Maximizing Profitability Part 27

Prerequisite Trees – Steps to Construct

In the previous blog we discussed the basic principles that make up the Prerequisite Tree (PRT). In this section we will discuss the steps to construct a PRT and some helpful hints for each step.

Step 1 -Verbalize your objective.

A clear and complete verbalization of your stated objective will better enable you to stay focused. Without the necessary focus there could be a tendency to wonder off the path. The correct focus will help you achieve the ultimate objective. The best objective is to choose something that you truly want and which is beneficial to the system. It is possible when doing a full TOC analysis the Objective could be an injection from your FRT. Something you really want, or need, in order to benefit the system, but aren’t exactly sure how to achieve it.

- Identify a situation you have tasked to accomplish and you sense it will be difficult. If you don’t already know how to accomplish the task, this will help you define the necessary steps.

- Ask yourself what the purpose or objective of the task is. It must be something that we really want and which is worth the effort to work toward achieving.

- State the purpose as a specific objective in the present tense. When using a Prerequisite Tree following a Future Reality Tree choose as an objective the injection that you feel will be the most difficult (often the largest one) to achieve. Many times some of the other injections on the Future Reality will be prerequisites to that difficult injection.

- Determine whether or not to use the Prerequisite Tree. Not every situation will benefit from the time and energy required to do a PRT. When you are using a PRT following an FRT, usually some of your injections must be broken down further using a PRT.

Hint: Look at the big picture. Ask yourself whether or not the objective(s) you have chosen present any major obstacles that you do not already know how to overcome.

Step 2 - List the obstacles that prevent the attainment or existence of the objective.

Capturing all of the things that may block you from achieving your objective enables you to address each obstacle individually. People are very good at listing the reasons something "can't" be done. Typically you will feel much better about your ability to reach the objective simply by surfacing the obstacles.

- Write down an Objective at the top of the page. If you are doing the PRT following an FRT, begin with the injection that looks like the most difficult.

- In one column, write down the major obstacles you think stand in the way of achieving the objective.

- Check each obstacle. Check that you have written an obstacle to your stated objective.

a. Check what you have written for entity existence. "Does (obstacle) exist in my current reality?"

b. Check what you have written for causality existence. "If (obstacle), then I will not be able to achieve (objective). "It is possible you have not captured the true obstacle that is preventing reaching of the objective. Be careful to keep the objective foremost in your mind so that you will not stray into obstacles that are not related to your objective. (FOCUS)

HINT: If you have two objectives/injections from the FRT work them separately. Start with the Injection you believe to be the most difficult to achieve. You may find that subsequent objectives are actually IO’s to the major objective you started with.

Step 3 - Determine Intermediate Objectives that eliminate the obstacles you have listed.

Tackling each obstacle individually helps to break the Objective down into a series of smaller pieces or Intermediate Objectives. Each Intermediate Objective should be sufficient to overcome its corresponding obstacle, and it should be more feasible for you to achieve than the Objective.

- For each obstacle on your list, ask yourself what would overcome it.

At this point you are not necessarily trying to define the actions that you must take to achieve the objective, but rather to state the other things that you must accomplish on the way to it.

- Write down your idea as an entity in the present tense.

This entity is called an "Intermediate Objective". When doing the PRT after a FRT, you can use other Injections as the IO’s. Sometimes one IO will overcome more than one Obstacle on your list. This is perfectly acceptable and can reduce the number of IO’s required to reach your Objective. However, each IO should be able to overcome the obstacle by itself. The IO should be more feasible than the Objective. Since we are trying to make the task of reaching the objective easier, each IO must be in itself more manageable than the ultimate Objective. If it is not, you should search for something else that will eliminate the obstacle and be easier to attain.

HINT: If you have difficulty coming up with an acceptable IO, use the Conflict Diagram to generate more ideas. If you feel “stuck” it is usually because of some conflict that blocks you from overcoming the obstacle - the Conflict Diagram will help you expose the conflict and enable you to break it.

Step 4 - Find the time dependencies between the Intermediate Objectives.

Most of the time you will find time dependencies that exist between IO’s, such that you cannot accomplish one without first accomplishing the other. These time dependencies establish the intrinsic order in which you must accomplish the IO’s and work toward the objective. In essence it provides the step for the implementation planning. Which one do you first? Which one second?

- Identify two Intermediate Objectives that have an apparent time dependency between them. One must complete before the other can be happen.

- Illustrate the connection.

Necessary Condition arrows are between the IO”S, Sufficiency arrows are from the obstacle to the Necessary Condition arrows.

- Scrutinize the connection.

"In order to have (IO at the tip of the arrow), I must have (IO at the base of the arrow), because of (Obstacle at the base of the Sufficiency arrow)." AND "I cannot have (IO at the tip of the arrow) because of (Obstacle at the base of the Sufficiency arrow)." It may be necessary to add other IO’s and obstacles from your list to bridge and validate the connection. Sometimes there is a time dependency between 2 IO’s, but it is not a direct one. In these cases you will need to place other IO’s in between your original connection to make it more intrinsically logical.

- Connect additional IO’s from your list to this original cluster.

Try placing the other IO’s in their appropriate time dependencies sequence with the first cluster. Scrutinize each connection you make as in step 3. If an IO doesn't seem to fit add do not connect it to the others. This means it probably does not have a time dependency with the other IO’s and can be achieved without first accomplishing other IO’s. You may have more than one grouping in a PRT, as well as some IO’s that don't seem to fit anywhere.

- Connect the IO’s at the top of each cluster directly to the objective.

Any IO’s that are not connected to any others, as well as the top IO in each cluster are still needed to achieve the Objective, so they need to be connected directly to the Objective. These “hangers” are prerequisites for the objective and must therefore be tied below it. No IO’s should be left without any connection after this step. All IO’s should at least be connected to the Objective with their corresponding Obstacles.

Step 5 - Check the Prerequisite Tree for feasibility.

This step ensures that you have sufficiently separated the objective into workable IO’s to determine what actions we should take to achieve each Intermediate Objective. If you cannot think of the necessary actions to take, then additional obstacles must be present.

- Check the IO's that appear at the base of the tree - IOs with no arrows going into them.

You should have actions in mind on how to achieve each of them. If you don't it means that there are additional obstacles that you have not verbalized. If this is the case ask yourself what is the obstacle(s) that block me from achieving the desired IO. Select an IO for each and connect them at the base of the tree to the IO in question.

- Read the tree both top-down and bottom-up.

TOP-DOWN (starting with the Objective)

• "I can't have (tip of the necessary condition arrow), until I have (base of the necessary condition arrow)."

BOTTOM-UP (starting at the base of the tree)

• "I must have (base of the necessary condition arrow) before I can get (tip of the necessary condition arrow)."

- Move into action.

If appropriate, use a Transition Tree to develop your action plan if you are using the PRT as part of a full TOC analysis. The Transition Tree (TT) should be completed to insure that your actions will lead to the achievement of the necessary IO’s.

eIn the next blog we will discuss the basic principles of Transition Tress (TT) and how they can be used to develop action plans for difficult IO’s.

Maximizing Profitability Part 26

Prerequisite Trees - Basic Principles

In the last blog we discussed the elements of the Future Reality Tree (FRT). With the FRT you determined an injection of idea that you want to move forward with. With the FRT you want to determine what are those obstacles that stop you from doing this right now? Many people might be inclined to offer reason for “why” it won’t work.

Prerequisite Trees (PRT) are based on necessary conditions, which provide the process to systematically dissect any major tasks into a set of smaller segments of more achievable intermediate objectives (IO). Each IO is determined as a necessary condition to overcome previously known, or perceived, obstacles. Once they are identified, the IO’s are sequenced in the intrinsic order to accommodate for the existing time dependencies that will exist between them. The completed Prerequisite Tree presents the time sequence of the IO’s and the stated obstacle(s) each is intended to overcome.

Whenever you try to implement change it seems that the most frequent response is "It won't work here because..." These “because” statements are often followed by an explanation of what is perceived to be the obstacles (sometimes many) which can delay, obstruct, or completely block the achieving of the objective. In majority of cases, the presenter neither actively seeks, nor greatly appreciates the input of the naysayers. However, when building a Prerequisite Tree, such input for obstacles is actively required. By surfacing the obstacles in advance, the implementer has the opportunity to plan strategy to overcome them instead of waiting for them to block progress in reality.

Once the obstacles are identified, you need to create a specific IO sufficient to overcome or eliminate the impact of the obstacle. Each IO, when achieved, must be sufficient to overcome one or more of the obstacles which block progress. When all IO’s are achieved the path to completing objective is much more straightforward.

Sometimes when you are assigned a major new project the mere thought and scope of the effort can be daunting. It is difficult to figure out where to start and what to do. This difficulty is compounded even further by the fact that there could be many required IO’s necessary to reach the stated objective. By defining the obstacles in your specific situation and determining the needed IO’s you can map the logical and intrinsic flow, or steps, you must go through to achieve the desired objective. Many times you will find that simply defining and listing the obstacles to your objective will make it seem much more achievable to you and to others. In many case you will find the mystery has now dissolved. The Prerequisite Tree is a logical tool designed to drastically simplify organizing data for a large task. The intrinsic order of task completion will become obvious and set the foundation for a clearly defined implementation plan. If the logic is solid, then the implementation will be solid.

Prerequisite Tree (PRT)

Prerequisite Trees can be used to:
• Set Intermediate Objectives for implementation of the solution.
• Systematically dissect a major task into a set of interdependent bite-sized pieces.
• Identify and overcome obstacles.

This figure provides an example of the PRT structure. Note on the example that the objective boxes are squared cornered meaning they are the IO’s or something that does not yet exist in reality. The round cornered boxes are the obstacles, or statement from reality that do exist.

The tree is read “In order to have….” (Entity at the end of the arrow) “I must have…” (Entity at the base of the arrow) This statement sets up the necessity for the arrow. The obstacles are pointing to the necessity arrow. So when reading the entire statement it reads “In order to have…” (Entity at the tip of the arrow) “I must have…” (Entity at the base of the arrow) “Because…” (The statement from the Obstacle entity).

In the next blog we will discuss the steps to construct a PRT as well as some useful hints to consider.

Maximizing Profitability Part 25

In the last blog we discussed the basic principles of the Future Reality Tree (FRT). In this section we will discuss the necessary steps to construct an FRT.

Steps to Construct.

The following steps provide the intrinsic order of thinking when constructing an FRT. It is best to follow in the order given to construct the best possible tree.

Step 1 - Define the function of the Future Reality Tree.

When constructing an FRT it is always best to define the function. In other words, “why are you constructing the tree?” A Future Reality Tree can be used to construct a full solution that you want to implement. It can also be used to test an idea (yours or someone else's) or to present the merits of an idea to someone else. When you focus on what role you want this technique to be used for, then the remaining analysis will be more relevant.

Step 2 - Capture the idea.

There can be a significant difference between a “new” idea and a “good” idea. A good idea is one that accomplishes its objectives without creating unwanted negative effects. In this action, the new idea is captured verbally. Again, capture your idea as succinctly and concisely as possible. A single statement that captures clearly what it is you really want to do.

Step 3 - Make a list of potential Desirable and Negative Effects

One thing you want to verbally capture is the desired positive effects that you would like to see happen. The list of desired effects will depend on the type of FRT you are constructing, Suppose you are constructing an FRT to complement a full TOC analysis, then you can use the Undesirable Effects (UDEs) from the CRT as a guide. For example, suppose one of the UDEs from the CRT was “ROI is too low” then the Desired Effect would read: “ROI is high”. Continue building your Desired Effects list until you have listed all, or most, of the things you want.

There may be some expectations, as well as possible concerns about what this idea, once implemented, will accomplish. What you are looking for are the “good” things that will exist when the idea is implemented. Write down the potential positive effects and the potential negative effects (Step 6) of what this idea, once implemented, will cause. Be honest and be logical. Spend the time necessary to filter those emotional statements from the logical statements.

Step 4 - Build the causal connections between the Injection and Desirable Effects.

You are looking for the causal relationship between two of your desirable effects. Can you see a connection between any two entities where one would be sufficient to cause the other? If so, make the connection. If you are using the tree to validate an Injection from a CD, then it is desirable for the Injection to be near the bottom of the tree. What you are looking for are all of the desired effects that will come from the Injection. At this stage, continue to look for, and connect the other causal links between the Injection and the Desirable Effects. In the course of constructing the tree it is very possible you will surface additional desirable effects not on your original list. It is also possible that you will add additional Injections to take care of the potential Negative Effects.

Step 5 - Strengthen your analysis.

A powerful outcome from constructing an FRT is to look for the positive reinforcing loops. In other words, those things that, through time, just continue to keep happening These positive loops help ensure that the solution will work the way you want it to over and over again.

Apply the Categories of Legitimate Reservation (CLR’s) and strengthen the logic. Are there additional positive effects (Predicted Effects)? Is there additional cause required to make something happen (Injection)? Full scrutiny with the CLR’s will result in a powerful and useful FRT.

Step 6 - Actively Seek Negative Branches

This is probably one of the most important aspects and outcomes from an FRT – looking for the Negative Branches or Negative Effects from your idea. Don’t be frustrated and think that your idea won’t work because you found a negative effect. Quite the opposite is true. It now provides an opportunity to know that a negative effect is possible and allows the chance to inject with an additional idea to keep the negative effect from happening. It’s much better to attack it now and have a way to overcome, than wait until it is actually implemented. It’s part of the necessary planning. Applying the Negative Branch technique helps ensure that the medicine is not worse than the disease. If you don't find and resolve the negative effects as part of your solution, the negative effects will appear in reality--and be much more difficult to solve.

Once you have completed the FRT and discovered the best idea that you want to move forward with, the next question becomes “What stops me from doing this right now?” In the next blog we will discuss the Prerequisite Tree (PRT). The PRT is used to define and overcome the obstacles that seem to be stopping the implementation of your good idea.

Maximizing Profitability Part 24

In the last blog we discussed using the CD to break the assumptions of a conflict. When you break an assumption you create an injection or idea. The injection is something that if it existed, then the assumption would be broken and the conflict is resolved. It is possible to generate several different ideas, each sufficient to resolve the conflict. The choice now becomes which injections do you want to pursue – which one gives you the best results? We use the Future Reality Tree (FRT) to test these ideas.

A Future Reality Tree is a sufficiency-based logic structure that is used to check ideas. It is possible that an idea that has good possibilities for success might also contain some flaws or negative effects. Knowing that some bad can co-exist with the good is probably why the common technique used to evaluate an idea/decision is a list of pros and cons. This technique isn't all bad. Unfortunately, it does not provide enough information as a means of systematically elevating your idea to create a good solution nor does it enable you to check if the "pros" will really result from the idea. The FRT first validates that the selected idea will lead to the desired results. If it doesn't, the idea is supplemented with additional injections until all desired results are achieved. Then, the FRT uses any potential problems (negative effects) of an idea as a means to improve the idea instead of a reason for dismissing it.

The Future Reality Tree is based upon three fundamental assumptions:

1) It is better to know what the idea yields before acting on it.

2) The future is predictable to the extent that current causalities are understood.

3) Negative side effects, as long as they are determined before the idea is implemented, provide the means for improving the idea.

In many ways the Future Reality Tree is a simulation model for ideas. It simulates the system to react to an idea with no limits on the number of ideas that can be simultaneously tested. Using the FRT, the existence of Injections (ideas) is assumed and their inevitable effects are predictable using well-scrutinized cause-effect-cause relationships. Usually, single injections are insufficient to cause the desired effects, but during the process of building the FRT additional Injections can be discovered that are needed in order to reach the desired result.

Sometimes a brilliant idea can turn sour. Has it ever happened that what seemed like a good idea produced less than the anticipated results? What seemed to be a good idea in the beginning quickly starts to generate some negative effects? The old adage that: “too many times the medicine is more harmful than the disease” could very well true.

Remember, as a sufficiency based structure the tree is read “If the base of the arrow, then the tip of the arrow” and the ellipse represents a logical “and” statement. The additional injections noted in the example tree are the ideas you have generated along the way to keep your good idea on track and stable. Those additional things that must exist in order for your idea to work.

Future Reality Tree

Future Reality tree can be used for:

• Testing the merits of ideas before taking action.

• Construct a solution that yields a high degree of assurance that the existing undesirable effects will be eliminated without creating devastating new ones.

• Check for and prevent potential negative ramifications of an idea.

• Build a Strategic plan.

• Verbalize and communicate a vision.

Building an FRT can take some time to construct, but a good FRT is worth the effort. It is always better to test your ideas before implementation rather then find out after the fact that the idea wasn’t so good. It’s a way, if you will; to view your idea in “Fast Forward” and make sure you like the end results. If you don’t like the results, and you can’t come up with additional injections to nullify the negative effects, then go back and select another idea to implement.

In the next blog we will discuss the Steps to construct an FRT and look for the positive and negative effects that can come from ideas.

Maximizing Profitability Part 23

Conflict Diagrams – Steps to Construct and Categories

In the last blog we discussed some basic principles for Conflict Diagram (CD). In this blog we will discuss the steps to construct one, as well as the different categories that a CD might fall into.

The Steps

There are basically 4 Steps to construct a workable CD and following them in order presents the best chance for success.

1. Identify a scenario where you know, or suspect, a conflict is blocking the achievement of an objective.

In today's ever changing and demanding world, there always seems to be many situations in which we think there is “No way out”. The feeling is that we are somehow caught between a rock and a hard place with no way to resolve the problem. This feeling of frustration occurs only when the conflict is blocking the way to achieving something that we really want. These types of dilemmas are the situations that benefit the use of the Conflict Diagram.

2. Concisely verbalize the dilemma.

Sometimes the real dilemma or problem in a situation is not as clear as it should be. By concisely verbalizing the dilemma you're half-way toward solving it. If you don’t clearly understand the problem, then it is very difficult to provide an effective solution. By identifying the conflict objective, requirements and prerequisites that make up the dilemma, you will develop a very concise verbalization of the dilemma. Verbalizing and understanding the dilemma provides an excellent starting point for effective problem solving.

3. Surface assumptions that support the existence of the dilemma.

Within whatever system you are operating there are many things that we assume to be absolutes. In others words, they appear to be things we assume we can’t change. There are many instances when assume these things to be concrete – things that are somehow unchangeable. Yet there really are very few things in systems that are unchangeable. The purpose of Step 3 is to separate the wheat from the chaff, in other words a way to separate the actual “facts” from the perceived “fiction.” Once you understand what’s real and what isn’t the task become much easier.

The assumptions are the answer to the question on the solid lines of the diagram. In other word, “in order to have A” – I must have B” “Because….?” It’s the assumptions that make the lines solid and we want to break an assumption. When the assumption is broken, the line is no longer solid, and the conflict can be resolved.

4. Generate breakthrough ideas that will invalidate at least one of the assumptions.

Generating the breakthrough idea is the primary function of the CD. To surface an idea that completely eliminates the assumption. When you surface the assumptions on each arrow, ask yourself “What must exist in order for the assumption not to be true?” Whatever the statement is, this is your injection or idea to replace the assumption.

Categories of CD

Most Conflict Diagrams will fall into one of these four (4) categories. This section provides some hints about how to construct the CD based on what type of category it falls into. These definitions will tell you which entity to fill in first and which one second…etc. Where do you start and what do you do next. What steps to take within each of the categories of CD’s.

1 - Negotiation: your opinion versus someone else's

2 - Crisis: current reality versus desired reality.

3 - Classic: I know what I don't want.

4 - Core Problem: concisely verbalizing the core problem from a CRT.

By constructing and using the CD, you have surfaced the injection or idea that you want to implement into your reality. How do you know if your idea will generate the results that you want/need? In the next segment we will discuss the Future Reality Tree (FRT) as a means of testing ideas, not only of the positive impact, but also to surface any negative branches that might exist with your idea.

Maximizing Profitability Part 22

Conflict Diagrams - Basic Principles

Of all the tools associated with the Thinking Processes, I have found the most useful and the one I use most often is the Conflict Diagram. It seems that solving conflicts are part of everyday life. No matter how much you plan, no matter how careful you are, there always seems to be conflicts. So, if conflicts are a normal aspect of everyday life, and decisions are required to solve conflicts, then having access to the best tools to resolve conflicts is paramount.

Conflict Diagrams are necessary condition-based (necessity-based logic) structures used to verbalize and resolve conflicts (dilemmas). In the past this thinking tool has come to be known by many different names. In the early days of TOC development it was known as the “evaporating cloud”. It has also been referred to as the “conflict diagram” and the “conflict resolution diagram”. Whichever name you choose the structure remains the same. I have chosen the term Conflict Diagram.

Typically, resolving conflicts involves investing time (sometimes large quantities of time) in finding a compromise upon which both sides will agree – however reluctantly. Yet there are many times when there is no acceptable compromise that both parties will agree to. The problem with a compromise is both sides have to give up something in order to achieve common ground. When a compromise is used, the end result is usually so diluted that it jeopardizes the achievement of an important objective. Unfortunately, many objectives are compromised through this process of seeking consensus on a solution, that in the end the results are not satisfying for either side. The compromise process usually results in a “lose-lose” situation. In other words, neither side achieved what they really wanted. If such is the case, wouldn’t it make more sense to spend the necessary time trying to eliminate some conditions (assumptions) in reality that need changing, rather than to compromise the objective? In the process of compromise it makes sense that breakthrough ideas are usually hidden to us – we are geared to looking for compromises. Perhaps generating the idea (injection) that creates a “win-win” without a compromise, would be a much more acceptable platform to resolve conflicts.

By rejecting the tendency to compromise the stated objective, one gains the ability to:

1) Set objectives based upon what is wanted/needed, rather than on that which is currently deemed possible.

2) Challenge vital assumptions that sustain the conflict.

3) Find paradigm-shifting ideas that increase the likelihood of achieving the objective.

The Conflict Diagram provides a concise verbalization of a problem. What is a problem? It is usually defined as a situation where you are unable to get what you want. From this definition, it is easy to see that one element of the Conflict Diagram is a description of what you want – the objective – and another element of the Conflict Diagram is a description of something that is preventing the achievement of the objective. In essence – clearly defining the conflict. Once the situation is clearly defined, and the entities of the conflict are clearly verbalized, the stage is set for generating breakthrough ideas.

Most people have had an idea come to them from out of the blue. You know, you have been thinking about a problem and then all of the sudden you wake up one morning and a brilliantly simplistic solution comes to you. What blocked you from being able to solve the problem before? You probably had some assumptions about a necessary condition that didn’t really have to be necessary. Once you realized this at some level, you were able to come up with a way out of the predicament. Finding breakthrough ideas comes through challenging assumptions we make about our reality. The assumption based thinking (human behavior) is an essential part of the Conflict Diagram.

Structure of a Conflict Diagram

The “A” entity is the objective. It is the statement that defines what you really want to do. The “B” requirement is a statement (entity) that defines something that must exist in order to achieve the Objective “A”. The “C” requirement is the statement of an additional requirement that must exist to achieve the Objective “A”. “D” is the prerequisite statement (entity) for “B”. “E” is the prerequisite statement for “C”. The conflict, when it is surfaced, will reside between “D” and “E” (HENCE: the lighting bolt arrow). The statements written in “D” and “E” will usually be opposite statements. For example, the statement in “D” might say “do something”, and the statement in “E” will say “Don’t do something”, The line between “D” and “E” represents the tug-of-war between the two statements. As a necessity based structure it is read: “In order to have “A”… I must have “B”. In order to have “B” I must have “D”. The same rules apply to the lower leg of the diagram: “In order to have “A”… I must have “C”. In order to have “C”… I must have “E”.

The structure of a Conflict Diagram is such that it presents both sides of an argument or dilemma. Each side of the dilemma is commonly referred to as a leg. One leg presents your side of the conflict, and the other leg represents the other side of the conflict. Each leg appears valid to the person or group presenting those statements. Each leg appears to define the “necessary conditions” to achieve the objective. But each leg is in conflict with each other. One side says, “Do this” and the other side says, “Do that”. You can’t do both – so what do you do? In the next segment we will discuss the uses for Conflict Diagrams and the steps to construct a Conflict Diagram.

Maximizing Profitability Part 21

Creating the CRT

In the last blog we discussed the basic elements of the Current Reality Tree (CRT), with the promise to share a CRT from a real situation.

Without revealing company names, let’s start with some background on the particular company. They are a major producer of electronic components, mostly in the form of circuit cards. They are major supplier to other companies in the electronics industry. The plant was configured with seven (7) major assembly lines. Most lines were dedicated to certain types of boards, but there was also several with cross-functionality. In other words, the same type of board could be produced on more than one line. The most notable problem, and the reason they called us, was they were suffering from very high levels of WIP and not being able to meet on-time delivery demands from the customer.

We started our analysis with them by interviewing the workers on the line. We were first looking for the perceived UDE’s that existed.

Collecting UDE’s

The UDE’s provide a very important piece of the puzzle you are trying to solve. But, BEWARE: Not ALL UDE’s are really UDE’s. It’s important when you collect UDE”S to have people write them down in the form of answering a question. For exmple; “When I think of the current system, it bothers me that…” The “that statement” becomes the UDE. The more people you talk with, the better the UDE list will become. Another important factor is to note the commonality between statements. Five or six different people might all say something different, but all six mean exactly the same thing. When you find an UDE that fits this category – you’ve found an important UDE. It is also important to filter the UDE’s – to separate those emotional statements from logical statements. As an example, suppose during the UDE collection someone responds back to the statement with “It bothers me that my boss is an idiot!” No matter how true that statement may, or may not be, it is an emotional statement and not a logical statement. Spending the necessary time on the front end to filter the UDE’s, can translate into a much smoother process when constructing a CRT.

With that said, here is the final UDE list developed for this company:

1. The front of the line is measured in utilization minutes.

2. The back of the line is measured in boards per day.

3. RM’s are sometimes not available for production runs.

4. Testing takes too long to complete for some boards.

5. FTC and CQA perform the same function.

6. Some test equipment is not effectively used.

7. 100% of the boards are tested.

8. Boards can be rejected for cosmetic reason and not functionality.

9. Some batch sizes for some boards are too large.

10. Some FG’s sit in testing waiting for transfer to FG inventory.

11. Testing is not considered part of the production line.

From the 30 or so different UDE’s collected the list was reduced to the above list. Each UDE seems to be a separate problem, with no clear correlation between them, and each is causing its fair share of Undesirable Effects in the system. So, the hunt was on to discover correlation between the UDE’s and surface a probable Root Cause.

Constructing the CRT

With the UDE list, we are trying to build correlation between the entities. In other words, are there any two of these entities where one can cause the other? When you find those two, it becomes the starting point to build the rest of the CRT. Continue building until all, or most of the UDE’s, have been connected. Figure 1 shows how these entities were connected to show the CRT. You’ll notice that the entity boxes each contain a number at the top. This is nothing more than an entity address. This method helps when scrutinizing using the CLR’s to be able to point out entities quickly in order to make a connection. Those entity numbers with an asterisk (*) were entities from the original list. You will also notice some entity numbers without an “*”. These entities surfaced during development of the CRT as predicted effects and additional causes from the CLR’s

Using the CRT to formulate the sufficiency based logic you can see that from the original UDE list, we were able to show cause-effect-cause relationships between all of these undesirable effects. The root cause in this example WAS NOT an entity listed in the original list, but rather a root cause that was exposed because of the CRT. In this case it was policy constraints. I say constraints as plural because this company has so many measurements they were trying to record, and some of these measurements were in direct conflict with each other. You’ll notice at the bottom of the CRT the two measurements – one for minutes and one for boards. In their mind, high machine utilization was equal to producing lots of boards. They had very expensive equipment and the only way they could justify the equipment was to keep it busy all the time. Because of this measure, they continually loaded the system with work, which created a vast amounts of work-in-process (WIP) inventory, much longer lead times, and consequently missed due dates.

In the end, policy measurements were changed, or eliminated, and the system was structured as a Drum-Buffer-Rope system with the test equipment being the drum. By using the test equipment as the drum we were able to release (“pull”) work into the system at the correct rate. This was a much different environment than trying to “push” work into the system for the sake of efficiency. The overall WIP reduced dramatically, the lead-times were shortened to hours rather than days, and on time delivery skyrocketed. Revenue jumped $350M in 6 months time and all because a CRT helped them understand what the real root cause was.

In the next blog we will discuss the Conflict Diagram and review some basic principles for its use and structure.

Maximizing Profitability Part 20

I’ve asked my good friend Bruce Nelson, to contribute to my blog for the next series of postings. Bruce has over 30 years combined experience in the manufacturing and production industry. Bruce excels in the areas of TOC problem solving concepts, including systems analysis, Drum-Buffer-Rope (DBR), Critical Chain Project Management (CCPM), Distribution and Replenish modeling and Supply Chain Management – all focused on generating bottom line results.

Bruce has been trained as a TOC Jonah’s Jonah and is a board certified TOC Expert with the Theory of Constraints International Certification Organization (TOCICO). Bruce is also an Academic Jonah who held a faculty position at Weber State University. I am grateful to Bruce for agreeing to write a series of postings for my blog. This introductory blog will be longer than my normal ones, but I think you will find it to be very interesting and informative.

Bob Sproull

Current Reality Trees - Basic Principles

Sometimes when you are faced with solving a problem, being able to precisely verbalize the problem is 95% of what is needed to solve a problem. From a preliminary problem analysis, you can quickly understand ALL the things that are going wrong (the effects), but you aren’t sure why they happen (the cause or causes). Sometimes, what might appear to be many different negative effects, happening all at once, can be reduced down to a single core problem. If the core problem is removed from reality, then there is a high probability that ALL of the negative effects will be removed as well, especially if the cause-effect-cause relationships can be established.

As Bob has mentioned in his earlier posts being able to focus, is the single most important element of solving a problem. When faced with many different negative effects, the question becomes – “Which one do I focus my attention on?” When you review and analyze the negative effects, there are usually many things you can fix, but which one should you really focus your attention on? Which one provides the long lever that, if it is removed, most of the other problems go away. The Current Reality Tree (CRT) provides such an analysis tool. The CRT is a powerful logical thinking tool that can help you filter the insignificant many from the important few. The CRT is probably not a document that you will assemble and analyze in 15 or 20 minutes. It will take some time – but the effort is well worth the results.

Current Reality Trees are sufficiency-based logic structures that enable individuals to investigate situations with a high degree of assurance that they are distinguishing reality from fiction. When people are asked to "find out what's going on" in a given situation, their first step usually involves gathering data. They take the data and categorize it while looking for correlations. Often, the categories are prioritized according to the investigator's intuition about the existing correlations. This method of investigation is helpful – to a point. Classifying things to be dealt with, or considered separately, is not as efficient or effective as identifying one or two focus areas that will significantly impact the remaining areas in a positive way.

By revealing and examining the underlying intrinsic order of entities using cause-effect-cause relationships, one gains the ability to:

1) To distinguish fact from fiction without spending a lot of time gathering data.

2) To focus on a core problem instead of multiple symptoms;

3) To succinctly communicate the past or current situation to others.

The Current Reality Tree is based on the fundamental natural law that order does exist. Events within a system do not happen with near the randomness that people think they do. Something happens (effect) because something else happened (cause). This technique provides the means for careful examination of hypotheses, assumptions and pursuing common causes that account for more and more of the effects in the system.

When using a Current Reality Tree to determine “what to change” in your existing system, you should search for those few entities that are causing most of the Undesirable Effects (UDE’s) in your area of concern. It is always possible to build a comprehensive enough Current Reality Tree in which at least one cause leads to the existence of most of the UDE’s.

Figure 1 displays an example for the structure of a CRT. As a sufficiency based logic tree it is read using the “IF’ and “THEN” statements. In other words, the logic is; if the entity at the base of the arrow, then the entity at the tip of the arrow. The arrow represents the logical connection and also signifies that the entity at the base of the arrow is sufficient to cause the entity at the tip of the arrow to exist. As an example: IF the car battery is dead, THEN the car won’t start. Obviously if the battery is dead, it is sufficient to keep the car from starting. At this stage it is important to apply the Categories of Legitimate Reservation (see Bob's prior posting on CLR’s) and validate the arrow’s existence. In other words, make sure the arrow is logically solid.

Figure 1

In the example CRT you notice ellipses that combine some of the arrows. These ellipses are the logical “and” statements. So, reading the statement becomes If entity #1 “AND” entity #2, THEN entity #3. The “and” statement implies that both entities (causes) are required to generate the effect.

Current Reality Trees can be used to:

1. Identify the core problem – What is constraining the Throughput of the system?

2. Focus and leverage improvement efforts.

3. Determine what is happening or what has happened.

4. Communicate information about a past or a current situation clearly and concisely to others.

5. Provide a pattern from which future events may be predicted.

6. Analyze the validity of an article or argument.

STEPS TO CONSTRUCT A CRT

1. Choose the topic you wish to address.

Do you want to find the weakest link in your area of responsibility? Do you want to investigate why certain things happen? Do you want to understand your teenager? This step results in concisely defining the system you want to analyze.

2. List the Undesirable Effects within the chosen system

Focus and direction are gained through clarifying the preliminary boundaries of the area to be analyzed. Undesirable Effects should relate to the unsuccessful attainment of the goal (or necessary conditions) as revealed by its measures. You can find the UDE’s by asked the question “When I think about this system it bothers me that…” Your list of “it bothers that…” statement translate into the list of UDE’s

3. Map out the causal connections among the Undesirable Effects.

Through mapping the sufficiency relationships that connect the UDE’s, common causes begin to take shape and the picture of the current situation becomes clearer. This step involves rigorous use of the Categories of Legitimate Reservation (logic-checking tools) to minimize self-deception. What you are looking for is a relationship between the UDE’s. Is there a particular UDE that exists because another UDE exists? If there is, draw the arrow between your two entities and apply the CLR’s to check the validity.

4. Modify the tree to reflect your intuition about the system being analyzed.

The previous action had you working at a micro-level. This action provides a safety net – just in case you "can't see the forest for the trees." You may find this step enables you to limit or expand the analysis so that it is in proper perspective.

5. Identify those entities you perceive to be the most undesirable

Your initial list of UDE’s was a mini-brainstorming session. At this stage of the game, you should have a much clearer picture of what is going on and a better sense of what the important UDE’s are – the ones that are impeding the organization.

6. Trim entities that do not participate in connecting the major Undesirable Effects

When seeking to find the constraint in a given system, one must focus on the connections that matter – the connection between a common cause and the effects you want to eliminate. This step asks you to remove the extraneous entities. The point here is to trim the UDE’s that fall outside of your area of control or sphere of influence. It helps establish the focus and defines the boundaries of what you really want to analyze. Knowing this information provides the Leverage to accomplishing the effort.

7. Identify the core problem

This final action entails examining the entry points (entry points are UDE’s that DO NOT have an arrow pointing to them) to the tree and finding one that is responsible for a significant portion of the major UDE’s. Which entity is responsible for most of the UDE’s? A general guideline is whatever entity is causing 80% of the UDE’s is usually a good candidate for the core problem.

The CRT allows you to focus on those one or two things that can really make a difference and concentrate your resources on solving that particular problem. In other words, you gain the ability to filter the insignificant many from the important few. When you focus on the proper core problem, and remove it, the other UDE’s, by default, will also disappear. If the causality is gone, so is the negative effect. So, now you have found the core problem – Now what? You’ve found “What to change”. Now, we need to answer the question; “What to change to” – what is the best solution to solve the core problem?

In my next blog I will create a simple, but real, CRT to demonstrate what a completed CRT looks like. We’ll then get into what comes next and move onto the next TP Tool. The Conflict Diagram.