Critical Chain Project Management (CCPM)

1. Critical Chain Project Management (CCPM) Ron Henry Project Management Journal Club June 3, 2009

2. What is CCPM? • Billed as new project management paradigm • Very different management approach • Term “critical chain” does not fully capture the shift • Really a philosophy built around a buzzword (like Six Sigma, TQM, EV) • Key Ideas • Resource management is central to planning • Manage to project finish date, not interim milestones • Aggressive (median) activity duration estimates • Safety time removed from activities and aggregated into project buffer • Focus on critical chain and protect it from delays in non-critical activities • Discourage multitasking

3. CCPM Origins • Developed by Eliyahu Goldratt • Israeli physicist turned business consultant • Developed “Theory of Constraints” (TOC) • Popularized CC in 1997 with publication of Critical Chain • Intellectual Roots • Analysis of problems with traditional project management • Most projects fail to finish on time or within budget • Same PM problems occur across a wide range of organizations • There must be a systemic reason for this • Insight into human nature • Traditional management can create perverse incentives • Statistics • Less margin is needed to protect project as a whole than to protect each individual task • Business administration • CC is application of TOC to project management

4. Definitions and Metaphors • Critical Chain vs. Critical Path • Critical Path: The path in a network schedule with zero slack (or float) • Usually only task dependencies are considered • Note that slack only appears in a schedule if non-critical tasks are scheduled early • If tasks are scheduled as late as possible, longest path is most critical • Critical Chain: The longest chain of consecutively dependent activities, considering both task and resource dependencies • Metaphor shift is as important as the technical difference • Gets PM thinking about the people involved (links of the chain) • A chain is only as strong as its weakest link • Project execution as a relay race • Different athletes, different skills • Each leg should be finished as quickly as possible • Coordination between resources to minimize overhead of passing baton

5. Pathologies with Traditional Scheduling (1) • Philosophy • Brooks’ Law (1975) • “Adding manpower to a late software project makes it later” • Goldratt makes a similar assertion • Deadline pressure on a task causes it to take longer • Why task deadlines are counterproductive • Resources held accountable for meeting their estimates have strong incentive to pad those estimates with “safety time” to assure ~90% success probability • Once estimates have been padded, perverse incentives arise • Student syndrome • When people think they have extra time on a task, they tend to begin it late (if busy) • Parkinson’s Law • Work expands to fill available time (if less busy) • Murphy’s Law • People tend to underestimate the amount of safety time they need, then overcompensate • No time to cope with unexpected obstacles if safety time has already been used up by starting late or increasing scope • Trivial example: commuting to make an early meeting • Ask for meeting to start later, then leave later and may be late anyway

6. Pathologies with Traditional Scheduling (2) • Little incentive to finish tasks early • Early finish may lead managers to discount future estimates • Similar to syndrome of government agencies using up their budgets • If a task does finish early, usually little benefit to project • Resources to begin successor task not available until scheduled start date • Reasons for bad multitasking • Each project manager wants to see some progress, even if small • If one has safety time on a task, one may decide to interrupt it to work on something else that may have an earlier deadline • Bad multitasking leads to inefficiency • Repeated context switching overhead due to loss of focus • Tasks not completed, so successor tasks can’t start • Large amount of work-in-process (WIP) which hasn’t earned any revenue • Upshot • Accountability for estimates causes people to waste time, increase scope and work inefficiently • Safety time nearly always used up • Even padded estimates often exceeded (or met only through heroics)

7. What Makes CCPM Different?

8. “Aggressive” (50%) “Safe” (85-95%) Time Aggregation and Statistics • Task durations have a skewed distribution • Compare assuming 2-point estimates • Suppose project P consists of just two independent tasks A and B • Conventional project duration: 21 days • Little chance of finishing early • CCPM project duration: 19 days including 5-day buffer • ~10% reduction in lead time (savings increase with length of chain) • Real chance to finish early

9. CCPM Planning Methodology • Define activities (same as CP) • Estimate activity durations (ask for average-case estimates) • Build network schedule by working backward from completion date • Level resources and resolve any resource contention issues • Identify critical chain • Add project buffer (up to ~50% of length of critical chain) • Insert feeding buffers for non-critical paths where they feed into critical chain • Baseline schedule and enter tracking mode

10. Buffer Management • Project Buffer • Buffer penetration is expected to increase during project • Green, red, and yellow zones as function of date within project • If penetration reaches yellow zone, think about contingency plans • If penetration reaches red zone, put them into effect • Feeding buffers • These protect critical chain from a delay in a non-critical activity • If feeding buffer is consumed, that just uses up some time in project buffer • Resource buffers (shorthand for a coordination system) • Resources asked to estimate how much lead time they need before they can get up to speed on a task • Monitor expected time to predecessor task completion • Notify resource needed for successor task when within lead time of completion • Resource then prepares to start task and shifts to interruptible work • Getting ready to “receive baton” • Exact time when “baton will be passed” remains uncertain • Number of buffers to manage depends on complexity of project

11. Fever Chart Example

12. CCPM and Earned Value • Problems with Earned Value Management • Deterministic (invests baseline estimates with more certainty than actually exists) • Backward-looking • Does not distinguish between critical and non-critical activities • May be more useful to the sponsor deciding whether to kill a poorly performing project than to the PM trying to fix it • EV generally not considered a good fit for CCPM methodology • Requires estimated task completion dates, which strictly speaking don’t exist in CCPM • Buffer management considered a better technique for monitoring and control • Avoids illusion of precision • Less data to collect and analyze • Focuses attention on critical chain • EV may still have a role, however • Collect data to satisfy contractual requirements • Provides generic metrics to facilitate assessment of different PM approaches across projects (including CCPM itself)

13. Management of Multiple Projects Using CCPM • Applies “Theory of Constraints” to project portfolio management • Development organization is a system in itself • The system has a goal • That goal is to maximize throughput • Techniques for Maximizing Throughput • Identify critical constraint(s) that are limiting throughput • Typically one or more bottleneck resources • Subordinate non-critical resources to critical ones • Keep critical resource busy by ensuring it never has to wait for inputs • Concept of “drum resource” that is most in demand across projects • Everyone marches to beat of drum • Avoid forcing resources to multitask • Simple project priority scheme based on “first in” • Use capacity buffers to avoid starting projects before resources are available

14. CCPM in Practice • Used successfully on many large projects • Boeing 777 airframe design project (Johnson 2004) is an example • Pilot project for CCPM at Boeing • Involved nearly 1000 people at its peak • Significant improvement in EV metrics after CCPM was adopted • Evidence for significant learning curve • Performance improved onlyafter project team learned to use CCPM effectively • Some authors claim major project performance improvements for CCPM • Wikipedia references 1998 New Zealand study by Balderstone & Madin • Study claims a reduction of 69% in lead time from 32 observations • However, study was on Theory of Constraints in general, not specific to CCPM • Difficult to evaluate this without more research • More recent data would be helpful

15. CCPM Problems • Practice of requiring resources to give average-case duration estimates is “very controversial” (Lechler et al 2005) • Can lead to behavioral problems of its own • Claim that Parkinson’s Law and student syndrome are major causes of wasted time in projects is unproven • Very difficult to get objective data • Requires major change in organization’s PM culture (Patrick) • May be difficult to implement piecemeal or as a pilot project if management has not bought in • Johnson paper offers some useful lessons on pilot implementations • Benefits appear proportional to project size (Johnson) • May be best suited for large and complex projects • Technical issues • Appropriate buffer sizing • Possible shifts in critical chain • How to identify bottleneck resources across projects

16. Conclusions • CCPM is a different set of techniques from traditional PM, built around a different management philosophy • Seems to work best in a well-managed organization with the ability to coordinate across projects • Need to identify and resolve resource contention problems quickly • Things that make CCPM well suited to STScI environment • We often know need dates on projects well before they start, so “backward scheduling” seems a natural technique to use • Project buffer concept is just an extension of the way NASA manages other key resources by holding reserve at project level • Mass, power, cost ... why not time? • Things that may make it less well suited • Nonprofit environment • Little benefit to finishing projects early • How could we define throughput and how would the organization benefit from maximizing it?

17. CCPM Resources • Journal papers • Stephen Johnson paper on use of CCPM on large Boeing project (2004) • Comparison of CC and CP methodologies by Lechler et al (Engineering Management Journal, December 2005) • Provides a more objective perspective • Contains an extensive list of references for follow-up study • Books by Eliyahu Goldratt (presented as “business novels”) • The Goal (1986) • Theory of Constraints (1990) • Critical Chain (1997) • Other books • Goldratt’s Theory of Constraints: A Systems Approach for Continuous Improvement (William Dettner, ASQ Quality Press, 1997) • Highly recommended in Johnson’s paper • Software • Commercial software is available to facilitate project management using CCPM • Prochain Project Scheduling from ProChain Solutions • Project Scheduler 8 (PS8) from Scitor Corp. (discussed in Patrick material)