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?

Conference 2012 PMI Kerala

June 09, 2012

PMI Study

Conference 2012 PMI Kerala

June 09, 2012

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

Conference 2012 PMI Kerala

June 09, 2012

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"

Conference 2012 PMI Kerala

June 09, 2012

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?

Conference 2012 PMI Kerala

June 09, 2012

 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

Conference 2012 PMI Kerala

June 09, 2012

Why do our Projects delay?

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

Conference 2012 PMI Kerala

June 09, 2012

How do we estimate project duration?

Past Data
Top Down or Bottom up approach
Cushions for uncertainty
Activity precedence (network technique)

How much is the cushion you provide??

Conference 2012 PMI Kerala

June 09, 2012

Project Duration

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%
Conference 2012 PMI Kerala

June 09, 2012

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

Conference 2012 PMI Kerala

June 09, 2012

1.0

0.8

25%

50%

0.6

0.4

0.2

90%
0

T50
Conference 2012 PMI Kerala

Time

T90
June 09, 2012

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%

Conference 2012 PMI Kerala

1 2

Number of days to
Complete
project
June
09, 2012

Buffers on Each Activity

Why after all these cushions project get delayed?

Conference 2012 PMI Kerala

June 09, 2012

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!

Conference 2012 PMI Kerala

June 09, 2012

Effect of Fluctuation

Start Date

Conference 2012 PMI Kerala

Due Date

Finish Date

Due Date

June 09, 2012

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

Parkinsons Law
Work expands to fill its time

3-Minute EGG Rule

Its 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

Conference 2012 PMI Kerala

June 09, 2012

The Conflict
Avoid
Parkisnons
Parkisnons
Law
Law
Minimise
Minimise
Project
Project
Leadtime
Leadtime
Manage
Projects
Successfully
Meet Project
Promise
Promise

Schedule
Without
safety
Schedule
With
SAFETY
SAFETY

Con
flict

Provide
Provide
For
For
Murphy
Murphy

Conference 2012 PMI Kerala

June 09, 2012

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

Conference 2012 PMI Kerala

June 09, 2012

Plan B - Coping behaviours

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

Conference 2012 PMI Kerala

June 09, 2012

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

Conference 2012 PMI Kerala

June 09, 2012

What is the way out?

Conference 2012 PMI Kerala

June 09, 2012

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 on-time
completion of each individual activity in a project
TOC approach focuses on successful on-time
completion of the entire project

Conference 2012 PMI Kerala

June 09, 2012

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?

Conference 2012 PMI Kerala

June 09, 2012

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

Conference 2012 PMI Kerala

June 09, 2012

Theory of Constraints

Systems are analogous to chains, or

networks of chains
Like a chain, a systems performance is
limited by the performance of its
weakest link
The weakest link is the systems
constraint
Conference 2012 PMI Kerala

June 09, 2012

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

Conference 2012 PMI Kerala

June 09, 2012

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

Conference 2012 PMI Kerala

June 09, 2012

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

Conference 2012 PMI Kerala

June 09, 2012

Critical Chain Project Management

Uncertainty always present it doesnt 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

Conference 2012 PMI Kerala

June 09, 2012

Revisiting activities

Conference 2012 PMI Kerala

June 09, 2012

Power of Aggregation

Conference 2012 PMI Kerala

June 09, 2012

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

Critical Chain Schedule

Job 3
Job 4
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.
Conference 2012 PMI Kerala

June 09, 2012

 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
Conference 2012 PMI Kerala

June 09, 2012

 Resource buffers
a wakeup call to alert resources to be ready to work on
critical tasks
Scheduled idle time can provide better info about resources
availability (capacity)

Feeding
Buffer
Critical Chain
Alert Wkr A
Alert Wkr B

Resource
Buffers
Conference 2012 PMI Kerala

Project
Buffer

Alert Wkr C

June 09, 2012

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

Conference 2012 PMI Kerala

June 09, 2012

Critical Chain Project Management

Original Critical Path

2

Task 1

Original Critical Path with

Buffer
1

Project Buffer

(Safety removed from individual

tasks)
Conference 2012 PMI Kerala

June 09, 2012

Conference 2012 PMI Kerala

June 09, 2012

Conference 2012 PMI Kerala

June 09, 2012

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

Conference 2012 PMI Kerala

June 09, 2012

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

Conference 2012 PMI Kerala

June 09, 2012

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

Conference 2012 PMI Kerala

June 09, 2012

 Thank You
saji@iimk.ac.in / saji.gopinath@yahoo.in
9400050850

Conference 2012 PMI Kerala

June 09, 2012