Theory of Constraints and System Dynamics: thinking tools for the

Change Agent

Serhiy Yevtushenko syevtushenko@agileukraine.org

A thought that does not result in action is nothing much, and action which does not proceed from a thought is nothing at all

George Bernanos

Content

TOC: theory of constraintsSystems Dynamics

TOC: history

Created by Dr. Eliyahu Goldratt

“Goal”“It’s not Luck”…

TOC: Prerequisites

Determine the system and its purposeDetermine the systems fundamental measurements

TOC: fundamental measurements

ThroughputOperating ExpensesInventory

InventoryExpensesOperatingThroughputROI _−

=

TOC: Basic Idea

TOC: Five focusing steps

1. Identify systems constraint2. Decide how to exploit it3. Subordinate everything else to the

decisions made in step 1 and 24. Elevate the systems constraint5. Don’t allow inertia to be system

constraint. When constraint has been broken, go to step 1

TOC and agile software development

Agile software development methods make assumption, that software development is the most constrained resource (i.e. bottleneck)

TOC Thinking tools

Introduction of TOC required training of people, doing it, think like Jonah

This has led to the creation of the TOC thinking Tools

TOC: Thinking Tools

Logic based framework for analysis of situation and performing changesAnswer on 3 basic questions:

What to change?What to change to?How to cause a change?

TOC: Thinking Tools

Current Reality Tree Evaporating CloudsTransition TreeFuture Reality TreePrerequisite Tree

For Checking Validity of Thinking there are Categories of Legitimate Reservations

Categories of Legitimate Reservations

Entity ExistenceCausality existenceClarity

Additional EffectInsufficient CausePredicted Effect

Current Reality Tree

Tool, that is similar to the Toyota “Five Why”Allows analyzing current situation, and defining root causes of the problems, present in current situation

Current Reality Tree Example (incomplete)

UDE1: Unit tests are

failing often

1: Developers are not running test before check-in

2: Whole test suite is taking to

long time to run

3: Developers does not update

& run tests before doing

check-in

4: Developers write unstable

tests

TOC Links

http://www.dbrmfg.co.nz – one of the best sites on TOC and TOC thinking toolsAgile Management for Software Engineering: Applying the Theory of Constraints for Business ResultsBy David J. Anderson, Eli Schragenheim – TOC in the context of Software development

System Dynamics

Recommended reading list from CSM training

…The Blind Men and the Elephant: Mastering Project Work, David Schmaltz, Berrett-Koehler Publishers; , March 2003Corps Business, David Freedman, HarperCollins, 2000Industrial Dynamics, Jay W. Forrester, MIT Press, 1961

System Dynamics: History

Created by J. ForresterDeveloped from 1956 in MIT1961: Industrial Dynamics1969: Urban Dynamics1971: World Dynamics 1990: Peter Senge: “Fifth Discipline”1992: Beyond the Limits: Confronting Global Collapse, Envisioning a Sustainable Future

Building Blocks of the System Dynamics

Feedback loops

Action

Information about problem Results

Kind of Feedback loops

Positive (Exponential Growth)Chain reactionAvalanche

Negative (Balancing)Thermostat…

Rates and flows

Elements of the model in the System Dynamics can be of 2 types:

Flows (speed of change)Stock (something, that is being accumulated)

To flows decision rules may be attached, which determine management policies

Delays

Additionally, also delays are used in models (Delay may be simulated by using rates and flows, and some decision rules)

Researchers in System Dynamics have found, that people in general are very bad in predicting effects of delays

Simulations

Creation of the system dynamics model clarifies structure of the feedback loops, existing in real world system, and allows to reason qualitatively about problemAfter that, quantity based modeling may be performedAllows trying out effects of different decisions before making their implementations

Example

System Dynamics Application in Software

There is a full system dynamics model of the Software Development ProcessFor different processes of software development (for example, inspections) there are system dynamics models“Quality Software Management” of Gerald Weinberg contains quite a lot system thinking models for SDSome firm has created simulators, which allow simulation of the Software Project Management based on System Dynamics Models

Experience from applications

In many cases, when TOC or System Dynamics has been applied for the evaluation of the problems in firms, it was found out, that a firm policies were the reasons for the problems, which the firm was experiencing.

12 ways to influence systems12. Constants, parameters, numbers (subsidies, taxes, standards)11. Size of buffers and other stabilizing stocks, relative to flows 10. Structure of material flows9. Length of delays, relative to the rate of system changes8. The strength of negative feedback loops, relative to the effect they are trying to correct7. The gain around driving positive feedback loops

12 ways to influence systems

6. The structure of the information flow (who does and does not have access to what kinds of information)5. The rules of system (such as incentives, punishments, constraints)4. The power to add, remove or self-organize system structure3. The goal of system2. The mindset or paradigm, from which the system rises out1. The power to transcend paradigms

System Dynamics Resources

http://sysdyn.clexchange.org/road-maps/home.html - training course on system dynamicsPeter Senge “Fifth Discipline”Форрестер «Основы кибернетики предприятия»Donella Meadows: 12 leverage points