Intro to the Theory of Constraints

1. Constraints Management Intro to the Theory of Constraints (An introduction to the Thinking Process side of the Theory of Constraints.) James R. Holt, Ph.D., PE Professor Engineering & Technology Management jholt@wsu.eduhttp://www.engrmgt.wsu.edu/ © Washington State University-2010

2. Welcome to the TOC! • TOC IS: • A set of Proven Solutions • DBR, CCPM, Replenishment, Sales/Marketing, Human Behavior, Measurements, Strategy • An Approach to Problems • Five Steps of Continuous Improvement • Tools for Discovery of New Solutions • What to Change • What to Change to • How to Cause the Change (The TP) © Washington State University-2010

3. Input Output Larger Process Process Process Process Input Output Input Output Input Output Process Theory Process Input Output © Washington State University-2010

4. Systems Concepts • Organizations / Systems exist for a purpose • That purpose is better achieved by cooperation of multiple, independent elements linked together • Each Inter-linked event depends in some detail upon the other links. • The system owner determines purpose © Washington State University-2010

5. 100 There is a “Weakest Link” • Different link capabilities, normal variation and changing workload make it impossible to balance everything. • One element of the system is more limited than another. • When the whole system is dependent upon the cooperation of all elements, the weakest link determines the strength of the chain. © Washington State University-2010

6. Non-Production Constraints • What-if you don’t manufacture anything? • What-if you don’t move physical things? • What-if your world is: service, knowledge, procedures, policies, behavior, paperwork, strategy, relationships or understandings? • What-if your constraint is: schedule, statistics, cooperation, apathy, politics? • What-if your problem is not a simple flow line? © Washington State University-2010

7. More Systems Study • Some Systems are complicated, complex or even chaotic • We can manage any system using TOC Concepts • Let’s look at a non-production constraints in the next section © Washington State University-2010

8. You Have Intuition! • Goal: Lower the Ball yet keep it attached. Minimize: Y subject to: (X-1)^2+(Y-8)^2<=24(X-3)^2+(Y-8)^2<=14(X-5)^2+(Y-8)^2<=2(X-7)^2+(Y-8)^2<=22(X-9)^2+(Y-8)^2<=26 Y-> X-> © Washington State University-2010

9. My View ofmy World The Real World © Washington State University-2010

10. Thinking Time • We think! • It’s what we do! • Our minds are like CPUs. They keep on running and running and running … • We feel uncomfortable if we don’t have thoughts in our head. • That’s why there are magazines in Doctor’s offices! • That’s why junk TV still survives. © Washington State University-2010

11. Thinking Experiment • Get out a pencil and paper. • Wait for the starting signal. • Work really hard at not thinking! GO! © Washington State University-2010

12. QUICK! • Write down every thought you had in the last minute! • Just a word to catch the thought you had • Capture as many as possible. © Washington State University-2010

13. In the production world, we would call recurring thoughts RE-WORK! How many of those thoughts have you had before? 40%, 60%, 80%? How Many Thoughts did you have in 1 Minute? Probable # 0 3 6 9 12 15 18 Number of thoughts © Washington State University-2010

14. Improving our Mental Throughput • We need to increase our mental effectiveness • We need to tie together the stray pieces so we don’t have to deal with individual thoughts • We need to get the whole picture, solve it, and move on. © Washington State University-2010

15. What is this? © Washington State University-2010

16. Jonathan’s Family © Washington State University-2010

17. There a System to Thinking! • We will learn a systemic process of Thinking. • There are rules that cause us to be logical • There are simple methods to test our logic. • There is discipline to practice • Thinking, as it turns out, is hard work! • You will need to practice and have someone scrutinize you! © Washington State University-2010

18. To Learn to Think more Effectively/Efficiently... • We will extrapolate from the hard sciences • The Science of Discovery • CAUSE AND EFFECT! • We will simplify but • Include all the Necessary parts • Be sufficient as well • (We can benefit from history without having to relive it!) © Washington State University-2010

19. Let’s look at an Overview • First we have a lot of problems • We need to find a common cause © Washington State University-2010

20. Verify • We need to then confirm that our suspected cause is indeed the one! © Washington State University-2010

21. Find an Answer • If we can solve the Core Conflict that causes this, we could have a great future! © Washington State University-2010

22. If we can overcome the obstacles • There are plenty of rocks and hills in the road. But if we can get past them… Great things are possible © Washington State University-2010

23. We can do the things we need to do to get there! © Washington State University-2010

24. Since you will want to do a project... • Let’s show an example from the beginning to end and see how this unfolds. • Yet, let’s pick something tough enough to merit our efforts. • Let’s pick an example that is common (to other people, not you as an individual--but you probably know someone in this fix) • How about Marital Strife! © Washington State University-2010

25. First the Approach: The Thinking Process What to Change? Let’s get rid ofthe UnDesireableEffects (UDEs). Do that by Eliminating the Core Problem. UDEs UDEs UDEs UDEs UDEs UDEs UDEs UDEs Core Problem © Washington State University-2010

26. Find What’s Blocking the Solution What to Change To?(Why couldn’t we solve this before?) Necessary Condition Prerequisite Goal Necessary Condition Prerequisite Key Injection that invalidates the assumption The assumption that makes this condition logical. © Washington State University-2010

27. See the Future What to Change To? Take actions thatcreate theDesired Effects (DEs) DE DE DE DE DE DE Key Injection DE DE Key Injection Key Injection © Washington State University-2010

28. Plan a Path Around Obstacles Key Injection Key Injection How to Cause the Change? Overcome the Obstaclesto your Injections Obstacle Obstacle Intermediate Objective Intermediate Objective Obstacle Obstacle Intermediate Objective Obstacle Intermediate Objective © Washington State University-2010

29. Go Step-by-Step to “Success” Intermediate Objective How to Cause the Change? Detail Steps to the IntermediateObjective Key Action Logic of Action Need Facts in Reality New Reality Key Action Logic of Action Need Facts in Reality Current Reality © Washington State University-2010

30. Scrutiny! Always Thinking! • The Categories of Legitimate Reservation are simple methods to check logic. • They are very powerful when applied in a systematic way. They are the tools to discover the underlying assumptions. • Using the CLRs  Power Thinking! • A corollary, “Without the CLRs, you just have ‘Wishful Thinking!’” © Washington State University-2010

31. 4. Insufficiency 5. Additional Cause 2. Entity Existence 3. Causality 7. Cause Reversal 6. Predicted Effect 8. Tautology Level IIReservations Level III Reservations Categories of Legitimate Reservation Level I Reservation 1. Clarity Always Start Here! © Washington State University-2010

32. This is a very small school for girls Much Improved! 1. Clarity on Words(Level I) Girls School Clarity on the “Girl’s School”? What is that? Clarity on the “pretty”? A school for Pretty Girls? A Pretty School? Is it Pretty Little? Are there boys there too? Is the apostrophe missing? Does the building look nice? What is the enrollment? This is a pretty little girls school © Washington State University-2010

33. 2. Entity Existence (Level II) A brand new Lexus costs $15,000 The exterior appearance of the car doesn’t matter There is free maintenance for 100,000 miles Operating costs are of little concern Entity Existence Reservation: If any of these entities don’t exist in your own world, ask, “Do any of these things really exist in your world?” © Washington State University-2010

34. I become a millionaire I need a car I need pants like Joe’s My roommate has a car I buy stock I want to be different Causality Causality:Show me how the parts in the effect (point) come from the cause (tail). I receive 20% interest There are problems here with each one. I open an account at the credit union © Washington State University-2010

35. My Project goes well Insufficiency(Level III) Insufficiency Reservation: You also need to complete a good individual project to get excellent grades I get excellent grades in Constraints Management Class I turn-in good homework Our Group Project goes well © Washington State University-2010

36. Additional Cause Reservation: Additional Cause Reservation: I don’t use help (ask for clarity from the instructor, peers, Student Assistants or email discussion groups) I didn’t read the course material Additional Cause I don’t understand the class material This class progresses too quickly © Washington State University-2010

37. Others with same or less income would not be able to pay their bills We buy too many things we really don’t need Predicted Effect We don’t have enough money to pay our bills Predicted Effect Reservation: If our income is too low, I would expect to see most people with the same income (or less) unable to pay their bills. Yet, I see lots of people with less income than we have who are paying their bills just fine. Our Income is too low Many others with the same or less income do pay their bills Actually, you don’t need to provide a substitute possible cause for the effect when you make a Predicted Effect Reservation. But, if you see one and can provide it without offending the presenter, you may (or should). It could help the presenter in the search for the missing ‘Cause’. © Washington State University-2010

38. Cause Reversal There is a fire truck in front of the house I see smoke coming from the house Someone called the alarm The house is on fire Cause Reversal Reservation: The smoke did not cause the fire. The house is on fire There is a fire truck in front of the house I see smoke coming from the house © Washington State University-2010

39. There are many better opportunities I bought over valued stock I gain little return from my investments I paid a lot for little return Tautology I bought over valued stock I gain little return from my investments Tautology Reservation: The logic is circular. Add other entities © Washington State University-2010

40. Tautology ReservationA Too Tight a Logical Loop 11. A Male and Female Chicken can produce a fertile Egg 14. There is a Male Chicken OR 20. There is a fertile Egg 16. There is a Female Chicken Too Tight a Logic Loop 10. There is a Chicken 20. There is an Egg A Longer Logical LoopResolves the Age Old Question But, maybe there were two eggs first! © Washington State University-2010

41. How Do Tautologies Happen? They are obstinate They are obstinate I push them harder I tell them what to do They still don’t do it I push them Do we ever stop to think why? Why don’t people do what they are told? Hum? They don’t do it I tell them what to do © Washington State University-2010

42. Marital Strife • How many Problems are there with Marital Strife? • Tons! Many UnDesirable Effects! • Let’s just pick a few that should be enough to guide our discovery process. © Washington State University-2010

43. Marital Strife UnDesirable Effects Lack of Affection Lack of Trust One Carries Excessive Load Infidelity Frequent Disagreements Unequal Workload Little Support Lack of Compassion Difference of Opinion © Washington State University-2010

44. My spouse feels free from my bondage I trust my spouse at all times I feel good about my marriage I don’t trust my spouse I don’t get hurt Story - Trust 1. My spouse doesn’t come home when I expect him (her). This is happening more and more. The stories seem to be weaker and weaker. I want to trust my spouse. But I don’t want to be hurt. © Washington State University-2010

45. My spouse can do his/her own thing Give lots of support We use our time well Give little support I have time for myself Story - Support 2. My spouse is deeply involved in ______. He/she expects me to support him/her by taking care of __________ while he/she is gone. I don’t mind doing it, but it leaves me little time for my own hobbies. © Washington State University-2010

46. I survive my Job We balance our domestic workload We both Achieve My spouse gets ahead We have unequal workload Story-Workload 3. My spouse is in a stressful job and at a critical point in his/her career. It seems like this “critical point” is getting longer and longer. In the mean time, I have to do my job and hold down the domestic duties too! © Washington State University-2010

47. My spouse does what he/she wants My Spouse is Happy Happy Marriage My spouse doesn’t get what he/she wants I am Happy Generic Conflict 1. Spouse freedom2. Spouse does own thing3. Spouse gets ahead 1. Trust2. Support3. Unequal work 1. Feel Good2. Use Time Effective3. Achieve 1. Lack of Trust2. Lack of Support3. Balanced work 1. I’m not hurt2. Time for me3. I Survive © Washington State University-2010

48. Core Conflict Often, my spouse takes second place I am often slighted We have different goals There is pressure to give my spouse does what he/she wants There is pressure not to give what he/she wants Our wants are different I have real needs The things my spouse wants are important to our marriage My Spouse needs to be happy I need to be happy We want a Happy Marriage My personal feelings are important I not happy unless my spouse is happy © Washington State University-2010

49. Results of the Core Conflict Infidelity Loss of trust Lack of Affection Lack of Compassion Lack of support Time continues Excessive burdens Frequent arguments Unequal workload Things need to be done Different Opinions Different people have different levels of importance We have different goals © Washington State University-2010

50. A Potential Future We have complete confidence We have a close relationship We share our burdens We rarely disagree on important matters We share the workload Committed to each other We support each other We really understand each other Caring Relationship © Washington State University-2010