Critical Chain Project Management

- A breakthrough solution in Multi-Project

Management
Objective

 Common problems with today’s Project Management environment.

 Critical Chain concepts
 The Multi – Project Management the TOC concept
 Typical Benefits -
 Organisations that have benefited.
 Aim of TOC Project Management Solution : Complete projects on or before
the scheduled due date.
 The elements of a successful project

A successful project

1. The project addresses the 4. The execution of the schedule

correct problem delivers the scope and design of the
project, achieving the overall objective,
within the budget and on time

2. The overall objective of the project, 3. The scope and design of the project,
when achieved, solves the correct if delivered, achieves the overall
problem objective
 What is Project Management the TOC way?

 Better managing the inherent variability in Project Management.

 Combining both the project layout and accessibility of resources assigned to project
tasks to determine project lead time.

 Project scheduling that treats resource and task constraints equally - “Critical Chain”.

With the focus being on project execution.

Typical Project Problems / issues

 Existing project work is not complete before new projects require a shifting in priorities.
 The organization is too slow responding to important opportunities.
 Managers feel constant pressure to increase staff to handle peak project loads.
 Promised lead times are longer than desired.
 There are difficulties completing projects on time.
 There is too much rework activity.
 There are difficulties completing projects within budget.
 Project scope/content is too often compromised to meet dates and/or budget.
 Some projects are abandoned or completed without the organization gaining the promised benefit.
 Project Managers and Resource Managers have frequent conflicts about priorities and resource
commitments.
 Problems in one project cascade into problems in other projects.
Project Management has high uncertainty

When should I plan

on starting:
day 15 or day 27?

10+/-3 10+/-3
days days

 Sources of uncertainty
• Creating something new, cannot estimate with
precision

• Environment in constant flux: technology

keeps changing, consumer needs keep
shifting, etc.

• Non-uniform skills: every knowledge worker is

different
Project Management Environments have become more distributed

Functional
Virtual Teams
pools

• Some team members are shared

across multiple programs

• Distributed decision-making
The effects of conflicting resource priorities between
projects

Task A Three Tasks arrive at the same time for the same
Project 1 resource. All Projects are essential for the success of
One Week the program – what can the resource do?

Task B
Project 2
One Week

Task C
Project 3
One Week
 Juggling project priorities - bad multi-tasking

In order to keep each project

1/2 A 1/2 B 1/2 C 1/2 A 1/2 B 1/2 C
on track, a resource does half
of task A, then half of task B,
then half of task C, then
finishes task A, then B, then C.
How long does each task
take to complete?

Task A
Project 1
One Week Vs. Focused Effort

Task B
Project 2
One Week
Task C
Project 3
One Week
Collaboration has become impossible to achieve

 Multiple decision points

• Engineers
• Team leaders
• Project managers
• Resource managers
• Program managers
• Business unit managers
Current feedback after surveying more than dozen cases

 30% of projects cancelled before finished

 75% of completed projects are late
 Average cost overruns of 189%
 Average time overruns of 222%
How these issues are addressed

Multi - Project Management the TOC Way has five

main components:

1. Synchronization mechanism.

2. Planning processes

3. Scheduling processes
.
4. Resource Behavior

5. Project Control & Visibility

 KEY CONCEPTS

Critical Chain:
 Longest chain
Buffers
 incorporates resource
dependencies/constraints
Critical Chain

Buffers:
 Use available slack in
feeding chain to isolate
critical chain from delays
 Remove buffer from critical
chain components, and
insert it in the end
Let’s consider a simple project

10 10 16

20

16 16

Theoretical this project should finish within 56 days.

Will it?
Project Planning :
Have strategic protection times - Buffers

5 5 8
10 Project Buffer 28
Feeding
8 8 Buffer 16

10 10 16

20

16 16
Change in behaviours allows aggregated buffers to be smaller than the
individual safety.

ie There is less Multi-tasking!!!

5 5 8
Project Buffer
10 14
8 8 FB 8

5 5 8
10 Project Buffer 28
Feeding
8 8 Buffer 16
 Does it ever happen that a resource is needed in two places at
the same time?

What happens if the lower path experiences uncertainty beyond its duration
times and the top doesn’t? Won’t we have a need for the C Resource at the
same time?

A5 B5 C8
Project Buffer
E10 14

D8 C8 FB 8

Solution: The Critical Chain

 Identifying the Critical Chain

Resource dependencies are identified once resource contention is removed.

Finally, the longest path of dependent events - the Critical Chain - is identified.
( We have already removed the safety from the task times, which was half of
original task estimate).

A5 B5
A5 B5 C8

E10 D8 C8 C8 E10

D8 C8
A feasible and immune schedule
Buffers - Strategic protection of the Due date

A5 B5 FB5

D8 C8 C8 E10 Project Buffer 17

A5 B5

D8 C8 C8 E10
 Buffers are used to provide focus and early warning to
protect the critical chain and due date

PB

OK WATCH ACT
Zone 3 & PLAN Zone 1
BUFFER Zone 2
MANAGEMENT Remaining
Project Buffer:

100% 67% 67% 33% 33% 0%

Buffer Management

The first task completes 2 days early, but the

second task takes 15 days to complete. Buffer
Management shows the Project Buffer to be in
Zone 3. What action should the Project
Manager take?

8 ->
6
3 2 1
8 -> 15

Project Buffer
10
17

18 days 12 days

Today
Project Due
Date
Synchronization of a common critical Resource obtains collaboration despite
constant flux and competition for shared resources.

Transparent buffer signals

establish consistent
priorities across programs,
across multiple points of
control despite uncertainty

Modules/Activities
Program 1

Program 2
Not Program 3
Critical
Program 4

Program 5
Critical Buffers
Typical Benefits - Globally

• Completing projects ahead of schedule

• Increasing capacity - i.e. more projects (thru-put ) with the same number of
resources (typically 20 to 50%);

• Competitive advantage - can guarantee customers when delivery will be

• Increased revenue and profitability

• Management has clearer view of project status and resource availability

Typical Benefits - Continued

• Unified approach to managing, scheduling and synchronizing projects

• Visibility and understanding of project requirements

• Resources (internal and contractors) have one system for priority

• More accurate forward planning of resources and projects

• Less stress burnout at the Program Director / Project Manger level

• Resource planning becomes logical and not emotional

 Project Management the TOC Way - summary

Is both LOGISTICAL and CULTURAL.

Multi-Project Management the TOC Way has five main components:

1. A synchronization mechanism that allows projects to be started later, but finished sooner
and that clarifies resource assignment priorities.

2. Planning processes that account for the needed dependencies and completion criteria.

3. Scheduling processes that concentrate safety where it will provide the most protection.

4. Changes in behavior that support a world class relay team culture.

5. Mechanisms that create “Project Control & Visibility” to assist in global decision
making. –
 Results - June 1999 - Seabridge - Israel

Telecommunications start-up - with Multi-Service Access Platform (50 people - 35 in

R&D)
Purchased by Siemens & NewBridge in November 1997
 To deliver Release 2.0 by March 1998 - Bonus tied
 Performance - 5 months late
 CEO reads Critical Chain - decides to implement Sept 1998
 1st project on schedule; 2nd project 2 months early; 3rd on track to meet
“Unrealistic time constraint”;
 Major review by Siemens on company turnaround
Results -
Harris Semiconductor - new $250m plant

New technology product - first 8-inch discrete power wafer fab

New raw material, new automated technology
New facility, doubling capacity
Project scope - construction, installation, ramp-up,
Focus on actual delivery of production via the Critical Chain
 Industry norm
 Groundbreaking to first silicon - 28-36 months
 Time to ramp production - 18 months
 Harris results with Critical Chain
 Groundbreaking to first silicon - 13 months
 Time to ramp production - 21 days
Results -
Balfour Beatty Civil Engineering (UK)

 1st Project - By pass road (A13) 80 M GBP - 2.5 yr

 Half way stage - well behind schedule
 Handover 2 weeks early -
 99% complete vs Industry norm of 80%

 2nd Project - 8km highway (A50)- 35M GBP- 2.4 yr

 Beat tender program by 9.5 weeks
 45 weeks earlier than contract completion date.
 Increased Project Profit Margin.
The change is both logistical and cultural!

 Staggering the introduction of work to minimize the negative effects of bad

multitasking.
 Building and scrutinizing individual project networks in a way that significantly
reduces the opportunity for missing critical dependencies.
 Constructing project schedules in a way that recognizes both resource and path
dependencies.
 Placing safety strategically to protect the project, not the individual tasks.
 Eliminating behaviors that waste safety.
bad multi-tasking unreported early finishes
unclear task completion criteria delayed task starts (Student
Syndrome)
 Managing resource assignments according to which project has the greatest need.
(Buffer Management)
 Managing project progress according to buffer depletion - taking corrective actions
when and only when required.
Thanks You