Theory of Constraints (T.O.C.)
Introduction to the Thinking Processes &
Summary of Key TOC Thinking Processes
Among many books that teach concepts for how to identify and solve operational problems, The Goal by Eli Goldratt is a particularly interesting one. It tells the story of a manager who learns fundamental managerial and operational insights that are based on common sense, but which sadly are not common practice. Within the book there lies the seed of a larger idea: that an organization's challenge is to identify its core constraint - the deeper root cause that limits or constrains the performance of the system. It is common sense to focus the organizations best efforts on this core constraint as the best way to improve the health and performance of the organization.
When the book was introduced, many firms had not yet effectively identified and handled their operational bottlenecks, and the book was greeted with widespread enthusiasm that still persists. It is estimated that the book is used in well over 200 universities, including many top business schools in the United States. Many organizations found that identification of critical operational bottlenecks and solutions to increase their capacity was a key first step, but not the last one. Firms often find that solving the operational constraint that limits performance will lead to another constraint which may often lie outside of operations. Solution of one problem reveals another problem. Such is life.
The general condition of organizations cries out for an ongoing process of continuous improvement. Specifically, TOC asserts the need for a process of identifying the core constraint in a logically rigorous manner that also identify how to eliminate or modify that constraint for maximal benefit to the organization. The Thinking Processes are the intellectual foundation supporting The Goal by Eli Goldratt that allows any organization (even one person) to develop the solutions and tactics that maximize their goal without introducing harmful side-effects. The Thinking Processes is a general, graphical, logical, and practical method of problem solving that can be summarized in three steps as follows:
Three Steps:
What to change?
CRD = Conflict Resolution Diagram or Evaporating Cloud. Identify unresolved conflict.
CRT = Current Reality Tree. Build and map deep intuition about the core conflict.
To what to change?
FRT = Future Reality Tree. This is a logical justification of how the proposed injections (solution ideas) will be effective in bringing about the desired effects and strategic objectives.
Negative Branch Reservation (NBR). Identifies, defines, and addresses the potential, significant negative outcomes or side effects resulting from our proposed solution.
How to cause the change?
PRT = Prerequisite Tree, which identifies the obstacles to implementing our solution as well as intermediate objectives that will surmount them.
TT = Transition Tree, which develops a roadmap to solution implementation.
Six Phases of Buy-in, a process used to minimize
resistance to change and enhancing the collaboration of key
stakeholders:
Phase 1: Agreeing on the problem.
Phase 2: Agreeing on
the direction of the solution.
Phase 3: Agreeing that the solution
solves the problem.
Phase 4: Agreeing that the solution will not lead
to any significant negative effects.
Phase 5: Agreeing on the way to
overcome any obstacles that might block the implementation of
The
solution.
Phase 6: Agreeing to implement.
Supplementary Tools:
Categories of Legitimate Reservation (CLR's). A way to communicate our questions and concerns in a non-threatening way using basic logic tools.
TLT: Work smart - focus on the decisions and constraints that matter most.
"Transformation LogicTree" (TLT) is a software tool that supports the TOC Thinking Process Tools and can also be used for fishbone diagrams and Root Cause Analysis, flowcharting, Process and Value Stream Mapping, Strategy Maps, etc.