This paper presents an approach to understand the logic in ladder diagram (LD)/LD program by transforming it into a sequential function chart (SFC). Transformation of LD into SFC is done by employing state-space-based approach and rule-based heuristics. State space approach generates all possible states of the system, being controlled by LD, by assuming the occurrence of various events in the manufacturing system in an asynchronous manner. From all these states, practically feasible states that conform to heuristic rules developed for various control elements in the system are identified. From these feasible states, the sequence of occurrence of states, i.e., sequence graph is derived by a heuristic that relies on the essential input conditions activating each output in the LD. The effectiveness of the proposed approach is demonstrated with several case studies, representing increasing levels of logical complexity in the respective ladder diagrams. Copyright © 2013 Inderscience Enterprises Ltd.