Theory of Constraints and Project Management: Challenging the Dominant Paradigm

Theory of Constraints and Project Management: Challenging the Dominant Paradigm Bob Donaldson, VP Strategy, McElroy Translation Company

Setting the Stage: Technology Pressures
CMS/TMS Integration
Automates Localization Project Initiation
Impact on Capacity Planning?
Translation Memory & Advanced Leverage Tools
Improves Translation Reuse
Impact on Translator Involvement?
Collaborative Working Models & Environments
Enables More Parallelism
Impact on Quality Control?
Machine Translation Integration
Improves Translator Productivity
Impact on Business Model?

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%
Over budget
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.
Late
Survey Results (1998)* Challenges & Symptoms

Project or Standard Services or Life Cycle?
Localization Project
Historical Usage
Describes Initial Localization of Legacy Material
Implies Unique Set of Goals, Tasks, Challenges
Localization Life Cycle
Standard Component of Product/Content Development
Better Describes Buyer Viewpoint
Implies Regularity & Repetition
Localization Services
Standard Tools, Processes & Deliverables
Better Describes Vendor Viewpoint
Implies Global Perspective on Multi-Project Management

Service Delivery Challenges
Service delivery depends upon people who …
Do not always work at the same rate
Do not always communicate effectively
Constitute a capacity constraint
Customer satisfaction depends upon …
Service Quality  standard processes
Service Responsiveness  flexible processes
Management intervention to adjust priorities
Suboptimal processes & metrics often create
Interdepartmental friction
An environment of chaos

Dilbert’s Perspective on Coordination

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

PMBOK – The Current Standard
Initiating
Sponsorship, Project Goals, etc.
Planning
Schedule, Budget, Resource Allocation, etc.
Executing
Monitoring, Problem Resolution, QA, etc.
Controlling
Performance/Risk Reporting, Forecasting, etc.
Closing
Delivery, Lessons Learned, etc.

Why Projects Fail
The Dilbert Principle:
“ Anything I don’t understand must be easy.”
Do we really understand the difference between project management & project monitoring ?

Typical Project Plan Note the illusion of certainty! Critical Path Local ‘Safety Time’ Embedded Throughout

Typical Plan w/Resource Leveling Illusion of certainty remains Critical Path Local ‘Safety Time’ Embedded Throughout Resource Contention

Multi-Project [Standard Services] Issues Actual Performance? Early Late Expected Performance Early Late ……

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!

Implications for Project Execution
Resources scheduled to maximize utilization
Late completion is penalized (obviously)
So local safety time expands
Early completion is also penalized
“ Excess” capacity invites more work
Utilization is often part of performance reviews
Credibility of estimates may be in question
On-time delivery is placed at risk
Current ‘on time’ status not indicative of risk
Time ‘saved’ by early completion is typically wasted
Time ‘lost’ by late completion cascades to subsequent tasks (and projects!)

Dilbert’s Perspective on Project Status

Theory of Constraints – Focus on Throughput Identify Exploit Subordinate Elevate Evaluate Strategic (Corporate) Loop Tactical (Project) Loop

Tactical Constraints – Single Project
Goal is to deliver project benefit as quickly as possible
Effective project management involves
Identifying the critical chain of tasks that are constraining the project’s completion
Exploiting potential capacity constraints through effective scheduling
Subordinating non-critical tasks & Controlling uncertainty through buffer management
Focus on throughput not utilization

Theory of Constraints in PMBOK Context
Initiating
Planning
Critical Chain Schedule (vs. Critical Path)
Executing
Maximize Throughput (vs. Utilization)
Controlling
Buffer Management (vs. Task Completion)
Closing

Back to our Familiar Project Plan Critical Path

Critical Chain Plan w/Buffers Critical Chain

Critical Chain Plan w/Buffers Gating Buffer Constraint Buffers Feeding Buffer Project Buffer Critical Chain

Typical Resource Utilization Plan Adjusted by removing “safety” time …

The Roadrunner … Sprint Capacity Roadrunners have two speeds … Stopped (but ready for action) and Fast !

Roadrunner Advantages
Working to capacity per schedule generates throughput
Not working ahead protects throughput by
Preserving “sprint capacity”
Avoiding unnecessary work
Reducing work in progress
It’s all about throughput !

Strategic Constraints
Goal is to maximize organizational throughput
“Hard” Constraints
Resource Capacity
Infrastructure Capacity
“Soft” Constraints
Existing Policies
Existing Performance Metrics

A Few Words on Metrics
Typical metrics are cost-centric
Resource utilization levels
Task duration & on-time completion
Project cost & on-time delivery
We need throughput-centric metrics
$’s of throughput per unit of time
$-days of buffer consumption
$-days of work in progress

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

Resolving the Dilemma GOAL: Become a Good Service Company Maintain Consistent Quality Meet Timeliness Expectations Constraint Management Buffer Management Throughput Oriented Metrics

Summary
Identify the Constraint
Select the best leverage point
Exploit the Constraint
Maximize throughput with system schedule
Protect throughput with project buffers
Subordinate everything else to the Constraint
Beware of legacy performance metrics
Provide for “Roadrunner” responses
Elevate the Constraint
Address capacity or productivity limits
Repeat!

Further Reading
A Guide to Implementing the Theory of Constraints (TOC). Dr. K. J. Youngman. www.dbrmfg.co.nz
Any book by Eliyahu Goldratt …
TOC Resultants – www.toc-resultants.com

Contact Details
Bob Donaldson
VP Strategy
McElroy Translation Company
910 West Avenue
Austin, TX 78701
+1 (512) 472-6753
[email_address]
www.mcelroytranslation.com

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Theory of Constraints and Project Management: Challenging the Dominant Paradigm

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