Critical chain

1. CRITICAL CHAIN PROJECT
MANAGEMENT
EMCM5103 TOPIC 9

2. INTRODUCTION
• This topic deals with the complications and changes that occur in
standard operating procedures. Since complications usually occur
after resource requirements have been linked to the developed
schedule of the project, alternative approaches need to be
developed in order to deal with the constrained situation.
• The discipline of the mechanism to overcome the constraints of
complications in a project comes from the theory of constraints by
Goldratt (Tu, Sebla & Vayvay, 2014). The theory of constraints
(TOC) is a management philosophy which focuses on the weakest
ring(s) in the chain to improve the performance of systems.

3. INTRODUCTION
• It was originally proposed as a process for removing bottlenecks from
production processes. One of the key features in critical change project
management (CCPM) theory is that the important technical and
behavioural elements must be understood in relation to each other.
• The CCPM method reengineers the project planning and management
practices, in order to eliminate issues and problems that lead to poor
project results. The critical chain refers to the longest string of
dependencies that are present in a project. The term chain is used
instead of path, because the critical path is only linked to technical
dependencies and not resource dependencies .

4. THEORY OF CONSTRAINTS
• Theory of Constraint (TOC) is a change method where the focus is
on identifying constraints or bottlenecks in processes and systems.
• These bottlenecks can prevent organisations to maximise its
performance and reach the objective, which is normally to
increase profit
• These bottlenecks can include information, equipment, work
force, and supplies, and can be both internal and external to an
organisation. The fundamental concept of the theory is that,
every business has at least one constraint. That is, any factor that
limits the output of the organisation and prevents it to improve
the performance.

5. THEORY OF CONSTRAINTS (TOC)
The 5 steps of TOC

6. THEORY OF CONSTRAINTS (TOC)
5 steps within TOC methodology that make up the CCPM
Identify the system’s constraint - An intensive identification
of small, minor problems or numerous secondary causes of
constraints must be made to uncover the principle constraint
- the root cause - which limits the output of any system.;
what type of bottleneck that cause problem in the system.
Determine how to exploit these
constraints: Find ways to ensure the
maximum utilisation of the
bottleneck. This could mean
reducing the number of changeovers,
offload work that can be done on
another machine or reduce setup
times to create additional capacity.
Once the root constraint is
identified, a strategy for focusing
and viewing all activities in terms of
the constraint is necessary.
Subject everything else to the system’s
constraint - Make resource commitments or
scheduling decisions after handling the needs of
the root constraint.To keep the bottleneck
running at full capacity at all times, all other
decisions must be subordinated. Running other
machines with a higher production rate than
the bottleneck is considered waste.
Elevate the system’s constraint - This
step addresses the improvement of
the system by elevating the
constraint or seeking to solve the
constraint problem by eliminating the
bottleneck effect.
Elevate constraints to a new level of
productivity: Concentrate all
resources and efforts on the
bottleneck to increase throughput rate
or output. One way to do this is to run
the bottleneck machine for extra
hours every day, this increases the
capacity of the machine . The
difference between step 2 and 4
relates to the amount of investment
required
Start again on step on: With increased capacity of the machine,
there might be a new bottleneck, which needs to be addressed.
The process of improvement must be repeated. Here it is
important to make sure inertia does not cause a system constraint
Determine if a new constraint has been uncovered, then repeat
the process.

7. CRITICAL CHAIN PROJECT MANAGEMENT
(CCPM)
Theory of Constraints (TOC) – developed by Goldratt : for applications within
production environment.
5 steps within TOC methodology that make up the CCPM :
(a)Identify the system’s constraint - An intensive identification of small, minor
problems or numerous secondary causes of constraints must be made to
uncover the principle constraint - the root cause - which limits the output of
any system.
(b) Exploit the system’s constraint - Once the root constraint is identified, a
strategy for focusing and viewing all activities in terms of the constraint is
necessary.

8. CRITICAL CHAIN PROJECT MANAGEMENT
(CCPM)
(c) Subject everything else to the system’s constraint - Make resource commitments
or scheduling decisions after handling the needs of the root constraint.
(d) Elevate the system’s constraint - This step addresses the improvement of the system
by elevating the constraint or seeking to solve the constraint problem by eliminating
the bottleneck effect.
(e) Determine if a new constraint has been uncovered, then repeat the process.

9. • Critical chain method is a modified form of the critical path method. Here, availability
of resources is considered while creating the project schedule.
• In critical chain project management, instead of float, buffers are used. These buffers
are designed in such a way that they completely eliminate the concept of float or
slack.
• The main philosophy of tasks under the CCPM is to manage the implementation of
individual project tasks and the critical chain of tasks scheduled around the effective
use of resources.
• CCPM focuses on the optimisation of the schedule by working with the safety margin
that people build into their task estimations. The safety margin has to be removed and
replaced by buffers at specific points in the project schedule.
CRITICAL CHAIN PROJECT MANAGEMENT
(CCPM)

10. ANATOMY OF A TASK
The main philosophy of tasks under the CCPM is to manage the implementation of
individual project tasks and the critical chain of tasks scheduled around the
effective use of resources . The anatomy of a task is defined as an internal structure
of task within the CCPM. It consists of tasks that define the lowest possible lead
time. The composition of tasks are made up of sequentially dependent tasks.
There are two types of dependencies between tasks involved under CCPM.
One is the ‘tail to head’ task dependency of which the output of one task is
required as an input for another task. The other is resource dependency, also
known as resource constrained critical path, which affects the completion time
of the project.
CCPM focuses on the optimisation of the schedule by working with the safety
margin that people build into their task estimations. The safety margin has to
be removed and replaced by buffers at specific points in the project schedule.

11. There are four types of buffers that are commonly practised:
(a) Project buffer - It is usually placed at the end of the project schedule and is
flexible to accommodate for adjustments based on project experience;
(b) Feeding buffer - This type of buffer is placed at points where inputs from
non-critical tasks merge with critical chain tasks;
(c) Resource buffer - This is the cut-off warning for having to complete the
current task and the project team has to start preparing for a critical chain
task as soon as the current work is done; and
(d) Capacity buffer - This buffer is placed as an on call resource in the schedule
when it is needed to prevent delays in the schedule. This type of buffer adds
costs to the project. Usually it is practised in multiple project setting.

13. • Project Buffer This buffer is placed between the last task and the project completion date as a
non-activity buffer, and this buffer acts as a contingency for the critical chain activities. Any delay on
the critical chain will eat this buffer, but the project completion date will remain unchanged. Also, if
there is any gain from the early finish of any activity, this gain will be added to this buffer as well.
Usually the duration of this buffer is 50% of the contingency that you have removed from each task
estimate.
• Feeding Buffers These buffers are added to the non-critical chain so that any delay on the non-
critical chain does not affect the critical chain. They are inserted between the last task on a non-
critical chain and the critical chain.
• Feeding buffers are also calculated the same way as the project buffer. The duration of these buffers
is based on some fraction of the safety removed from the tasks on non-critical chains.
• Resource Buffers These buffers are kept alongside the critical chain to make sure that they are
available when they are required. This buffer can be a human resource or any equipment. Critical
chain considers the resource constraints as well, it may be longer than the critical path schedule.
However, this might be compensated by removing the contingencies from the activities. Resources
used in critical chain are known as critical resources.

14. EXECUTION OF CRITICAL CHAIN PROJECT
SOLUTION
The word “buffer” or “safety” has been used to refer to the contingency reserve
for individual activities that project managers would like to maintain. This reserve
is reduced when we aggregate risks to ensure that all durations are realistic
rather than adopting the duration estimates based on a 90 per cent likelihood of
successful completion, hence, all activity duration estimates are at the 50 per cent
level. The provision for contingency, in the form of project safety, is removed from
the individual activities and applied at the project level. As a result, indirectly the
project duration is reduced. The remaining questions that need to be answered are:
How much of the project duration has already been reduced and how much of the
aggregated buffer is sufficient?

15. Realistically, the application of CCPM can be categorised into three phases:
(a) Lay all the relevant project tasks in a simplified manner using illustrated diagrams;
(b) Shrink all the duration estimates to the 50 per cent likelihood level. All individual tasks
safety or buffer have been aggregated and is now presented as the project-level buffer; and
(c) Using the rule of thumb of 50 per cent shrinkage, the project schedule is still significantly
shorter than the original. Suppose that a project activity network diagram yielded the initial
values as given in Table 9.1. Note that the modified network shortens the overall project
duration by 22 days, from the original 40 to 18 days. This is because all the risks has been
aggregated at the project level. There is a total of 22 days of potential slack in the schedule
resulting from shrinking activity estimates at each project step. A CPPM modified project
schedule would reapply 11 days of the acquired schedule shrinkage to serve as overall
project buffer. Therefore, the new project schedule will anticipate a duration estimates that
requires 29 days to complete the project.

17. CCPM is not without weaknesses and critics. There are several arguments in the
methodology of CCPM as mentioned in the following:
(a) Lack of project milestones make coordinated scheduling highly problematic,
particularly with external suppliers. Critics contend that the lack of inprocess project
milestones adversely affects the means to coordinate schedule dates with suppliers
who provide the external delivery of critical components;
(b) CCPM is refuted as an ill-suited technique for many types of projects or viewed as
a reconceptualisation of well-understood scheduling methodologies such as Project
evaluation review technique (PERT);
(c) Organisations have to be extremely careful when deciding to exclude conventional
project management scheduling processes in order to solely adopt a CCPM approach as
the method for planning and scheduling activities; and
(d) CCPM is known to bring increased discipline to project scheduling but arguably
seen as an inefficient method for managing the firm’s portfolio of
projects.

18. IMPLEMENTATION OF MULTI PROJECT
CRITICAL PATH
• Critical chain is not the same as the critical path within an activity network.
Critical chain usually skips task dependency links because it requires all
resource levelling to be done before the critical chain can be identified, not after
as in the case of PERT and CPM (Critical path method) networks.
• Critical path depends on task dependency, that is, the linkage of tasks with their
predecessors. In this process, activity slack is discovered after the fact is known
about the layout of the network and the identification of the critical path, all
other paths and activities that may contain some level of slack. For example, a
simplified PERT network that identifies three paths as shown in Figure 9.1.

20. • Figure 9.1 shows the length of the critical path that represents a sequence of activities in
the project network which only involves one staff. Scheduling projects with resource
constraints might lead to resource conflicts as shown in the Figure 9.1. In order to solve
this resource conflict, activities might need to be shifted further to time periods where
resources are still available as illustrated in Figure 9.2, with added path to represent the
solution.
• Given the usual practice, the critical path should have only one critical path per project
but if there is more than one path, one of the options for the project manager is to have an
additional staff (such as assistant project manager) for each critical path added to the
project. The change may be added as part of the contract documentation in the Planning
Phase (procedures, work practices and policies) and how it will be managed in Execution
Phase (meetings, inspections and status reports) in order to keep the project completion a
reality. An additional risk analysis and priority matrix may need to be considered for
each additional path. Figure 9.2 shows a suggested example of the additional path that
might be taken to curb the resource conflict.

22. • https://youtu.be/CLUixYV7bok
• https://youtu.be/mpc_FdAt75A
• https://youtu.be/eLuYgRhT4RI

23. THANK YOU