A cloud does not know why it moves in just such a direction and at such a speed. It feels an impulsion . . . this is the place to go now. But the sky knows the reason and the patterns behind all clouds, and you will know, too, when you lift yourself high enough to see beyond horizons.

-Richard Bach, Illusions The second standard TOC TP tool that is used on a regular basis is the Evaporating Cloud (EC).7 The Cloud is the tool that enables us to eliminate any conflict, and paves the way for a win-win solution. In a world where conflicts do in fact exist, and in which nearly everyone believes that the only way to deal with a conflict is to compromise (which typically means that all parties settle for less than what they really need in order to "meet in the middle"), why is TOC so bold to claim that every conflict can be eliminated?

We look no further than the concept of inherent simplicity for the answer. A conflict is a situation in which each side thinks that it needs something that is in direct contradiction with (cannot coexist with) what the other side thinks that it needs. If we accept Newton's statement that nature is "always consonant (harmonious) to itself," then we must accept that in reality, there are no real contradictions. It must be, then, that any conflict contains an erroneous assumption that blocks the ability for each "side" to get what it needs, and is thus blocking what should otherwise be a naturally harmonious reality.

Eli and Efrat Goldratt provides an excellent explanation in The Choice (Goldratt, 2009, 4647).

Suppose that we have two different techniques to measure the height of a building. And when we use them to measure the height of a specific building we get two very different heights. Facing such an apparent contradiction no one would say, let's compromise; let's agree that the height of this building is the average between the two measurements.

What we would say is that somewhere along the line we have made an erroneous assumption. We'll check to see if, in the time that passed between the two measurements, additional floors were added. If that's not the case, we'll explore if our assumption-that each of the measurements was carried out properly-is correct. If they were, we'll look for an erroneous assumption in the techniques themselves; we'll explore the possibility that one of these two techniques is faulty. In extreme cases, we'll even doubt our understanding of height. But we'll always look for the erroneous assumption and never contemplate the possibility of compromise. This is how strong our belief is that there are no contradictions in nature.

In other words, I say, when we face a conflict, especially when we cannot easily find an acceptable compromise, let's do exactly the same thing we do when we encounter a contradiction; let's insist that one of the underlying assumptions is faulty. If, or should I say when, we pin down the underlying assumption that can be removed, we remove the cause of the conflict; we solve the conflict by eliminating it. (Used with permission by E. M. Goldratt, E. M. Goldratt. All rights reserved.) Up to this point, we have been discussing cause and effect in terms of "sufficiency." (See Fig. 25-9.) To say that "Y" is an effect of "X" is to say the following: If "X," then we must have "Y."

"Y" exists because "X" exists.

If "X" exists, then we know that "Y" must exist. If "Y" exists, "X" may not-something else might cause "Y" to exist.

When viewing cause and effect in terms of "necessity," we are looking at conditions that must be in place in order for something (e.g., an objective) to be able to exist. To say that "B" is a necessary condition for "A" is to say the following (see Fig. 25-10): In order to have "A," we must have "B."

We cannot have "A" unless "B" is in place.

If we do not have "B," then "A" is impossible.

If "A" exists, we know that "B" must exist. However, if "B" exists, "A" may not-additional conditions may be necessary to cause it.

FIGURE 25-9 Sufficiency illustration.

FIGURE 25-10 Necessity illustration.

FIGURE 25-11 Cloud illustration.

The EC consists of five entities, and the arrows connecting them indicate the logic of necessity (see Fig. 25-11). The conflict itself-the conditions that are perceived as needed but that are in direct contradiction with each other-are described in the D and D entities of the Cloud. "D" is a necessary condition for "B" and "D" is a necessary condition for "C." Both "B" and "C" are necessary conditions for "A."

Once a Cloud is written, it provides several places for us to search for and locate the invalid assumption that is forcing the conflict-the perceived need for a contradiction (D and D). If we could figure out that B is not really a necessary condition for A, then D is no longer necessary, and the conflict would be eliminated. Or, if we could figure out that D is not really a necessary condition for B, then it is no longer necessary, and the conflict could be eliminated. Or, if we could figure out that C is not really a necessary condition for A, then D is not needed and the conflict would be eliminated. Or, if we could figure out that D is not really a necessary condition for C, then it is no longer necessary and the conflict could be eliminated. Or, if we could figure out that D and D are not really contradictions to each other and could actually coexist, then the conflict could be eliminated!

Necessity is not an established fact, but an interpretation.

-Friedrich Nietzsche The Cloud is used to articulate any problem as a conflict, find the erroneous necessary condition relationship, and establish an injection that creates the path for a solution in which the conflict is fully eliminated. Some of the generic situations in which a Cloud is used are: Being caught between a rock and hard place-a decision needs to be made, and the only options available mean meeting the needs of one side and sacrificing the needs of the other.

Eliminating gaps between authority and responsibility (the main cause for "firefighting" in organizations).

Any argument between individuals, teams, organizations, and communities.

When TOC is implemented in operations, improving flow (reducing lead time) becomes an explicit, primary objective of the operation. Once the flow is put under control of the solutions such as Drum-Buffer-Rope (DBR) and Buffer Management (BM), the Process of Ongoing Improvement (POOGI) is put in place, in order to constantly improve the flow. The POOGI process for a make-to-order (MTO) manufacturer consists of documenting the answer to the question, "What is the order waiting for?" every time an order is delayed (not moving) for 10 percent of the production lead time. Periodically (e.g., weekly), a Pareto analysis is performed on the sources8 of all such delays that occurred for orders that the priority system (BM) indicated were at risk of becoming late. Teams are then put to the task of analyzing and eliminating the major sources of delay.9 The Cloud is a critical tool that teams use to analyze and solve the major source of delay. An example of this is provided as the steps to use an EC are described. You will also find detailed guidelines for using the Cloud on a day-to-day basis in Chapter 24.

TABLE 25-1 Examples of D and D Conflicts 1. Write the D and D entities of the Cloud. Write them in a way that it is obvious that they are mutually exclusive. Some examples are in Table 25-1.

Our example company makes heavy steel products. In order to form and machine the steel to their customer specifications, the process includes heat treat-putting the product in large ovens to heat the steel and then placing the product in a tank of liquid (quench tank) to cool it rapidly and bring it to possess the metallurgical properties needed. The weekly POOGI Pareto analysis revealed that the most frequent answer to "What is the order waiting for?" was "Waiting for heat treat." A POOGI team was assigned to analyze and eliminate heat treat as a major source of delay. As they reviewed the data, they found that the vast majority of the delays could be further classified as "green10 orders waiting for the assigned quench tank to become available." They began to construct the Cloud (Fig. 25-12).

2. Write the corresponding B and C entities.

B should answer the following questions: For what is D needed?

What need will not be met if D doesn't materialize?

You should be able to fill in the blanks to the following statements: B won't happen without D.

In order to have B, we must D.

FIGURE 25-12 Cloud example 1.

C should answer the following questions: For what is D needed?

What need will not be met if D doesn't materialize?

You should be able to fill in the blanks to the following statements: C won't happen without D.

In order to have C, we must D.

The following check will also help: If D exists, then C cannot.

If D exists, then B cannot.

The POOGI team's analysis led them to understand the internal policy that forced orders to wait for quench tanks. It was not the lack of usable quench tanks in the company; rather it was the unavailability of the specific quench tank defined in the order's routing. The company had previously set a policy that allowed production managers to move orders to capable work centers other than those specifically identified in the routing when the priority system indicated that the order was becoming at risk of being late (yellow or red) or already late (black). In order to avoid "unnecessary expenditures" of time (making changes to paperwork) and money (transportation costs to move the product from one plant to another), the company did not allow such "exceptions" for "green" orders. Our steel products company's Cloud now looked like the illustration in Figs. 25-13 and 25-14.

FIGURE 25-13 Cloud example 2.

FIGURE 25-14 Cloud example 3.

Identify A, the mutual objective of B and C. Similar questions will enable you to verbalize the objective.

You should be able to fill in the blanks to the following statements: [A] won't happen without [B] and [C].

In order to have [A], we must [B] and [C].

Our steel products company POOGI team completed their Cloud.

3. Surface the assumptions of each of the necessary condition relationships and identify those that are invalid in the situation of conflict being analyzed.

The Cloud (as well as the PRT) utilizes the logic of necessary condition. Figure 25-15 illustrates the relationship between this logic and the logic of cause and effect that we have been using thus far.

FIGURE 25-15 The relationship between necessary condition and cause-and-effect.

By understanding this relationship, you can surface-and check the validity of-the assumptions that are being made by using some simple questions and fill-in-the-blank statements: In order for A, we must11 B, because __________.

Why can't A happen without B?

In order for A, we must C, because __________.

Why can't A happen without C?

In order for B, we must D, because __________.

Why can't B happen without D?

In order for C, we must D', because __________.

Why can't C happen without D'?

D and D' cannot coexist because___________.

Why can't B happen if D' exists?

Why can't C happen if D exists?

Note that you are looking for the "beliefs" that exist in the given situation. In Table 25-2 some of the assumptions surfaced by the steel products company POOGI team are given.

4. Using the erroneous assumption as your guide, define an injection that would enable the conflict to be eliminated. A good injection will enable you to "evaporate" at least one of the arrows in the Cloud. You should be able to fill in the blanks to at least one of the following sentences: If [injection], then [A] can be achieved without [B] because _____.

If [injection], then [A] can be achieved without [C] because _____.

If [injection], then [B] can be achieved without [D] because _____.

If [injection], then [C] can be achieved without [D'] because _____.

If [injection], then [D] and [D'] coexist because _____.

The analysis of the steel products POOGI team uncovered the following facts, which were in direct contradiction with existing policies: Allowing green orders to sit was not helping the company maximize flow, and in many cases led to expensive expediting later in the process.

Moving an order to an equivalent resource that has open capacity, even if that resource is located at another nearby plant, is the most cost-effective approach to managing production.

The routings had not kept up with the growth of the company-as equivalent resources had been added, the routings continued to identify a specific resource at a specific plant.

As the company's TOC implementation had progressed, the plant managers and supervisors of the various plants had established robust interplant communications, and it could be quite easy to identify where to move orders in order to ensure that orders "sit" only when there is no capable resource available to process them.

The injections, then, became obvious and were communicated and implemented within days: If the resource on the routing is busy and another equivalent resource is available, move orders to any equivalent resource that is available, irrespective of color.

TABLE 25-2 Steel Products Company Necessary Condition Assumptions Modify the routings so that equivalent resources are not an exception. (Upon subjecting the injections to NBR, the company decided to take the approach to modify routings as new orders are placed. As a make-to-order (MTO) company, this enabled the company to modify routings as they were needed, and avoided the expenditure of key personnel time on making unneeded modifications.) If you would like to use the POOGI Cloud template in your organization, see Appendix D on the McGraw-Hill website: http://www.mhprofessional.com/TOCHandbook.

Conflict can be seen as a gift of energy, in which neither side loses and a new dance is created.

-Thomas Crum

The Integrated TOC Thinking Processes

The whole history of science has been the gradual realization that events do not happen in an arbitrary manner, but that they reflect a certain underlying order, which may or may not be divinely inspired.

-Stephen Hawking We have explored the fundamental assumptions and basic building blocks of the TOC TP, in terms of the way that cause-and-effect logic, the protocol used for mapping the logic, the mindset required, and the scientific premise on which TOC and the TP are based. By putting to use the basics, you will be well prepared to use the full set of TP in order to improve any system.

To improve something means to make it better. And the only way for something to get better is if it changes. Think about the vast number of variables in any organization, relationship, or individual that could be better. If this is difficult to imagine, just think about the number of complaints you make or hear throughout any given day! If you agree that some improvements are better than others, and that the list of potential improvements outstrips the capacity available to make improvements, then you would conclude that in order to ensure a meaningful state of ongoing improvement, we must be able to systematically answer three fundamental questions (Goldratt 1990): 1. What to Change? Given everything that could be changed, what should be changed? No person or organization has infinite time on their hands, so if we are going to spend time making changes, it behooves us to distinguish between the important few and the trivial many. We should have a way to identify the variables that, if changed, could render the most signficant improvement to the system.

Throughout this chapter, I use the words system and situation. I am not using them synonymously, though. A system is "a group of interacting, interrelated, or interdependent elements forming a complex whole." A situation is "the combination of circumstances at a given moment; a state of affairs" (The American Heritage Dictionary, 2004). We need both an understanding of the system itself and of the situation (state) in which the system finds itself, in order to find the answer to "What to change?"

2. To What to Change? Once we pinpoint what we want to improve, we should define the improvement itself-the future improved state we intend to create-and articulate the specific changes that need to be put in place in order for the desired improvement to become the reality.

3. How to Cause the Change? By answering the first question, we have defined the critical few variables in the system that we intend to change in order to improve the situation. We have then designed the future improved scenario, highlighting the changes to make which will create the new reality. Now we need to draw the map and detail the action plan that, when followed, should bring us from the present to the improved future. The three questions of change are pictured in Fig. 25-16.

The TOC TP are the tools used to answer the three questions of change. The Current Reality Tree (CRT) uses cause-and-effect logic to create a map of the existing situation and pinpoint a core problem-the common cause for many undesirable effects-and the answer to the question, "what to change." With the EC, the problem is verbalized as a conflict, and a direction for a win-win solution is established by uncovering and replacing at least one erroneous assumption of the conflict. The Future Reality Tree (FRT) and NBR provide the process to create the logical model of the future system. They are used to answer the question, "to what to change," highlighting the cause-and-effect relationships between the changes that will be made and the desired future state that those changes are intended to create. The PRT and Transition Tree (TRT) are the tools that TOC provides in order to logically derive and map what we need to do to close the gap between the current state and the desired future. With these tools, we clarify the obstacles that stand in our way, and what needs to happen in order to overcome them. The newest addition to the TOC TP-the Strategy and Tactic Tree (S&T)-provides for the full synchronization and communication of the implementation of a change. In Table 25-3, we see the purposes and relationships of the TP tools.

FIGURE 25-16 The three questions of change.

I am sure we are all guilty of having what we think is a great idea, and then falling in love with that idea to the extent that we spend our energy justifying, rather than validating, the value of the idea. A great way to not improve a situation is to fool yourself about what the situation really is and implement a solution for a non-problem. There is a term for this in TOC-choopchick. A Yiddish slang word originating in Serbia, a choopchick is generally translated as a triviality. In TOC, it is a dangerous form of triviality-it is a triviality that is believed to be important, and thus a distraction from what the focus of attention should be. By making the decision to take an internally honest, scientific, logical approach to answering the three questions of change, we can help avoid implementing non-solutions and chasing choopchicks.

TABLE 25-3 The Purposes and Relationships of the TP Tools The effect of choopchiks within the management process can be devastating. Attracting attention to relatively unimportant issues diverts efforts from genuinely significant concerns.

-John Caspari, Handbook of Management Accounting

Reinforcing the Mentality of a Scientist-Jonah's Approach

It is one thing to get on my soapbox and ask you to be internally honest, scientific, and logical. However, this chapter is about providing you with a practical means to actually do so. Here are four simple steps that can guide you to a good understanding of the present situation, the future you want to create, and the decisions and actions you would need to take to turn the future you want into reality.12 1. Entity Existence. Verify that each entity really does exist in the environment that is being analyzed. If an entity is something that cannot be directly confirmed, physically observed, or numerically verified-use the scientific method. For instance, a person smiling is something that is physically observed. What a person is thinking, or what we assume is a person's attitude, is not physically observed and can only be directly confirmed by the person. Predict another effect that must exist as a result, and check for it. If the effect exists, you have increased the likelihood that the intangible effect exists. If the predicted effect does not exist, then you have eliminated the likelihood that the intangible effect exists.

Let us revisit the lamp example from earlier in the chapter. At one point, we predicted that the power was out in the rest of the neighborhood. The street was dark, which was an additional effect of a neighborhood power outage. If we had looked outside and saw all of the streetlights and the lights in our neighbors' homes brightly lit, then we would have known that there was not a power outage in the neighborhood. It would not have been an entity that existed in the situation we were analyzing.

2. Entity Clarity. Ensure each entity is stated clearly and concisely, as a simple yet complete sentence. A good test is that when you read the entity statement aloud, it needs no further explanation. An indicator that the statement is not yet clear enough is if you read it aloud to someone and feel compelled to explain further what it means.

3. Causality Existence. Validate that each cause and effect relationship identified in the analysis really does exist in the situation being analyzed. Even when you verify that the described elements do in fact exist in the situation or system being analyzed, it could very well be that the hypothesized cause-effect relationship between them does not. Here is an example.

I know a young woman who had a persistent headache. The headache was there when she woke up in the morning, throughout the day, and when she went to sleep at night. It simply did not go away. After a couple of weeks, she went to a local urgent care center.13 After asking a few questions and short examination, the doctor formulated his hypothesis and prescribed a solution accordingly. His hypothesis of the woman's problem was that she had a simple tension headache. He prescribed a painkiller and told her to go home and relax. A simple analysis of the situation, in the doctor's view, would have looked like Fig. 27-17a. Unfortunately, even though every entity in the tree did exist, and even though for most young adults stress is the cause for a headache, it was not in this case.

FIGURE 25-17 Validating "causality existence."

A week or so and many pain pills later, the headache was not only still present, it had worsened, and she had become nauseated and disoriented. The young woman went to the emergency room at a local hospital. After a short interview and examination, the ER doctor formulated his hypothesis, which was that there was something physically going on in her head, possibly a tumor. He ordered a CT scan, which verified the existence of a quite large tumor in the left frontal lobe of her brain. (See Fig. 25-17b.) I am not illustrating this case in order to pass judgment on either of the two doctors involved. I am illustrating this case in order to show that even though the same conditions might exist in two different realities, they have a cause-and-effect relationship in one of those realities and not another. The young woman did have some stress in her life, and she did have a headache. Tension is the cause for headaches often, but not always.14 Check the causality! It doesn't take long to ask any or all of these questions: Why? How do I/we/you know? Is this always the case? Under what circumstances is this the case? Under what circumstances is this not the case? Oh, really? Why?