Critical Chain Project ManagementCritical Chain Project Managementin the Supply Chainin the Supply Chain

Presented ByPresented By

Greg SullivanGreg Sullivan

APICS Nashville Chapter 19 Feb 2008 Sullivan Group Consulting, Inc.

ProjectsProjects

Does anyone here today work in a project ?Does anyone here today work in a project ?

What do you want from your projects ?What do you want from your projects ?

What percentage of Projects complete:What percentage of Projects complete:– On Time ?On Time ?– On Budget ?On Budget ?– Entire Scope Achieved ?Entire Scope Achieved ?– All design quality targets met completely ?All design quality targets met completely ?

What Happens near the end of a Project ?What Happens near the end of a Project ?

Product Dev.

Results of Critical Chain Results of Critical Chain

A Working SystemA Working System

The conventional way of dealing

with complex systems is:

Dissect it to Dissect it to

sub-systems!sub-systems!

What are the drawbacks?What are the drawbacks?

Effects of SubsystemsEffects of Subsystems

Silos are formedSilos are formed

Communication becomes more difficultCommunication becomes more difficult

Objectives are differentObjectives are different

Silos are misaligned Silos are misaligned

Metrics cause misalignmentMetrics cause misalignment

Unified action of company is difficultUnified action of company is difficult

System does not achieve its GoalSystem does not achieve its Goal

““No one has to change, survival is optional.”No one has to change, survival is optional.”

- W. Edwards Deming- W. Edwards Deming

Dr. W. Edwards DemingDr. W. Edwards Deming wrote in Chapter 4 of his wrote in Chapter 4 of his book, book, The New EconomicsThe New Economics

““The prevailing style of management must The prevailing style of management must undergo transformation. A system can not undergo transformation. A system can not understand itself. The transformation requires a understand itself. The transformation requires a view from outside. The aim of this chapter is to view from outside. The aim of this chapter is to provide an outside view - a lens - that provide an outside view - a lens - that I call a I call a system of profound knowledge. It provides a map system of profound knowledge. It provides a map of theory by which to understand the organizations of theory by which to understand the organizations that we work in.”that we work in.”

# 2. . Learn the new philosophy, top management Learn the new philosophy, top management and everybody. and everybody.

- W. Edwards Deming’s 14 Points- W. Edwards Deming’s 14 Points

# 5. Improve constantly and forever the system of production and service.

- W. Edwards Deming’s 14 Points- W. Edwards Deming’s 14 Points

ProjectsProjects

Does anyone here today work in a project ?Does anyone here today work in a project ?

What do you want from your projects ?What do you want from your projects ?

What percentage of Projects complete:What percentage of Projects complete:– On Time ?On Time ?– On Budget ?On Budget ?– Entire Scope Achieved ?Entire Scope Achieved ?– All design quality targets met completely ?All design quality targets met completely ?

What Happens near the end of a Project ?What Happens near the end of a Project ?

Do you have sufficient Do you have sufficient resources ?resources ?

Time ?Time ?

People ?People ?

Money and equipment ?Money and equipment ?

Quality / Value

TIME

Final Result

BUDGET Original P

lan

Waste

Was

te

VALUE ADDED / NON-VALUE ADDED COMPONENTS IN A PROJECT

0

TIME

BUDGET

Original

Scope

Waste

PROJECTS CONSIST OF VALUE ADDED TASKS MERGED WITH

DELAYS

0

Delays

Tasks

Consider the sequence of tasks along the Critical Path of a Project

TIME

BUDGET

Original

Scope

Waste0

Delays

Tasks

How Do How Do Task Times Task Times Get Chosen Get Chosen

by Task by Task Managers ?Managers ?

Estimating Task TimesEstimating Task Times

Pretend that you are the experienced task Pretend that you are the experienced task manager and you must tell the Project manager and you must tell the Project manager how long a task will take. manager how long a task will take.

Let’s say this task is writing the Inspection Let’s say this task is writing the Inspection Plan for a new product, or writing some Plan for a new product, or writing some computer code for a business application.computer code for a business application.

Task times are variable, making a statistical Task times are variable, making a statistical distribution likely……distribution likely……

Fre

quen

cy D

istr

ibut

ion

Med

ian

0 14 38 71

TASK MANAGERS DISTRIBUTION OF TASK COMPLETION TIME

TASK: 134-36

Performed: 152 Times

Days to Complete Task

Task Manager’s ChoiceTask Manager’s Choice

How Much Time Will Task Take ?How Much Time Will Task Take ?

What happens if Murphy Strikes ?What happens if Murphy Strikes ?

How do I avoid Missing the Task How do I avoid Missing the Task Due Date ?Due Date ?

Fre

quen

cy D

istr

ibut

ion

Days to Complete Task

Med

ian

0 14 38 71

TASK MANAGERS PROTECTED ESTIMATE OF TASK TIME

TASK: 134-36

Performed: 152 Times

90% Confident that Task Will Complete in 42 days

Task Manager DecisionTask Manager Decision

What Choice would you make ?What Choice would you make ?

10 Days10 Days

14 Days14 Days

42 Days42 Days

Fre

quen

cy D

istr

ibut

ion

Days to Complete Task

Med

ian

0 14 38 71

TASK MANAGERS TYPICALL CHOOSE THE INFLATED TASK TIME

TASK: 134-36

Performed: 152 Times

90% Confident that Task Will Complete in 42 days

42 Days

Why do Most Task Managers Why do Most Task Managers Select a Longer Time than the Select a Longer Time than the

Mean or the Median ?Mean or the Median ?

They know that things happen. (Murphy)They know that things happen. (Murphy)They need to buffer their task so that it is They need to buffer their task so that it is not responsible for project delays.not responsible for project delays.A good task manager makes sure that A good task manager makes sure that his group is “taken care of ”.his group is “taken care of ”.He is responsible for his group & task, He is responsible for his group & task, not the entire project.not the entire project.

TIME

BUDGET

Original

Scope

Waste0

Individual Task Buffers

Tasks

Each Task Each Task has a has a

Buffer built-Buffer built-in to allow in to allow for Murphyfor Murphy

Parkinson’s LawParkinson’s Law

““..work expands so as to fill the time ..work expands so as to fill the time available for its completion.“available for its completion.“

- - Cyril Northcote Parkinson, 1955Cyril Northcote Parkinson, 1955

Implication: Implication:

Each task will use as much time as it is Each task will use as much time as it is allowed, when given a due date. allowed, when given a due date.

Student SyndromeStudent Syndrome

Student syndromeStudent syndrome: the latest possible start : the latest possible start of tasks in which the buffer for any given of tasks in which the buffer for any given task is wasted beforehand, rather than task is wasted beforehand, rather than kept in reserve. kept in reserve.

Implication: Implication: The individual Task buffer is The individual Task buffer is used beforeused before

the task begins based on the latest start the task begins based on the latest start date, date, leaving no individual task reserveleaving no individual task reserve, , and guaranteeing late/rushed projects! and guaranteeing late/rushed projects!

TIME

BUDGET

Original

Scope

Waste

WHAT WOULD HAPPEN IF WE USED THE MEDIAN

TIME FOR EACH TASK, &PLACED ALL TASKS ON A

CRITICAL CHAIN WITH TASK BUFFERS ?

0

Built In Delays

Tasks

TIME

BUDGET

Original

Scope

Waste

WE NOW HAVE A PROJECT BUFFER !

And the Possibility of An Early Completion Date

0

PROJECT BUFFER

Tasks

What About Things that go Wrong ? What About Things that go Wrong ? Won’t the Project get Delayed If any Won’t the Project get Delayed If any

oneone task takes longer than the Median task takes longer than the Median Time?Time?

Yes, any task taking longer than the median time Yes, any task taking longer than the median time will push the Critical Chain into the Project Buffer will push the Critical Chain into the Project Buffer and use part of the Buffer.and use part of the Buffer.

But ….. Now we can see the size of the But ….. Now we can see the size of the ““Project Buffer PenetrationProject Buffer Penetration” and take actions to ” and take actions to minimize it, possibly by cross-leveling resources.minimize it, possibly by cross-leveling resources.

We also have a way to compare multiple projects We also have a way to compare multiple projects

Having a common “Project Buffer” allows every Having a common “Project Buffer” allows every task to share in the consolidated buffer. Some task to share in the consolidated buffer. Some tasks will need to use the buffer and others will tasks will need to use the buffer and others will help to “help to “Regain BufferRegain Buffer”.”.

If any one task gets done earlier, the next task on If any one task gets done earlier, the next task on the critical chain can begin, allowing the entire the critical chain can begin, allowing the entire project to earlier completionproject to earlier completion

Task managers no longer work in their “Silos” but Task managers no longer work in their “Silos” but participate as a team by helping keep all tasks participate as a team by helping keep all tasks from using the buffer. from using the buffer.

Note: Tasks have no due dates. Task Teams just Note: Tasks have no due dates. Task Teams just collect data on the days required to finish and plot collect data on the days required to finish and plot them in CCPM. them in CCPM.

Summary of Human Behavior Summary of Human Behavior Factors Affecting ProjectsFactors Affecting Projects

Parkinson’s LawParkinson’s Law

Student SyndromeStudent Syndrome

Bad MultitaskingBad Multitasking

Protection of Work SilosProtection of Work Silos

How is the Critical Chain different How is the Critical Chain different than the Critical Path ?than the Critical Path ?

Both reverse schedule the projectBoth reverse schedule the projectBoth use a project Gantt ChartBoth use a project Gantt ChartBoth use a Work Breakdown StructureBoth use a Work Breakdown Structure

Critical Path selects the longest sequence of Critical Path selects the longest sequence of dependent tasks, dependent tasks, regardless of resource regardless of resource availability, and allows task bufferingavailability, and allows task bufferingCritical Chain selects the longest sequence of Critical Chain selects the longest sequence of tasks required to be completed by the tasks required to be completed by the most most scarce resource and requires project bufferingscarce resource and requires project buffering

What are your recommendations What are your recommendations to improve Future projects ?to improve Future projects ?

Are your managers interested in Are your managers interested in improving projects ?improving projects ?

How much better are you today than 5 How much better are you today than 5 years ago ?years ago ?

What plans do you have to improve ?What plans do you have to improve ?

Boeing ContrastsBoeing Contrasts

787 Dreamliner787 Dreamliner

Project encountered huge delaysProject encountered huge delays– Delays became known only a the last secondDelays became known only a the last second– Used traditional Project managementUsed traditional Project management

777 -200 ER 777 -200 ER – Project delivered ahead of time, under budgetProject delivered ahead of time, under budget– Used Critical Chain Project Management CCPMUsed Critical Chain Project Management CCPM

Boeing Case ExampleBoeing Case Example777-200ER 777-200ER

Over 10,000 Drawings

Boeing 777-200ER Boeing 777-200ER Changes in Behavior with CCPMChanges in Behavior with CCPM

Upcoming Memphis Upcoming Memphis Events on CCPM and Events on CCPM and

“How to do it”“How to do it”

5 Part Live Goldratt Webcast Series 5 Part Live Goldratt Webcast Series being offered in Memphisbeing offered in MemphisDates are Feb through Mar 2008Dates are Feb through Mar 2008Contact Greg Sullivan for detailsContact Greg Sullivan for details

THANK YOUTHANK YOU

Some ExamplesSome Examples