presentation of critical chain and theory of constraints

8/9/2019 Presentation of Critical Chain and Theory of Constraints

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- A breakthrough solution in Multi-ProjectManagement

Critical Chain Project Management


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Objective

Common problems with todays Project Management environment.

Critical Chain concepts

The Multi Project Management the TOC concept

Typical Benefits -

Organisations that have benefited. Aim of TOC Project Management Solution : Complete projects on or before

the scheduled due date.


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What is Project Management the TOC way?

Better managing the inherent variability in Project Management.

Combining both the project layout and accessibility of resources assigned to projecttasks to determine project lead time.

Project scheduling that treats resource and task constraints equally - Critical Chain.

With the focus being on project execution.


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Typical Project Problems / issues

Existing project work is not complete before new projects require a shifting in priorities.

The organization is too slow responding to important opportunities.

Managers feel constant pressure to increase staff to handle peak project loads.

Promised lead times are longer than desired.

There are difficulties completing projects on time.

There is too much rework activity.

There are difficulties completing projects within budget.

Project scope/content is too often compromised to meet dates and/or budget.

Some projects are abandoned or completed without the organization gaining the promised benefit.

Project Managers and Resource Managers have frequent conflicts about priorities and resourcecommitments.

Problems in one project cascade into problems in other projects.


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Project Management has high uncertainty

When should I planWhen should I plan

on starting:on starting:day 15 or day 27?day 15 or day 27?

10+/-3days

10+/-3days

Sources of uncertainty

Creating something new, cannot estimate with

precision

Environment in constant flux: technologykeeps changing, consumer needs keepshifting, etc.

Non-uniform skills: every knowledge worker isdifferent


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Project Management Environments have become more distributed

Virtual Teams

Some team members are sharedacross multiple programs

Distributed decision-making

Functionalpools


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The effects of conflicting resource priorities betweenprojects

Three Tasks arrive at the same time for the same

resource. All Projects are essential for the success ofthe program what can the resource do?

Task A

Project 1One Week

Task BProject 2

One Week

Task CProject 3

One Week


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Collaboration has become impossible to achieve

Engineers

Team leaders Project managers Resource managers Program managers Business unit managers

Multiple decision points


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Current feedback after surveying more than dozen cases

30% of projects cancelled before finished

75% of completed projects are late

Average cost overruns of 189% Average time overruns of 222%


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How these issues are addressed

Multi - Project Management the TOC Way has five

main components:

1. Synchronization mechanism.

2. Planning processes

3. Scheduling processes

.4. Resource Behavior

5. Project Control & Visibility


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KEY CONCEPTS

Buffers

Critical Chain

Critical Chain:

Longest chain

incorporates resourcedependencies/constraints

Buffers: Use available slack in

feeding chain to isolatecritical chain from delays

Remove buffer from critical

chain components, andinsert it in the end


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Project Planning :

Have strategic protection times - Buffers

5 85

8 8

10 Project Buffer 28

FeedingBuffer 16

10

20

16 16

1610


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Change in behaviours allows aggregated buffers to be smaller than the

individual safety.

ie There is less Multi-tasking!!!

5 85

8 8

10Project Buffer

14

FB 8

5 85

8 8

10 Project Buffer 28FeedingBuffer 16


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Does it ever happen that a resource is needed in two places at

the same time?

A5 C 8B5

D8 C 8

E10Project Buffer

14

FB 8

What happens if the lower path experiences uncertainty beyond its durationtimes and the top doesnt? Wont we have a need for the C Resource at the

same time?

Solution: The Critical Chain


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Identifying the Critical Chain

B5 C8

D8 C8

A5

E10

Resource dependencies are identified once resource contention is removed.

Finally, the longest path of dependent events - the Critical Chain - is identified.( We have already removed the safety from the task times, which was half oforiginal task estimate).

A5 B5

E10D8 C8 C8


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A feasible and immune schedule

A5 B5

E10D8 C8 C8

A5 B5

E10D8 C8 C8 Project Buffer 17

FB5

Buffers - Strategic protection of the Due date


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Buffers are used to provide focus and early warning to

protect the critical chain and due date

OKZone 3

WATCH& PLAN

Zone 2

ACTZone 1

RemainingProject Buffer:

BUFFER

MANAGEMENT

PB

100% 67% 67% 33% 33% 0%


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Typical Benefits - Globally

Completing projects ahead of schedule

Increasing capacity - i.e. more projects (thru-put ) with the same number of

resources (typically 20 to 50%);

Competitive advantage - can guarantee customers when delivery will be

Increased revenue and profitability

Management has clearer view of project status and resource availability


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Typical Benefits - Continued

Unified approach to managing, scheduling and synchronizing projects

Visibility and understanding of project requirements

Resources (internal and contractors) have one system for priority

More accurate forward planning of resources and projects

Less stress burnout at the Program Director / Project Manger level

Resource planning becomes logical and not emotional


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Project Management the TOC Way - summary

Is both LOGISTICAL and CULTURAL.

Multi-Project Management the TOC Way has five main components:

1. A synchronization mechanism that allows projects to be started later, but finished sooner

and that clarifies resource assignment priorities.

2. Planning processes that account for the needed dependencies and completion criteria.

3. Scheduling processes that concentrate safety where it will provide the most protection.

4. Changes in behavior that support a world class relay team culture.

5. Mechanisms that create Project Control & Visibility to assist in global decision

making.


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Results - June 1999 - Seabridge - Israel

Telecommunications start-up - with Multi-Service Access Platform (50 people - 35 inR&D)

Purchased by Siemens & NewBridge in November 1997

To deliver Release 2.0 by March 1998 - Bonus tied

Performance - 5 months late

CEO reads Critical Chain - decides to implement Sept 1998

1st project on schedule; 2nd project 2 months early; 3rd on track to meetUnrealistic time constraint;

Major review by Siemens on company turnaround


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Results -

Harris Semiconductor - new $250m plant

New technology product - first 8-inch discrete power wafer fabNew raw material, new automated technologyNew facility, doubling capacityProject scope - construction, installation, ramp-up,Focus on actual delivery of production via the Critical Chain

Industry norm Groundbreaking to first silicon - 28-36 months

Time to ramp production - 18 months

Harris results with Critical Chain

Groundbreaking to first silicon - 13 months

Time to ramp production - 21 days


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Results -

Balfour Beatty Civil Engineering (UK)

1st Project - By pass road (A13) 80 M GBP - 2.5 yr

Half way stage - well behind schedule

Handover 2 weeks early -

99% complete vs Industry norm of 80%

2nd Project - 8km highway (A50)- 35M GBP- 2.4 yr

Beat tender program by 9.5 weeks

45 weeks earlier than contract completion date.

Increased Project Profit Margin.


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The change is both logistical and cultural!

Staggering the introduction of work to minimize the negative effects of badmultitasking.

Building and scrutinizing individual project networks in a way that significantlyreduces the opportunity for missing critical dependencies.

Constructing project schedules in a way that recognizes both resource and pathdependencies.

Placing safety strategically to protect the project, not the individual tasks.

Eliminating behaviors that waste safety.bad multi-tasking unreported early finishes

unclear task completion criteria delayed task starts (StudentSyndrome)

Managing resource assignments according to which project has the greatest need.

(Buffer Management) Managing project progress according to buffer depletion - taking corrective actions

when and only when required.


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Thanks You

presentation of critical chain and theory of constraints

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