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Critical Chain Project Management


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A compilation / overview of CCPM

A compilation / overview of CCPM

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  • 1. Critical Chain Project Management - Introduction
  • 2. Agenda
    • Refresher
      • Project Network
      • Critical Path
      • Earned Value
    • Traditional Project Estimation
    • Critical Chain Project Mgmt.
      • Differences from Critical Path
      • CCPM Principles
      • Task & Project Buffers
      • EVM and Buffer Management
      • CCPM Behaviors
      • CCPM Focus
  • 3. Refresher - Project Network
    • A project network is a graph (flow chart) depicting the sequence in which a project's terminal elements are to be completed by showing terminal elements and their dependencies.
    • Float/Slack in project management is the amount of time that a terminal element in a project network can be delayed by, without causing a delay to:
      • Subsequent terminal elements (free float)
      • Project completion date (total float).
  • 4. Refresher - Critical Path
    • A Critical path is the sequence of project network terminal elements with the longest overall duration , determining the shortest time to complete the project.
    • The duration of the critical path determines the duration of the entire project. Any delay of a terminal element on the critical path directly impacts the planned project completion date (i.e. there is no slack on the critical path ).
    • A project can have several, parallel critical paths. An additional parallel path through the network with the total durations just shorter than the critical path is called a sub-critical path.
    • The critical path method was invented by the DuPont corporation and originally considered only logical dependencies among terminal elements
  • 5. Refresher - Earned Value
    • Earned value (EV) compares the work finished so far with the estimates made in the beginning of the project.
      • Gives a measure of how far the project is from completion.
      • Allows PM to extrapolate to arrive at Estimate at Completion
    • Earned Value is measured in terms of
      • budgeted cost of work scheduled (BCWS) or planned value: for every period the budgets of the tasks that were planned to be finished in this time unit
      • budgeted cost of work produced (BCWP) or earned value: for every period the budgets of the tasks that actually finished in this time unit
      • actual cost of work produced (ACWP) or effort spent: for every period the actual costs of the work
      • budget at completion (BAC): sum(BCWS), the total budget estimated to be spent to complete the project
  • 6. Refresher - Earned Value
    • Earned Value is expressed in terms of
      • the cost variance (CV): BCWP - ACWP, greater than 0 is good
      • the schedule variance (SV): BCWP - BCWS, greater than 0 is good
      • the cost performance index (CPI): BCWP/ACWP, greater than 1 is good
      • the schedule performance index (SPI): BCWP/BCWS, greater than 1 is good
      • the estimate at completion (EAC): sum(ACWP) + (BAC - sum(BCWP)) / CPI, an estimate of the budget spent at the end of the project
  • 7. Traditional Project Estimation
    • Assume Infinite Resources
    • Protect the whole by protecting the completion date of each step
      • Pad each step with a lot of safety time
      • Create a Lifecycle network using these estimates to identify the critical path
    • Most of the safety time is taken away by:
        • Student Syndrome
        • Multi-tasking
        • Delays accumulate, advances do not
    Critical Path is the constraint on the project
  • 8. The Limitations
      • “ Work expands to fill (and often exceed) the time allowed.” — Parkinson’s Law
      • “ Whatever can go wrong, will.” — Murphy’s Law
      • “ Many people will start to fully apply themselves to a task just in the wake of a deadline”
        • No matter how long you give students to work on something, they will start the night before.
        • End Result – When problems are encountered deep into the project, there is no buffer to dig into.
  • 9. Critical Chain Project Mgmt.
    • CCPM was developed by Dr. Eliyahu Goldratt
      • Application of Theory of Constraints (TOC) to Project Management
        • TOC Presented in his Business Novel The Goal
        • CCPM Presented in his Business Novel Critical Chain
    • TOC suggests that all real-world systems have at least one constraint; otherwise they would be capable of infinite throughput, which is clearly impossible.
      • TOC claims that a real-world system with more than three constraints is extremely unlikely.
      • Managing a complex system can be made simpler & effective, by providing managers with a few specific focus areas on which to focus -- maximizing performance in the areas of key constraints, or "elevating" the constraint
  • 10. Critical Chain Project Mgmt.
    • Systems are Analogous to Chains
      • Weakest Link is the System’s Constraint
      • A System’s Optimum Performance IS NOT the Sum of Local Optima
      • A System Has Only One Constraint at a Time
    • Constraints Can Never Really be Eliminated
      • Can Move From One Part of the System to Another
    • In project management, the critical chain is the sequence of both precedence- and resource-dependent terminal elements that prevents a project from being completed in a shorter time, given finite resources.
    • If resource availability is not a constraint, then a project's critical chain is identical to its critical path.
  • 11. Differences from Critical Path
    • The use of (often implicit) resource dependencies. Implicit means that they are not included in the project network but have to be identified by looking at the resource requirements.
    • Lack of search for an optimum solution. This means that a "good enough" solution is enough because:
      • As far as is known, there is no analytical method of finding an absolute optimum
      • The inherent uncertainty in estimates is much greater than the difference between the optimum and near-optimum ("good enough" solutions).
    • The identification and insertion of buffers:
      • project buffer
      • feeding buffers
      • resource buffers.
  • 12. CCPM Principles
    • Single Integrated Schedule
    • Eliminate Safeties from Each Task
      • Management Must Not Insist on Each Task Starting & Finishing “On Time”
    • Start Right Jobs at Right Time Using Prioritized Task List
    • Focus on Meeting Milestone Dates , Not Task Dates
    • Counter Parkinson’s Law
      • Conserve Available Float/Slack on Each Task, Reduce Time Available
    • Counter Student Syndrome. Claim Early Finishes Immediately
      • Start Each Task As Early As Possible
    • Predict Milestones Based on Buffer Penetration
    • Focus on Task Throughput , NOT on Task Costs
  • 13. Task & Project Buffers
  • 14. Task & Project Buffers
  • 15. EVM and Buffer Management
    • Earned value (EV) compares the work finished so far with the estimates made in the beginning of the project.
      • Gives a measure of how far the project is from completion.
      • Allows PM to extrapolate to arrive at Estimate at Completion
    • EVM does not distinguish between the progress on the project constraint (i.e. its critical chain) from progress on the non-constraints
    • Buffer Management focuses on throughput.
  • 16. CCPM Behaviors
    • Base Duration & Cost Estimates on Average/Bare Bones Performance
    • When Problems Occur, Solve the Problem vice Starting New Task
    • Decrease Frequency & Duration of Meetings
      • Resolve Conflicts Immediately at the Jobsite
    • Eliminate Bad Multi-tasking
      • Resources Focus on One Job at a Time, Work to Completion
    • Request Only Resources Necessary to Accommodate Priority Work
    • Request Only Overtime Necessary to Recover Buffer on Priority Work
    • Move Resources When Work is Done to Next Priority Work Quickly
    • Work Right Jobs instead of Easy Jobs
    • Plan for New Work & Scope Changes vice Complaining About it
  • 17.
    • Project Focus
      • Identify the System Constraint
      • Exploit the Constraint
      • Subordinate Everything Else
      • Elevate the Constraint
      • Go back to Step 1
    • Senior Management Buy in
      • Promote early finishes
      • Focus on usage of Project Buffer
      • Avoid evaluating of team w.r.t. task deadlines
    CCPM Focus
  • 18. Summary and Conclusion
    • Critical Chain Project Management can dramatically...
      • Improve project delivery date reliability
      • Shorten overall project duration
      • Provide “early warning” of threats to project delivery
      • Enable earlier, less drastic responses
      • Reduce Costs
      • Reduce Overtime
      • Reduce Rework
  • 19. Bibliography / Reference
    • Wikipedia
    • Critical Chain
      • Dr. Eliyahu Goldratt
    • Buffering Against Risk -- Risk Management and Critical Chain.
    • Getting Out From Between Parkinson's Rock and Murphy's Hard Place – Francis S. Patrick
    • Managing an ERP project using critical chain
      • M van Loggerenberg. EDS Enterprise Solutions
  • 20.
    • Thank You