A Critical Look At Critical Chain Project Management

Best Practice Project Management A Critical Look At Critical Chain Project Management Tzvi Raz, Ph.D., P.M.P. Tel Aviv University, Israel tzvir@tauex.tau.ac.il Robert Barnes, M.Sc., Dip. Mgmt, P.M.P. The iE3 Group Ltd, New Zealand robertb@voyager.co.nz

R. Barnes’ attendance at this conference was sponsored by the Auckland Branch, New Zealand Computer Society Acknowledgement

Agenda • Introduction - What is CCPM? • Critical analysis of CCPM • based on the evidence in the research literature and in practice. • CCPM - substitute for or addition to conventional PM.

Section 1. Introduction • Critical Chain Project Management is - • “A fresh look at Project Management” from Eliyahu Goldratt ( “Critical Chain”) • Applies Theory Of Constraints (TOC) to Projects • Claimed to achieve dramatic successes for projects, as TOC did for processes ( “The Goal”) • Intuitively Plausible • Seems to hold answers to many of the problems that have long troubled Project Managers • Creating huge interest in the PM community • eg, at least one paper on CCPM in most PM Network issues

Is it New and Brilliant? • or Largely Hype? • But first - what is it? • (How does it differ from conventional PM?)

B B A A D D C C An Overview Of CCPM • Step 1. Identify “Critical Chain” • Initial Schedule -> Critical Path. (A-> B-> D) • Resource leveling -> Critical Chain. (A->B-> C-> D) “Critical Chain” - The longest path through the network after resource leveling.

What you’ll promise An Overview Of CCPM (contd) • Step 2. Make hidden buffers explicit. Hidden Buffer 50% 80% Unused Hidden Buffer is Wasted!

Why do we loose hidden buffer? Wkr B knows that (s)he’s not needed until day 6, => Wkr B keeps busy with other work, and is not available until day 6 => if Wkr A finishes Job1 early, job 2 can’t start anyway => Wkr A knows that finishing early won’t help the project => rather than finishing early, Wkr A will use spare time on other tasks Non-critical Jobs Another Job(Wkr B) Another Job2(Wkr B) Job 1(Wkr A) Job 2(Wkr B) Job 3(Wkr C) Job 4(Wkr B)

Step 3. Pool buffers 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 2 Date 1 Feeding Buffer If Slack remains, then schedule as late as possible

Adds neither Time nor Cost to the Project Resource Buffers - a “Wake up” call Feeding Buffer Critical Chain Project Buffer Alert Wkr A Alert Wkr B Resource Buffers Alert Wkr C

CCPM Project Execution It’s OK for a task to be late But not TOO Late Focus on Buffer Consumption. Should be in Proportion or better

Multiple Projects under CCPM • Resources required to work simultaneously on several projects should give priority to the task of the one project that is in the greatest risk of missing its committed date, as measured by the remaining fraction of project buffer.

Section 2. A Critique of CCPM • Does CCPM deliver? Anecdotal evidence suggests “Yes” Closer examination more ambiguous • There are several points where CCPM assumptions can be challenged

Task duration and safety margins • CCPM assumes that • all task owners pad estimates • the actual duration expands to fill the time allotted. • This is very Plausible, • but there’s no scientific support • Research literature contains contrary evidence {Hill et al. (2000) } • Does reducing task duration reduce commitment? • Personal experience - little effect, but suspect that there could be some risk of this • Do we still get safety margin on top of buffer? • Probably yes. “Parkinson’s Law”

Use of buffers • CCPM does not provide any scientific or objective basis for determining the buffer size • Default 1/3 suggested, based on probability distribution • No empirical basis for using this probability curve

Project Network • The concept of feeding chains is based on the assumption that the project network consists of several paths that can start in parallel and merge into each other.

Other Project Networks • When tasks have both predecessors and successors from several chains, it is not clear at all how much feeding buffer should be allotted to each merging task.

The Critical Chain • How good is the resource-leveled schedule that serves as the basis for CCPM ? • As good as the algorithm used for its calculation • The critical chain may change: • Feeding buffer exceeds the free slack of the feeding chain • During project execution the critical chain may change as resource availability changes or as buffers are used

Schedule control • CCPM achieves schedule control by monitoring the extent of buffer penetration. • The remaining-work estimate is also subjected to inflation by safety margins. • CCPM assigns priority to the task belonging to the chain with the highest rate of buffer penetration. • Ignores other important criteria, such as a project’s strategic or financial impact.

Multi-Project Management • CCPM staggers the projects around the constraining resource. • At any given point in time there could be several constraining resources, each leading to a different schedule. • The premise that there is a single constraining resource comes from the steady state of manufacturing and operations environments. • Consequently we doubt the applicability of the solution obtained with CCPM.

Scope of CCPM • Project success and project management success are not equivalent. • Project management success: meeting agreed goals on time and budget. • Project success: benefits to customers and stakeholders • Both conventional and CCPM deal with project management success rather than project success • CCPM focus: meeting schedule goals by dealing with schedule uncertainty.

CCPM and schedule uncertainty • CCPM accepts duration uncertainty as a given, and attempts to manage it by means of buffer management. • CCPM does not preclude the application of more comprehensive risk management approaches,but its focus is very limited. • CCPM is not suited to serve as the single tool for dealing with project uncertainty. • At best, it can help manage the schedule uncertainty that remains after the application of risk analysis and risk mitigation tools.

Adoption of CCPM • CCPM is presented as a revolutionary concept that replaces current project management knowledge and practices • It is not properly integrated with the accepted body of knowledge and state of the practice. • Dilemma to organizations that are new to project management: choose between CCPM or mainstream methodologies.

Adoption Costs • Specialized software tool • CCPM presented as a methodology to be adopted as a whole massive re-education • Culture change : • Give up ownership of the task duration • Rely on common buffers to absorb deviations in individual task performance. • Replace “Due Date” by “Estimated Completion Date Range” as represented by feeding and project buffers. • No multi-tasking.

3. Concluding remarks. • CCPM has adapted the concepts of bottlenecks and material buffers from TOC for operations management, calling them “critical chain” and “time buffers” in projects. • CCPM concepts are not necessarily new

The Key Question - • Is CCPM as a methodology indeed superior to the currently accepted project management methodologies? • Some dramatic successes have been claimed. • However, we are not aware of studies comparing CCPM with a properly-applied conventional project management methodology. • We DO NOT believe that CCPM is a better alternative to conventional PM. • We DO believe that CCPM has some good ideas which should be included in conventional PM

CCPM Contributions • Account explicitly for duration uncertainty • Always consider resource availability • Focus on the key tasks and resources • Do not split your management attention • Reduce or eliminate multitasking • Constantly monitor the amount of slack (buffer) in your schedule • Provide advance notice of upcoming work to critical resources

Finally, our suggestions • Consider the broader context: • Project success vs. meeting due date • Reducing uncertainty vs. buffer management • Adopt a comprehensive methodology • Leverage on widely accepted knowledge • Consider costs as well as benefits • Incorporate those CCPM elements that are applicable to your environment within a broader project management methodology.

Are there any Questions? Thank you for Listening

A Critical Look At Critical Chain Project Management