ANZSYS CONFERENCE 2005 Integrating Systems Thinking with Theory of Constraints: Senge meets Goldratt

1
ANZSYS CONFERENCE 2005 Integrating Systems
Thinking with Theory of Constraints Senge
meets Goldratt
Vicky Mabin, John Davies, and JF
CoxVictoria University of Wellington,
NZUniversity of Georgia at Athens,
USA December 2005
2
About the Authors


Vicky MabinAssociate Professor
James F Cox IIIProfessor Emeritus
John DaviesAssociate Professor

• Victoria Management School Victoria University
  of WellingtonNew Zealand

University of Georgia at AthensUSA
3
Purpose

• Explore links between systems thinking and Theory
  of Constraints
• Senges Systems Archetypes
• Goldratts Thinking Processes
• To suggest new directions for ST and TOC

4
Background

• Many years of combined experience with TOC
• Many years of combined experience at VMS with
  other methods
• OR/MS
• Engineering and Ops Mgmt
• Systems methods including
• Senges Systems archetypes
• SD including Causal Loop modelling
• Systems Thinking

5
Background Contd

• Undergraduate course at VMS (since 2001)
• Systems Thinking and Decision Making
• Systems Thinking and systems frameworks
  including
• System Dynamics elements
• Senges Archetypes/Five Disciplines
• Causal Loop Diagramming (CLD)
• Theory of Constraints elements
• Integration of TOC and CLDs
• Token at first
• Emergent property tangible connections

6
Methodological considerations

• Parallel developments critiquing TOC methodology
  cf other methodologies
• TOC
• a methodology for change management

7
Defining a Methodology
"To do X by Y in order to achieve
Z" Checkland Scholes 1990, p27
A system to do the process specified, by
developing models of that assumed to exist,in
the specified form of representation based on
necessary information gained from particular
sourcesin order to assist users achieve
specific purposes.
From Mingers 2003, p562
8
Classifying methodologies Mingers' Framework for
Characterising the Philosophical Assumptions
underlying Systems Methodologies
Mingers 2003
9
Classifying methodologies Framework for
Characterising the Philosophical Assumptions
underlying TOC Methods
Davies, Mabin Balderstone, OMEGA The
International Journal of Management Science,
2005, Vol 33/6, 506 524
10
Classifying methodologies
Phases of Intervention







Appreciation

Analysis

Assessment

Action

of

of

of

to


Social practices,

Distortions,

Ways of
Generate
power relations

conflicts of
ch
allenging

empowerment

Social

interests

altering power
and enlightenment

structures

Problem

Individuals'
Different
Alternative
Generate
Personal

beliefs, meanings,
perceptions and
conceptualizations
accommodations

Domain

emotions

Weltanschauung

and constructions

and consensus


Physical
Underlying causal
Alternative
Select and
circumstances

structure

physical and
implement best
Material

structural
alternatives

arrangements

Mingers-Brocklesby Framework for Mapping
Methodologies (1997)
 

11
Mapping methodologies

Systems Dynamics
Phases of Intervention
Problem
Domain

From Mingers (2003)
12
Mapping methodologies TOC as a
Meta-Methodology
Phases of Intervention
Problem
Domain
Davies, Mabin and Balderstone, The theory of
constraints a methodology apart? A comparison
with selected OR/MS methodologies, Omega 33
(2005) 506 - 524
13
Systems Archetypes (Senge)

• Fixes that Fail
• Shifting the Burden
• Limits to Growth
• Success to the Successful
• Tragedy of the Commons
• Etc
• How can they be interpreted using TOC?

14
Fixes That Fail

• Situation
• To smoke or not to smoke?
• Senges Archetype
• Fix That Fails archetype
• Represented using a Causal Loop Diagram
• Goldratts TOC
• Evaporating Cloud

15
FTF - Causal Loop Diagram
B

Feeling Blue
Smoking
_

R
Addiction

16
FTF - TOC Evaporating Cloud
Jo must B Feel happy.
Jo must D Keep smoking.
Jo must A Feel good about herself.
Jo must C Be healthy.
Jo must D' Quit smoking.

• Basic premises - that compromise is
  unacceptable, untenable - that resolving the
  dilemma is both desirable and possible
• So we seek breakthrough ideas to get BOTH B and
  C

17
FTF - TOC Evaporating Cloud - surfacing
assumptions
because smoking cigarettes is the only way
for me to feel good.
because I dont feel good about myself when I
feel blue.
I must B Feel happy.
I must D Keep smoking.
I must A Feel good about myself.
I must C Be healthy.
I must D' Quit smoking.
18
FTF - TOC Evaporating CloudAssumptions and
Injections
Assumptions

Ideas fo
r Solutions
-
'Injections'

A

Feeling good about oneself is a valid objective
for any person.
A

I could change this (eg Looking cool,
or perform well at work)
.

AB




AB

Perhaps I can feel good about myself even if Im
not happy eg feel proud of my work.
I cant feel good about myself if Im feeling
unhappy.

.


BD

Cigarettes are the only way I feel happy.
Without cigarettes, Ill feel grumpy and
anxious.
BD

I could do other things to feel happy,
eg go for a walk/run, eat chocolate

Listen to music, go to the beach,

Wear nicotine patches
.

AC

Being healthy is essential to feel good.
Sickness makes me feel negative.
AC

Pe
rhaps I can feel good even in poor
Health eg feel proud of coping in adversity.
.

CD

I cant smoke without damaging health.

CD

Find a way of not suffering health side
effects.


Could smoke weak cigarettes, limit the
intake.

DD

Cant keep smoking and quit smoking
-

DD

Could
smoke but not inhale

simultaneously

Could smoke only when a
real

pleasure
rather than as a habit
.


19
Developing a Solution

• TOC Negative Branch Reservation process
• Uses TOC Cause-Effect diagramming to
• Map out actions and consequences as cause-effect
  relationships
• Both positive and negative effects
• Add in assumptions
• Add in actions to prevent negative effects
• Work towards Future Reality Tree

20
Developing a solution Mapping the consequences of
solution idea
90 Patches arent an effective way of stopping
smoking.
70 I get addicted to patches or something else.
80 I take up smoking again.
60 I feel grumpy.
DE1. I feel healthier.
30 I dont know what to do with my hands.
50 I suffer from withdrawal symptoms.
40 Therell be tension with friends who smoke.
DE2. I wont stink of smoke.
20 I dont need cigarettes.
DE3. I save money.
10 I stop smoking.
Inj 1. I wear patches to stop smoking.
21
Add in assumptions
90 Patches arent an effective way of stopping
smoking.
80 I take up smoking again.
70 I get addicted to patches or something else.
60 I feel grumpy.
35 I dont like not knowing what to do with my
hands.
30 I dont know what to do with my hands.
45 I dont like withdrawal symptoms.
50 I suffer from withdrawal symptoms.
25 When I smoke my hands are always busy.
40 Therell be tension with friends who smoke.
DE1. I feel healthier.
20 I dont need cigarettes.
DE2. I wont stink of smoke.
15 Many of my friends smoke.
DE3. I save money.
10 I stop smoking.
Inj 1. I wear patches to stop smoking.
22
Add in actions . to prevent the negative
effects
90 Patches arent an effective way of stopping
smoking.
80 I take up smoking again.
70 I get addicted to patches or something else.
60 I feel grumpy.
35 I dont like not knowing what to do with my
hands.
Inj. 2 Retrain hands!
Inj. 5 Learn how to cope.
30 I dont know what to do with my hands.
45 I dont like withdrawal symptoms.
50 I suffer from withdrawal symptoms.
25 When I smoke my hands are always busy.
40 Therell be tension with friends who smoke.
Inj. 4 Withdraw gradually.
DE1. I feel healthier.
20 I dont need cigarettes.
Inj. 3 Find friends who dont smoke.
DE2. I wont stink of smoke.
10 I stop smoking.
15 Many of my friends smoke.
DE3. I save money.
Inj 1. I wear patches to stop smoking.
23
Towards the FRT
100 I feel good about myself.
90 I view patches as an effective way of
stopping smoking.
80 I dont take up smoking again.
70 I dont get addicted to patches or something
else.
35 I like knowing what to do with my hands..
60 I feel happy.
Inj. 5 Learn how to cope.
Inj. 2 Retrain my hands.
50 I suffer only slight withdrawal symptoms.
45 I dont like withdrawal symptoms.
30 My hands are idle.
40 I will be OK not smoking with friends.
Inj. 4 Withdraw gradually.
25 Smoking keeps my hands busy.
DE1. I feel healthier.
Inj. 3 Find friends who dont smoke.
DE2. I wont stink of smoke.
10 I stop smoking.
DE3. I save money.
Inj 1. I wear patches to stop smoking.
24
Fixes that Fail

• Examples from industry
• Short-term firefighting
• Problem solving in functional silos
• Local solutions vs global solutions
• TOC Action-Dilemma cloud

25
Fix that Fails CLD
Action-Dilemma Cloud
Low-level mgrs must B Show immediate improvement.
Supervisors must do D Quick fix.
Mgmt must A Improve relative to the goal.
Supervisors must D' Not do quick fix.
Top Mgmt must C Achieve long- term relief.
26
Systems Archetypes (Senge)

• Fixes that Fail
• Shifting the Burden
• Limits to Growth
• Success to the Successful
• Tragedy of the Commons
• Etc

27
Shifting the Burden Archetype

• Quick Fix with a Side-effect
• By taking the short term action, the quick fix,
  we take away our ability to take the correct
  action which is necessary to survive in the
  long term.
• eg Deleting poor performing products from the
  product mix
• Leaving remaining products to bear an even
  greater burden of the overheads
• Strategic management trap
• Short term solutions/ short term firefighting
  mode

28
Fix that Fails Shifting the Burden
29
Shifting the Burden - example
Quick Fix deleting products from the product
range Side-effectLower sales Net
Effect Budget not improved
-O
-O
Product range offered
Level of Sales
Budget deficit
-O
S
S
Overhead burden for each product
-O
30
Shifting the Burden EC
Short-term versus long-term Action Cloud
Accounting must B Eliminate the budget deficit
immediately.
Operations must D Reduce the product range
offered.
Mgmt must A Improve relative to the goal.
Operations must D Increase the product range
offered.
Marketing must C Increase the sales level.
31
Comments on Shifting the Burden

• Senge By taking the short-term action, the quick
  fix, we are taking away our own ability to take
  the correct action which will help us in the long
  term.
• TOC Short-term fire-fighting versus Long-term
  solutions
• Lessons from STB archetype
• Avoid the easy option, short-term view
• Think of the longer term consequences
• Think of longer term solutions
• Lessons from TOC
• Find ways of taking long-term actions that
  deliver relief in the short term as well

32
Comparing FTF and STB

• Fix that Fails (FTF)
• Quick Fix creates a problem in the long term
• Shifting the Burden (STB)
• The choice is between the QF and the long-term
  solution
• Choosing the QF undermines our ability to act in
  the long term.
• Were shooting ourselves in the foot with
  respect to long-term capability building
• Both
• Acting without understanding what is impacting
  upon us.

33
Systems Archetypes Contd

• Fixes that Fail
• Shifting the Burden
• Success to the Successful
• Taking the lead in the market
• eg retail chains overtaking small shops
• Tragedy of the Commons
• Over-use of common resource
• eg popular tourist sites
• Limits to Growth
• Etc

34
Success to the Successful Archetype St Trinians v
Downtown High in the Education Market
s
Success of St Trinians
St Trinians Fee Revenue
S
s
Fickle parents support St Trinians instead of
Downtown HS
-O
-O
Downtowns Fee Revenue
s
Downtowns Success
Lesson avoid unnecessary systemic conflict for
resources
35
S2S - TOC Evaporating Cloud - surfacing
assumptions
because parents want access to good schools.
because a good school system responds to
parental need
City must B provide for parental choice.
City must D allow good schools to flourish -
not intervene.
City must A have a sound education system.
City must C address student needs.
City must D strengthen underperforming
schools - intervene.
36
Limits to Growth

• Factors are stopping us from growing
• . from improving performance
• Senge maps as Causal Loop Diagrams
• TOC Use Five Focusing Steps (as in The Goal)
• Identify the constraint(s)
• Exploit the constraint
• Subordinate
• Or one of generic solutions

37
Mapping the Archetypes using TOC

• All the archetypes can be mapped using TOC
• As Evaporating Clouds
• to diagnose and to suggest win-win solutions
• As a Current Reality Tree to show why the
  problem has developed
• Side effects of solutions can be mapped as
  Negative Branch Reservations (NBRs)
• Fundamental solutions can be developed using the
  Future Reality Tree (FRT)
• Limits to Growth situations
• can be approached using 5 Focusing Steps
  (POOGI), or one of the generic solutions
  marketing, production,

38
Comparing CLDs and TOC

• CLD
• Captures dynamics
• Wider system big picture without the detail
  (long arrows)
• Feedback loops (not linear thinking)
• Simple annotation of arrows and loops
• Archetypical situations
• TOC
• Tighter statements of causality
• Joint conditions needed for causality to hold
• Leverage points -gt Options for action
• Ability to show why, and to map out solutions
• Skeleton frameworks for specific purposes from
  analysis through to implementation

39
Lessons for TOC users from CLDs and Senges
System Archetypes

• Common situations exist
• Look for common themes
• Search for fundamental solutions
• Generic solution directions
• Reinterpret the TOC trees eg the CRB/FRB
• Nature of feedback
• Positive and negative feedback defined
  differently by Systems world and TOC (TOC the odd
  one out!)

40
What can Systems Thinkers learn from TOC?

• Augment CLD with TOC maps to provide
• Recognition of dilemma inherent in CLD
• Tighter statements of causality making
  assumptions explicit
• Joint conditions needed for causality to hold
• Leverage points -gt Options for action
• Reasons why situation exists
• Map out solutions

41
Conclusions

• CLD
• Dynamics, system view, nature of feedback,
  common archetypes
• TOC
• More detailed mapping
• Specific tools for analysis through to
  implementation
• Together
• Best of both worlds?

42
References

• Cox, Blackstone Schleier, (2003) Managing
  Operations A Focus on Excellence. North River
  Press Gt Barrington, MA.
• Maani Cavana, Systems Thinking and Modelling,
  Prentice-Hall 2000.
• Cox, Mabin, Davies (2005). A Case of Personal
  Productivity Illustrating Methodological
  Developments in TOC. Journal of Human Systems
  Management 24, Special Issue on TOC, 39-65.
• Davies, Mabin Balderstone (2005). The Theory of
  Constraints a methodology apart? a comparison
  with selected OR/MS methodologies, OMEGA The
  International Journal of Management Science,
  2005, Vol 33/6, 506 524.
• Mabin, Davies, Cox. Using the Theory of
  Constraints to Complement System Dynamics' Causal
  Loop Diagrams in Developing Fundamental
  Solutions, ITOR, forthcoming, Jan 2006.
• Davies, Mabin Cox, Intl SD Conference
  proceedings July 2004
• Mabin Davies, Multi-methodology Colloquium,
  DSI, Boston Nov 2004.

43
Assessing TOC as a methodology

• What is a methodology?
• What defines a methodology?
• A methodology is a structured set of guidelines
  or activities to assist an individual in
  undertaking research.
• A methodology will embody the assumptions and
  principles of the paradigm.
• Such assumptions and principles may develop
  subconsciously or emerge as prescriptions for
  good practice for using particular techniques
  within a paradigm.
• What defines a paradigm?
• Kuhns notion of paradigm as 'models for
  thinking
• 'a constellation of concepts, values, perceptions
  and practices shared by a community which forms a
  particular vision of reality that is the way a
  community organises itself
• a systematic set of ideas and values, methods
  and problem fields, as well as standard
  solutions, that explain the world and inform
  action.'
• Applying that to TOC

44
In other words