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Contents
Articles
Thinking processes (Theory of Constraints) Theory of constraints Current reality tree (TOC) Evaporating Cloud Negative branch reservations Positive Reinforcement Loop Transition Tree 1 3 11 12 13 14 14

References
Article Sources and Contributors Image Sources, Licenses and Contributors 15 16

Article Licenses
License 17

Thinking processes (Theory of Constraints)

Thinking processes (Theory of Constraints)

This page is about thinking processes in the Theory of constraints. Wikipedia also has a list of thought processes. Thinking processes in Eliyahu M. Goldratt's Theory of Constraints, are the five methods to enable the focused improvement of any system (especially business system).

Purpose
The purpose of the thinking processes is to help one answer questions essential to achieving focused improvement: 1. What to change? 2. What to change it into? 3. How to cause the change? Sometimes two other questions are considered as well: 1. Why Change? and: 1. How to maintain the process of ongoing improvement (POOGI)? A more thorough rationale is presented in What is this thing called Theory of Constraints and how should it be implemented.[1] A more thorough work mapping the use and evolution of the Thinking Processes was conducted by Mabin et al.[2]

Processes
The primary thinking processes, as codified by Goldratt and others: Current Reality Tree (CRT, similar to the current state map used by many organizations) evaluates the network of cause-effect relations between the undesirable effects (UDE's, also known as gap elements) and helps to pinpoint the root cause(s) of most of the undesirable effects. Evaporating Cloud (conflict resolution diagram or CRD) - solves conflicts that usually perpetuate the causes for an undesirable situation. Core Conflict Cloud (CCC) - A combination of conflict clouds based several UDE's. Looking for deeper conflicts that create the undesirable effects. Future Reality Tree (FRT, similar to a future state map) - Once some actions (injections) are chosen (not necessarily detailed) to solve the root cause(s) uncovered in the CRT and to resolve the conflict in the CRD the FRT shows the future states of the system and helps to identify possible negative outcomes of the changes (Negative Branches) and to prune them before implementing the changes. Negative Branch Reservations (NBR) - Identify potential negative ramifications of any action (such as an injection, or a half-baked idea). The goal of the NBR is to understand the causal path between the action and negative ramifications so that the negative effect can be "trimmed." Positive Reinforcement Loop (PRL) - Desired effect (DE) presented in FRT amplifies intermediate objective (IO) that is earlier (lower) in the tree. While intermediate objective is strengthened it positively affects this DE. Finding out PRLs makes FRT more sustaining. Prerequisite Tree (PRT) - states that all of the intermediate objectives necessary to carry out an action chosen and the obstacles that will be overcome in the process. Transition Tree (TT) - describes in great detail the action that will lead to the fulfillment of a plan to implement changes (outlined on a PRT or not). Strategy & Tactics (S&T) - the overall project plan and metrics that will lead to a successful implementation and the ongoing loop through POOGI. Goldratt adapted three operating level performance measuresthroughput,

Thinking processes (Theory of Constraints) inventory and operating expenseand adopted three strategic performance measuresnet income, return on investment, and cash flowto maintain the change. Some observers note that these processes are not fundamentally very different from some other management change models such as PDCA "Plan-Do-Check-Act" (aka "Plan-Do-Study-Act") or "Survey-Assess-Decide-Implement-Evaluate", but the way they can be used is clearer and more straightforward. More on this can be seen on Goldratt's Theory of Constraints - A Systems Approach to Continuous Improvement by William Dettmer ISBN 0-87389-370-0.

Software
jThinker [3] is an open-source tool for visual building of thinking processes diagrams. Harmony [4] is a Strategy & Tactics Expert System. Flying Logic [5] a cross platform TOC thinking process suite.

Books
H. William Dettmer. The Logical Thinking Process: A Systems Approach to Complex Problem Solving (2007). ISBN 978-0-87389-723-5 H. William Dettmer. Strategic Navigation: A Systems Approach to Business Strategy (2003). ISBN 0-87389-603-3 Eliyahu M. Goldratt and Jeff Cox. The Goal: A Process of Ongoing Improvement. ISBN 0-88427-061-0 Eliyahu M. Goldratt. It's Not Luck. ISBN 0-88427-115-3 Eliyahu M. Goldratt. Critical Chain. ISBN 0-88427-153-6 Eliyahu M. Goldratt, Eli Schragenheim, Carol A. Ptak. Necessary But Not Sufficient. ISBN 0-88427-170-6 Lisa J. Scheinkopf Thinking For a Change: Putting the TOC Thinking Processes to Use. ISBN 1-57444-101-9 Eli Schragenheim. Management Dilemmas: The Theory of Constraints Approach to Problem Identification and Solutions. ISBN 1-57444-222-8 John Tripp TOC Executive Challenge A Goal Game. ISBN 0-88427-186-2

References
[1] Goldratt, Eliyahu M. (1990). What is this thing called Theory of Constraints and how should it be implemented. [Croton-on-Hudson, NY]: North River Press. pp.161. ISBN0-88427-166-8. [2] Seonmin Kim, Victoria Jane Mabin, John Davies (2008). "The theory of constraints thinking processes: retrospect and prospect". International Journal of Operations & Production Management (Emerald Group Publishing Limited) 28 (2): 155184. doi:10.1108/01443570810846883. [3] http:/ / code. google. com/ p/ jthinker [4] http:/ / www. goldrattresearchlabs. com [5] http:/ / www. flyinglogic. com

Theory of constraints

Theory of constraints
Part of a series of articles on

Industry

Manufacturing methods Batch production Job production Continuous production Improvement methods LM TPM QRM VDM TOC Six Sigma RCM Information & communication ISA-88 ISA-95 ERP SAP IEC 62264 B2MML Process control PLC DCS

The theory of constraints (TOC) adopts the common idiom "A chain is no stronger than its weakest link" as a new management paradigm. This means that processes, organizations, etc., are vulnerable because the weakest person or part can always damage or break them or at least adversely affect the outcome. The analytic approach with TOC comes from the contention that any manageable system is limited in achieving more of its goals by a very small number of constraints, and that there is always at least one constraint. Hence the TOC process seeks to identify the constraint and restructure the rest of the organization around it, through the use of five focusing steps.

History
The theory of constraints (TOC) is an overall management philosophy introduced by Eliyahu M. Goldratt in his 1984 book titled The Goal, that is geared to help organizations continually achieve their goals.[1] Goldratt adopted the concept with his book Critical Chain, published 1997. The concept was extended to TOC with respectively titled publication in 1999. An earlier propagator of the concept was Wolfgang Mewes[2] in Germany with publications on power-oriented management theory (Machtorientierte Fhrungstheorie, 1963) and following with his Energo-Kybernetic System (EKS, 1971), later renamed Engpasskonzentrierte Strategie[3] as a more advanced theory of bottlenecks. The publications of Wolfgang Mewes are marketed through the FAZ Verlag, publishing house of the German newspaper Frankfurter Allgemeine Zeitung. However, the paradigm Theory of constraints was first used by Goldratt.

Theory of constraints

Key assumption
The underlying premise of theory of constraints is that organizations can be measured and controlled by variations on three measures: throughput, operational expense, and inventory. Throughput is the rate at which the system generates money through sales. Inventory is all the money that the system has invested in purchasing things which it intends to sell. Operational expense is all the money the system spends in order to turn inventory into throughput.[4] The goal itself is to make money. All other benefits are derived, in one way or another, from that single primary goal.

The five focusing steps

Theory of constraints is based on the premise that the rate of goal achievement is limited by at least one constraining process. Only by increasing flow through the constraint can overall throughput be increased.[1] Assuming the goal of the organization has been articulated (e.g., "Make money now and in the future") the steps are: 1. Identify the constraint (the resource or policy that prevents the organization from obtaining more of the goal) 2. Decide how to exploit the constraint (get the most capacity out of the constrained process) 3. Subordinate all other processes to above decision (align the whole system or organization to support the decision made above) 4. Elevate the constraint (make other major changes needed to break the constraint) 5. If, as a result of these steps, the constraint has moved, return to Step 1. Don't let inertia become the constraint.[5] The five focusing steps aim to ensure ongoing improvement efforts are centered around the organization's constraints. In the TOC literature, this is referred to as the process of ongoing improvement (POOGI). These focusing steps are the key steps to developing the specific applications mentioned below.

Constraints
A constraint is anything that prevents the system from achieving more of its goal. There are many ways that constraints can show up, but a core principle within TOC is that there are not tens or hundreds of constraints. There is at least one and at most a few in any given system. Constraints can be internal or external to the system. An internal constraint is in evidence when the market demands more from the system than it can deliver. If this is the case, then the focus of the organization should be on discovering that constraint and following the five focusing steps to open it up (and potentially remove it). An external constraint exists when the system can produce more than the market will bear. If this is the case, then the organization should focus on mechanisms to create more demand for its products or services. Types of (internal) constraints Equipment: The way equipment is currently used limits the ability of the system to produce more salable goods/services. People: Lack of skilled people limits the system. Mental models held by people can cause behaviour that becomes a constraint. Policy: A written or unwritten policy prevents the system from making more. The concept of the constraint in Theory of Constraints differs from the constraint that shows up in mathematical optimization. In TOC, the constraint is used as a focusing mechanism for management of the system. In optimization, the constraint is written into the mathematical expressions to limit the scope of the solution (X can be no greater than 5). Please note: organizations have many problems with equipment, people, policies, etc. (A breakdown is just that a breakdown and is not a constraint in the true sense of the TOC concept) The constraint is the thing that is preventing the organization from getting more throughput (typically, revenue through sales).

Theory of constraints

Buffers
Buffers are used throughout the theory of constraints. They often result as part of the exploit and subordinate steps of the five focusing steps. Buffers are placed before the governing constraint, thus ensuring that the constraint is never starved. Buffers are also placed behind the constraint to prevent downstream failure to block the constraint's output. Buffers used in this way protect the constraint from variations in the rest of the system and should allow for normal variation of processing time and the occasional upset (Murphy) before and behind the constraint. Buffers can be a bank of physical objects before a work center, waiting to be processed by that work center. Buffers ultimately buy you time, as in the time before work reaches the constraint and are often verbalized as time buffers. There should always be enough (but not excessive) work in the time queue before the constraint and adequate offloading space behind the constraint. Buffers are not the small queue of work that sits before every work center in a Kanban system although it is similar if you regard the assembly line as the governing constraint. A prerequisite in the theory is that with one constraint in the system, all other parts of the system must have sufficient capacity to keep up with the work at the constraint and to catch up if time was lost. In a balanced line, as espoused by Kanban, when one work center goes down for a period longer than the buffer allows, then the entire system must wait until that work center is restored. In a TOC system, the only situation where work is in danger, is if the constraint is unable to process (either due to malfunction, sickness or a "hole" in the buffer if something goes wrong that the time buffer can not protect). Buffer management therefore represents a crucial attribute of the theory of constraints. There are many ways to do it, but the most often used is a visual system of designating the buffer in three colours: green (okay), yellow (caution) and red (action required). Creating this kind of visibility enables the system as a whole to align and thus subordinate to the need of the constraint in a holistic manner. This can also be done daily in a central operations room that is accessible to everybody.

Plant types
There are four primary types of plants in the TOC lexicon. Draw the flow of material from the bottom of a page to the top, and you get the four types. They specify the general flow of materials through a system, and they provide some hints about where to look for typical problems. The four types can be combined in many ways in larger facilities. I-plant: Material flows in a sequence, such as in an assembly line. The primary work is done in a straight sequence of events (one-to-one). The constraint is the slowest operation. A-plant: The general flow of material is many-to-one, such as in a plant where many sub-assemblies converge for a final assembly. The primary problem in A-plants is in synchronizing the converging lines so that each supplies the final assembly point at the right time. V-plant: The general flow of material is one-to-many, such as a plant that takes one raw material and can make many final products. Classic examples are meat rendering plants or a steel manufacturer. The primary problem in V-plants is "robbing" where one operation (A) immediately after a diverging point "steals" materials meant for the other operation (B). Once the material has been processed by A, it cannot come back and be run through B without significant rework. T-plant: The general flow is that of an I-plant (or has multiple lines), which then splits into many assemblies (many-to-many). Most manufactured parts are used in multiple assemblies and nearly all assemblies use multiple parts. Customized devices, such as computers, are good examples. T-plants suffer from both synchronization problems of A-plants (parts aren't all available for an assembly) and the robbing problems of V-plants (one assembly steals parts that could have been used in another). For non-material systems, one can draw the flow of work or the flow of processes and arrive at similar basic structures. A project, for example is an A-shaped sequence of work, culminating in a delivered project.

Theory of constraints

Applications
The focusing steps, this process of ongoing improvement, have been applied to manufacturing, project management, supply chain/distribution generated specific solutions. Other tools (mainly the "thinking process") also led to TOC applications in the fields of marketing and sales, and finance. The solution as applied to each of these areas are listed below.

Operations
Within manufacturing operations and operations management, the solution seeks to pull materials through the system, rather than push them into the system. The primary methodology use is drum-buffer-rope (DBR)[6] and a variation called simplified drum-buffer-rope (S-DBR).[7] Drum-buffer-rope is a manufacturing execution methodology, named for its three components. The drum is the physical constraint of the plant: the work center or machine or operation that limits the ability of the entire system to produce more. The rest of the plant follows the beat of the drum. They make sure the drum has work and that anything the drum has processed does not get wasted. The buffer protects the drum, so that it always has work flowing to it. Buffers in DBR have time as their unit of measure, rather than quantity of material. This makes the priority system operate strictly based on the time an order is expected to be at the drum. Traditional DBR usually calls for buffers at several points in the system: the constraint, synchronization points and at shipping. S-DBR has a buffer at shipping and manages the flow of work across the drum through a load planning mechanism. The rope is the work release mechanism for the plant. Orders are released to the shop floor at one "buffer time" before they are due. In other words, if the buffer is 5 days, the order is released 5 days before it is due at the constraint. Putting work into the system earlier than this buffer time is likely to generate too-high work-in-process and slow down the entire system.

Supply chain / logistics

In general, the solution for supply chains is to create flow of inventory so as to ensure greater availability and to eliminate surpluses. The TOC distribution solution is effective when used to address a single link in the supply chain and more so across the entire system, even if that system comprises many different companies. The purpose of the TOC distribution solution is to establish a decisive competitive edge based on extraordinary availability by dramatically reducing the damages caused when the flow of goods is interrupted by shortages and surpluses. This approach uses several new rules to protect availability with less inventory than is conventionally required. Before explaining these new rules, the term Replenishment Time must be defined. Replenishment Time (RT) is the sum of the delay, after the first consumption following a delivery, before an order is placed plus the delay after the order is placed until the ordered goods arrive at the ordering location. 1. Inventory is held at an aggregation point(s) as close as possible to the source. This approach ensures smoothed demand at the aggregation point, requiring proportionally less inventory. The distribution centers holding the aggregated stock are able to ship goods downstream to the next link in the supply chain much more quickly than a make-to-order manufacturer can. #:Following this rule may result in a make-to-order manufacturer converting to make-to-stock. The inventory added at the aggregation point is significantly less than the inventory reduction downstream. 2. In all stocking locations, initial inventory buffers are set which effectively create an upper limit of the inventory at that location. The buffer size is equal to the maximum expected consumption within the average RT, plus additional stock to protect in case a delivery is late. In other words, there is no advantage in holding more inventory in a location than the amount that might be consumed before more could be ordered and received.

Theory of constraints Typically, the sum of the on hand value of such buffers are 2575% less than currently observed average inventory levels. 3. Once buffers have been established, no replenishment orders are placed as long as the quantity inbound (already ordered but not yet received) plus the quantity on hand are equal to or greater than the buffer size. Following this rule causes surplus inventory to be bled off as it is consumed. 4. For any reason, when on hand plus inbound inventory is less than the buffer, orders are placed as soon as practical to increase the inbound inventory so that the relationship On Hand + Inbound = Buffer is maintained. 5. To ensure buffers remain correctly sized even with changes in the rates of demand and replenishment, a simple recursive algorithm called Buffer Management is used. When the on hand inventory level is in the upper third of the buffer for a full RT, the buffer is reduced by one third (and dont forget rule 3). Alternatively, when the on hand inventory is in the bottom one third of the buffer for too long, the buffer is increased by one third (and dont forget rule 4). The definition of too long may be changed depending on required service levels, however, a general rule of thumb is 20% of the RT. Moving buffers up more readily than down is supported by the usually greater damage caused by shortages as compared to the damage caused by surpluses. Once inventory is managed as described above, continuous efforts should be undertaken to reduce RT, late deliveries, supplier minimum order quantities (both per SKU and per order) and customer order batching. Any improvements in these areas will automatically improve both availability and inventory turns, thanks to the adaptive nature of Buffer Management. A stocking location that manages inventory according to the TOC should help a non-TOC customer (downstream link in a supply chain, whether internal or external) manage their inventory according to the TOC process. This type of help can take the form of a vendor managed inventory (VMI). The TOC distribution link simply extends its buffer sizing and management techniques to its customers inventories. Doing so has the effect of smoothing the demand from the customer and reducing order sizes per SKU. VMI results in better availability and inventory turns for both supplier and customer. More than that, the benefits to the non-TOC customers are sufficient to meet the purpose of capitalizing on the decisive competitive edge by giving the customer a powerful reason to be more loyal and give more business to the upstream link. When the end consumers buy more the whole supply chain sells more. One caveat should be considered. Initially and only temporarily, the supply chain or a specific link may sell less as the surplus inventory in the system is sold. However, the immediate sales lift due to improved availability is a countervailing factor. The current levels of surpluses and shortages make each case different.

Finance and accounting

The solution for finance and accounting is to apply holistic thinking to the finance application. This has been termed throughput accounting.[8] Throughput accounting suggests that one examine the impact of investments and operational changes in terms of the impact on the throughput of the business. It is an alternative to cost accounting. The primary measures for a TOC view of finance and accounting are: throughput, operating expense and investment. Throughput is calculated from sales minus totally variable cost. Totally variable cost is usually calculated as the cost of raw materials that go into creating the item sold.

Theory of constraints

Project management
Critical Chain Project Management (CCPM) is utilized in this area.[9] CCPM is based on the idea that all projects look like A-plants: all activities converge to a final deliverable. As such, to protect the project, there must be internal buffers to protect synchronization points and a final project buffer to protect the overall project.

Marketing and sales

While originally focused on manufacturing and logistics, TOC has expanded lately into sales management and marketing. Its role is explicitly acknowledged in the field of sales process engineering.[10] For effective sales management one can apply Drum Buffer Rope to the sales process similar to the way it is applied to operations (see Reengineering the Sales Process book reference below). This technique is appropriate when your constraint is in the sales process itself or you just want an effective sales management technique and includes the topics of funnel management and conversion rates.

The TOC thinking processes

The thinking processes are a set of tools to help managers walk through the steps of initiating and implementing a project. When used in a logical flow, the Thinking Processes help walk through a buy-in process: 1. 2. 3. 4. 5. Gain agreement on the problem Gain agreement on the direction for a solution Gain agreement that the solution solves the problem Agree to overcome any potential negative ramifications Agree to overcome any obstacles to implementation

TOC practitioners sometimes refer to these in the negative as working through layers of resistance to a change. Recently, the current reality tree (CRT) and future reality tree (FRT) have been applied to an argumentative academic paper.[11]

Development and practice

TOC was initiated by Goldratt, who until his recent death was still the main driving force behind the development and practice of TOC. There is a network of individuals and small companies loosely coupled as practitioners around the world. TOC is sometimes referred to as "constraint management". TOC is a large body of knowledge with a strong guiding philosophy of growth.

Criticism
Criticisms that have been leveled against TOC include:

Theory of constraints

Claimed suboptimality of drum-buffer-rope

While TOC has been compared favorably to linear programming techniques,[12] D. Trietsch from University of Auckland argues that DBR methodology is inferior to competing methodologies.[13] [14] Linhares, from the Getulio Vargas Foundation, has shown that the TOC approach to establishing an optimal product mix is unlikely to yield optimum results, as it would imply that P=NP.[15]

Unacknowledged debt
Duncan (as cited by Steyn)[16] says that TOC borrows heavily from systems dynamics developed by Forrester in the 1950s and from statistical process control which dates back to World War II. And Noreen Smith and Mackey, in their independent report on TOC, point out that several key concepts in TOC "have been topics in management accounting textbooks for decades."[17] People claim Goldratt's books fail to acknowledge that TOC borrows from more than 40 years of previous management science research and practice, particularly from PERT/CPM and JIT. A rebuttal to these criticisms is offered in Goldratt's "What is the Theory of Constraints and How Should it be Implemented?", and in his audio program, "Beyond The Goal". In these, Goldratt discusses the history of disciplinary sciences, compares the strengths and weaknesses of the various disciplines, and acknowledges the sources of information and inspiration for the thinking processes and critical chain methodologies. Articles published in the now-defunct Journal of Theory of Constraints referenced foundational materials. Goldratt published an article and gave talks[18] with the title "Standing on the Shoulders of Giants" in which he gives credit for many of the core ideas of Theory of Constraints. Goldratt has sought many times to show the correlation between various improvement methods. However, many Goldratt adherents often denigrate other methodologies as inferior to TOC.

References
[1] Cox, Jeff; Goldratt, Eliyahu M. (1986). The goal: a process of ongoing improvement. [Croton-on-Hudson, NY]: North River Press. ISBN0-88427-061-0. [2] CV Wolfgang Mewes (http:/ / www. wolfgangmewes. de/ wm. htm) [3] EKS [4] Goldratt, Eliyahu M.. Essays on the Theory of Constraints. [Great Barrington, MA]: North River Press. ISBN0-88427-159-5. [5] Dettmer, H William. 1997. _Goldratt's theory of constraints: a systems approach to continuous improvement_, ISBN 0-87389-370-0, p 14, 15. [6] Goldratt, Eliyahu; Fox, Robert (1986). The Race. [Croton-on-Hudson, NY]: North River Press. pp.179. ISBN978-0884270621. [7] Eli Schragenheim and H. William Dettmer (2000) (PDF). Simplified Drum-Buffer-Rope: A Whole System Approach to High Velocity Manufacturing (http:/ / www. goalsys. com/ books/ documents/ S-DBRPaper. pdf). . Retrieved 2007-12-08. [8] Corbett, Thomas (1998). Throughput Accounting. North River Press. pp.160. ISBN978-0884271581. [9] Goldratt, Eliyahu M. (1997). Critical Chain. Great Barrington, MA: North River Press. ISBN0-88427-153-6. [10] Paul H. Selden (1997). Sales Process Engineering: A Personal Workshop. Milwaukee, WI: ASQ Quality Press. pp.3335, 264268. ISBN0873894189. [11] See the annex of: Vidal, C. 2008. The Future of Scientific Simulations: from Artificial Life to Artificial Cosmogenesis (http:/ / arxiv. org/ abs/ 0803. 1087). In Death And Anti-Death , ed. Charles Tandy, 6: Thirty Years After Kurt Gdel (19061978) p. 285-318. Ria University Press.) [12] Qui, Mabel; Fredendall, Lawrence; Zhu, Zhiwei (2002). "TOC or LP? [production control]". Manufacturing Engineer 81 (4): 190195. doi:10.1049/me:20020411. [13] http:/ / ac. aua. am/ trietsch/ web/ MBC_to_MBC_II. pdf D. Trietsch, From Management by Constraints (MBC) to Management By Criticalities (MBC II), Human Systems Management (24) 105115, 2005 [14] http:/ / ac. aua. am/ trietsch/ web/ WorkingPaper281. pdf D. Trietsch, From the Flawed Theory of Constraints to Hierarchically Balancing Criticalities (HBC), Department of Information Systems and Operations Management, University of Auckland, Working Paper No. 281, May 2004. [15] http:/ / dx. doi. org/ 10. 1016/ j. ijpe. 2009. 04. 023 Linhares, Alexandre (2009). "Theory of constraints and the combinatorial complexity of the product-mix decision". International Journal of Production Economics 121 (1): 121129. doi:10.1016/j.ijpe.2009.04.023. [16] Steyn, Herman (2000). "An Investigation Into the Fundamentals of Critical Chain Project Scheduling.". International Journal of Project Management (19): 363369.

Theory of constraints
[17] Eric Noreen; Debra Smith, James T. Mackey (1995). The Theory of Constraints and its implications for Management Accounting. North River Press. pp.149. ISBN0-88427-116-1. [18] Eliyahu Goldratt. Standing on the Shoulders of Giants (http:/ / www. youtube. com/ watch?v=C3RPFUh3ePQ). .

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Further reading
Cox, Jeff; Goldratt, Eliyahu M. (1986). The goal: a process of ongoing improvement. [Great Barrington, MA]: North River Press. ISBN0-88427-061-0. Dettmer, H. William. (2003). Strategic Navigation: A Systems Approach to Business Strategy. [Milwaukee, WI]: ASQ Quality Press. pp.302. ISBN0-87389-603-3. Dettmer, H. William. (2007). The Logical Thinking Process: A Systems Approach to Complex Problem Solving. [Milwaukee, WI]: ASQ Quality Press. pp.413. ISBN978-0-87389-723-5. Goldratt, Eliyahu M. (1994). It's not luck. [Great Barrington, MA]: North River Press. ISBN0-88427-115-3. Goldratt, Eliyahu M. (1997). Critical chain. [Great Barrington, MA]: North River Press. ISBN0-88427-153-6. Carol A. Ptak; Goldratt, Eliyahu M.; Eli Schragenheim. Necessary But Not Sufficient. [Great Barrington, MA]: North River Press. ISBN0-88427-170-6. Goldratt, Eliyahu M.. Essays on the Theory of Constraints. [Great Barrington, MA]: North River Press. ISBN0-88427-159-5. Goldratt, Eliyahu M.. Theory of Constraints. [Great Barrington, MA]: North River Press. ISBN0-88427-166-8. Goldratt, Eliyahu M.. Beyond the Goal : Eliyahu Goldratt Speaks on the Theory of Constraints (Your Coach in a Box). Coach Series. ISBN1-59659-023-8. Dr Lisa Lang. Achieving a Viable Vision: The Theory of Constraints Strategic Approach to Rapid Sustainable Growth. Throughput Publishing, Inc. ISBN0-9777604-1-3. Goldratt, Eliyahu M. (1990). The haystack syndrome: sifting information out of the data ocean. [Great Barrington, MA]: North River Press. ISBN0-88427-089-0. Fox, Robert; Goldratt, Eliyahu M. (1986). The race. [Great Barrington, MA]: North River Press. ISBN0-88427-062-9. Schragenheim, Eli. (1999). Management dilemmas. [Boca Raton, FL]: St. Lucie Press. pp.209. ISBN1-57444-222-8. Schragenheim, Eli, and Dettmer, H. William. (2000). Manufacturing at warp speed: optimizing supply chain financial performance. [Boca Raton, FL]: St. Lucie Press. pp.342. ISBN1-57444-293-7. Schragenheim, Eli, Dettmer, H. William, and Patterson, J. Wayne. (2009). Supply chain management at warp speed: integrating the system from end to end. [Boca Raton, FL]: CRC Press. pp.220. ISBN978-1-4200-7335-7. John Tripp TOC Executive Challenge A Goal Game. ISBN 0-88427-186-2 Goldratt, Eliyahu M.. Production the TOC Way with Simulator. North River Pr. ISBN0-88427-175-7. Stein, Robert E.. Re-Engineering The Manufacturing System. Marcel Dekker. ISBN0-8247-4265-6. Stein, Robert E.. The Theory Of Constraints. Marcel Dekker. ISBN0-8247-0064-3.

External links
What is TOC? (http://www.toc.tv?id=166) In a video Goldratt Explains the definition of Theory of Constraints. An Online Guide To The Theory Of Constraints (http://www.dbrmfg.co.nz/) Fundamentals, Thinking Process, Production, Projects, Supply Chain, The Theory of Constraints in Plain English (http://idoinfotech.com/1331/management/ toc-theory-of-constraints-basics/) A simple example of constraint identification. Theory of Constraints (http://www.scholarpedia.org/article/Theory_of_Constraints) at Scholarpedia, curated by Dr. John Blackstone.

Theory of constraints Theory of Constraints Short Term Capacity Optimization (http://www.wepapers.com/Papers/113031/ Theory_of_Constraints.ppt) A PowerPoint presentation about the Theory of Constraints and its process. TOC Journey blog (http://tocjourney.blogspot.com) a blog collecting Theory of Constraints resources, presenting ideas and sharing experience

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Current reality tree (TOC)

One of the Thinking Processes in the Theory of Constraints, a Current Reality Tree (CRT) is 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. A current reality tree isn't really a tree, but a directed graph.

Simplified explanation
This process treats multiple problems as symptoms arising from a few ultimate root causes. It describes, in a simple visual drawing, the main perceived symptoms (along with secondary/hidden ones that lead up to the perceived symptom(s)) of a problem scenario and ultimately the apparent root cause(s) or conflict. The benefit of doing this is that it is much easier to identify the connections or dependencies between these. Thus, focus can be placed on the bits which would cause the biggest positive change if tackled.

Contextual explanation
A current reality tree is a statement of an underlying core problem and the symptoms that arise from it. It maps out a sequence of cause and effect from the core problem to the symptoms. Most of the symptoms will arise from the one core problem or a core conflict. Remove the core problem and we may well be able to remove each of the symptoms as well. Operationally we work backwards from the apparent undesirable effects or symptoms to uncover or discover the underlying core cause.[1] [2] [3]

Example
A CRT begins with a list of problems, known as undesirable effects (UDEs.) These are assumed to be symptoms of a deeper common cause. To take a somewhat frivolous example, a car owner may have the following UDEs: 1. the car's engine will not start. 2. the air conditioning is not working. 3. the car's radio sounds distorted. The CRT depicts a chain of cause-and-effect reasoning (IF...AND...THEN) in graphical form, where ellipses or circles represent an "AND". The graphic is constructed by:

Current Reality Tree example

attempting to link any two UDEs using cause-and-effect reasoning. For example, IF the engine needs fuel in order to run AND fuel is not getting to the engine, THEN the car's engine will not start. elaborating the reasoning to ensure it is sound and plausible. For example, IF the air intake is full of water THEN air conditioning is not working. Elaboration (because air is not able to circulate) gets added as in-between step. linking each of the remaining UDEs to the existing tree by repeating the previous steps. This approach tends to converge on a single root cause. In the illustrated case, the root cause of the above UDEs is seen as being a faulty handbrake.

Current reality tree (TOC)

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Software
jThinker [3] is a free tool for building TOC Thinking Processes diagrams including the current reality tree. Flying Logic [4] is a commercial tool for building TOC Thinking Processes diagrams including the current reality tree.

References
[1] Dettmer, H. W., (1997) Goldratts Theory of Constraints: a systems approach to continuous improvement. ASQC Quality Press, pp 62-119. [2] Dettmer, H. W., (1998) Breaking the constraints to world class performance. ASQ Quality Press, pp 69-102. [3] Scheinkopf, L., (1999) Thinking for a change: putting the TOC thinking processes to use. St Lucie Press/APICS series on constraint management, pp 143-169. [4] http:/ / flyinglogic. com/

Evaporating Cloud
The Evaporating Cloud is one of the six Thinking Processes in the Theory of Constraints initially developed by Eliyahu M. Goldratt to enable the focused improvement of any system (especially business system). The Evaporating Cloud is also referred to in the literature as The Conflict Resolution Diagram. The Evaporating Cloud is suited to finding a solution to conflict between two parties or two points of view. The method requires the participants to find 'win-win' solutions because it emphasizes that both parties are trying to reach the same ultimate goal. This understanding of conflict can be diagrammed as follows: B < D / A conflict \ C < Not D B < Some D / OR \ C < Some more D A conflict (not enough D)

Where A is the Objective, B and C are Requirements, and the D nodes are Prerequisites that are in conflict. The lines or arrows connecting the nodes represent the rationale or causal assumptions that are used to link the nodes. When writing the cloud, the arrows should be read as in order to or because or so that. For example: In order to achieve A we require B because there is no way we can have A without B. Or: There is no way we can have D and Not have D at the same time. Steps in problem solving: 1. Decide that you really must solve the problem. 2. Draw the cloud and define clearly the conflict, the common goal, and the intermediate assertions. What does each party want? This will be boxes D and NOT D. Clearly identify why they cant both be met. Identify the underlying requirements--the reason why each party needs what they want. These are boxes B and C. What is the common goal that ties B and C together? This can be difficult to determine, but unless there is a common goal there would be no conflict! Maybe its as simple as we both keep our jobs; but there has to be something. 3. Obtain agreement that the definition is correct. 4. Look under the arrows and review the causal assumptions. 5. Challenge each of the causal assumptions.

Evaporating Cloud

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Example
Goldratt has illustrated the use of the evaporating cloud technique in a discussion of the Economic production quantity model, as applied to a production line. [1] The prerequisites are to run large batches (node D) and yet to run small batches (node Not-D). These are clearly in conflict. The requirement that D is trying to meet is to reduce setup cost (node B), whereas the Not-D prerequisite is intended to reduce carrying cost per unit (node C). Both requirements are aimed at the objective (node A): to reduce cost per unit.

Evaporating Cloud example

The assumed causal reasoning between the conflicting D nodes is something like there is no way we can run large batches and small batches at the same time. This conflict can be challenged by distinguishing between production batch size (between setups) and transfer batch size (between workstations), and so allowing different sized batches for different purposes.

Core Conflict Cloud

The Core Conflict Cloud is an Evaporating Cloud that emerges from analysis of a Current Reality Tree, which is one of the Thinking Processes introduced in Eliyahu M. Goldratt's novel It's Not Luck.

References
[1] E.M. Goldratt. What is this thing called the Theory of Constraints and how is it implemented? North River Press: Crofton-on-Hudson NY, 1990.

Negative branch reservations

Negative Branch Reservations are an emerging phenomenon that occurs when one doubts and brings up negative effects or outcomes when one is interrogating a Future Reality Tree, Transition Tree, or Prerequisite Tree which are part of the Thinking Processes of Eliyahu Goldratt's Theory of Constraints.

Positive Reinforcement Loop

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Positive Reinforcement Loop

The Positive Reinforcement Loop is one characteristic that emerges through the use of the Thinking Processes of Eliyahu Goldratt's Theory of Constraints.

Transition Tree
The Transition Tree is one of the Thinking Processes of Eliyahu Goldratt's Theory of Constraints.

Article Sources and Contributors

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Article Sources and Contributors

Thinking processes (Theory of Constraints) Source: http://en.wikipedia.org/w/index.php?oldid=450123069 Contributors: ArglebargleIV, Gloucks, Helvitica Bold, Hrbaptista, Ironwolf, JSambrook, JVT001, Jeffmcneill, Joy, Jschwa1, Kuru, LessHeard vanU, Letranova, Lotje, Materialscientist, Michael Hardy, Mkoval, PamD, RTG, Rich Farmbrough, Ronz, Ryanbates, Snori, TrojanBUFDriver, W0lfie, 24 anonymous edits Theory of constraints Source: http://en.wikipedia.org/w/index.php?oldid=459896573 Contributors: Activplant, Alvestrand, Amit A., Ampers&Amper&, Ancheta Wis, Andrewfuqua, AndriuZ, Arrievn, Aweinstein, Bdelfield, Bill Levinson, Bob402, Bonadea, Camw, Cbhoov, Celique, Chewie103, ChrisCork, Chriss.2, Cngoulimis, Colerichardcole, Craigburke, Crasshopper, Dhollm, Diego Moya, Dupdegrove, ESkog, EagleFan, Ecksteing, Elwikipedista, EugeneZelenko, Facius, Gail, Garkbit, Gil mo, Gloucks, GraemeL, GregorB, H005, Henry Delforn, Hfcamp, Hrbaptista, HumbertoRB, Ihcoyc, Innerlite, Iris lorain, Ironicon, Ironwolf, Iskatel, JSambrook, JVT001, Jackvinson, Jagmore, Jctrabs, Jeffmcneill, Jenny MacKinnon, Jensbn, Jmuenzing, Jojalozzo, Jonahphile, Journalist procesverb, Joy, Jschwa1, Kankan.paul, Kevinalewis, Khalid, Khazar, Kolyma, Kuru, LeanImplementor, Lsisson, MJKazin, Marfinan, MarkProffitt, Maurreen, Mausy5043, Mbenna, Metacomet, Meyerkl, Michael Hardy, Mkoval, MrOllie, Mydogategodshat, Nhansencmg, Nickren, Notheruser, Nposs, Nskillen, Ocee, Oleg Alexandrov, OllieFury, Palvarezflores, Pegasus1138, Peterthorby, Philip Marris, Pmeisel, Pwilliams TOCH, RJBurkhart, RJBurkhart3, Red dwarf, Rich Farmbrough, Rmptls, Robofish, RogerR00, Ronhjones, Ronz, Shadowjams, Snowded, Soljaguar, Sonneborn, Sp3, Spalding, Steindl, Stevebushnell, Stumps, Surendra mohnot, Svetovid, Systemica, TOCExpert, Technikolor, Tedd, That Guy, From That Show!, The Rambling Man, Tj.klaucke, Toddwill, Tony1, Tresiden, Trevithj, TrojanBUFDriver, Unyoyega, Usually Right, Van der Hoorn, Vegaswikian, WVhybrid, Wcrosbie, Wik, William Avery, Wireless friend, 385 anonymous edits Current reality tree (TOC) Source: http://en.wikipedia.org/w/index.php?oldid=437867011 Contributors: Deepraj, Erockrph, Fang Aili, Ironwolf, Jchyip, Ospalh, Profdb, Ronz, Trevithj, W0lfie, 18 anonymous edits Evaporating Cloud Source: http://en.wikipedia.org/w/index.php?oldid=442274658 Contributors: Acewolf359, Andycjp, Exprexxo, Facius, Ironwolf, JVT001, Jeffmcneill, Kastrel, Materialscientist, No1lakersfan, Rayc, Rjwilmsi, Sylvain Mielot, Trevithj, 10 anonymous edits Negative branch reservations Source: http://en.wikipedia.org/w/index.php?oldid=450747934 Contributors: Ice Cold Beer, Jeffmcneill, Jeodesic, Kelisi, Tony1 Positive Reinforcement Loop Source: http://en.wikipedia.org/w/index.php?oldid=190131506 Contributors: Gary King, Jeffmcneill Transition Tree Source: http://en.wikipedia.org/w/index.php?oldid=169960506 Contributors: Jeffmcneill

Image Sources, Licenses and Contributors

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Image Sources, Licenses and Contributors

Image:Factory.svg Source: http://en.wikipedia.org/w/index.php?title=File:Factory.svg License: Public Domain Contributors: Howard Cheng Image:CurrentRealityTree Example.png Source: http://en.wikipedia.org/w/index.php?title=File:CurrentRealityTree_Example.png License: Creative Commons Attribution-Sharealike 3.0 Contributors: Trevithj Image:Evaporating Cloud Example.PNG Source: http://en.wikipedia.org/w/index.php?title=File:Evaporating_Cloud_Example.PNG License: Creative Commons Attribution-Sharealike 3.0 Contributors: Trevithj

License

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License
Creative Commons Attribution-Share Alike 3.0 Unported //creativecommons.org/licenses/by-sa/3.0/