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Washington State University Engineering Management Program

Course Outline

EM 526, Constraints Management (Graduate)

EM 426, Constraints Management (Under Graduate)

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Faculty: Dr. James R. Holt
9300 Bellwood Drive
Fredericksburg, VA 22407

Campus Phone (to leave a message): (509) 335-0125
Campus Fax: (509) 335-4725
Home Office Phone:  (540) 412-5315

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James R. Holt, Ph.D., PE, is Professor of Engineering Management at Washington State University. He has taught Operations Research, Statistics, Engineering Economics, Simulation, Theory of Constraints and other special topics for over 15 years. He was a Principal Consultant with Management Advisory Group, Inc. and a Certified Associate of the Avraham Y. Goldratt Institute. Prior to his consulting work, he was Department Head, Engineering and Environmental Management at the Air Force Institute of Technology, Wright-Patterson AFB, Ohio. Dr. Holt retired from the Air Force with 20 years experience in engineering, computer and technology management. He has published many articles on project management, maintenance and artificial intelligence. He holds a BS in Mechanical Engineering (Utah State University), a MS in Facilities Engineering (Air Force Institute of Technology) and a Ph.D. specializing in Industrial Engineering / Business Administration (Texas A&M University).Dr. Holt is certified in the TOC Thinking Process, TOC Operations Management, TOC Project Management and TOC Holistic Strategy by the Theory of Constraints International Certification Organization. He is happily married for over 40 years and has five children and ten grandchildren.

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The Need

 Background: Management programs provide students with a myriad of advanced management techniques. Some include: Mathematical decision analysis, Organizational behavior, Business and finance, Information systems, Simulation and Production and Operations management. However, the application of these tools in the real world leaves much to be desired.

Today's managers are pressed more than ever to provide fast, efficient fixes to problems. They try to apply their powerful management tools appropriately. But, applying sophisticated tools takes time and focus. Too often, other more pressing problems occur before the first problem is solved. And many times, even if the first problem is solved, it seems to just reoccur a few years later. Fire fighting becomes a management style that wears out managers, stifles progress and destroys creativity. Clearly a different, more effective approach is necessary.

Every system is constrained in some way. Otherwise, total chaos would occur. The constraint or limiting factor determines the rate of growth, the expansion of the system or the accomplishment of the objective. When we know the constraint, we can make valuable decisions around the binding point to optimize the situation. However, much of the time, constraints can't be found using traditional tools. The constraint may be physical but difficult to quantify. Or, the constraint could be non-physical, such as a policy constraint. Making decisions without knowing the constraint of the system is "fire fighting with unknown consequences". Managers must have a systems understanding and a focused approach at solving THE problems that NEED to be solved (not just those "they know how to solve"). Manager need an approach that exploits their intuition and the skills developed over time and an approach that will make a real difference in the bottom line.

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Constraints Management

 Objectives: This course helps the engineer manager develop the ability to think clearly about any situation and identify the constraint that prohibits improvement. Students learn the ability to: Describe the goal, Identify the constraint, Create meaningful progress measures relative to the constraint, Exploit the constraint, Subordinate all other activities to the constraint, Elevate the constraint to new levels and Avoid the inertia that restricts continuous improvement. The student effectively applies these principles in day-to-day situations and in a major project relevant to his field of study.

 Theory: This course focuses on continuous improvement. Improvement implies change. The real issue then becomes: What to change? Clearly there are many options. Students learn which ONE THING should be changed to cause the most systemic improvement. Next is: What to change to? It is easy to complain and point out flaws but more difficult to present a better solution. Students learn how to develop solid, common sense solutions that make major impact without causing devastating side effects (side effects can often be worse than the original problems). Last: How to cause the change? It is extremely frustrating to know the answer and have it ignored. Students learn the step by step process of how to cause (influence or effect) reality to change in the direction they desire (even when the solution appears to be beyond their control).

 Tools: This course introduces the student to the Theory of Constraints. Students learn the formal analysis techniques that find the limiting factor in any system. Students learn to clearly identify the goal and necessary conditions that must be met to achieve success in the system. Students learn to think logically and formulate the cause and effect relationships that define the system. They learn to differentiate between the many annoying problems that exist in the system and the few root causes (the core problems) that cause most of the many negative effects. Students learn how to find breakthrough injections to open the way for solutions that eliminate the conflict that has always prevented the core problem from being solved. They also learn how to break down the obstacles that prevent near impossible tasks and how to cause change to occur within the system. These concepts are based on the Thinking Process that was used to develop the Theory of Constraints.

 Application: The theoretical material is applied in a variety of systems. Simple and complex organizations are examined. Manufacturing, design, construction, process systems, distribution, sales and service organizations are used for case study and theory development. Students learn to apply the theory in every day situations and in a significant work related application. There is a full breadth of exposure to the Theory of Constraints. Examples from human behavior, personal problems, political science, education and project management are included. Many 'proven solution' from past analysis are developed during the class.

 Prerequisites: There are no formal prerequisites for this class. However, the class moves very quickly and students must be self motivated to grasp the significance of much of the material presented. Students are also asked to perform significant mental exercises as they resolve long-standing problems at work, at home, in service organizations and in personal life. Consequently, students should be successful graduate students who have demonstrated their ability to expand their understanding in areas they enjoy.

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Required Texts 

  1. It's Not Luck, Eliyahu M. Goldratt, North River Press 1994, (800) 486-2665, ISBN 088427-115-3
  2. The Logical Thinking Process: A Systems Approach to Complex Problem Solving, H. William Dettmer, ASQC Quality Press, 2007, (800) 248-1946, ISBN 978-0-87389-723-5
  3. The Choice, Eliyahu M. Goldratt, North River Press 2008, (800) 486-2665, ISBN 978-0-88427-189-5.

Recommended Texts 

  1. The Goal: A Process of Ongoing Improvement, 2nd Revised Edition, Eliyahu M. Goldratt, North River Press 1992, (800) 486-2665, ISBN 088427-061-0 
  2. Thinking for a Change, Lisa J. Scheinkopf, St. Lucie Press, 1999, ISBN 1-57444-101-9 
  3. Critical Chain, Eliyahu M. Goldratt, North River Press 1997, (800) 486-2665, ISBN 0-88427-153-6 
  4. Necessary But Not Sufficient, Eliyahu M. Goldratt, Eli Schragenheim and Carol A. Ptak, North River Press 2000, (800) 486-2665, ISBN 0-88427-170-6 
  5. The Race, Eliyahu M. Goldratt and Robert E. Fox, North River Press 1997, (800) 486-2665, ISBN 088427-062-9 
  6. Shifting Information Out of the Data Ocean: The Haystack Syndrome, Eliyahu M. Goldratt, North River Press 1990, (800) 486-2665, ISBN 088427-089-0 
  7. Regaining Competitiveness: Putting The Goal to Work, 2nd Edition, Mokshagundam L. Srikanth and Harold E. Cavallaro, Jr., Spectrum Publishing, (800) 452-8998, ISBN 088427-106-4 
  8. Project Management in the Fast Lane: Applying the Theory of Constraints, Robert C. Newbold, St. Lucie Press 1998, ISBN 1-57444-195-7 
  9. Breaking the Constraints to World Class Performance, Bill Dettmer, ASQ Quality Press 1998, (800) 248-1946 Catalogue #H1003

Other Suggested Readings

  1.  The Theory of Constraints Journal, Volumes 1, Numbers 1 through 6, Avraham Y. Goldratt Institute,1988-1990. 
  2. Deming and Goldratt, the Theory of Constraints and the System of Profound Knowledge, Domenico Lepore and Oded Cohen, North River Press 1999, (800) 486-2665. ISBN 0-88427-163-3 
  3. Management Accountants' Handbook, 4th Edition Supplement, (See the chapter on Theory of Constraints), Chapter Author: John A. Caspari, Book Authors Keller, Bulloch, Shutis, Wiley 1993 
  4. Relevance Lost: The Rise and Fall of Management Accounting, Robert S. Kaplan and H. Thomas Johnson, Harvard Business Press, Boston 1987. 
  5. Relevance Regained: From Top-Down Control to Bottom-Up Empowerment, H. Thomas Johnson, The Free Press, New York 1992. 
  6. The Theory of Constraints and its Implications for Management Accounting, Eric Noreen, Debra Smith and James T. Mackey, Institute of Management Accounting Special Publications, Code 9430,(800) 638-4427 ext. 278 
  7. Re-Engineering the Manufacturing Ssytem: Applying the Theory of Constraints,Robert E. Stein, Marcel Dekker, Inc. New York 1996, ISBN 0-8247-9747-7 
  8. Re-Engineering Performance Measurement, Archie Lochamy and James Cox, Irwin/APICS Book Press, ISBN 1-55623-916-5 
  9. Introduction to the Theory of Constraints (TOC) Management System, Thomas B. McMullen, St. Lucie Press 1998, ISBN 1-57444-066-7 
  10. The Constraints Management Handbook, James F. Cox III and Michael S. Spencer, St. Lucie Press 1998, ISBN 1-57444-060-8 
  11. Synchronous Management Volume I and II, Mokshagundam L. Srikanth and M. Micael Umble, Spectrum Publishing 1997 (203) 453-2233, ISBN 0-943953-06-5
  12. The Forces of Progress, Kobus Van Der Zel, Lulu, Inc., www.lulu.com, 2006, ISBN 978-1-4303-0709-9

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 Classroom Approach: The course outline introduces the Theory of Constraints and the Thinking Process in a logical, easy to digest form. Topics are discussed in simple every day applications and then applied to harder problems. Students successively gain skills in new areas while at the same time build on skills presented previously. The two required textbooks by Goldratt introduce new topics and demonstrate applications in a variety of situations. The texts provide form and cohesiveness to the individual topics presented. The required text by Dettmer documents and clarifies the techniques alluded to in the Goldratt text. Class lecture introduces the textbook topics, the tools, new topics, and challenges for students. The student will benefit from the short introductory lectures and the self study materials associated with each weeks lecture.

This is an Internet class. While there will be weekly lecture, where students can ask questions and participate in discussion. However, most discussion will occur off line and in response to student self study.

Several topics will be discussed during each class period. The different topics will solidify and broaden the students understanding. Each student is responsible for reading and understanding the text and additional material.. There are a number of supplemental readings recommended by the instructor to address more detail and to amplify class topics. Students should seek out these materials as their project topic dictates. Students are encouraged to bring their own current reality with them to the classroom and share problems and solutions in group email discussion.

 Homework: Most weeks have a major or minor assignment relating to the lecture topic and discussion. These assignments help keep students current in the class and help the instructor evaluate the progress of the class. In general, the weekly assignments are NOT returned. If there is significant problem, the instructor will contact the student or return graded homework with specific suggestions.

 Class Discussions: In-class discussion is encouraged as much as possible within the tight schedule and the Internet Chat Room capabilities. Most discussion will be off-line in groups, or through email and listservers. Generally, the discussion materials are not evaluated or recorded. Occasionally, students will want to share their work with the whole class. Students are encouraged to submit exceptional work or other thoughtful materials to the instructor as the class progresses. Selected discussion material will be posted on the class web pages. Students actively involved in the learning process develop the most.

 Peer Review: The peer review process cannot be over stressed. Peer review is essential! The peer review allows students to verbalize their intuition and to have others help you refine your own views. The peer review will help the student learn the tools better and broaden the classroom experience into other topic areas. It is as important for you to review other students work as it is for you to have your work reviewed by others. IT IS VIRTUALLY IMPOSSIBLE TO MASTER THE CATEGORIES OF LEGITIMATE RESERVATION WITHOUT USING THEM EXTENSIVELY TO SCRUTINIZE OTHERS WORK. You will need to practice both scrutinizing and being scrutinized. We will not have time to do this in the classroom.

 Documentation of a Tree from the Texts (Class Helps Tree): Each student will create a Current Reality Tree, Future Reality Tree, or Transition Tree (cause and effect logic diagram) from It's Not Luck (or The Goal) and document the logic presented in the text. There are many trees and topics described in words in these texts. Students are invited to also share their Class Helps Trees (whenever they complete them) to the DRHOLT-LIST or to post them on Web-CT. (The Class Helps Tree is not required for EM 426).

 Major Project Requirements: Each student will complete a major project during the course. This project applies all the techniques taught in the course. The project should be an important, significant topic in an area where the student has both intuition and energy. Hopefully, the project can be focused on a real-time employment problem. In general, the project should address a problem that appears to be the responsibility of someone one or two levels above their level (my boss' level, or my boss' boss' level). Students will submit the project in five phases (CRT, EC, FRT, PRT, TT) as outlined on the schedule. Each submission will include ALL the previous phases (including any changes and improvements made as the class progresses). BEFORE SUBMITTING any phase, AT LEAST TWO peers must scrutinize your work.  The names of the peer reviewers should be shown on each submission. Each class member must review ten phases (that would be each phase for two students or a few phases of several students) to receive full credit as a reviewer.

 Computers: Student work will be submitted in PowerPoint. While this is not the best software for displaying logic trees, it is sufficient and readily available to all students. And, with practice, you can become good at it. PowerPoint has some nice features.

 Evaluation: The various evaluation measures are weighted as follows:

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Alternate Class Web Page

This course will be taught over the Internet using WebCT Course Management software. That means all your materials will be accessed through WebCT. You may find some prior course documents, prior student work and links to other TOC sites posted on the public class web site at:


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EM 526 Class Email News Group

Students are spread out throughout the world. Many students will be participating watching there archived video streams (because of time zones or band width). This means we need to have an effective means of group discussion that is asynchronous. In addition, students frequently have questions outside the classroom as they do their work. To meet these needs EM 526 has a virtual classroom electronic mail system. This system is an email news group which allows students to ask questions at any time as if in class. The question is posted for the whole class to see. Often, students chose to answer each other questions in an effective 'classroom discussion' done over email. And, all students see the answer to all questions--just like in class.

Each student should subscribe to the 'drholtlist' electronic mail group by visiting the WSU List Server web page as follows:

Go to: http://lists.wsu.edu
Select <Joint a List>
Enter Your Name and Email address where you want to receive group email.
Go down to the line where you type in the name of the list (DrHoltList is not a public list).
type in: DrHoltList
You will be added to the list after you reply to the confirmation email.

To post a question or answer to 'drholtlist' for all subscribers to see, send your message to:
To: drholtlist@lists.wsu.edu

To remove yourself from the 'drholtlist':
Go to http://list.wsu.edu
Select Leave a List>
Enter the email address you want to remove.
Go down to the line where you type in the name of the list and type: DrHoltList.
You will receive a confirmation by email.

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Student Notices on Academic Policies

Treatment of Sensitive Material: The students of this class come from many companies. While you will be amazed how often different companies suffer from the same types of problems, some companies are reluctant to make public their concerns and breakthrough solutions. In addition, some students may be dealing with sensitive or proprietary materials within their company. We have academic freedom within the classroom, we do not mean to embarrass any student. And academic freedom does not mean we have a secure environment even with password protection. If you have sensitive material that should not be shared publicly, please do not discuss it in class or other class communications channels.

If you indicate you have sensitive material in your homework submissions, I will not share that information with any other people. Some firms desire a non-disclosure agreement in this cases. Such agreements are easily possible for sensitive work. However, most of the time, a simple "sensitive material" statement is all you need.

Online Collaboration: The essence of education is exposure to diverse viewpoints. In your threaded discussion posts you’ll meet students with vastly different opinions and backgrounds. When you don’t agree with their views, pause a moment. Weigh their words. You’re encouraged to disagree with the substance of others’ ideas and opinions, but do so with an active sense of respect for one another, and without losing focus on the topic at hand. Personal attacks, inflammatory statements, flaming, trolling, and disruption of the discussion do not have a place in academic discourse.

Your instructors will promote high-quality academic discussions by removing any posts they view as disruptive of the educational process and alerting students whose posts have been removed that they have violated course expectations. Students who continue to misuse the discussion boards after a warning may be subject to removal of access rights, course failure, and referral to the Office of Student Conduct.

Postings must comply with University policy on use of computing resources, including those regarding harassment and discrimination, as well as conform to the Standards of Conduct for Students. Students are encouraged to review the Standards, particularly WAC 504-26-218, 504-26-220, and 504-26-222. Visit the University Website specific to your campus of enrollment for more information.

In certain courses, assessment of discussion posts is part of the final grade. Criteria for evaluating your discussion participation will be explained elsewhere in the course space, if applicable.

Netiquette: Just as in a physical classroom, a good discussion in an online classroom depends on everyone feeling safe and respected. Here are a few tips for creating an educational and enjoyable discussion space:

< [·      It is difficult to “read” emotion in online discussions – be clear, use emoticons or concisely express your feelings (e.g., "ha, ha")

<![·         Use of capitals sends the message that YOU ARE SHOUTING!

<!··        Give positive feedback (good idea, thanks), be polite, and avoid hostile or curt comments, sterotypes and labels.

<!··        Apply the same standards you would follow in a face-to-face classroom discussion.

<![·         Maintain a sense of dignity and decorum (class is not the same place as your Facebook account or your email).

<![·         Argue not with emotion but with knowledge, facts, authority and reason.

For more on the Core Rules of Netiquette visit http://coursedesign.colostate.edu/obj/corerulesnet.html

Incomplete Policy: Occasionally, events beyond the students control prevent the student from completing all the required work for the Major Application Project. This project is represents the meat of the course and demonstrates the student has adequately learned the course material. If a student has completed at least through the FRT (representing more than 50% of the course material) but has not completed the full project by the time grades are do, the student will be awarded an 'I' - Incomplete grade. Students receiving an Incomplete should try to complete their project within the following semester.

Disability: Reasonable accommodations are available in online classes for students with a documented disability. All accommodations must be approved through your WSU Disability Services office. If you have a disability and need accommodations, we recommend you begin the process as soon as possible.

For more information contact a Disability Specialist on your home campus:

<![·     WSU Online & Pullman: 509-335-3417 http://www.accesscenter.wsu.edu, Access.Center@wsu.edu

<![·     Spokane: http://spokane.wsu.edu.html

<![·   Tri-Cities: http://www.tricity.wsu.edu/disability/

<![·   Vancouver: 360-546-9138 http://studentaffairs.vancouver.wsu.edu/student-resource-center/disability-services

Plagiarism: Cases of academic dishonesty shall be processed in accordance with the Academic Integrity Policy, as printed in the Student Handbook and the Faculty Manual and as available from the Office of Student Affairs: http://www.wsulibs.wsu.edu/plagiarism/main.html.

WSU Online Student Support: The WSU Online Web site (http://online.wsu.edu) has all the non-content and administrative related information you need to be a successful online learner. Login using your WSU Network ID and password to access your personalized information.

<![·         Student Services information is available to provide assistance with any non-advising administrative questions

<![·         Study tips and resources give you a good head start in assuring success with your course are also located on the Web site.

Library Support: All students enrolled in Washington State University online courses can use the WSU Libraries online databases and receive reference and research assistance from their home campus. Students can also borrow books and other circulating material and access full text journal articles.

<·    ·        General Library Links by Campus
WSU Online: 
WSU Vancouver: 
WSU Tri-Cities: 
WSU Spokane – Riverpoint and Nursing at Yakima: 
WSU College of Nursing: 

<![·        Review the Libraries’ Online Information for more guidance.



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Schedule / Sequence of Study



 Texts (INL-It's Not Luck, TOC-Dettmer)


Lecture Topics


 Self Study Topics


Homework Assigned


Chap. 12, 15
Chap. 1

Introduction to Constraints Management

Physical/non-Physical Constraints, Common Causes, TOC/TP Overview

Thinking Using Cause and Effect

Read INL as soon as possible.

Send in your Contact Information

Write a Logical Twig (self justification twig)


Chap. 2, 10
Chap. 4

Evaporating Clouds-Identifying and resolving Conflict.

Creating a simple Personal Cloud

Necessary Based logic.

Choosing a Class Project.

Your First Evaporating Cloud.

Paragraph of Class Project


Chap. 17
Chap. 4

Three Cloud Technique

Finding a Core Conflict

Rules for the Three Cloud Technique

List of Un-Desirable Effects for your Class Projects.

Your Core Conflict Cloud.



Chap. 2-3

Creating Common Sense-The Current Reality Tree.

Scrutinizing Logic

Group Project Assignment

Rules for Current Reality Trees and the CLR

Complete Team Project / Group effort CRT Tree and document it personally



Chap. 15


Chap. 2-3

Using the CLR to Communicate without emotion.

Discussion of Group Project

Sample Logic Trees.

Examples of CLRs

Your First CRT for your Class Project



Chap. 20,23


Chap. 5

Finding Breakthrough Solutions.

Creating Future Reality

Rules for the FRT

Five injections to your Generic Cloud for your Class Project



Chap. 21,23,25


Chap. 5

Negative Branch Reservations (What if you get what you ask for?)

Dealing with "Yes, BUT!"

Rules for Negative Branch Reservations

Negative Branch Twig



Chap. 30,31


Chap. 5

Strategic Future Reality Trees

Securing the Future of the Firm

Rules for the SFRT

Polishing your FRT

Complete Second Team / Group effort FRT tree and document it personally



Chap. 26


Chap. 6

Achieving Ambitious Targets (Overcoming Significant Obstacles)

The PreRequisite Tree

Rules for the PRT

Your First FRT for your Class Project.

A small PRT Exercise



Chap. 21, 22


Chap. 8

Team Building

Communicating by Cause and Effect.

Introduction to Transition Trees

Rules for the Transition Tree

Your PRT for your Class Project



Chap. 19, 24, 27


Chap. 7

Changing Reality one action at a time (real empowerment)

Transition Trees-The art of communication

Class Helps Tree



Chap. 28


Chap. 8


Overcoming the Layers of Resistance

Developing the Presentation of your Class Project to Senior Management

Your TT for your Class Project



Chap. 13, 18

Proven Solutions

TOC Measurements

Using Plant Control as a Strategic Weapon

ABCDE Bean Game

PQ and PQ Plus

Job Shop Game

Results of the Bean Game, PQ, PQ Plus and Job Shop Game



Chap. 30, 31

Proven Solutions:
Critical Chain Project Management
Single and Multiple Projects
Supply Chain

TOC Certification

Paradigm Shift Approaches



Last Class

TOC Certification

Paradigm Shift Approaches

TOC Certification
Paradigm Shift Approaches
TOC Operating Strategy


Latest date to turn-in your Class Project and Class Helps Tree to receive a grade this term is the last class

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 Page created by James R. HoltComments and questions: jholt@wsu.edu

 URL: http://public.wsu.edu~engrmgmt/holt/em526/em526syl.htm