1. 1 Goldratt’s Thinking Process and Systems Thinking James R. Burns Fall 2010

2. 5/28/2002 THEORY OF CONSTRAINTS: GOLDRATT 1. Identify the system constraints 2. Decide how to exploit the system constraints 3. Subordinate everything else to that decision 4. Elevate the system constraints 5. When this creates new constraints, go back to step 1

3. 5/28/20023 Reference(s) b Dettmer, H. William, Goldratt’s Theory of Constraints, ASQ, 1997.

4. 5/28/2002 THE ISSUES ARE: b What to change? {What is the core problem?}{What is the core problem?} b What to change to? {Where to look for the breakthrough idea?}{Where to look for the breakthrough idea?} b How to effect the change? {How to bridge from a breakthrough idea to a full solution?}{How to bridge from a breakthrough idea to a full solution?}

5. 5/28/20025 Goldratt’s TP (Thinking Process) b An excellent methodology to facilitate sessions during the initiation phase (definition and conceptualization stage) of a project

6. 5/28/2002 Strategy for change b Create the tree b Critique the tree

7. 5/28/2002 Why trees?? b To get a complete picture of what is going on b To model all of the causation involved b To see what is related to what b To identify the core problem b To validate a proposed injection

8. 5/28/2002 What to change? b Team constructs a current reality tree (CRT) b Team starts by listing all undesirable effects (UDE’s) b Team inter-relates these by use of a tree, called a CRT b In the current reality tree, the team traces UDE’s back to a core problem (CP)

9. 5/28/2002 EXAMPLES OF UDE’s b Due dates are often missed b It is difficult to respond to urgent demands b There is too much expediting b Inventory levels are too high b There are frequent material shortages b Safety stocks are inadequate

10. 5/28/200210 Symptoms, Root Causes & a Core Problem b Rather than reacting to symptoms, we should be finding root causes b We consider undesirable effects to be symptoms b We look for a “common cause” that is the source for most of the undesirable effects

11. 5/28/200211 A CRT for software development b Only 28% of software projects are successful—on-time, within budget and with full functionality b Software projects are always the slowest projects to be completed TI merged two divisions of the firm….TI merged two divisions of the firm…. –It took 6 months to do all logistics –It took 18 months to reconcile all of the software differences

12. 5/28/200212 Example Current Reality Tree Managing Software Development Projects Is rarely successful Software Development Projects take too long Software Development Projects cost too much Software Development Projects have quality problems A

13. 5/28/200213 Software Development Projects take too long Software Development Projects cost too much Fixing changes takes time There are many late- breaking changes to requirements Fixing changes costs money Users discover new features they want included in the software Users don’t know what they want Users change their minds Users are untrained and not sophisticated

14. 5/28/200214 Users are untrained and not sophisticated Late in the lifecycle Users discover new features they want included in the software Project Managers do not utilize “early discovery” techniques with users Project Managers Do not train and teach Users about software development Software Project Managers Are poorly trained And unaware of pitfalls in Software projects Software Project Managers do not encourage use of walkthroughs through testing Software is of poor quality and takes Much time/money to debug A

15. 5/28/200215 We conclude…. b That the core problem is with poorly trained software project managers

16. 5/28/200216 The next construct is the Evaporating Cloud {EC} b The Evaporating Cloud is used to address the question… What to Change to….

17. 5/28/2002 Core problems are studied further by use of an evaporating cloud b Evaporating clouds (ECs) will surface assumptions b Breaking an assumption leads to a breakthrough called an injection b At this point the team is unconcerned with the practicality of the injection

18. 5/28/2002 What is an injection? b a solution to the core problem b a strategy that will mitigate all of the UDE’s b Injections that appear impossible to achieve are called flying pigs

19. 5/28/200219 Example Evaporating Cloud Many well-trained Project Managers Are available now Training takes much time/money, requires trainers Project Manager expertise is required now Instant Project Manager expertise required Project training is long and arduous

20. 5/28/200220 What have we learned from the EC above? b Many expert project managers are needed now b Creating well-trained project managers takes time b Instant project management expertise is required now b SOLUTION: Expert system for project management

21. 5/28/200221 INJECTION b Create a PM expert system An advisory system that novice Project Managers can seek and obtain advice from.An advisory system that novice Project Managers can seek and obtain advice from.

22. 5/28/2002 What to change to? b From the CRT and ECs, a Future Reality Tree (FRT) is constructed b One purpose of the Future Reality Tree is to validate that the injection will achieve the desired effects (DE’s)

23. 5/28/2002 Examples of DE’s b Due dates are rarely missed b Demands are met 99% of the time b There is little expediting b Inventory levels are low b There are no material shortages b Production lead times are short or satisfactory b Due date perf. is high b Customers rely on quick responses b There is little expediting b Inventory levels are reduced significantly b Material is available when needed b Customers rely on quick responses

24. 5/28/2002 Building the Future Reality Tree b Start by turning the UDE’s around and writing them with a positive tone as DE’s b Place DE’s at the top of the limbs in the FRT b At the bottom of the FRT place the injection b Building the FRT is a two-phase process Build considering only positive, ideal links, and assuming win/win strategiesBuild considering only positive, ideal links, and assuming win/win strategies Add negative loops laterAdd negative loops later

25. 5/28/2002 What to change to, Cont’d? b The idea here is to get a picture of how an injection (a breakthrough) might affect the overall performance of the system. b The Future Reality Tree is the validation that a collection of injections will turn all of the UDE’s into DE’s

26. 5/28/200226 Future Reality Tree for our example Managing Software Development Projects Is usually successful Software Development Projects take reasonable lengths of time Software Development Projects aren’t too costly Software Development Projects create quality products A

27. 5/28/200227 Software Development Projects take too long Software Development Projects cost too much There are many late- breaking changes to requirements Fixing changes costs money Users discover new features they want included in the software Users don’t know what they want Users change their minds Users are untrained and not sophisticated Software Development Projects take too long Software Development Projects cost too much There are many late- breaking changes to requirements Fixing changes costs money Users discover new features they want included in the software Users don’t know what they want Users change their minds Users are untrained and not sophisticated Software Development Projects take reasonable Lengths of time Software Development Projects aren’t too costly There are few late- breaking changes to requirements Fixing changes costs money Users discover no new features they want included in the software Users don’t know what they want Users rarely change their minds Users are more trained and sophisticated Fixing changes takes time

28. 5/28/200228 Users are trained and sophisticated Late in the lifecycle Users rarely discover features they want included in the software Project Managers utilize “early discovery” techniques with users Project Managers Do train and teach Users about software development Software Project Managers use an expert system To avoid pitfalls in Software projects Software Project Managers encourage use of walkthroughs through testing Software is of good quality and dubbing is inexpensive and quick A

29. 5/28/200229 Last Question…. How to cause the change? We will use two more trees

30. 5/28/2002 How to cause the change? b The prerequisite tree b The transition tree b These help to get buy-in b These help us to develop a strategy for achieving a flying pig (an injection that appears impossible to achieve or implement)

31. 5/28/2002 The Prerequisite Tree b Place INJECTIONS at the top b List the obstacles that are expected b For each obstacle that is overcome, an intermediate objective is achieved Each obstacle gives rise to an intermediate objectiveEach obstacle gives rise to an intermediate objective b The intermediate objectives need to be sequenced b The prerequisite tree does the sequencing

32. 5/28/200232 OBSTACLE INTERM. OBJECTIVE b No well-defined ES Architecture Architecture b There are many commercially- available ES Shells b Pick an appropriate ES Architecture b Select an appropriate ES Shell

33. 5/28/2002 The Prerequisite Tree, Cont’d b Takes an impediment or obstacle approach b This approach enables dissection of the implementation task into an array of interrelated, well-defined, intermediate objectives

34. 5/28/200234 The Prerequisite Tree Our Example Create Project Management Expert System Test Project Management Expert System A Objective

35. 5/28/200235 Construct Project Management Expert System Select Expert System Shell Codify PM Body of Knowledge into Expert System Shell Obtain PM Body of Knowledge Decide upon Expert System Architecture A No well-defined PM Body of Knowledge No well-defined ES Architecture

36. 5/28/2002 The Transition Tree b We know where we stand b We identified the core problem b We found an injection (one or more) that produces the desired effects b We found the milestones of the journey-- the intermediate objectives (IO’s) b The question now is What specific actions must we take?

37. 5/28/2002 The Transition Tree, Cont’d b We must focus, not on what we plan to do but on what we plan to accomplish b For each IO, a specific action or set of actions are determined and initiated b Causing a specific change in reality is the imperative b The transition tree provides a ROAD MAP for getting from here to there!

38. 5/28/200238 The Four-Element Transition Tree Expected effect Condition of reality Unfulfilled need Specific action

39. 5/28/200239 Expected effect Condition of reality Unfulfilled need Specific action Unfilled need Condition of reality Unfulfilled need Specific action

40. 5/28/200240 The Transition Tree Our Example Create Project Management Expert System Test Project Management Expert System A

41. 5/28/200241

42. 5/28/200242 That’s it for Goldratt’s Critical Thinking b To get the full version, you have to go to New Hampshire (Goldratt Institute), spend two weeks and $10,000 b To learn more, please refer to… b www.eligoldratt.com www.eligoldratt.com