The document discusses Critical Chain Project Management (CCPM) as a new approach to managing projects that addresses some of the limitations of traditional project management such as localized risk management. CCPM proposes using a global approach to risk management through techniques such as aggregating risks across all tasks in a project rather than at the individual task level and prioritizing projects based on their buffer consumption status. The document outlines some of the key concepts of CCPM such as critical chain planning and buffer management.

1. Critical Chain Project Management:
Motivation & Overview
Robert Richards, Ph.D.
Project Manager
Stottler Henke Associates, Inc.
Hilbert Robinson
President
Afinitus Group LLC
Used with Permission

2. Are You A Responsible Person?
Scenario:
You live in New England and it’s late Winter
Time to airport varies from 45 minutes to 3 hours depending…
Most times it takes a little over 65 minutes
You are joining the President at 9:00 AM at the airport
Questions:
How early should you leave? __________
Why?_____________________________
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3. Presentation Outline
Background
• Triple Constraints
• Murphy’s Law
• Complexity
Problem [What to Change]
• Localized Risk Management
- Task Level Insurance Policy
- Student Syndrome
- Parkinson’s Law
- Multi-tasking
Solution [What to Change to]
• Governing Principle - Global Risk Management
- Project Level Protection
- Systems Perspective
- Execution Control
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4. Background
Triple Constraints [Binding Commitments]
1. Time [Minimize]
2. Capacity / Resource Budget [Minimize]
3. Content / Scope / Quality [Maximize]
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5. Background
Murphy’s Law [Disruption Event]
• Number of unknowns
• Range of possibilities
• Frequency of repetition
Complexity [Amplification factor]
• Degree of integration required
• Number of dimensions to be integrated
• Speed of execution
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6. Presentation Outline
Background
• Governing Principle or Paradigm Shift
• Triple Constraints
• Complexity
• Murphy’s Law
Problem [What to Change]
• Localized Risk Management
– Task Level Insurance Policy
– Student Syndrome
– Parkinson’s Law
– Multi-tasking
Solution [What to Change to]
• Governing Principle - Global Risk Management
– Project Level Protection
– Systems Perspective
– Execution Control
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7. Problem: Localized Risk
Management Strategy
1. Task level insurance policy
See opening scenario – answers?
And if it was a task in a project??
** How safe is safe enough?**
2. Student Syndrome
The dog ate my homework
3. Parkinson's Law
Self-fulfilling prophecy [good estimating?]
4. Multi-tasking [absence of priorities]
Hero or villain?
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8. Problem: Localized Risk Management
One Resource, Four Task, from Four Different Projects
Multi-tasking causes delays to spread across all projects,
adding as much as 20% to all projects
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9. Presentation Outline
Background
• Governing Principle or Paradigm Shift
• Triple Constraints
• Complexity
• Murphy’s Law
Problem [What to Change]
• Localized Risk Management
– Task Level Insurance Policy
– Student Syndrome
– Parkinson’s Law
Solution [What to Change to]
• Global Risk Management
– Project Level Protection
– Systems Perspective
– Execution Control
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10. Solution
Governing Principle Behind CCPM is:
Aggregation of risk…
Benefits:
• Lower overall protection needed
• Higher degree of “coverage” achieved
• Leading to lower incidence of “failure”
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11. Solution:
Global Approach to Risk Management
1. Planning
1. Project Level vs. Task Level Protection
2. Systems Perspective for Multiple Projects
1. Should load for multiple projects be considered?
2. Why?
3. How?
2. Execution Control
1. Promote and encourage team culture
2. Controlled work queues
3. No multi-tasking work rules
4. No batch processing work rules
5. Task assignment prioritization
6. Management by Exception
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12. Critical Chain Planning Process
From Task to Project Protection
1. Traditional Plan 144 hours
2. Safety Excluded 72 hours
3. Resource Leveled
4. Critical Chain Marked 84 hours
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13. Critical Chain Planning Process
From Task to
Project Protection
144 Hours
1. Traditional Plan
72 Hours
2. Safety Excluded
3. Resource Leveled 84 Hours
4. Critical Chain Marked in
Yellow
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14. Aggregation Principle
The Concept of Risk Pooling:
Can someone explain why this works?
Health Care Example:
Larger pool = Lower cost
.
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15. Aggregation Principle
Insurance is designed to work by spreading costs across a large number
of people. Premiums are based on the average costs for the people in
an insured group. This risk-spreading function helps make insurance
reasonably affordable for most people.
http://www.insurance.wa.gov/legislative/factsheets/PoolingRiskReducingCost.asp
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16. Critical Chain Planning
Compared to 144 days
traditional
132 hours
PB = Project Buffer FB = Feeding Buffer
Aggregation Principle [where did some of the safety go?]:
1. Pooled protection provides more coverage
2. Location is just as important as amount
3. Sizing Rule of Thumb  2/3rds to 1/3rd
Buffer is half of preceding chain
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17. Critical Chain Planning
Schedule shown in Aurora
132 hours compared to
144 hours in traditional
schedule
Proj_Buf = Project Buffer FB = Feeding Buffer
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18. Critical Chain in Execution
Schedule Before Execution Starts
132 hours
“AS OF DATE”
132 hours
1. T8 experienced a 5 day increase in scope or delay
2. Results in a 2.5 day impact to the project buffer
3. The rest was absorbed by the Critical Chain gap
4. 35-32.5=2.5 7% Complete and 14% Buffer Consumed
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19. Perspective on Buffers
Not “rear view mirror watching”
Predictive/Preventative/Leading Indicator
Mechanism to Promote and encourage Team Work
Collaboration / Communication Incentive Mechanism
Measuring device – Neutral, Normalized Metrics
Real-time Risk Meter
Encourages an holistic/goal oriented perspective
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20. Critical Chain Priority Metric
Project Status Trend Chart or “Fever” Chart
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21. Critical Chain Priority Metric
Project Status Trend Chart or “Fever” Chart
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22. Multi-Project System
Systems Perspective for Multiple Projects
1. Should load for multiple projects be considered jointly?
– Obviously
2. Why?
– Prevent System Overload/Multi-tasking
3. How?
– By taking a Systems Perspective
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23. Creating a Multi-Project Schedule
Finite Capacity Pipeline
Due Dates Are Derived
Ingredients:
1. CC Plans [shorter]
2. Strategic Pacing Mechanism
3. Strict Priority Scheme
4. Rate Limit Policy/Guidelines
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24. Multi-Project Execution Control
Pipeline Status Snap Shot
100
% Buffer Consumed
In Execution, Buffer Status Drives Priority
Decisions, not Project Importance
0
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
0 | | |
| % Critical Chain 10
Completed 0
By Portfolio of Projects
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25. The Upshot…
Benefits
1. Operational Coherence – Stability
2. 20% Shorter Cycle-Times – Speed
3. On-time Performance – Reliability
4. More throughput – Growth
Challenges:
1. Simple but not easy to grasp – too simple?
2. Requires a change in mindset
3. Takes 120 days for typical 100 person team
4. We don’t need that much improvement
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26. Questions ???
Robert Richards Ph.D.,
Stottler Henke Associates, Inc.
Richards@StottlerHenke.com
Hilbert Robinson
President
Afinitus Group LLC
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