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Evaporating cloud

The evaporating cloud, also known as the conflict resolution diagram, is a logical tool within the Theory of Constraints (TOC) framework, developed by Eliyahu M. Goldratt, designed to map out and dissolve conflicts by surfacing shared goals, competing needs, and opposing actions while challenging the assumptions that sustain the dilemma. The name is inspired by a scene in Richard Bach's 1977 book Illusions, where characters cause clouds to evaporate.^[1]^[2]^[3] Introduced in Goldratt's 1994 book It's Not Luck, the evaporating cloud provides a structured visual representation of conflicts, typically depicted as a diagram with five interconnected elements: a common objective (labeled A), prerequisite needs for two conflicting parties (B and C), and mutually exclusive actions (D and D') that each party believes necessary to satisfy their needs.^[2]^[3] The tool operates on necessity-based logic, where arrows between elements indicate "if-then" relationships, and the core conflict arises between D and D', indicated by a vertical bar separating them.^[2] By systematically identifying and invalidating the unexamined assumptions underlying these relationships—through "injections" or innovative solutions—the cloud "evaporates," revealing win-win resolutions that align with the shared goal without compromise.^[3] This method is particularly valuable in organizational settings, where it addresses intra-personal, inter-personal, and inter-departmental conflicts, such as resource allocation disputes or policy changes, by fostering collaborative problem-solving and reducing the time managers spend on conflict-related issues, which can account for up to 20% of their workload.^[3] In project management, for instance, it has been applied to resolve dilemmas like tight deadlines versus quality assurance, leading to practical outcomes such as phased implementation or contingency planning.^[2] As part of TOC's broader thinking processes, the evaporating cloud complements other tools like the current reality tree, emphasizing systemic optimization over local fixes, and has been refined by subsequent TOC practitioners for broader applications in decision-making and ethical conundrums.^[3] Despite its intuitive structure, empirical studies note the need for further validation, though its adoption in business and management contexts underscores its role in promoting integrative conflict styles.^[3]

Introduction

Definition and Purpose

The evaporating cloud, also known as the Conflict Resolution Diagram (CRD), is a necessity-logic diagram within problem-solving methodologies that maps out conflicts stemming from incompatible actions required to achieve shared objectives.^[2] It structures dilemmas by articulating the logical relationships between a common goal and the prerequisites that lead to opposing courses of action, thereby clarifying the core tension without presupposing a resolution.^[3] This tool originates from the Theory of Constraints (TOC), a management philosophy focused on identifying and addressing systemic bottlenecks.^[4] The primary purpose of the evaporating cloud is to facilitate the identification and elimination of conflicts by systematically challenging the underlying assumptions that sustain the dilemma, ultimately "evaporating" the cloud through innovative, non-compromising solutions.^[3] By externalizing the logic of the conflict, it enables users to inject new ideas or prerequisites that reconcile the opposing needs, promoting win-win outcomes rather than trade-offs.^[2] This approach shifts focus from symptom-level disputes to root-cause assumptions, fostering creative problem-solving in organizational, project, or interpersonal contexts.^[5] Visually, the evaporating cloud resembles a cloud formation, comprising five key elements—A (the common objective), B and C (prerequisite needs), and D and D' (the mutually exclusive actions)—interconnected by arrows denoting logical necessities (e.g., "In order to achieve B, we must perform D").^[6] These connections highlight how the pursuit of one action (D) undermines the other (D'), while both support the shared goal (A), providing a concise framework for analysis.^[4]

Historical Origins

The evaporating cloud derives its name from Richard Bach's 1977 novel Illusions: The Adventures of a Reluctant Messiah, in which clouds represent illusory obstacles or false conflicts that vanish when closely examined, analogous to how the tool eliminates apparent dilemmas by invalidating core assumptions.^[7] Eliyahu M. Goldratt introduced the evaporating cloud in the 1980s as part of the Theory of Constraints (TOC) thinking processes, evolving from prior conflict mapping approaches in systems thinking to provide a structured method for resolving incompatibilities in goal-directed systems. It was first detailed in Goldratt's 1990 publication What is this thing called Theory of Constraints and how should it be implemented?, where the technique is applied to address dilemmas in decision-making.^[8] Early adoption occurred within TOC practitioners and organizations seeking operational improvements, with the tool refined through Goldratt's subsequent literature in the 1990s, including It's Not Luck (1994), which expanded its use in business conflict resolution and solidified it within the TOC framework.^[9] As part of TOC's broader thinking processes, the evaporating cloud complements tools like the current reality tree for systemic analysis.

Theoretical Foundations

Relation to Theory of Constraints

The evaporating cloud is one of the core thinking processes within the Theory of Constraints (TOC), a management philosophy developed by Eliyahu M. Goldratt, alongside tools such as the current reality tree, future reality tree, prerequisite tree, and transition tree.^[10] These processes collectively support the TOC framework by providing logical tools to analyze and resolve systemic issues.^[11] Specifically, the evaporating cloud addresses the "What to change?" question in TOC's five focusing steps, which guide ongoing improvement by identifying and elevating system constraints.^[12] In TOC, the evaporating cloud plays a pivotal role by surfacing and resolving conflicts that sustain core constraints, often arising from conflicting policies or operational necessities that hinder system performance.^[10] It targets apparent dilemmas at the policy or operational level, enabling practitioners to challenge underlying assumptions and inject solutions that align with the system's goal without compromising necessary conditions.^[11] This tool visualizes conflicts to facilitate breakthrough thinking, distinguishing it from other processes that focus on cause-effect mapping or implementation planning.^[7] The evaporating cloud was integrated into TOC's logical thinking tools in the 1990s, building on Goldratt's foundational work and expanding the methodology beyond initial manufacturing applications.^[13] It has since been applied across diverse sectors, including services and project management, as outlined in Goldratt's methodologies, to resolve policy-level conflicts and enhance throughput.^[12]

Key Principles of Conflict Resolution

The evaporating cloud employs necessity-based logic to dissect conflicts, where apparent dilemmas emerge from interconnected "if-then" statements linking core needs to proposed actions, such as "in order to achieve objective A, we must satisfy requirement B, which necessitates prerequisite D."^[14] This logic posits that conflicts are not inherent but arise from unexamined assumptions within these necessity chains, and resolution occurs by invalidating those assumptions rather than opting for compromise, thereby evaporating the dilemma entirely.^[2] As part of the Theory of Constraints thinking processes, this approach ensures that solutions align with systemic goals without partial concessions.^[15] Central to the evaporating cloud is the win-win paradigm, which rejects zero-sum trade-offs in favor of solutions that fully satisfy all parties' underlying needs without requiring sacrifices from any side.^[3] By framing conflicts as shared pursuits of a common objective, the tool fosters collaborative innovation, ensuring that resolutions enhance overall system performance rather than merely balancing losses.^[16] This principle underscores the philosophy that true conflicts are resolvable through creativity, not negotiation.^[17] At its core, assumption surfacing reveals that conflicts are illusory, perpetuated by untested beliefs connecting prerequisites to requirements, such as assuming D is the only way to achieve B.^[18] The process systematically exposes these hidden assumptions for scrutiny and refutation, transforming apparent oppositions into opportunities for breakthrough thinking.^[19] This foundational tenet empowers users to dissolve dilemmas at their source, promoting clarity and consensus in decision-making.^[20]

Diagram Structure

Core Components

The evaporating cloud diagram serves as a visual tool within the Theory of Constraints to structure conflicts, encapsulating the core elements of a dilemma in a cloud-like enclosure that highlights the tension between opposing necessities.^[2] This enclosure represents the foggy uncertainty of unresolved conflicts, with all components interconnected to reveal the shared foundation beneath apparent incompatibilities.^[6] At the apex of the diagram is Box A, denoting the common objective or goal that both conflicting parties agree upon and seek to achieve, such as ensuring overall organizational efficiency.^[2] This box anchors the diagram, emphasizing unity at the highest level despite lower-level disputes.^[21] Branching downward from Box A are Boxes B and C, which represent the prerequisite needs or requirements essential for attaining the common objective in Box A.^[6] Box B captures the need from one party's perspective, while Box C articulates the need from the opposing side, illustrating how each side perceives distinct prerequisites as vital to the shared goal.^[22] For instance, in a supply chain scenario, Box B might specify "meet local departmental goals," and Box C "optimize the entire chain."^[21] At the base of the structure lie Boxes D and D', embodying the conflicting actions or wants that arise from the needs in Boxes B and C, respectively, but which cannot both be pursued simultaneously due to their mutual exclusivity.^[2] These boxes pinpoint the dilemma's core, such as one party wanting "to include buffer times in estimates" while the other insists on "excluding them to avoid delays."^[6] The conflict between D and D' is often marked by a jagged, double-headed arrow, underscoring their incompatibility.^[21] Connecting the boxes are arrows that denote necessity logic, typically read from base to apex as "in order to have [upper box], we must [lower box]," forging the causal chain from conflicting actions through needs to the common goal.^[22] These directional links, excluding the conflict arrow between D and D', clarify the logical dependencies driving the impasse.^[6] The diagram's overall V-shaped, cloud-like form—with Box A at the top, B and C diverging midway, and D and D' at the bottom—symbolizes the enveloping nature of the conflict, inviting scrutiny of assumptions to dissipate the "cloud."^[2]

Logical Linkages

The logical linkages in the evaporating cloud diagram are constructed using necessity-based logic, where arrows represent "must have" or "in order to" relationships that connect the core components—objective A, requirements B and C, and prerequisites D and D'.^[23] These necessity arrows flow from prerequisites to requirements and then to the objective: specifically, an arrow from D to B indicates that prerequisite D is essential to achieve requirement B; similarly, D' leads to C, showing D' as necessary for C; and both B and C connect to A, establishing that the requirements are indispensable for the common objective.^[23] At the diagram's core, a bidirectional conflict arrow links prerequisites D and D', symbolizing their incompatibility—D and D' cannot both be true simultaneously, creating the apparent dilemma.^[23] This arrow underscores the mutual exclusivity that prevents resolution without intervention, as pursuing one prerequisite undermines the other.^[23] To ensure the validity of these linkages, the categories of legitimate reservations (CLR) provide a structured framework for testing the arrows' logical soundness, drawing from necessity logic principles in the Theory of Constraints.^[11] CLR categories include clarity (requests additional explanation due to unclear cause-effect relationships or entities), entity existence (questions the existence of a cause or effect entity), causality existence (challenges the existence of a causal link between cause and effect), predicted effect existence (uses another effect to show the hypothesized cause doesn’t produce the initial effect), insufficient cause (suggests an additional non-trivial cause is needed to explain the effect), additional cause (proposes an extra cause that amplifies the effect, where neither cause alone suffices), and tautology (identifies redundancy in stating the cause-effect relationship).^[24] For instance, an entity existence reservation might question whether prerequisite D truly materializes in practice, while a predicted effect reservation could test if D leads to B as anticipated by examining related outcomes.^[25] Collectively, these interconnections form a chain that illustrates the dilemma: both paths from D through B to A and from D' through C to A appear logically necessary for the objective, yet the conflict between D and D' renders them simultaneously unattainable, highlighting the need for deeper scrutiny of underlying assumptions.^[23]

Construction Process

Step-by-Step Methodology

The step-by-step methodology for constructing an evaporating cloud begins with clearly identifying the underlying conflict to ensure the diagram accurately represents the dilemma at hand. This involves determining the type of conflict—such as personal (internal to an individual), interpersonal (between two parties), or policy (institutional or organizational)—and articulating a factual storyline that describes the situation without bias or judgment. For instance, in an interpersonal conflict, the storyline might outline the positions of both parties involved in the dispute. This initial step establishes a neutral foundation for the diagram, drawing on the core components of the evaporating cloud, which include a common objective (A), intermediate needs (B and C), and opposing actions (D and D'). Once the conflict is identified, the next step is to articulate the common goal, represented in Box A at the apex of the cloud. This goal must be a shared objective that both sides in the conflict agree upon and are striving to achieve, often phrased as a broad, desirable outcome such as "improve organizational performance" or "ensure project success." To formulate Box A effectively, facilitators pose questions like "What is the ultimate purpose both parties are trying to fulfill?" to align perspectives and confirm mutual buy-in. This step ensures the cloud focuses on convergence rather than divergence from the outset.^[2] Following the goal definition, the methodology proceeds to defining the needs in Boxes B and C, which represent the intermediate requirements or prerequisites necessary to achieve the common goal. These needs are derived using guiding questions such as "What is necessary to achieve A from Party 1's perspective?" for Box B and similarly for Party 2's viewpoint in Box C. The statements should be precise and linked logically to A, emphasizing systemic necessities rather than preferences, to highlight why each party believes their approach is essential. This differentiation between B and C captures the partial overlap in objectives while underscoring the conflict's roots.^[3] The fourth step involves specifying the conflicting actions in Boxes D and D', which are the specific, actionable prerequisites or behaviors that each party proposes to satisfy their respective needs. These should be stated as clear, operational decisions under pressure, such as "Implement strict deadlines" (D) versus "Allow flexible scheduling" (D'), ensuring they are mutually exclusive and collectively exhaustive of the options. Guiding questions include "What action is required to fulfill B?" and the counterpart for C, promoting actionable language that avoids vagueness. This step solidifies the dilemma at the base of the cloud.^[2] With the boxes defined, the fifth step is to draw the arrows representing logical linkages and validate the structure using necessity-based if-then reasoning. Arrows connect D to B, D' to C, B to A, and C to A, forming the characteristic "V" shapes that illustrate the necessity logic: "If D, then B; if B, then A." Validation involves verbalizing each linkage aloud (e.g., "In order to achieve A, we must have B, because...") to confirm the causal relationships hold true for all parties, iterating as needed to refine imprecise elements. This ensures the diagram's integrity and logical flow.^[26] Finally, the sixth step is to review the completed cloud for completeness, verifying that it fully represents all parties' perspectives without omissions or distortions. This includes checking for balance in the needs and actions, ensuring the common goal is sufficiently high-level to encompass both sides, and confirming that the storyline aligns with the diagram. In cases of one-sided conflicts, such as internal dilemmas where a single decision-maker faces opposing options, the structure remains the same but emphasizes personal prerequisites in B and C; for two-sided conflicts, it explicitly incorporates multiple viewpoints to foster dialogue. Adjustments may involve elevating the common goal if it proves too narrow, promoting a robust, verifiable model ready for further analysis.^[27]

Surfacing Assumptions

Surfacing assumptions is a critical step in the evaporating cloud process, where the focus shifts to examining the necessity logic arrows that connect the diagram's entities, revealing the unstated beliefs that perpetuate the conflict. For each arrow, which represents a "if-then" necessity relationship (e.g., from a requirement to a prerequisite action), practitioners ask targeted questions such as "What must be true for this necessity to hold?" or articulate the link using "because" statements to uncover the underlying assumptions supporting the logic.^[28] This method, introduced by Eliyahu M. Goldratt in the Theory of Constraints thinking processes, exposes the hidden premises that make the conflicting actions appear inevitable.^[3] Assumptions are categorized into surface-level (obvious and readily apparent) and deep (causal and more embedded) types, with the evaporating cloud emphasizing the initial surfacing of surface assumptions to build consensus before probing deeper layers if needed. Surface assumptions often emerge quickly through group discussion, such as the belief that a specific action is the sole means to achieve a need, while deep assumptions involve causal chains that may require further exploration to reveal root beliefs sustaining the dilemma.^[28] This categorization aligns with Goldratt's framework, ensuring a systematic progression from evident to underlying factors without resolving the conflict prematurely.^[3] Once surfaced, assumptions are validated by testing them against available evidence, using criteria like causality verification (does the assumption predict observed effects?) and empirical data to determine their truthfulness. Invalid assumptions, identified through this scrutiny, highlight opportunities for resolution by showing where the necessity logic breaks down, though the focus remains on analysis rather than immediate fixes.^[28] Goldratt emphasized rigorous testing to avoid perpetuating flawed beliefs, often employing simple questions to challenge predictions derived from the assumptions.^[3] Common pitfalls in surfacing assumptions include treating prerequisite actions (e.g., the conflicting D and D' elements) as the only viable paths to meet needs, which fosters false dichotomies and overlooks alternative necessities. Another frequent error is generating generic or mirrored statements that fail to specify unique assumptions per arrow, leading to superficial analysis.^[29] To counter this, facilitators encourage "but" challenges (e.g., "We need high-ROI tasks because..., but we could also...") to broaden perspectives and avoid entrapment in rigid thinking.^[28] For deeper causation, the prerequisite tree can be linked to the evaporating cloud when surface assumptions point to complex obstacles, mapping out intermediate steps and barriers to refine the unstated beliefs further. This integration, part of the broader TOC toolkit, ensures comprehensive uncovering without altering the cloud's core structure.^[28] As Goldratt noted, such tools prevent incomplete assumption lists that could sustain unresolved conflicts.^[3]

Resolution Techniques

Developing Injections

In the evaporating cloud methodology of the Theory of Constraints, an injection refers to a targeted action or systemic change that invalidates one or more underlying assumptions, thereby severing the necessity links that perpetuate the core conflict between competing desires D and D', ultimately dissolving the dilemma.^[3] These interventions, first articulated by Eliyahu M. Goldratt, focus on creative reconfiguration rather than compromise, enabling a path where both objectives can coexist without trade-offs. The development process starts by selecting critical assumptions—those most pivotal in sustaining the conflict, often identified along necessity arrows such as from prerequisite B to D or from prerequisite C to D'—as starting points from prior surfacing efforts. From there, brainstorming generates injections through structured questioning, such as "If this assumption were invalidated, what alternative path would emerge?" This encourages exploring prerequisites, resources, or logical connections that, when altered, provide a non-conflicting route forward.^[2] Criteria for effective injections emphasize practicality and precision: they must be feasible given available resources and organizational constraints, entail low risk of secondary issues, and directly evaporate the cloud by permitting pursuit of both D and D' or viable equivalents that fulfill the common objective A. Injections failing these standards are discarded to avoid superficial fixes that merely relocate the conflict.^[2]^[3] Iteration refines candidate injections through logical scrutiny before any real-world application, incorporating negative branch reservations to probe for hidden drawbacks—such as "What if this change leads to X unintended effect?"—and adjusting accordingly to bolster viability. This step-by-step validation ensures injections are robust and aligned with systemic improvement goals.^[2] Common types of injections include policy changes, such as modifying incentive structures to align with broader objectives; technology adoptions, like implementing software for better resource buffering; and behavioral shifts, including training teams in collaborative assumption-challenging dialogues. Each type targets assumption invalidation in context-specific ways, drawing from Goldratt's foundational principles.^[2]

Achieving Win-Win Outcomes

Once developed injections have been identified to resolve the evaporating cloud, validation is essential to ensure they lead to desired outcomes without unintended consequences. This involves constructing a Future Reality Tree (FRT), which maps the logical chain of effects from applying the injections, predicting how they transform undesirable effects (UDEs) into desirable effects (DEs). The FRT uses sufficiency-based logic to verify completeness, while incorporating Negative Branch Reservations (NBRs) to identify and mitigate potential side effects, such as new conflicts or inefficiencies arising from the changes. For instance, if an injection alters resource allocation, the FRT would trace downstream impacts to confirm no negative ramifications undermine the resolution.^[30] A true win-win outcome in the evaporating cloud requires that both conflicting needs—typically labeled as B and C—are fully satisfied without compromise, allowing both conflicting actions D and D' (or their equivalents) to become feasible simultaneously. This evaporation of the conflict is confirmed when the original dilemma no longer forces a choice between alternatives, as the invalidating injection removes the underlying assumption barrier. To communicate this resolution effectively to stakeholders, a structured approach is used, presenting a clear picture of the future state, the rationale for the injection, supporting details on its mechanics, and quantified savings in terms of benefits like improved performance. This approach fosters agreement by aligning on the enhanced reality post-resolution.^[10]^[30] Implementation transitions the validated evaporating cloud into a practical action plan, often using a Prerequisite Tree to outline necessary steps and obstacles, followed by a Transition Tree detailing the sequence of activities. Progress is monitored using core TOC metrics, including throughput (revenue minus totally variable costs), inventory (money invested in things intended to sell), and operating expense (money spent to operate the system), ensuring the resolution sustains system-wide improvements without shifting constraints elsewhere. Success is measured by the actual evaporation of the conflict, where both original actions (or their equivalents) are pursued viably, leading to measurable gains in goal achievement, such as increased throughput or reduced inventory.^[12]^[30] Challenges in achieving win-win outcomes often stem from resistance to change, rooted in psychological or social barriers like fear of the unknown or attachment to status quo assumptions. TOC addresses this through a systematic buy-in process, layering communication to build stakeholder consensus—from agreeing on the problem to resolving implementation concerns—thereby securing commitment and minimizing pushback. Without broad stakeholder involvement, solutions risk incomplete adoption, underscoring the need for inclusive facilitation to harness resistance as a refining force rather than an obstacle.^[31]^[32]

Applications and Examples

Economic Production Quantity Example

In manufacturing environments, a classic dilemma arises when determining optimal production batch sizes to minimize total unit costs, often framed within the Economic Production Quantity (EPQ) model. This conflict pits the benefits of large batches, which spread fixed setup costs over more units to lower per-unit setup expenses (prerequisite D), against small batches, which reduce inventory holding costs by minimizing stock accumulation (prerequisite D').^[33] The common goal (A) is to achieve the lowest possible total unit production cost. This objective stems from two core needs: B, ensuring efficient use of resources such as labor and equipment to avoid idle time, and C, minimizing capital tied up in excess inventory to improve cash flow and reduce storage expenses. The evaporating cloud visualizes this tension, where large batches satisfy need B by amortizing setups but exacerbate need C through higher holding costs, while small batches address need C but inflate setup costs per unit, undermining need B.^[33] Underlying assumptions fuel the conflict, including the notion that setup times and costs are fixed and inherently high, necessitating large batches for economic viability, and that inventory holding costs increase linearly with batch size due to prolonged stock levels. These assumptions, rooted in traditional operations logic, create the illusion of mutual exclusivity between D and D'.^[33] A key resolution injection challenges the assumption of fixed, high setup times by applying Single-Minute Exchange of Die (SMED) techniques, which systematically convert internal setup activities (performed while the machine is stopped) to external ones (done while running) and streamline remaining steps to drastically reduce changeover durations—often to under 10 minutes. Developed by Shigeo Shingo, SMED enables smaller batches without incurring prohibitive setup penalties, evaporating the cloud by satisfying both needs B and C simultaneously.^[34]^[35] In the EPQ context, this evaporation shifts key parameters in the standard formula for optimal batch quantity, Q = \sqrt{\frac{2DS}{H\left(1 - \frac{d}{p}\right)}}, where D represents annual demand, S is setup cost per batch (now lowered via SMED), H is the annual holding cost per unit, d is the demand rate, and p is the production rate. By reducing S, the model yields a smaller Q that balances costs more effectively, leading to lower total unit expenses without the trade-offs of the original conflict.

Modern Case Studies

In project management, a 2025 case study in product development for small-scale industries applied the evaporating cloud to resolve conflicts between cost-effectiveness and efficiency in designing a cucumber grating tool using additive manufacturing. The team identified the core objective of producing functional prototypes for local food processing, with conflicting needs for low-cost materials and high-strength outputs; by surfacing assumptions about material limitations, they injected lean design principles, integrating agile proof-of-concept iterations to challenge resource allocation constraints. This approach, aligned with Theory of Constraints methodology, enabled streamlined prototyping over 8 days with reduced filament usage, demonstrating viability for resource-limited environments.^[36] Firms adopting the evaporating cloud within Theory of Constraints frameworks have reported improvements in operational throughput and lead times, as evidenced in service sector implementations where conflict resolution directly improved workflow balancing. Tools like Flying Logic software facilitate diagramming these clouds, supporting visual surfacing of assumptions and injections for practical application.^[18] Recent trends indicate growing adoption of the evaporating cloud in non-manufacturing sectors such as healthcare and IT outsourcing, with digital adaptations like web-based apps enhancing accessibility for remote teams and AI-integrated analyses. Systematic reviews highlight its role in paradigm shifts toward continuous improvement beyond traditional manufacturing.

Advanced Usage

Core Conflict Cloud

The core conflict cloud (CCC) represents an advanced adaptation of the evaporating cloud within the Theory of Constraints (TOC), serving as a higher-level diagram derived from the current reality tree to address root organizational conflicts. It targets the core constraint or policy that underlies multiple surface-level conflicts, often manifesting as undesirable effects (UDEs) across a system. By synthesizing individual conflicts into a unified representation, the CCC identifies the systemic dilemma driving broader organizational dysfunction, enabling practitioners to focus on fundamental leverage points rather than symptomatic issues. This approach emphasizes logical cause-and-effect relationships, typically verified through sufficiency-based analysis in the current reality tree.^[37]^[38]^[39] Construction of the core conflict cloud involves aggregating common elements from multiple individual evaporating clouds, each initially built around specific UDEs identified in the current reality tree. Practitioners first develop three or more prerequisite clouds linked to key UDEs, then merge overlapping components—such as shared objectives (A), conflicting requirements (B and C), and prerequisites (D and D')—to form a single, generic cloud encapsulating the core conflict. This three-cloud approach ensures completeness, with the resulting structure tested by tracing all relevant UDEs back to the CCC using if-then logic. The standard evaporating cloud format is retained, providing a clear visual and verbal articulation of the dilemma without introducing new elements.^[37]^[38]^[39] In strategic TOC applications, the core conflict cloud facilitates the "evaporation" of entrenched problems by surfacing invalid assumptions tied to core policies, such as those pitting short-term profit maximization against long-term market share growth in enterprises. For example, it has been applied to resolve dilemmas in sales and distribution strategies where aggressive expansion threatens margins, allowing for injections that align both objectives. TOC gained prominence in the mid-1990s, with applications demonstrating its utility in uncovering policy-based constraints that perpetuated inefficiencies.^[37]^[38] The primary benefits of the core conflict cloud include revealing high-impact leverage points for systemic change, promoting win-win resolutions over compromises, and enhancing cross-functional alignment by clarifying shared objectives amid apparent oppositions. However, its effectiveness depends on prior completion of a robust current reality tree analysis to establish UDE linkages; without this foundation, the cloud may overlook critical causal chains. Additionally, it is ill-suited for simple interpersonal disputes, as its complexity is optimized for multifaceted organizational challenges requiring strategic intervention.^[37]^[38]^[39]

Integration with Other TOC Tools

The evaporating cloud serves as a pivotal tool within the Theory of Constraints (TOC) thinking processes, particularly by building upon the analysis provided by the Current Reality Tree (CRT). The CRT maps out undesirable effects and their cause-and-effect relationships to pinpoint the core problem or constraint in the current system. Once the CRT identifies a conflict at the root, the evaporating cloud is constructed to explicitly articulate this dilemma, surfacing underlying assumptions that perpetuate it, thereby enabling targeted resolution.^[10]^[40] Following conflict resolution through injections in the evaporating cloud, the Future Reality Tree (FRT) is employed to validate these solutions by projecting the anticipated effects of implementation. The FRT extends the logic from the cloud's common objective and needs, trimming potential negative branches and injecting additional elements to ensure a robust, desirable future state without unintended consequences. This integration confirms that the evaporating cloud's resolutions align with systemic improvement goals.^[10]^[41] To translate evaporating cloud resolutions into executable strategies, the Prerequisite Tree (PRT) and Transition Tree (TT) provide the necessary implementation framework. The PRT delineates intermediate objectives and obstacles to achieving the injections, while the TT sequences detailed actions, including if-then logic, to overcome these barriers and realize the changes. This linkage ensures that conceptual resolutions from the cloud evolve into practical, step-by-step plans.^[10]^[40] In the broader TOC methodology, the evaporating cloud fits into the "what to change now?" phase of the five focusing steps, where thinking processes diagnose and resolve core constraints before advancing to exploitation and subordination via operational tools such as drum-buffer-rope (DBR). DBR then synchronizes production flow around the resolved constraint, minimizing inventory while maximizing throughput, thus operationalizing the strategic shifts initiated by the cloud.^[13]^[12] Recent advancements in digital tools have enhanced these interconnections, with software like Vithanco and Flying Logic enabling automated linkages between evaporating clouds and other TOC trees. These platforms, updated post-2020, support dedicated notations for CRT, FRT, PRT, and TT, allowing users to visually connect conflict resolutions to reality trees and implementation plans in a single workspace, facilitating more efficient holistic problem-solving. As of 2025, tools like Flying Logic continue to support TOC applications, including sponsorship of events such as the TOC Innovation Summit.^[42]^[43]^[44]

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Conflict Resolution Diagram / Evaporating Cloud | Chris HOHMANN
Nov 17, 2014 · The Conflict Resolution Diagram (CRD), also known as Evaporating Cloud (EC) or simply 'Cloud', is a necessity-logic based tool from Theory ...Missing: source | Show results with:source
[22]
The Thinking Process and Evaporation Clouds | by Tom Connor
Jan 6, 2021 · The evaporating cloud or conflict resolution diagram is an excellent tool for systematically surfacing and challenging conflicts.Missing: definition | Show results with:definition
[23]
[PDF] The Graduate Collage - UW-Stout
Evaporating Cloud ... In diagram number two both Box A and Box C are necessary for Box B to exist. ... Box C has the same relationship with Box D'. The ...<|control11|><|separator|>
[24]
Conflict Resolution Diagram | Untools
Conflict Resolution Diagram (also called “Evaporating Cloud”) is a tool that will help you resolve them peacefully while making sure that needs of both sides ...
[25]
[PDF] The TOC Thinking Processes . . . Tools for Problem Solving
Tool 1 -- The Evaporating Cloud. The Evaporating Cloud is a construct of necessity logic that takes the form: B) Requirement <----- D) Prerequisite. /. ^. /. |.
[26]
https://cdn.ymaws.com/www.tocico.org/resource/resmgr/white_paper/change_matrix_cloud_process_.pdf
[27]
What are the Categories of Legitimate Reservation? - Flying Logic
What are the Categories of Legitimate Reservation? · Clarity · Entity Existence · Causality Existence · Cause-Effect Reversal · Indirect Effects · Back Edges.
[28]
[PDF] DRAFT The Change Matrix Cloud Process
Goldratt introduced the Evaporating Cloud3 in the late 1980s as a problem-solving, thinking process to help people invent simple, practical, win-win solutions.Missing: source | Show results with:source<|control11|><|separator|>
[29]
[PDF] A Theory of Constraints analysis of organisational budgeting ...
... Evaporating Cloud ... 8/ Budgets are often contradictory (Hansen et al, 2003). Goldratt's Theory of Constraints at its core, acknowledges the ubiquity of conflict ...
[30]
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### Summary of Evaporating Cloud from the PDF
[31]
Mistakes and Difficulties in Working with TOC Logical Tools
Mistakes and Difficulties in Working with TOC Logical Tools focuses on typical errors in wording, content, logic and purpose of Clouds and Current Reality ...Missing: common | Show results with:common
[32]
A framework for using Theory of Constraints thinking processes and ...
Mar 14, 2024 · The purpose of an evaporating cloud (EC) is to establish why a conflict (or impasse) exists (helping answer the question of What to change?), ...
[33]
(PDF) Harnessing resistance: Using the theory of constraints to ...
Aug 5, 2025 · Describes a management methodology called the theory of constraints (TOC) which views resistance as a necessary and positive force.
[34]
[PDF] The Layers of Resistance – The Buy-In Process According to TOC
What TOC suggests is that instead of blaming the other party, the person proposing the change should be accountable for thoroughly planning and presenting the ...Missing: stakeholder | Show results with:stakeholder
[35]
Physical Contradictions and Evaporating Clouds - The Triz Journal
The area of greatest common ground between the Evaporating Cloud (EvC) and TRIZ lies in the way in which the Cloud helps to define Physical Contradictions. Case ...Missing: statistics | Show results with:statistics
[36]
SMED (Single-Minute Exchange of Die) | Lean Production
SMED is a system to reduce equipment changeover times by converting steps to external and simplifying remaining steps, aiming for under 10 minutes.
[37]
(PDF) Setup time reduction: SMED-balancing integrated model for ...
Aug 5, 2025 · The SMED method, originally developed by the Japanese industrial engineer Shigeo Shingo for reducing the time to exchange dies, gives a really ...<|separator|>
[38]
conceptual design using evaporating cloud method - ResearchGate
Aug 26, 2025 · Evaporating Cloud (EC) diagram is a tool commonly used in project management Theory of Constraints. (TOC) methodology to solve bottleneck ...
[39]
The Evaporating Cloud as a Business Communication Tool
Oct 4, 2025 · This article introduces the Evaporating Cloud tool—part of the Theory of Constraints Thinking Processes—as a structured communication aid.
[40]
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[41]
[PDF] THEORY OF CONSTRAINTS IMPLICATIONS IN MARKETING ...
The theory of Constraints ... A significant recent extension of the cloud method is in the development of a generic cloud (or core conflict cloud).
[42]
Applying the TOC TP: A case study in the service sector
Aug 7, 2025 · An increasingly utilized framework for implementing the continuous improvement management philosophy is the Theory of Constraints (TOC).
[43]
The TOC Thinking Process: The viability of change - ResearchGate
Mar 14, 2025 · Request PDF | The TOC Thinking Process: The viability of change ... Entities from these conflict clouds were synthesized into a core conflict ...
[44]
A Deep Dive into TOC Thinking Processes - A-dato
Sep 15, 2023 · These tools include logic diagrams such as the current reality tree (CRT), evaporating cloud (EC), future reality tree (FRT), prerequisite tree ...
[45]
Thinking Processes – Future Reality Tree | Chris HOHMANN
Apr 6, 2015 · A FRT usually follows an analysis with a Current Reality Tree (CRT) and an Evaporating Cloud (EC), also known as Conflict Resolution Diagram ( ...Missing: validation | Show results with:validation
[46]
The Theory of Constraints (TOC) Thinking Processes - Vithanco
Evaporating Cloud (EC) ... The thinking processes were described by Goldratt as a sequel to the first TOC novel ("The Goal") by the Name "It's not luck".
[47]
Flying Logic Software | Visual planning for TOC and strategy ...
Flying Logic provides an intuitive gestural and visual landscape that helps you map out complex systems, ideate at the beginning of a change process.About · Contact · Version History · Flying Logic 3.0 Released