Critical Chain Project Management (CCPM)

1
Critical Chain Project Management (CCPM)

• Ron Henry
• Project Management Journal Club
• June 3, 2009

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What is CCPM?

• Billed as new project management paradigm
• Very different management approach
• Term critical chain does not fully capture the
  shift
• Really a philosophy built around a buzzword (like
  Six Sigma, TQM, EV)
• Key Ideas
• Resource management is central to planning
• Manage to project finish date, not interim
  milestones
• Aggressive (median) activity duration estimates
• Safety time removed from activities and
  aggregated into project buffer
• Focus on critical chain and protect it from
  delays in non-critical activities
• Discourage multitasking

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CCPM Origins

• Developed by Eliyahu Goldratt
• Israeli physicist turned business consultant
• Developed Theory of Constraints (TOC)
• Popularized CC in 1997 with publication of
  Critical Chain
• Intellectual Roots
• Analysis of problems with traditional project
  management
• Most projects fail to finish on time or within
  budget
• Same PM problems occur across a wide range of
  organizations
• There must be a systemic reason for this
• Insight into human nature
• Traditional management can create perverse
  incentives
• Statistics
• Less margin is needed to protect project as a
  whole than to protect each individual task
• Business administration
• CC is application of TOC to project management

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Definitions and Metaphors

• Critical Chain vs. Critical Path
• Critical Path The path in a network schedule
  with zero slack (or float)
• Usually only task dependencies are considered
• Note that slack only appears in a schedule if
  non-critical tasks are scheduled early
• If tasks are scheduled as late as possible,
  longest path is most critical
• Critical Chain The longest chain of
  consecutively dependent activities, considering
  both task and resource dependencies
• Metaphor shift is as important as the technical
  difference
• Gets PM thinking about the people involved (links
  of the chain)
• A chain is only as strong as its weakest link
• Project execution as a relay race
• Different athletes, different skills
• Each leg should be finished as quickly as
  possible
• Coordination between resources to minimize
  overhead of passing baton

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Pathologies with Traditional Scheduling (1)

• Philosophy
• Brooks Law (1975)
• Adding manpower to a late software project makes
  it later
• Goldratt makes a similar assertion
• Deadline pressure on a task causes it to take
  longer
• Why task deadlines are counterproductive
• Resources held accountable for meeting their
  estimates have strong incentive to pad those
  estimates with safety time to assure 90
  success probability
• Once estimates have been padded, perverse
  incentives arise
• Student syndrome
• When people think they have extra time on a task,
  they tend to begin it late (if busy)
• Parkinsons Law
• Work expands to fill available time (if less
  busy)
• Murphys Law
• People tend to underestimate the amount of safety
  time they need, then overcompensate
• No time to cope with unexpected obstacles if
  safety time has already been used up by starting
  late or increasing scope
• Trivial example commuting to make an early
  meeting
• Ask for meeting to start later, then leave later
  and may be late anyway

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Pathologies with Traditional Scheduling (2)

• Little incentive to finish tasks early
• Early finish may lead managers to discount future
  estimates
• Similar to syndrome of government agencies using
  up their budgets
• If a task does finish early, usually little
  benefit to project
• Resources to begin successor task not available
  until scheduled start date
• Reasons for bad multitasking
• Each project manager wants to see some progress,
  even if small
• If one has safety time on a task, one may decide
  to interrupt it to work on something else that
  may have an earlier deadline
• Bad multitasking leads to inefficiency
• Repeated context switching overhead due to loss
  of focus
• Tasks not completed, so successor tasks cant
  start
• Large amount of work-in-process (WIP) which
  hasnt earned any revenue
• Upshot
• Accountability for estimates causes people to
  waste time, increase scope and work inefficiently
• Safety time nearly always used up
• Even padded estimates often exceeded (or met only
  through heroics)

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What Makes CCPM Different?
Focus Area Traditional Approach CCPM Approach
Duration estimation Requested without clear guidelines and often padded Insist on average-case estimates aggregate safety time into project buffer
Planning approach Optimizing Satisficing
Handling of uncertainty Planning phase only estimates treated as deterministic once made Comfortable with uncertainty during both planning and execution
Resource leveling Optional technique to improve schedule Integral part of scheduling
Resource management Attempt to utilize all resources to optimum level Non-critical resources subordinated to critical ones
Scheduling bias Forward from project start start activities as early as possible Backward from need date start activities as late as possible
Execution and control Manage based on interim milestones Manage based on buffers only date that matters is project completion
Schedule accountability Team members accountable for making realistic estimates and meeting them Team members accountable for overall contribution to project success, not for meeting individual deadlines
Project monitoring Backward looking (how much value have I earned?) Forward looking (buffer management, lead time on task completion)
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Aggregation and Statistics

• Task durations have a skewed distribution
• Compare assuming 2-point estimates

• Suppose project P consists of just two
  independent tasks A and B

Activity/Path Aggressive Estimate (days) Safety Margin Safe Estimate
A 6 3 9
B 8 4 12
P 14 5 19

• Conventional project duration 21 days
• Little chance of finishing early
• CCPM project duration 19 days including 5-day
  buffer
• 10 reduction in lead time (savings increase
  with length of chain)
• Real chance to finish early

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CCPM Planning Methodology

• Define activities (same as CP)
• Estimate activity durations (ask for average-case
  estimates)
• Build network schedule by working backward from
  completion date
• Level resources and resolve any resource
  contention issues
• Identify critical chain
• Add project buffer (up to 50 of length of
  critical chain)
• Insert feeding buffers for non-critical paths
  where they feed into critical chain
• Baseline schedule and enter tracking mode

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Buffer Management

• Project Buffer
• Buffer penetration is expected to increase during
  project
• Green, red, and yellow zones as function of date
  within project
• If penetration reaches yellow zone, think about
  contingency plans
• If penetration reaches red zone, put them into
  effect
• Feeding buffers
• These protect critical chain from a delay in a
  non-critical activity
• If feeding buffer is consumed, that just uses up
  some time in project buffer
• Resource buffers (shorthand for a coordination
  system)
• Resources asked to estimate how much lead time
  they need before they can get up to speed on a
  task
• Monitor expected time to predecessor task
  completion
• Notify resource needed for successor task when
  within lead time of completion
• Resource then prepares to start task and shifts
  to interruptible work
• Getting ready to receive baton
• Exact time when baton will be passed remains
  uncertain
• Number of buffers to manage depends on complexity
  of project

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Fever Chart Example
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CCPM and Earned Value

• Problems with Earned Value Management
• Deterministic (invests baseline estimates with
  more certainty than actually exists)
• Backward-looking
• Does not distinguish between critical and
  non-critical activities
• May be more useful to the sponsor deciding
  whether to kill a poorly performing project than
  to the PM trying to fix it
• EV generally not considered a good fit for CCPM
  methodology
• Requires estimated task completion dates, which
  strictly speaking dont exist in CCPM
• Buffer management considered a better technique
  for monitoring and control
• Avoids illusion of precision
• Less data to collect and analyze
• Focuses attention on critical chain
• EV may still have a role, however
• Collect data to satisfy contractual requirements
• Provides generic metrics to facilitate assessment
  of different PM approaches across projects
  (including CCPM itself)

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Management of Multiple Projects Using CCPM

• Applies Theory of Constraints to project
  portfolio management
• Development organization is a system in itself
• The system has a goal
• That goal is to maximize throughput
• Techniques for Maximizing Throughput
• Identify critical constraint(s) that are limiting
  throughput
• Typically one or more bottleneck resources
• Subordinate non-critical resources to critical
  ones
• Keep critical resource busy by ensuring it never
  has to wait for inputs
• Concept of drum resource that is most in demand
  across projects
• Everyone marches to beat of drum
• Avoid forcing resources to multitask
• Simple project priority scheme based on first
  in
• Use capacity buffers to avoid starting projects
  before resources are available

14
CCPM in Practice

• Used successfully on many large projects
• Boeing 777 airframe design project (Johnson 2004)
  is an example
• Pilot project for CCPM at Boeing
• Involved nearly 1000 people at its peak
• Significant improvement in EV metrics after CCPM
  was adopted
• Evidence for significant learning curve
• Performance improved only after project team
  learned to use CCPM effectively
• Some authors claim major project performance
  improvements for CCPM
• Wikipedia references 1998 New Zealand study by
  Balderstone Madin
• Study claims a reduction of 69 in lead time from
  32 observations
• However, study was on Theory of Constraints in
  general, not specific to CCPM
• Difficult to evaluate this without more research
• More recent data would be helpful

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CCPM Problems

• Practice of requiring resources to give
  average-case duration estimates is very
  controversial (Lechler et al 2005)
• Can lead to behavioral problems of its own
• Claim that Parkinsons Law and student syndrome
  are major causes of wasted time in projects is
  unproven
• Very difficult to get objective data
• Requires major change in organizations PM
  culture (Patrick)
• May be difficult to implement piecemeal or as a
  pilot project if management has not bought in
• Johnson paper offers some useful lessons on pilot
  implementations
• Benefits appear proportional to project size
  (Johnson)
• May be best suited for large and complex projects
• Technical issues
• Appropriate buffer sizing
• Possible shifts in critical chain
• How to identify bottleneck resources across
  projects

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Conclusions

• CCPM is a different set of techniques from
  traditional PM, built around a different
  management philosophy
• Seems to work best in a well-managed organization
  with the ability to coordinate across projects
• Need to identify and resolve resource contention
  problems quickly
• Things that make CCPM well suited to STScI
  environment
• We often know need dates on projects well before
  they start, so backward scheduling seems a
  natural technique to use
• Project buffer concept is just an extension of
  the way NASA manages other key resources by
  holding reserve at project level
• Mass, power, cost ... why not time?
• Things that may make it less well suited
• Nonprofit environment
• Little benefit to finishing projects early
• How could we define throughput and how would the
  organization benefit from maximizing it?

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CCPM Resources

• Journal papers
• Stephen Johnson paper on use of CCPM on large
  Boeing project (2004)
• Comparison of CC and CP methodologies by Lechler
  et al (Engineering Management Journal, December
  2005)
• Provides a more objective perspective
• Contains an extensive list of references for
  follow-up study
• Books by Eliyahu Goldratt (presented as business
  novels)
• The Goal (1986)
• Theory of Constraints (1990)
• Critical Chain (1997)
• Other books
• Goldratts Theory of Constraints A Systems
  Approach for Continuous Improvement (William
  Dettner, ASQ Quality Press, 1997)
• Highly recommended in Johnsons paper
• Software
• Commercial software is available to facilitate
  project management using CCPM
• Prochain Project Scheduling from ProChain
  Solutions
• Project Scheduler 8 (PS8) from Scitor Corp.
  (discussed in Patrick material)