Critical Chain Method

1
Critical Chain Method
Complex solutions do not work, the more complex
the problem the simpler the solution must
be. Eli Goldratt.
These sides and note were prepared using 1. The
book Streamlined Building Lean Supply Chain
Using the Theory of Constraints. Srinivasan.
McGraw-Hell. 2. The slides originally prepared by
Professor M. M. Srinivasan. 3. Presentation of
Dr. Daniel Walsh, Vector Strategies. Continuous
Process Improvement Summit. 2012, Northridge,
CA. 3. Presentation of Dr. Rob Richards, Stottler
Henke. Continuous Process Improvement Summit.
2012, Northridge, CA.
2
Predicting the Future
It is tough to make perdition, especially about
the future. Yogi (Lawrence P.) Berra, Baseball
catcher and manager, 1925.
The best way to predict the future is to create
it. Peter F. Druker. Writer and professor,
1909-2005.
3
Motivation
4
Why Projects are Late

• Unavailability of resources.
• Not high enough priorities
• Murphy Law
• ..
• .
• They ran out of time

5
Wrong Metrics - Gedanken
Courtesy of Dr. Daniel Walsh, Vector Strategies.
6
Project Management Problems Usually Faced

• Task durations are highly variable. A lot of
  uncertainty involved in estimating task durations
• Project is not clearly defined Known Work
  Known Unknown Work Unknown Work.
• Existing project work is not complete before new
  projects shift priorities leading to
  multi-tasking.
• Problems in a project cascade into another
  project.
• Constant pressure to increase staff for peak
  loads.

7
Task Duration

• An activity is composed of three types of work
  Known Work Known Unknown Work Unknown Work.
• Due to unknowns, task durations are highly
  variable. People usually give a number that they
  expect to have a 10 chance or less of missing.
  There is 90 or more probability that the
  duration is less than the given number. Inflated
  task times reduce productivity and unnecessarily
  inflate budgets.
• CCPM motivates people to give a number they have
  a high probability (50 or more) of missing. The
  idea is to pool task buffers and allow the tasks
  to use the buffer only if they need it.

8
Task Duration

• The buffer for the critical chain is smaller than
  the sum of the buffers required for all the tasks
  on the critical chain.
• Protecting task times with buffers will degrade
  on-time performance,
• Providing specific due date to complete each
  specific task is against a systematic approach,
  and
• Aggressive-but-possible task times increase
  on-time completion of the projects.

9
Sequential Tasks
Task 1
Task 2

• If each task has mean of 15 and StdDev of 5. With
  95 probability each task is completed in 25
  days. Project 50 days.
• But Variance of the critical path is 252550,
  StsDev of 7.1
• We can have duration of 15 for each task and a
  14.2 days project buffer. With 95 probability,
  the project is complete in 44.2 days.

Task 1
Task 2
Buffer

10
How a Task is Done
11
Task Duration Syndromes

• Parkinsons syndrome Work expands to fill the
  time available. People tend to continue working
  on a task that could have been completed earlier
  if they are given a pre-specified completion
  time.
• Continue to Polish syndrome (aka the 3-Minute
  Egg Rule) Its not quality if its finished
  before time is up.
• Student Syndrome When people feel there is
  plenty of time to complete a task, other things
  become important and they procrastinate on the
  task.

12
Managing Projects Under Uncertainty
13
Sequential Tasks

• Consider a simple project with 2 tasks performed
  by 2 different operators.

Assume task durations are uniformly distributed
(5,25). On average 15 days.
Generate 1000 Projects
What is average project completion time?
30 days StdDev lt StdDev1 StdDev2
Average
StdDev
14
Merging Nodes

• Consider a slightly more complex project.

What is the average project completion time?
33 days Task 3 Max(Task 1, Task2)
15
Merging Nodes
Probability of completing project in 30 days?
33
16
Merging Nodes and Resources

• The affect of resource interdependencies on a
  simple project.

What is the average project duration? What is the
probability of competing the project in 45 days.
17
1000 Instances
18
1000 Instances

• A projects most likely completion time is much
  larger than the sum of the averages of the tasks
  making up its longest path (due to
  synchronization or due to task dependencies).
• So, how do we quote estimated completion time of
  the project?
• Do people give a number that they know has a high
  (50 or more) chance of missing?

19
Task and Project Durations the Traditional Way
Task 1
Task 3
Task 5
Task 2
Task 4
So, the average task times are padded to
accommodate any possible delays. Instead of
specifying a 50 time estimate (which fails half
the time), a 98 confidence estimate is developed
for the tasks and project duration. 98 of 5,25
5.9820 519.6 24.6 What is
the chance the project will complete in 70 days?
20
Given CPM computation, the project will take 15
weeks, and all tasks are on the critical path.
If the project was scheduled for 20 weeks, there
is a 5 week project buffer.
21
Project Buffer and Feeding Buffers
a) Compute the project buffer. b) Compute and
identify the feeding buffer(s).
22
Fever Chart
Courtesy of Dr. Daniel Walsh, Vector Strategies.
23
Fever Chart
Courtesy of Dr. Daniel Walsh, Vector Strategies.
24
Buffer Management Allocate Resources to Tasks
Based on Buffer Burn Rate
Chain 1
Buffer
20 buffer consumed
33 work completed
Chain 2
Buffer
50 work completed
60 buffer consumed
Burn Rate of buffer consumed vs. of work
completed. Automatically calculated on an ongoing
basis to assess how much buffer is still
available for future uncertainties. Task
Priorities Tasks that lie on chains with less
safety remaining are given top priority. This
ensures that buffers are not wasted, and also
reduces pressure to multitask.
25
Multi Tasking
26
Pipelining Release Projects Based on Constraints
Instead of Starting ASAP

• Most heavily loaded shared resource (constraint),
  determines throughput
• Project starts are based on constraints
  capacity,
• Pressure to multitask also comes down

Pipelining is more efficient than starting
projects ASAP
ã Realization Technologies, Inc.
27
What to Change?

• Erroneous assumptions
• Protecting task times with buffers will improve
  on-time performance (this is a biggie)
• By finishing too soon, people hurt their future
  negotiating power.
• Providing milestones for each task is good
• It is good to induct work as soon as possible
• Multitasking is beneficial

28
Summary Sources of Project Delays

• Synchronization Delays
• Integration (assembly) points
• Resources and tasks
• Delays due to Behavioral Effects
• Parkinsons Law
• Student Syndrome
• Continue to Polish Syndrome
• Queuing Delays
• Induct work ahead of schedule
• Multitasking

29
Summary

• 50 chance od failure, not 1. Avoid the 3
  syndrome.
• Aggregation, project buffer, feeding buffers
• Integrate the resources into the CPM.
• Proactive, leading, how much of PB is consumed.
• Not how many days have you worked on the task,
  but how many days do you need to complete the
  task.
• Team work culture at the project level not
  individualism at task level
• Managing by exception, fever chart, what are
  todays priorities?
• Avoid multi-tasking, follow constraint recourse
  based release.
• Avoid inducting work ahead of schedule (ASAP).
• Do not switch the Critical Chain

30
Courtesy of Dr. Rob Richards, Stottler Henke
31
Courtesy of Dr. Rob Richards, Stottler Henke
32
Courtesy of Dr. Rob Richards, Stottler Henke
33
(No Transcript)
34
(No Transcript)
35
(No Transcript)
36
(No Transcript)