Theory of Constraints (TOC): Trees and Branches

TOC Thinking Process Tools

  • Goal Tree: Why change?
  • Current Reality Tree: What to change?
  • Evaporating Cloud: What to change to?
  • Prerequisite Tree/ Transition Tree/ Strategy & Tactics Tree: How to cause the change?
  • Right measures: How to sustain the change?

Two Ways to Think

  • Sufficient cause: Effect-cause-effect (inevitable result of something else).
  • Necessary condition thinking: Requirements that must exist to achieve something.

Evaporating Cloud

  • Components: A, B, C, D', D, Pre-requisite #1 (Wants), Pre-requisite #2 (Wants), Requirement #1 (Needs), Requirement #2 (Needs), Objective, Side A, Side B, Injection, Assumption, Assumption.

Goal Tree

  • Necessity Logic: In order to have a goal, must have Critical Success Factors (CSF). In order to have CSF's, must have Necessary Conditions (NC).
  • Example CSF: Customer Satisfaction Index > 97%, Profit margin above 15%, Throughput growth 20%.
  • Example NC: On-time delivery > 97%, Customer Quality Rate > 98%, Focus Improvement on the constraint.

Current Reality Tree (CRT)

  • Depicts the state of reality as it currently exists.
  • Reflects the most probable chain of cause and effect.

Why CRT?

  • Basis for understanding complex systems.
  • Articulate Undesirable Effects (UDEs).
  • Relate UDEs through a logical chain of cause and effect to Root Causes (RC).
  • Identify critical root causes.
  • Determine which root causes are beyond one’s span of control.
  • Identify the simplest potential changes.

Undesirable Effects (UDE)

  • Something that really exists and is negative compared to the system’s goal, critical success factors, or necessary conditions.

TOC Thinking Process Tools

  • Sufficient thinking: "If…., Then…"
  • Necessary thinking: "In order to…., we must…"

Future Reality Tree (FRT)

  • Sufficiency-type logic structure to predict how changes affect reality to produce Desired Effects (DE).
  • Unfolds cause-and-effect relationship between changes and outcomes.
  • Framework to design and refine change.

Why FRT?

  • Ensures changes advance the goal and CSF.
  • Enables effectiveness testing before committing resources.
  • Logically determines if changes will produce desired effects without devastating side effects.
  • Reveals negative branches.
  • Assesses impacts of localized decisions on the entire system.
  • Initial planning tool for changing the course of the future.

Negative Branch

  • Exposes hidden undesirable outcomes.

FRT Symbology

  • Injections: New condition or action that does not exist in current reality.

Where Injections Come From?

  • Critical root causes in the CRT.
  • Evaporating Cloud, suggesting injections as alternatives to causes in existing reality.

Negative Branches

  • Expose possible undesirable outcomes associated with an injection.

Trimming Negative Branches

  • Example: Lease the machine for the initial period and assess the market potential

NBR Process

  1. State the proposed action (injection) clearly
  2. List 3 Positive or Desirable Effects (DE)
  3. List 3 Negative or Undesirable Effects (UDE)
  4. Build the tree
  5. Trim the tree

Building FRT

  1. Gather information from the CRT (UDEs and root causes) and EC (objective, requirements, injections).
  2. Formulate Desired Effects by rephrasing UDEs.
  3. Add Injection(s) and Evaporating Cloud Requirements.
  4. Fill the Gaps - Build Upward: Start w/ injection, build toward desired effects.
  5. Look for Negative Branches: After the FRT is completed (solicit outside help). Evaluate each expected effect.
  6. Develop Negative Branches: Build upward from the originating injection to the Undesirable Effect(s).
  7. Trim Negative Branches: Validate injection(s) on a separate sheet of paper
  8. Incorporate the Branch-Trimming Injection into the FRT

Summary

  • Good ideas go sour because: lack of verification, unawareness of obstacles, and ignoring required behavioral changes.