The logical thinking process : a systems approach to complex problem solving

445 Pages·2007·8.2 MB·English

by  Dettmer

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“Proving that continuing to apply logic to the thinking process (yes, the principles dating back to
Aristotle that were adapted and advanced by Eliyahu M. Goldratt in our modern age) can improve it
substantially, H. William Dettmer’s new edition of his landmark book, Goldratt’s Theory of Constraints,
reflects the evolution of the thinking process to its current level: the LogicalThinking Process. Make
no mistake: the majority of heavy lifting to elevate the thinking process has been done by Dettmer
himself. Goldratt once told me that he did not write anything of depth about the thinking process
(TP). Instead, he left it to the few brave and uniquely qualified educators, of whom Dettmer has risen
to the forefront. This new edition teaches how leaders can face down real-life issues by employing the
rigorous deductive logic he’s honed to perfection by repeated application: how a better quality Current
Reality Tree (CRT) can be created in less time. New material includes a chapter on changing the status
quo. If there’s one Dettmer book to own ahead of all others, it isThe Logical Thinking Process.”
Jeff “SKI” Kinsey, Jonah
Throughput Press
Hilton Head Island, SC
“Where would the logical approach to problem solving espoused by TOC proponents be without Bill
Dettmer? Is logical thinking so simple that a cave man might be able to do it? Is it common sense, that
we need not overthink it? I would argue neither. The Logical Thinking Process clearly demonstrates that
a thorough, logical approach can be used not only to identify complex problems and find potential
solutions, but also to generate buy-in among those individuals who must bring about improvement
in the organization as well as provide support for the process of planning and implementing effective
solutions. Bill’s dedication, experience, and motivation to develop the necessary tools for this problem-
solving approach have been invaluable to both practitioners and academicians. He goes about it in
such a thoughtful, unrelenting, and disciplined way that his work has effectively defined the field
of study.”
J. Wayne Patterson, Ph.D.
Professor of Operations Management
Clemson University
“After years of thinking, applying, re-thinking, and modifying, we have now Bill Dettmer’s most
recent update, documenting those years of experience with verbalizing intuition into clear logic and
applying it to business. This process facilitates clarification of thoughts, the challenge of hidden
assumptions, identification of real root causes, and rational prediction of what could happen in the
future. This is all based on logic and common sense; there is no ‘believe me— it works.’ All managers
who use this book will find themselves better prepared to think logically, without losing any of their
own intuition. Is there anything more important for managers to be doing? Read this book carefully—
it could be very important to you.”
Eli Schragenheim
Elyakim Management Systems, Ltd.
“Don’t buy this book if you believe that ‘gut feel’ is the perfect tool for leaders to use in deciding what
they should do and what their people should do. However, if you are looking for a box of logical
decision-making tools to use in setting goals, deciding how they should be achieved, and leading the
execution of your plan, then this book must be on the top of your desk daily. It is thereference for the
tools of constraint management—the leadership discipline that focuses on finding and resolving
system constraints.”
Dieter Legat, Ph.D.
Managing Director
Delta Institute
Geneva, Switzerland
“Dettmer has made an important contribution to competitive strategy by writing what is, as far as
I know, the first book to unify and demonstrate the power of both the Logical Thinking Process
developed by Goldratt and the OODA loop (observe-orient-decide-act). Operating together, they will
be very, very hard to beat.”
Chet Richards, Ph.D.
Author of Certain to Winand an international expert on the philosophy of John Boyd
“When I started reading The Logical Thinking Process,I couldn’t easily put it aside. There are a lot of new
insights in this book, even for those who are already familiar with previous books on the Theory of
Constraints. Bill does not simply tell the story of the logical thinking tools (as invented by someone
else). He creates his own story of the thinking tools. He introduces a new tool, the Intermediate
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Objectives Map, which brilliantly dissolves many difficulties that people might have had with the
other tools. He merges the Prerequisite Tree and Transition Tree into a more useful Prerequisite Tree,
and he dissects the 3-UDE Cloud.
He is at his best with this book, and you will feel the experience of decades of consulting and teaching.
Working through the book is the next best thing to attending one of his thinking process classes in
person. Get the book, take your time to read through it, be patient, and reap the benefits from your
increased understanding and the streamlined method.”
Christoph Steindl, Ph.D.
Managing Director, Catalysts GmbH
Linz, Austria
“The Logical Thinking Process is the most comprehensive, easy-to-follow, step-by-step guide to finding
real solutions to problems I face in business every day. Dettmer has created the definitive guide for
applying the Logical Thinking Process that Goldratt created. If you really want to find the key leverage
points to fundamentally improve your business, The Logical Thinking Processwill give you the tools to
achieve your goal.”
Christopher M. Zephro
Director, Supply Chain
Seagate Technology
“I find Bill to be the world’s most articulate exponent of the thinking process tools of theTheory of
Constraintsand very much enjoy the experience and knowledge he brings to his writing style. This
book manages to be precise without being pedantic, and entertaining without losing sight of the
seriousness of the topic. The book works both as a grand overview of a systems approach to complex
problem solving and as a practical chapter-by-chapter guide to the tools and techniques of rational
thinking. If you’re wondering how best to structure, test, and communicate your reasoning, then read
Bill’s book.”
David V. Hodes, Managing Director
TOC Center of Australia (TOCCA)
Sydney, Australia
“This is a complete guide for the Logical Thinking Process (TP). It embodies the latest thinking about
logical thinking. It covers all modes of TP application, from personal problem solving to strategic
development, and from corporate problem solving to legal applications of the thinking process. In
teaching this thinking process in Japan, I have personally witnessed phenomenal development of
students’ capabilities to solve problems and visualize the interactions of whole systems. This book is
Bill Dettmer’s gift for humanity.”
Haruyuki Uchiyama, President
MoreThroughput.com
Japan
“The topics that are a must-read are the Intermediate Objectives Map and Current Reality Tree. There
is a basic research in these areas that can be invaluable to the reader. The chapter on the Intermediate
Objectives Map provides an excellent guide for understanding undesirable effects and selecting them
effectively. This improves the quality of the Current Reality Tree significantly.”
Sadashiv S Pandit
Executive Chairman
Fleetguard Filters Private Limited
India
“The Logical Thinking Processis a practical guide to improving any system’s performance, from one of
the clearest authors in the field of the Theory of Constraints. It quickly gets to the heart of major
concepts and techniques, and updates prior readers of the literature with the latest developments.
Many standard tools for continuous improvement fail to achieve noteworthy results at a macro level.
Why? Because too often, the problems to which the tools are applied are local in nature. The tools, and
the problems to which they are applied, do not address the greatest constraints holding back the
system as a whole. InThe Logical Thinking Process,leaders and improvement teams are given a concrete
method for creating the kind of major turnaround that today’s crises so often demand.
The Logical Thinking Processis a must-have tool in the arsenal of any continuous improvemen t effort.”
Paul H. Selden, Ph. D.
Founder and President, Performance Management, Inc.
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The Logical
Thinking Process
A Systems Approach to
Complex Problem Solving
H1315-00 Front Matter:H1315 7/31/07 2:20 PM Page 4
Also available from ASQ Quality Press:
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Business Process Improvement Toolbox, Second Edition
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Pillars, and Baldrige
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The Process-Focused Organization: A Transition Strategy for Success
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Inside Knowledge: Rediscovering the Source of Performance Improvement
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Decision Process Quality Management
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Defining and Analyzing a Business Process: A Six Sigma Pocket Guide
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To request a complimentary catalog of ASQ Quality Press publications, call 800-248-
1946, or visit our Web site at http://qualitypress.asq.org.
H1315-00 Front Matter:H1315 7/31/07 2:20 PM Page 5
The Logical
Thinking Process
A Systems Approach to
Complex Problem Solving
H. William Dettmer
ASQ Quality Press
Milwaukee, Wisconsin
H1315-00 Front Matter:H1315 7/31/07 2:20 PM Page 6
American Society for Quality, Quality Press, Milwaukee, WI 53203
© 2007 by H. William Dettmer
All rights reserved. Published 2007.
Printed in the United States of America.
13 12 11 10 09 08 07 5 4 3 2 1
Library of Congress Cataloging-in-Publication Data
Dettmer, H. William.
The logical thinking process : a systems approach to complex problem solving /
H. William Dettmer.
p. cm.
A total re-write, more than a second edition, of his Goldratt’s Theory of Constraints, c1997.
Accompanied by a compact disk that contains a full-function, unrestricted copy of version 1.0 of
Transformation Logic Tree software.
ISBN 978-0-87389-723-5
1. Decision support systems. 2. Problem solving. 3. Theory of constraints (Management)
4. Decision trees--Computer programs. 5. Industrial management. I. Dettmer, H. William.
Goldratt’s theory of constraints. II. Title. III. Title: Systems approach to complex problem solving.
HD30.213.D48 2007
658.4'03--dc22
2007026109
No part of this book may be reproduced in any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without the prior written permission of the publisher.
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Printed on acid-free paper
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For Doris Herron, Jean Hardman, and Marjorie Ebeling.
All for one, and one for all.
H1315-00 Front Matter:H1315 7/31/07 2:20 PM Page 8
H1315-00 Front Matter:H1315 7/31/07 2:20 PM Page vii
Table of Contents
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxiii
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxv
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxvii
PART I –THE DESTINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Chapter 1 Introduction to the Theory of Constraints . . . . . . . . . . . . . . . . . . . . . 3
Systems and “Profound Knowledge” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The System’s Goal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Manager’s Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Who Is a Manager? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
What Is the Goal? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Goal, Critical Success Factor, or Necessary Condition? . . . . . . . . . . . . . . . . . . . 6
The Concept of System Constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Systems as Chains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The “Weakest Link” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Constraints and Non-constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
A Production Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Relation of Constraints to Quality Improvement . . . . . . . . . . . . . . . . . . . . . . . . 10
Change and the Theory of Constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
TOC Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Systems as Chains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Local vs. System Optima . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Cause and Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Undesirable Effects and Critical Root Causes . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Solution Deterioration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Physical vs. Policy Constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Ideas Are NOT Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
The Five Focusing Steps of TOC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1. Identify the System Constraint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2. Decide How to Exploit the Constraint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3. Subordinate Everything Else . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4. Elevate the Constraint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5. Go Back to Step 1, but Beware of “Inertia” . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
vii
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viii Table of Contents
Throughput, Inventory, and Operating Expense . . . . . . . . . . . . . . . . . . . . . . . . . 16
Throughput (T) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Inventory/Investment (I) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Operating Expense (OE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Which Is Most Important: T, I, or OE? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
T, I, and OE: An Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
T, I, and OE in Not-for-Profit Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Universal Measures of Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Passive Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Active Inventory (Investment) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Managing T Through Undesirable Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
The TOC Paradigm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Applications and Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Drum-Buffer-Rope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Critical Chain Project Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Replenishment and Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Throughput Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
The Logical Thinking Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
The Intermediate Objectives Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
The Current Reality Tree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
The Evaporating Cloud: A Conflict Resolution Diagram . . . . . . . . . . . . . . . . . . 24
The Future Reality Tree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
The Prerequisite Tree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
The Transition Tree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
The Categories of Legitimate Reservation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
The Logical Tools as a Complete “Thinking Process” . . . . . . . . . . . . . . . . . . . . . 29
Figure 1.19: The Six Logical Tools as an Integrated Thinking Process . . . . . . . 30
Chapter 2 Categories of Legitimate Reservation . . . . . . . . . . . . . . . . . . . . . . . . . 31
Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
How to Use This Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Description of the Categories of Legitimate Reservation . . . . . . . . . . . . . . . . . . 34
1. Clarity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Why Clarity Comes First . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
What Clarity Means . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2. Entity Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Completeness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3. Causality Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4. Cause Insufficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
The Ellipse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Relative Magnitude of Dependent Causes . . . . . . . . . . . . . . . . . . . . . . . 42
How Many Arrows? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
The Concept of “Oxygen” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5. Additional Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Magnitude . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
A Unique Variation of Additional Cause . . . . . . . . . . . . . . . . . . . . . . . . 44