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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
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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
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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
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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
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Elyakim Management Systems, Ltd.
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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
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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
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Christoph Steindl, Ph.D.
Managing Director, Catalysts GmbH
Linz, Austria
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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
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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
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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
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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
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Many standard tools for continuous improvement fail to achieve noteworthy results at a macro level.
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system as a whole. InThe Logical Thinking Process,leaders and improvement teams are given a concrete
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The Logical Thinking Processis a must-have tool in the arsenal of any continuous improveme nt effort.”
Paul H. Selden, Ph. D.
Founder and President, Performance Management, Inc.
H1315-00 Front Matter:H1315 7/31/07 2:20 PM Page 3
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:
Breaking the Constraints to World-Class Performance
H. William Dettmer
Strategic Navigation: A Systems Approach to Business Strategy
H. William Dettmer
Enterprise Process Mapping: Integrating Systems for Compliance and Business Excellence
Charles G. Cobb
Root Cause Analysis: Simplified Tools and Techniques, Second Edition
Bjørn Andersen and Tom Fagerhaug
The Certified Quality Process Analyst Handbook
Eldon H. Christensen, Kathleen M. Coombes-Betz, and Marilyn S. Stein
Making Change Work: Practical Tools for Overcoming Human Resistance to Change
Brien Palmer
Business Process Improvement Toolbox, Second Edition
Bjørn Andersen
Business Performance through Lean Six Sigma: Linking the Knowledge Worker, the Twelve
Pillars, and Baldrige
James T. Schutta
The Process-Focused Organization: A Transition Strategy for Success
Robert A. Gardner
Inside Knowledge: Rediscovering the Source of Performance Improvement
David Fearon & Steven A. Cavaleri
Decision Process Quality Management
William D. Mawby
Defining and Analyzing a Business Process: A Six Sigma Pocket Guide
Jeffrey N. Lowenthal
Avoiding the Corporate Death Spiral: Recognizing and Eliminating the Signs of Decline
Gregg Stocker
To request a complimentary catalog of ASQ Quality Press publications, call 800-248-
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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.
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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
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2007026109
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For Doris Herron, Jean Hardman, and Marjorie Ebeling.
All for one, and one for all.
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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
H1315-00 Front Matter:H1315 7/31/07 2:20 PM Page viii
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
