Critical Chain project management

The ideas have been taken from the book - Critical Chain Project Management by Eliyahu M Goldratt. This article is the summary of his book. 

A project is a set of activities aimed to achieve a specific objective and have a clear start and end. Almost every project suffers from huge budget overruns and overdue, as a result of which the projects, most of them, don’t finish on time or on budget. Sometimes, even project specifications have to be compromised in order to finish the project on time. These are some of the major problems almost all projects have to suffer.

Projects are undertaken by the organizations to reap out the benefits, the profits out of it for their survival, but because of delays the payback period usually increases, thus leaving organizations under huge budget overruns and overdue. Delays can happen in any project, at any time, in any amount. Usually, when a delay happens, organizations give their reasons of delays, which most of the time blames uncertainty. There are official reasons as well as unofficial reasons of delay. This is a blame game and official reasons, given by top management, are mostly pointing fingers outside the organization but when we come to unofficial reasons, which are given by low level managers or workers, we come to know some real reasons for the delay. These people tend to point fingers internally unlike the top management.  In order to avoid delays, people add a certain amount of safety to their works. For example – a work, which can be done in four days, will have some safety added to it by the concerned personnel. Let us say that the person gave the duration for completion of the work as Eight days, so the extra four days added here is the safety.

Now, let’s talk about Critical path. Critical path determines the time any project will take to finish. It is the longest duration and any delay on the critical path will lead to the delay of the project. It is mainly task dependent. This has become a traditional method in project management and mostly all projects follow the critical path method. But there are problems related to this traditional method. It doesn’t address the misuse of safety.

There are certain issues which affect the project directly but are not addressed by this traditional method. First, the issue of Late Start or Student’s Syndrome, which states that the people will start late, hence they consume all the safety they had put for the work. Second, problem of Multitasking, people are not able to focus on a single task rather are forced or work on multiple tasks at the same time. This reduces their efficiency, the value of the project and often results in errors. Third, Parkinson’s law, which states that people, knowing that they have certain number of days for a task, will divide their work in such a way that the whole time allotted for the job is consumed. There is no early finish here. In addition to this, the Project measurement system for measuring the progress of the project is also faulty. Progress is measured according to the amount of work, or investment already done, relative to the amount left to do. This system doesn’t differentiate between the works done on the critical path and that done on non-critical paths. The management also forces its employees to work on more than one projects. This traditional project management doesn’t take into account the misuse of safety and dependencies of task which can cause delay.

To perform work more efficiently, Theory of Constraints has been introduced which will greatly impact the Critical Chain Project Management. TOC is a blend of three different breakthroughs namely, New management philosophy, New research methods and Robust applications. It says, in order to manage projects, managers must control cost and at the same time protect throughput. Let us suppose that an organization has various departments and they all are involved in the development of a product or working on a project. This means that all the departments have to work together in order for the timely delivery of the end product. To improve the cost, any department or a link needs to perform better individually, which is also termed as local improvement. This local improvement will help increase the cost world. But for the throughput to increase, the linkage between various links or departments should be strengthened. In order for an organization to flourish, they have to compromise between the cost world and the throughput world. Thus, comes the focusing part, which shows how organizations should focus on weak links and linkages so that the cost world and throughput world can run side by side. For focusing, TOC has given certain steps which needs to be followed. They are as follows –

·         IDENTIFY the systems constraints or the bottleneck.

·        EXPLOIT – Try to strengthen the constraint either by Crashing or Squeezing          the maximum capacity.

·         SUBORDINATE – Reduce work so that the bottleneck can perform better.

·         ELEVATE the systems constraints, buy more resources.

·         REPEAT – This is an ongoing process.

This constraint, we just talked about, for projects is its Critical path. The fact that we pad each work with safety is the core problem. So, what happens in critical chain project management is that it adds Buffers. There are mainly three types of buffers which are added in a project. They are as follows –

·         Project Buffer – It is added at the end of the project network between the last    task and the completion date on the critical path. It is supposed to be half the    safety time.

·       Feeding Buffer – Delays on paths of the tasks feeding into the longest chain      can impact the critical path. So, a feeding buffer is added on the last task on     a feeding path & the critical chain.

·     Resource Buffer – Can be set alongside of the critical chain to ensure that appropriate people are available to work on a specific task on critical chain.

Under this, the progress is measured only on the critical path. And there is no Milestone. Tasks are monitored on the basis of the remaining time not on the basis of percentage complete. In addition to this, those activities that reduce the project buffer more are set on higher priority and those that are consuming the feeding buffer on the second priority.

Now, when an activity in a non-critical path absorbs all the feeding buffer and consumes some of the project buffer, the critical path changes. It may happen as a result of resource constraint. Dependencies between steps can be result of a path or a result of a common resource. Thus, Critical Chain is defined as the longest chain of dependent tasks, dependent referring to resources and resource contention. Resource contention means that the same resource is supposed to do two different steps at the same time. In order to solve the resource contention, TOC is used. Thus, identification of the bottleneck followed by the scheduling the sequence of work for the bottleneck. Subordinate all the other resources to it and remove all the loads from the overloaded resource. Focus on a single work at a time and then move on to another. The resource contention will be solved. Monitor the feeding buffers at regular intervals and if a resource contention starts consuming the feeding buffer, take steps to solve the issue and move on.