critical chain basics

Critical Chain Project Management

Brief Idea Overview

Does this remind you of something?

Project 1Project 2

Project 3

Project 4

Project 5

Project 6

Is it true that….• … projects take too long to finish?• … projects are finished late and over budget?• … there are too many changes and rework?• … project resources are not available when needed?• … managers feel constant need to increase staff to handle

peek project loads?• … conflicts regarding project priorities and resource

commitments are frequent?• … problems in one project quickly affect other projects?

Common denominator of all projects: UNCERTAINTY UNCERTAINTY

Uncertainty examined

Prob

abili

ty

Probability distribution of a simple task driving from Prague to Brno

30 min 90 min 180 min 240 min

Project uncertaintyProject uncertaintystems from two types of uncertainty:1.Task uncertainty (how long a task will really take)2.Iteration uncertainty (how many times do we have to repeat the task)

How do people deal with uncertainty?

50% 80%

Safety

People add time (safety) to their plans to increase probability of meeting their individual commitments.

In reality, people pad task estimates to have In reality, people pad task estimates to have 80 – 90% 80 – 90%

chance of delivering on time…chance of delivering on time…

… … and every aggregation level adds some and every aggregation level adds some moremore safety! safety!

We have all this safety in the plan. How come we never finish projects on time?

► Student’s syndrome► Parkinson’s law► Dependencies► Multitasking

Because ofBecause of

Student’s syndrome – valid not just for students

Milestone - task planned Milestone - task planned due datedue date

Time

Effor

t

Murphy

People plan to start as soon as possible, but then waste all safety!but then waste all safety!

Parkinson’s Law – reality bites

““Work expands so as to fill the Work expands so as to fill the time available for its time available for its

completion.”completion.”People People

prefer to prefer to use use

remaining remaining time to do time to do a “better a “better

job” rather job” rather then report then report

early early completioncompletion

Task dependencies – project delay accumulation

Task integration points

15 d (delay)

A (10 d)

B (10 d)

C (10 d)

D (5 d)

Plan 15 d

“D” can start only when “A”, “B” & “C” are finished.

How long will the project really take?How long will the project really take?

5 d (early finish)

Early finishes are not propagated through project at all, but delays are propagated always!but delays are propagated always!

Resource dependencies – multi-project delay accumulation

Resource integration points

A

C

B

D

Project 1

Project 2

Resource α

Resource α

Tasks “A” & “C” have 50% chance of delay. What is the probability of task “D” starting on time?What is the probability of task “D” starting on time?

Delays propagate Delays propagate across projectsacross projects through resource through resource dependencies!dependencies!

Multitasking – real project plan killer

Project Asetu

p

Asetu

p

Bsetu

p

Bsetu

p

Csetu

p

Bsetu

p

Task for project A finished

It is not only the waste in multiple set-up times, but the significant increase in task total durations!but the significant increase in task total durations!

Task for project C finished

PLAN

REALITY Csetu

p Csetu

p

DELAY

DELAY

Project Bsetu

p

Project C

setu

p

NO MULTITASKING Project A Project B Project C

setu

p

setu

p

setu

p

Task for project B finished

One Resource

DELAY

Multitasking game• Two tasks

– A : write numbers from 20 to 1, one number in each row– B: write letters of English alphabet from A to T, one letter in each row

• Round 1– Multi-task: work on both tasks in parallel, write one number and one letter.

Record time of finishing task A and B

• Round 2– Focus: work first on task A (write all numbers) and record duration. Then

work on task B (write all letters) and record duration.

Duration A Duration B

Round 1

Round 2

~ 50 sec ~ 50 sec

~ 15 sec ~ 30 sec

►HOW ARE WE DEALING WITH THESE FACTS NOW?

►DOES IT HELP?

►CAN WE DO SOMETHING TO CHANGE IT?

Solution overview

Critical Chain Project ManagementCritical Chain Project Management

Ground-breaking project management methodology developed by

Dr. Eliyahu Goldratt, management guru and author of “Theory Of Constraints”

CCPMCCPMoffers radical improvement in project management by

implementing

3 BASIC PRINCIPLES

3 principles of CCPM

1. Plan safety (buffer) where it can do most good (protect the longest project path)

2. Release projects into execution based on the constraint availability

3. Drive execution priorities based on relative buffer consumption

Start

safety safety safety safety safety

Finish

safety safety

safetysafety safety

1/2 of task durations

1/2

1/2

Finish

Project buffer protects the due date

safety

# 1 – Put safety (buffer) where it can do most good (protect the longest project path)

20–50%

P=80% P=80%

P=80%

P=80%

P=80%

P=80%

P=80%

P=80%

P=80%

P=80% P=80%

P=8,6%

P=95%

• Constraint in a multi-project environment is the Capacity Constrained Resource (CCR)– Most heavily loaded resource across all projects– Must be near project integration point

# 2 - Release projects into execution based on the constraint availability

C

C

# 2 - Release projects into execution based on the constraint availability

Proj

ect 1

Proj

ect 2

Proj

ect 3

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C

We must reduce multitasking of constraint, thereforewe must stagger project starts based on constraintwe must stagger project starts based on constraint availabilityavailability

Proj

ect 1

Proj

ect 2

Proj

ect 3

# 2 - Release projects into execution based on the constraint availability

30-70%

Project execution“You will start working on this task in 5 months, Tuesday 2nd (at 3:00 PM)”

GOOD PLANNING or WISHFUL THINKING?GOOD PLANNING or WISHFUL THINKING?

Probability of starting on this date is max 20,9%We cannot capitalize on early-finishes

What if the resource is on 2nd needed in other project?

80% 80% 80% 80% 80%

80% 80%

5 months

Instead of detailed planning, drive task execution byPROJECT PRIORITIESPROJECT PRIORITIES

# 3 - Drive execution priorities based on relative buffer consumption

Project priority is determined by the status of the project buffer - the less buffer remaining, the higher the priority

The secret of Critical Chain Project Management Critical Chain Project Management success lies in ideas that

make common sense, but counter common practice

1. Buffers make project finish EARLIEREARLIER(Assign time buffers where they can do most good)

2. Early start does NOTNOT lead to early finish (Release projects into execution based on the constraint availability)

3. Resources and tasks CANNOT BE PRECISELYCANNOT BE PRECISELY scheduled at planning time (Drive execution priorities based on relative buffer consumption)

CRITICAL CHAIN IMPLEMENTED

Who will be affected and how?

PPRROOJJEECCTTSS

Project team Project team membermember Project managerProject manager

Project officeProject officeLine managerLine manager

Top managers / Top managers / sponsorssponsors

Top managersTop managers / / sponsorssponsors

We have consistent and instant information about projects that require our attention.

We have objective data about status of each project

% of project completed

% o

f buff

er c

onsu

med

Project managerProject manager

I have instant information about project status and estimated due date.

I also have information, on what project tasks to focus on to restore buffer penetration

Project officeProject office

We can prepare precise impact scenarios of new projects to running projects based on constraining resources and let top

managers decide.

Resource overload

Line managerLine manager

I have detailed overview of task priorities my department is working on.

I have information about planned resource requirements from projects to my department

Priority task

Not urgent

Priority task coming in 3

weeks

Utilization overview

In 4 weeks we will

have issue

2

Project team Project team membermember

I have clear priorities of my project tasks, both current and future.

Task progress reporting is so simple!

Priority task My

current tasks

“hot potato” coming

How many days until finished?

What are the benefits of CCPM?►Reduced time to market time to market (typically by 20 – 50 %by 20 – 50 %)►Major increase of due-date deliverydue-date delivery (OTOBIF) close to 95 %close to 95 %►Up to 50%50% more projects more projects done with same resources►Unambiguous information about project statusproject status►Ability to resolve project issues beforebefore they impact due

date►Effective resource planning / balancingresource planning / balancing►Alignment of project priorities project priorities across whole company►Less negative dependenciesdependencies between projects► Less changesLess changes in projects►Objective data for further project execution project execution improvements

►SKODA POWER►Delta Air Lines, Inc.►T-Systems►eIrcom►Alcatel-Lucent►Medtronic►Alna Software►Proctor & Gamble Pharmaceuticals►ThyssenKrupp (Johann A. Krause, Inc.)►Rapid Solutions Group►Oklahoma City Air Logistics Center►U.S. Naval Shipyards►LSI Logic►Medtronic Europe►LeTourneau Technologies►Northern Digital Inc.►Oregon Freeze Dry►Erickson Air-Crane►Skye Group►Marketing Architects

►AHOLD Central Europe►SKOFin►HP Digital Camera Group►AMDOCS Software►Boeing Space & Intelligence Systems►Bosch Security Systems►BHP Billiton►Central Nuclear Almaraz Trillo►U.S. Marine Corps►AFOTEC U.S. Air Force►Hamilton Beach/Proctor-Silex►Airgo Networks►Action Park Multiforma Grupo►Celsa Group►USAF Ogden Air Logistics Center►Duke Energy►Edwards Airforce Base►TATA Steel►Danisco (Genencor International)

Has anyone else implemented CCPM?

What next?

ADDITIONAL INFORMATION

Key lessons learned► Focus on results, not cultural change

− Culture and behavior can become a smokescreen to hide real implementation issues− Change management rules and related policies and measurements, and the culture will also

change.

► Success is achieved through intimate involvement of top executives

– Official sponsorship is not enough. To implement successfully, senior management should1. Set aggressive goals2. Remove policy obstacles3. Create habit of managing buffers

► CCPM is not about better planning and tracking, but effective execution

– Capacity is wasted because of poor synchronization– Reflect only key variables in project plans– Prioritize based on buffer consumption across whole organization

► Do not accept compromises on 3 CCPM principles