Critical Chain Project Management

Case Study Application and Lessons Learned Prepared for PMI Montgomery Chapter February Chapter dinner February 6, 2013 Mike Hannan, VP, Public Sector Services Hilbert Robinson, Senior Program Manager

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Objectives

1. Use Actual Case Studies to address typical questions about the applicability of CCPM to real life project/program management challenges 2. Stimulate thinking about how you might apply this yourselves

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Agenda

1.

Brief Review of “The Three New Rules” of CCPM 2.

Case Study # 1 : Redesign of Commercial Jetliner 3.

Case Study # 2 : Nuclear Submarine Maintenance 4.

Q & A

New Rules

4 1 2 3

Problem Old Rule

Task variability prevents reliable project commitments.

Focusing staff on 1 task at a time results in low resource utilization, and holds up other projects.

Plan each task as a highly reliable commitment.

Assign staff to multiple tasks, and start all projects as early as possible.

Priorities across projects shift, resulting in persistent conflicts over resources.

Each PM lobbies the PMO for critical resources.

Buffer Projects, Not Tasks Advantage Faster project and a more reliable project commitment.

Stagger Projects Maximize project completion rate and resource utilization.

Protect Project Buffers That Need It Most Clarity, commonly agreed priorities, stronger cooperation among PMs

Change the rules, change the game, change results, close the gap

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Case Study Format

    

Background, Performance Gap Implementation Challenges Approach / Application of the New Rules Results Lessons Learned

Case Study # 1 – New Product Development The Application of CCPM to the Re design of Commercial Jet Liner

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Background / Performance Gap

 Program budget is lowest ever – dictated by promises to investors  Program schedule is shortest ever – dictated by promises to the market  Program delivery date is set and not negotiable  Executive in charge of only part of the program  Only half the staff located at main site, 25% are overseas  Must implement EVM and other “Best Practices” • Mechanical Engineering Only • Several hundred scientists, designers, analysts and technicians involved • Budget in the high 9 figures • Sub-contractors not involved

Program Launch Conceptual Design Preliminary Design Detail Design Fabrication Assembly Test Delivery

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Additional Challenges and Special Considerations

 How to draw boundaries around the resource pools  What do we define as a project  What work statement to include or ignore  How much of the value stream to include  Should we do a pilot  How to integrate with other best practices / avoid turf wars  Should we also consider: – – Budget buffers Scope / performance buffers

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Approach / application of the rules

 Independent cross functional product teams by airplane sections  Program management specialist does both EVM and CCPM  Build CCPM team plan first then convert to EVM baseline  Standardize the design and drawing release process  Each drawing is a project, hundreds of projects per team  Use common template library for ease of planning and integration of reporting across multiple teams  Build comprehensive load to capacity model for each team  Initially, no staggering – dates already set  Instead, analyze staffing requirements and adjust staffing plans  Renegotiate supplier commitments where necessary

Example Multi-Project Dashboard

40 30 20 10 0 0 100 90 80 70 60 50 150

Different shaped dots for different types of deliverables

149 146 140

Approaching the

130

end of the

120

program

110 124 135 120 10 20 30 73 40 99 81 75 72 73 45 63 10 40 50

% Critical Chain Complete

60 0 102 70 43 0 70 0 0 150 59 0 80 79 110 150 60 16 29 30 90 137 128 000000 100 114

Approach / Application of Rules

Poster Used to Communicate Desired Behavior

All team members work to the same priorities Critical Chain Execution Run Rules Plan using 50% probabilities for task durations, not 80% Seek out, identify and resolve issues quickly Start only when ALL the prerequisites are complete NO multi-tasking

Results Earned Value Reports-Before

Element: LR777.01

Contractor2 1 CPAF RDTE CPI and SPI 2001 MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Name: AFIT 2002 JAN FEB 1.3

Business as usual Crisis

1.2

1.1

1.0

0.9

0.8

Question: Please predict how the chart looks from this point to the end of the program.

CPI SPI 1.001

0.972

0.965

0.940

0.960

0.944

0.964

0.949

0.962

0.923

0.960

0.982

0.899

1.030

0.998

1.009

1.005

1.007

1.014

1.003

1.018

1.005

0.993

Schedule Performance Index (SPI)

Results Earned Value Reports-After

Element: LR777.01

Contractor2 1 CPAF RDTE CPI and SPI 2001 MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Name: AFIT 2002 JAN FEB 1.3

1.2

Business as usual Crisis New mode of operations

1.1

1.0

0.9

0.8

Did you guess correctly? Be honest

CPI SPI 1.001

0.972

0.965

0.940

0.960

0.944

0.964

0.949

0.962

0.923

0.960

0.982

0.899

1.030

0.998

1.009

1.005

1.007

1.014

1.003

1.018

1.005

0.993

Schedule Performance Index (SPI)

Results Second Airplane Program

Even shorter schedule yet finished 3 months early!!

Two weeks of xmas break Engineering thought that this was a VERY aggressive schedule 12 weeks ahead 3 weeks ahead 4 weeks ahead 8 weeks ahead

Lessons Learned

15  Trust the data or, fix the data then, trust the data  No compelling need or reason to get better, no compelling results  Buffer Watching is not the same as Buffer Management  EVM and CCPM works together just fine, if you want them to  CCPM Scales up just fine  Benefits grow with increased alignment over a larger span of control  Quality improves with improved focus  Some people will have a hard time making the switch  100% compliance is not a pre-requisite  It is not just about scheduling. Focus on behaviors  It is not about the software  Trust the data or, fix the data then, …

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Case Study # 2

Find picture of fast attack submarine

The Application of CCPM to the

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Case Study Format

    

Background / Performance Gap Implementation challenges Approach / Application of the rules (deviations) Results Lessons Learned

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Background / Performance Gap

 Pearl Harbor Naval Shipyards employ about 4,000 people  Maintain and modernize submarines  Projects start and end at a pre-determined time  Much of the work is identified after project starts  Tasks completed using 81 specific trade skills

Background / Performance Gap

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2002 Data Total Workforce Attrition 23,530 1,129 33%over 50 6000 5000 4000 3000 2000 1000 0 5065

Workforce Age Profile

3887 5311 63 88 2326 2066 1707 5248 5065 144 1306 1051 3799 735 493 279 1027 2182 2066 972 383 668 493

18 - 25 26 - 30 31 - 35 36 - 40 41 - 45 46 - 50 51 - 55 56 - 60 61 - 65

100

100 66+

Total ES w/o Apprentices Apprentices Total ES

Expect high attrition – must refresh workforce - maintain critical skills

Background / Performance Gap

20 •

Uncertainty

Neither the scope nor the work content is clear upfront, but we need to make firm commitments before the projects begin •

Not enough capacity

Our people (and equipment) resources are already overloaded, but we keep accepting more projects •

Aggressive schedules

It already takes heroic efforts to meet due-dates, yet we are being asked to deliver more scope in lesser time • • •

Complexity

Fixing Hundreds of components, in dozens of integrated systems Severe space constraints – space is a limited resource Highly dependent on specialized skills in short supply

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Background / Performance Gap

• •

Constraining Business Rules/Practices

Managing the money got in the way of managing the work Bad measures driving people to behave badly – – – Poor planning (confusion between work breakdown and workflow logic) Multi-tasking – staying busy but not making progress Parkinson's Law – Keep jobs open until all money has been spent

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Background / Performance Gap

 Customers disillusioned with late projects  Multiple scheduling tools and work lists  Job timelines inconsistent  Multiple priority lists across the organization  Difficulty in correctly prioritizing jobs  Increasing management complexity with contractors  No appropriate tool for balancing resources  No means for evaluating impact of new work  No means to validate necessity of overtime

Background / Performance Gap

Proud tradition and impressive accomplishments , but… There still existed a substantial gap.

After Measure

Percent of on-time delivery Amount of overtime charges Work not completed at end of project Staffing requirements

Before

< 60% Too high > 6% Too high 23 Add to this picture: 1.

2.

Six months post 9/11 There is an X-fold increase in the need for secret missions

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Implementation Challenges

 How to deal with the nuclear culture – all changes increase safety risk  How to plan when 30% of the work has not yet been identified  How to integrate work being done by shipboard personnel  How to integrate work being done by contractors  How to integrate work being done in the many production shops  How to handle a single CCPM project in a multi-project environment  How to deal with fixed start AND finish dates  How do deal with high volume of non-project work  Getting permission to ignore / modify business rules / practices

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Approach / Application of the Rules

 Used templates and place holders to complete planning quickly  Joint planning sessions with contractors and crew  Modeled physical space as resources  S eparate “misc work” file reduced schedule clutter  Free standing Local Area Network to address IT/security concerns  Use schedule to determined and renegotiate due dates  Not able to officially implement pipelining / (pseudo stagger)  Full load to capacity picture for the first time – – Identified pockets of hidden resources Identified urgent cross training needs – shifted manpower around  All over time decisions made based on buffer recovery expectations

Approach / Application of the Rules

Task Name Task #

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Initiate Work Request Screen w ork to FM B Rev iew w ork for acceptance Perform ship check Identify w ork scope Identify material requirements Write w ork package and prov ide to Zone M anager Rev iew w ork package content for completeness Submit w ork package to w ork control Write w ork authorization form (WAF) and submit to ship Hang Tags, open WAF and notify Zone M anager WAF is open Remov e M iscelleaneous interference as necessary Remov e maj or inteference w here required Perform authorized w ork

This step does the work

Rev iew completed w ork Grant testing authority to ship Clear tags and rev ise WAF Verify that all w ork related to the affected system is complete Establish required system conditions in preparation for testing Test system to v erify integrity and performance requirments

Typical process to repair a single component

Document test results Re-install all interference Close WAF

Summarized to seven

Sign AWR (Ship and QA)

schedulable steps and

Rev iew TGI and submit to Work Package Control

replicate for each component

Close All TGIs Sign Pre-requisit List Sign Certification Letter Issue Certification Letter

Focused Use of Overtime

35.0% 30.0% 29.8% 25.0% 20.0% 15.0% 27.7% $2,750,000 $2,489,450 17.4% $2,015,968 $2,220,402 $1,981,335 $2,187,398 $2,250,000 $1,750,000 $1,398,487 $1,250,000 14.6% 14.9% 13.0% 12.5% 10.1% $750,000 10.0% $250,000 5.0% 28 0.0% 2000 2001 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 -$250,000 May 2003

4 3 2 1 9 8 7 6 5 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 (1) (2) (3) (4) (5) 29

On Time Completion

This chart displays the "On Time Completion" metric for the last 35 availabilities. It also superimposes a 10 Availability moving average line. The small tick marks at the axis indicate on time completion. Numbers above the line indicate late, numbers below the line indicate early.

Avail Start Date

May 2003

Improved Schedule Adherence

the total number "On Time" versus the total completed. (This is the equivalent of the Schedule Indicator in the DMOIs.)

1.00

0.80

0.60

0.40

0.20

30 0.00

2000 2001 1Q02 2Q02

Quarter

3Q02

The Goal

4Q02 1Q03 2Q03 May 2003

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Background / Performance Gap

Proud tradition and impressive accomplishments , but… There still existed a substantial gap.

Measure

Percent of on-time delivery Amount of overtime charges Work not completed at end of project Staffing requirements

Before

< 60% Too high > 6% Too high

After >95% Cut in half <2% Cut by 25%

Performance Gap significantly reduced!!!

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Critical Success Factors

1. Project schedules buffered, with aggressive task estimates 2. Modeling is not too granular, and does not require too much data 3. Pipeline is level-loaded at the constraints only, with adequate protective capacity for all resources 4. Task priorities are followed and tasks are regularly updated 5. Buffer recovery is planned and managed 6. Resource requirements are proactively managed 7. Write new planning and execution process guides 8. Use CCPM to focus other initiatives 9. Revise performance metrics and accounting process 10. Conduct CCPM expert training for stabilization

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Transformation Challenges

1.

2.

3.

4.

5.

System (holistic) versus functional (silo) perspective Multiple initiatives / change overload Frequent changes in military and civilian leadership Difficult to change large project midstream Full benefits not visible for single projects in the multi-project, multi-shipyard environment

A Few Key Takeaways

34     CCPM is simple in concept —it turns common sense into common practice.

Introducing CCPM will help any project right away, regardless of how sophisticated and disciplined your project management practices are (or aren’t).

Some “high-discipline” PM organizations take longer to realize CCPM benefits, because they have a harder time letting go of the “Old Rules.” Many “low-discipline” PM organizations have an easier time adopting CCPM, because the “Old Rules” are not as deeply embedded.

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Questions???

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Documented Benefits of Critical Chain

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Sample Results

 18 months vs. 60 months,  IT department first then drug development – CEO: “100% due date performance”  Warner Robbins – Iraq War – Expanded C-5 air lift capacity by 8 million ton-miles  Iraq War – One extra submarine in steaming days  Satellite Division – Turned around the business  Engine Division – partially funded Northwest acquisition  Software delivered 5 months early, 33% cost reduction