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Project management & critical chain

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Project management & critical chain

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Project management & critical chain

  1. 1. On Project Management & The Critical Chain Ziya G. Boyacigiller This presentation was created and given by Ziya Boyacigiller who was leading Angel Investor and a loved mentor to many young entrepreneurs in Turkey. We have shared it on the web for everyone’s benefit. It is free to use but please cite Ziya Boyacigiller as the source when you use any part of this presentation. For more about Ziya Boyacigiller’s contributions to the start-up Ecosystem of Turkey, please go to www.ziyaboyacigiller.com
  2. 2. Copyright © Ziya G. Boyacigiller 2003,2004 On Project Management & The Critical Chain Ziya G. Boyacigiller
  3. 3. Copyright © Ziya G. Boyacigiller 2003,2004 What can us from Succeeding in Product Development? 1. Definition: Not working with key customer(s) on the α-version (prototype) 2. Planning: Not signing up to an Objective Specification (concurrent engineering). 3. Management: Not using Project Management with intensity end-to-end. 4. Quality: Not adopting and applying Dr. Deming’s (or Dr. Juran’s, etc.) principles.
  4. 4. Copyright © Ziya G. Boyacigiller 2003,2004 CCRITICAL-RITICAL-CCHAINHAIN SCHEDULING & MANAGEMENT TECHNIQUES Eliyahu Goldratt, North River Press
  5. 5. Copyright © Ziya G. Boyacigiller 2003,2004 Q: Where do profits come from? CUSTOMER PAYS COMPANY COMPANY SHIPS PRODUCT TO CUSTOMER COMPANY BUILDS PRODUCT COMPANY SAMPLES, DESIGNS-IN, BOOKS PRODUCT COMPANY INTRODUCES PRODUCT COMPANY DEVELOPS PRODUCTS COMPANY USES PROFITS TO START NEW PROJECTS
  6. 6. Copyright © Ziya G. Boyacigiller 2003,2004 If we can’t make a product shipment, we lose the profit for that shipment. Whereas if we can’t introduce a product on time we lose much bigger: “A six month delay in product introduction (TTM) reduces lifetime profits by 50%.” “McKinsey & Co.” sales t im e
  7. 7. Copyright © Ziya G. Boyacigiller 2003,2004 Incomplete, Misfocused Design results in cost, time overruns – loss of profits and position
  8. 8. Copyright © Ziya G. Boyacigiller 2003,2004 Affect of TTM on Return on Development Time ASP - 2-3x use monopoly pricing / maintain higher pricing longer margin - 1-2x get a head-start in experience- curve, use higher-volume volume - 2-3x get to see more quotes / get to win more designs lifetime - 1-2x get a head start / get into better quality projects DEMM - 1-3x use same or more resources RODT - 4-12x get a better payback
  9. 9. Copyright © Ziya G. Boyacigiller 2003,2004 fast cycle-time => TTM => higher profits 0 20 40 60 80 100 1201 3 5 7 9 years revenue fast (1 yr cycle) slow (2 yr cycle)
  10. 10. Copyright © Ziya G. Boyacigiller 2003,2004 TTM Focus is vital to Competitiveness
  11. 11. Copyright © Ziya G. Boyacigiller 2003,2004 ALL SCHEDULES START NEAT AT THE BEGINNING... E X P E C T E D F I N IS H D A T E " M I L E S T O N E " A B C D
  12. 12. Copyright © Ziya G. Boyacigiller 2003,2004 Pareto of Typical Delays 0 2 4 6 8 10 12 14 16 18 20FrequencyofOccurance (wks) CONFLICT ESTIMATION RESOURCE/PO TECHNICAL TECHNICAL COORDINATION DEFINITION TECHNICAL TECHNICAL REQUIREMENT VENDOR ACTSOFGOD VACATION DONWTIME PERSONNEL MANAGEMENT HUMANERRS TECHNICAL DOCUMENTATION QA/SHIP
  13. 13. Copyright © Ziya G. Boyacigiller 2003,2004 UNCERTAINITY IS WHY WE NEED PROJECT MANAGEMENT T I M E T O C O M P L E T I O N PROBABILITYOFON-TIMECOMPLETION MEDIAN 1 X > 1 X
  14. 14. Copyright © Ziya G. Boyacigiller 2003,2004 Murphy’s Law: “Whatever can go wrong, willwill.”
  15. 15. Copyright © Ziya G. Boyacigiller 2003,2004 ParkinsonParkinson’’s Laws Law “Work expands to fill (and evenand even exceedexceed ) the time available.”
  16. 16. Copyright © Ziya G. Boyacigiller 2003,2004 Pareto of Historic Delays 0 5 10 15 20 25 30 35 40 45%of1800WW MURPHY PARKINSONS MULTI-TASKING SUBORDINATION OTHER
  17. 17. Copyright © Ziya G. Boyacigiller 2003,2004 Q : What does “Manage Well” reallyreally mean? Faster project development times Meet schedule dates Meet milestone date Maximize engineering productivity Minimize costs Minimize rework Do not keep resources idle . . .
  18. 18. Copyright © Ziya G. Boyacigiller 2003,2004 SACRIFICE LOCAL OBJECTIVES, FOCUS ON THE GLOBAL OBJECTIVE C 1 5 D 9 0 B 3 0 E 3 0 L A T E S T A R T ( S A V E C O S T / R E W O R K ) C 1 5 D 9 0 A 9 0 B 3 0 E 3 0 E A R L Y S T A R T ( P R O T E C T C R I T I C A L - P A T H )
  19. 19. Copyright © Ziya G. Boyacigiller 2003,2004 SUBORDINATE ALL OTHER OBJECTIVES TO PROTECT THE CRITICAL-CHAIN M A N A G E W E L L C O N T R O L C O S T S P R O T E C T T H R O U G H P U T E A R L Y S T A R T L A T E S T A R T G O O D L O C A L P E R F O R M A N C E G O O D G L O B A L P E R F O R M A N C E
  20. 20. Copyright © Ziya G. Boyacigiller 2003,2004 S C H E D U L E S A R E M I S S E D M E E T S C H E D U L E S P R O D U C T I V I T Y T O O L O W I M P R O V E P R O D U C T I V I T Y S C H E D U L E L E S S S L A C K T I M E F O R U N C E R T A I N I T I E S S C H E D U L E M O R E S L A C K T I M E F O R U N C E R T A I N I T I E S .... need to decide what is more important to make us win...
  21. 21. Copyright © Ziya G. Boyacigiller 2003,2004 “SAFETY” BUILT INTO ESTIMATES, EXTENDS TASK SCHEDULES BY 2X T I M E T O C O M P L E T I O N " A G G R E S I V E E S T I M A T E " W I T H M I N I M U M S A F E T Y 5 0 % C O N F I D E N C E " S A F E E S T I M A T E " 8 0 - 9 0 % C O N F I D E N C E S A F E T Y PROBABILITYOFON-TIMECOMPLETION MEDIAN 1 X > 1 X
  22. 22. Copyright © Ziya G. Boyacigiller 2003,2004 BELIEF: The only way to meet the schedule is through protecting each step... Pad every step with safety. T IM E SAFETYA SAFETYB SAFETYC SAFETYD
  23. 23. Copyright © Ziya G. Boyacigiller 2003,2004 SAFETY IS INSERTED INTO PROJECTS IN 3 WAYS  TIME ESTIMATES BASED ON PESSIMISTIC EXPERIENCES  EVERY LEVEL MANAGER ADDS ONE ADDITIONAL SAFETY  ESTIMATOR SANDBAGS AGAINST “CUTS” Q : If estimates have so much safety why do projects finish late?
  24. 24. Copyright © Ziya G. Boyacigiller 2003,2004 Only 50% of projects meet Original Schedule Date (OSD) Over 90% of products introduce the last week of the quarter Q : If estimates have so much safety why do projects finish late?
  25. 25. Copyright © Ziya G. Boyacigiller 2003,2004 PARKINSON’S LAW KICKS IN... EXPECTED FINISH DELAYED START "URGENT" STUFF  Student Syndrome  Multi-Tasking  Accumulating Delays  Interruptions  Distractions
  26. 26. Copyright © Ziya G. Boyacigiller 2003,2004 PARKINSON + MURPHY = DELAY E X P E C T E D F I N IS H M I L E S T O N E D A T E A B C D
  27. 27. Copyright © Ziya G. Boyacigiller 2003,2004 Q : How come we allow multi- tasking? A 1 0 B 1 0 C 1 0 N O M U L T I - T A S K I N G A 5 B 5 C 5 A 5 B 5 C 5 2 0 + d M U L T I - T A S K I N G 2 0 + d 2 0 + d PLUS if A is delayed by “d”, domino-effect kicks in and delays all projects by “d”.
  28. 28. Copyright © Ziya G. Boyacigiller 2003,2004 AVOID MULTI-TASKING Use free-time (waiting time) to help other projects Select resources with low loading- factor Use resource buffers to eliminate domino-effect Coordinate resources through advanced reminders
  29. 29. Copyright © Ziya G. Boyacigiller 2003,2004 DELAYS ACCUMULATE, GAINS DON’T... E X P E C T E D F I N IS H M I L E S T O N E D A T E A C T U A L F IN IS H D A T E A B C D
  30. 30. Copyright © Ziya G. Boyacigiller 2003,2004 PROTECT THE CRITICAL-PATH WITH A PROJECT BUFFER... T IM E SLACKA SLACKB SLACKC SLACKD P R O J E C T B U F F E R
  31. 31. Copyright © Ziya G. Boyacigiller 2003,2004 ATTACK THE HIGHEST UNCERTAINTY TASKS FIRST... T IM E SLACKA SLACKB SLACKC SLACKD P R O J E C T B U F F E R C A B D
  32. 32. Copyright © Ziya G. Boyacigiller 2003,2004 Buffer Simplifies Priorities, Provides Focus and Early Warnings For Managers O K W A T C H / P L A N A C T S A F E T Y B U F F E R
  33. 33. Copyright © Ziya G. Boyacigiller 2003,2004 FEEDING-BUFFERS PROTECT THE CRITICAL-CHAIN, AND PREVENT CRITICAL-PATH FROM CHANGING DURING PROJECT F E E D IN G - B R A N C H E S & F E E D IN G - B U F F E R S
  34. 34. Copyright © Ziya G. Boyacigiller 2003,2004 MANAGING THE SCHEDULE :MANAGING THE SCHEDULE : Eliminate Milestones Force On-time/early Starts Manage To Meet The Aggresive Durations Manage Murphy’s Delays RESULT:RESULT: Gain The Times When Tasks Are Finished Early & Minimize Parkinson’s Delays
  35. 35. Copyright © Ziya G. Boyacigiller 2003,2004 Critical-Chain Technique Saves Resources and Cuts TTM  Half the tasks will be finished on time or early (gains accumulate).  This will offset the other half done late.  Statistically, a project will need less than 1/2 of the safety (project buffer) Therefore, on the average projects will pull in by over 25%
  36. 36. Copyright © Ziya G. Boyacigiller 2003,2004 Less-is-More! Make TTMMake TTM firstfirst priority.priority. MISSINGTTM, PRODUCTIVITY ISLOW MEETTTM, PRODUCTIVITY ISHIGHER PRODUCTIVITY TOOLOW MISSTTM, PRODUCTIVITY ISSTILLLOW START MOREPROJECTS (ONEENGINEERPERPROJECT) START LESSPROJECTS (MULTIPLEENGINEERSPER PROJECT) versus
  37. 37. Copyright © Ziya G. Boyacigiller 2003,2004 We need a paradigm shift for TTM...We need a paradigm shift for TTM...  TTM means focused product plansfocused product plans (less-is- more)  TTM means simplicitysimplicity (straight-line to target)  TTM means focus on futurefocus on future (duck-hunting)  TTM means commitment to wincommitment to win (doing vs winning)  TTM means taking riskstaking risks (risk failure now - win later)
  38. 38. Copyright © Ziya G. Boyacigiller 2003,2004 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% PRE-MFH MFH PD IOS DES LAY FAB TEST INTRO MANAGEMENT INFLUENCE MANAGEMENT ATTENTION Management Influence is Lowest Towards the End of a Project Front-End Roles Back-End Roles
  39. 39. Copyright © Ziya G. Boyacigiller 2003,2004 MANAGEMENT ROLESMANAGEMENT ROLES FRONT-END  Define business strategies  Define product direction  Define process direction  Manage aggregate project & resource portfolios (build - match)  Own and operate product development process  Launch projects & teams  Obtain firm commitmentsObtain firm commitments BACK-END  Review commitmentsReview commitments  Review projects & plans  Provide resources  Assure support from functional organizations  Manage changes & conflicts  Fix systematic problems  Teach, train, indoctrinate  Improve product development process
  40. 40. Copyright © Ziya G. Boyacigiller 2003,2004 Make Commitment to WinCommitment to Win Highest Priority  CEOCEO buys into project - commits to support resource requirements fully & on- time  Senior ManagersSenior Managers buy into project - commit to provide service and support fully & on-provide service and support fully & on- timetime  Project TeamProject Team signs-up to win - commit to meet TTM and other goals - with no excuses
  41. 41. Copyright © Ziya G. Boyacigiller 2003,2004 Manage Project ConflictManage Project Conflict  Commit to meet TTM for all projects when planning OSPCommit to meet TTM for all projects when planning OSP  Eliminate uncertainty - achieve first pass success  Anticipate potential problems, and schedule into successor project a “reasonable” time to resolve them  Have additional resources available to add to predecessor project if problem is beyond reasonable / free up engineer altogether (takes consulting role) if possible  Double-up engineers on successor project to have at least one available all the time (trade the other engineer if problem is beyond reasonable)  Add resources to successor project to make up the lost time
  42. 42. Copyright © Ziya G. Boyacigiller 2003,2004 Manage Estimation ErrorsManage Estimation Errors  Break project into tasks and determine “without- problems” & “with-problems” time estimates  Allow “sufficient” slack time in addition to the cumulative without-problems time  CommitCommit to meet this schedule  Publish project bonus amounts when schedule is signed  Review schedule performance weekly, and actively coach / manage  Eliminate rework by using systems approach to design, and doing cell/block level objective (before design) and design (after design) reviews  Dictate cell / block reuse  Compile task time actuals to use in future estimates
  43. 43. Copyright © Ziya G. Boyacigiller 2003,2004 TTM needs back-end support for good results LIFETIME PROFIT FROM PRODUCT CUSTOMER REQUIREMENTS (POTENTIAL = 100%) PRODUCT DEFINITION IOS DESIGN TEST TTM REACH QUOTE LEADTIME/PRICE DELIVERY RESULT 10% ???

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