Larry Leach, PMP

208-345-1136

Advanced-Projects.com
Lawrence_leach@hotmail.com
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Objectives
Identify why the critical chain, not the critical path, is often the constraint of a project Exploit the constraint (critical chain) of a project Subordinate everything else to the project goal Define buffers used in Critical Chain Project Management Exploit the multi-project constraint

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Successful Users & Clients Include

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Harris Semiconductor Lucent Technologies Honeywell DAS Israeli Aircraft Company UA Air Force US Navy

PHNSY-FMB Improvements
METRIC BEFORE CCPM AFTER CCPM IMPROVEMENT

ON-TIME (Scheduled Availabilities) Average Cost per Job (incl. overtime) Man-Days Job Completion Rate (same time period) Overtime Customer Backlog
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40% (8 of 20)

93% (25 of 27)

133% 23% 41% 22% 57% 25%

$6,113

$4,700

3,741 180 (93%) 28.75% 110

4

2,202 220 (99%) 12.5% 83

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1. Remove resource conflicts

2. Critical Chain

9. Relay racer task performance

3. Mean Task Duration

B A B E C

C C D
4. Project Buffer

6. Late start 5. Feeding Buffer

Time
Resource Leveled Critical (?) Path
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Goldratts Theory of Constraints

System Throughput Limited by a Constraint
Raw Material from Suppliers Products (or Projects) to Customers

Production Functions

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The Theory of Constraints Focusing Steps

IDENTIFY constraint EXPLOIT constraint SUBORDINATE everything else to the constraint Only then, ELEVATE the constraint Do not let INERTIA prevent future improvement
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Identify: Is the critical path the constraint?

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Resource Leveled CP

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Critical Chain Identified: The longest path through the projectafter resource leveling.

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Example Group Result

H isto g ra m
6 5
F re que nc y C umula tive %

120.00% 100.00% 80.00% 60.00% 40.00% 20.00% .00%

Frequency

4 3 2 1 0 B in 5

10

20

30

40

50

60

70

8 0 M o re

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All Project Activity Times Are Uncertain Estimates

Most Likely Time/Cost
1 0.9 0.8 0.7 0.6

0.5 0.4 0.3 0.2

Minimum Time/Cost

0.1 0 0 0.5 1 1.5 2 2.5

Long tail means no definite upper limit

Activity Time or Cost

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Focus On Milestones And Variances Drives Low-risk (90%+) Activity Duration Estimates
1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 0 Rev. 4: 2/27/04 0.5 1 1.5 2 2.5

Cumulative Completion Probability Scheduled Duration

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Critical Path Schedule Hides Contingency In Each Activity

Activity 1 Activity 2 Activity 3 Activity 4 Activity 5
1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 0 0.5 1 1.5 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 20 2.5 0.5 1 1.5 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 20 2.5 0.5 1 1.5 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 20 2.5 0.5 1 1.5 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2 0 2.50.5 1 1.5 2 2.5

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Date-driven Human Behavior Uses Scheduled Activity Time

6 5 4 3 2 1 0 0 0.5 1 1.5 2 2.5
Activity Time or Cost

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1 = Plan Time or Cost

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Exploit the Project Constraint

Uncertainty:
Variation in estimate Variation in task performance

Dependent events: resources

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EXPLOIT variation by taking contingency out of each task, and moving it to the end of the chain.
Task 1 Task 2 Task 3 Task 4

Task 1 Task 2
1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 0 0.5 1 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 0 1.5 0.5 2 1 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2.5 0

Task 3 Task 4
1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0
1.5 0.5 2 1 2.5 0 1.5

Combining variances Central limit theorem

0.5 2 1 2.5 1.5 2 2.5

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Critical chain differs from critical path by: Resolving resource contentions first (Identify) C Using 50 % probable activity times (Exploit) C D (Smaller) aggregated Buffer at end of chain (Exploit)

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Buffer Provides Anticipatory Measure to Exploit Constraint

1 2 3 4 5

BUFFER

Watch Watch

Plan Plan

Act Act

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Buffer Tracking Predicts Action Need

Project Buffer

1 2/3 1/3 0x x
Act Plan

x x x

x x

Time

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Some Applications Deploy Dynamic Buffer Threshold

Project Buffer

% Buffer x

Plan

x x

RED Act x x x YELLOW x x x

GREEN

GREEN

% Chain
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Subordinate Merging Paths With Feeding Buffers

Project Buffer FB FB

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Example project as a CCPM schedule.

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Subordinate to the Critical Chain

Eliminate start and stop dates for each activity (Only start dates for chains, and end of Project Buffer!) Late start feeding chains Intermediate milestone (hard) dates (But...technical milestones are necessary, and there is a way to meet client or regulator demands: buffer milestone dates.)
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 Critical chain task gets priority over non critical chain task Priority to task causing greatest project buffer penetration Non-project work lowest priority

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1. Remove resource conflicts

2. Critical Chain

9. Relay racer task performance

3. Mean Task Duration

B A B E C

C C D
4. Project Buffer

6. Late start 5. Feeding Buffer

Time
Resource Leveled Critical (?) Path
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 Resources must multi-task Projects are late Quality deteriorates

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Task A Task B Task C

Switching Inefficiency

Task A

Task B

Task C

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Consider Unloading Ships...

Five ships arrive. Each requires 5 person-days to unload. Each owner wants his ship unloaded ASAP. You have five people to unload the ships. Simpleassign one to each ship.

Starting each one right away (the sooner you start) each ship is unloaded on the end of the fifth day.
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Put all five resources on ship 1 the first day, ship 2 the second day, etc. Result: Ship New (days) Old (days) Saved 1 1 5 4 2 2 5 3 3 3 5 2 4 4 5 1 5 5 5 0 Nobody loses. Four of five clients done sooner. Cost = $ 0
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 IDENTIFY: Multi-project resource constraint EXPLOIT: Prioritize projects (Drum) SUBORDINATE: Stagger project start ELEVATE INERTIA
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Prioritize & Sequence Projects to Accelerate Completion! Individual Project Schedules (Note resource contention) BUFFER BUFFER

Synchronized Multiple Projects Accelerate and Reduce Resource Contention

BUFFER

Synchronizing (Constraint) Buffer

BUFFER

Constraint Resource
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Objectives
Identify why the critical chain, not the critical path, is often the constraint of a project Exploit the constraint (critical chain) of a project Subordinate everything else to the project goal Define buffers used in Critical Chain Project Management Exploit the multi-project constraint

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Path Forward

Implement effective process for: Management leadership and behavior Client alignment Resource behavior Buffer Management Organization specific obstacles Potential unintended consequences
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For Further Information

Leach, Lawrence P. Critical Chain Project Management Artech House, Boston, 2000 Available from PMI Bookstore, Amazon.com,and other major online book sellers. Lawrence_leach@hotmail.com Tel. Home: 208-345-1136

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