Critical Chain Project Management


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A compilation / overview of CCPM

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Critical Chain Project Management

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