Theory of Constaints - Introductory Presentation – Projects
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Transcript of Theory of Constaints - Introductory Presentation – Projects
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Theory of Constraints – Introductory Presentation
(TOCIP)
Presented by
Rajeev Athavale
TOC – Application for Projects CCPM
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Project Management – Problems, Causes and TOC Solution
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What Do We Strive For?
• We strive to deliver our projects – Within Time – Within Budget – With Full Scope
So that we satisfy our customers and our business flourishes! • Every project has these three promises at least
and if we are executing say 100 projects, we have 300 promises to keep!!
• A Tall Order!!!
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What Really Happens?
• Usually original Due dates are not met,
• There are too many changes,
• Too often resources are not available when needed,
• Necessary things are not available on time,
• There are fights about priorities between projects,
• There are Budget over-runs,
• There is too much rework
In short, our projects are late, over-budget and do not deliver everything that we promised
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What is the Cause?
• Dr. Goldratt said, “Most compromises on content or budget stem from the pressure to meet the promised due date”
• So, if our solution ensures that most projects are delivered on or before the promised due date, there may not be any need to compromise on budget or scope
• And if there is no such pressure, we can deliver our projects within time, budget and with full scope
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Wait a Minute…
• But we are not wasting any time
• Also, we use estimation tools to estimate our projects
• We provide some time – about 10 to 15% - for contingencies
• We ensure that people are working all the time
• Still, our projects are late
• Is there something that we are missing?
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Do we know…
• That there is a lot of safety built in our task estimates?
• And that we waste most of it?
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Safety is Estimates
• People need to give reliable estimates
• How can people give “reliable” estimates if they don’t embed enough safety in it? – After all, they are operating in a highly uncertain
environment
– And they witness a large degree of variability when they actually execute the tasks
– And they are judged by the estimates that they keep
• So we intuitively know that there is a good amount of hidden safety in task estimates
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Safety is Estimates
• What we really don’t know is how much safety is hidden in our estimates
– Vast experience across industries, geographies, project sizes tells us that it is easily around 50%
– More the experience, more the safety!
• What we also don’t know is
– How this huge safety gets wasted and
– How we don’t even come to know when it is wasted!
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What causes the Waste of Safety?
• Multitasking • Murphy’s Law • Student’s Syndrome • Parkinson’s Law • Dependencies • Meeting Culture • Training Culture • Rocking Chair Syndrome • Wait and Queue
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The Vicious Cycle
• We give reliable estimates (Based on our recent worst experience, we pad the tasks with enough safety)
• Due to multitasking, Student’s Syndrome etc. most of this safety gets wasted
• Our projects are delayed; we are blamed
• We learn our lesson – We decide to be even more paranoid for the next
project estimate
– We give even larger estimates
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The Vicious Cycle
• Owing to uncertainty, our detailed plans start becoming irrelevant
• We start managing our projects without referring to such plans
• These things lead to problems and sometimes, there is a chaos
• At times, we don’t know what is important and what is not
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The Vicious Cycle
• There is increasing pressure on us to show progress
– So we start on as many paths as we could, doing easy things first
– We look good for quite some time until the real problems start showing up
– Suddenly we find that the project which was going well is likely to be delayed
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The Vicious Cycle
• Meanwhile, we start on more projects and there are more problems
– Then we do more multitasking
– So it takes more time until we solve the problems
– By then we have yet more problems
– So, we become more and more paranoid in our estimates
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The Vicious Cycle
• Things become worse and worse until there is a limit put by the external world which is “Sorry, if that’s really your estimate, then there is no project”
• So we start cutting our estimates substantially
• Due to reasons mentioned earlier, we start going late and then …
• This is the vicious cycle, the negative loop
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What is the Root Cause?
• When there is so much of safety that is built in our estimates and it gets wasted, it is obvious that we are not using this safety correctly
• So, what is the way?
• Just by doing that can we really deliver within time, within budget and with full scope?
• What all we need to do?
• What is the solution?
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Before We Talk About the Solution…
Do not discuss the solution unless:
• People have understood the problems
• The causes and
• They are able to relate them to their situation
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Before We Talk About the Solution… How do we judge a solution to be good? Dr. Goldratt said that a solution is good if: • It results in excellent benefits • It is a Win-Win-Win for all whose collaboration is
needed • The risk (multiplied by damage) is small relative
to the benefits • It is simpler than what we do now • The sequence enables people to come on board –
any cluster of actions brings immediate significant results
• It does not self-destruct
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SOLUTION
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Dr. Goldratt Said:
• If we want to reverse any vicious cycle, we need to do at least one thing which is exactly opposite of what we have been doing!
• The solution lies here!
• It is called Critical Chain Project Management (CCPM)
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What is the basic Difference between CPM and CCPM?
• In Critical Path method, we take care of Task Dependencies
• In Critical Chain method, we take care of not only Task Dependencies but Resource Dependencies also
• Is that all? – Not Really
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Solution
The solution lies in the answers to the following questions:
• Where does the constraint reside in our projects?
• How do we use the built-in safety / buffer better?
• What do we measure to know the progress of our projects?
• What cultural changes are needed to implement the solution successfully?
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Components of the Solution
• Reducing Bad Multitasking
• Full-kit preparation
• Project planning
• Staggering the projects
• Execution management
Let us understand each one of them briefly…
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Reducing Bad Multitasking
• Freezing projects
– When there are too many projects going around, the opportunity and temptation to multitask is very high
– Any amount of coaching / lecturing will not reducing the tendency to multitask
– The easy way to do that is to significantly reduce the opportunity to multitask
– The objective of “Freeze” is to improve the flow and throughput of projects by reducing the number of open projects
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Accelerating the project completion
• If a significant number of projects are frozen, some resources are freed up
• We use these resources to accelerate the open projects
• Since we had too many projects running, we had thinly spread our resources across projects
• Now we have the opportunity to allocate optimum number of resources for the open projects
• This improves the rate of completion significantly
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Full-kit preparation What is Full-Kit? • Look at an operation theatre before a surgery • You will find that all the necessary instruments,
equipments, medicines etc. are checked, calibrated, tested and kept ready
• Patient is physically and mentally prepared for the surgery
• His health reports are available and checked • All the necessary people such as surgeon,
anesthetist, nurses etc. are present before the surgery
This is full-kit for a surgery
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Full-kit preparation
• For projects, Full-kit is detailed specifications, authorizations, materials, licenses, drawings, tools & equipments etc. that are needed before starting a project
• Prepare Full-Kit at:
– The start of a project
– The start of certain activities in project
– A task
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Project Planning
• Preparing “Good Enough” Project Plan and Schedule
• Staggering the projects
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Project planning
Any realistic Plan should: • Match the current rate of completion - A plan
must predict outcome which is at least as high as currently achieved
• Not cause overload on key resources • Be based on project structures (PERTs) that are
“good enough” • Be based on priorities given to the projects that
reflect the true management preference
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What is meant by a “Good Enough” schedule?
• It must be credible to all those associated with the project
• It must be owned by project team members and management
• The schedule must be used for – Setting priorities,
– Updating status,
– Analyzing possible actions and
– Making predictions
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Creating Good Enough Project Network
• Create a “Good Enough” project task network – Avoid too detailed network
– Don’t make it a task manual or even a Reminder List
– Let a task represent a group of related work
– Any task that takes less than 2% of the project’s lead time need not appear in the plan; but should be a part of a group of a related task, unless you have a very good reason for keeping it on the schedule
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Creating CCPM Network
• Remove safety from tasks and pool it at strategic points
– The Longest Path i.e. Critical Chain – Project Buffer
– All other paths that meet the Critical Chain – Feeding Buffer
– Typically, 50% of the task estimate is pooled at these strategic points
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Creating CCPM Network
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Creating CCPM Network
• Note: We are not cutting the estimates; we are removing the safety from the individual tasks and pooling it at the strategic points
• Review the resultant CCPM plan and try to reduce the project lead time
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Staggering the Projects
• It is necessary to reduce the workload by freezing the projects; necessary, but not sufficient!
• Individually, every project plan may look great; but it cannot take care of resource contention across projects
• In multi-project environments most key resources work across projects; so there are many occasions when there is a resource contention
• Not considering resource contentions across projects makes the plan unrealistic to start with and encourages, by design, Bad Multitasking
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Staggering the Projects
• While scheduling a pipeline of prioritized projects, CCPM identifies the resource, which is – Commonly used across projects, – Heavily in demand, and – Its unavailability constrains the projects’ completions
• After identification of such a resource, CCPM staggers the projects considering the availability of such heavily loaded resource combined with individual critical chain project schedules
• In this way the resource conflicts between projects are minimized
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Execution Management
• As execution proceeds, some tasks may take longer
– This is expected because we have trimmed the estimate by 50%
– This is normal; there is no need to get panicked
• When a task takes longer than the time allotted, the corresponding buffer gets consumed
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Execution Management
• Similarly, some tasks may get finished before the time allotted – This can happen since we have minimized bad
multitasking and taken certain other steps
• When a task takes less time, the corresponding buffer gets replenished
• We keep measuring the buffers and use that information to manage the execution
• Depending upon the chain completion and buffer consumption, colors are assigned and “Fever Chart” is prepared for each project
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Fever Chart for a Project
Which projects will get priority?
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Fever Chart for a Group of Projects
How do you know the progress of various projects?
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Execution Management
CCPM measures the buffers; it helps us to:
– Assess the magnitude of problems (e.g. how much do we care that something is a week late)
– Determine the extent to which a project is in trouble
– Protect (and set realistic expectations for) customers
• “Buffer Management” is the key for managing Execution successfully
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CCPM CULTURE
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CCPM Culture for Top Management
• Encourage focusing and discourage Bad Multitasking
• Commit due dates based on the staggering mechanism
• Measure the project progress only on the basis of Chain Completion and Buffer Penetration
• Offer help; do not ask why there was a delay and who is responsible for it
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CCPM Culture for Managers
• Embrace uncertainty as a fact of life • Make realistic estimates – Be paranoid; but not
hysterical • Flow is the number one consideration • Eliminate behaviors that waste Safety • Drive a “project buffer recovery" process for cross
departmental actions and exceptions not handled by task management when a project is in red zone
• Offer help; do not ask why there was a delay and who is responsible for it
• Seek help when you need it
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CCPM Culture for Task Managers
• Flow is the number one consideration; ensure that the tasks are not stuck
• Avoid Bad Multitasking
• Assign maximum effective number of resources per task
• Only follow priorities as represented by the buffer colors
• Make preparations in advance for incoming tasks
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CCPM Culture for Resources
• Follow Relay Runner Ethic
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Features of CCPM • New way for Project Management • Helps to define where to focus • Takes care of both Task as well as
Resource Dependencies • Embraces Uncertainty as a part of life • Exploit variation for project advantage • Simple and meaningful Measurements • Project Prediction made easy
Pitfalls addressed • Student’s Syndrome • Bad Multi-Tasking • Parkinson’s Law • Murphy’s Law • Loss of Safety due to dependencies • Panic due to frequent changes • Team Morale Issues
CCPM provides • Thumb rules for Project Planning • Resolution for priority issues • Challenging environment for the team • Information as decisions • New ethics and code of conduct for the
PMs, RMs and TMs • Provides visibility to individuals as to
how they influence project’s success
CCPM does not • Ask for ideal scenarios, perfect data • Create Information Overload or
Information Vacuum or Out-of-date reports
• Create Analysis Paralysis or a huge bureaucracy overhead
• Need a Rocket Science
Critical Chain Project Management
(CCPM)
Benefits of CCPM • Improved Project Management Success • Reduced Time to Market • Simplified Project Management • In-process Controls • Creates environment for Teamwork and
high Productivity • Increased Team Satisfaction • Competitive Edge
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Backup Slides
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Some Quotes
• I love deadlines. I like the whooshing sound they make as they fly by
• Project Management: “The art of declaring man hours with a straight face when you know perfectly well they're 100% fiction”
• Any project can be estimated accurately (once it's completed)
• For a project manager overruns are as certain as death and taxes
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Projects are Balancing Acts
Dependent
Events Statistical
Variation
Human
Behavior
Quality and
Scope
Timing and
Schedule
Budgeted
Costs
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Understanding Variability in Estimates
What is 8 times 8?
8? Or 8±1? What is 8?
64? Are you sure?
So, what is
8±1 times 8±1?
Somewhere between
49 and 81!
So, what if it is 8±2 times 8±2? ...
An estimate is not a single number
It’s a range of possibilities - a statistical entity
An estimate is an estimate –
Not a sacrosanct number
Not a commitment
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Example
• Tomorrow morning at 9.00 a.m. you need to attend a meeting in an office 15 KM away from your home
• At what time will you start from your home? • What is the best time that you have ever taken? • Suppose you are told that you will be meeting
your boss and he will give you promotion letter! And if you are late, he will not give you promotion!!
• At what time will you start from home? (Some people said, they will go there tonight and stay in the office!!!)
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Probability Curve
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Probability Curve
• Almost certainly projects contain substantial variability
• Most people are unaware of this, and can’t tell you “How much variability is considered while estimating?”
• Even if they could, they’d be too suspicious of your motives to tell you
Where are you going to put
this line?
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55
Multi-tasking
When someone is working on four tasks, he is spending 10% of his productive time on each task.
That adds up to 40% of his time. Where does the other 60% go?
That missing 60% goes to ...
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That missing 60% goes to:
• Breaking concentration on the task A • Picking up task B • Organizing materials related to task B • Remembering where you were last time you
worked on task B • Establishing concentration on task B • Overcoming emotional inertia • Recreating the train of thought that got you to
the current point on task B.... and so forth and so on
56
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Learn More…
• Read Theory of Constraints (TOC) Application for Projects: Learn CCPM in Detail
• Theory of Constraints – Do It Yourself Kit for Small & Medium size Enterprises for Projects: Learn how to implement CCPM
• Theory of Constraints (TOC) Basic Concepts and Decision Making: Learn more about TOC
• Visit https://leanpub.com/u/rajeevathavale
• For Training and consulting contact: