning outcomes: Differentiate between system development and system implementation. In system development, present in detail the content of the preliminary study, the main study and the detailed studies. In system implementation, produce an overview on system establishment, system introduction and handover, system operation, and system decommission.

  • 19.1.3 The Problem Solving Cycle

    Intended learning outcomes: Identify the problem-solving cycle. Present in detail situational analysis, formulation of objectives, synthesis of solutions, analysis of solutions, evaluation of solutions, and decision in the problem-solving cycle.