an introduction to critical chain project management (ccpm)

Gary Palmer Critical Point Consulting

1

An extract of a presentation given to the APM PMC SIG Seminar on

2nd October 2013

www.criticalpoint.co.uk

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Intellectual Property

This document is the Intellectual Property of Critical Point Ltd

This document is supplied for the personal use of

the recipient and is not to be copied, edited, transmitted or broadcast in part or in whole

without the prior permission of Critical Point Ltd.


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Late

What do we mean by ‘Project Failure’?

3

Over Budget

Below Specification

Below Quality

Any one (or more) of the above


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Late

4

Over Budget

Below Specification

Below Quality

Why do we need to change? - 1

Because many projects are one or more of the above


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Productivity & Throughput:

Often Low

Excessive Wastage

Slow Progress

Costly


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Business Impact:

Product Expensive

Late to Market

Customer Dissatisfaction

Reputation

Project Failure & Slow Costly Projects Cripples Business


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1. The traditional methods in use,

VIRTUALLY GUARANTEE these results.

Why do we continue to have poor project performance?

7

2. We have not had a viable alternative.

Until now…


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CCPM Statistics:

Project Delivery: 90%+ on time

Project Completion: 20% - 50% Faster

Productivity: 20% - 60% Increase

Throughput: 50% - 200% Increase

Critical Chain Project Management

8

Without increasing resources


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By resolving:

Endemic problems in Traditional Proj. Mgmt

How Does CCPM Deliver These Improvements?


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‘A set of interlinked techniques and tools that work individually and collaboratively to significantly improve the processes and operation of scheduling and execution in project, programme and portfolio environments’

What is CCPM?

10


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What is CCPM?

11

Techniques: Working practices, Behaviours

Tools: Processes, Software


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What is CCPM?

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Individually: Resolve a specific problem

Collaboratively: In unison to support the whole


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What is CCPM?

13

Improvements: Efficient processes

Faster operation


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What is CCPM?

14

Scheduling: Optimum, realistic schedule

Effective contingency protection

Execution: Efficient working practices

Excellent progress visibility, focus, control


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What is CCPM?

15

Projects: Single projects

Programme: Multi-project

Portfolio: Enterprise-wide


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Traditional Project Management

The Five Elements of Failure

Task-Level Contingency

Poor Measures & Control

Multi-tasking

Critical Path

Deadline Schedule

16

So, what are the problems in Traditional Proj. Mgmt.?


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Multi-tasking

Critical Path

Deadline Schedule

17


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Planned Completion

Attempt to impose a Rigid construct on a Variable situation

Actual dates will always change

… and will need constant and continued updating

09/09 1/10

13/09 23/09 04/10

10/09 1/09 15/09 23/09 1/10 15/10

10/09 15/09 21/09 07/10

23/09 22/09

30/09

13/10

22/09 03/10 09/10

09/09 14/09 22/09 13/10

14/09 20/09 06/10 13/10


Task Deadline Scheduling – Planning to Fail

18


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Shouldn’t early and late finishes balance out?

Usually not.

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Potential Early Finish

Parkinson’s Law – ‘Work expands to fill the time available’

Task

Deadline Date

Missed Time-Saving

20




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3 d

5 days

7 days

Late Finish Adds Time

Early Finish Gain Lost

5 days

5 days 5 days

Planned

2 days added to schedule

No benefit to schedule

Parallel Converging Tasks tied to schedule dates

Losses Accumulate - Gains Don’t …And the schedule moves out

21



5 days 5 days 5 days

✓

✓

✓


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Dates attempt a rigid structure on a variable situation

Parkinson’s Law often prevents early finishes

Losses increase time and costs, not offset by gains

Schedule is guaranteed to require frequent changes

Project end-date slip is almost inevitable

Summary

22




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Multi-tasking

Critical Path

23

CCPM Schedule


The Five Elements of Success


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09/09 1/10

13/09 23/09 04/10

10/09 1/09 15/09 23/09 1/10 15/10

10/09 15/09 21/09 07/10

23/09 22/09

30/09

13/10

22/09 03/10 09/10

09/09 14/09 22/09 13/10

14/09 20/09 06/10 13/10

24

Why use dates if we know that they are going to change?


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No Due Dates / Deadlines Schedule is used only as a Dependency Chart

Work is progressed as a ‘Relay Race’ No schedule updating necessary

CCPM Schedule

25


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Potential Early Finish

Task

Deadline Date

CCPM Schedule

26

So now, without deadlines to fuel Parkinson behaviours,


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High Levels of Embedded Contingency

CCPM Project-Level Contingency

Traditional Task-Level Contingency (Review)


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Remove task-level contingency

28


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Task Estimates have no in-built contingency

Estimates are based on ‘Aggressive-but-possible’ task times


Shorter Task Durations & much reduced timeline

No space for Parkinson or Student Syndrome

But where is our contingency now?

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Buffer protects the Project – not individual tasks Provides the project Commit Date

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Aggregate Contingency

Project Commit

Date

Project Buffer

31


Critical Task over-runs are absorbed by the Buffer

The Project ’Schedule’ remains unchanged

The Project Commit Date is not affected

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Project Protection

Project Commit

Date

Project Buffer

32


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Project Protection

Project Commit

Date

Project Buffer

Buffer Status shows the impact on contingency

And we are able to measure and manage our contingency

Buffer Status

33


If a Critical Task finishes early…

The time saved is ‘added back’ into our contingency

Buffer Status always shows the latest position

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Project Protection

Project Commit

Date

Project Buffer

34

Buffer Status


Project Contingency which results in

Student Syndrome which results in

Parkinson’s Behaviours and

Streamlined Schedules with

Aggregated Uncertainties are built into a

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Visible, Manageable Contingency which prevents

Protected From Delays and

Fast and Efficient Projects which are

Do not require Schedule Changes


35

Project-Level Contingency Cascade


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Multi-tasking

Critical Path

36

CCPM Schedule

Project-Level Contingency


Task H

Task F

Task I

Task B Task C Task D

Task G

Task A Task J

Task E

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Critical Path ignores resources Critical Path based ONLY on task dependency & duration

Valid only in an environment without resource constraints

But what happens if we have resource contentions?


Critical Path – A dangerous path to follow?

37


Critical Path Problems

Resource Contentions

Task H

Task F

Task I


Task G

Task A Task J

Task E

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Post–CP Resource Levelling

Task E

Task H

Task F

Task I

Task B Task D

Task G

Task A Task J

Levelling resolves the issue… but increases timescales

And the vision of the Critical Path dominates

…and so tactical manoeuvres soon start...

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Task C

39



Avoidance Tactics 1- Multi-Tasking

Task H

Task B Task D Task A Task J

Task E

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Quality may be reduced

Predictability becomes less certain

Work becomes fragmented and control less easy

But because Multi-tasking takes longer…

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2 - Overtime

Task H


Task E

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…Extra hours need to be worked

Scheduling becomes difficult

And Control starts to ebb away

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Slippage

Task H


Task E

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Multi-tasking is high risk

High potential for slippage

Diminishing returns due to staff morale / burnout

Schedule long since become unmanageable 42



Scope Cut

Task H


Task E

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Last resort to hit target date is a Scope Cut

May cause work in other areas

Further degrades quality

‘Project Meltdown’

Sco

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ut

Sco

pe

Cu

t

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Incorrect Dependency Path often with

Misleading Priorities which encourages a spiral of

Ignoring Resources Contentions leads to an

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Unstable Schedule which needs



Fire-fighting tactics which leads to an

Unrealistic Completion Dates and

Out of Control Project with an

Critical Path Cascade

44

Frequent Changes


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Multi-tasking

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CCPM Schedule


Critical Chain




Task H

Task F

Task I


Task G

Task A Task J

Task E

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CCPM Critical Chain

1. Build Dependency Network As Normal

Include Resource Requirements

46


CCPM Critical Chain

2. CCPM Software - Resource Levelling

Task E

Task H

Task F

Task I


Task G

Task A Task J

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Prevents over-allocation of resources


CCPM Critical Chain

3. CCPM Software - Identify the Critical Chain

Task E

Task H

Task F

Task I


Task G

Task A Task J

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CCPM treats Resource Constraints as dependencies…

…which changes the project priority path

Priority sequence ‘jumps’ to resource dependencies

A realistic critical sequence – The Critical Chain 48


Critical Chain / Critical Path Comparison

Task E

Task H

Task F

Task I


Task G

Task A Task J

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Task H

Task F

Task I


Task G

Task A Task J

Task E

Critical Chain

Critical Path

49


Correct Dependency Path with

Realistic Priorities which provides a

Including Resources Contentions leads to a

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Stable Schedule that

Realistic Project Duration and

Project Under Control with a

CCPM Critical Chain

Critical Chain Cascade

50

Does not need changes


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Multi-tasking

51

CCPM Schedule


Critical Chain


3d

Task 1: 9 days Task 2: 9 days Task 3: 9 days

Time

3d 3d 3d 3d 3d 3d 3d 3d

Without Multi-tasking:

With Multi-tasking:

27 Days

29 Days

• Nothing gets completed until day 23.

2 days added to overall duration. Quality likely to be poorer.

Day 23 Day 9

• Everything is late.

Task 1: +14 days late(+155%) Task 2: + 8 days late (+42%)

Task 3: +2 days late (+22%)

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Traditional Project Management Multi-tasking:

The Illusion of being productive

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Multi-tasking; The SINGLE best way…

…to screw up TWO JOBS.

It slows everything down

It reduces quality

It wastes time and costs more

It is bad for morale

It complicates scheduling & control

It removes planning predictability

It causes delivery delays

Summary

Traditional Project Management Multi-tasking:


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CCPM Schedule


Critical Chain

Single-tasking




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One task only worked on at a time

No interruptions

Dedicated work until complete

CCPM - Task Management

Single Tasking

55


3d


Time

3d 3d 3d 3d 3d 3d 3d 3d


With Multi-tasking:

27 Days

29 Days

• Nothing gets completed until day 23.

2 days added to overall duration. Quality likely to be poorer.

Day 23 Day 9

• Everything is late.

Task 1: +14 days late(+155%) Task 2: + 8 days late (+42%)

Task 3: +2 days late (+22%)

Traditional Project Management Multi-tasking


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Time


27 Days

CCPM Single Tasking

The reality of being productive

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It improves quality

It reduces time & money spent

It simplifies scheduling & control

It enables planning predictability

It is good for morale

It speeds everything up

Summary

CCPM Single Tasking

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Multi-tasking

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CCPM Schedule


Critical Chain

Single-tasking


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Use of ‘Percentage Complete’:

Report to expectation – no bad news to give

Can’t be challenged – only task owner knows

Often simply aligned with time used

Optimism that time can be pulled back

Reality is often ignored - An easy place to hide


Progress Measurement

60


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Measurements - Percentage Complete, Time / money used / left

Position against base line, Milestones achieved…

What do they tell us? How much time/money used - Retrospective

What do they tell us about the future? Very little…



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What is the Only Question PM’s get asked?


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Are we on target?

What do we really need to know?

How exposed are we?

Have we got enough safety in hand?

Is there a trend?

Is it upward or downward?

Should we be taking any action?

Where should we be taking action?



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Often not a true / realistic picture

Real Status / safety contingency is hidden

False sense of schedule security

Leads to persisting ‘90% complete’ / late-emerging issues

Can cause major / incorrect re-scheduling

Doesn’t answer the Big Question

Summary



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Multi-tasking

64

CCPM Schedule


Critical Chain

Single-tasking

Good Measures Visible Control


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CCPM Progress Reporting:

Frequent – daily

Is task complete?

If not, how much task-time left remaining?

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CCPM Progress Measurement


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‘Critical Chain’ Completed

✓

✓

✓

Critical Chain completed reported into CCPM software

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A

B C D

E F


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Contingency Buffer Usage

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+3

+3

A

B C D

E F

✓


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Task C has no effect on buffer

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Buffer Used

+3

+3

+3 +3

Buffer Remaining

A

B C D

E F

✓


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Early report from task D that an additional 5 days will be required

This report also feeds into the Buffer usage

Provides earliest notification of expected position

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Buffer Used

+3

+3

+5

+3 +3

Buffer Remaining

D C B

A E F

+5


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Amount of critical work completed: Critical Chain

Put these two together…


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Now we have two key measurements:

How much contingency remaining: Project Buffer


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Singular

Objective

Predictive

Easily interpreted

Auto constructed

Up-to-date

Immediate


The Fever Chart

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Daily Reporting:

Progress is always up-to-date

Project position is always up-to-date

Summary - 1


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‘Remaining Duration’ Reporting:

More accurate / realistic picture

Focusses the task worker

Real Status / safety contingency is visible

Persisting ‘90% complete’ syndrome banished

Prevents late-emerging issues

Summary - 2


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Fever Chart:

Combined view of progress and contingency

Trends provide early warning

Objective, singular, visual, always available

Prevents unnecessary schedule changes

Answers the Big Question!

Summary - 3


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Multi-tasking

75

CCPM Schedule


Critical Chain

Single-tasking

Good Measures Visible Control

Yes – but not just 5 problems, CCPM fixes 2 more as well.

So, have we fixed all of the problems?


The Ever

Changing

Schedule

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The Five Problems



Multi-tasking

Critical Path

Deadline Schedule

77 What other problem is common to each of these?


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Schedule Changes

Schedule Changes

Schedule Changes

Schedule Changes

Schedule Changes

78 Each individual issue causes schedule changes



Multi-tasking

Critical Path

Deadline Schedule



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Rem. Duration Visible Control

Single-tasking

Critical Chain

CCPM Schedule

CCPM Schedule Stability

79

Each CCPM element fixes individual problems AND

removes the causes of Schedule Changes


Vicious Circles C

riti

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on

sult

ing

80


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Schedule Changes

Schedule Changes

Schedule Changes

Schedule Changes

Schedule Changes

81



Multi-tasking

Critical Path

Deadline Schedule

But…Not only does each problem area cause schedule

changes…


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Schedule Changes

Schedule Changes

Schedule Changes

Schedule Changes

Schedule Changes

82 Each individual problem area perpetuates others



Multi-tasking

Critical Path

Deadline Schedule


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Self-Perpetuation

Schedule Changes

Schedule Changes

Schedule Changes

Schedule Changes

Schedule Changes

83 Locked-in to self-perpetuating systemic failure



Multi-tasking

Critical Path

Deadline Schedule


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Rem. Duration Visible Control

Single-tasking

Critical Chain

CCPM Schedule

CCPM Schedule Stability

84

CCPM removes the causes of individual problems,

constant schedule changes and systemic failure


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Seven Problems of Traditional PM…

…and the Seven Solutions of CCPM

Traditional Problems:

Deadline Scheduling


Critical Path

Multi-tasking


Schedule Volatility

Problem Perpetuation

85

CCPM Solutions:

Flexible Scheduling


Critical Chain

Single-tasking

Good Measures & Control

Schedule Stability

Solution Constancy

Traditional v’s CCPM – Overall Summary

+ Poor Work Environment

= ‘Progressive Excellence’

+ Good Work Environment

= ‘Terminal Mediocrity’


Programme

& Portfolio

Myth

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Achieving Terminal

Mediocrity on a

Large Scale 86


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The Programme & Portfolio Myth

1. That the more projects you start, the more you will get done

87

CCPM in Programme and Portfolio

Environments


KR

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Overlapping Projects + Overloaded Resources

KR

KR

KR

Key Resource

KR

Project 1

Project 2

Project 3

88 Projects stopped by resource contention


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3mths

Project 1: 9mths Project 2: 9mths Project3: 9mths

3mths 3mths 3mths 3mths 3mths 3mths 3mths 3mths

Project Fragmentation:

27 mths

30 mths

mth 23

mth 9

Overloaded Programme

1. Project Fragmentation

Overloading can lead to project fragmentation

Fragmentation delays all projects

89


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3mths

Project 1: 9 mths Project 2: 9mths Project3: 9mths

3mths 3mths 3mths 3mths 3mths 3mths 3mths 3mths

27 mths

30 mths


2. Increased Exposure to Change

9 mths

21 mths

Longer elapsed time gives more exposure time for changes

Changes generate more work and extend projects

Meanwhile unfinished work gets ‘rusty’ 90


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Project 1

Project 2

Project 3

Perception Reality at Working Level


3. Generates Multi-tasking

Overloading creates multi-tasking at the working level Causes constant schedule changes

Causes fighting for resources Slows all projects

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Project 1

Project 2

Project 3

Plan Reality


4. Loss of Completion Predictability

?

?

Multi-tasking leads to Fragmentation

Fragmentation makes completion unpredictable

?

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Project fragmentation causes delays

Increased exposure to changes

Drives multi-tasking

Competition for Resources

Loss of Planning Predictability

Summary



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1. That the more projects you start, the more you will get done’

… You won’t

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So what can we do to improve this?

1. That the more projects you start, the more you will get done

95

… You won’t


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Recognise that:

Increasing work in progress slows throughput

Decreasing work in progress speeds up throughput

CCPM in Multi-Project Environment: Maximising Throughput

96


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‘Reducing Work in Progress:

Reduce & Limit ‘In progress’ projects to optimum

‘Stagger’ new project starts

Implement a ‘Pull’ System: not a ‘Push’ System


97


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Overlapping Projects + Overloaded Resources

“It’s all TOP PRIORITY”

KR

KR

KR

Key Resource

KR

Project 1

Project 2

Project 3

98 Projects stopped by resource contention


KR

KR

KR

Project 1

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KR Project 3

Stagger Project Starts on Key Resource

Project 2 KR

KR

Key Resource 99 Stagger projects = faster completions


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Reducing WIP accelerates throughput

Staggering starts reduces key resource contention

Multi-tasking greatly reduced

Competition for resources reduced

Planning predictability restored

Increased throughput improves profitability

Summary


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It’s what you finish…

…not what you start.

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Singular

Objective

Predictive

Easily interpreted

Auto constructed

Up-to-date

Immediate

CCPM Programme Management

The Programme Fever Chart

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Programme Fever Chart focusses on projects that need attention


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Progress Monitoring

Drill Down for detail

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The Evidence

for CCPM

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High Tech 3M Advasense Technologies Agilent Technologie AMCC AMD Avaya Avitronics Barco Bell Canada BT Radianz Computer Sciences Corp Cray, Inc. ECI Telecom Ltd. Eclozion Informatique Ericsson Estonian Telephone Fairchild Semiconductor Graftech Hewlett Packard Hitachi Computer Products Honeywell IBM Ismeca Europe Semiconductor ITT Canon L-3 Communication Systems LSI Logic Lucent Technologies Marvell

High Tech / Medtronic, Inc. Microsoft Motorola Numonyx Philips Semiconductors Pioneer Qualcomm RSA Security SanDisk Sapient Seagate Technology LLC Sony Ericsson Spirent Communications Sprint Sun Microsystems Symbian Tadiran Spectralink Tektronix TT Technologies Tundra Semiconductor Workscape Xerox Corporation Business Education Ashridge Management College Project Management Institute London Business School + Over 160 Universities

Life Sciences Abbott Labs Adirondack Surgery AHIS-St. Vincent Health AMGEN Andover Healthcare Inc. Arterain Medical Baxter Boston Scientific Central Dupage Health Bovis Pharmaceuticals Converge Medical Inc. Cytori Therapeutics, Inc. Edwards Lifescience Ethicon Gambro Healthcare GlaxoSmithKline Johnson & Johnson Medtronic Merck Medco Managed Care Pfizer Pharmacia Roche Diagnostics Spectranetics Tenet Health Care Tyco Healthcare United Behavioral Health Vascore Medical Ventana

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Companies Using CCPM - 1

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Aerospace and Defense Aerojet Corporation Air Force Institute of Tech. BAE Systems The Boeing Company General Dynamics Halliburton ITT Space Systems Lockheed NASA Northrop Grumman Portsmouth Naval Shipyard Puget Sound Naval Shipyard Raytheon SAAB Avionics US Air Force

Consumer Products Coca-Cola Colgate Palmolive Del Monte Foods Fonterra Gillette Heineken IKEA Kraft Foods McKee Foods Nike Philip Morris

Industrial ABB Accoat Advanced Energy Technology Alcan Alfa Lava American Rubber Products Applied Plasmonics AREVA Atomic Energy of Canada . Balfour Beatty Bimba Manufacturing Bosal Bosch Rexroth Ltda. Brice Manufacturing BVR Technologies Company C.F. Roark Welding. Callaway Golf Celite Corporation s Conoco Corning Cable Systems Cueros Industrializados DaimlerChrysler UK Danfoss Delta Faucet Company Detroit Diesel Reman-West DuPont Eastman Kodak Company

Industrial/ ExxonMobil Chemical Fisher Controls Fluid Brasil Sistemas Fluke Corporation Fuel Cell Energy GE Industrial Systems Hach Honda ITT Corporation Kawasaki Heavy Industries, M&M Precision Systems Marshall Industries Merichem Chemicals Milwaukee Forge Rail care Raychem Rolls Royce Siemens Sylvania Unilever Tata UPC Technology Volvo Source:TOC International, Gatlinburg, TN.

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Companies Using CCPM - 2

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Space Shuttle Software Development Project Projects completed up to 42% ahead of schedule.

Space Shuttle Hardware Development Project Hardware delivered 36% early, 20% under budget, exceeded quality expectations

Space Shuttle Engineering Document Development Project Schedule reduction of 58%, exceeded customer expectations

Boeing Space Shuttle Development Results using CCPM:

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Some Results:

After having used it in 2,523 public works projects in 2007 and over 4,000 public works projects in 2008, the Japanese government has recommended that critical chain project management “be used on all projects henceforth (approximately 20,000 projects per year).”

Japanese Government

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Professional Recognition

APM Body of Knowledge. "An alternative to creating networks based on activity dependencies is to use a technique called critical chain. This method considers the availability of resources and the interdependencies between resources.“ - APM Body of Knowledge 6th edition (2012) p 155

Association for Project Management

PMI Body of Knowledge “Critical chain is a schedule network analysis technique that modifies the project schedule to account for limited resources. Initially, the project schedule network diagram is built using duration estimates with required dependencies and defined constraints as inputs. The critical path is then calculated. After the critical path is identified, resource availability is entered and the resource-limited schedule result is determined. The resulting schedule often has an altered critical path.” PMI BoK 4th edition. Ch 6 Time Management p.155

Project Management Institute

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http://www.google.co.uk/url?sa=t&rct=j&q=apm&source=web&cd=&sqi=2&ved=0CIcBEKEQUAE&url=https://plus.google.com/114687352375530136328?socpid=1&socfid=web:infocard:default:image&ei=-k6zUKOXJPGR0QWqlIGABg&usg=AFQjCNE_my-3yDwj9eKQ2gKdcnYyuZC5LA


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Professional Recognition

Conference Presentation Critical Chain Project Management using Microsoft Project 2010 and Prochain: Implementing Project Portfolio Management.

The Theory of Constraints International Certification Organization (TOCICO) is a global not-for-profit certification organization for TOC practitioners, consultants and academics to develop and administer certification standards, and facilitate the exchange of latest developments. TOCICO has run an international conference for the past 8 years.

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Development:

Result of many years of continuous development

Based on Theory of Constraints (TOC) 1980’s

Needed software to be truly viable

Software to slow to develop

Now several good software products

Key Publications by Eliyah Goldratt:

1984 'The Goal' – TOC in manufacturing

1997 ‘ Critical Chain’ - Applying TOC to project management

CCPM Potted History

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Not just software!

Often considerable culture change

Requires education throughout company

People need time to get used to new working methods

No ‘Big Bang’

Start with single project ‘Pilot’

Progress to Multi-project (Programme)

Progress to Portfolio (Organisation)

CCPM Implementation

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Over 15 years successful implementations of CCPM

in

Multiple companies / Multiple industries / Multiple countries

Consider what CCPM could do for your organisation

Contact us for

a free CCPM overview presentation

at your organisation

[email protected] 01892 506881


Critical Point Consulting

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‘Critical Chain Project Management presents us with an opportunity to plan projects well for maybe the very first time. We should make sure that we break with our old traditions of how we have done things in the past, and re-plan our projects from scratch.

But planning is only half the story. The real power of CCPM comes from the control afforded during the execution or deployment of the job. Buffer status and buffer management allows us unprecedented feedback on the progress of the project and where to focus attention and where not.

And maybe this is the most important factor in the whole approach.

We have a totally new and systemic way to manage projects. We should make the very most of this opportunity.’ Dr. Kelvin Youngman

Last Word

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