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The Thinking Processes Part 3: The Current Reality Tree

The Thinking Processes Part 3: The Current Reality Tree

By Bob Sproull

The Answer

At the end of my last post, I laid out a scenario where you were the Plant Manager of a company that has problems with on-time delivery of your products to your customers. Your CEO told you that you needed to fix this problem as fast as possible.  I asked you what Thinking Process tool you would use to identify the root cause of your delivery problems. I gave you the following four options:

  1. A causal chain
  2. A Cause & Effect Diagram
  3. A  Pareto Chart
  4. A Current Reality Tree

The correct answer is D., “A Current Reality Tree”.  The primary purpose of the Causal Chain, Cause & Effect Diagram and the Pareto Chart are for solving known problems.  The Current Reality Tree is used to assess the current state of your organization and to identify core problems. 

The Thinking Process Diagrams

In my last post, we completed a broad overview of the TOC Thinking Processes, today we will dive into the basics of the Current Reality Tree and how to construct one.  Remember these logic diagrams are intended to answer the three critical questions I have discussed in previous posts:

  1. What to change?
  2. What to change to?
  3. How to cause the change to happen?

The Current Reality Tree is used to answer the first question of what to change.

The Basics of the Current Reality Tree

As part of the logical thinking process, Goldratt introduced a set of tools used to identify the root causes of negative symptoms or Undesirable Effects (UDE’s) that exist within organizations. Goldratt believed that there are generally only a few core problems that create most of the UDE’s and if we can identify these core problems (i.e. What to change?) and find their root causes and eliminate them, then most of the organization’s UDE’s will simply disappear. Let’s talk a bit more about these things called Undesirable Effects (UDE’s) and how we can identify and understand them.

In order to understand what UDE’s are, we must first understand that they must be considered in the context of an organization’s goals, necessary conditions and performance metrics. For example, suppose the organization’s goal is:

  • To make money now and in the future

And its necessary conditions are things like:

  • Keeping its employees happy and secure
  • Keeping customer satisfaction high
  • Achieving superior quality and on-time delivery
  • Etc.

Further suppose that the organization measures its performance by things like:

  • On-time delivery
  • Some kind of productivity measurement
  • The cost to produce products
  • A customer satisfaction index
  • Quality through parts per million defective (ppm)

Any organizational effect that moves the organization away from its goal or violates one of the necessary conditions or drives a performance metric in a negative direction with respect to its target is considered undesirable. So think for a minute about what UDE’s might exist in your company.

The tool Goldratt developed to expose system type problems or policy constraints is referred to as the Current Reality Tree (CRT). The CRT is used to discover organizational problems, or UDE’s, and then work backwards to identify at least one root cause that leads to most of the UDE’s. Dettmer [1] defines a root cause as, “the lowest cause in a chain of cause and effect at which we have some capability to cause the break.” His point being that the cause and effect chain could continue on indefinitely, but unless the cause lies within the scope and control of the organization, it will not be solved. I happen to believe Dettmer’s definition of a root cause is the finest characterization I have ever observed. Dettmer further explains that two characteristics apply to root causes:

  1. They are the lowest point at which human intervention can change or break the cause.
  1. They are within our capability to unilaterally control, or to influence, changes to the cause.

The CRT begins with identifying undesirable effects (UDEs) or negative symptoms existing within an organization that let us know that a core problem exists. Core problems are unique in that if the root cause or causes can be found, they can usually be traced to an exceptionally large percentage of the undesirable effects. Actually Dettmer [1] suggests that this percentage could be as high as 70 percent and sometimes higher. Dettmer refers to a CRT as a “snapshot of reality as it exists at a particular moment in time.” Dettmer further explains, “As with a photograph, it’s not really reality itself, just a picture of reality, and, like a photo, it encloses only what we choose to aim at through the camera’s viewfinder.”

By aiming our “logical camera” at the undesirable effects and their root causes, we’re essentially eliminating all of the details that don’t relate to them. In other words, the CRT helps us focus in on and pinpoint core problems. There are several different versions of the CRT available in the literature on the subject, but they all provide the same end product, at least one actionable core problem. Some CRT’s are very detailed while some are more general in nature.

Constructing a Current Reality Tree

The example I will present in my posts is a company that was having a problem generating enough throughput (i.e. capacity constraint). They had plenty of orders, but were just unable to produce enough parts to satisfy the market demand. It is clear to me that many of the problems organizations encounter on a daily basis are really interconnected, systems-related problems. It is further clear that by focusing on these core problems, organizations can essentially kill multiple birds with a few stones!

The company involved here produces flexible tanks used to hold and transport volatile organic liquids. This company had serious problems generating enough throughput to satisfy the volume and delivery requirements of their customers. By creating a CRT, this company was able to pinpoint specific system problems that were constraining their throughput and then take actions to alleviate the problem.

The following are the steps used to create this CRT as developed by Dettmer [1]:

  1. Define the system boundaries, goals, necessary conditions and performance measures.   Because we are talking about a system, it is important that we avoid sub-optimization. That is, we must always avoid trying to optimize individual processes and assume that if we do so we will have optimized the system. This assumption or belief that the sum individual process step optimizations will result in optimization of the total system is completely invalid.  All organizations exist for some purpose or goal which is simply the end toward which effort is being directed. Usually this goal is to make money now and in the future. The necessary conditions, on the other hand, are vital success factors that must be satisfied as we achieve our goal. The performance measurements are simply those organizational metrics that tell us how the organization is performing as it pursues its goal. The following are the actual boundaries, goals, necessary conditions and performance measures from our example:
    1. Boundary: Manufacturing and Assembly Area
    2. Goal: Make money now and in the future
    3. Necessary conditions:
      1. Minimize customer returns and complaints
      2. Achieve at least 95% on-time delivery to all customers
      3. Provide a safe, comfortable and secure work environment for all employees
      4. Meet budget P & L expectations for the board of directors
    4. Performance measures:
      1. On-time delivery
      2. Rework hours per tank
      3. Sales $’s per labor hour
      4. Accident rate
      5. Workstation efficiency
      6. Throughput/revenue
      7. Operating expense
  2. State the System Problem – In order to develop a meaningful problem statement, we should always formulate it as a “why?” question. Whatever the biggest issue that you don’t like about your system’s performance, simply state it as a why question.
    1. Problem statement: Why is our throughput/revenue so low?
  3. Create a Causes, Negatives, and Why’s Table – This is done by first creating three columns and then listing, in the Negatives column (center column), the things you don’t like about the way your system is currently performing which include all of the things that make your job more difficult to perform. My advice to you is, don’t try to solve world hunger. List no more that 5 to 8 Negatives, otherwise the CRT will become unmanageable.



Causes (What is causing this negative?)

Negatives (What I don’t like about the current situation?)

Why is this negative bad for our goal, necessary condition or measurement?


Absenteeism is high and unstable



Processes are not stable & predictable



Operators don’t/won’t follow specifications



Product build cycle times are excessively long



Equipment breaks down frequently



Incoming materials are frequently non-conforming



QA inspections are inconsistent between inspectors



Problems are never really solved



Next time

In my next post we’ll continue with the construction of our example Current Reality Tree.  As always, if you have any questions or comments about any of my posts, leave me a message and I will respond. 

Until next time.

Bob Sproull


[1] The Logical Thinking Process – H. William Dettmer, Quality Press, 2007

Bob Sproull

About the author

Bob Sproull has helped businesses across the manufacturing spectrum improve their operations for more than 40 years.

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