CURRENT REALITY TREE &

EVAPORATING THE CLOUD

(THEORY OF CONSTRAINTS PRESENTATION- GROUP 11)

Managing Complexity
TOC provides a set of holistic processes and rules that simplifies the
complexity of improving and managing complex organizations through
focusing on the few constraining points and establishing the necessary
and sufficient conditions to achieve continuous improvement in the
performance of the system as a whole
According to TOC, a complex system (characterized by a high number of
relationships) has only a few significant elements that can affect the
whole system; Goldratt (2004) calls this inherent simplicity
Goldratt introduced Thinking Process in his book Its not Luck, which
is basically a suite of tools that enable people to develop unique
solutions to complex problems in order to achieve continuous
improvement
The Thinking Process has emerged as a useful tool as TOC practitioners
worked with organizations that needed to identify their core constraints
and how to manage or elevate them

Goldratts Thinking
Processes

Current Reality Tree

root cause analysis

Evaporating Cloud

What to
change?

conflict resolution

Future Reality Tree

solution testing

Negative Branch

What to
change it
into?

negative side-effect abatement

Prerequisite Tree
reaching an ambitious target

Transition Tree
fail-safe action planning

How to
cause the
change?

Goldratts Thinking
Processes

Current Reality Tree

root cause analysis

Evaporating Cloud

What to
change?

conflict resolution

Future Reality Tree

solution testing

Negative Branch

What to
change it
into?

negative side-effect abatement

Prerequisite Tree
reaching an ambitious target

Transition Tree
fail-safe action planning

How to
cause the
change?

Current Reality Tree

A way of analyzing many system or organizational
problems at once. By identifying root causes common to
most or all of the problems, the CRT can greatly aid
focused improvement of the system

Undesirable Effects
To identify the constraint, physical evidence (such as
inventory) might always not be present
One must look for negative events:

Frequently shipping orders late

Excessive amounts of inventory
Lead times that are increasing
Poor human relations within the organization

Goldratt calls these Undesirable Effects, or UDEs. The

challenge is to map out the interrelated web of cause that
links the undesirable effects together. Once completed,
one is generally able to identify a core problem at the
bottom of the map

Objectives of CRT
Provide the basis for understanding complex systems

Identify undesirable effects (UDEs) exhibited by a system

Relate UDEs through a logical chain of cause and effect to root
causes
Identify, where possible, a core problem that eventually
produces 70% or more of the systems UDEs
Determine at what points the root causes and/or core problem
lie beyond one's span of control or sphere of influence
Isolate those few causative factors (constraints) that must be
addressed in order to realise the maximum improvement of the
system
Identify the one simplest change to make that will have the
greatest positive impact on the system

CRT Process
The major steps to building the Current Reality Tree
are:
Determine the scope
Identify the Undesirable Effects (UDEs)
Ask why the effect happens- find the underlying cause
Treat the cause as an effect and try to find its cause
Keep on asking why to dig deeper root causes
There maybe multiple causes for an effectconsolidate the common causes
Identify the core causes

Current Reality Tree

VF Corporation:
Global apparel
giant
Grey shaded areas:
undesirable effects
Bold borders: root
causes

A current reality tree for VF Corporation

Goldratts Thinking
Processes

Current Reality Tree

root cause analysis

Evaporating Cloud

What to
change?

conflict resolution

Future Reality Tree

solution testing

Negative Branch

What to
change it
into?

negative side-effect abatement

Prerequisite Tree
reaching an ambitious target

Transition Tree
fail-safe action planning

How to
cause the
change?

Goldratts Thinking
Processes

Current Reality Tree

root cause analysis

Evaporating Cloud

What to
change?

conflict resolution

Future Reality Tree

solution testing

Negative Branch

What to
change it
into?

negative side-effect abatement

Prerequisite Tree
reaching an ambitious target

Transition Tree
fail-safe action planning

How to
cause the
change?

Evaporating Cloud What to

change it into?
The Evaporating Cloud
is so named in honor
of Richard Bach. In
Bach's
1977
book
Illusions,
the
main
characters
remove
storm clouds from the
sky by thinking them
away.
The Evaporating Cloud
tool is intended to
similarly
"vapourize"
difficult problems by
resolving
an
underlying conflict.

Identify
conflict

the

core

Develop
a
breakthrough
idea
(referred to as an
"injection") that will
resolve the conflict
This is accomplished
using a tool known as
the
"Evaporating
Cloud"

Conflict Types
Interorganizatio
nal

Intraorganizatio
nal

Interdepartmen
tal

Intradepartmen
tal

Inter-group

Intra-group

Interpersonal
Intrapersonal

Conflict Management
Styles/Models
Concern for self (Assertiveness)
LOW

HIGH

Concern for others

(Cooperativeness)

Obliging (Lose/Win)

Compromising
(Partial Win/Win)
Dominating
(Win/Lose)

Avoiding (Lose/Lose)

LO
W

Collaborating
(Win/Win)

HI
G
H

Evaporate the Cloud

Methodology for a win-win solution

Identify and
display all
elements of
conflict

Identify
underlying
assumptions that
cause conflict

Negotiating on interests

Develop solutions
that invalidate
assumptions

Step 1 Visualise the

cloud
us
a
C
e
e
Eff
ct

NEED/REQUIREM
ENT

Caus
e
Effec
t

OPPOSING
ACTION/WANT

Other partys side

Common
Objective
Ca
us
e
Eff
e
ct

Conflic
t

My side

NEED/REQUIREM
ENT that is
satisfied by
<action>

Caus
e
Effe
ct

ACTION /WANT :
I feel pressure to
do <action> to
solve the
problem

Step 2 Communicate
the cloud
In order for < objective to be satisfied>, the <need
has to be satisfied>. In order for <the need to be
satisfied> the <action must be done>
Repeat for lower branch of cloud
Communicate the conflict arrow :

On the one hand, (I) feel that (Action) needs to be done,

whereas
(other party) feels (opposing action) needs to be done

Step 3 Identify Assumptions

Behind each arrow, there are assumptions
List down all assumptions behind each arrow

Step 4 Find an idea to evaporate the

cloud
Disprove any 1 assumption of Step 3
to break Cause-effect relationship
This also leads to the solution
Step 5 Validate solution using Future
Reality Tree to prevent more negative
consequences

Example We Googled You

THANK YOU!!