Transcript Document

Critical Chain Approach to
Project Success
Dr. Saji Gopinath
IIM Kozhikode
Conference 2012
PMI Project
Kerala Management Conference 2012 June 09, 2012
PMI-
Motivation
• Theme of This conference
– Project Management- a Life skill
• What is common in all our projects?
– Time overrun
– Cost overruns?
• Why?
• More importantly
– Why such overruns happen rarely in our “personal”
projects
– A new way of looking at projects?
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PMI Study
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What do we want from Project Management ?
•
Reliable on time in full to budget delivery performance
More revenue, more Profit, happy customers
•
A stable plan
More Productive use of resources
•
Simple, objective measures of Project progress ; project health status
Shorter meetings, better informed
stakeholders - less waste, more productivity
•
Clear signals for when corrective action is - and is not - necessary
Better directed recovery efforts - less waste,
more productivity
•
Direction for ongoing improvement efforts
The future brings more revenue, more profit, happier
customers than the present
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And what we normally get!!
• Reliable on time in full to budget delivery performance ?
A continuous struggle with time, cost and scope ?
• A stable plan
Repeated rescheduling ?
• Simple, objective measures of Project progress ?
Clarity at the start and end, thick fog in between ?
• Measures of Project health status ?
Subjective assessments compounded by human factors ?
• Clear signals for when corrective action is - and is not necessary ?
Intervening too much too early, and too little too late ?
• Direction for ongoing improvement efforts ?
"We'll improve our methods when things get better"
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Revisiting the beleifs….
• Do our projects fail because of “bad panning”?
– (is planning the most important PM Skill?)
• Is the delays happen due to “A” Class items/
Activities
• Why do our project finish when it is on “Mission
Mode”?
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• Classical Project Management
– Performance & Increasing Complexity
– Re-look at the fundamental assumptions
• Technical and Behavioral Dimensions of Project
Management
– Why our projects are delaying?
• Re-thinking the way we manage our projects
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Why do our Projects delay?
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The time estimates are too tight
The changes in environment is too drastic
The interfacing agencies are inefficient
It is impossible to predict the time of completion
of a ‘work package’ (activity)
• Others
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How do we estimate project duration?
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•
•
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Past Data
Top Down or Bottom up approach
Cushions for uncertainty
Activity precedence (network technique)
• How much is the cushion you provide??
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Project Duration
3
5
Theory
6 7
• What is the effect?
4
5
12
20
Actual
The effect is that the typical cushions you provide on
each activity is around 50-100%
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Conventional Project Management
Task Time Estimating
• Take best guess at how long a task will take
• Consider the effect of unknowns or
unplanned interruptions
• Add sufficient safety to be able to deliver
with 90% probability
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1.0
0.8
25%
50%
0.6
0.4
0.2
90%
0
T50
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Time
T90
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Problems with the conventional project management techniques
To keep project on schedule - variability encourages
people to pad individual activity times with safety time.
• Three mechanisms that inflate time estimates
– The worst-case scenario
– Add safety time to ensure project is on time
– By inflating original time to protect against a global cut
0.4
Probability of
Completing
project within
x number of
days
Median = 2 days
Estimated = 5 days
Safety time =
3 days
0.3
0.2
0.1
Confidence level
80-90%
50%
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1 2
3
4
5 6 7
Number of days to
Complete
project
June
09, 2012
Buffers on Each Activity
Why after all these cushions project get delayed?
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Conventional SAFETY TIME inflates project completion time
But.. Adding safety time to protecting project objectives
seldom works…..
• Three Ways to Waste Safety time
– passing on of previous delays
Dependencies between activities cause delays to accumulate
– student syndrome
Wait until the last minute to start a task
– multi-tasking
Multitasking caused by limited resources ( resource contention )
• How the Safety Gets Wasted
– Adding safety time to resolve the resource contention problem does
not help
– we add safety everywhere and then we waste it!
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Effect of Fluctuation
Start Date
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Due Date
Finish Date
Due Date
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Behavioral Dimension of Project Environment
• Additive Rule
– Commitments of duration and total cost of a project are
based upon adding up the duration and cost of individual
tasks
• Parkinson’s Law
– Work expands to fill its time
• 3-Minute EGG Rule
– It’s not quality if it is finished before time is up
• Hockey Stick Syndrome (student syndrome)
– Waiting to start a task due to more important work at hand
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The Conflict
Avoid
Parkisnon’s
Law
Minimise
Project
Leadtime
Manage
Projects
Successfully
Meet Project
Promise
Schedule
Without
safety
Schedule
With
SAFETY
Con
flict
Provide
For
Murphy
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Way Out?
• Plan A - invest our energy in reducing the extent
of the variability:
-
Allowing longer in Project planning stage for preparing estimates
Training staff in estimating
Use of formal estimating methods
Measuring progress and feeding results back into estimating practice
More detailed specifications
Less flexibility over changes to specifications
Training the staff better in their job content
Using individual performance measures to identify poor performers
Keeping projects short (< 6 months), breaking larger
undertakings into several short Projects
Doing this can help, but doesn't solve the problem
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Plan B - Coping behaviours
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•
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•
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Project Managers fight to be assigned the most viable Projects
Project Managers fight for the best staff
Project Managers fight to keep the Project scope down
Project Managers exploit changes in scope to unduly extend
timelines and budgets
Project Managers quit long Projects well before the delivery date
Project Managers disregard targets they know to be impossible
Staff work double shifts in the final weeks / months
Dumping the blame elsewhere
Doing these may help the individual, but not the organisation
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Plan C: Approach the problem in a different way
We can reduce variability, but we cannot eliminate it,
because it is inherent to the nature of a Project
We must manage the variability that remains
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What is the way out?
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Critical Chain Project Management
• Adaptation of Principles of Theory of constraints
• Applying TOC concepts to project management
– Critical Chain is a project management application of
the Theory of Constraints (TOC)
– According to TOC, the main constraint in any project
is the time taken for completion of the Critical Chain
• Critical Chain Project Management
– Conventional approach focuses on successful ontime completion of each individual activity in a project
– TOC approach focuses on successful on-time
completion of the entire project
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Critical Chain Project Management
• The TOC philosophy applied to project
management attempts to remove the
undesirable effects (late, over-budget, and
under-performance projects) by attacking
individual measurements and uncertainty.
• What is TOC Philosophy?
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Theory of Constraints
• A system improvement philosophy (as
opposed to a process improvement
philosophy)
• Organizations live or die as systems, not as
processes
• Success or failure is a function of how well
different component processes interact
with one another
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Theory of Constraints
• Systems are analogous to chains, or
networks of chains
• Like a chain, a system’s performance is
limited by the performance of its weakest
link
• The weakest link is the system’s
constraint
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Theory of Constraints
• Another basic principle of TOC
– A large number of undesirable effects will be
caused by a relatively small number of core
drivers
– Eliminating a very few core problems can result
in a huge improvement
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How we handle variability in Critical Chain
How does all this relate to projects?
• We do not build in any contingency at the Task level
• We move all the contingency to the Project level - call this the
Completion Buffer
Individual Tasks can now be late without affecting the
completion date of the Project
The Project due date is protected as long as
the accumulated lateness along any one
chain is less than the completion buffer
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What difference does this make to our probability of being late ?
Under 'normal' practice, if any task is later than its contingency
allowance, we have a problem
Under Critical Chain, we only have a problem if the total lateness
exceeds the total contingency
This second condition is much less likely than the first [ Law of averages
/ Central limit theorem] and increasingly so as the number of tasks
increases
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Critical Chain Project Management
• Uncertainty always present – it doesn’t go away
• Take the safety out of each of the critical path tasks
and lump them into a safety net at the end of the
project
• Identify constraints along the path and set up buffers in
front of tasks that can suffer from the constraint
(constraints = time and resources)
• Allow tasks to start when predecessors are completed
and resources are available
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Revisiting activities
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Power of Aggregation
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Remove safety time from individual activities
• Safety buffers
Conventional Project Schedule
Job 1
• Pooled buffers
Task buffers(safety time) are hidden
within individual activities
Job 2
Job 3
Job 4
Critical Chain Schedule
Buffers are pooled,
and made explicit
Project Buffer,
Project buffer is safety time added to the end of the critical chain
to protect the completion date of the project.
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• Feeding buffer on the non-critical path
Critical Chain
Feeding
path
Project Buffer
Feeding Buffer
If Slack remains,
then schedule as
late as possible
Feeding buffers are designed to protect the critical chain from
delays on non-critical paths
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• Resource buffers
– a wakeup call to alert resources to be ready to work on
critical tasks
– Scheduled idle time can provide better info about resource’s
availability (capacity)
Feeding
Buffer
Critical Chain
Alert Wkr A
Alert Wkr B
Resource
Buffers
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Project
Buffer
Alert Wkr C
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Critical Chain Project Management
• Critical Chain - set of tasks which determines overall project
duration, taking into account both precedence and resource
dependencies; improvement along Critical Chain will likely result
in improvements to the project as a whole; improvements
elsewhere will not
• Project buffer - protects project commitment dates from
fluctuations on the Critical Chain
• Feeding buffer - protects Critical Chain from fluctuations on
feeding tasks; provides the possibility for Critical Chain tasks to
start early
• Resource buffer - protects the Critical Chain from lack of
availability of required resources; also provides the possibility
for Critical Chain tasks to start early
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Critical Chain Project Management
Original Critical Path
Task 1
2
3
4
Original Critical Path with
Buffer
1
2
3
4
Project Buffer
(Safety removed from individual tasks)
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Critical Chain Project Management
• About Buffers
– Identify the points at which to place project, feeding,
and resource buffers
– Buffer sizes determined approximately, based either on
average task duration estimates, or a combination of
average and worst-case duration estimates
– Individual buffer sizes can be adjusted based on
intuitive assessment of risk
– Buffer insertion may cause the Critical Chain, and
hence the project completion date, to be pushed later
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Critical Chain Project Management
• The Critical Chain approach to scheduling
helps minimize project duration and WIP,
delay investment as far as possible, and
maximize the chance of on-time completion
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Last word
• The development of new project management
techniques have not reduced uncertainty
• Hence we need ways to manage and not avoid
uncertainty
• Critical Chain Management is a way to achieve
this
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– Thank You
[email protected] / [email protected]
9400050850
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