Document

Critical Chain Approach to

Project Success

Dr. Saji Gopinath

IIM Kozhikode

June 09, 2012

Motivation

• Theme of This conference

– Project Management- a Life skill

• What is common in all our projects?

– Time overrun

– Cost overruns?

• Why?

• More importantly

– Why such overruns happen rarely in our “personal” projects

– A new way of looking at projects?

Conference 2012 PMI Kerala June 09, 2012

PMI Study


What do we want from Project Management ?

• Reliable on time in full to budget delivery performance

More revenue, more Profit, happy customers

• A stable plan

More Productive use of resources

• Simple, objective measures of Project progress ; project health status

Shorter meetings, better informed stakeholders - less waste, more productivity

• Clear signals for when corrective action is and is not - necessary

Better directed recovery efforts - less waste, more productivity

• Direction for ongoing improvement efforts

The future brings more revenue, more profit, happier customers than the present


And what we normally get!!

• Reliable on time in full to budget delivery performance ?

A continuous struggle with time, cost and scope ?

• A stable plan

Repeated rescheduling ?

• Simple, objective measures of Project progress ?

Clarity at the start and end, thick fog in between ?

• Measures of Project health status ?

Subjective assessments compounded by human factors ?

• Clear signals for when corrective action is - and is not necessary ?

Intervening too much too early, and too little too late ?

• Direction for ongoing improvement efforts ?

"We'll improve our methods when things get better"


Revisiting the beleifs ….

• Do our projects fail because of “bad panning”?

– (is planning the most important PM Skill?)

• Is the delays happen due to “A” Class items/

Activities

• Why do our project finish when it is on “Mission

Mode”?


• Classical Project Management

– Performance & Increasing Complexity

– Re-look at the fundamental assumptions

• Technical and Behavioral Dimensions of Project

Management

– Why our projects are delaying?

• Re-thinking the way we manage our projects


Why do our Projects delay?

• The time estimates are too tight

• The changes in environment is too drastic

• The interfacing agencies are inefficient

• It is impossible to predict the time of completion of a ‘work package’ (activity)

• Others


How do we estimate project duration?

• Past Data

• Top Down or Bottom up approach

• Cushions for uncertainty

• Activity precedence (network technique)

• How much is the cushion you provide??


Project Duration

Theory

• What is the effect?

Actual

The effect is that the typical cushions you provide on each activity is around 50-100%


Conventional Project Management

Task Time Estimating

• Take best guess at how long a task will take

• Consider the effect of unknowns or unplanned interruptions

• Add sufficient safety to be able to deliver with 90% probability


1.0

0.8

25%

50%

0.6

0.4

0.2

0

Conference 2012 PMI Kerala

T

50

Time

90%

T

90

June 09, 2012

Problems with the conventional project management techniques

To keep project on schedule - variability encourages people to pad individual activity times with safety time.

• Three mechanisms that inflate time estimates

– The worst-case scenario

– Add safety time to ensure project is on time

– By inflating original time to protect against a global cut

0.4

Median = 2 days

Probability of

Completing project within x number of days

0.3

0.2

Safety time =

3 days

Estimated = 5 days

0.1

Confidence level

80-90%

50%

Number of days to

Buffers on Each Activity

Why after all these cushions project get delayed?


Conventional SAFETY TIME inflates project completion time

But.. Adding safety time to protecting project objectives seldom works…..

• Three Ways to Waste Safety time

– passing on of previous delays

Dependencies between activities cause delays to accumulate

– student syndrome

Wait until the last minute to start a task

– multi-tasking

Multitasking caused by limited resources ( resource contention )

• How the Safety Gets Wasted

– Adding safety time to resolve the resource contention problem does not help

– we add safety everywhere and then we waste it!


Effect of Fluctuation

Due Date

Start Date Finish Date Due Date


Behavioral Dimension of Project Environment

• Additive Rule

– Commitments of duration and total cost of a project are based upon adding up the duration and cost of individual tasks

• Parkinson’s Law

– Work expands to fill its time

• 3-Minute EGG Rule

– It’s not quality if it is finished before time is up

• Hockey Stick Syndrome (student syndrome)

– Waiting to start a task due to more important work at hand


The Conflict

Avoid

Parkisnon’s

Law

Minimise

Project

Leadtime

Manage

Projects

Successfully


Meet Project

Promise

Provide

For

Murphy

Schedule

Without safety

Schedule

With

SAFETY

Con flict

June 09, 2012

Way Out?

• Plan A - invest our energy in reducing the extent of the variability:

Allowing longer in Project planning stage for preparing estimates

Training staff in estimating

Use of formal estimating methods

Measuring progress and feeding results back into estimating practice

More detailed specifications

Less flexibility over changes to specifications

Training the staff better in their job content

Using individual performance measures to identify poor performers

Keeping projects short (< 6 months), breaking larger undertakings into several short Projects

Doing this can help, but doesn't solve the problem


Plan B - Coping behaviours

• Project Managers fight to be assigned the most viable Projects

• Project Managers fight for the best staff

• Project Managers fight to keep the Project scope down

• Project Managers exploit changes in scope to unduly extend timelines and budgets

• Project Managers quit long Projects well before the delivery date

• Project Managers disregard targets they know to be impossible

• Staff work double shifts in the final weeks / months

• Dumping the blame elsewhere

Doing these may help the individual, but not the organisation


Plan C: Approach the problem in a different way

We can reduce variability, but we cannot eliminate it, because it is inherent to the nature of a Project

We must manage the variability that remains


What is the way out?


Critical Chain Project Management

• Adaptation of Principles of Theory of constraints

• Applying TOC concepts to project management

– Critical Chain is a project management application of the Theory of Constraints (TOC)

– According to TOC, the main constraint in any project is the time taken for completion of the Critical Chain

• Critical Chain Project Management

– Conventional approach focuses on successful ontime completion of each individual activity in a project

– TOC approach focuses on successful on-time completion of the entire project



• The TOC philosophy applied to project management attempts to remove the undesirable effects (late, over-budget, and under-performance projects) by attacking individual measurements and uncertainty.

• What is TOC Philosophy?


Theory of Constraints

• A system improvement philosophy (as opposed to a process improvement philosophy)

• Organizations live or die as systems, not as processes

• Success or failure is a function of how well different component processes interact with one another



• Systems are analogous to chains, or networks of chains

• Like a chain, a system ’ s performance is limited by the performance of its weakest link

• The weakest link is the system ’ s constraint



• Another basic principle of TOC

– A large number of undesirable effects will be caused by a relatively small number of core drivers

– Eliminating a very few core problems can result in a huge improvement


How we handle variability in Critical Chain

How does all this relate to projects?

• We do not build in any contingency at the Task level

• We move all the contingency to the Project level - call this the

Completion Buffer

Individual Tasks can now be late without affecting the completion date of the Project

The Project due date is protected as long as the accumulated lateness along any one chain is less than the completion buffer


What difference does this make to our probability of being late ?

Under 'normal' practice, if any task is later than its contingency allowance , we have a problem

Under Critical Chain, we only have a problem if the total lateness exceeds the total contingency

This second condition is much less likely than the first [ Law of averages

/ Central limit theorem] and increasingly so as the number of tasks increases



• Uncertainty always present – it doesn ’ t go away

• Take the safety out of each of the critical path tasks and lump them into a safety net at the end of the project

• Identify constraints along the path and set up buffers in front of tasks that can suffer from the constraint

(constraints = time and resources)

• Allow tasks to start when predecessors are completed and resources are available


Revisiting activities


Power of Aggregation


Remove safety time from individual activities

• Safety buffers

Conventional Project Schedule Task buffers(safety time) are hidden within individual activities

Job 1

Job 2

• Pooled buffers

Job 3

Job 4

Critical Chain Schedule

Buffers are pooled, and made explicit

Project Buffer

,

Project buffer is safety time added to the end of the critical chain to protect the completion date of the project.


• Feeding buffer on the non-critical path

Critical Chain

Feeding path

Project Buffer

Feeding Buffer

If Slack remains, then schedule as late as possible

Feeding buffers are designed to protect the critical chain from delays on non-critical paths


• Resource buffers

– a wakeup call to alert resources to be ready to work on critical tasks

– Scheduled idle time can provide better info about resource’s availability (capacity)

Feeding

Buffer

Critical Chain

Alert Wkr A

Resource

Buffers


Alert Wkr B

Alert Wkr C

Project

Buffer

June 09, 2012


• Critical Chain - set of tasks which determines overall project duration, taking into account both precedence and resource dependencies; improvement along Critical Chain will likely result in improvements to the project as a whole; improvements elsewhere will not

• Project buffer - protects project commitment dates from fluctuations on the Critical Chain

• Feeding buffer - protects Critical Chain from fluctuations on feeding tasks; provides the possibility for Critical Chain tasks to start early

• Resource buffer - protects the Critical Chain from lack of availability of required resources; also provides the possibility for Critical Chain tasks to start early



Task 1

Original Critical Path

2 3 4

Original Critical Path with

Buffer

2 3 4 Project Buffer 1

(Safety removed from individual tasks)





• About Buffers

– Identify the points at which to place project, feeding, and resource buffers

– Buffer sizes determined approximately, based either on average task duration estimates, or a combination of average and worst-case duration estimates

– Individual buffer sizes can be adjusted based on intuitive assessment of risk

– Buffer insertion may cause the Critical Chain, and hence the project completion date, to be pushed later



• The Critical Chain approach to scheduling helps minimize project duration and WIP, delay investment as far as possible, and maximize the chance of on-time completion


Last word

• The development of new project management techniques have not reduced uncertainty

• Hence we need ways to manage and not avoid uncertainty

• Critical Chain Management is a way to achieve this


– Thank You saji@iimk.ac.in / saji.gopinath@yahoo.in

9400050850


Document

Critical Chain Approach to

Project Success

Motivation

And what we normally get!!

Revisiting the beleifs ….

How do we estimate project duration?

Behavioral Dimension of Project Environment

The Conflict

What is the way out?

Critical Chain Project Management

Critical Chain Project Management

Last word

Related documents

Products

Support

Document

Critical Chain Approach to

Project Success

Motivation

And what we normally get!!

Revisiting the beleifs ….

How do we estimate project duration?

Behavioral Dimension of Project Environment

The Conflict

What is the way out?

Critical Chain Project Management

Critical Chain Project Management

Last word

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