SUNConferences, Southern African Institute for Industrial Engineering 2014

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CORRELATION AND CAUSATION: A POTENTIAL PITFALL FOR EFFICIENT ASSET MANAGEMENT
Johannes Hendrik Heyns, PJ Vlok

Last modified: 2014-06-26

Abstract


The successful coordination of activities and practices within a system rely on the organisation’s ability to make  informed decisions. Decisions must be made quickly and effectively, while ensuring efficient  Physical  Asset  Management  (PAM). Access to processed data, in the form of reliable information,  on  how sub systems interact greatly simplifies decision-making. Many organisations mistake correlation for causation  when analysing this data. Such a mistake carries great consequences for organisations, since important decisions might  unknowingly  be  based on self-invented problems, while the true problem is left unresolved.  It is crucial to understand the difference between correlation and causation when practising root cause analysis within a PAM environment.  Although root cause analysisis presumed  a highly specialised field,  organisations can equip themselves to better understand how different events within a PAM system are interconnected. If done correctly this might simplify the process of detecting problems, which might exist within a system.This paper highlights the differences between correlation and causation. Potential pitfalls on how correlation can be mistaken for causation within a PAM environment are identify and explained. Recommendations are made on how to avoid these pitfalls.


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