Introduction To Critical Chain Project Management

1. Introduction To Critical Chain Project Management Hilbert Robinson, Afinitus Group, LLC Robert Richards Ph.D,, Stottler Henke Associates, Inc.

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 Question: • How early should you leave? __________ • Why?_____________________________

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

4. Background • Triple Constraints [Binding Commitments] • Time [Minimize] • Capacity [Minimize] • Content [Maximize]

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

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

7. The Problem Localized Risk Management Strategy • Task level insurance policy See opening scenario – answers? And if it was a task in a project?? ** How safe is safe enough?** • Student Syndrome The dog ate my homework • Parkinson's Law Self-fulfilling prophecy [good estimating?] • Multi-tasking [absence of priorities] Hero or villain?

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 9

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

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”

11. SolutionGlobal Approach to Risk Management • Planning • Project Level vs. Task Level Protection • Systems Perspective for Multiple Projects • Should load for multiple projects be considered? • Why? • How? • Execution Control • Promote and encourage team culture • Controlled work queues • No multi-tasking work rules • No batch processing work rules • Task assignment prioritization • Management by Exception

12. Critical Chain Planning Process From Task to Project Protection 1. Traditional Plan 2. Safety Excluded 3. Resource Leveled 4. Critical Chain Marked

13. . Aggregation Principle • The Concept of Risk Pooling: • Can someone explain why this works? • Health Care Example: • larger pool = lower cost

14. 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

15. Critical Chain Planning Compared to 60days traditional PB = Project Buffer FB = Feeding Buffer • Aggregation Principle [where did some of the safety go?]: • Pooled protection provides more coverage • Location is just as important as amount • Sizing Rule of Thumb  2/3rds to 1/3rd • Buffer is half of preceding chain

16. Critical Chain in Execution Schedule Before Execution Starts “AS OF DATE” • T8 experienced a 5 day increase in scope or delay • Results in a 2.5 day impact to the project buffer • The rest was absorbed by the Critical Chain gap 4. 35-32.5=2.5 7% Complete and 14% Buffer Consumed

17. 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 Perspectiveon Buffers

18. Critical Chain Priority Metric Project Status Trend Chart or “Fever” Chart

19. Multi-Project System Systems Perspective for Multiple Projects • Should load for multiple projects be considered jointly? • Obviously • Why? • Prevent System Overload/Multi-tasking • How? • By taking a Systems Perspective

20. Creating a Multi-Project Schedule Finite Capacity Pipeline Due Dates Are Derived Ingredients: • CC Plans [shorter] • Strategic Pacing Mechanism • Strict Priority Scheme • Rate Limit Policy/Guidelines

21. 1007 1003 1005 1006 1004 1002 1001 1009 1008 0 % Buffer Consumed 100 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | % Critical Chain Completed 0 100 Multi-Project Execution ControlPipeline Status Snap Shot In Execution, Buffer Status Drives Priority Decisions, not Project Importance 1010 By Portfolio of Projects

22. The Upshot… Benefits • Operational Coherence – Stability • 20% Shorter Cycle-Times – Speed • On-time Performance – Reliability • More throughput – Growth Challenges: 1. Simple but not easy to grasp – too simple? • Requires a change in mindset • Takes 120 days for typical 100 person team • We don’t need that much improvement

23. Questions??? Hilbert Robinson, Afinitus Group, LLC www.afinitus.com Robert Richards Ph.D,, Stottler Henke Associates, Inc. AACE2009.R.RichardsPhD@Neverbox.com www.StottlerHenke.com