Issue trees
Introduction & examples from real consulting projects
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Create Issue tree
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Issue tree - general
Analysis to be
Area of analysis Suspected problems Possible reasons performed
Possible Reason 1 Analysis 1
Problem 1
Possible Reason 2 Analysis 2
Area 1
Possible Reason 3 Analysis 3
Problem 2
Possible Reason 4 Analysis 4
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Issue tree in Logistics –
examples
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Issue tree - general
Analysis to be
Area of analysis Suspected problems Possible reasons performed
Possible Reason 1 Analysis 1
Problem 1
Possible Reason 2 Analysis 2
Area 1
Possible Reason 3 Analysis 3
Problem 2
Possible Reason 4 Analysis 4
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Issue tree – example – chicken meat producer
Analysis to be
Area of analysis Suspected problems Possible reasons performed
Analysis of designed routes, their length
Badly designed routes
and the influence of possible changes
High costs of transport per ton of Analysis of fuel usage and kilometers
Too big fuel usage
goods covered by vehicles
No shipments on the way back Analysis of load carried on the way back
Badly designed method of packaging
Analysis of correlation between type of
which makes the product prone to
packaging and percentage of damaged
damage
Big level of waste and breakage in
Transport
transport
Analysis of time spent on the way and
Speed not adjusted to the product
kilometers covered in that time
Badly organized work and schedule of Analysis of level of overtime, daily
deliveries organization of drivers work
Low usage of resources
Limitation on delivery time of finished Analysis of Clients’ preferences on delivery
goods time
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Issue tree in Retail –
examples
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When you are talking about retail you should have a look a
the following areas
Retail chain development Expansion model
Product Range / Category Range
In-store process
Management
Pricing HR especially trainings
Logistic / Supply Chain
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Below you can see example of issue tree in Retail Chain
Development
Analysis to be
Area of analysis Suspected problems Possible reasons performed
Low LFL due to cannibalization (on- Analyze the change in sales after opening
line, new stores in old locations) new stores / on-line introduction
Low growth in sales
Analysis of number of openings vs
Few new openings in locations
availability of new places
Increasing rents due not proper usage Analysis of rents vs comparable
of purchasing power competition
Retail chain Decreasing EBITDA of new stores
development Salaries growth vs rotation – comparison
Growing salaries to keep low rotation
with competition
No support from the shopping malls Analysis of contracts with shopping malls
High cost of building new stores
Not optimized formats, expensive Analysis of cost per 1 sq. m, number of
fixtures fixtures, cost per fixtures
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Issue tree – example – chicken meat producer
Analysis to be
Area of analysis Suspected problems Possible reasons performed
Too many supplier of Category A that Analyze of number of suppliers and their
undermines your purchasing power share in sales vs market
Low margin on Category A
Analysis of Private Labels potential –
Lack of Private Labels
benchmarks and potential supplier
Usage of middlemen instead of direct Analysis of whom we buy from Category B
suppliers and the whole value chain
Product Range Low margin on Category B
Management
Improper planning and allocation by
Analysis of planning and allocation process
stores
Improper planning and allocation by
Analysis of planning and allocation process
stores
High inventory cost
Analysis of lead times, deliverability on-
Non-responsive supply chain
time, level of breakage
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Issue tree example for a
FMCG firm
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When you are talking about FMCG you should have a look a
the following areas
Marketing Supply Chain including Planning & Sourcing
Product Development Customer Data Analysis
Managing Sales Force Competition Analysis
Production Expansion Model
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Below you can see example of issue tree in FMCG – Sales Force
Management
Analysis to be
Area of analysis Suspected problems Possible reasons performed
Bonus system with a high threshold
Analyze the motivation system
that incentives pushing the product
High sales at the end of the month
The firm is not producing what the Analyze sales forecasting, planning of
customer wants production and return rate
We have set-up too low targets for
Analyze the motivation system
some regions
Sales Force Different market shares in regions
Management
Some regions have different channels Analyze channels per region
Drive with sales force team members,
We have inefficient sales team
analyze processes, tools, efficiency
High cost of sales force in relation
to sales
We have too many overlapping sales Analyze sales per sales representative and
representatives compare with competition
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Below you can see example of issue tree in FMCG – Production
Analysis to be
Area of analysis Suspected problems Possible reasons performed
A lot of people are required for some Analyze solution used by other firms,
of the processes especially automatization
We have high production costs
related to labor
Check the Overall Labor Efficiency (OLE)
We use the people inefficiently
and look for bottlenecks
We are very bad at planning and there Analyze production planning and
is no sales forecasting procurement, sales forecasting
Inventory level are extremely high
Production
The machines / part of production are Analyze how work is controlled on the
not linked properly production floor
We are using wrong technology or Analyze waste by technology and
machines machines. Check planned vs actual
We have high waste cost
Analyze cost of production by different
We are using wrong materials
type of materials
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