Critical Chain Project

Management
The Efficient way of Project Follow
up
 Why project gets delayed ?
 Corporate forced an unrealistic schedule to start with.
 Our policy dictated to choose the cheaper vendors.

 The vendors were grossly incapable and unreliable.

 Despite repeated warnings there was no trained man power.

 Too much reliance on the vendors progress report that on site visit
turned out to be less than accurate.
 The arrogant / apathy of state government for giving land, settling
local disputes.

 Bad Weather, Force Majure,

 Too many wasteful ‘synchronization’ meetings interrupted the
actual work.

[Somebody else’s fault]

 It's a catch 22
 The longer a project takes…
The more it costs
The longer it takes
The more opportunities exist to change scope
The more changes in scope…
 The more it costs
 The longer it takes

Perhaps we should figure out a way to prevent projects from

taking longer than they absolutely need to!
 A delayed project means
 Budget over runs.
 Time over runs.
 Compromising the specification.
 Sales delayed, Incentive delayed.
 Interest payment / 0.5% ROE incentive.
 Shortage of cash flow.
 Growth delayed,Loose market share, market domination.
 Drop in share price, mammoth damage to share holders.
 Reputation is at stake both for company and individual.
 Constituent may shift to our competitors (Lanko,Adani..)
 Constituents may reject to pay the burden.
Powai to Santacruz :Estimation
Variation

50% confidence

35 m
Safety

10%
confidence 90% confidence

10 m
50 m
90 m
 Effective utilization of safety
buffers

Task 1
Do not use safety buffers in the tasks

Task 2

Task 3
 Effective utilization of safety
buffers

Task 1
Do not use safety buffers in the tasks

Task 2

Task 3

Move the safety buffer to protect the commitment

Effective utilization of safety
buffers

Safety
Safety Safety End

Safety

Remove the safety from the individual tasks

Put it where the project benefits

Earliest
Possible Expected
Finish Finish
Taking advantage of Group Insurance
It’s something like group insurance
 Effective utilization of safety
buffers
 Consider an insurance analogy
3 homes need to insure against risk
 The old way (CPM)
Assumes each home will suffer a serious problem
So each home self-insures
Not enough to cover a serious problem
 The Critical Chain Way
Assume that not every home will get hit with a
serious problem
Pool your resources
Enough to cover a serious problem, possibly more
 Why Project gets
delayed..

 The main problem is variation – things

happen in a not predictable way (“It is
always different!”). And Mr. Murphy is a
workaholic!

 Basic negative factors can be grouped as:

 Multitasking
(accumulation of numerous pending tasks at the same time);

 “Student’s Syndrome” (everything is done at the

last moment and then something goes wrong);
 Mutual dependence between tasks (delays are
passed but the advances are not passed on). 14
 Why do projects fail?

 Parkinson’s law – work fills the time available; why make

added effort to complete a task today that isn’t due until
tomorrow. No reward for early finish.
 Self-protection – if finish early then will be given less
time next time
 Dropped baton – early finish may not lead to an early
start of the next activity if people aren’t ready to start
(or don’t received the signal to start)
 Excessive multitasking
 Resource bottlenecks
 Student syndrome – delay the start of tasks until you
absolutely have to
 Prerogatives of a PL
 The ability to focus on all the steps.

 Bothearly start and late start may

jeopardize the ability of a PL to focus.

 Ignoring is the heart of problem.

 Present method of monitoring
 Progress report is made according to the
amount of work , or investment ,or metric
ton already achieved relative to the
amount still to do. (Popular but ineffective)

 This kind of measurement never

differentiate between workdone on the
critical path and the work done on non
critical paths.
 Fallacy of measurement
 Our present method measure the progress of
the project by target date but the problem is by
the time the report indicates something wrong it
is actually too late. A ‘Pareto’ is not much of use
due to ‘dependent tasks’.

 A typical progress report tells 90% of the project

is finished in one year and the remaining 10%
take another full year.
 Cost world Vs. Throughput world
 Controllingcost and protecting throughput
two absolutely necessary conditions we
cannot be satisfied with one without the
other.

 It’s a chain-chain world.

 Cost world vs throughput world

Fin C&M IS OS TS IT HR Coml. T&CC

Cost :: Any local improvement automatically translates

into an improvement of the organization

Throughput :: Any local improvement does not necessarily

translates into an improvement of the organization
 (Almost) A Joke
...

The weakest link in a

chain is in fact the
strongest one since it
breaks it !
22
 The Five Focused Steps
in TOC
• Identify the constraint;
• Exploit the constraint;
• Subordinate everything else in the
System to bottleneck;
• Elevate the bottleneck;
• Go back to 1 – and do not allow inertia
to become the real constraint!
( E. Goldratt )
23
How To Manage Project This
Way?

1. Identify the Constraint!

It is the Critical Chain that acts as

project constraint;
It defines its success or failure!

24
 2. Exploit the

Constraint!
“Squeeze” the Critical Chain! Press timely
implementation (“net times!”) of all tasks lying on it!

 Resources work without fixed deadline – their orders

look like “Start at …, work with full priority and
maximal intensity, and when you are ready – pass
the task to the next resource!”

 Protect the whole project length by Project Buffer;

 Main indicator is consumption of the project buffer!

25
 3. Subordinate everything else in
the System to Art. 2!

• The non-critical parts of project plan are completely

subordinated to the Critical Chain.
• These part are known as “Feeding chains”;“Subordination”
means that these chains must be completed before
planned start of next task in the Critical Chain;
• Resulting protection time “gap” is called Feeding Buffer. 26
 Tough Issues!
We must create attitude in people
which does not allow the “Student
Syndrome”!
Apply “relay race method” (“When I
get a task, I will start it immediately,
I will do it in the fastest possible
way, I will do nothing else and I will
transfer it immediately to next link
of project chain!”)
No multitasking is allowed!
Make this basic part of Company 27
 When you start , run like anything
and then pass the hot potato
 Tasks may actually
finish early!
 Treat the transition of
tasks as a baton race
 Keep appropriate
people informed that
an early finish may be
imminent so they can
be prepared to grab
the baton and run!
 Critical Chain Project Tracking
 For each task, collect:
 Actual Start Date
 Days Remaining
 Actual End Date

 Calculate the impact on the project and feeding buffers

 If a task is late or expected to be late, consume days
from the appropriate buffer and DOCUMENT WHY
 If a task is early (completes ahead of estimate),
replenish the appropriate buffer

 Monitor trends in buffer utilization for issues

 Use a fever chart to assess project health

 Focus On…
 Starting tasks on time
 Completing tasks as aggressively as
possible
 Maintaining quality, despite aggressive
push
 Amount of Project Buffer that is consumed
 Differences between old and CCPM
The Old Way Critical Chain

Uses worst-case estimates Uses average-case

estimates

Protects individual tasks with safety Protects project with buffers

Starts tasks as soon as

Starts and finishes tasks at
predecessors are done,
scheduled start and finish
finishes tasks as quickly as
times
possible. 

Individual ownership of task Team ownership of

completion project completion
Project health is based on
Project health is based on
days used from the project
individual task completion
buffer
 Benefits of CCPM
• Protection against Murphy’s Law
• Take advantage of early finishes
• Team protection of the buffer
• Opportunity for team to focus
• Visibility to aggressive, possible, and realistic
schedule
• Better visibility to when project is in trouble
• Strong response to buffer changes / Monitoring.
 Challenges
• Resource multi-tasking goes against key goal of
requiring focus to complete tasks as quickly as
possible
• Works best in an environment where “everyone’s
doing it”
• Cultural changes required
• Tools availability – a spreadsheet will help
• Moving target for a completion date
 What Had to Change?
• Educate the project and management team on the
methodology to get buy-in
• Estimate aggressively by removing safety from
individual tasks
• Trust management to not hold staff accountable to
aggressive estimates without safety
• Minimize multi-tasking
• Track and track and only track buffer Consumption
 If it’s so great, why isn’t
everyone doing it?
• Process innovation brings unique challenges,
compared to product innovation
– You can prove a light bulb works without showing
how it works
– To prove a process works, people must
understand and accept how it works before the
light bulb goes on
 Multitasking

Job-A = 10 D Job-B = 10 D Job-C = 10 D

10 10
10

20

20

20

Proper Resource Planning Reqd.

 Example: Bad Multitasking
Tasks Task A 3 days
Lost
assigned to a Task B 3 days Productivity
resource Task C 3 days

Should happen: Task A Task B Task C

3 days 3 days 3 days
Could happen: A B C A B C
6 days
6 days
6 days
Does happen: A B C A B C
7 days
7 days
7 days
 X FB

X FB

X Project Bufer

X FB

X FB

A Resource hunched project

 FB X

FB X

X FB Project Bufer

FB X

X
FB
 Time Buffers Shown Explicitly

Conventional Project Schedule Task buffers are hidden

within individual tasks
Job 1
Job 2
Job 3
Job 4
CCPM Schedule

Buffers are pooled,

and made explicit

Project Buffer,
 Feeding Buffers - the same
principle, but on non-critical paths

Project Buffer

Date 1 Date 2

Feeding Buffer

If Slack remains,
then schedule as
late as possible
Resource Buffers - a “Wake up” call
Feeding
Buffer

Critical Chain

Project
Alert Wkr A
Buffer
Alert Wkr B

Resource Alert Wkr C

Buffers

Adds neither Time nor Cost to the Project

CCPM Project Execution
It’s OK for a But not TOO
task to be late
Late

Focus on Buffer Consumption.

Should be in Proportion or better
Fever Chart
 % Buffer Utilization

0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
9/27/2005 100.0%
10/4/2005
10/11/2005
10/18/2005
10/25/2005
11/1/2005
11/8/2005
11/15/2005
11/22/2005
11/29/2005
12/6/2005
12/13/2005
12/20/2005
12/27/2005
1/3/2006
1/10/2006
1/17/2006
1/24/2006
1/31/2006
2/7/2006
2/14/2006
2/21/2006
2/28/2006
3/7/2006
Fever

3/14/2006
PS 8.9

3/21/2006
3/28/2006
4/4/2006
4/11/2006
4/18/2006
4/25/2006
Chart

Execute contingency plan

5/2/2006
5/9/2006
5/16/2006
5/23/2006

Status Date
5/30/2006
6/6/2006
Upgrade Fever Chart

6/13/2006
6/20/2006
6/27/2006
7/4/2006
7/11/2006
7/18/2006
7/25/2006
8/1/2006
Identify contingency plan

July

8/8/2006
8/15/2006
8/22/2006
8/29/2006
9/5/2006
9/12/2006
9/19/2006
9/26/2006
10/3/2006
10/10/2006
10/17/2006
October

10/24/2006
10/31/2006
11/7/2006
11/14/2006
11/21/2006
All is good

11/28/2006
12/5/2006
December

12/12/2006
12/19/2006