Theory of Constraints and Project Management: Challenging the Dominant Paradigm

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Theory of Constraints and Project Management: Challenging the Dominant Paradigm

  1. 1. Theory of Constraints and Project Management: Challenging the Dominant Paradigm Bob Donaldson, VP Strategy, McElroy Translation Company
  2. 2. Setting the Stage: Technology Pressures <ul><li>CMS/TMS Integration </li></ul><ul><ul><li>Automates Localization Project Initiation </li></ul></ul><ul><ul><li>Impact on Capacity Planning? </li></ul></ul><ul><li>Translation Memory & Advanced Leverage Tools </li></ul><ul><ul><li>Improves Translation Reuse </li></ul></ul><ul><ul><li>Impact on Translator Involvement? </li></ul></ul><ul><li>Collaborative Working Models & Environments </li></ul><ul><ul><li>Enables More Parallelism </li></ul></ul><ul><ul><li>Impact on Quality Control? </li></ul></ul><ul><li>Machine Translation Integration </li></ul><ul><ul><li>Improves Translator Productivity </li></ul></ul><ul><ul><li>Impact on Business Model? </li></ul></ul>
  3. 3. Typical Project Problems Source: National survey conducted by The Standish Group Until it's too late No reliable way to measure project status Epidemic Day-to-day chaos & frustrations 30% of projects Canceled before finished 70% of projects Fall short of planned technical content By 189% <ul><ul><li>Over budget </li></ul></ul>Only 44% of all projects finish on schedule or before.  The rest tend to be very late.  On average, projects are 222% longer than planned. <ul><ul><ul><li>Late </li></ul></ul></ul>Survey Results (1998)* Challenges & Symptoms
  4. 4. Project or Standard Services or Life Cycle? <ul><li>Localization Project </li></ul><ul><ul><li>Historical Usage </li></ul></ul><ul><ul><li>Describes Initial Localization of Legacy Material </li></ul></ul><ul><ul><li>Implies Unique Set of Goals, Tasks, Challenges </li></ul></ul><ul><li>Localization Life Cycle </li></ul><ul><ul><li>Standard Component of Product/Content Development </li></ul></ul><ul><ul><li>Better Describes Buyer Viewpoint </li></ul></ul><ul><ul><li>Implies Regularity & Repetition </li></ul></ul><ul><li>Localization Services </li></ul><ul><ul><li>Standard Tools, Processes & Deliverables </li></ul></ul><ul><ul><li>Better Describes Vendor Viewpoint </li></ul></ul><ul><ul><li>Implies Global Perspective on Multi-Project Management </li></ul></ul>
  5. 5. Service Delivery Challenges <ul><li>Service delivery depends upon people who … </li></ul><ul><ul><li>Do not always work at the same rate </li></ul></ul><ul><ul><li>Do not always communicate effectively </li></ul></ul><ul><ul><li>Constitute a capacity constraint </li></ul></ul><ul><li>Customer satisfaction depends upon … </li></ul><ul><ul><li>Service Quality  standard processes </li></ul></ul><ul><ul><li>Service Responsiveness  flexible processes </li></ul></ul><ul><ul><li>Management intervention to adjust priorities </li></ul></ul><ul><li>Suboptimal processes & metrics often create </li></ul><ul><ul><li>Interdepartmental friction </li></ul></ul><ul><ul><li>An environment of chaos </li></ul></ul>
  6. 6. Dilbert’s Perspective on Coordination
  7. 7. Service Delivery Dilemma GOAL: Become a Good Service Company Source: TOC Resultants: www.toc-resultants.com Maintain Consistent Quality Meet Timeliness Expectations Work to Standard Processes Work Flexibly
  8. 8. PMBOK – The Current Standard <ul><li>Initiating </li></ul><ul><ul><li>Sponsorship, Project Goals, etc. </li></ul></ul><ul><li>Planning </li></ul><ul><ul><li>Schedule, Budget, Resource Allocation, etc. </li></ul></ul><ul><li>Executing </li></ul><ul><ul><li>Monitoring, Problem Resolution, QA, etc. </li></ul></ul><ul><li>Controlling </li></ul><ul><ul><li>Performance/Risk Reporting, Forecasting, etc. </li></ul></ul><ul><li>Closing </li></ul><ul><ul><li>Delivery, Lessons Learned, etc. </li></ul></ul>
  9. 9. Why Projects Fail <ul><li>The Dilbert Principle: </li></ul><ul><ul><ul><li>“ Anything I don’t understand must be easy.” </li></ul></ul></ul>Do we really understand the difference between project management & project monitoring ?
  10. 10. Typical Project Plan Note the illusion of certainty! Critical Path Local ‘Safety Time’ Embedded Throughout
  11. 11. Typical Plan w/Resource Leveling Illusion of certainty remains Critical Path Local ‘Safety Time’ Embedded Throughout Resource Contention
  12. 12. Multi-Project [Standard Services] Issues Actual Performance? Early Late Expected Performance Early Late ……
  13. 13. Parkinson’s Law 1 C. Northcote Parkinson; The Economist, Nov. 1955 Work expands to fill the time available for its completion 1 The root problem is “Safety” time!
  14. 14. Implications for Project Execution <ul><li>Resources scheduled to maximize utilization </li></ul><ul><li>Late completion is penalized (obviously) </li></ul><ul><ul><li>So local safety time expands </li></ul></ul><ul><li>Early completion is also penalized </li></ul><ul><ul><li>“ Excess” capacity invites more work </li></ul></ul><ul><ul><li>Utilization is often part of performance reviews </li></ul></ul><ul><ul><li>Credibility of estimates may be in question </li></ul></ul><ul><li>On-time delivery is placed at risk </li></ul><ul><ul><li>Current ‘on time’ status not indicative of risk </li></ul></ul><ul><ul><li>Time ‘saved’ by early completion is typically wasted </li></ul></ul><ul><ul><li>Time ‘lost’ by late completion cascades to subsequent tasks (and projects!) </li></ul></ul>
  15. 15. Dilbert’s Perspective on Project Status
  16. 16. Theory of Constraints – Focus on Throughput Identify Exploit Subordinate Elevate Evaluate Strategic (Corporate) Loop Tactical (Project) Loop
  17. 17. Tactical Constraints – Single Project <ul><li>Goal is to deliver project benefit as quickly as possible </li></ul><ul><li>Effective project management involves </li></ul><ul><ul><li>Identifying the critical chain of tasks that are constraining the project’s completion </li></ul></ul><ul><ul><li>Exploiting potential capacity constraints through effective scheduling </li></ul></ul><ul><ul><li>Subordinating non-critical tasks & Controlling uncertainty through buffer management </li></ul></ul><ul><li>Focus on throughput not utilization </li></ul>
  18. 18. Theory of Constraints in PMBOK Context <ul><li>Initiating </li></ul><ul><li>Planning </li></ul><ul><ul><li>Critical Chain Schedule (vs. Critical Path) </li></ul></ul><ul><li>Executing </li></ul><ul><ul><li>Maximize Throughput (vs. Utilization) </li></ul></ul><ul><li>Controlling </li></ul><ul><ul><li>Buffer Management (vs. Task Completion) </li></ul></ul><ul><li>Closing </li></ul>
  19. 19. Back to our Familiar Project Plan Critical Path
  20. 20. Critical Chain Plan w/Buffers Critical Chain
  21. 21. Critical Chain Plan w/Buffers Gating Buffer Constraint Buffers Feeding Buffer Project Buffer Critical Chain
  22. 22. Typical Resource Utilization Plan Adjusted by removing “safety” time …
  23. 23. The Roadrunner … Sprint Capacity Roadrunners have two speeds … Stopped (but ready for action) and Fast !
  24. 24. Roadrunner Advantages <ul><li>Working to capacity per schedule generates throughput </li></ul><ul><li>Not working ahead protects throughput by </li></ul><ul><ul><li>Preserving “sprint capacity” </li></ul></ul><ul><ul><li>Avoiding unnecessary work </li></ul></ul><ul><ul><li>Reducing work in progress </li></ul></ul><ul><li>It’s all about throughput ! </li></ul>
  25. 25. Strategic Constraints <ul><li>Goal is to maximize organizational throughput </li></ul><ul><li>“Hard” Constraints </li></ul><ul><ul><li>Resource Capacity </li></ul></ul><ul><ul><li>Infrastructure Capacity </li></ul></ul><ul><li>“Soft” Constraints </li></ul><ul><ul><li>Existing Policies </li></ul></ul><ul><ul><li>Existing Performance Metrics </li></ul></ul>
  26. 26. A Few Words on Metrics <ul><li>Typical metrics are cost-centric </li></ul><ul><ul><li>Resource utilization levels </li></ul></ul><ul><ul><li>Task duration & on-time completion </li></ul></ul><ul><ul><li>Project cost & on-time delivery </li></ul></ul><ul><li>We need throughput-centric metrics </li></ul><ul><ul><li>$’s of throughput per unit of time </li></ul></ul><ul><ul><li>$-days of buffer consumption </li></ul></ul><ul><ul><li>$-days of work in progress </li></ul></ul>
  27. 27. Performance Metrics w/Buffers Source: http://www.dbrmfg.co.nz Throughput Dollar Days Late Throughput Dollar Days Late Near-the-end Middle Beginning End Track Feeding Buffer End Time 0  Buffer Checking Time Constraint Buffer End Time 0  Buffer Checking Time Tracking Zone
  28. 28. Resolving the Dilemma GOAL: Become a Good Service Company Maintain Consistent Quality Meet Timeliness Expectations Constraint Management Buffer Management Throughput Oriented Metrics
  29. 29. Summary <ul><li>Identify the Constraint </li></ul><ul><ul><li>Select the best leverage point </li></ul></ul><ul><li>Exploit the Constraint </li></ul><ul><ul><li>Maximize throughput with system schedule </li></ul></ul><ul><ul><li>Protect throughput with project buffers </li></ul></ul><ul><li>Subordinate everything else to the Constraint </li></ul><ul><ul><li>Beware of legacy performance metrics </li></ul></ul><ul><ul><li>Provide for “Roadrunner” responses </li></ul></ul><ul><li>Elevate the Constraint </li></ul><ul><ul><li>Address capacity or productivity limits </li></ul></ul><ul><li>Repeat! </li></ul>
  30. 30. Further Reading <ul><li>A Guide to Implementing the Theory of Constraints (TOC). Dr. K. J. Youngman. www.dbrmfg.co.nz </li></ul><ul><li>Any book by Eliyahu Goldratt … </li></ul><ul><li>TOC Resultants – www.toc-resultants.com </li></ul>
  31. 31. Contact Details <ul><li>Bob Donaldson </li></ul><ul><li>VP Strategy </li></ul><ul><li>McElroy Translation Company </li></ul><ul><li>910 West Avenue </li></ul><ul><li>Austin, TX 78701 </li></ul><ul><li>+1 (512) 472-6753 </li></ul><ul><li>[email_address] </li></ul><ul><li>www.mcelroytranslation.com </li></ul>

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