03/11/2021
Critical Chain Project Management
Critical Chain Project Management (CCPM) is a method of planning and managing projects that places emphasis on the resources required to execute the project tasks. It was developed and publicized by Dr. Eliyahu M. Goldratt in 1997.
The Critical Path Method
One of the tasks involved in any project is scheduling. Scheduling is defined as the process of sequencing all the project activities by assigning each activity a duration in a way so that they are completed in a timely manner. The Critical Path Method (CPM) is the most widely adopted method of scheduling.
However, in practice, in spite of preparing an optimized schedule and building adequate buffers into activities, it has been very often found that the projects miss their committed schedule. Dr. Goldratt deeply studied the reasons of project failure, especially the failure in the scheduling. Based on his studies, Dr. Goldratt identified various factors that lead to failures in the schedule. Some of these are:
• Over-estimating
The performance of the workstations sometimes over-estimated and lack sufficient contingencies in the form of “buffer” or “padding”. Over-estimation can also be caused by Cultural Beliefs and Organizational Policies. Another cause of Over-estimation is that CPM is a very optimistic method and assumes that that the project always has resources whenever needed. No organization can provide unlimited resources for any project, and as such, this assumption can lead to delays and additional costs
• Overrunning the estimate
The has been observed a tendency to wait until an activity is urgent to begin work on it. As a result, the activity has no float, and any delay in the activity will affect the project schedule. Dr. Goldratt refereed to this phenomenon as the “student Syndrome”. The contingencies like “slack” are also often taken for granted and misused. According to Parkinson’s Law, “work expands to fill the time available for its completion.” Team members often misuse the slack, causing delays in the schedule.
• Activity Completion Gain/Loss
If an activity is completed early, the time gain is useless because the next must wait until its early start date. This may happen because the resources allocated to the next activity may not be available at the moment. However, the opposite is not true. If any activity is delayed, it will affect the next, and the next activity will be delayed, and thus the project is too. Delays accumulate in the critical path method, but gain does not.
• Not Passing on Time Savings
In an organization, team members are often not provided sufficient incentive to inspire them to finish their tasks early. There have also been observations wherein team members were reluctant to finish early as they feared that they will be expected to finish early every time subsequently and/or that they would be assigned additional tasks thereon.
• Path Convergence
There are often situations wherein multiple predecessors merging into a single activity. In such a situation, the longest delay, from among the predecessors, is passed on to the initialization of the successor activity.
• Multitasking
Many organizations encourage extensive multitasking among its employees. Being tasked with multiple activities can result in a loss of focus on the primary activity. This focus on local efficiency could potentially damage the overall performance of the system.
It was clear that a critical path-based schedule contained many potential pitfalls for project managers. There was a need for a pragmatic approach to developing a realistic schedule to help project managers complete projects on time with minimal obstruction. Keeping these observations in mind, Dr. Eliyahu M. Goldratt developed the Critical Chain Method as an improvement over the Critical Path Method.
The Critical Chain Method
The critical chain is “the longest path in the network diagram considering activity interdependence and resource constraints”. This method was made to accommodate and manage the ever-present uncertainties found in project environments. It is an especially powerful tool to use in multi-project environments. Scheduling in the new method is done by making the following alteration to CPM:
• The team members are encouraged to make optimistic estimates rather than traditional pessimistic estimates.
• Buffers are not kept with individual activities, instead, collective buffers are built at the end of each chain of activities.
• Project Buffer is kept at the end of the Critical Chain (longest chain) and Feeding Buffers are kept at the end of Non-Critical Chains which are feeding into the Critical Chain thus reducing the impact of Path Convergence impacts.
• Buffers are shown as activities which are under the control of the project manager. This helps in effective use of buffers and eliminating their unnecessary wastage.
• Resources are not punished if they miss a deadline of an activity, as there are buffers at the end of the chains.
• Late Start schedules are used rather than traditional Early Start schedules used in Critical Path Method.
• Resources are allocated 100% to avoid multitasking.
By putting a few rules in place, this method can greatly reduce the time wasted during project ex*****on through interruptions, iterations, rework, work expansion etc.:
1. Full Kit: Rapid project ex*****on is possible if proper “gating” rules are imposed at various stages. This means that the next stage of any project should only be started once the “full kit” i.e., all the inputs from the previous stage, are complete.
2. No bad multi-tasking: While well accepted, the pressure of time forces often forces managers to break the gating rules. As such, in order to apply the above rule, the time needed to complete each stage has to be reduced significantly. One way to reduce this lead time is to cut down the level of multi-tasking.
3. Controlled WIP: Bad multi-taking can be eliminated only when the total number of open work fronts is controlled. Strict WIP rules will help focus on closure of the tasks at hand. Further a global priority mechanism can create a common understanding of what is truly urgent. Projects can be given a sequential queue number and tasks can be picked up in the order of their queue numbers.
4. Active task management: There needs to be a process of daily management and predefined issue resolution frequency rather than the traditional process of intervention close to committed dates in order to ensure quick decisions and fast issue resolution at all levels within the company.
5. Buffer management: Critical Path Project Management Defines Three Types of Buffers – Project Buffer, Feeding Buffer, and Pooled buffer. By differentiating the touch time from the total lead time of a task, the buffers can be made visible. The visible buffers provide signals as to where level of uncertainty is significant and needs intervention. As the progress of the project is reported, the critical chain is recalculated. Additionally, The buffer consumption rate provides an early warning and visibility to top management on delays, and as a result, intervention happens early rather than later. The rate of its consumption also provides priority signals to ensure correct utilization of resources for different projects and also ensure synchronization of parts within a project.
Summary
The Critical Chain Method is a more practical approach to developing the project schedule. The availability of resources is taken into consideration while scheduling the project. This method addresses many shortcomings of the Critical Path Method, provides a realistic schedule, encourages team members to perform efficiently, and improves productivity.
