17 November 2009

The New ERP - Part 8

Creating your Current Reality Tree (CRT)

Once you have completed your CRT, take a close look at the "roots." Roots are those entities at the bottom of the tree that have no arrow leading into them. Generally speaking, you will find that the roots of your CRT will fall into two very broad categories:
  1. Things you can change or affect in some way, and

  2. Things you likely cannot change or affect (de facto roots).
When classifying entities into the latter category (de facto) take great care. Do not allow yourself or your team to make excuses by simply saying that "we have no control over that." For example, quality issues from outside suppliers may not be in your direct control, but they are certainly within your realm of influence -- especially if you are a major customer of the vendor.

Once your team has identified all of the roots that fall into the first category, you will likely find that these roots may be further subdivided into three more categories:
  1. Root causes for which improvement requires no new technologies
  2. Root causes where you may achieve some improvement without the aid of new technologies, but further improvement may also be achieved by applying new technologies as part of an ongoing improvement process
  3. Root causes where the most logical and most effective action toward improvement will involve the deployment of new technologies
Most of the organizations we work with find that more of the things they need to change for improvement do not involve investments in new technologies. If this is your case, then "Congratulations!" In less than one day (most likely) you and your management team have discovered how to begin system-wide improvement that
  • May be commenced immediately

  • May involve little or no cost

  • Will likely deliver improvements that increase Throughput, reduce Inventories or the demand for new Investment, and/or will probably help you hold the line on Operating Expenses while you grow your business
Equally as important, however, is the fact that if you find the need for new technologies, the cash flow from the non-technology early-win improvements can help pave the way for the investment in new technologies in the near future.

[To be continued]

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