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  TOC Dictionary

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Activity The lowest level of the work breakdown structure (WBS); a packet of work that forms the basic building block of a plan or network. Interchangeable with task.

Activity network A network made up of two or more activities with a precedence relationship.

Additional Cause Reservation One of the Categories of Legitimate Reservations used to scrutinize logic trees. The reservation means that the causes posed are insufficient to cause the predicted effect.

Bottleneck The constraint to Throughput in a production flow process. The limiting capacity process step.

Buffer In process inventory, time or budget allowance used to protect scheduled throughput, delivery dates, or cost estimates on a production process or project.

Buffer Management

• Weekly updating and communication of projects' buffer status by asking "how many working days to complete?" for all tasks currently in work, and projecting buffer penetration.

• Actions by Project Managers in response to the buffer report. If buffers are green, Project Managers should take no action. If yellow, they should plan how to recover time by looking down the chain from the current working task. If red, they should implement the recovery plan.

• Actions by task resources to select which task to work on next when presented with multiple tasks. Resources should work on critical chain tasks over non-critical chain tasks. If presented with multiple critical chain tasks, or multiple non-critical chain tasks, resources should work on the task with the greatest % buffer penetration.

Buffer Penetration The amount of buffer projected to be consumed comparing the current status of the project network, actual durations for completed activities, projected days to complete for working activities, and estimated (mean) duration for future activities. Sometimes called Buffer Incursion.

Capacity Buffer aka Capacity Constraint Buffer (CCB) The buffer that sequences project. It is part of the Drum schedule. Size the capacity buffer to equal the duration of the drum task in the predecessor project.

Cause An entity that inevitably leads to a certain result (effect). Causality is determined if the predicted effect is always present when the cause is present and never present when the cause is not. Causes may be single or may require other conditions to lead to the effect.

Categories of Legitimate Reservation (CLR) A simplified set of logical fallacies used to check the logic of TOC causality trees. The CLRs commonly include:

• Clarity

• Entity Existence

• Causality Existence

• Insufficient Cause

• Predicted Effect

• Additional Cause

• House-on-fire

Causality Reservation Concern that the posed causality does not exist in reality.

Clarity Reservation Concern that an entity is a logic tree is not clear. Common clarity reservations include use of acronyms, too brief a description of the entity, and including 'and' in the entity.

Cloud (EVAPORATING)  See Evaporating Cloud.

Conflict Resolution Diagram (CRD)  Another name for the Evaporating Cloud. 

Constraint In general systems thinking, a limit to a system entity or relationship. In TOC, the process or process step that limits Throughput. In CCPM, the Critical Chain of a single project, or the Drum Resource in a multi-project environment. In project terminology, limitations placed on scheduling a task; e.g. 'Start no earlier than.

Communication Current Reality Tree (CCRT) A CRT with an Evaporating Cloud at the base, originally developed to present current reality to a specific group of people for buy-in. The CCRT presents the Evaporating Cloud in sufficiency form, adding entities as necessary to do so. For most TOC applications, the CCRT has replaced the CRT in the Thinking Process. Development of the CCRT starts with identifying three Evaporating Clouds to address three UDEs, and then generalizing those clouds into a Core Conflict.

Core Conflict The conflict placed at the bottom of a CCRT, from which many or most (at least 2/3) of the UDEs stem.

Core Problem A primary cause of most of the UDE symptoms in your system. You identify the Core Problem as an entry point on your CRT that traces, in cause-effect-cause relationships, through at least 2/3 of the UDEs, and which you have the stamina and energy to change.

Cost Buffer The contingency or management reserve added to the sum of the project mean task estimates to create the project baseline budget. You can use the cost buffer to manage project cost. Cost buffer penetration is the cost variance from earned value: See the Project Management Institute's Project Management Body of Knowledge (PMBOK) or other project resources to understand Earned Value.

Critical Chain The longest set of dependent activities, with explicit consideration of resource availability, to achieve a project goal. The Critical Chain is NOT the same as you get from performing resource leveling on a critical path schedule. The Critical Chain defines an alternate path which completes the project earlier by resolving resource contention up front.

Critical Chain Feeding Buffer (CCFB) A time buffer at the end of a project activity chain which feeds the critical chain.

Critical Chain Resource Buffer (CCRB) A buffer placed on the critical chain to ensure that resources are available when needed to protect the critical chain schedule. This buffer is insurance of resource availability, and does not add time to the critical chain. It takes the form of a contract with the resources that ensures their availability, whether or not you are ready to use them then, through the latest time you might need the resource. Often shortened to Resource Buffer, and sometimes called Resource Flag

Critical Chain Project Management (CCPM) A complete system of effective project management integrating the Critical Chain method of project time management with the other elements of the Project Management Institute's Project Management Body of Knowledge (PMBOK^TM)

Critical Path The longest set of dependent activities in a project, not accounting for the resource constraint. See the Project Management Institute's Project Management Body of Knowledge (PMBOK) or other project resources to understand critical path

Current Reality Tree (CRT) A system model of the current behavior of system causing undesired effects (UDEs). The first step in the TOC Thinking process.

Current Reality Tree (CRT) A sufficiency tree connecting together all of your UDEs on a particular system. The CRT is the first step in the Thinking Process, and is created to identify the Core Problem of your system, and to aid in developing your Future Reality Tree.

Dependent events Events in which the output of one event influences the input to another event.

Desired Effect (DE) The positive effect you want to have in Future Reality to replace your UnDesired Effect of current reality.

DBR Drum-Buffer-Rope method for production scheduling. The drum is the capacity of the plant constraint, and is used to set the overall throughput schedule. The buffers are in process inventories strategically located to eliminate starving the constraint due to statistical fluctuations. The rope is the information connection between the constraint and material release into the process.

Drum The bottleneck processing rate, which is used to schedule an entire plant. Also refers to the bottleneck work station. In CCPM, the resource used to stagger the start of projects. It should be the most highly used resource, and one that is not easy to elevate.

Drum Buffer: Buffer placed in the project plan immediately in front of the first use of the drum resource in a project. It's purpose is to enable project acceleration if the drum resource is available early. Size the Drum Buffer as a feeding buffer for the preceding chain in the project. Drum buffers only exist in a multiple project environment. Drum buffers are the least important buffer, and are used infrequnetly.

Drum Manager In Critical Chain, the manager responsible for allocation of the drum resource. The Drum Manager creates the Drum Schedule, which is used to sequence the start of projects.

Effect An entity representing the result of one or more causes.

Elevate The TOC term for increasing a resource.

Entity A condition that exists.

Entry Point An entity on a sufficiency tree which has no causes (arrows) leading into it.

Evaporating Cloud: A process for conflict resolution consisting of a five entity necessity tree and processes for developing and communicating to achieve win-win solutions to any conflict. In my estimation, the Evaporating Cloud is Goldratt's highest achievement.

The action alternatives are best expressed as opposites e.g., 'Do D, don't do D." The cloud has five entities and arrows. See the Thinking Process description.

You identify the assumptions underlying the arrows to resolve the cloud. You develop injections that will invalidate the assumption, and therefore invalidate the arrow and 'dissolve' the cloud.

Exploit In TOC, getting the most out of the constraint resource, in a positive sense, directed at the goal.

Existence Reservation (Entity or Causality) This means, "Prove it." Following Popper's elaboration of the scientific method, such proof is the result of critical discussion and/or experiment. While you can never prove reality, you can prove that this statement of reality is operationally more effective than alternative theories.

Feeding Buffer See Critical Chain Feeding Buffer.

Five Focusing Steps 

• IDENTIFY the constraint to the goal

• EXPLOIT

• SUBORDINATE

• ELEVATE

• Do not let INERTIA  prevent you from doing it again.

Float In critical path, the difference in path length between the critical path and converging path. Also called slack. Float is often confused with Feeding Buffers. It is not the same. Float is an accident of the network logic, and has nothing to do with the uncertainty of the duration of the tasks in the chain. Float varies inversely with the necessary size of feeding buffers, and thus does not provide protection for uncertainty in task duration.

Future Reality Tree (FRT) The system model of the desired final state of a system, showing the Desired Effects (DEs), and the logic, including Injections, necessary to create and maintain the future system state.

Flush A project measure for making decisions. Flush is the time integral of net profit times days, in units of dollar-days.

Future Reality Tree A sufficiency tree connecting INJECTIONS to Desired Effects.

Goal The purpose for the existence of a system; or the single end that the system seeks to maximize. For profit making companies, the goal is to make money now and in the future. Not-for profit companies have alternative goals, usually expressible in terms of Throughput related to their purpose. Most organizations have a set of necessary conditions required to achieve the goal, usually including necessary conditions 1 and 2 (See in glossary). 

Goal, The Book by Dr. Eliyahu M. Goldratt.

Hockey Stick The shape of a curve that is relatively flat and then rises rapidly, representing, for example, the amount of effort one puts out as a deadline approaches.

House-on-Fire-Reservation A logical error: affirming the consequent. "If there is smoke, then the house is on fire."

Injections Changes in reality that will lead to desired effects. Injections may be actions or Intermediate Objective.

Intermediate Objective (IO) An action or effect which is a necessary prerequisite to an injection or another IO.

Inventory All of the money a system invests in things it intends to sell. In TOC, it extends beyond the conventional definition to include all the items traditionally considered as depreciable assets. For projects, there may be value in considering the work invested in  projects as Inventory until the project is complete, and it begins to produce Throughput.

Jonah Character in The Goal. Title awarded to those who complete the AGI 'Thinking Process' training.

Mean The average of a group of data, also called the first moment of the data population. In a distribution skewed to the right, as most duration and cost estimates are, the mean is higher than the median. Mathematically, mean durations should be used on the Critical Chain, as they are the only statistic that adds linearly.

Median The middle value of a group of ordered data. The median is the '50/50' probability statistic, often confused with the mean or the mode.

Mode The most frequent value of a population.

Need A requirement which MUST be met in order to achieve an objective or goal.

Necessity Tree A logic tree in which each item at the tail of an arrow MUST exist in order for the item at the head of the arrow to exist, BECAUSE of some assumption or obstacle represented by the arrow.

Necessary Condition #1 Satisfy customers now and in the future. (A necessary condition to meet the Goal of any enterprise.)

Necessary Condition #2 Satisfy and motivate employees now and in the future. (A necessary condition to meet the Goal of any enterprise.)

Negative Branch A sufficiency logic tree (potential FRT) stemming from an INJECTION which leads to unintended negative consequences.

Obstacle An entity which prevents an effect from existing.

Operating Expense All of the money it costs to convert raw material into throughput.

Parkinson's Law "Work expands so as to fill the time available for its completion." Parkinson, C. (1957). Parkinson's Law. Cutchogue, NY; Buccaneer Books.

PMBOK^TM Project Management Body of Knowledge: The Project Management Institute's description of a complete project management system. (See www.PMI.org)

Prerequisite Tree (PRT) A necessity tree representing the intermediate objective to achieve a goal. PRT development starts with a definition of the Goal, and proceeds to identify the obstacles to achieve the goal. It then identifies and sequences the Intermediate Objectives (IOs) to overcome the obstacles.

Priority The priority assigned to a project, used to determine access to the drum resource. Priority should be based on the expected project Throughput per unit of drum resource consumption. The Drum Manager uses the project priority and project schedules to level demand on the drum resource by sequencing the start of projects.

Project Charter The first document prepared for a project. It guides the team to plan the project. It includes the mission or purpose for the project (Why), the general scope, identifies the project team and stakeholders, and provides other key project parameters necessary to plan the project, such as key assumptions.

Project Execution Plan aka Project Plan, Project Management Plan, Project Work Plan: The plan for the project, describing scope, budget, schedule, the project team, project stakeholders, and project control.

Project Buffer (PB) A time buffer placed at the end of the critical chain in a project schedule to protect the overall schedule.

Predicted Effect Reservation One of the CLRs challenging entity existence and/or causality existence on the basis of the lack of an inevitable effect that would have to exist if the entity existed.  This is perhaps the most powerful CLR, representing application of the scientific method. The draft tree is the hypothesis, and you are seeking to invalidate it by critical discussion and perhaps even test.

Prerequisite Tree (PRT) A logic tree representing the time phasing of actions to achieve a goal, connecting intermediate objectives with effects that overcome obstacles. The PRT is read, "In order to have ENTITY AT HEAD OF ARROW we must have ENTITY AT TAIL OF ARROW because of OBSTACLE."

Queuing The lining up of work to be processed by a server (resource).

Red curve-Green curve The Red Curve represents the typical process of ongoing improvement, which increases for a while and then decreases.

Relay Runner Behavior The task behavior expected of each individual working on Critical Chain projects, in which they:

• Start a task as soon as they are available and have all of the inputs, 

• Work on only that one task applying 100% of their work effort, and 

• Pass on the result of their work as soon as they complete it. 

If presented with multiple tasks to work on, resources exhibiting  Relay Runner Behavior use the Buffer report and buffer management rules to decide which task to work on next.

Resource Allocation Assigning resources to project tasks.

Resource Buffer. A buffer associated with critical chain tasks to reduce queuing delay for work on critical chain tasks. Originally conceived as a warning device to alert resources to upcoming critical chain tasks. Supplanted in most instances by filtered prioritized lists of tasks for all resources.

Resource Leveling Adjusting a project plan such that the plan demanded resources do not exceed the available resources.

Roadrunner Behavior See Relay Runner Behavior. Roadrunner was the initial metaphor suggested, but some feel that the cartoon it is based on is not the best description of the performance expectation.

Root Cause The cause which, if changed, will prevent recurrence of an UDE. The same as the TOC Core Problem.

Root Cause Analysis (RCA) Assessment of system performance to aid prevention of negative consequences.

Rope The information flow from the Drum (bottleneck resource) to the front of the line (material release) which controls plant Throughput.

Scrutiny Inspection of a tree to ensure that none of the categories of legitimate reservation apply, and that all of the entities are necessary to connect the UDEs.

Sequencing Scheduling the start of projects to not overload the drum resource.

Statistical fluctuations Common cause variations in output quantity or quality.

Student Syndrome The natural tendency of many people to wait until a due date is near before applying full energy to complete the activity.

Subordinate In TOC, enabling exploiting the constraint to the goal by not allowing other things to prevent its exploitation. For example, not allowing efficiency measures to cause ineffective operation of a system to achieve the goal.

Sufficiency Tree A tree construction in which the existence of the entities at the tail of the arrow make the existence of the entity at the head of the arrow an unavoidable result.

Task See activity.

Throughput The rate at which the system makes money. All of  the money our customers pay us minus the raw material cost.

Thinking Process The five step process which identifies What to change?, What to change to?, and How to cause the change? There are two prerequisites to apply the Thinking Process. You must first:

• Define the system (which requires defining its Goal and boundaries).

• Create operational measures for  the Goal.

The Thinking Process  uses the following tools:

• Evaporating Cloud

• Current Reality Tree (CRT)

• Future Reality Tree (FRT)

• Negative Branch (NBR)

• Prerequisite Tree (PRT)

• Transition Tree (CRT)

• Categories of Legitimate Reservation (CLR)

• Communication Trees (TRTs to apply the Thinking Process, CCRTs, and CFRTs)

The initial Thinking Process applied the Evaporating Cloud after using the CRT to determine a Core Problem. The current method starts with three Evaporating Clouds to pose a Core Conflict, and builds the initial CRT as a CCRT.

Theory of Constraints (TOC) A management philosophy developed by Dr. Eliyahu M. Goldratt based on the principle that complex systems exhibit inherent simplicity, i.e., even a very complex system made up of thousands of people and pieces of equipment can have any given time only a very, small number of variables – perhaps only one (know as a constraint) – that actually limits the ability to generate more of the system’s goal.

Transition Tree (TRT) An effect plan specifying the effects to be achieved, the starting conditions, the actions necessary to create the effects, the logic of why the action will create the effect, and the logic for the sequence of the effects.

UnDesired Effect (UDE)  UDEs are negative effects of the system that exist in reality, and about which you can say, "It really bothers me that UDE." UDEs must be negative in and of themselves; i.e. they should prevent you from achieving more of the Goal of your system, including blocking one or more of the necessary conditions for the Goal . Note that UDEs are EFFECTS. They can not contain 'IF..THEN' statements.

Want The effect that one believes MUST exist in order to satisfy a need, because of some set of ASSUMPTIONS.

Work Breakdown Structure (WBS) A hierarchical representation of the deliverables of a project. The starting point for project scope definition and integration of the project.