Theory of Constraints:
A look at the Drum-Buffer-Rope and
Critical Chain Project Management
approach
EMGT 364 Term Paper
Jesse Crispino and Ryan Saulsbury
Theory of Constraints
Developed by Eliyahu M. Goldratt
A systems management philosophy
developed in the 1980s
Boost process performance by looking at
the entire process
Identifying and reducing “bottlenecks”
Often applied in conjunction with TQM,
JIT and ABM
Theory of Constraints
Project managers have always analyzed
individual components of a process
Maximizing components may not improve the
process
Goldratt views the entire process and finds the
weakest link--Capacity Constrained Resource
(CCR)
All projects contain one, but not many CCRs
Theory of Constraints:
Principles
If a system is performing as well as it can,
only one of its component parts will be.
If all parts are performing as well as they
can, the system as a whole will not be.
Inertial is the worst enemy of a process of
ongoing improvement. Solutions develop
weight that resists change.
Ideas are not solution.
Theory of Constraints:
Steps
Goldratt’s Five Steps
Identify the systems constraints
Decide how to exploit the constraints
Subordinate everything else to the exploitation
of constraints
Elevate the systems constraint
If any constraints have been violated, repeat
the process
Theory of Constraints:
Defined
Constraint: Anything that limits a system’s
performance relative to its goal
Inventory: All the money used to purchase
things the system intends to sell
Operating expense: The money a system
spends to turn inventory into throughput
Throughput accounting: An accounting
system used to measure TOC operations
Theory of Constraints:
Defined
Throughput: the difference between net
revenues and direct material cost
limited by internal constraints (plant capacity)
limited by external constraints (market
demand)
Two critical assumptions:
The goal of product or customer mix and
volume should be to maximize throughput
Assumes that once a certain capacity exists,
operating expenses are fixed
Theory of Constraints:
Applied
Soldier analogy:
Gaps appear due to
Dependent events
Statistical fluctuation
Drum-Buffer-Rope (DBR) system links first
“soldier” with the slowest one
Drum-Buffer-Rope (DBR)
Logistical tool that balances flow of a
system
Drum: A schedule for capacity of the
constraint
Buffer: Built in time for parts to reach the
constraint early (in process inventory)
Rope: A schedule, or information
connection, for releasing raw materials
Drum-Buffer-Rope:
Implementing
Identify CCRs-Pareto’s Rule may help
Schedule CCRs to capacity (drum)
Protect from statistical fluctuations with
time buffers (buffer)
Monitor CCRs to ensure the timely release
of materials “upstream” (rope)
Monitor Buffer--Buffer Management (BM)
Drum-Buffer-Rope: Case
Study #1
Oregon Freeze Dry: Four step process
wash/prepare food
freeze food in cold room
dry food to remove ice crystals (sublimation)
packaging/shipping
Difficulty finding space in cold room-wash/preparation was very quick
Considered buying new cold room
Drum-Buffer-Rope: Case
Study #1
Reduced the amount of raw food going into
wash phase
Cold room scheduled by using a BTU
calculation for max efficiency
Less product in cold room created faster
freezing rates.
Oregon Freeze uses only 30% of cold room
capacity and produces a higher quality
product
Drum-Buffer-Rope: Case
Study #2
Wendell August Forge: Hand-hammered
aluminum commemorative items
Six production cells
Expected hammering to be drum
Walk on shop floor showed buffing backup
to be CCR
Union mandated breaks
Drum-Buffer-Rope: Case
Study #2
Break schedule staggered--exploitation
Capacity immediately increased 12%
Implemented a Rope to limit raw materials
Work in progress inventories decreased
Managers educated on TOC attitudes
Capacity up 27% by years
Critical Chain Project
Management
Traditional project management, Critical
Path Method (CPM) used for over 40 years
DoD projects: 100-200% more expensive,
and exceeded duration 40-50% of the time
Commercial projects: 70% more expensive,
and exceeded duration 40% of the time
Goldratt’s 1997 book Critical Chain--new
paradigm for PMs
People plan and execute projects
Critical Chain Project
Management
Accounts for human nature factors
Individuals always desire a safety buffer
Goldratt’s “student syndrome”
Parkinson’s law--Work expands to fill the time
allotted
PM multi-tasking reduces efficiency and
penalizes the highest priority
No early finishes
Critical Chain Project
Management
CPM: Tasks scheduled as soon as possible
(ASAP)
CCPM: Tasks scheduled as late as possible
(ASLP)
Reduce work in progress
Reduce up-front costs
PMs focus on first tasks
Increased knowledge as project progresses
Critical Chain Project
Management
ALAP drawback: As the project progresses,
all tasks become critical to project
completion
Goldratt’s solution: Drum-Buffer-Rope
logistical scheduling and consolidated safety
buffers
CCPM: Re-define Your
Paradigm
CCPM requires individual and organizational
behavior changes
Locate and remove hidden safety buffers
Embrace uncertainty vs attempting better
estimates
A 50% change of completing a task on-time
is acceptable--Do not measure against
baseline
“Tell me how you will measure me and I will
tell you how I will behave”
CCPM:
Implementing
Assume all material and information for
tasks are on-hand
Resolve resource conflicts
Locate the Critical Chain--longest chain of
tasks that consider both task and resource
dependencies
Critical Path--longest chain of tasks based
upon task dependencies
CCPM:
Implementing
Individual projects no longer have safety
buffer
Two types of safety buffers are inserted into
the project as a whole
Project Buffer: protects against overruns
on the critical chain
Feeding Buffer: protects against
overruns on tasks that feed the critical
chain
CPM vs CCPM
CPM:
Tasks have scheduled start and finish dates
Early finishes on critical path do not accumulate
Project is on time or late
CCPM:
Relay race analogy
Tasks are scheduled by preceding tasks
completion
CPM vs CCPM
CCPM will finish tasks faster
Project team’s moral and effectiveness will
improve
Project teams/project managers can
produce early finishes
Overall costs will decline
CPM
Start
Finish
- Indicates critical path
CCPM
Rope
Resource
Buffer
Start
Feeding
Buffer
- Indicates critical chain
Project
Buffer
Finish
Critical Chain:
Case Study #1
Harris Semi-conductor: $250M new wafer
fabrication plant
Typical construction time 54 months
CPM analysis yielded 6000 tasks
Critical chain analysis reduced to 150 tasks
40 day delay for weather
15 day delay for equipment problems
Critical Chain:
Case Study #1
Buffers allowed for project delays
Project completed 3 days ahead of schedule
Plant constructed in 13 months
Overall cost only 4% above estimate
Wafer Fabrication plant able to produce
products 40 months faster than the industry
standard
Critical Chain:
Case Study #2
Habitat for Humanity: World Record
attempt for building a house
Old record: 4hrs 39min, Nashville--1998
Critical Chain method predicted 4 hours
Bathroom finished 1 hour longer than
estimated
Overall finishing time: 3hrs 44min
In Class Example:
You are a new plant manager for LETZ GETZ
BLITZED BREWING CO INC.
You need to re-work the production line soon
because your boss, CEO Always Hammered is
getting thirsty for the profits so to speak.
Your Suppliers Bottle Cap Billy, and Hops McGee
are consistently late. Your line supervisor Mr.
Schmidt explains that those producers are from
Denmark and the delays are due to rotten
shipping.
In Class Example:
 Current Situation:
The Hops & Malt used in the brewing process is suppose to arrive
on the 1st of each month but it can arrive 1 day late.
Yeast is purchased in bulk and is delivered on the 4th of the month.
The line supervisor claims yeast requires 4 days of preparation
before being added to the WORT.
Packaging is delivered on the 11th of the month and requires
imprinting and then fix/assembly (2days total)
Your bottles are delivered on the 15th. You can fix the labels and
assemble the packaging after your bottles arrive.
Bottle caps are suppose to arrive on the 16th but lately they have
been a day late.
You are unable to obtain new suppliers because of existing
contracts signed by the CEO.
In Class Example:
The following is a general concept of how to make
the beer in your factory:
Step 1: You can start by creating the WORT. A process
that includes adding water, hops, malt and then a
boiling/cooling process. ( 1 day)
Step 2: Transfer to the fermenter where the yeast is
added
Step 3: Fermentation (10 days-Cannot be reduced)
Step 4: Final Preparation includes: Siphon beer to
remove yeast sediment, Add Sugar-Bitters added to
product to produce, and carbonation (4 days)
Step 5: Bottling/Packaging (2 days)
In Class Example CPM:
In Class Example CCPM:
Develop a CCPM for the Beer Making Process
Remember: Reduce the Critical Path by 50%,
Project Buffer(5 days)
Feeder Buffer(2 total)
Critical Chain vs Critical
Path for Army/UMR?
 Must teach both techniques
 CCPM
 CPM
 Army constrained by resources
 Operations difficult to apply
 Maintenance has potential
Key differences
 ASAP vs. ASLP
 Buffer Management
Drum-Buffer-Rope &
Critical Chain Method
QUESTIONS ??