CRITICAL CHAIN By Eliyahu M.

Goldratt
Eliyahu Moshe Goldratt, was an Israeli physicist who became a business management guru, chose to break from this conventional writing style by presenting his ideas in the form of business novels. Goldratts most famous novel is called The Goal A Process of Ongoing Improvement. Critical Chain applies the Theory of Constraint (TOC) principals to Project Management. Critical Chain by Eliyahu M. Goldratt is written as a novel but the sub-title, A business novel, actually describes what it is. The main story in the book is about an associate professor named Rick Silver who is trying to attain his tenure at a university's business school. The whole story is in form of conversation between Prof. Silver and his students of project management in the course of executive MBA. Initially there are parallel stories running which ultimately converge into one at the end. It lays the focus on importance of TOC (Theory of Constraints) which is introduced by Prof. Johhny, who has recently returned from a sabbatical at a large conglomerate that uses the Theory of Constraints. The discussion focuses on the current methods of measuring success at a work center (cost and throughput) and shows how they are contradictory to the success of the production line as a whole. It (TOC) is further elaborated by Prof. Silver in his project management course to solve the problems; his students are actually facing in their ongoing projects. The ongoing conversation and discussion of Prof. Silver makes it easier for the reader to grasp various concepts as well as their actual implementation. The lectures usually identify the problem in the students projects and the lecture ends with some kind of consensus. The consensus so formed is basically learning for the readers. E.g. problems in a project: a) Student syndrome in the resource assigned to the task: they have more than enough time to do the task, therefore they start the task late using up all the safety. b) Multitasking: The safety is added knowing that the resource will not be able to focus on the task and hence encouraged to multitask on multiple projects at a time, which significantly impacts all projects. c) Not claiming early completion: In order to preserve the safety concept in future projects, resources do not report tasks completed early. Obviously, though, there is no way to hide a late completion. The book stresses on focus of project manager and his team. The focus should rely on both cost as well as throughput which are governed by the cost world and the throughput world. Both these are considered as trade-offs but in reality they complement each other. Both try to maximize the efficiency of a firm/ process/ operation/ project. The practical implementation and applicability of these processes
Book Review (Group I) Critical Chain by Eliyahu Goldratt Page 1

are made clear through the practical examples like steel mill where all the inefficiencies cropped not because of inefficient systems but the way to measure the product itself. The book also gives how to effectively use the concept of buffer. There are three kinds of buffers viz:
y

Project Buffer A project buffer is inserted at the end of the project network between the last task and the completion date. Any delays on the longest chain of dependant tasks will consume some of the buffer but will leave the completion date unchanged and so protect the project. Feeding Buffers delays on paths of tasks feeding into the longest chain can impact the project by delaying a subsequent task on the Critical Chain. To protect against this, feeding buffers are inserted between the last task on a feeding path and the Critical Chain. Resource Buffers Resource buffers can be set alongside of the Critical Chain to ensure that the appropriate people and skills are available to work on the Critical Chain tasks as soon as needed.

These are the three kinds of buffers that should be inserted while project planning. The safety which is usually inserted at each task by each level in the organization falters the entire project and its actual completion. The entire book was actually a practical learning experience. It clearly brought into focus how to put the concepts into real time projects and assignments. The concept of finishing and concentrating (focusing in Goldratts terminology) was a breakthrough concept. Rather than multi-tasking one resource should be put to one work and can be channeled to other works in order of their priority. Thus, the resource is not over strained and the works also finish on/ before time. The most interesting part of the book is the methodology of Prof. Silver to teach the students: y to bring out the original problem; y capture the essence ; y work on the problem; y come out with a unanimous decision. Thus, the book is a must read to know the depth of decision making and strike a perfect balance between various trade-offs and ultimately make them beneficial for the working of entire organization.

Local Improvements are necessary to get the Global Ones.

Book Review (Group I)

Critical Chain by Eliyahu Goldratt

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