Critical Chain Project Management

Critical Chain Project Management

Applying Theory of Constraints to Project Management yields shorter project durations, superb on-time completions and more projects completed in the same time frame by the same resources

When you apply the Theory of Constraints (TOC) principles to the problems of Project Management, what emerges is a technique called Critical Chain Project Management – a technique that many people consider the most powerful of all the TOC applications..

This approach to Project Management deals head-on with many of the biggest challenges in the project environment.

In most project environments, people are working flat-out or even at burn-out rates. Uncertainty is a dominant characteristic of the environment; requirements, tasks, and resource availability often change within the project life-span. Task times are estimates and can “prove” to be wrong by a mile.

These are the realities that any approach to managing projects must deal with – and Theory of Constraints is no exception.

The power of the Critical Chain project management approach is that despite all these realities, the technique delivers greatly reduced project durations (25% to 33% is common) along with very high due-date performance, which is unprecedented in most project environments – and it does this without compromising the deliverable or the project budget.

More: it achieves these results in environments as far apart as IT projects, new product development, MRO aircraft turnaround, and road and building construction.

And still more: in a “pure” project environment, in contrast to a manufacturing company where project resources typically also have “real” jobs, Critical Chain Project Management enables the same resources to complete 2X and even 3X the number of projects, in the same time. This, of course is HUGE.

Symptoms of the problem:

  • Planned project durations are longer than anyone would prefer.
  • Actual completion is typically later than the plans called for – often much later.
  • Projects are regularly over-budget by their completion.
  • The deliverable is often compromised to deal with lead time or budget pressures.
  • There is an end-of-project “crunch,” often with major impact on resources and their subsequent productivity.
  • There is poor quality-of-life among project resources in general.

Common management frustrations:

“How can we ALWAYS be late? Once or twice I can understand, but why is it ALWAYS that way? Even when everyone always pads their part of the schedule, and WE add a buffer on top of that?”

“I can understand missing one deadline for a project, because there are a lot of unknowns … but how come EVERY promised date after that is also missed? Even the ones that we get when the project is supposed to be 70% or even 90% complete? Aren’t we supposed to be experts at this?”

“Why do we always find out too late that the project is going to be late? If we’d known earlier we could have done some damage control or put more resources on it …”

“Sometimes it seems to me that when we throw more resources at the project, progress seems to slow down not speed up!”

“We spend months, even years, hire the best people and invest a fortune to get the new product out … then instead of capturing the planned market share we actually alienate many of the customers our sales and marketing people have worked for months to win, by promising dates we miss again and again and again … ”

“To get the thing finished even close to when we promised it we have to take resources away from other projects, and all we’re doing is digging our grave deeper with each one.”

The Theory of Constraints Solution: Critical Chain Scheduling

  • Planned project durations are typically reduced by 25% the first time the Critical Chain technique is used; then shrink more on subsequent projects as lessons (and new behaviors) are learned.
  • It is common for 85 – 99% of Critical Chain projects to be completed on or before the promised date – despite many Murphy-strikes, despite the uncertainties associated with projects in almost all environments, and despite the planned duration being shorter than conventional.
  • The combination of the two above outcomes usually translates to Critical Chain projects actually being completed in a LOT less time than conventionally managed projects; not just 25% less.
  • One side effect is that Critical Chain projects usually arrive on-budget, or very close.
  • Projects are commonly completed on time and within budget without any need to compromise the original specifications.
  • THIS IS HUGE … a Critical Chain project environment routinely generates these types of results without the characteristics that lead to burn-out – less overtime, more stable priorities, “crunch” episodes reduced in frequency and magnitude.
  • THIS IS HUGE … companies are discovering that with Critical Chain scheduling and project management they can get 2 or 3 times as many projects completed by the same resources in the same time, without resource burn-out.
  • True Project status is clear at any time. In fact, Critical Chain is in a class of its own when it comes to identifying where things really stand, what really needs attention.
  • You’ll also find that Critical Chain provides a solid basis for some useful what-if analysis before and during the project.
  • The Project Schedule typically remains stable for the duration of the project … despite all the realities that are so different from the expectations.

A common question: How is Critical Chain different from Critical Path?

The best way to describe the mechanical difference is in terms of outcomes. If you were to compare the Critical Path identified by Microsoft Project for a project and compare it to the project’s Critical Chain, you would notice two things:

  • The series of tasks that comprise the Critical Chain genuinely represent the longest path through the project network, taking into account task and resource dependencies, i.e. these genuinely deserve management’s rigorous attention, and
  • Many of the tasks on that Critical Chain (sometimes “most,” sometimes “all”) simply do not appear on the Critical Path.

The difference is usually major. The difference between the Critical Chain approach to Project Management and the Critical Path approach to Project Management is far greater than just the difference in the focal point of the network of tasks; it embraces mechanical issues, policy and measurement issues, and most important of all – behavioral issues.

What does it take to make it work?

  1. Education – to use an over-worked expression, Critical Chain project management is genuinely a paradigm shift and education for resource managers, project managers, and project resources is essential.
  2. Construct schedule Gantts that include all the relevant data – tasks, dependencies, task effort estimates, resource assignments and capacity. If this sounds redundant, it isn’t – in our experience most projects aren’t fully scheduled with all this data because experienced managers know that the picture will have changed significantly in weeks, even in days. So why bother? Well, with Critical Chain it IS worth bothering – because despite the inevitable Murphy, and despite changes in resources etc most critical chain projects never have to be rescheduled – so the investment of time up-front is worth it.
  3. Estimate task times differently. I’ll leave this point at that!
  4. Use the Critical Chain algorithm to schedule the project. You need software for this.
  5. Change policies, procedures and measurements such that many project behaviors are also changed, in consequence. Again … that’s enough for now but you can probably imagine that there’s a tad more involved in doing this than saying it.

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