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 robert.barnes@xtra.co.nz www.robertb.co.nz My presentation supported by

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. • NB - I have significantly edited this presentation since the conference

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

Critical Chain Project Mgmt • Is it New and Brilliant? • or Largely Hype? • 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 is hidden buffer wasted(1)? Origins in workers’ conflict: - • Want to finish tasks on time • so need buffers • Want to be productive (busy) • need plenty of work, no buffers • CONFLICT • solve by taking on more work

Why is hidden buffer wasted (2)? 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)

Hence the schedule rule - • If estimated durations are correct ON AVERAGE • THE PROJECT WILL STILL BE LATE! Because • Schedule gains are lost • Schedule losses are passed on in full

Step 3. Show buffers explicitly and pool them CCPM Step 3. Buffer Management 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

Focus on the Critical Chain Ensure resources give CC tasks priority Eliminate multitasking CCPM Project Management (1)

CCPM Project Management (2) 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

1/ Hidden buffers may not exist • 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) } • Personal experience - mixed. Some incorrigible optimists! • 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”

2/ How big should explicit buffers be? • 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 • CCPM uses statistical assumption of independent values (for task duration and buffer) - NOT TRUE • Experience • Discuss with task owner, get agreement • Varies widely • Optimists, pessimists - estimating errors don’t cancel

3/ CCPM gives incorrect Resource Graph • When do you need Worker A? Gantt Chart Resource Graph. Not this But This

4/ What if there’s insufficient room for feeding buffer? Conventional Plan - had free float Date 2 Date 1 Should excess buffer be added to the critical chain? Correct answer is NO, but what do you do with it? (CCPM ignores this problem). Indicates a near-critical path - could easily become the CP.

5/ 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 • This is true of conventional PM also • but CCPM may add complexity

6/ 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.

7/ 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.

8/ CCPM Focus • 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 • but CCPM focuses exclusively on ON TIME • Focus • CCPM: meeting schedule goals by dealing with schedule uncertainty • Conventional: both cost and schedule.

9/ CCPM is presented as Alternative • 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.

10/ CCPM may have high Adoption Costs • Specialized software tool needed • CCPM presented as a methodology to be adopted as a whole massive re-education • Culture change may be difficult - • 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.

Section 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 • But does this matter? In our view, NO. CCPM would be worthy of study even it were only a packaging of old ideas • and there’s more to it than that!

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 good ideas which should be included in conventional PM • PMBOK should take it more seriously

A Parallel

Good ideas from CCPM (1) • Account explicitly for duration uncertainty • Focus on “Project on time”, not “Task on time” • Always consider resource availability • What is the shortest realistic plan? • “Critical Chain” is a useful term • Focus on the key tasks and resources • Reduce or eliminate multitasking • Management focus

Good ideas from CCPM (2) • Constantly monitor the amount of slack (buffer) in your schedule • Provide flexible advance notice of upcoming work to critical resources

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

Are there any Questions? Thank you for Listening

A Critical Look At Critical Chain Project Management