conference 2012 pmi kerala june 09, 2012 critical chain approach to project success dr. saji...

Conference 2012 PMI KeralaConference 2012 PMI Kerala June 09, 2012June 09, 2012

Critical Chain Approach toCritical Chain Approach toProject SuccessProject Success

Dr. Saji GopinathDr. Saji GopinathIIM KozhikodeIIM Kozhikode

PMI- Project Management Conference 2012 PMI- Project Management Conference 2012


MotivationMotivation

• Theme of This conferenceTheme of This conference– Project Management- a Life skill

• What is common in all our projects?What is common in all our projects?– Time overrun– Cost overruns?

• Why?Why?• More importantlyMore importantly

– Why such overruns happen rarely in our “personal” projects

– A new way of looking at projects?


PMI StudyPMI Study


What do we want from Project Management ?What do we want from Project Management ?

• Reliable on time in full to budget delivery performanceReliable on time in full to budget delivery performance

More revenue, more Profit, happy customers

• A stable planA stable plan

More Productive use of resources

• Simple, objective measures of Project progress ; project health statusSimple, objective measures of Project progress ; project health status

Shorter meetings, better informed stakeholders - less waste, more productivity

• Clear signals for when corrective action is - Clear signals for when corrective action is - and is notand is not - necessary - necessary

Better directed recovery efforts - less waste, more productivity

• Direction for ongoing improvement effortsDirection for ongoing improvement efforts

The future brings more revenue, more profit, happier customers than the present


And what we normally get!!And what we normally get!!• Reliable on time in full to budget delivery performance ?

A continuous struggle with time, cost and scope ?

• A stable plan Repeated rescheduling ?

• Simple, objective measures of Project progress ? Clarity at the start and end, thick fog in between ?

• Measures of Project health status ? Subjective assessments compounded by human factors ?

• Clear signals for when corrective action is - and is not - necessary ?

Intervening too much too early, and too little too late ?• Direction for ongoing improvement efforts ?

"We'll improve our methods when things get better"


• Do our projects fail because of “bad panning”?Do our projects fail because of “bad panning”?– (is planning the most important PM Skill?)

• Is the delays happen due to “A” Class items/ Is the delays happen due to “A” Class items/ ActivitiesActivities

• Why do our project finish when it is on “Mission Why do our project finish when it is on “Mission Mode”?Mode”?

Revisiting the beleifs….Revisiting the beleifs….


• Classical Project ManagementClassical Project Management– Performance & Increasing Complexity– Re-look at the fundamental assumptions

• Technical and Behavioral Dimensions of Project Technical and Behavioral Dimensions of Project ManagementManagement– Why our projects are delaying?

• Re-thinking the way we manage our projectsRe-thinking the way we manage our projects


Why do our Projects delay?Why do our Projects delay?

• The time estimates are too tightThe time estimates are too tight• The changes in environment is too drasticThe changes in environment is too drastic• The interfacing agencies are inefficientThe interfacing agencies are inefficient• It is impossible to predict the time of completion It is impossible to predict the time of completion

of a ‘work package’ (activity)of a ‘work package’ (activity)• OthersOthers


How do we estimate project duration?How do we estimate project duration?

• Past DataPast Data• Top Down or Bottom up approachTop Down or Bottom up approach• Cushions for uncertaintyCushions for uncertainty• Activity precedence (network technique)Activity precedence (network technique)

• How much is the cushion you provide??How much is the cushion you provide??


Project DurationProject Duration

• What is the effect?What is the effect?

TheoryTheory

ActualActual

The effect is that the typical cushions you provide on The effect is that the typical cushions you provide on each activity is around 50-100% each activity is around 50-100%

3 5 73 5 7

4 5 204 5 20

66

1212


Conventional Project ManagementConventional Project Management

Task Time EstimatingTask Time Estimating• Take best guess at how long a task will Take best guess at how long a task will

taketake• Consider the effect of unknowns or Consider the effect of unknowns or

unplanned interruptionsunplanned interruptions• Add sufficient safety to be able to deliver Add sufficient safety to be able to deliver

with 90% probabilitywith 90% probability


0.2

0.6

0.8

0.4

1.0

0

Time

25% 50%

90%

T50 T90


Problems with the conventional project management techniquesProblems with the conventional project management techniques

• Three mechanisms that inflate time estimatesThree mechanisms that inflate time estimates– The worst-case scenario– Add safety time to ensure project is on time– By inflating original time to protect against a global cut

Median = 2 days Estimated = 5 days

Safety time = 3 days

Confidence level 80-90%

0.4

0.3

0.2

0.1

1 2 3 4 5 6 7

Probability of Completing project within x number of days

Number of days to Complete project

To keep project on schedule - variability encourages people to pad individual activity times with safety time.

50%


Buffers on Each ActivityBuffers on Each Activity

Why after all these cushions project get delayed?Why after all these cushions project get delayed?


• Three Ways to Waste Safety timeThree Ways to Waste Safety time– passing on of previous delays

Dependencies between activities cause delays to accumulateDependencies between activities cause delays to accumulate

– student syndrome

Wait until the last minute to start a taskWait until the last minute to start a task

– multi-taskingMultitasking caused by limited resources ( resource contention )Multitasking caused by limited resources ( resource contention )

• How the Safety Gets WastedHow the Safety Gets Wasted– Adding safety time to resolve the resource contention problem does

not help– we add safety everywhere and then we waste it!

Conventional Conventional SAFETY TIMESAFETY TIME inflates project completion time inflates project completion time

But.. Adding safety time to protecting project objectives seldom works…..


Due DateDue Date

Start Date Finish Date Due DateStart Date Finish Date Due Date

Effect of FluctuationEffect of Fluctuation


Behavioral Dimension of Project EnvironmentBehavioral Dimension of Project Environment

• Additive RuleAdditive Rule– Commitments of duration and total cost of a project are

based upon adding up the duration and cost of individual tasks

• Parkinson’s LawParkinson’s Law– Work expands to fill its time

• 3-Minute EGG Rule3-Minute EGG Rule– It’s not quality if it is finished before time is up

• Hockey Stick Syndrome (student syndrome)Hockey Stick Syndrome (student syndrome)– Waiting to start a task due to more important work at hand


The ConflictThe Conflict

ManageManageProjectsProjects

SuccessfullySuccessfully

ManageManageProjectsProjects

SuccessfullySuccessfully

AvoidAvoidParkisnon’sParkisnon’s

LawLaw

AvoidAvoidParkisnon’sParkisnon’s

LawLaw

MinimiseMinimiseProjectProject

LeadtimeLeadtime

MinimiseMinimiseProjectProject

LeadtimeLeadtime ScheduleScheduleWithoutWithoutsafetysafety

ScheduleScheduleWithoutWithoutsafetysafety

Meet ProjectMeet ProjectPromisePromise

Meet ProjectMeet ProjectPromisePromise

ProvideProvideForFor

MurphyMurphy

ProvideProvideForFor

MurphyMurphy

ScheduleScheduleWithWith

SAFETYSAFETY

ScheduleScheduleWithWith

SAFETYSAFETY

ConConflictflict


Way Out?Way Out?

• Plan A - invest our energy in reducing the extent of Plan A - invest our energy in reducing the extent of the variability:the variability:

- Allowing longer in Project planning stage for preparing estimatesAllowing longer in Project planning stage for preparing estimates- Training staff in estimatingTraining staff in estimating- Use of formal estimating methodsUse of formal estimating methods- Measuring progress and feeding results back into estimating practiceMeasuring progress and feeding results back into estimating practice- More detailed specificationsMore detailed specifications- Less flexibility over changes to specificationsLess flexibility over changes to specifications- Training the staff better in their job contentTraining the staff better in their job content- Using individual performance measures to identify poor performers Using individual performance measures to identify poor performers - Keeping projects short (< 6 months), breaking larger undertakings Keeping projects short (< 6 months), breaking larger undertakings

into several short Projectsinto several short Projects

Doing this can help, but doesn't Doing this can help, but doesn't solvesolve the problem the problem


Plan B - Coping behavioursPlan B - Coping behaviours

• Project Managers Project Managers fight fight to be assigned the most viable Projects to be assigned the most viable Projects • Project Managers Project Managers fightfight for the best staff for the best staff• Project Managers Project Managers fight fight to keep the Project scope downto keep the Project scope down• Project Managers Project Managers exploitexploit changes in scope to unduly extend changes in scope to unduly extend

timelines and budgetstimelines and budgets• Project Managers Project Managers quitquit long Projects well before the delivery date long Projects well before the delivery date• Project Managers Project Managers disregard targetsdisregard targets they know to be impossible they know to be impossible• Staff work Staff work double shiftsdouble shifts in the final weeks / months in the final weeks / months• Dumping the Dumping the blameblame elsewhere elsewhere

Doing these may help the Doing these may help the individual,individual, but not the but not the organisationorganisation


We can We can reducereduce variability, but we cannot variability, but we cannot eliminateeliminate it, it, because it is because it is inherentinherent to the nature of a Project to the nature of a Project

Plan C: Plan C: Approach the problem in a different way Approach the problem in a different way

We must We must managemanage the the variabilityvariability that remains that remains


What is the way out?What is the way out?


Critical Chain Project ManagementCritical Chain Project Management

• Adaptation of Principles of Theory of constraintsAdaptation of Principles of Theory of constraints• Applying TOC concepts to project managementApplying TOC concepts to project management

– Critical Chain is a project management application of the Theory of Constraints (TOC)

– According to TOC, the main constraint in any project is the time taken for completion of the Critical Chain

• Critical Chain Project ManagementCritical Chain Project Management– Conventional approach focuses on successful on-

time completion of each individual activity in a project – TOC approach focuses on successful on-time

completion of the entire project



• The The TOC philosophyTOC philosophy applied to project applied to project management attempts to remove the management attempts to remove the undesirable effects (late, over-budget, undesirable effects (late, over-budget, and under-performance projects) by and under-performance projects) by attacking individual measurements and attacking individual measurements and uncertainty.uncertainty.

• What is TOC Philosophy?What is TOC Philosophy?


Theory of ConstraintsTheory of Constraints• A system improvement philosophy (as A system improvement philosophy (as

opposed to a process improvement opposed to a process improvement philosophy)philosophy)

• Organizations live or die as systems, not Organizations live or die as systems, not as as processesprocesses

• Success or failure is a function of how well Success or failure is a function of how well different component processes different component processes interactinteract with one another with one another


Theory of ConstraintsTheory of Constraints

• Systems are analogous to chains, or Systems are analogous to chains, or networks of chainsnetworks of chains

• Like a chain, a systemLike a chain, a system’’s performance is s performance is limited by the performance of its limited by the performance of its weakest linkweakest link

• The weakest link is the systemThe weakest link is the system’’s s constraintconstraint


Theory of ConstraintsTheory of Constraints

• Another basic principle of TOCAnother basic principle of TOC– A large number of undesirable effects will be

caused by a relatively small number of core drivers

– Eliminating a very few core problems can result in a huge improvement


How we handle variability in Critical Chain How we handle variability in Critical Chain

• We do not build in any contingency at the Task levelWe do not build in any contingency at the Task level• We move all the contingency to the Project level - call this the We move all the contingency to the Project level - call this the

Completion BufferCompletion Buffer

Individual Tasks can now be late without affecting the completion date of the Project

The Project due date is protected as long as the accumulated lateness along any one chain is less than the completion buffer

How does all this relate to projects?How does all this relate to projects?


What difference does this make to our probability of being late ?What difference does this make to our probability of being late ?

Under 'normal' practice, if Under 'normal' practice, if any task any task is is later than later than its contingency its contingency allowanceallowance, we have a problem, we have a problem

Under Critical Chain, we only have a problem if the Under Critical Chain, we only have a problem if the totaltotal lateness lateness exceeds the total contingencyexceeds the total contingency

This second condition is This second condition is much less likelymuch less likely than the first than the first [ Law of averages [ Law of averages / Central limit theorem]/ Central limit theorem] and and increasinglyincreasingly so as the number of tasks so as the number of tasks increasesincreases


Critical Chain Project ManagementCritical Chain Project Management• Uncertainty always present Uncertainty always present –– it doesn it doesn’’t go awayt go away

• Take the safety out of each of the critical path tasks Take the safety out of each of the critical path tasks and lump them into a safety net at the end of the and lump them into a safety net at the end of the projectproject

• Identify constraints along the path and set up Identify constraints along the path and set up buffers in front of tasks that can suffer from the buffers in front of tasks that can suffer from the constraint (constraints = time and resources)constraint (constraints = time and resources)

• Allow tasks to start when predecessors are Allow tasks to start when predecessors are completed and resources are availablecompleted and resources are available


Revisiting activitiesRevisiting activities


Power of AggregationPower of Aggregation


Remove safety time from individual activities Remove safety time from individual activities

Job 4

Job 2

Job 3

Job 1

Conventional Project Schedule Task buffers(safety time) are hidden

within individual activities

Critical Chain Schedule

Buffers are pooled,and made explicit

Project Buffer,

• Safety buffersSafety buffers

• Pooled buffersPooled buffers

Project buffer is safety time added to the end of the critical chain to protect the completion date of the project.


• Feeding buffer on the non-critical pathFeeding buffer on the non-critical path

Feeding BufferProject Buffer

If Slack remains,then schedule aslate as possible

Critical Chain

Feeding path

Feeding buffers are designed to protect the critical chain from delays on non-critical paths


• Resource buffersResource buffers

– a wakeup call to alert resources to be ready to work on critical tasks

– Scheduled idle time can provide better info about resource’s availability (capacity)

ResourceBuffers

Critical Chain

ProjectBuffer

FeedingBuffer

Alert Wkr A

Alert Wkr B

Alert Wkr C



• Critical ChainCritical Chain - set of tasks which determines overall - set of tasks which determines overall project duration, taking into account project duration, taking into account both precedence and both precedence and resource dependencies;resource dependencies; improvement along Critical Chain will improvement along Critical Chain will likely result in improvements to the project as a whole; likely result in improvements to the project as a whole; improvements elsewhere will notimprovements elsewhere will not

• Project bufferProject buffer - protects project commitment dates from - protects project commitment dates from fluctuations on the Critical Chainfluctuations on the Critical Chain

• Feeding bufferFeeding buffer - protects Critical Chain from fluctuations - protects Critical Chain from fluctuations on feeding tasks; provides the possibility for Critical Chain on feeding tasks; provides the possibility for Critical Chain tasks to start earlytasks to start early

• Resource bufferResource buffer - protects the Critical Chain from lack of - protects the Critical Chain from lack of availability of required resources; also provides the possibility availability of required resources; also provides the possibility for Critical Chain tasks to start earlyfor Critical Chain tasks to start early



2 3 4

1 2 3 4 Project Buffer

Task 1

Original Critical Path

Original Critical Path with Buffer

(Safety removed from individual tasks)



• About BuffersAbout Buffers– Identify the points at which to place project, feeding,

and resource buffers– Buffer sizes determined approximately, based either

on average task duration estimates, or a combination of average and worst-case duration estimates

– Individual buffer sizes can be adjusted based on intuitive assessment of risk

– Buffer insertion may cause the Critical Chain, and hence the project completion date, to be pushed later



• The Critical Chain approach to scheduling The Critical Chain approach to scheduling helps minimize project duration and WIP, helps minimize project duration and WIP, delay investment as far as possible, and delay investment as far as possible, and maximize the chance of on-time maximize the chance of on-time completioncompletion


Last wordLast word

• The development of new project management The development of new project management techniques have not reduced uncertaintytechniques have not reduced uncertainty

• Hence we need ways to Hence we need ways to managemanage and and not avoidnot avoid uncertaintyuncertainty

• Critical Chain Management is a way to achieve Critical Chain Management is a way to achieve thisthis


– Thank You

[email protected] / [email protected] / [email protected]@yahoo.in

94000508509400050850

conference 2012 pmi kerala june 09, 2012 critical chain approach to project success dr. saji...

Documents