Sunday, March 24, 2013

Focus and Leverage Part 194

Building the Current Reality Tree (CRT)

In the last posting we presented the business case for analysis and asked if anyone had ideas on how to help Bill with this analysis.  The Dome Company appears to be a company in chaos and what is required is to help them develop a path forward to improve.  We did receive a few recommendations, but one of them stood out by recommending the construction of a simple Current Reality Tree (CRT).  In the next several postings, we will do just that.  We intend to build this CRT methodically so that everyone who is not totally familiar with CRT’s will see what powerful information can be gleaned from it.  Remember one of the keys to improvement is the recognition of the many cause and effect relationships that exist and that most of the time, if we simply take our time to identify the one or two core problems and "fix" them, most of the symptoms we see will disappear.

Develop the Undesirable Effect (UDE) List

From the business case you can instantly deduce many undesirable effects (UDEs) that are taking place within this company.  The important step here is to determine the important few from the frivolous many.  In others words determine which ones are important and which ones aren’t so important.  Many times an original UDE list is only one side of the story and it’s usually the management side.  Every story usually has two, or more, sides and it’s important to get ALL sides of the story.  So, how do you do that?  First, is what you are being told is the problem – is it real?  Second, would be from observation of the system.  What do YOU see as you watch products move through the system?  What do you hear when you talk with people on the line? Third, would be validation that what you are being told actually exists.  Many times what someone thinks is happening can be far removed from what is actually happening.  This UDE gap can widen between what you are told versus what actually exists.
With an accurate and robust UDE list you can determine ALL of the system effects, in this case the undesirable effects.  We see the system effects, now we must understand the cause for these effects. For every person who reads the business case the UDE list would most likely be similar but, different. Each person might focus on, and highlight, different comments and observations for their UDE list.  Not to worry.  Many times the difference can be overcome with emphasized scrutiny using the CLR’s (see posting 192 and 192B for an explanation of the CLR’s).  So, let’s build the list and start from there.  A good list will consist of 5 – 10 UDEs.  It’s a place to start and more UDEs will probably surface when you start to build a CRT.  To develop the UDE list, answer the question: “It bothers me that….” Our list would include:

10 Dome is losing sales
20-time delivery is poor
30 Some orders are sometimes entered incorrectly
40 Quality is becoming a problem
50 Production has many change orders
60 Some customers want Dome to pay a late charge
70 New Product design/development seems slow

This list is probably good enough to start.  We’ve hit some of the highlights from the business case.  Now we need to take these effects and start assembling into a CRT to surface the cause.

Building the Current Reality Tree (CRT)
First, look for two entity statements that look like they might be related to each other in terms of cause-and-effect.  Remember:  the CRT is sufficiency based logic, so the logic statements are “If entity A …Then, entity B”.

(NOTE: The number with the asterisk in the box is strictly a number system to give an entity address.  This number (or a multiple of it – e.g. entity 1 x 10 = 10 which is the designation used here) is how it appeared on the UDE list.  The asterisk indicates that this entity came from the original UDE list.  This can be important to distinguish between original UDEs and surfaced UDEs.)
It would appear that “poor on-time delivery” would be sufficient to cause a “loss of sales.”  The next question would be, “Is there anything else on our list that could happen because of poor on-time delivery?

It appears as if entity 60 can also be an effect of late on-time delivery.  From here you can work the tree in two different directions.  First, look for any effects on the list that might be caused by entity 10, or entity 60.  Second, you can ask the question, “What caused entity 20?”  For sake of discussion let’s look on our list and see if we can identify a cause for entity 20.  There is a possible connection between entity 20 and 50 on our list – “Production has many change orders.”

So far, it appears to be a good fit.  It seems sufficient and it also makes sense.  “If Production has many change orders, then On-time delivery is poor.”  Now, there are four (4) possible avenues of continuance.

1.)  Is there another effect on our list that comes from entity 50?

2.)  What caused entity 50?

3.)  What is the effect of entity 10?

4.)  What is the effect of entity 60?


Let’s look on the list and see if there is something that could cause entity 50?  If you look at the list you’ll notice 30 – “Some orders are entered incorrectly.”  That statement would seem sufficient to explain “why” production has many change orders.  However, in this case we are going to invoke the clarity reservation and add some clarity to the statement.  We will change the statement to read: “Some orders are incorrectly entered into the system.” 

In our next posting we'll continue building our CRT, complete it, and then move on to our next Thinking Process Tool, the Conflict Diagram.
Bob Sproull



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