Paradigm Shift for Practice –Critical Chain

Murugappan Chettiar, PMPmpchettiar@yahoo.com

Project Management InstituteNorthern Utah ChapterJan 2013

AcknowledgementsDr. Eli Goldratt, Goldratt Institute, Israel

Critical Chain, Goldratt, The North River PressDr. Michael Poli, Worldwide Project Management, NJ

AgendaContext & ObjectiveEfficiency TrapEstimation Game11th Hour RushBuffer ManagementResource ContentionCritical ChainSummaryQ&A

Context & ObjectiveProject due dates by sales!Senior management changes without consultation.Corporate mentality on SNAFU(s).Synchronization meetings.Budget overruns, Schedule overruns impact.Project Management and good luck.Shift from Critical Path thinking to Critical Chain thinking.

Critical Path vs. Critical ChainCritical PathSchedule onlyIndividual focusLocal EfficienciesSafety added to each step

Critical ChainSchedule + ResourceTeam focusProject EfficiencySafety added to project as a whole

Efficiency TrapLeadersIncrease Revenue (i.e. Gain Market share)Macro Environment

Economic, Political and Governmental, Socio-cultural, Natural, Demographic, Technological & International Environments

External Focus

Revenue- Cost

---------------Profit/Loss

Efficiency Trap

The compensation-productivity gap: a visual essay - Susan Fleck, John Glaser, and Shawn Sprague. Monthly Labor Review • January 2011

Efficiency Trap

ManagersReduce Cost (i.e. Increase Efficiency)

ProcessProceduresTemplates

Organizational EnvironmentInternal Focus

Internal

Process

Macro

Feedback loopSpeed of reactingCritical Path – Pure ProjectSet Expiration Dates!

Critical Path – Estimation GameTypical budget cycleNeed = $75Ask = $1001st level = $1202nd level = $125Accounting = $110Executive = $100

In most environments there is little positive incentive (if any) to finish ahead of time/under budget.Estimates are a self fulfilling prophecy.

Estimation Game – SafetyWhat is Safety?E.g. Production, Project.Issue of safety embedded in planning process.What is your normal safety net (percentage)?

Estimates are based on pessimistic experience. Each level of management adds its own safety.Estimators protect estimations from global cut.

Estimation Game – Distribution

http://en.wikipedia.org/wiki/Positive_skew#positive_skew

Estimation Game – ExampleDrive to work

Time (Min)

Probability (%)

Best case 10 25

Normal 20 50Worst case 50 80

Prob 80 -Prob 50

Actual Time Time as %

30%30 Min 150

Opportunity cost.We try to protect the performance of each step. Steps completed on time don’t matter, as long as Project is delivered on time.Reduce Safety %!

Critical PathLongest chain of dependent steps.Critical Path as the bottleneck.Protect the Critical Path.Example to work with:

A

10

B

10

C

10

D

10

Critical Path – 11th Hour RushStudent Syndrome.First fight for safety time. When you get it, why hurry. Impact is the amount of risk exposure.Risks not documented e.g. win the lottery.Start early (not necessarily as soon)!

Critical Path – Multi TaskingMulti-tasking Concept.Priority setting by shouting.Why multi-tasking is the killer of lead time.Minimize Multi-Tasking!

A B C

10 10 10

A

5

B

5

C

5

A

5

B

5

C

5

A@20

B@25

Critical Path – DependenciesDependencies.A delay in one step is passed on fully to next step.An advance made in one step is usually wasted.Reduce Dependencies!

A

B

C

D

Next Task(choke point)

-5

-5

-5

+15

Buffer Management – Project Buffer

Concept of Buffer.Project Level Buffer vs. Task Level Safety.Put safety where it matters!

A

10

B

10

C

10

D

10

A

5

B

5

C

5

D

5

Project Buffer

20

A

7.5

B

7.5

C

7.5

D

7.5 10

Project Buffer

Buffer Management – Feeding Buffers

Most problems do not occur on the Critical Path.Total Float vs. Free Float.Feeding Buffer.Protect the Critical Path!

A

7.5

B

7.5

C

7.5

D

7.5 10

Project Buffer

C1 FBC2

D1 FBD2

Buffer Management – Resource Buffer

Resource Buffer.Communication Tool.E.g. T-10, T-5, T-2 about Critical Path tasks.Friendly Reminders!

Resource ContentionCritical Resource as a bottleneck.Resource contention.Not just Resource Leveling.

Project Buffer

X

X

X

FBX

X

FB

FB

FB

Critical ChainLongest chain due to network and resource.Removes time/resource contention.Later end date (possibly).

Project Buffer

X

X

X

FBX

X

FB

FB

FB

Try Critical Chain with a PilotSet expiration dates on current tools.Identify a small project with a cohesive team.Reduce task level safety estimations.Introduce Project Buffer as a WBS element.Introduce Feeding Buffers as a WBS element.Formalize Resource Buffer notifications.Start early and reduce risk exposure.Measure the % complete on Critical Path.Leadership buy in is critical.

Critical Path vs. Critical ChainCritical PathSchedule onlyIndividual focusLocal EfficienciesSafety added to each step

Critical ChainSchedule + ResourceTeam focusProject EfficiencySafety added to project as a whole

Its not moving numbers but a cultural shift to project management.

Critical Chain allows us to execute projects more realistically!

Q&A

Thank you!