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Goldratts TOCThinking Process,Using the TOC Thinking Process to Identify Problems, Develop Alternatives, and Implement SolutionsEd D. Walker IIDepartment of ManagementLangdale College of Business AdministrationValdosta State University,You graduate and get a good job. Now what?,You are expected to solve problems. If the job were perfectly routine they would not hire a college graduate.,What 3 questions must you answer to solve a problem?,What to change?To What to Change? How to Change?,How do we solve problems?,Too often we treat the symptom. Shouldnt we treat the underlying problem?Have you ever been taught a tool for this?,Tools created by Eli Goldratt,What to change? Current Reality TreeTo what to change? Evaporating Cloud Future Reality Tree & Negative Branch How to change? Prerequisite Tree Transition Tree,The Current Reality Tree,Today we will focus on the first questionWhat to Change?,There are two types of problems: Deviations and Dilemmas.,A deviation is easily fixed once the cause is recognized. For example - the house is too hot. Why? The air conditioner isnt on. Solution: turn on the air conditioner.A dilemma is hard to fix even when the problem is recognized because a conflict is involved. Mary wants to watch “60 Minutes”. John wants to finish watching the football game. There is one TV.,Most business problems are dilemmas.,If the problems were mere deviations they would have been solved once the deviation was recognized. There is nothing to prevent the solution.In a business very often the symptoms of the problem appear in department X (say production) but the underlying cause is in department Y (say marketing) and marketing has no incentive to fix the problem.,Current Reality Tree (CRT)What to Change?,A CRT is a diagram that links underlying cause to symptoms via cause-and-effect arrows.If the underlying cause involves a dilemma we will need the next tool (evaporating cloud) to solve it.,Basic Structure of a CRT,Definitions - CRT,Current Reality Tree - a logic-based tool for using cause-and-effect relationships to determine root problems that cause the undesirable effects of the system (APICS Dictionary, p. 19.),CRT Benefits,FocusTeam-BuildingRoot Cause AnalysisSystems ThinkingCross Functional Problem SolvingEffective CommunicationsCommon and Agreed upon Understanding of the System,Steps in Construction of the CRT,1. List between 5 and 10 problems (called undesirable effects - UDEs) related to the situation.2. Test each UDE for clarity - is the UDE a clear and concise statement. This test is called the clarity reservation.3. Search for a causal relationship between two of the UDEs.4. Determine which UDE is the cause and which is the effect. Read as IF cause THEN effect. This test is called the causality reservation. Occasionally you may have the cause and effect reversed, check using the following statement Effect BECAUSE cause.,Steps in Construction of the CRT,5. Continue the process of connecting the UDEs using the If-Then logic until all UDEs are connected.6. Many times the causality is strong to the person feeling the problem but doesnt seem to exist to others. In these instances, clarity is the problem. Use the clarity reservation. Generally, entities between the cause and the effect are missing. The current relationship is stated as IF cause THEN effect. The correct structure in its simplest form may be IF cause THEN (missing effect). (Missing effect becomes missing cause at the next higher level.) IF (missing cause) THEN effect.,Steps in Construction of the CRT,7. Sometimes the cause by itself may not seem enough to create the effect. These cases are tested with the cause insufficiency reservation and are improved by reading IF cause AND _ THEN effect. What is the missing dependent statement that completes the logical relationship? Add it to your diagram using the AND CONNECTOR (represented graphically by a horizontal line or an ellipse across both connecting arrows). The and in this relationship is called a conceptual and which means that both entities connected with the and connector have to be present for the effect to exist. If either entity is eliminated, the effect is eliminated as well.,Steps in Construction of the CRT,8. Sometimes the effect is caused by many independent causes. The causal relationships are strengthened by the additional cause reservation. The problem to be addressed is how many of the causes are important enough to address? One, two, sometimes three causes frequently result in creating about 80 percent of the effect. Generally, eliminating these few causes is enough of a reduction where the remaining effect becomes minor. Therefore it is not necessary to have an exhaustive list of causes for an effect. These cause-effect relationships are called a magnitudinal and for each cause increases the magnitude of the effect. Each of the causes must be addressed individually to eliminate most of the effect.,Steps in Construction of the CRT,9. Sometimes an if-then relationship seems logical but the causality is not appropriate in its wording. In these instances words like some, few, many, frequently, sometimes and other adjectives can make the causality stronger.10. Numbering of UDEs on the CRT is for ease of locating entities only. An asterisk by a UDE indicates that UDE was provided in the original list of UDEs.,Constructing a CRT,List Undesirable Effects (UDEs)Many bank tellers quit to take a better job.Some single parent bank tellers quit to make more money on public assistance and to be with their children.Many bank teller job vacancies occur each year.,Constructing a CRT,List Undesirable Effects (UDEs)The banks budget for hiring, training, and raises is quite small.Some bank tellers (students or their spouses) quit at college graduation.Bank teller jobs are low paying entry level positions.,Constructing a CRT,Search for causal relationships,Constructing a CRT,Search for causal relationships,Constructing a CRT,Search for causal relationships,Constructing a CRT,Search for causal relationships,Constructing a CRT,Search for causal relationships,The Bank Teller CRT,The Steakhouse CRT,Categories of Legitimate Reservation,Clarity Entity Existence Causality Tautology (House on Fire) Cause Insufficiency Additional Cause Predicted Effect,Application of CLR,List of Undesirable Effects (problems),1) Secretaries are frustrated.2) Secretaries make mistakes.3) The manager/department appears inept.4) Work is completed slowly.5) Secretaries constantly ask managers for clarification.6) Managers do not trust the system.7) Secretaries often change departments.8) The secretary is not trained.,Test each UDE for clarityIs the UDE a clear and concise statement?,1) Secretaries become frustrated with their work assignment/load.2) Secretaries make mistakes.3) The manager/department appears inept.4) Work gets postponed/completed more slowly than expected.5) Work must iterate between the manager and secretary several times.6) Management loses trust in the system.7) Secretaries are rotated among the managers frequently.8) Assignments are made for which the secretary is not trained.,The search for causal relationships.,2* Secretaries make mistakes.,3* The manager/ department appears inept.,The search for causal relationships.,2* Secretaries make mistakes.,8* Assignments are made for which the secretary is not trained.,The search for causal relationships.,3* The manager/ department appears inept.,4* Work get postponed/completed more slowly than expected.,The search for more causal relationships.,An example of cause insufficiency.,An example of the clarity reservation.,An example of the clarity reservation.,The initial Current Reality Tree.,7* Secretaries are rotated among managers frequently.,8* Assignments are made for which the secretary is not trained.,21 Different departments/managers require different skill sets of their secretaries.,2* Secretaries make mistakes.,1* Secretaries become frustrated with their work assignment/load.,23 Secretaries are unable to learn what a particular department/manager likes.,5
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