The previous chapters have described Theory of Constraints (TOC) applications in various functional areas and activities, such as projects, production, accounting, strategy, sales, and marketing. All the innovations put forward in those chapters are underpinned by the powerful Thinking Processes used by Goldratt to develop solutions for common problematic situations such as those encountered in The Goal (Goldratt and Cox, 1984). These thinking processes were then formalized into a suite of Thinking Processes (TP) by Goldratt and colleagues in the early 1990s (Goldratt, 1990a, 1990b; Scheinkopf, 1999) leading to their public unveiling in It's Not Luck (Goldratt, 1994). As Watson et al. (2007) explain, in keeping with Goldratt's preference for the Socratic Method and directed at self-discovery, It's Not Luck is not a cookbook for implementation of generic TOC solutions; rather it presents a roadmap for discovering novel solutions to complex unstructured problems. The TP provide a rigorous and systematic means to address identification and resolution of unstructured business problems related to management policies (Schragenheim and Dettmer, 2001). The TP have subsequently been described, used, and developed further by many TOC practitioners, academics, consultants, and authors.

This chapter introduces the TP, while the following chapters will describe the TP in more detail and demonstrate their use in day-to-day operations, strategic and tactical planning, and in various domains such as schools and prisons. While such applications provide many concrete and convincing examples of how the TP can liberate our thinking and change lives, they are far from exhaustive: The TP are equally applicable in every area of our lives, and are fully deserving of serious study in terms of such applicability and utility.

Copyright 2010 by Victoria J. Mabin and John Davies.

Purpose of the Chapter

Our first aim is to provide an overview of the TP that is not only conceptual and methodological in orientation, but which also has a practical dimension based on the literature. In doing so, we seek to provide a supporting rationale for the existence of the TP by explaining how they fill a need of a methodological and practical nature not addressed by other problem-solving methods.

Our second aim is to respond to calls for more rigorous academic research on TOC, applying academic methodologies and concepts to TOC, to confirm and improve its methods, and to apply academic rigor to such research on TOC (Ronen, 2005). To this end, we note the need to review existing research on TOC TP in terms of their methodological and theoretical basis, and examine the underpinnings of TOC from a methodological viewpoint, in the belief that by so doing, we may assist TOC in achieving its deserved recognition as a "proper" methodology. Practitioners and academics alike will ultimately benefit from such analysis.

Outline of the Chapter

In this chapter, we first provide a brief description of the nature, development, and use of the TP before examining how they relate to one another and to other typical approaches to problem structuring and problem solving. In order to make this comparison, we use extant conceptual taxonomies, not only to examine how the TP contribute to different phases of problem-solving activity, but also to examine the implicit assumptions and underlying philosophical frameworks that characterize TOC and other approaches. This allows us to better understand TOC as a methodological set, its strengths, and its potential for development, using TOC TP tools and methods on their own, in concert with one another, or with other decision-making methods. In doing so, we provide an alternative route or means by which to validate and enhance the TP.

The investigation and identification of TOC as a methodology or meta-methodology also allows us to see TOC as more than just a set of problem-solving logic tools: TOC fits well with a philosophy of continuous improvement, as well as prompting dramatic change; it fits with other systems mapping methods and problem-solving approaches such as Operations Research/Management Science (OR/MS-both hard and soft OR). The examination of TOC's philosophical underpinnings and the comparison with other methodologies provides a basis for TOC to be viewed as a legitimate field for academic enquiry, not just as a problem-solving methodology. When used as problem-solving methods and tools, the TP allow managers to draw on the relationships between causes and effects, between end goals and their necessary conditions, to build pictures of their realities, capturing complexity, viewing conflicts, yet still being able to discern a way forward. The tools handle complexity and systemic interactions without losing sight of the key factors: the core problems and thorny dilemmas that need resolving to make true progress.

The Nature, Development, and Use of the TOC TP

In this section, we provide a brief overview of the TP, and of their historical development from their early published forms to the current day. We comment on their underpinning logics, and describe the TP in order to discuss the categorization of the TP literature that highlight the use of the TP, and then in the following section, to explore the philosophical and methodological characteristics of the TP. Such categorization then facilitates a deeper understanding of why the TP are considered to be systemic in nature, and why the TP have been termed a "complete package" by Dettmer (Chapter 19, this volume) or a comprehensive methodology or meta-methodology by Davies et al., (2005).

Overview of TP and Their History and Development

Watson et al. (2007) provided a "Silver Anniversary" review of the evolution of TOC concepts and practices, reviewing TOC's accomplishments and deficiencies. The development of the TOC approach began with a manufacturing scheduling algorithm in 1979, which tripled plant output in a short time, and was reported at a 1980 APICS conference. Its development continued as an effective methodology for production applications (Cox and Spencer, 1998), and by the mid-1990s, the approach was in worldwide use by companies of all sizes (Hrisak, 1995). Goldratt (1994) then developed a suite of logic tools to help managers address business problems in general. These have become known collectively as the TOC Thinking Processes, the TP logic tools, or TP tools (see Kendall, 1998; Dettmer, 1998; Scheinkopf, 1999), although Dettmer chooses to use the term Logical Thinking Process (LTP) to describe a modified and expanded set of thinking processes that have been developed to address issues of a strategic nature (Dettmer, 2007; Chapter 19 in this Handbook).

The TP tools act as guides for the decision-making process as well as representations of logic. They embrace problem structuring or representational tools, such as the Current Reality Tree (CRT), the Evaporating Cloud (EC), and the Future Reality Tree (FRT), and tools such as the Prerequisite Tree (PRT) and Transition Tree (TRT) that facilitate effective implementation.

The TP were developed to facilitate beneficial change, which in most circumstances also requires, or relates to, overcoming resistance to change. They guide the user to find answers to basic questions relating to the change sequence, namely, What to Change? What to Change to? and How to Cause the Change? For example, the CRT helps identify what, in the system, needs to be changed. The EC is then used to gain an understanding of the conflict within the system environment, or of the reality that may be causing the conflict. The EC also provides ideas of what can be changed to break the conflict and resolve the core problem. The FRT used in concert with the Negative Branch Reservation (NBR; a sub-tree of the FRT) takes these ideas for change and demonstrates that the new reality created would lead, in fact, to resolution of the unsatisfactory systems conditions and not cause new ones. The PRT determines obstacles to implementation and the desired sequence to overcome them, and the TRT is a means by which to create a step-by-step change implementation plan. Four preliminary steps usually precede such discussion, namely, What the system is, What its goal is, How progress toward the goal will be measured,2 and Why the change is needed. In addition, following these are the steps to sustain the change and to develop a process of ongoing improvement (POOGI).3 Dettmer (2007) provides the Intermediate Objectives (IO) map for this purpose, while others follow the Business System Model of Cox et al. (2003) and the Three-Cloud Method (Button, 1999, 2000), and yet others describe these steps as preliminary to the Five Focusing Steps (5FS; Scheinkopf, 1999).

The various TP tools subsequently have been further developed to improve or simplify the building of logic diagrams. While the TP were designed and introduced as an integrated set of problem-solving tools, we know also that by using the TP tools, individually or in concert, an organization can develop and implement change solutions successfully (Scheinkopf, 1999).

The TP's embrace and are constructed from three basic logic building blocks (Scheinkopf, 1999). Two of the building blocks manifest cause-effect thinking through employing either sufficiency-based if-then logic or necessity-based in order to . . . we must have . . . logic. The CRT, FRT, and TRT are sufficiency-based logic diagrams, whereas the EC and PRT are necessity-based logic structures. The third building block manifests as a set of rules governing the logic-in-use and provides a protocol for establishing and challenging the existing cause-effect thinking and logic. It does so through the seven Categories of Legitimate Reservation (CLR) (Goldratt, 1994, Chapter 15; Noreen et al., 1995; Dettmer, 1998; Scheinkopf, 1999, Chapter 4. Chapter 25, Appendix B of this Handbook lists and describes the CLR.) that legitimize, depersonalize, and depoliticize any challenges to current thinking. Such rules are used to add rigor to the modeling process and to check the validity of the constructed logic relations as logic tree diagrams. The result is a logical, structured, and rigorous process to guide managerial decision-making, utilizing the intuition and knowledge of those involved and invoking challenges to existing thinking using the protocols of the CLR.

The next section provides a description of each TP tool, judged to be sufficient to characterize and facilitate comparison of the TP tools and methods with other more traditional OR/MS methods. Further description is provided in the following chapters, and formal definitions in Sullivan et al. (2007).

The TP Tools

The Current Reality Tree (CRT)

The CRT is a sufficiency (if-then) logic-based tool used to identify and describe cause-effect relationships that may help to determine core problems that cause the undesirable effects (UDEs) of the system (Cox et al., 2003; Sullivan et al., 2007). The CRT is designed to answer the question, What to Change? taking care to avoid actions that merely deal with symptoms. This tool is a particularly effective tool if the symptoms are caused by a policy as opposed to a physical constraint of the existing system. A useful variant is the Communications Current Reality Tree (CCRT; Scheinkopf, 1999; Chapter 25, this volume).

The Evaporating Cloud (EC)

Policy constraints identified in the CRT can often be viewed as a conflict or dilemma between two opposing actions. The TP tool for such situations is the Evaporating Cloud (EC), referred to by some as the Conflict Resolution Diagram (CRD; Dettmer, 1999). The EC is used for solving problems-using necessity-based (in order to, we must . . .) logic-that may arise not only from the seeming irreconcilability of opposing actions, attitudes, and behaviors, but also from what may be regarded as a chronic conflict of competing actions, conflict of interest, or as intractable dilemmas of a political, policy, or ethical nature.

Though the EC process frames the problem, for example, as starting with two diametrically opposed actions or views, engaging in the process also implicitly assumes these matters can be resolved by a win-win solution to generate the system goal or objective A, via the attainment of necessary intermediate states, B and C. In order to find such a solution, we elicit those assumptions or reasons why the relationships are thought to hold. Some of these assumptions may be shown as annotations in the "thought bubbles" on the EC diagram (Fig. 23-1).

Often when the assumptions are surfaced and articulated, they may be seen to be false or weak, and the conflict represented by the cloud evaporates. Where assumptions are recognized as valid, they may be addressed in a manner that invalidates them, reduces their importance or impact, and allows for a resolution of the conflict. We develop a list of such assumptions and the accompanying "injections" that may be used to "attack" or address those assumptions to resolve the conflict. Indeed, the EC diagram may provide a basis for insights about the nature of root causes and the core problem identified in our CRT. Specialized versions of the EC include the Generic Evaporating Cloud (GEC), the 3-UDE Cloud, and the Core Conflict Cloud. See Chapters 24 and 25 for a detailed development of the EC.

FIGURE 23-1 The EC diagram.

The Future Reality Tree (FRT)

The FRT process, in contrast to the CRT, begins with the identification of actions, conditions, or solutions of choice, what Goldratt collectively names as "injections," and then through the mapping of sufficiency-based logic relations, checks whether the causal links will lead to what we have decided are desirable outcomes, that is, the removal or closing of Dettmer's "mismatches." As Rizzo (2001, 14) states, the construction of the FRT can be viewed as a "what-if exercise," helping to identify what actions and conditions will be necessary and sufficient to bring about desirable effects or change, and whether or not additional UDEs will also emerge from our actions (Kendall, 1998, 39).

Subtrees may be constructed in this process whenever someone raises a "Yes, but . . ." doubt or type of reservation. Such situations indicate that the "objector" has thought of a possible negative side effect of the proposed solution. Rather than brush the comments aside or abandon the proposal, we are encouraged by the TOC philosophy to explore ways of adapting the proposal to avoid such negative side effects while still keeping the positive effects, using a method known as the negative branch reservation (NBR). The NBR (Goldratt, 1996) is formally a sub-tree of the FRT, but can be used as a stand-alone tool to improve critical feedback and develop half-formed ideas such as changes to organizational performance measures. Illustrations of the NBR method can be found in Boyd and Cox (1997), Mabin, Davies, and Cox (2006), Dettmer (2007, 226).

The Prerequisite Tree (PRT)

Development of the PRT, complementing and building on the FRT, seeks to identify local obstacles, omissions, and conditions that might block the path to the desired outcomes, and then to set new IOs and goals that would equate to overcoming those obstacles. The PRT is often developed by a team, in addressing obstacles that confront them, and hence social practices and power relations embedded in the problem will be considered implicitly, if not explicitly. If the team or working relationships are perceived to be an obstacle, then such issues will usually be raised.

The Transition Tree (TRT)

The development of the final logic structure, the TRT, seeks to identify tasks and actions both necessary and sufficient to meet the IOs of the PRT, to overcome what might go wrong, to provide a rationale and schedule for action, and, as such, to provide what we may regard as a coherent step-by-step implementation plan, and which also accounts for prevailing beliefs, feelings, and norms.

Summary

As we move through the tools, CRT through to TRT, there is generally more involvement from the wider group affected by the problem, or by actions designed to address it. The tools purposefully address successive layers of "resistance" and "buy-in" (Houle and Burton-Houle, 1998; Goldratt, Chapter 20; Lang, Chapter 22), and other issues raised in the broader "change management" literature (Mabin et al., 2001). The CRT may be developed by a smaller group, initially, with buy-in being developed increasingly through the remaining steps of the TP. Likewise, empowerment also develops through the TP. The CRT represents the current situation, enlightening but not necessarily empowering. The PRT and TRT in particular are designed to build collective buy-in, aiding the implementation phase. The end goal and normal outcome of the FRT, NBR, PRT, and TRT is to help people gain a better understanding of the problematic situation and the results of their actions, and to feel empowered through having an agreed course of action.

The next section moves from a consideration of what the TP tools are to a review of the tools-in-use, patterns of use, and opportunities for further use and enhancement of the tools.

The TOC TP Literature

In this section, we review developments to the TOC body of knowledge, particularly the TOC TP as reported in the public domain peer-reviewed literature. In doing so, we also comment on the nature of the TP, vis-a-vis their evolution and their domains of application.

The commentary primarily draws on the work of Kim et al. (2008) who examined the peer-reviewed literature on TP, from the publication of Goldratt's It's Not Luck in 1994 up until early 2006. Two prior studies, by Rahman (1998) and Mabin and Balderstone (2000; 2003), provided reviews of the broader TOC literature, and reviewed papers published before 2000. Kim et al.'s (2008) work complemented and extended those other reviews by focusing on TP up to early 2006. These reviews have provided a valuable summary, for academics and practitioners, of the developing TOC body of knowledge that have found outlet in the peer-reviewed literature. In addition, Watson et al.'s (2007) review of the evolution of TOC, while not attempting to provide a literature review, does discuss TP and identifies some deficiencies.

Whereas Rahman's (1998) review of the TOC literature classified the TOC literature based on what he termed the philosophical orientation and application of TOC, the review conducted by Kim et al. (2008) used an extended set of five dimensions or orientations: theoretical or methodological, application, time, epistemological, and TP tool orientation. Kim et al.'s review relates to over 110 peer reviewed journal papers on TP, 70 of which were published in the period from 2000 to early 2006. A subsequent search reveals another dozen or so applications papers published between early 2006 and late 2009.4 We summarize and update the main findings from the Kim et al. review in the next sections, looking at application orientation, the prevalence of individual tools, and last, methodological developments.

The Application Orientation of the TOC TP Literature

Over 100 papers have described applications of TP. Kim et al. (2008) identified three self-defining categories of TP "application-oriented" papers, namely those relating to the whole business system, to specific functional areas, and to the service sector. Applications to the whole business system mainly described the process of implementing the use of TP tools in a single organization, and investigated the impact of TP on the organization in terms of organization-wide performance measurement and change management. Such applications traversed a diversity of issues and contexts including change management, performance measures, pricing conflict, outsourcing decisions, project cost recovery, mergers, and healthcare.

TP applications to functional areas included manufacturing and production, Supply Chain Management (SCM) in particular, but also marketing, sales, accounting, quality, strategy, human resource management, and new venture development, addressing outdated policies, unacceptable scrap rates, and poor delivery performance. SCM applications included identifying critical success factors and a performance measurement system to assist supply chain members to realize the potential benefits of collaboration. Recent papers address invoicing (Taylor and Thomas, 2008) and human resource management functions (Taylor and Poyner, 2008).

About a third of the TP application-oriented papers described how TP have been or could be applied to service sectors such as healthcare (for example, military medical service, operating room utilization, aeromedical evacuation system, ambulatory care system, supervisory oversight procedures, multi-site medical practices, and insurance claims processes), education (including curriculum applications and capacity management in distance education), and public services (water systems [Reid and Shoemaker, 2006; Shoemaker and Reid, 2006], and police/fire services [Taylor et al., 2006]). Legal service and white-collar service TP applications were detailed in Kim et al. (2008). In addition, there have been a number of books, especially recently, devoted to the service sector, such as Ricketts (2008), Jamieson (2007), Ronen et al. (2006), and Wright and King (2006), although these are not included in the data, as noted earlier.

TP Tool Orientation

Kim et al. (2008) also categorized papers according to the TP tools that were employed to address problem situations. The updated data confirms that by far the most common tool employed was the EC, with approximately three-quarters of papers (78 percent) using this tool, one-quarter using the EC on its own (25 percent), and over half using the EC in combination with other tools (54 percent). Nearly two-thirds of the papers (65 percent) used the CRT or one of its variants. See Tables 23-1 and 23-2.