Critical Chain Project Management (Artech House Professional Development Library) 9781580530743, 1580530745
I am a new starter to CCPM and TOC since last month. What I can say to this book is, you must have it on your bookshelf.
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Critic al Chain Proje c t Manag e m e nt
Critic al Chain Proje c t Manag e m e nt Lawren ce P. Leach
Artech Hou se Boston • Lon don
Library o f Co n gre ss Catalo gin g-in -Pu blicatio n D ata Leach , Lawren ce P. Critical ch ain project m an agem en t / Lawren ce P. Leach . p. cm . — (Artech Hou se profession al developm en t library) In clu des bibliograph ical referen ces an d in dex. ISBN 1-58053-074-5 (alk. paper) 1. In du strial project m an agem en t. I. Title. II. Series. T56.8 L34 2000 658.4’04—dc21 99-058090 CIP British Library Catalo gu in g in Pu blicatio n D ata Leach , Lawren ce P. Critical ch ain project m an agem en t. — (Artech Hou se profession al developm en t library) 1. In du strial project m an agem en t I. Title 658.4’04 ISBN
1-58053-074-5
Co ve r d e sign by Igo r Vald m an © 2000 A RTECH HOUSE, IN C. 685 Can to n Stre e t N o rw o o d , MA 02062 All righ ts reserved. Prin ted an d bou n d in th e Un ited States of Am erica. No part of th is book m ay be reprodu ced or u tilized in an y form or by an y m ean s, electron ic or m ech an ical, in clu din g ph otocopyin g, recordin g, or by an y in form ation storage an d retrieval system , with ou t perm ission in writin g from th e pu blish er. All term s m en tion ed in th is book th at are kn own to be tradem arks or service m arks h ave been appropriately capitalized. Artech Hou se can n ot attest to th e accu racy of th is in form ation . Use of a term in th is book sh ou ld n ot be regarded as affectin g th e validity of an y tradem ark or service m ark. In tern ation al Stan dard Book Nu m ber: 1-58053-074-5 Library of Con gress Catalog Card Nu m ber: 99-058090 10 9 8 7 6 5 4 3 2 1
C o n te n ts Pre face
1
xv
Be g in at the b e g inning 1.1
Proje ct succe ss
3
1.2
De fining the prob le m
4
1.2.1
How good is the current project system ?
1.2.2
The project m anagem ent business
11
1.2.3
Cause of the problem
12
1.2.4
Right solution
16
1.2.5
Right execution
22
5
1.3
Succe ss with critical chain
23
1.4
Summary
26
Re fe re nce s
2
1
The synthe sis of TQM, TOC, and PMBOK 2.1
PMBOK
27 29 31
2.1.1
Project integration m anagem ent
32
2.1.2
Project scope m anagem ent
32
v
vi
C r itic a l C ha in Pr oje c t Ma na g e m e nt
2.1.3
Project tim e m anagem ent
33
2.1.4
Project risk m anagem ent
34
2.1.5
Other PMBOK areas
34
2.2
TQM
2.2.1
Appreciation for a system
37
2.2.2
Understanding variation and uncertainty
43
2.2.3
Psychology
46
2.2.4
Theory of knowledge
50
2.3
TOC
52
2.3.1
The throughput world
56
2.3.2
The production solution
58
2.3.3
Five focusing steps
63
2.3.4
The thinking process
67
2.3.5
Resistance to change
70
2.4
Summary
Re fe re nce s
3
34
The d ire ction of the solution 3.1
De ciding what to change
71 73 75 75
3.1.1
Defining the project m anagem ent system
76
3.1.2
Project failure as the undesired effect
76
3.2
Toward a core dile mma
78
3.2.1
Longer and longer project duration
78
3.2.2
Projects frequently overrun schedule
81
3.2.3
Multitasking
85
3.2.4
Core conflict leading to UDEs
87
3.3
Toward de sire d e ffe cts
90
3.3.1
Resolving the core conflict
90
3.3.2
The resource constraint
92
Contents
vii
3.4
Solution fe asib ility (e vide nce )
95
3.5
De te rmining what to change to
97
3.6
Summary
98
Re fe re nce s
4
The comp le te sing le -p roje ct solution 4.1
From syste m re quire me nts to syste m de sign
101 101
4.1.1
Requirem ents m atrix
101
4.1.2
Sum m ary of single-project critical chain
104
4.2
De ve loping the critical chain solution
106
4.2.1
Identifying the project constraint
106
4.2.2
Exploiting the constraint
109
4.2.3
Subordinating m erging paths
113
4.2.4
Task perform ance
115
4.2.5
Early start versus late finish
116
4.3
Exploiting the plan using b uffe r manage me nt
117
4.4
Fe ature s (more or le ss) from PMBOK
120
4.4.1
Project charter
121
4.4.2
Project work plan
121
4.4.3
Project m easurem ent and control process
122
4.4.4
Project change control
123
4.4.5
Project risk m anagem ent
123
4.5
Summary
Re fe re nce s
5
99
Starting a ne w p roje ct
123 124 125
5.1
Proje ct initiation proce ss
125
5.2
The proje ct charte r
126
5.3
Stake holde r e ndorse me nt
127
viii
C r itic a l C ha in Pr oje c t Ma na g e m e nt
5.4
The work b re akdown structure
127
5.5
Re sponsib ility assignme nt
130
5.6
Mile stone se que ncing
131
5.7
Work package s
133
5.7.1
Assum ptions
134
5.7.2
Project logic
135
5.7.3
How m any tasks?
137
5.7.4
Activity duration estim ate
138
5.7.5
Uncertainty revisited
139
5.7.6
Cost buffer
141
5.7.7
Basis for cost estim ates
143
5.8
The proje ct work plan
144
5.9
A planning and control policy
145
5.10
Change manage me nt
147
5.11
Proje ct closure
148
5.12
Summary
148
Re fe re nce s
6
De ve lop ing the (sing le -p roje ct) critical chain p lan
149 151
6.1
The proce ss
151
6.2
The “good e nough” conce pt
153
6.3
Example s and practice
154
6.3.1
Sm all exam ple
154
6.3.2
Large exam ple
159
6.3.3
Large exercise
164
6.4
Buffe r and thre shold sizing
164
6.4.1
Statistical background
167
6.4.2
Project buffer size
168
6.4.3
Feeding buffer size
169
6.4.4
Buffer trigger points
169
Contents
ix
6.4.5
170
6.5
Cost b uffe r
170
6.6
Me thods to cre ate the plan
171
6.6.1
Manual m ethod
171
6.6.2
Critical path software
172
6.6.3
Critical chain software
174
6.7
Exte rnal constraints
174
6.8
Re ducing planne d time (a.k.a. dictate d e nd date s)
175
6.8.1 Acceleration without cost im pact (exploit and subordinate to the constraint)
175
6.8.2 Acceleration with increased raw m aterial cost (elevate the constraint)
176
6.9
7
Resource buffer size
Ente rprise wide re source planning
176
6.10
Fre que ntly aske d que stions
177
6.11
Summary
180
De ve lop ing the e nte rp rise multip roje ct critical chain p lan
183
7.1
Ide ntifying the multiproje ct constraint
183
7.2
Exploiting the multiproje ct constraint
189
7.3
Fe ature s of multiproje ct critical chains
190
7.3.1
Project priority
190
7.3.2
Selecting the drum resource
191
7.3.3
The drum schedule
193
7.3.4
The capacity constraint buffer
194
7.3.5
The drum buffer
194
7.3.6
Project schedules
195
7.4
Introducing ne w proje cts to the e nte rprise
195
7.5
Summary
197
x
C r itic a l C ha in Pr oje c t Ma na g e m e nt
8
Me asure me nt and control 8.1
Buffe r manage me nt
201
8.1.1
Status reporting
201
8.1.2
The buffer report
202
8.1.3
Resource use of buffer reports
204
8.2
The cost b uffe r
8.2.1
Cost buffer penetration
205 206
8.3
Quality me asure me nt
208
8.4
Re sponse s to b uffe r signals
209
8.4.1
Schedule buffer exceeds first third
209
8.4.2
Cost buffer exceeds first third
210
8.4.3
Dollar-days quality increasing
211
8.4.4
Schedule buffer exceeds second third
211
8.4.5
Cost buffer exceeds second third
211
8.5
The cost world
211
8.6
Change control actions
214
8.7
Summary
215
Re fe re nce s
9
199
Imp le me nting the chang e to critical chain
216 217
9.1
Imple me ntation mode l
218
9.2
Vision of the e nd
223
9.3
Imple me ntation the ory
224
9.3.1
The rule of 3-4-3
224
9.3.2
Appreciation for a system
226
9.3.3
Resistance to change
228
9.3.4
Psychology
230
9.3.5
Paradigm lock
232
Contents
9.4
xi
Goldratt’s re sistance mode l
9.4.1
Overcom ing layers 1, 2, and 3
239
9.4.2
Overcom ing layer 4
239
9.4.3
Overcom ing layer 5
241
9.4.4
Overcom ing layer 6
241
9.5
To pilot or not to pilot?
242
9.6
Plan the change
244
9.6.1
Endorse the im plem entation project
244
9.6.2
Charter the im plem entation project
245
9.6.3
Create the im plem entation project work plan
245
9.6.4
Plan to prevent or m itigate im plem entation risks
250
9.7
Move ahe ad!
251
9.8
Me asure and control imple me ntation
253
9.9
What if imple me ntation progre ss stalls?
255
9.10
Summary
Re fe re nce s
10
239
Proje ct risk manag e me nt
255 256 257
10.1
De fining proje ct risk manage me nt
259
10.2
Risk manage me nt proce ss
259
10.2.1
The risk m atrix
260
10.2.2
Incorporating risk assessm ent into the project process
262
10.3
Ide ntifying risks
262
10.3.1
Risk list
262
10.3.2
Classifying risk probability
264
10.3.3
Classifying risk im pact
267
10.4
Planning to control risks
268
10.4.1
Risk m onitoring
268
10.4.2
Prevention
268
xii
C r itic a l C ha in Pr oje c t Ma na g e m e nt
10.4.3
10.5
Mitigation planning
Summary
Re fe re nce s
11
268
268 269
The TOC thinking p roce ss ap p lie d to p roje ct manag e me nt
271
11.1 Applying Goldratt’s thinking proce ss to proje ct manage me nt
272
11.2
273
Curre nt-re ality tre e
11.2.1
Policies, m easures, and behavior
276
11.2.2
Feedback loops
276
11.2.3
Scrutiny
277
11.2.4
Buy-in
278
11.3
Future re ality tre e
279
11.3.1
Desired effects
279
11.3.2
Injections
279
11.3.3
Future reality tree
282
11.3.4
Feedback loops
282
11.3.5
Unintended consequences (a.k.a. negative branches)
284
11.4
Pre re quisite tre e
287
11.5
Transition tre e
289
11.6
The multiproje ct proce ss
290
11.6.1
Multiproject current-reality tree additions
290
11.6.2
Multiproject future-reality tree additions
291
11.6.3
Multiproject prerequisite tree additions
291
11.7
Future dire ctions
292
11.8
Summary
293
11.9
Closure
294
Re fe re nce s
295
Contents
xiii
List of acronyms and ab b re viations
297
Glossary
299
Ab out the author
315
Inde x
317
P re fa c e
I
h ave seen eviden ce from m an y com pan ies attribu tin g faster an d m ore su ccessfu l projects—an d less stress on project team s—to critical ch ain project m an agem en t (CCPM). I h ave also seen a n u m ber of com pan ies, drawn by th ose ben efits, in vest in train in g m an y people an d ach ieve little or n o ben efit. CCPM is already followin g a fam iliar beh avior pattern of bu sin ess fads. A few early adapters get great resu lts. Oth ers scram ble to get on th e ban dwagon . A few su cceed, bu t m an y do n ot. Th ose wh o do n ot su cceed blam e it on th e system (a fad). Th e fad fades away, to be replaced by th e n ext on e. My favorite m an agem en t book is Peter Sen ge’s The Fifth Discipline. Alth ou gh system s th in kin g seem s to h ave followed th e fam iliar boom an d-bu st cycle, organ ization al learn in g is alive an d well. Bu ried in The Fifth Discipline, you will fin d th at “to ch an ge th e beh avior of a system , you m u st iden tify an d ch an ge th e lim itin g factor.” Th at is a good statem en t of wh at Eli Goldratt calls th e th eory of con strain ts (TOC). Goldratt wrapped h is th eory in a love story to attract an au dien ce wider th an th ose wh o read dry m an agem en t books. The Goal, pu blish ed in 1984 by a th en u n kn own pu blish in g com pan y, h as sold over 2,000,000 copies in eigh t lan gu ages. TOC becam e a fad in produ ction m an agem en t an d still appears to be in th e early growth stage. Goldratt prom ises m agic resu lts from som e sim ple th in kin g th at h e calls “u n com m on sen se.”
xv
xvi
C r itic a l C ha in Pr oje c t Ma na g e m e nt
Alth ou gh The Goal was arou n d for a dozen years by th e m id-1990s, n o on e seem ed able to relate it to project m an agem en t. After I learn ed th e TOC approach to project m an agem en t, I cou ld n o lon ger u n derstan d h ow people cou ld read The Goal an d n ot see it. Goldratt tried to rectify th at in 1997 with h is book Critical Chain an d is h avin g som e su ccess. I h ave com e to u n derstan d th at th e lim itin g factor (wh ich Goldratt calls th e con strain t) of an y system in volvin g people is th eir beliefs. Th e beliefs m ost im portan t to bu sin ess su ccess are th ose th at con stitu te wh at Harvard professor Ch ris Argyris calls th eir “th eory in u se.” He argu es th at people’s beh avior is th e on ly real eviden ce of wh at th ey believe, th at th eir action s often con flict with th eir espou sed beliefs. W. Edwards Dem in g repeatedly stated, “In m y experien ce, m ost trou bles an d m ost possibilities for im provem en t add u p to proportion s som eth in g like th is: 94% belon g to th e system (th e respon sibility of m an agem en t) an d 6% are attribu table to special cau ses.” Special cau ses, also called assign able cau ses, are som eth in g special, n ot part of th e system of com m on cau ses. Argyis reports th at h is research fou n d a con sisten t th eory in u se across all Western m an agem en t, th at is, a com m on belief system . Th is th eory in u se leads to organ ization al defen se m ech an ism s th at system atically preven t organ ization al learn in g. No won der fads com e an d go. It takes on ly a few ch an ges in m an agem en t’s th eory in u se to m ake CCPM work. Man agem en t m u st:
1. Stop pressu rin g people to com m it to an d deliver in dividu al project task resu lts on specific dates (th ey can an d sh ou ld com m it to project com pletion dates); 2. Stop cau sin g people to m u ltitask, en able th em to work on on e project task at a tim e u n til th ey are don e, an d th en pass on th eir resu lt as soon as it is com plete with n o pen alty; 3. In com pan ies with m u ltiple projects, decide as a m an agem en t team on project priorities an d in trodu ce n ew projects in to th e system on ly th rou gh th e priority ran kin g; 4. Use critical ch ain plan s for all project work;
Preface
xvii
5. Use th e critical ch ain m easu rem en t system to m ake decision s on projects, in clu din g resou rce assign m en ts an d wh en to act to adju st th e plan . Un fortu n ately, som e of th at beh avior requ ires ch an gin g th e th eory in u se th at Argyris fin ds extan t in all organ ization s. If you can ch an ge th ose beh aviors, I can prom ise you th e ben efits of CCPM. It is en tirely u p to you r m an agem en t team an d is, so to speak, all in you r m in ds.
C HAP TER
1 Conte nts 1.1
Pr oje c t suc c e ss
1.2 De fining the p r ob le m 1.3 Suc c e ss with c r itic a l c ha in 1.4
Sum m a r y
Re fe r e nc e s
Be g i n a t th e be g inning
P
rojects fail at an alarm in g rate. Qu an titative evalu ation s sh ow th at as m an y as 30% of projects are can celed before com pletion , wastin g all th e tim e, m on ey, an d effort spen t on th em . Su rvivin g projects u su ally fail to deliver th e fu ll in itial project scope, or deliver late, or overru n th e bu dget. Project delays an d overru n s frequ en tly ru n to h u n dreds of percen tage poin ts. Th ose failu res con su m e billion s of dollars per year. Th ey occu r in all cu ltu res an d for all kin ds of projects. Attem pts to im prove project perform an ce create person al an d organ ization al pain an d paperwork, with little or n egative im pact on project perform an ce. Th e field of project m an agem en t h as n ot kept pace with im provem en ts in oth er areas of h u m an en deavor, su ch as tech n ology an d m an u factu rin g. Th is book seeks to explain wh y, an d to pu t you an d you r organ ization on a path to radically im proved project su ccess. Th e Project Man agem en t In stitu te’s Guide to the Project Management Body of Knowledge 1
2
C r itic a l C ha in Pr oje c t Ma na g e m e nt
(PMBOK) defin es a project as “a tem porary en deavor u n dertaken to create a u n iqu e produ ct or service” [1]. Th e word temporary distin gu ish es projects from produ ction -like en deavors. Unique m ean s th at projects are differen t from each oth er. In th is book, Ch apters 1 th rou gh 3 m ake referen ce to th e existin g project system . Th e PMBOK Gu ide describes th e system , wh ich m ost project m an agem en t software on th e m arket today im plem en ts. Th is text con siders th e system described by th e PMBOK Gu ide as th e cu rren t th eory, wh ich u ses th e critical-path m eth od (CPM) to defin e a project sch edu le. Th e PMBOK Gu ide allu des to oth er m eth ods, bu t CPM is th e m eth od u sed m ost, by a wide m argin . Th e PMBOK Gu ide describes m eth ods to deal with u n certain ty on projects th rou gh con sideration of project risk. It also describes th e earn ed valu e m eth od of project m easu rem en t an d con trol. Most large projects u se project risk m an agem en t an d earn ed valu e, especially on projects perform ed for th e U.S. govern m en t. Alth ou gh n ot a specific poin t of gu idan ce, m ost software an d all th e application s we h ave seen apply CPM u sin g “early-start” sch edu les. Figu re 1.1 illu strates a typical project plan u sin g th is m eth od. People u su ally distin gu ish projects from produ ction operation s by th e qu an tity of th e produ cts produ ced an d th e relative am ou n t of tim e on June
ID 2 3 4 5 6 7 8 10 11 12 13 14 15 17 18 19 20 21 22 23
Task name Plan Pe rmit Site p re p Hole Land scap e Dr ive and walks
July
Aug ust
Se p te mb e r
6/ 1 6/ 8 6/ 15 6/ 22 6/ 29 7/ 6 7/ 13 7/ 20 7/ 27 8/ 3 8/ 10 8/ 17 8/ 24 8/ 31 9/ 7 9/ 14
Found ation Frame Roof She ath Tr im Plumb ing Ele ctr ical Cab ine ts Drywall Paint Tr im Comp le te
Fig u r e 1.1 A typ ic a l C PM p r oje c t p la n id e ntifie s the c r itic a l p a th a nd a ll a c tivity sta r t a nd finish d a te s. Most of the tim e , the p la ns use a n e a r ly sta r t sc he d ule .
Begin at the beginning
3
task. Projects u su ally produ ce som eth in g th at is on e of a kin d. Produ ction operation s produ ce m an y item s, all m ore or less sim ilar. Th ere is a gray area between cu stom -m ade produ ction operation s (e.g., m ade-to-order au tom obiles) an d projects. I h ave fou n d it in terestin g to observe th at m ost people con sider produ ction operation s an d projects as distin ctly differen t. A few years ago, I becam e in terested in th e system th eory called th e Th eory of Con strain ts (TOC), first described by its in ven tor, Dr. Eliyah u Goldratt, in h is book The Goal [2]. I recom m en ded th is book to oth er project m an agers, on ly to fin d th at th ey cou ld n ot see an y relevan ce of th e book or th e th eory to projects. Su bsequ en tly, I discovered a m eth od to break th e paradigm . I draw a sketch sim ilar to Figu re 1.2 an d ask, “Wh ich is th is, a project or a produ ction operation ?” Th e reaction is in terestin g. Most people look pu zzled at first an d do n ot respon d im m ediately. Th en th ey offer, “Well, it cou ld be eith er.” In deed it cou ld. At th is level, th e sim ilarity is m ore strikin g th an th e differen ces. Th e actu al work tim e in produ ction operation s is u su ally a very sm all part of th e delivery tim e. Most people th in k th at th e actu al work tim e (tim e on task) determ in es th e overall tim e of project an d th erefore approach es 100% of th e project delivery tim e.
1. 1
P ro je c t s u c c e s s
Su ccessfu l projects m eet th e n eeds of everyon e wh o h as an in terest th e project, th at is, th e stakeh olders. All projects h ave a goal. Figu re 1.3 illu strates th at satisfyin g th e goal n orm ally requ ires satisfyin g th ree n ecessary con dition s:
Fig u r e 1.2
Is this a p r oje c t or a p r od uc tion p r oc e ss?
C r itic a l C ha in Pr oje c t Ma na g e m e nt
t
Re source s
os
Sc o
C
pe
4
Sche d ule Fig u r e 1.3 Sa tisfying the p r oje c t g oa l r e q uir e s thr e e ne c e ssa r y c ond itions.
1. Th e scope sets a m in im u m stan dard for th e project resu lts. 2. Th e budget sets a m axim u m cost. 3. Th e schedule sets th e m axim u m tim e for th e project. Figu re 1.3 also sh ows resou rces, wh ich in flu en ce all th ree n ecessary tech n ical con dition s for su ccess. Th e th ree n ecessary con dition s are in terdepen den t. Th e lon ger a project takes, th e m ore it costs. Th e m ore a project costs, th e lon ger it takes. Th e lon ger a project takes, th e m ore opportu n ities exist to ch an ge th e scope. Th e m ore th e scope ch an ges, th e m ore cost an d sch edu le in crease. Su bsequ en t defin ition of th e project system explores th ose relation sh ips in detail.
1. 2
D e fi n i n g th e p ro b l e m
Most scien tists agree th at precise defin ition of a problem is th e m ost im portan t step to a su ccessfu l solu tion . Popper n otes th at “scien ce begin s with problem s, an d proceeds from th ere to com petin g th eories wh ich it evalu ates critically” [3]. Th is text deals with th e gen eral problem of im provin g project su ccess an d resolvin g th is problem : How do we design an d operate a project system to satisfy cu stom ers (deliver th e fu ll scope) with in th e estim ated (com petitive) bu dget in th e sh ortest tim e, all th e tim e? A n ecessary con dition to solvin g th at problem is to m otivate th e people wh o work on th e project, n ow an d in th e fu tu re.
Begin at the beginning 1. 2. 1
5
Ho w g o o d i s th e c u rre n t p ro je c t s y s te m ?
Ask you rself th e followin g qu estion s: ◗ Have you ever h eard of projects takin g lon ger th an sch edu led? ◗ Have you ever h eard of a project bein g com pleted m u ch qu icker
th an origin ally sch edu led, with ou t a lot of expeditin g an d pressu re on th e project team ? ◗ Have you ever h eard of a project goin g over bu dget? ◗ How m an y projects are you aware of th at were com pleted for
sign ifican tly less th an th e origin al proposed bu dget? ◗ Have you ever h eard of projects th at h ad to redefin e th eir scope
or specification s becau se th ey cou ld n ot m eet th e origin al scope or specification s? ◗ Are cu stom ers u su ally deligh ted with project resu lts?
In each case, th e an swers are u su ally in th e u n desired direction ; th at is, projects often u n derdeliver, overru n th e bu dget, overru n th e sch edu le, an d en d u p with u n h appy cu stom ers. 1.2.1.1
Tw o ty p e s o f p r o je c ts
Table 1.1 lists exam ples of two types of projects. Th e an swers to th e precedin g list of qu estion s are sligh tly differen t for th e two project types. Th e first type is th e absolu te deadlin e–driven project. Exam ples in clu de proposals an d m ajor even ts. Becau se requ esters sim ply do n ot accept proposals after th e specified delivery tim e, proposal team s rarely deliver proposals late. Man agem en t u su ally respon ds decisively to a proposal m an ager wh o spen ds th e tim e an d m on ey on a proposal an d delivers it late—th ey give th e m an ager an opportu n ity to seek em ploym en t elsewh ere. Likewise, alth ou gh th ere m ay be m u ch adju stin g of scope an d expeditin g, oth er deadlin e-driven projects u su ally h appen on tim e. Th ey do n ot delay th e Olym pics; th ey fin ish th e stadiu m (som eh ow). People do n ot very often fail to h ave th in gs ready for a n ation al m eetin g or a prebooked trip. People rarely bow ou t of election s becau se th eir cam paign is beh in d sch edu le. In th ose types of projects, th e m on ey an d th e scope u su ally ch an ge, wh ile th e sch edu le is h eld.
6
C r itic a l C ha in Pr oje c t Ma na g e m e nt Ta bl e 1. 1
Two Major Types of Projects Abs olute -De adline Proje c ts
Re lative -De adline Proje c ts
Proposals
Ne w-product de ve lopme nt
Major me e tings
Marke ting or adve rtising (most)
Major e ve nts (e .g., the Olympics)
Construction
Ele ction campaigns
Compute r software
Re gulatory compliance
Improve me nt proje cts
Annual b udge ts
Mainte nance proje cts
Conte st sub missions
Re se arch proje cts
Se asonal marke ting
Th e secon d type of project does n ot h ave a specific extern ally driven en d date (alth ou gh m an agem en t m ay set on e in tern ally). All projects are perform ed to m ake m on ey (e.g., n ew-produ ct developm en t an d oil platform s) an d m ost govern m en t projects fall in to th e secon d category, as do m an y im provem en t projects. All ben efits are n ot lost becau se of project delay, ju st som e ben efits for som e tim e. (Th e loss is u su ally u n derstated or u n kn own .) In th e case of projects th at are n ot en d-date driven , all th ree project variables (scope, sch edu le, an d cost) m ay ch an ge. 1.2.1.2
An e c d o ta l d a ta
Project m an agem en t h as a lon g h istory, wh ich is reflected in th e m an m ade won ders of th e world. Bu t, did th ey do it on sch edu le? Did th ey do it to an approved bu dget? Did th ey com ply with all specification s an d regu lation s? More an d m ore in recen t years, th e an swer to each of th ose qu estion s is “No.” Most people are aware of th e m ajor projects th at h ave su ffered from problem s, for exam ple, th e n ew Den ver Airport or th e Ch u n n el con n ectin g En glan d an d Fran ce. Besides bein g late an d over bu dget, th ey also experien ced scope problem s. Th e Den ver Airport baggage system did n ot work for a lon g tim e after th e airport open ed. Th e Ch u n n el h ad an open in g cerem on y bu t cou ld n ot tran sport passen gers. Man y people are also aware of th e “vaporware” problem in th e software in du stry: Alm ost all software releases are later th an predicted, an d m ost h ave bu gs in th e in itial release.
Begin at the beginning
7
A recen t n ewspaper article su m m arized th e saga of th e Den ver Airport. Th e project was over two years late, an d th e cost rose from $3 billion to over $4.2 billion . Th e scope was n ot—an d, as of th is writin g, still is n ot—com plete. Besides th e baggage problem , people can n ot fin d th eir way arou n d, leadin g to th e spen din g of m ore th an a m illion dollars to ch an ge th e sign s. Is it n ot likely th at sign s were in th e origin al scope of th e airport? Th e n ewspaper wrote th e report to give th e good n ews th at th e airport m ade a $28-m illion -dollar profit in 1996. Let’s see: $28 m illion on a $4.2-billion -dollar in vestm en t works ou t to a retu rn on in vestm en t (ROI) of 0.6% per year. How m an y in vestors wou ld pu t th eir m on ey in a project like th at? Bon d in vestors h ave filed a lawsu it. Table 1.2 is fou n d th rou gh ou t th e project m an agem en t world an d is distribu ted worldwide across th e In tern et. It is on ly on e exam ple of m an y with sim ilar th em es, attestin g to th e fact th at projects often fail to ach ieve su ccess. It is in stru ctive to n ote th at th e effects appear to tran scen d all
Ta bl e 1. 2
Im m u table Laws of Project Man agem en t Law 1:
No major proje ct e ve r comple te s on time , within b udge t, and with the same staff that starte d it, and the proje ct doe s not do what it is suppose d to do. Corollary 1: The b e ne fits will b e smalle r than initially e stimate d, if any e stimate s we re made at all. Corollary 2: The syste m finally installe d will b e late and will not do what it is suppose d to do. Corollary 3: It will cost more b ut will b e te chnically succe ssful.
Law 2:
One advantage of fuzzy proje ct ob je ctive s is that the y le t you avoid e mb arrassme nt in e stimating the corre sponding costs.
Law 3:
The e ffort re quire d to corre ct a proje ct that is off course incre ase s ge ome trically with time . Corollary 1: The longe r you wait, the harde r it ge ts. Corollary 2: If you wait until the proje ct is comple te d, it is too late . Corollary 3: Do it now re gardle ss of the e mb arrassme nt.
Law 4:
Eve ryone e lse unde rstands the proje ct purpose state me nt you wrote diffe re ntly. Corollary 1: If you e xplain the purpose so cle arly that no one could possib ly misunde rstand, some one will. Corollary 2: If you do some thing that you are sure will me e t e ve ryone ’s approval, some one will not like it.
Law 5:
Me asurab le b e ne fits are re al. Intangib le b e ne fits are not me asurab le , thus intangib le b e ne fits are not re al. Corollary: Intangib le b e ne fits are re al if you can prove the y are re al.
8
C r itic a l C ha in Pr oje c t Ma na g e m e nt Ta b l e 1 . 2 (c o n tin u e d ) Law 6:
Anyone who can work e ffe ctive ly on a proje ct part-time ce rtainly doe s not have e nough to do now. Corollary 1: If a b oss will not give a worke r a full-time job , ne ithe r should you. Corollary 2: If a proje ct participant has a time conflict, the work give n b y the full-time b oss will not suffe r.
Law 7:
The gre ate r the proje ct’s te chnical comple xity, the le ss you ne e d a te chnician to manage it. Corollary 1: Ge t the b e st manage r you can. The manage r will ge t the te chnicians. Corollary 2: The re ve rse of corollary 1 is almost ne ve r true .
Law 8:
A care le ssly planne d proje ct will take thre e time s longe r to comple te than e xpe cte d. A care fully planne d proje ct will take only twice as long. Corollary: If nothing can possib ly go wrong, it will anyway.
Law 9:
Whe n the proje ct is going we ll, some thing will go wrong. Corollary 1: Whe n things cannot ge t any worse , the y will. Corollary 2: Whe n things appe ar to b e going b e tte r, you have ove rlooke d some thing.
Law 10:
Proje ct te ams de te st we e kly progre ss re porting b e cause it so vividly manife sts the ir lack of progre ss.
Law 11:
Proje cts progre ss rapidly until the y are 90 pe rce nt comple te ; the n the y re main 90 pe rce nt comple te fore ve r.
Law 12:
If proje ct conte nt is allowe d to change fre e ly, the rate of change will e xce e d the rate of progre ss.
Law 13:
If the use r doe s not b e lie ve in the syste m, a paralle l syste m will b e de ve lope d. Ne ithe r syste m will work we ll.
Law 14:
Be ne fits achie ve d are a function of the thoroughne ss of the postaudit che ck. Corollary: The prospe ct of an inde pe nde nt postaudit is a powe rful ince ntive for a proje ct te am to de live r a good syste m on sche dule and within b udge t.
Law 15:
No law is immutab le .
cu ltu res an d n ation al bou n daries. Man y project m an agem en t books in clu de a section on wh y projects fail an d offer rem edies to th e variou s cau ses. 1.2.1.3
Q u a n tita tiv e d a ta
Th e govern m en t is willin g to com pile an d pu blish resu lts of qu an titative review of a project perform an ce. Usu ally, th ey do n ot both er to pu blish good n ews on con tractors, so th e pu blish ed in form ation m ay be biased. Two qu an titative exam ples are described n ext.
Begin at the beginning
9
Followin g a review of m ajor system s acqu isition s (projects over $75 m illion ) by th e U.S. Departm en t of En ergy (DOE), th e Govern m en t Accou n tin g Office (GAO) reported th e followin g [4]: ◗ From 1980 th rou gh 1996, DOE carried ou t 80 projects design ated as
m ajor system acqu isition s. ◗ Of th ose 80 projects, 31 were term in ated prior to com pletion , after
expen ditu res of over $10 billion . ◗ On ly 15 of th e projects were com pleted, m ost of th em beh in d
sch edu le an d with cost overru n s. ◗ Th ree of th e 15 com pleted projects h ave yet to be u sed for th eir
in ten ded pu rpose. ◗ Th e rem ain in g 34 projects are on goin g, m an y with sign ifican t cost
in creases an d lapsed sch edu les. In an oth er report evalu atin g m an agem en t of a recen t version of a space station by th e Nation al Aeron au tics an d Space Adm in istration (NASA), GAO n oted th e followin g [5]: ◗ Th e cost an d sch edu le perform an ce u n der th e prim e con tract h ad
been deterioratin g for som e tim e. ◗ Between Jan u ary 1995 an d April 1997, th e costs associated with
th e sch edu le slippage in creased from $43 m illion to $129 m illion . ◗ Du rin g th at sam e period, th e differen ce between th e actu al cost to
com plete specific work an d th e bu dget for th at work wen t from a cost u n derru n of $27 m illion to a cost overru n of $291 m illion . ◗ As of Ju ly 1997, costs associated with th e sch edu le slippage h ad
in creased to $135 m illion an d th e cost overru n to $355 m illion . Accordin g to GAO, “Th e rate of declin e for th e cost varian ce is especially worrisom e becau se it h as sh own n o particu lar in clin ation to lessen ” [5]. You r tax dollars at work! Th e DOE an d NASA are two separate govern m en t agen cies with very differen t projects an d very differen t con strain ts, yet th eir perform an ces are equ ally m iserable.
10
C r itic a l C ha in Pr oje c t Ma na g e m e nt
Th e Departm en t of Defen se (DOD) sh ows sim ilar tales of woe. Lewis [6] reports on th e can celation of th e A-12 Aven ger Program in 1991, wh ich cau sed th e loss of 9,000 jobs an d en tailed a lawsu it by th e govern m en t for $1.35 billion in con tractor overpaym en ts. Lewis n otes, “It h as been ackn owledged by reliable DOD sou rces th at th e C/ SCSC m an agem en t system s were im plem en ted properly, an d were fu n ction in g well at both th e prin cipal con tractors.” (C/ SCSC stan ds for cost/ sch edu le con trol system criteria, th e m ost soph isticated project m an agem en t system cu rren tly available.) On e n ow som ewh at dated stu dy from Au stralia fou n d th at con stru ction projects com pleted on ly on e-eigh th of bu ildin g con tracts with in th e sch edu led com pletion date an d th at th e average overru n exceeded 40% [7]. Ch u n an d Ku m m araswam y reported th at in a recen t stu dy of th e cau ses of tim e overru n s in Hon g Kon g con stru ction projects [8]. Th e sam e stu dy n oted, “Delays in con stru ction projects are still very com m on in m ost parts of th e world, even with th e in trodu ction of advan ced con stru ction tech n ologies an d m ore effective m an agem en t tech n iqu es.” Software projects are also pron e to failu re. Recen t stu dies in dicate th at as m an y as 30% of software projects are can celed before th ey com plete, an d on ly 15% of th e rem ain in g can be con sidered su ccessfu l in term s of th e th ree n ecessary con dition s. In oth er words, m an y types of projects in m an y in du stries an d in m an y cou n tries (im plyin g m an y cu ltu res) seem to experien ce h igh rates of failu re. Th e on ly com m on th read is th e project system : Th ey all u se th e presen t th eory of th e critical-path m eth od, as defin ed by th e PMBOΚ Gu ide. Th ey m ay n ot all u se it th e sam e, an d th ey m ay n ot all u se it well, bu t th ey all u se it. Im provin g project m an agem en t is, in itself, a project. To th at en d, several precu rsor con dition s sh ou ld be satisfied before th e start of an y project (in addition to th e th ree n ecessary con dition s of scope, bu dget, an d sch edu le). ◗ Theright problem. Be su re you are workin g on th e correct problem . ◗ The right solution. En su re th at th e overall objective of th e project,
wh en ach ieved, solves th e correct problem . ◗ The right design. Develop a scope an d a design th at deliver an im ple-
m en table solu tion to th e correct problem .
Begin at the beginning
11
◗ The right implementation. Execu te th e project to deliver th e design ed
scope, ach ievin g th e objective with in th e plan n ed sch edu le an d bu dget. Th e last poin t reiterates th e th ree n ecessary con dition s for an y project. 1. 2. 2
Th e p ro je c t m a n a g e m e n t b u s i n e s s
Despite th e gloom -an d-doom reports, m an y com pan ies prosper in th e bu sin ess of ru n n in g projects. Wh at do th ese com pan ies do th at th e losers are n ot doin g? Mu ch of th e project literatu re wou ld lead you to believe th at th ey are th e preciou s few wh o follow th e PMBOK an d th at all you h ave to do to join th em is do m ore of wh at you are doin g an d do it faster. Su ccessfu l project m an agem en t com pan ies h ave pu t in place system s th at allow th em to win in th eir en viron m en t. Th at en viron m en t gen erally in clu des com petitors u sin g a sim ilar system . A com petitive system does n ot requ ire you to be great or even good. It does n ot requ ire th at you r th eories be righ t. You ju st h ave to be better th an you r com petitors. However, th e first on e to pu t in place a dram atically im proved system h as th e opportu n ity to steal th e m arket if com petitors can n ot easily—or at least rapidly—m atch th e im provem en t. Th e cu rren t system s also m u st allow som e of th e people in th e com pan y to win , becau se a com pan y n eeds people experien ced in its system to m ake it work. We rarely h ear abou t th e poten tial im pact on th e rest of th e people in th e com pan y or of h ow th eir su ppliers get alon g. Th e m odel we develop of cu rren t perform an ce predicts sign ifican t expeditin g, exploitin g, an d stress am on g th e project participan ts. On e featu re seem s com m on to th e project system s of su ccessfu l project com pan ies. Th e PMBOK con siders it. Au th ors som etim es m en tion it in th e reason s projects fail, bu t perh aps n ot often en ou gh . Every com pan y th at su cceeds in th e project m an agem en t bu sin ess h as an effective ch an ge con trol process. Th is process allows th em to accou n t for ch an ges th at h appen to th e project alon g th e way an d to recou p an y fin an cial im pact from su ch ch an ges. For exam ple, I h ave worked with ch an ge con trol processes on m ajor govern m en t con tracts th at led to th ou san ds of form al project ch an ges per year (too m an y ch an ges to be effective, bu t th is is ju st an exam ple). An effective ch an ge process is on e way to h an dle variation
12
C r itic a l C ha in Pr oje c t Ma na g e m e nt
wh ile applyin g th e cu rren t system . Su bsequ en t ch apters reveal wh y it is n ot th e best way to h an dle m ost project perform an ce variation . An effective ch an ge con trol process is a n ecessary part of an effective project system . Th e critical ch ain m eth od adm its u se of ch an ge con trol wh en n ecessary bu t dram atically redu ces th e n u m ber of ch an ges.
1. 2. 3
C a u s e o f th e p ro b l e m
Defin in g th e problem at a h igh level is easy. Project m an agers m u st m eet cu stom er n eeds on tim e an d at or u n der bu dget all th e tim e. Th e eviden ce presen ted in th is section dem on strates th at th e cu rren t th eory does n ot produ ce th is desired resu lt. Th e problem is to in ven t a better th eory th at does produ ce th e desired effect. Th e Avrah am Y. Goldratt In stitu te asks project m an agem en t stu den ts, “Wh y is it so difficu lt to m eet th e th ree n ecessary con dition s for a su ccessfu l project?” Th e u su al reason s in clu de th in gs like th e follow in g: ◗ Bad weath er; ◗ Un foreseeable difficu lties at ven dors wh o su pply equ ipm en t; ◗ Lon ger th an expected tim e in m eetin g govern m en t requ irem en ts; ◗ An u n realistic sch edu le; ◗ Un reliable (bu t ch eaper) ven dors or con tractors; ◗ Difficu lties in m atch in g available operators with project n eeds; ◗ Em ergen cies.
Su ch lists u su ally h ave two th in gs in com m on : Wh atever cau sed th e problem is ou tside th e con trol of th e project m an ager, an d th e cau se is som e type of u n expected even t. Man y project m an agem en t texts in clu de lists of th e reason s projects fail. On e rem arkable aspect of su ch lists is th at th ey list differen t th in gs. Som e of th e lists com pare th e reason s for project failu re viewed by differen t people, for exam ple, th e project m an ager an d u pper m an agem en t. Th e lists disagree on th e im portan ce of variou s cau ses. A secon d rem arkable aspect is th at n on e of th em su spect th e project system . Two assu m ption s u n derlie m an y of th e evalu ation s leadin g to th ese lists:
Begin at the beginning
13
1. Project work is deterministic. Th e evalu ation s address reality as if it were possible to get accu rate or precise estim ates an d plan s. Th erefore, th ey assu m e variation in th e resu lt m u st be cau sed by failu re to defin e or operate effectively. 2. The current project management system is effective. Th is assu m ption leads to solu tion s th at iden tify th e particu lar part of th e existin g system th at did n ot fu n ction well to cau se a particu lar failu re. Non e of th e stu dies qu estion s th e effectiven ess of th e assu m ed system (wh ich is often poorly defin ed in th e stu dies th em selves). Non e of th e stu dies qu estion s th e assu m ption s u n derlyin g th e assu m ed effective system . On e way to begin to u n derstan d project su ccess or failu re better is to look at th e system , an d u n derstan d som e of th e assu m ption s th at u n derlie th e cu rren t system . Followin g Leopold [9] (wh o was workin g in an en tirely differen t problem dom ain ), we can iden tify factors an d in flu en ces th at affect th e su ccess of projects. Factors are th in gs th at m ore or less directly affect project su ccess in term s of scope, bu dget, an d sch edu le. Su ccess factors in clu de: ◗ Selection of th e righ t problem ; ◗ Selection of th e righ t solu tion ; ◗ Creation of a satisfactory plan ; ◗ An effective project con trol system ; ◗ Effective project execu tion ; ◗ An effective m eth od to m an age u n certain ty.
Fu rth er expan sion of th e fou rth su ccess factor, effective project con trol system , leads to: ◗ Resou rce qu an tity; ◗ Resou rce skill; ◗ Resou rce beh avior; ◗ Th e project m an agem en t process; ◗ Project execu tion tools; ◗ Project ch an ges.
14
C r itic a l C ha in Pr oje c t Ma na g e m e nt
Wh ile th is list of factors m ay n ot be com plete, it captu res m an y of th e item s addressed in project failu re stu dies. In addition to th e factors th at seem to in flu en ce project su ccess directly, you can also iden tify item s th at in flu en ce th ose factors. Project su ccess in flu en ces in tern al to th e project team m ay in clu de: ◗ Man agem en t; ◗ Measu rem en t; ◗ Rewards; ◗ Policies; ◗ Social n orm s; ◗ Variation in th e processes th at produ ce project resu lts.
In flu en ces extern al to th e project team m ay in clu de: ◗ Com petitors; ◗ Su ppliers; ◗ Clien t; ◗ Regu lators; ◗ Th e ph ysical en viron m en t; ◗ Oth er stakeh olders (e.g., th e pu blic).
In flu en ces m ay affect on e or m ore of th e factors th at m ore directly affect project su ccess. Table 1.3 illu strates th e relation sh ip between th e in flu en ces an d th e factors an d wh ich in flu en ces (in m y opin ion ) are stron ger. Th e rows represen t th e factors n ecessary for project su ccess. Th e colu m n s represen t in tern al an d extern al in flu en ces on th ose factors. An X in a box m ean s th at th e in flu en ce is of prim ary sign ifican ce to th e factor. An O in a box m ean s th at th e in flu en ce h as som e im pact on th e factor. Th e colu m n s with m ore Xs iden tify th e m ost sign ifican t in flu en ces (e.g., m an agem en t an d policies). Th e colu m n s with m ore blan ks are less in flu en tial (e.g., com petitors). You r en viron m en t m ay h ave differen t in flu en ces, an d you m ay ran k th eir sign ifican ce differen tly. I cau tion you again st ran kin g too m an y of th e extern al in flu en ces as h avin g sign ifican t
Begin at the beginning
15 Ta bl e 1. 3
Factors an d In flu en ces Th at Affect Project Su ccess Influe nc e s on Proje c t Suc c e s s Fac tors
Right solution
X
Effe ctive plan
X
X
X
Proje ct control
X
X
X
Sup p lie rs
Comp e titors
X X
Re g ulators
X
Clie nt
Right prob le m
Social
Policie s
Exte rnal
Re ward s
Me asure me nt
Inte rnal
Manag e me nt
Fac tors That De te rm ine Proje c t Suc c e s s
X
0
X
X
0
0
0
0
Proje ct e xe cution Re source quantity
X
X
Re source skill
X
X X
X
X
0
0 0
Re source b e havior
X
Work proce sse s
X
X
X
0
Tools
X
X
0
Change s
X
X
Unce rtainty
X
0
X
0 0
0
X
X
0
X
X = significant influe nce 0 = some influe nce
in flu en ce; th at cou ld be a defen se m ech an ism sayin g, “It’s ou t of m y h an ds.” If you th in k it is ou t of you r h an ds, you will m ake it so. Note th at th e factors are n ot in depen den t of each oth er. Likewise, th e in flu en ces are n ot n ecessarily in depen den t of each oth er. Th u s, th ere are relation sh ips am on g all th e variables. Th e project perform an ce system is a com plex system in deed. Th at, com bin ed with th e sh eer n u m ber of factors an d in flu en ces, m ay explain wh y people attribu te project failu res to su ch a wide ran ge of cau ses. For exam ple, cau ses often take th e form of blam in g failu re on th e followin g: ◗ Th e cu stom er, for n ot settin g requ irem en ts; ◗ Sen ior m an agem en t, for n ot su pportin g th e project en ou gh ;
16
C r itic a l C ha in Pr oje c t Ma na g e m e nt ◗ Peer (resou rce) m an agers in th e com pan y, for n ot su pportin g th e
project en ou gh ; ◗ Marketin g, for settin g im possible requ irem en ts (in clu din g dates); ◗ Su ppliers, for n ot deliverin g wh at was n eeded wh en an d wh ere it
was n eeded; ◗ Th e system , for providin g too little detail, n o project plan , or
in effective ch an ge con trol; ◗ Th e project team , for bein g u n m otivated, u n skilled, too sm all, or
self-servin g. System th eory, wh ich is described in Ch apter 2, clarifies th at in flu en ces can be m ore im portan t th an factors wh en we seek to im prove a system . Th at is certain ly tru e for m an agem en t-con trolled in flu en ces, su ch as th e m easu rem en t an d reward system s, an d policies of th e com pan y. It is also tru e for factors th at m an agem en t con trols directly, su ch as resou rce qu an tity an d skill an d work processes. Reason s for th e relative im portan ce of in flu en ces are th at (1) th e in flu en ces m ay affect m an y factors an d (2) th e in flu en ces m ay be m ore su bject to direct in terven tion (ch an ge) th an th e factors. Th e problem statem en t th at Dr. Goldratt proposed to develop critical ch ain blam ed poor project perform an ce on th e system . He asked, “Wh at is it abou t th e cu rren t system th at cau ses so m an y projects to fail?” He h ad a good h in t from h is previou s work with produ ction system s an d th eorized th at th e project system s failed to m an age u n certain ty effectively. 1. 2. 4
Ri g h t s o l u ti o n
Over th e last 40 years, m an y solu tion s h ave been posed to im prove project m an agem en t, in an attem pt to better m eet th e cu stom er n eeds on tim e an d at or u n der bu dget. Solu tion tren ds gen erally are in th e direction of providin g m ore an d m ore detail in th e plan n in g, m easu rem en t, an d con trol of th e project. Im proved availability of PC-based project m an agem en t system s leads to defin in g m ore tasks on projects. Th e software h elps to au tom atically create a project n etwork, defin e a critical path , allocate resou rces, an d m easu re project perform an ce at an y level of detail. Th erefore, it su btly en cou rages m ore an d m ore detail an d th u s con tribu tes to divertin g atten tion from th e im portan t issu es.
Begin at the beginning
17
Dr. Goldratt begin s Critical Chain with a discu ssion of a com pan y wan tin g to redu ce th e tim e on critical developm en t projects [10]. Th e com pan y h ad expert con su ltan ts perform an exten sive an alysis; th e con su ltan ts looked at th e project m an agem en t system an d recom m en ded m an y ch an ges. In discu ssin g th e costs or tim e saved from all th ose ch an ges, th e com pan y con clu ded th at it wou ld save m aybe 5% , if th at. Becau se projects fail by h u n dreds of percen tage poin ts, all th e ch an ges were at th e wron g level. 1.2.4.1
Do m o r e b e tte r
Earn ed valu e an d derivative cost sch edu le con trol system s (CSCS, or “CS squ ared”) [11] in crease th e detail of project plan s an d m easu res. Th e procedu res com pan ies pu t in place for u se of system s often are m an y h u n dreds of pages lon g, an d th e n u m ber of activities in project sch edu les goes in to th e th ou san ds. Som etim es activity du ration is lim ited to sh ort tim es, su ch as “n o m ore th an two weeks.” I worked with on e govern m en t agen cy th at followed th e process of requ irin g in creasin gly detailed plan n in g over a period of 20 years. Each tim e th e agen cy h ad a project problem , it blam ed som e people, in vestigated th e cau se of th e problem , an d pu t in m ore procedu res. Th e m in im u m tim e to do a project crept u p to alm ost seven years, n ot in clu din g th e tim e to do th e project! Th u s, th e agen cy bu ilt in seven years of plan n in g tim e before th e start of an y project. Th ere are en gin eerin g stu dies an d con ceptu al design reports an d in depen den t cost estim ates an d validated cost sch edu le con trol system s. Yet th e costs an d th e sch edu le dem an ds of projects con tin u ed to rise, an d m ore an d m ore projects failed to m eet tech n ical requ irem en ts. In on e case, th e agen cy can celed a project after h avin g spen t over a billion dollars on it. Oth er projects are ten s of years late. On e stu dy sh owed it cost th e agen cy fou r tim es as m u ch per squ are foot as local con stru ction by n on govern m en t pu rch asers to bu ild a sim ple office bu ildin g. Projects were h avin g larger an d larger crises, in wh ich th ey wou ld “rebaselin e,” yieldin g n ew cost an d sch edu le estim ates several tim es (u su ally th ree or m ore tim es) th e origin al estim ates. Th ey can celed larger an d larger projects becau se th e n eed was gon e before th e project was over or becau se th e n ewly projected cost an d sch edu le ch an ged th e cost-ben efit equ ation to wh ere th e project n o lon ger m ade sen se. Th at is th e problem th e agen cy was tryin g to solve in th e first place.
18
C r itic a l C ha in Pr oje c t Ma na g e m e nt
Is th e world ch an gin g th at m u ch ? On th e oth er h an d, cou ld it be th at ou r solu tion s are actu ally m akin g th in gs worse, n ot better? Let’s review th e logic of th e “do m ore better” approach . If you r objective is to reliably com plete projects to th e scope, sch edu le, an d cost, you m u st defin e th ose requ irem en ts accu rately. To defin e requ irem en ts accu rately, you m u st add detail to you r project plan s, becau se previou s projects failed to deliver at th e cu rren t level of detail. Th at logic seem s to m ake sen se an d to be in lin e w ith literatu re th at attribu tes project failu re to in adequ ate requ irem en ts or in su fficien t detail in th e project plan . Th e “do m ore better” approach frequ en tly leads to project plan s with th ou san ds of activities. We recen tly worked with clien ts wh o were rath er prou d of th e fact th at th eir project plan con tain ed m ore th an 15,000 activities. Con sider a m u ch m ore m odest project plan th at con tain s a m ere 100 activities. Th e average size of an activity in th at plan (m easu red in dollars, person -days, or even task-days) wou ld be, by sim ple m ath , 1% of th e total project (by com parable m easu re). Most project m an agers wou ld be h appy to h ave th eir project com e in with in 1% of plan . Th e problem with project su ccess m u st in volve som eth in g th at cau ses variation s of far m ore th an 1% . Th erefore, it is eviden t th at in creasin g plan detail beyon d 100 activities is n ot goin g to im prove project su ccess. Som etim es people defen d th e m ore detailed m eth od by su ggestin g th at th e problem , even th ou gh m u ch bigger th an 1% , is th at th ey m iss som eth in g in th eir plan . You are n ot likely to fin d th e m issin g 20% in side th e 1% ch u n ks of th e project. Lookin g in side th e 1% for th e big h itters rem in ds m e of th e story abou t th e dru n k wh o lost h is car keys in th e alleyway bu t is lookin g for th em u n der th e streetligh t becau se, “I can ’t see an yth in g over th ere in th e dark.” If you are worried abou t m issin g big ch u n ks, you wou ld do far better to exam in e th e spaces between th e 100 activities you h ave rath er th an break th e defin ed activities in to greater an d greater detail. Som e of th e literatu re th at poses cau ses an d solu tion s to project problem s also offers an ecdotal eviden ce th at solu tion s im proved project su ccess in on e or m ore su bsequ en t projects. Wh ile su ch eviden ce is in terestin g, it does little to prove th at th e solu tion h as really fou n d th e cau se of failu re in project system s, for th e followin g reason s: ◗ Theory of knowledge. On e or m ore su ccessfu l cases do n ot prove a
th eory (discu ssed in Ch apter 2).
Begin at the beginning
19
◗ The environment. If th e system h ad poor practices to begin with , an y
degree of disciplin e is likely to cau se an im provem en t. ◗ Regression to the mean. A particu larly bad perform an ce is likely to be
followed by a better perform an ce. ◗ The Hawthorne effect. In th is psych ological effect, workers sin gled ou t
to try n ew m eth ods respon d positively to an y ch an ge, in clu din g ch an gin g back to con dition s th at existed before th e experim en t. In oth er words, th e posed th eories h ave n ot been su bject to effective experim en tal tests. 1.2.4.2
Un c e r ta in ty
Everyon e kn ows th at project tasks h ave a certain am ou n t of in h eren t u n certain ty. Th e very defin ition of a project says you h ave n ot don e th is task before, or at th e least, you h ave n ot perform ed all th e tasks th e sam e way you will in th is particu lar project. To com plete th e project su ccessfu lly, you m u st accou n t for su ch u n certain ty. People’s ability to estim ate off th e cu ff varies depen din g on a n u m ber of factors. Th ere is su bstan tial eviden ce to in dicate th at people ten d toward overcon fiden ce in th eir belief in th e accu racy of th eir estim ates [12]. It is u n likely th at m ost project tasks can be estim ated better th an +20% . As part of ou r train in g classes, we h ave people estim ate a sim ple task: goin g to a local store an d bu yin g a specified object. If n ecessary, we tell th em wh ere th e store is. Nearly all th e participan ts in th e exercise agree th at th e task is m u ch sim pler th an m ost of th eir project tasks. Th ey also agree th at th e ability of th e oth er people in th e room to estim ate th e task sh ou ld be as good as or better th an th e ability of th eir project estim ators to calcu late project estim ates. Th e ran ge of th e estim ates u su ally is several h u n dred percen tage poin ts of th e m ean , an d th e stan dard deviation is u su ally on th e order of 30% of th e m ean . Figu re 1.4 illu strates typical resu lts from th is exercise. Figu re 1.5 illu strates th e expected gen eral beh avior of th e accu racy of a sin gle task estim ate as a fu n ction of th e am ou n t of effort pu t in to creatin g th e estim ate. Th e accu racy scale presen ts th e accu racy as a percen tage of th e m ean estim ate, so a perfectly accu rate estim ate h as an accu racy of zero. An estim ate with n o effort at all sh ou ld h ave an accu racy of at least 100% on th e down side an d cou ld be orders of m agn itu de (h u n dreds of
20
C r itic a l C ha in Pr oje c t Ma na g e m e nt Activity d uration e stimate s 12 10
Numb e r
8 Low-r isk Ave rag e
6 4 2 0 20
40
60 80 Minute s
100
120
Fig u r e 1.4 Estim a te unc e r ta inty for a ve r y sim p le p r oje c t ta sk illustr a te s the typ ic a l r a ng e of r e a l unc e r ta inty.
200 150 100
0.3
0.28
0.26
0.24
0.22
0.2
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0
0
0.04
50
0.02
Estimate unce rtainty
250
Estimate cost as a fraction of p roje ct cost
Fig u r e 1.5 Estim a te a c c ur a c y g e ne r a lly inc r e a se s with the e ffor t a p p lie d to the e stim a te , up to a lim it d e te r m ine d b y the p r oc e ss involving the sub je c t of the e stim a te .
percen tage poin ts) too low. Th e cu rve illu strates th at th e accu racy sh ou ld gen erally im prove as m ore effort is pu t toward th e estim ate. A lower lim it u su ally lim its im provem en t du e to th e in h eren t variation in th e process
Begin at the beginning
21
th at will produ ce th e task resu lt. Th at lower lim it, described fu rth er in Ch apter 2, is called com m on cau se variation . No m atter h ow m u ch m ore effort you pu t in to th e estim ate, you can n ever do better th an th e com m on cau se variation of th e process th at produ ces th e resu lt of th e task. You can redu ce com m on cau se variation on ly by ch an gin g th e task process. Con sider th e two region s in Figu re 1.5 divided by th e vertical dotted lin e. To th e righ t of th e lin e, addin g m ore effort to th e estim ate does n ot sign ifican tly im prove th e accu racy of th e estim ate. To th e righ t of th e lin e, redu cin g th e effort does n ot h ave m u ch im pact on u n certain ty. Estim ates to th e left of th e lin e sh ow in creasin g sen sitivity to th e am ou n t of effort applied. Sm all redu ction s in th e applied effort greatly in crease th e u n certain ty of th e estim ate, an d sm all in creases in th e effort sign ifican tly im prove th e estim ate. Th e effect on overall plan u n certain ty th at will obtain from addin g m ore tasks to you r project plan depen ds on th e region in wh ich you are operatin g. Assu m in g a fixed level of in vestm en t in th e estim ate, if you are well to th e righ t of th e lin e, addin g m ore tasks (wh ich redu ces th e effort per task) m ay in crease th e accu racy of th e overall plan . Th e reason is th at th e accu racy of th e overall plan im proves as th e plan is divided in to m ore equ al-sized pieces, if th e accu racy of th e in dividu al pieces is th e sam e. If th e am ou n t of estim atin g effort you can afford pu ts you n ear or to th e left of th e vertical lin e in Figu re 1.5, addin g m ore tasks to you r plan can decrease th e accu racy of th e overall plan . Th e reason is th at th e in creasin g u n certain ty in each task estim ate can be m u ch greater th an th e statistical ben efit of m ore in dividu al tasks. Addin g m ore tasks to a project plan in creases th e n u m ber of poten tial task con n ection s m u ch faster th an th e n u m ber of tasks you add. For exam ple, if you add on e task to a plan with 100 tasks, you on ly add on e task. However, you add th e poten tial for 200 addition al con n ection s becau se each task in th e existin g plan is a poten tial predecessor an d a poten tial su ccessor to th e task you ju st added. Th e addition al poten tial relation sh ips greatly in crease th e probability of errors in th e project task n etwork as th e n u m ber of tasks in th e plan in creases. A cau se th at m igh t be dedu ced from project failu re du e to th e alleged cau ses of project failu re posed so far is th at u n certain ty cau ses projects to fail. If th at were th e case, th en all projects with u n certain ty sh ou ld fail. Based on th e defin ition of a project an d ou r u n derstan din g of th e real
22
C r itic a l C ha in Pr oje c t Ma na g e m e nt
world, all projects h ave u n certain ty, an d, th erefore, all projects sh ou ld fail. However, n ot all projects fail. Fu rth erm ore, th ere is eviden ce th at som e projects su cceed despite extrem e u n certain ty. In Critical Chain , Goldratt describes an airplan e project th at defied th at prediction : The designers developed an airplane with unprecedented capabilities in eight months, instead of the 10 years such developments normally take. There are other cases. The United States succeeded in meeting President Kennedy’s objective to pu t a man on th e moon by th e en d of th e 1960s, on e of th e most u n certain projects ever u n dertaken . Creation of th e atom ic bom b was a similarly u n certain project completed in a rem arkably sh ort tim e. A corn erston e of th e scien tific m eth od is th at scien tists can n ever prove th at an y scien tific th eory or law will con tin u e to work in th e fu tu re; th ey can , h owever, disprove a th eory with ju st on e proper test. More th an on e in stan ce proves th at u n certain ty itself can n ot be th e cau se of project failu re. If sim ple u n certain ty does n ot m eet th e test of explain in g project failu re, can th e th eory be m odified to fit th e kn own eviden ce? Som e projects u se differen t ways to m an age u n certain ty. For exam ple, th e Apollo project m an aged risk by h irin g th ree com pan ies to produ ce th ree differen t solu tion s for h igh -risk developm en ts. On e solu tion was ch osen as th e prim ary path , an d th e oth er two were backu ps in case th e prim ary path failed. NASA plan n ed on m u ch test an d retest (an d th ey h ad plen ty of spectacu lar failu res alon g th e way). Wh ile th at is an expen sive way to m an age u n certain ty, it worked. Goldratt u sed th in kin g like th at to pose th e h ypoth esis th at it is failu re to effectively m an age u n certain ty th at cau ses m ost projects to fail. Ch apter 3 exam in es th at h ypoth esis in depth . If Goldratt is righ t, th e direction of th e solu tion is to create a differen t project system m ore able to m an age u n certain ty.
1. 2. 5
Ri g h t e x e c u ti o n
Righ t execu tion refers to execu tion of th e solu tion to th e problem . Im provem en t to th e project system is itself a project. In h is pam ph let “My Saga to Im prove Produ ction ,” Dr. Goldratt n oted th e followin g: It took m e som e tim e to figu re it ou t, bu t at last I cou ldn ’t escape th e sim ple explan ation : th e efforts to in stall th e software distracted th e
Begin at the beginning
23
plan t people from con cen tratin g on th e requ ired ch an ges—th e ch an ges in fu n dam en tal con cepts, m easu rem en ts an d procedu res. [13]
A sim ilar ph en om en on occu rs in m an y efforts to im prove perform an ce of th e project system . Th e u su al solu tion s are alon g th e lin e of doin g th e cu rren t system better, wh ich m an y people in terpret as m ore detail an d m ore docu m en tation . Th at often in volves in stallin g n ew project or database software. Su ch solu tion s distract people fu rth er from perform in g th e project an d seldom seem to im prove m u ch . Of cou rse, better im plem en tation of a flawed system is u n likely to im prove m u ch an yway. Ch apter 10 provides an effective plan to im plem en t th e critical ch ain project system .
1. 3
Su c c e s s w i th c ri ti c a l c h a i n
Now th at we h ave defin ed th e problem an d su bstan tiated th e claim th at th e cu rren t th eory is in n eed of im provem en t, th e n ext step requ ires creatin g a n ew th eory (of th e project system ): critical ch ain project m an agem en t (CCPM). Expectation s for th e th eory are th at it will, su bject to critical evalu ation , con sisten tly ach ieve project su ccess. It sh ou ld explain both past su ccess an d failu re an d provide testable prediction s of fu tu re perform an ce. Prelim in ary experien ce with th e n ew th eory sh ows ben efits th at exceed th e m in im al perform an ce requ irem en ts for th e n ew th eory bu t th at th e th eory can explain . Th ose ben efits (com pared to th e presen t critical path th eory) are th e followin g. ◗ Im proved project su ccess: ◗
Projects com pleted on tim e all th e tim e;
◗
Projects delivered fu ll scope;
◗
Project cost u n der bu dget;
◗
Im proved m arket position an d bu sin ess growth .
◗ Redu ced project du ration : ◗
Projects com pleted in h alf th e tim e (or less) of previou s sim ilar projects;
◗
In dividu al project plan s redu ced by at least 25% ;
24
C r itic a l C ha in Pr oje c t Ma na g e m e nt
◗
Mu ltiple project du ration s redu ced by larger am ou n ts;
◗
Project ch an ges redu ced;
◗
Early retu rn s for com m ercial projects;
◗
Redu ced payback periods for in vestm en t projects.
◗ In creased project team satisfaction : ◗
Redu ced con fu sion from m u ltitaskin g;
◗
Ability to focu s on on e task at a tim e;
◗
Redu ced ch an ges;
◗
Redu ced rework;
◗
Redu ced pressu re from m u ltiple project m an agers;
◗
Win -lose task com pletion (date-driven task pressu re) elim in ated;
◗
Bu ffer reportin g u sed by in dividu als to decide task priority;
◗
Redu ced in sertion of n ew priority tasks.
◗ Sim plified project m easu rem en t: ◗
Qu ick an d easy plan statu s;
◗
Real-tim e project statu s; n o n eed to wait for fin an cial reports;
◗
Im m ediate focu s by bu ffer, ch ain , an d task provided by statu s;
◗
Decision s defin ed by bu ffer report;
◗
Focu s of bu ffer reportin g on m an agem en t priority decision s (reflected in th e bu ffers by staggerin g project start).
◗ Sim plified project m an agem en t: ◗
Clear focu s for project m an ager (critical ch ain , redu ced early start);
◗
Sim plified project plan s redu ce paperwork;
◗
Sim plified project statu s reportin g;
◗
Wh eth er to plan or act decided by m easu rem en t;
◗
Resou rce priorities decided by m easu rem en t.
Begin at the beginning
25
◗ In creased project th rou gh pu t with sam e resou rce: ◗
Redu ced resou rce dem an d con flicts;
◗
More projects com pleted faster for th e sam e level of resou rces;
◗
Less n eed to h ire n ew critical resou rces;
◗
Less delay du e to resou rces;
◗
Im proved project cash flow;
◗
Im proved ROI.
Eviden ce of oth er u sers often gives people con fiden ce to try n ew ideas. Th e presen t CPM project paradigm h as been in force for over 40 years, m akin g ch an ge h ard for m an y people to accept. More an d m ore com pan ies, sm all an d large, are dem on stratin g su ccess with CCPM. Several exam ples illu strate th at su ccess. (As will be discu ssed later, th ese su ccess exam ples do n ot “prove” th e n ew th eory; th ey on ly provide con fiden ce th at it is n ot fatally flawed.) ◗ Honeywell Defense Avionic Systems (DAS) is experimenting with critical
chain. A recent internal article noted the following for a project they named RNLAF. “Th e RNLAF team was asked by th e cu stom er to deliver som eth in g we origin ally sch edu led to take 13 m on th s to deliver—an d th e team did it in six m on th s … Th e team is experim en tin g with a n ew way of sch edu lin g th e program u sin g critical ch ain con cepts. Boein g h as read th e book, an d is su pportin g th e con cept.” [13] ◗ Lucent Technologies. Lu cen t Tech n ologies h as adopted CCPM as
th eir prim ary tool for project m an agem en t. (Th e au th or provides Lu cen t train in g an d im plem en tation assistan ce.) “In 1996, Lu cen t Tech n ologies Advan ced Tech n ology System s, n ow part of Gen eral Dyn am ics, was told by a sister organ ization th at th e yearlon g project bein g con sidered was an im possibility … Th e project was u sed as a pilot effort, to evalu ate TOC project m an agem en t. Th e project was com pleted in Ju n e, 1997, with bu ffer to spare.” [14] ◗ Harris. Harris recen tly decided to u se CCPM to bu ild a n ew eigh t-
in ch sem icon du ctor wafer plan t. Th e largest previou s wafer was 6 in ch es in diam eter. Total in vestm en t for a plan t th at size is in th e
26
C r itic a l C ha in Pr oje c t Ma na g e m e nt
ran ge of $250 m illion , an d reven u e for su ch a plan t is in th e ran ge of $2 m illion per day! (Raw m aterial cost is very sm all.) Th e in du stry stan dard to bu ild a 6-in ch plan t was 30 m on th s u p to th e tim e th e equ ipm en t was qu alified, th at is, n o produ ction qu an tities. Th e in du stry stan dard to get th e plan t u p an d ru n n in g to 90% of capacity is abou t 46 m on th s. Th e plan t was recen tly com pleted an d u p to 90% produ ction in 13 m on th s. Harris presen ted th eir resu lts at a recen t con feren ce h osted by th e Avrah am Y. Goldratt In stitu te. See th eir In tern et page [15]. ◗ Israeli aircraft industry. Th e Israeli aircraft in du stry em ploys abou t
15,000 people. A m ajor fu n ction is to m ain tain ju m bo jets u sed in passen ger service. A particu lar type of m ain ten an ce, type D m ain ten an ce, n orm ally takes 46 days in th e in du stry. Th e pen alty for n on perform an ce to sch edu le is steep—$60,000 per day—becau se th e airlin es n eed th e plan es back in to sch edu led service. Th e com pan y h ad been payin g u p to $25 m illion per year in pen alties. A letter from th e m an ager to Dr. Goldratt n oted th at “we su cceeded to drop ou r average tu rn arou n d tim e per aircraft visit from th ree m on th s to two weeks an d to in crease ou r backlog from two m on th s to on e year” [16]. ◗ BOS. Accordin g to Izzy Gal, presiden t of Better On lin e Solu tion s
(BOS), “A project was origin ally plan n ed to be released to th e m arket in Au gu st 1997 (th ere is n o reason to believe th at it wou ld h ave been on tim e—bu t wh o kn ows?). Th e TOC sch edu lin g cu t fou r m on th s from th is tim etable—so it was plan n ed to be ready on May 1, 1997. It was fin ish ed in [th e] begin n in g of April, 1997, alm ost a m on th before th e corrected tim e. Alm ost five m on th s before th e origin al tim e.” [17]
1. 4
Su m m a ry
Th is ch apter defin ed th e problem th at th is book aim s to resolve an d iden tified critical ch ain project m an agem en t (CCPM) as a n ew th eory (h ypoth esis) to resolve th e problem . Key poin ts are: ◗ Projects su ccess rate u sin g th e existin g critical path paradigm is poor
for all types of projects in all types of cu ltu res.
Begin at the beginning
27
◗ Hypoth esized cau ses of project failu re do n ot address th e project
m an agem en t system as th e poten tial cau se, m ost often leadin g to rem edies of workin g h arder with th e old system . Th at does n ot seem to be th e righ t problem . ◗ Eviden ce su ggests th at th e righ t problem is in th e design of th e proj-
ect system itself; specifically, th e system fails to properly m an age th e reality of u n certain ty. ◗ Th e righ t solu tion requ ires a project system th at h as a m u ch h igh er
su ccess rate an d th at is sim ple to u se. ◗ A growin g body of eviden ce does n ot con tradict th e h ypoth esis th at
Goldratt’s critical ch ain m eth od satisfies th e n ecessary con dition s for project su ccess. Com parin g th e resu lts of applyin g th e critical ch ain th eory to th e existin g th eory (i.e., th e critical path th eory as described in th e PMBOK) provides su pport for u sin g th e critical ch ain th eory wh ile we con tin u e to critically review an d im prove it.
Referen ces [1]
Du n can , W. R., et. al., A Guide to the Project Management Body of Knowledge, Upper Darby, PA: Project Man agem en t In stitu te, 1996.
[2]
Goldratt, E. M., The Goal, Great Barrin gton , MA: North River Press, 1984.
[3]
Popper, K. R., Objective Knowledge: An Evolutionary Approach , Oxford: Claren don Press, 1997, p. 144.
[4]
GAO/ T-RCED-97-92, “Departm en t of En ergy: Im provin g Man agem en t of Major System Acqu isition s,” Testimony, March 6, 1997 .
[5]
GAO/ T-NSIAD-97-262, “Space Station : Deterioratin g Cost an d Sch edu le Perform an ce Un der th e Prim e Con tract,” Testimony, Sept. 18, 1997.
[6]
Lewis, J. P., The Project Manager’s Desk Reference, Ch icago: Irwin , 1995, p. 245.
[7]
Brom ilow, F. J., “Measu rem en t of Sch edu lin g of Con stru ction Tim e an d Cost Perform an ce in th e Bu ildin g In du stry,” The Chartered Builder, Vol. 10, 1974.
[8]
Ch u n , D. W. M., an d M. M. Ku m m araswam y, “A Com parative Stu dy of Cau ses of Tim e Overru n s in Hon g Kon g Con stru ction Projects, S)263-7863(96)0039-7, Inter. J. Project Management, Vol. 15, No. 1, Feb., 1997.
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[9] Leopold, A., Game Management, Un iversity of Wiscon sin Press, 1933. [10] Goldratt, E. M., Critical Chain , Great Barrin gton , MA: North River Press, 1997. [11] Lam bert, L. R., “Cost/ Sch edu le Con trol Criteria (C/ SCSC): An In tegrated Project Man agem en t Approach Usin g Earn ed Valu e Tech n iqu es,” The AMA Handbook of Project Management, New York: AMACOM, 1993. [12] Kah n em an , D., P. Dlovic, an d A. Tversh ky, Judgment Under Uncertainty: Heuristics and Biases, Cam bridge: Cam bridge Un iversity Press, 1982. [13] Goldratt, E., “My Saga to Im prove Produ ction ,” New Haven , CT: Avrah am Y. Goldratt In stitu te, 1994. [14] “RNLAF Team Seeks Im provem en t,” Horizons, Albu qu erqu e, New Mexico: Hon eywell Defen se Avon ics System s, Vol. 5, No. 2, Feb. 20, 1998. [15] Rizzo, A., “Th e TOC Solu tion of R&D an d Mu lti-Projects Organ ization s,” Wh ippan y, NJ: Lu cen t Tech n ologies, Jan u ary 5, 1998. [16] h ttp/ / www.tp.sem i.h arris.com / raptor.h tm l. [17] h ttp/ / www.Goldratt.com (In tern et site for Avrah am Y. Goldratt In stitu te).
C HAP TER
2 Conte nts 2.1
PMBOK
2.2
TQM
2.3
TOC
2.4
Sum m a r y
Th e s y n th e s i s o f TQ M , TO C , a n d P M BO K
Re fe r e nc e s
T
h is book approach es th e problem of im provin g project m an agem en t from th e perspective of syn th esizin g th ree areas of kn owledge: PMBOK, total qu ality m an agem en t (TQM), an d th e th eory of con strain ts (TOC). Th ese th ree kn owledge areas provide differen t reality filters, or paradigm s, for u n derstan din g th e project system . Th ree perspectives en able deeper u n derstan din g of th e th eory u n derlyin g CCPM. Th e u n derlyin g th eory en ables you to deal with issu es u n iqu e to you r en viron m en t or project. Figu re 2.1 illu strates h ow th e th ree perspectives on th e project system m igh t look at problem s in project perform an ce. Th e PMBOK perspective com pares actu al project system perform an ce to th e PMBOK m odel, wh ich it assu m es is correct. Th erefore, th e PMBOK perspective is u n likely to blam e th e PMBOK project system as th e cau se of th e problem s. It is m u ch m ore likely
29
30
C r itic a l C ha in Pr oje c t Ma na g e m e nt
Proje ct manag e me nt b od y of knowle d g e
Total q uality manag e me nt
Syste m Psychology Var iation The ory of knowle d g e
Syste m d e finition Knowle d g e are as Frame work Proce sse s Proje ct syste m
Syste m Focusing ste p s Thinking p roce ss Laye rs of re sistance
The ory of constraints
Fig u r e 2.1 Thr e e knowle d g e a r e a s inc r e a se p e r sp e c tive on the p r oje c t syste m .
to blam e perform an ce problem s on failu re to properly execu te th e (assu m ed) effective system . Th at is in deed th e n atu re of m u ch of th e project m an agem en t literatu re. Dr. W. Edwards Dem in g n oted th at we sh ou ld n ot expect sign ifican t system ch an ges to com e from with in th e system . A n atu ral con sequ en ce of solu tion s based on th e PMBOK perspective is to “do m ore better.” Th e TQM perspective con tin u ally im proves every process. It th erefore tacitly assu m es th at th e best way to im prove a system is to im prove every process. A leadin g con sideration in TQM (profou n d kn owledge) provides fou r su bperspectives th at lead to deeper u n derstan din g of th e poten tial cau ses of project problem s. TQM provides specific tools to perform root cau se an alysis to iden tify th e cau ses of problem s an d develops strategies to rem ove th ose cau ses. Th e TOC perspective iden tifies th e system con strain t an d works to im prove its th rou gh pu t. It provides a system view of projects an d a specific th eory to predict project perform an ce an d th e im pact of ch an ges to th e system . Th e TOC perspective differs from th e PMBOK view by
The synthesis of TQM, TOC, and PMBOK
31
con siderin g th e project system as a dyn am ic process to create com pleted projects. TOC looks at in dividu al project tasks as th e operation of a system for produ cin g th e resu lt or ou tpu t of th e tasks. It focu ses on th e fact th at th e task perform an ce process in clu des n atu ral variation an d th at th e in dividu al project tasks are in terrelated.
2. 1
P M B O K
Project m an agem en t m ade a great leap forward in th e 1950s an d 1960s with th e adven t of th e CPM an d th e Program Evalu ation an d Review Tech n iqu e (PERT). PERT was developed in 1958 as a join t effort between th e Un ited States Navy an d th e Booz, Allen , Ham ilton con su ltin g firm for th e Polaris su bm arin e project. Th e m eth od was en abled by th e in n ovation of com pu ters an d was su ccessfu l in m an agin g th e Apollo project to pu t people on th e m oon an d m an y large defen se projects. Person al com pu ters h ave brou gh t soph isticated com pu ter sch edu lin g tech n iqu es to everyon e’s desk. CSCSs h ave in creased th e com plexity of th ese system s. However, th ere h as been little progress in im provin g th e su ccess rate of projects an d even less in n ovation in th e u n derlyin g basis an d system . People con tin u e to work with project m an agem en t assu m ption s con ceived 40 years ago. Figu re 2.2 illu strates th e related kn owledge areas iden tified in th e PMBOK Gu ide. Th is text focu ses on an d proposes ch an ges to th e project m an agem en t kn owledge elem en ts to affect th e n ecessary con dition s for project su ccess: project in tegration m an agem en t, project scope m an agem en t, project tim e m an agem en t, an d project risk m an agem en t. You m u st address th e oth er kn owledge areas to varyin g degrees, depen din g on you r projects an d th e en viron m en t in wh ich you work. Th e PMBOK Gu ide describes gen eral processes for each kn owledge area, collected in to five types of processes: ◗ In itiatin g; ◗ Plan n in g; ◗ Con trollin g; ◗ Execu tin g; ◗ Closin g.
32
C r itic a l C ha in Pr oje c t Ma na g e m e nt
Proje ct manag e me nt
*Cr itical chain imp acts *shad e d b locks.
1 Inte g ration
2 Scop e
3 Time
4 Cost
5 Quality
6 Human re source s
7 Communications
8 Risk
9 Procure me nt
Fig u r e 2.2
PMBOK a r e a s id e ntify the p r oje c t syste m .
Th ese process ph ases rou gh ly correspon d to th e ph ases of a project, bu t th ere is con siderable overlap. Th e PMBOKTM Gu ide em ph asizes th at th ere are relation sh ips an d in teraction s between m ost of th e project system processes. Perh aps th e m ost im portan t elem en t of su ccessfu l projects is th e project team . An able leader an d an effective team can ach ieve project su ccess despite a flawed system . A weak team or leader will stru ggle with even an excellen t system . Wh ile th e h u m an side of project m an agem en t is extrem ely im portan t to project su ccess, it is n ot a specific topic of th is book. 2. 1. 1
P ro je c t i n te g ra ti o n m a n a g e m e n t
Project in tegration m an agem en t in clu des project plan developm en t an d execu tion an d overall ch an ge con trol th rou gh th e life of th e project. 2. 1. 2
P ro je c t s c o p e m a n a g e m e n t
Project scope m an agem en t in clu des th e process leadin g to in itiation of th e project an d scope plan n in g, defin ition , verification , an d ch an ge con trol. Prim ary ou tpu ts of th e scope m an agem en t processes in clu de a project ch arter, th e project work breakdown stru ctu re (WBS), detailed
The synthesis of TQM, TOC, and PMBOK
33
statem en ts of work (SOWs), fu n ction al an d operation al requ irem en ts (F&OR) or oth er defin ition s of th e deliverable scope, th e project assu m ption s, an d a process for scope ch an ge con trol. Project assu m ption s h elp plan n ers develop a determ in istic project plan . Th e plan an d con trol processes defin ed by th e PMBOK do n ot in clu de a way to h an dle decision bran ch es in a project plan . Assu m ption s defin e u n certain ty su fficien tly to perm it defin in g a determ in istic scope, cost, an d sch edu le. For exam ple, som e of th e research projects I h ave worked on requ ired u n preceden ted perform an ce of tech n ical parts. If th e parts su cceeded in deliverin g th e specified perform an ce, we wou ld follow th e path of bu ildin g th e u n its for in stallation in a larger system (in th is case, a n u clear reactor). If th e part did n ot perform as specified, we h ad to m odify th e design an d test again . Yet I cou ld h ave on ly on e project plan . I u su ally assu m ed we got it righ t th e first tim e, even th ou gh I kn ew we wou ld n ot always su cceed. Th at perm itted bu ildin g a plan an d a cost estim ate. I th en addressed th e poten tial of failu re to su cceed as part of th e project risk m an agem en t.
2. 1. 3
P ro je c t ti m e m a n a g e m e n t
Project tim e m an agem en t in clu des defin in g th e activities n ecessary to produ ce th e project scope, sequ en cin g th e activities, estim atin g activity du ration , developin g th e project sch edu le, an d con trollin g th e project to th e sch edu le. Sch edu le preparation requ ires th e WBS an d scope statem en ts as in pu ts. Th e sch edu le developm en t process iden tifies th e activity resou rce requ irem en ts an d oth er poten tial project con strain ts. Th e gu ide also discu sses th e n eed to level resou rces in th e plan , th at is, to adju st th e plan n ed resou rce dem an d of th e plan to m atch th e expected resou rce su pply. Th e PMBOK Gu ide n otes th at activity du ration estim ates sh ou ld specify u n certain ty an d refers th e reader to discu ssion s on project risk m an agem en t to h an dle th at u n certain ty. It does n ot differen tiate between com m on cau se variation an d special cau se variation . Th u s, it in clu des all poten tial variation in to th e sin gle category of project sch edu le risk m an agem en t. Th e PMBOK Gu ide addresses cost m an agem en t as a separate topic from tim e m an agem en t, bu t th e processes are iden tical. Th e sch edu le an d cost con trol process in clu des u pdatin g th e sch edu le an d com pletn g th e
34
C r itic a l C ha in Pr oje c t Ma na g e m e nt
project estim ate, plan n in g an d execu tin g corrective action , an d assessin g th e lesson s learn ed at th e close of th e project. 2. 1. 4
P ro je c t ri s k m a n a g e m e n t
Project risk m an agem en t in clu des iden tifyin g an d qu an tifyin g risks an d plan n in g an d con trollin g respon se to risk. Risk in clu des both th e likelih ood an d th e con sequ en ces of adverse im pacts to th e project. Th e PMBOK Gu ide does n ot distin gu ish between com m on cau se an d special cau se variation bu t appears to lu m p th em togeth er in th e perform an ce of risk m an agem en t.
2. 1. 5
O th e r P M B O K a re a s
Th e oth er PMBOK kn owledge areas, in clu din g qu ality, h u m an resou rces, com m u n ication s, an d procu rem en t m an agem en t, are all im portan t to projects. Th ey are im portan t to an y type of bu sin ess. Th e scope of th is text does n ot explore th ose areas.
2. 2
TQ M
Th e popu lar literatu re m ay lead you to believe th at TQM was a m an agem en t fad th at failed to deliver on its prom ise an d h ad ou tru n its applicability by th e en d of th e cen tu ry. Noth in g cou ld be fu rth er from th e tru th . At th e Febru ary 1999 award cerem on y in Wash in gton , D.C., Presiden t Clin ton n oted th at previou s win n ers of th e n ation al Malcolm Baldrige qu ality award from 1988–1997 posted an im pressive 460% retu rn on in vestm en t, com pared to a 175% in crease for th e S&P 500 over th e sam e period. Hen dricks an d Sin gh al pu blish ed resu lts in April 1999 dem on stratin g perform an ce m easu res for TQM award-win n in g firm s ou tstrippin g com parison con trol firm s by two to on e [1]. For exam ple, th e TQM firm s posted a 91% (vs. 43% for n on -TQM firm s) in crease in operatin g in com e, a 69% (vs. 32% ) in crease in sales, an d a 79% (vs. 37% ) in crease in total assets. Dr. W. Edwards Dem in g, th e m an m ost people con sider th e fath er of TQM, n ever defin ed TQM. Dem in g described h is approach in sem in ars an d books [2,3], an d th ou gh a great advocate of operation al defin ition s, h e ch ose to n ever offer on e for TQM. In stead, h e preferred to discu ss th e
The synthesis of TQM, TOC, and PMBOK
35
m atter in term s of h is 14 poin ts, or “Prin ciples for th e Tran sform ation of Western Man agem en t.” He su pplem en ted th ose poin ts with iden tified diseases an d obstacles to ach ievin g th e tran sform ation h e preach ed. Dr. Dem in g’s 14 poin ts for m an agem en t [2] are:
1. Create con stan cy of pu rpose toward im provem en t of produ ct an d service, with th e aim to becom e com petitive an d to stay in bu sin ess, an d to provide jobs. 2. Adopt th e n ew ph ilosoph y. We are in a n ew econ om ic age. Western m an agem en t m u st awaken to th e ch allen ge, m u st learn th eir respon sibilities, an d take on leadersh ip for ch an ge. 3. Cease depen den ce on in spection to ach ieve qu ality. Elim in ate th e n eed for in spection on a m ass basis by bu ildin g qu ality in to th e produ ct in th e first place. 4. En d th e practice of awardin g bu sin ess on th e basis of price tag. In stead, m in im ize total cost. Move toward a sin gle su pplier for an y on e item , on a lon g-term relation sh ip of loyalty an d tru st. 5. Im prove con stan tly an d forever th e system of produ ction an d service, to im prove qu ality an d produ ctivity, an d th u s con stan tly decrease cost. 6. In stitu te train in g on th e job. 7. In stitu te leadersh ip (see poin t 12). Th e aim of su pervision sh ou ld be to h elp people an d m ach in es an d gadgets to do a better job. Su pervision of m an agem en t is in n eed of overh au l, as well as su pervision of produ ction workers. 8. Drive ou t fear, so th at everyon e m ay work effectively for th e com pan y. 9. Break down barriers between departm en ts. People in research , design , sales, an d produ ction m u st work as a team , to foresee problem s of produ ction an d in u se th at m ay be en cou n tered with th e produ ct or service. 10. Elim in ate slogan s, exh ortation s, an d targets for th e work force askin g for zero defects an d n ew levels of produ ctivity. Su ch exh ortation s on ly create adversarial relation sh ips, as th e bu lk of
36
C r itic a l C ha in Pr oje c t Ma na g e m e nt
th e cau ses of low qu ality an d of low produ ctivity belon g to th e system an d th u s lie beyon d th e power of th e work force.
11. (a) Elim in ate work stan dards (qu otas) on th e factory floor. Su bstitu te leadersh ip. (b) Elim in ate m an agem en t by objective. Elim in ate m an agem en t by n u m bers, n u m erical goals. Su bstitu te leadersh ip. 12. (a) Rem ove barriers th at rob h ou rly workers of th eir righ t to pride in workm an sh ip. Th e respon sibility of su pervisors m u st be ch an ged from sh eer n u m bers to qu ality. (b) Rem ove barriers th at rob people in m an agem en t an d in en gin eerin g of th eir righ t to pride of workm an sh ip. Th is m ean s, in ter alia, abolish m en t of th e an n u al or m erit ratin g an d of m an agem en t by objectives. 13. In stitu te a vigorou s program of edu cation an d self-im provem en t. 14. Pu t everybody in th e com pan y to work to accom plish th e tran sform ation . Th e tran sform ation is everybody’s job. In later life, Dem in g brou gh t togeth er th e overall m eth ods h e believed in u n der th e title of “profou n d kn owledge” [3]. Dem in g defin ed a system of profou n d kn owledge as a len s an d a m ap of th e th eory to u n derstan d an d optim ize organ ization s. He em ph asized th at profou n d kn owledge is itself a system , h avin g an aim an d with all th e parts in tercon n ected. He iden tified fou r segm en ts for discu ssion bu t em ph asized th at th ey can n ot be separated. Th e fou r elem en ts are: ◗ Appreciation for a system ; ◗ Kn owledge abou t variation ; ◗ Th eory of kn owledge; ◗ Psych ology.
Figu re 2.3 illu strates th at th ose fou r ideas are in terrelated. Th e followin g section discu sses each elem en t as it relates to th e project m an agem en t system . Su bsequ en t section s describe th ese areas, em ph asizin g th e relation sh ip to th e project system .
The synthesis of TQM, TOC, and PMBOK
37
The ory of knowle d g e
Var iation Common cause Sp e cial cause Ag g re g ation
Scie ntific me thod Cr itical revie w
Syste m Fe e d b ack Dynamic Constraint
Psychology Motivation Re ward Te amwork
Fig u r e 2.3
2. 2. 1
The four a r e a s of p r ofound knowle d g e a r e inte r r e la te d .
Ap p re c i a ti o n fo r a s y s te m
Every system m u st h ave a defin ed aim or goal. Th at is th e pu rpose of th e system an d defin es th e bou n dary of th e system . Th e system itself is a n etwork of in terdepen den t com pon en ts th at work togeth er to try to accom plish th e aim of th e system . Profit-m akin g bu sin ess system s h ave th e goal of m akin g m on ey, n ow an d in th e fu tu re. Th at is wh y people in vest in profit-m akin g bu sin esses. Non profit bu sin esses (th ose in ten ded to be th at way, an yh ow) h ave differen t goals, for exam ple, creatin g h ealth for a h ealth care in stitu tion or creatin g fam ily well-bein g for som e social in stitu tion s. Projects h ave th e goal of deliverin g to th e cu stom er a specified u n iqu e produ ct or service on tim e an d with in cost. Th e clien t for th at goal can relate th e project resu lt to th e broader goal of th e in stitu tion . Th e project system con sists of ph ysical th in gs, people, an d n on ph ysical th in gs, su ch as policies, kn owledge, an d relation sh ips. All th ose th in gs
38
C r itic a l C ha in Pr oje c t Ma na g e m e nt
are in tercon n ected to varyin g degrees an d m ay affect th e perform an ce of th e system . Project plan n in g an d con trol are part of th e project system . Task perform an ce by th e project team is part of th e project system . Th in gs ou tside th e system m ay affect it. Bu sin ess system s are open system s, wh ich m ean s th at en ergy an d ph ysical th in gs flow th rou gh th em . Project system s are th e sam e. Th ese th in gs flowin g th rou gh , su ch as people, policies, an d capital, can affect th e system . For exam ple, laws an d regu lation s, wh ich are ou tside both th e bu sin ess system an d th e project system , can h ave an im m en se im pact on th e perform an ce of th e system . In 1950, Dr. Dem in g drew a sketch sim ilar to Figu re 2.4 on a blackboard in Japan . He attribu tes th e su bsequ en t su ccess of postwar Japan in large part to th e u n derstan din g con veyed by th e figu re. His description of th e system starts with ideas abou t possible produ cts or services. He con siders th ese ideas prediction s of wh at th e cu stom er m igh t wan t or n eed. Th e prediction leads to th e decision to design th e produ ct or service an d to test it in prelim in ary trials before com m ittin g to fu ll-scale produ ction . Feedback from th e cu stom ers is a key part of drivin g th e system toward th e fu tu re. Th e project m an agem en t system operates in precisely th e sam e way wh en you con sider it deliverin g project after project. Cu stom ers specify wh at th ey wan t from th e project. Th e project team prepares a project plan to create th e specified resu lt. Th e plan brin gs togeth er variou s fu n ction s with in th e com pan y an d pu rch ased services an d parts to produ ce th e desired resu lt. Ju st as a com pan y m ay produ ce m an y produ cts or deliver m an y services, th e project m an agem en t system is capable of deliverin g m an y com pleted projects. Alth ou gh th e deliverables from specific
Marke t re se arch and custome r fe e d b ack
Raw mate r ial from sup p lie rs
Prod ucts to custome rs Prod uction functions
Fig u r e 2.4 De m ing ’s ske tc h of a b usine ss syste m e m p ha size d inte r r e la tionship s a nd fe e d b a c k.
The synthesis of TQM, TOC, and PMBOK
39
projects are u n iqu e, th e sam e project m an agem en t system serves to produ ce th e resu lts. Dem in g u n derstood system dyn am ics. He observed th at operation of h is flow diagram requ ired th e flow of m aterial an d in form ation from an y part of th e system to m atch th e in pu t requ ired by th e n ext elem en t in th e system . He em ph asized th at th e defin ition of th e system m u st con sider th e im pact on th e fu tu re of th e system . He m akes referen ce to th e followin g m aterial. 2.2.1.1
Sy s te m d y n a m ic s
Sen ge [4] described th e essen ce of th e disciplin e of system s th in kin g as a sh ift of th e m in d to: ◗ Seein g in terrelation sh ips rath er th an lin ear cau se-effect ch ain s; ◗ Seein g processes of ch an ge rath er th an sn apsh ots.
He presen ted th e “laws of th e fifth disciplin e” to su m m arize an d u n derstan d h ow dyn am ic system s (in clu din g a project system ) work. Th e followin g list gives th e laws an d an in stan ce of h ow each applies to th e project m an agem en t system .
1. Today’s problem s com e from yesterday’s “solu tion s.” (Man agem en t was u n satisfied with too lon g a sch edu le on th e last project, so th ey cu t th e in dividu al task estim ates. Th is tim e, people added in a m argin for m an agem en t to cu t ou t.) 2. Th e h arder you pu sh , th e h arder th e system pu sh es back. (Man agem en t works to in crease efficien cy by assu rin g th at all resou rces h ave m u ltiple project tasks on wh ich th ey can work. Workin g on m u ltiple tasks m ean s all tasks take lon ger, sin ce people can really on ly work on on e task at a tim e. Th e oth ers are doin g n oth in g wh ile on e is worked on . Projects get lon ger an d lon ger an d efficien cy goes down .) 3. Beh avior grows better before it grows worse. (Man agem en t pu ts selected resou rces on overtim e to accelerate th e project. Resu lts im prove. Th e resou rces th en get u sed to th e extra in com e an d slow down to n ot work th em selves ou t of a job.)
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4. Th e easy way ou t u su ally leads back in . (Th e Mythical Man Month [5] explain s th is in detail. Man agem en t adds resou rces to recover th e sch edu le on a project th at is slippin g. Man agem en t m u st search for th e people, h ire th em , create places for th em to work, pu rch ase th em tools, an d in tegrate th em in to th e project team . Th e last step, in particu lar, requ ires th e tim e of th e m ost produ ctive project resou rces. Th e project falls fu rth er beh in d.) 5. Th e cu re can be worse th an th e disease. (Th e m ost com m on solu tion to im prove project perform an ce is to u se m ore rigor an d m ake m ore detailed project plan s. Th is often h elps on a project ju st after a m ajor project disaster, du e to regression to th e m ean . Th at is, it is u n likely th at two projects in a row will h ave a bu n ch of bad breaks. So from th en on , project plan s are m ore com plex an d requ ire m ore paperwork. Atten tion m oves from com pletin g th e project tasks to com pletin g th e paperwork. Project du ration s an d costs in crease. Project ch an ges in crease, fu rth er in creasin g cost an d tim e.) 6. Faster is slower. (Th e team passes on a piece of software th at really n eeded two m ore days of testin g to m eet th eir m ileston e date. Th e software cau ses problem s in th e in tegrated system test, wh ich takes weeks to diagn ose.) 7. Cau se an d effect are n ot closely related in tim e an d space. (Th e space sh u ttle blows u p on lau n ch from Cape Ken n edy in Florida. Th e cau se is a seal design m ade an d tested in Utah years before bu t n ot previou sly su bjected to specific en viron m en tal con dition s. Th e Hu bble space telescope is n ear-sigh ted (a billion -dollar m istake) becau se cru cial testin g was skipped years before, on earth , to keep th e sch edu le. 8. Sm all ch an ges can produ ce big resu lts, bu t th e areas of h igh est leverage are often th e least obviou s. (A m ajor lever for system s con tain in g people is th e m easu rem en t an d reward system . Th e im pacts of m easu res an d rewards are n ot always well th ou gh t ou t. For exam ple, as Dem in g n otes, m on th ly qu otas lead to th e en d-of-th e-m on th syn drom e, wh en a lot of bad produ ct is sh ipped. In projects, m an agem en t em ph asis th at people keep to
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th eir com m itm en ts cau ses th em to add tim e to th eir delivery estim ates an d with h old work th at is com pleted early.)
9. You can h ave you r cake an d eat it too—bu t n ot at on ce. (Th e critical ch ain m u ltiproject process com pletes m ore projects m u ch faster; in dividu al project du ration decreases, an d th e n u m ber of projects com plete at an y tim e in creases. Bu t you m u st delay th e start of projects to get th e ben efit.) 10. Dividin g an eleph an t in h alf does n ot produ ce two sm all eleph an ts. (Sen ge relates th e tale of th e blin d m en describin g an eleph an t based on feelin g its differen t parts: th e tru n k, th e m assive body, a leg, an d th e tail. Of cou rse, th eir description s vary. Project failu re an alysis often exam in es su bprocesses, su ch as th e workplan process or th e ch an ge con trol process, to see wh at part of th e system n eeds to be repaired. Th at approach fails to exam in e th e u n derlyin g assu m ption s, for exam ple, th e assu m ption of determ in istic task sch edu les im plicit to prin tin g ou t start an d fin ish dates for th ou san ds of tasks.) 2.2.1.2
Le v e r a g e
Dyn am ic system s lead logically to con sideration of th e possibility of u sin g th e system itself, as in ju jitsu , to m ove th e system in th e direction you wan t it to go. Leverage defin es sm all ch an ges (in pu ts to th e system ) th at cau se large resu lts (ou tpu ts from th e system ). Th e idea is like com pou n d in terest: if given en ou gh tim e to work, a sm all in terest rate can lead to very large accu m u lation of capital. People wh o kn owin gly work with com plex system s focu s on tryin g to fin d h igh -leverage in terven tion s to cau se desired ou tcom es. Sen ge n oted th at th ere are n o sim ple ru les to fin d h igh -leverage ch an ges to im prove system s, bu t th at th in kin g abou t th e u n derlyin g system stru ctu re, rath er th an focu sin g on even ts, m akes fin din g th ose ch an ges m ore likely. I con ten d th at th e m ajor reason th at th ere h as n ot been a sign ifican t im provem en t in project m an agem en t prior to CCPM is th at all th e observers were lookin g at th e problem from th e sam e flawed perspective; th at is, n ot lookin g at it as a system com prisin g people, th in gs, an d in form ation . Th ey appear to h ave asked, “How do I operate th is system better?” Th ey sh ou ld h ave asked, “How do I im prove th is system ?”
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Du e to th e effect of com pou n din g, it is likely th at an y h igh -leverage in terven tion s in system s will be in th e feedback loops. Feedback loops affect th e system based on th e resu lts th at obtain . More resu lts cau se m ore feedback, so su ch loops are sim ilar in im pact to com pou n din g in terest. Powerfu l feedback loops for system s in volvin g people always in clu de th e m easu rem en t an d reward system s. Th u s, th e project perform an ce m easu rem en t system is on e area we can focu s on to leverage im provem en ts in project su ccess. 2.2.1.3
Un in te n d e d c o n s e q u e n c e s
Th e lin kage an d correlation between th e parts of a system m ean th at ch an gin g an y part of th e system m ay in flu en ce oth er parts. As n oted in th e laws of th e fifth disciplin e, th e ch an ge m ay be in a desired direction or n ot, it m ay be large or sm all, an d it m ost likely will n ot be at th e sam e tim e an d in th e sam e place th at cau sed th e ch an ge. Man y people, especially th ose pron e to fiddlin g with social system s, talk in term s of “u n in ten ded con sequ en ces.” Hardin [6] m ade th e poin t th at, from th e ecological view of system s, th ere is n o su ch th in g as u n in ten ded con sequ en ces. Wh en you ch an ge part of a system , oth er parts ch an ge. Th at is it! You can cou n t on som e of th ose ch an ges as bein g u n desirable to on e or m ore perspectives of th e system . Th erefore, you m u st u se cau tion wh en posin g ch an ges to a system su ch as th e project m an agem en t system . Som e of th e ch an ges posed to elim in ate certain u n desired resu lts or root cau ses m ay h ave worse con sequ en ces elsewh ere. Several aspects of th e project system illu strate th at effect. For exam ple, if we m ake th e con sequ en ces for deliverin g a task resu lt on a project severe, it is likely to cau se all su bsequ en t estim ates to in clu de addition al con tin gen cy. It m ay cau se qu ality of ou tpu t to go down , in flu en cin g oth er tasks later in th e project. 2.2.1.4
De s tr u c tio n o f a s y s te m
Destru ction of a system by forces with in th e system was on e of th e key issu es th at Dem in g tried to brin g h om e to m an agem en t. He discu ssed h ow selfish com petition versu s cooperation between departm en ts often cau ses su ch destru ction . Sen ge [4] an d Dem in g [2] illu strated n u m erou s exam ples of h ow govern m en t attem pts to im prove th in gs often lead to destru ction of th e very system th ey were h opin g to im prove.
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In project system s, con flicts m ay arise between th e clien t an d th e project team , between sen ior m an agem en t an d th e project team , between differen t parts of th e project team , between th e project team an d su pportin g organ ization s with in th e com pan y. A frequ en t exam ple of con flict between th e project team an d su pportin g organ ization s is th e n early con tin u al battle between procu rem en t organ ization s an d project organ ization s in large com pan ies; especially th ose doin g work for th e federal govern m en t. Often th e procu rem en t organ ization ’s prim ary m easu res relate to com plian ce with a com plex system of procu rem en t regu lation s an d policies, wh ile th e project team is in terested on ly in h avin g it fast an d good. Som etim es th e procu rem en t organ ization ’s goal is to get it ch eap, wh ile th e project organ ization wan ts it good. Th e project system design m u st en su re th at th e m easu res an d rewards of in dividu al parts of th e organ ization cau se th e parts to work togeth er to su pport th e wh ole. Dem in g n otes: “Th e obligation of an y com pon en t [of a system ] is to con tribu te its best to th e system , n ot to m axim ize its own produ ction , profit, sales, n or an y oth er com petitive m easu re.” [2] 2. 2. 2
Un d e rs ta n d i n g v a ri a ti o n a n d u n c e rta i n ty
I retu rn ed, an d saw th at u n der th e su n , th at th e race is n ot to th e swift, n or th e battle to th e stron g, n eith er yet rich es to m en of u n derstan din g, n or yet favor to m en of skill; bu t tim e an d ch an ce h appen eth to th em all. (Ecclesiastes 9:11)
A project system attem pts to predict an d produ ce a certain resu lt for a certain cost by a certain tim e. As th e qu ote from Ecclesiastes illu strates, people kn ow fu ll well th at th e world is an u n certain place. Variation exists everywh ere. Prediction s are n ever com pletely accu rate. Un derstan din g variation is essen tial to m akin g an y real system operate. Popper, in an essay titled “Of Clou ds an d Clocks,” described a ran ge of reality fu n dam en tal to u n derstan din g variation [7]. He bids u s to con sider a h orizon tal lin e, with a clock on th e righ t represen tin g th e u ltim ate of a clockwork-like determ in istic world. In th at world, everyth in g wou ld even tu ally be com pletely predictable; it is on ly a m atter of u n derstan din g com pletely th e cau se-effect relation sh ips th at determ in e th e workin gs of th is m ech an ical m odel. Th e u ltim ate m an ifestation of th is m odel is th e
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workin g of th e plan ets of th e solar system , wh ose m otion s are predictable with u n can n y accu racy u sin g th e equ ation s defin ed by Isaac Newton . Th e clou d, at th e oth er extrem e of Popper’s con tin u u m , represen ts com plete ch aos—n ot th e determ in istic ch aos of cu rren t m ath em atics, bu t th e ran dom ch aos associated with th e world of com plete u n certain ty. It represen ts th e u n predictability of scien ce at th e qu an tu m level an d th e u n predictability of n atu re at th e h u m an scale. Popper wrote, “My clou ds are in ten ded to represen t ph ysical system s wh ich , like gases, are h igh ly irregu lar, disorderly, an d m ore or less u n predictable.” Everyth in g falls between th ose two extrem es. Un certain ty m ean s in defin ite, in determ in ate, an d n ot certain to occu r, problem atical, n ot kn own beyon d dou bt, or n ot con stan t. All prediction s are u n certain . Fu n dam en tal ph ysics tells u s th at all kn owledge of reality is u n certain ; th e better we kn ow th e position of som eth in g, th e less we kn ow abou t h ow fast it is m ovin g. Un certain ty is th e tru e state of th e world. Project m an agers can predict m an y th in gs well en ou gh to ach ieve th e th in gs th ey plan , su ch as bu ildin g a h ou se. Scien tists also kn ow th at we can n ever accu rately predict certain oth er th in gs. For exam ple, n o m atter h ow well we learn to m odel th e weath er, an d h ow well we m easu re con dition s at on e poin t in tim e to ru n th e m odel, ou r ability to predict specific ph en om en a will always be lim ited by th e n atu re of th e ph ysical laws th at determ in e local weath er beh avior. Scien tists n ow kn ow (from th e ch aos th eory) th at th ey will n ever be able to predict wh en an d wh ere th e n ext torn ado will tou ch down . On th e oth er h an d, th ey can predict season al tren ds reason ably well. Startin g in th e seven teen th cen tu ry, m ath em atician s an d scien tists h ave sou gh t to im prove th e ability to predict th e world fu rth er an d fu rth er over in to th e clou dy region . At th e sam e tim e, scien ce kept m ovin g th e clou dy region to in clu de m ore an d m ore of n atu re. It exten ded th e sm allest scale with qu an tu m m ech an ics, an d sh owed clou din ess at th e largest scale with in creasin g u n derstan din g of th e u n iverse. Clou din ess en com passed all in term ediate scales with th e discovery of ch aos an d stu dy of com plex adaptive system s. 2.2.2.1
C o m m o n a n d s p e c ia l c a u s e v a r ia tio n
Probability an d statistics are scien ce’s weapon s of ch oice to deal with clou dy system s. Sh ewh art [8], a m en tor to Dr. Dem in g, iden tified th e
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n eed to operate system s in a state of statistical con trol to h ave a degree of predictability. He observed, “Every m ath em atical th eorem in volvin g th is m ath em atically u n defin ed con cept [statistical con trol] can th en be given th e followin g predictive form : If you do so an d so, th en su ch an d su ch will h appen .” Followin g Sh ewh art, Dem in g em ph asized th e im portan ce of distin gu ish in g between com m on cau se variation an d special cau se variation . It is n ecessary to distin gu ish between th em to get a system u n der statistical con trol. It is n ecessary to h ave a system u n der statistical con trol to predict its fu tu re perform an ce. Com m on cau se variation is variation with in th e capability of a system to repeatedly produ ce resu lts. Special cau se variation is variation beyon d th at ran ge; u su ally variation with cau ses ou tside th e system . Man agem en t’s fu n ction is to im prove th e system wh ile avoidin g two m istakes: Mistake 1: Treatin g com m on cau se variation as if it were special cau se variation ; Mistake 2: Treatin g special cau se variation as if it were com m on cau se variation . Dr. Dem in g called m istake 1 “tam perin g.” Tam perin g is m akin g ch an ges with in a system th at is operatin g in statistical con trol. Tam perin g always degrades th e perform an ce of a system . He described th e case of a m ach in e th at h ad a feedback device attach ed to m easu re each part an d to adju st th e tool location based on th at m easu re to try to im prove th e repeatability of each part. It m ade th e variation in parts m u ch larger, becau se th e m easu rem en ts in clu ded th e n atu ral variation (capability) of th e system to produ ce parts. Th e tool sim ply am plified th at n atu ral variation . Tam perin g relates to th e m easu rem en t an d con trol of project perform an ce, an d th e decision s to take m an agem en t action s based on th ose m easu rem en ts. Th is ph en om en on m ean s th at respon din g to com m on cau se variation as if it were special cau se variation will m ake th e system perform an ce worse. In oth er words, respon din g to sm all varian ces by m akin g project ch an ges degrades project perform an ce. Th e govern m en t provides an on goin g set of exam ples for m istake n u m ber 2. Som eth in g u n desirable h appen s, an d th ey pu t in place a law to en su re it n ever h appen s again . We en d u p with th ou san ds of pages of
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regu lation s an d laws, each applicable to som e rare even t or even ts n ot even applicable to th e su bject of th e action . Mistake 2 is th e essen ce of th e growth of bu reau cracy. It h appen s in bu sin ess every bit as m u ch as in govern m en t. All th e estim ates in a project plan are u n certain . Perform in g each of th e tasks with in a project plan is a sin gle trial of a system (th e project task perform an ce system ) an d is, th erefore, u n predictable. However, statistical tech n iqu es en able u s to predict with kn own precision th e likely resu lts of n u m erou s trials from a produ ction system an d to separate ou t th e special cau ses of variation requ irin g corrective action . Wh ile kn owledge of variation h as been u sed to great profit in produ ction operation s, it h as n ot (u n til n ow) been u sed to im prove project perform an ce. Th e PMBOK Gu ide an d th e su pportin g literatu re we h ave exam in ed fail to differen tiate between com m on cau se variation an d special cau se variation , a m ajor oversigh t in th e cu rren t th eory.
2. 2. 3
Ps y c holog y
Several properties of th e h u m an m in d lead to in dividu al beh avior th at seem s to resist ch an ge. B. F. Skin n er described on e of th e m ore powerfu l m ech an ism s [9]. Skin n er asserted (with exten sive scien tific data) th at m u ch h u m an beh avior com es from h e called operan t con dition in g. Pu t sim ply, th at m ean s people con tin u e to do wh at gives positive rein forcem en t an d learn to avoid doin g th in gs th at do n ot lead to positive rein forcem en t or th at h elp th em avoid n egative rein forcem en t. Positive rein forcem en t is som eth in g a person likes. Negative rein forcem en t is som eth in g a person does n ot like. Positive an d n egative rein forcers vary from in dividu al to in dividu al. Skin n er n oted, “A rein forcin g con n ection n eed n ot be obviou s to th e in dividu al rein forced.” Figu re 2.5 illu strates m y ren dition of a con trol system view of Skin n er’s m odel. It starts with a n eed, wh ich is in flu en ced by th e person ’s cu rren t state, in clu din g deprivation or satiation relative to th e goal. Com parin g th at n eed to th e person ’s u n derstan din g of h is or h er cu rren t situ ation (perceived reality) yields a gap th at, if large en ou gh , m otivates th e person to action . Action seeks to ch an ge reality to close th e gap. Th e sen sor, wh ich m ay be th e five sen ses or m ore rem oved m eth ods of gain in g data, feeds back in form ation abou t th e effect th at th e action h as on reality. If th e ch an ge is positive (redu cin g th e gap or oth erwise
The synthesis of TQM, TOC, and PMBOK
Atte ntion
47
Motivation
Be lie fs
Pe rce p tion Se nsor
Ne e d (g oal)
Pe rce ive d re ality
Re ality
Gap (d r ive )
Action De cisions
Be lie fs
Fig u r e 2.5
C ontr ol syste m vie w of hum a n a c tions (b e ha vior ).
su pplyin g a reward), it stren gth en s th e ch an ces th at th e person will repeat th e beh avior. Th at is wh at Skin n er called operan t con dition in g. Operan t con dition in g m u st be som eh ow stored in a person ’s brain . Becau se it defin es a (perh aps ru dim en tary) m odel of th e world (if I do th is, th en I get th at), it can be con sidered a belief abou t h ow th e world works. Su ch beliefs m ay be con sciou s or u n con sciou s. Research dem on strates th at th ese beliefs h ave oth er im pacts on th e m odel. Figu re 2.5 illu strates th at beliefs affect wh at we pay atten tion to, h ow we in terpret wh at we sen se (perception ), wh at ou r m otivation s (n eeds) are, an d th e decision s we m ake on h ow to act in th e world so as to in crease rewards an d decrease n egative rein forcers. Th e in flu en ce is m ostly u n con sciou s. In oth er words, we see it becau se we believe it. 2.2.3.1
Re w a r d s
Wh ile operan t con dition in g works well for rats an d pigeon s, extrem e care m u st be u sed in applyin g th e m odel to h u m an bein gs. Mu ch of th e dam age don e in organ ization s follows directly from applyin g oversim plified models of operan t con dition in g to h u man bein gs. Th e field of perform an ce
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m easu rem en t an d con cepts su ch as pay for perform an ce are ju st som e of th e worst exam ples of in effective practices derived from oversim plified application of th e reward-pu n ish m en t con cepts, even th ou gh Skin n er iden tified an d described in depth an d proved by experim en t th at pu n ish m en t does n ot work. Worse yet, research with h u m an s con clu sively dem on strates, tim e an d again , th at rewards work on ly to m otivate people to get th e reward. Usu ally th ere are m ore u n in ten ded n egative con sequ en ces from reward system s th an positive ben efits. Koh n describes th e reason s for th is, n otin g th at reward an d pu n ish m en t are really two aspects of th e sam e th in g: attem pts at extern al con trol [10]. He explain s five reason s wh y rewards fail:
1. Rewards pu n ish ; 2. Rewards ru ptu re relation sh ips; 3. Rewards ign ore reason s (for th e problem th at elicited th e n eed for a reward); 4. Rewards discou rage risk takin g; 5. Rewards cau se people to lose in terest in th e task itself an d th erefore to lose in trin sic m otivation . Th at is n ot n ews, bu t m u ch of m odern m an agem en t does n ot get it. Frederick Herzberg n oted: Man agers do n ot m otivate em ployees by givin g th em h igh er wages, m ore ben efits, or n ew statu s sym bols. Rath er, em ployees are m otivated by th eir own in h eren t n eed to su cceed at a ch allen gin g task. Th e m an ager’s job, th en , is n ot to m otivate people to get th em to ach ieve; in stead, th e m an ager sh ou ld provide opportu n ities for people to ach ieve so th ey will becom e m otivated. [11]
Th e requ irem en ts for CCPM m u st in clu de design in g th e system to provide su ch opportu n ities. A sign ifican t barrier in th e determ in istic critical path approach is th at workers win or lose depen din g on wh eth er th ey com plete th eir tasks on tim e. Yet all in volved kn ow fu ll well th at th e task du ration estim ates in th e sch edu le h ave sign ifican t u n certain ty. As
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Dr. Dem in g dem on strates with h is bead experim en t [2], ran dom flu ctu ation s determ in e em ployee su ccess or failu re. Th at system clearly does n ot m eet th e design requ irem en t. 2.2.3.2
Ad d itio n a l p s y c h o lo g ic a l c o n s id e r a tio n s
Th e m odern view is th at ou r m in ds operate as pattern recogn ition devices. We h ave a w on derfu l ability to in fer th e au tom obile in th e pictu re by lookin g at on ly a sm all fragm en t of th e pictu re. We often can n am e th at tu n e in th ree n otes. It is rem arkable, w h en you th in k abou t it. Beliefs act to focu s ou r atten tion , an d th ey adju st ou r perception of reality by actin g as a kin d of in form ation filter. Two people witn essin g th e sam e even ts m ay h ave dram atically differen t views of wh at h appen ed. I was fascin ated wh ile listen in g to con gressm em bers from both parties argu in g th e im peach m en t of Presiden t Clin ton . Participan ts from both sides m ade logical an d em otion al argu m en ts for th eir position s. No on e argu ed th at th ey h eld th eir position becau se of th e political party with wh ich th ey were align ed. Yet, wh en th e vote cam e in , on ly five represen tatives of 417 crossed th e party lin e in th eir vote. Wh ile I am certain th at a sm all m in ority literally ch ose to vote with th e party, th e speakers con vin ced m e th at th ey really believed th e logical argu m en ts th at th ey m ade for th eir side. Becau se th e argu m en t was fram ed as an eith er-or ch oice, on e wou ld expect th at argu m en ts based on factu al an alysis sh ou ld h ave align ed people regardless of political party. My perceptive filter saw th at as an ou tstan din g exam ple of h ow people in terpret th e facts (i.e., perceive) in ways th at align reality with th eir beliefs. Th e im passion ed logical argu m en ts of both sides h ad n o im pact wh atsoever on th e oth er side, becau se th ey did n ot ch an ge th e basic u n derlyin g beliefs. Th e participan ts in th e debate were locked in to th eir own paradigm s. At an y poin t in tim e, people operatin g in an en viron m en t tu n e th eir beh avior to th e en viron m en t. Pu t an oth er way, feedback th rou gh operan t con dition in g cau ses th em to beh ave in ways th at m axim ize positive rein forcem en t an d m in im ize n egative rein forcem en t in th e cu rren t en viron m en t. Ch an ges in th e system th reaten th at position . Fu rth erm ore, Skin n er dem on strated th at extin gu ish in g beh avior establish ed by operan t con dition in g can take a lon g tim e. Th e organ ism will con tin u e to em it th e old beh avior, wh ich is n o lon ger rein forced, som etim es for th ou san ds of tries.
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Oth er aspects of psych ology, or h ow ou r m in ds work, are also im portan t to u n derstan d th e system you are attem ptin g to ch an ge. On e of th ose aspects is th e availability bias. Psych ological experim en ts repeatedly dem on strate th at we are relatively poor ju dges of probability. In stead, we focu s on th e in form ation we h eard or saw last or th at im pressed u s th e m ost, wh en offerin g ju dgm en ts abou t probability. For exam ple, you will often h ear statem en ts su ch as, “All scien tists (program m ers, en gin eers, etc.) ten d to u n derestim ate h ow lon g it will take to do a task.” Wh en pressed for data, people adm it to h avin g little. Data an alyses often prove oth erwise. Most project tasks are reported as com plete on th e du e date. (A m iracu lou s occu rren ce, by th e way, provin g th e existen ce of date-driven beh avior.) People also ten d to be overcon fiden t in th eir ability to estim ate probabilities. Th e PMBOK Gu ide does n ot deal with psych ology as a kn owledge area. Despite th at, m an y project m an agem en t texts deal with th e h u m an side of project m an agem en t. Th e project system m u st in tegrate with th e h u m an su bsystem . Th e in tegration h appen s th rou gh th e psych ology of in dividu als an d grou ps. Becau se th e cu rren t system was n ot design ed with th at con n ection in th e forefron t, you m ay expect to fin d som e problem s in th is area. Ch apter 3 dem on strates th at th e core con flict leadin g to m ost of th e observed u n desired effects with th e cu rren t project system stem from a m ism atch between in dividu al psych ology an d th e project system goal. 2. 2. 4
Th e o ry o f k n o w l e d g e
Popper, in an essay titled Conjectural Knowledge, stated, “From a rational point of view, we should not rely on any theory, for no theory has been shown true, nor can be shown to be true” [7]. That point, agreed on by most philosophers and scientists, is far from the understanding of the common person, who is prone to accepting a single instance that conforms to a theory as evidence that the theory is right. Popper went on to state: In oth er words, th ere is n o “absolu te relian ce”; bu t sin ce we have to ch oose, it will be “ration al” to ch oose th e best tested th eory. Th is will be “ration al” in th e m ost obviou s sen se of th e word kn own to m e: th e best tested th eory is th e on e wh ich , in th e ligh t of ou r critical discussion , appears to be th e best so far, an d I do n ot kn ow of an yth in g m ore “ration al” th an a well-con du cted critical discu ssion . [7]
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Popper also su ggested an objective criterion to prefer a n ew th eory, “is th at th e n ew th eory, alth ou gh it h as to explain wh at th e old th eory explain ed, corrects th e old th eory, so th at it actu ally contradicts th e old th eory: it con tain s th e old th eory, but only as an approximation .” Figu re 2.6 illu strates th e scien tific m eth od. Th e m eth od operates based on effect→cau se→effect. Scien tists start by defin in g a problem : h ypoth esizin g th e cau se for an observed effect. All n ew th eories h ave som e con firm in g eviden ce; th at is wh y a scien tist proposed th e n ew th eory. Th e prediction of a previou sly u n seen effect th at differen tiates th e n ew th eory from th e old tests th e th eory. Existen ce of th e predicted effect provides eviden ce to prefer th e n ew th eory to th e old. Lack of th e effect fails to provide eviden ce to prefer th e n ew th eory. A th eory is u sable u n til disproved. A su ccessfu l experim en t does n ot m ean th at it is correct (tru e), an d it does n ot m ean th at it will work in th e fu tu re. A su ccessfu l experim en t ju st m ean s th at it worked over th e dom ain so far experien ced. A com m on ly u sed exam ple of th e scien tific m eth od is Newton ’s laws of m otion an d gravitation . Before Newton , m an y data were gath ered on th e position s of th e su n an d th e plan ets. Correlation s were u sed to develop qu ite accu rate prediction s of th e m otion . Th ere was a fu n dam en tal flaw, of cou rse, in th at th ey h ad th e earth at th e cen ter of th e solar system . Neverth eless, th e correlation s worked. Newton ’s laws worked better th an th ose of h is predecessors becau se th ey exten ded beyon d wh at h ad been observed. Newton ’s laws allowed
Use the the ory Ye s Ob se rve e ffe ct
Prop ose the ory
Pre d ict ne w re sult
Exp e r ime nt
OK? No
Revise the ory
Fig u r e 2.6 The sc ie ntific m e thod c he c ks the va lid ity of a the or y b y e xp e r im e nt. No the or y is e ve r p r ove n. It is a c c e p te d a s “g ood e noug h” to use until it is r e je c te d b y a sing le e xp e r im e nt or r e p la c e d b y a the or y tha t b e tte r p r e d ic ts r e a lity.
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prediction beyon d th e realm of th e observed an d allowed u s to pu t h u m an s on th e m oon an d to sen d spacecraft to Ju piter. Th at is im possible u sin g correlation of plan etary m ovem en t. Th en alon g cam e Albert Ein stein . His equ ation s proved th at Newton ’s equ ation s are wron g. (Newton kn ew th at; h e h ad proposed th em as “good en ou gh .”) Ein stein ’s equ ation s redu ced Newton ’s equ ation s wh ere speeds are m odest com pared to th e speed of ligh t an d wh ere gravity is n ot too large. Th at fits Popper’s m odel of a better th eory. Ein stein spen t h is later life tryin g to prove h is own th eory wron g by developin g a u n ified th eory. So far, n o th eory better th an Ein stein ’s th eory h as been fou n d. Th erefore, scien tists con tin u e to u se Ein stein ’s th eory. Th is is a th eory of kn owledge at work. Un derstan din g th e th eory of kn owledge en ables you to better test th e CCPM th eory com pared to th e critical path th eory or oth er th eory of project m an agem en t you are cu rren tly u sin g. You n ow kn ow you can n ever prove a th eory tru e, bu t you h ave workin g tools (test an d critical discu ssion ) to ch oose between com petin g th eories. Th e th eory of kn owledge will also h elp you m ake decision s n ecessary to plan a specific project an d to operate th e project system you ch oose.
2. 3
TO C
Basically, TOC is a com m on sen se way to u n derstan d a system . TOC says, “An y system m u st h ave a con strain t th at lim its its ou tpu t.” We can prove th at with critical discu ssion . If th ere were n o con strain t, system ou tpu t wou ld eith er rise in defin itely or go to zero. Th erefore, a con strain t lim its an y system with a n on zero ou tpu t. Figu re 2.7 sh ows th at lim itin g th e flow th rou gh an y of th e arrows can lim it th e total ou tpu t of th e system . Th at Syste m throug hp ut limite d b y a constraint Raw mate r ial from sup p lie rs
Prod ucts to custome rs Prod uction functions
Fig u r e 2.7
TOC lim its the outp ut of a syste m b y a c onstr a int.
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arrow wou ld be th e system con strain t. People iden tify th e con strain t in ph ysical system s as a bottlen eck, a con striction th at lim its flow th rou gh th e system . Th e pu rpose of u sin g TOC is to im prove a bu sin ess system . In What Is This Thing Called Theory of Constraints, and How Should It Be Implemented?, Goldratt stated: … before we can deal with th e im provem en t of an y section of a system , we m u st first defin e th e system ’s global goal; an d th e m easu rem en ts th at will en able u s to ju dge th e im pact of an y su bsystem an d an y local decision , on th is global goal. [12]
Dr. W. Edwards Dem in g n oted in The New Economics th at “We learn ed th at optim ization is a process of orch estratin g th e efforts of all com pon en ts toward ach ievem en t of th e stated aim ” [2]. A ph ysical ch ain provides th e m ost com m on ly u sed prop to describe TOC. Th e goal of a ch ain is to provide stren gth in ten sion . Everyon e accepts th at th e weakest lin k determ in es th e stren gth of a ch ain . An yon e can see th at im provin g th e stren gth of lin ks oth er th an th e weakest lin k h as n o im pact on th e stren gth of th e ch ain (see Figu re 2.8).
Fig u r e 2.8 A p hysic a l c ha in illustr a te s TOC in a c tion: The we a ke st link c onstr a ins the str e ng th of the c ha in.
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C r itic a l C ha in Pr oje c t Ma na g e m e nt
Th e n ext step in u n derstan din g TOC is n ot so eviden t. TOC m akes a leap to th rou gh pu t ch ain s an d poses th e th eory th at for an y ch ain , th rou gh pu t (at an y tim e) is lim ited by, at m ost, on e con strain t. Perh aps th at is easier to see in th e project world, wh ere a project plan can h ave on ly on e lon gest path . Th e on ly case th at wou ld h ave th at as n ot tru e is if two or m ore path s are exactly th e sam e len gth . As soon as you start to perform th e project, it is likely th at on e path will becom e th e real con strain t. Th e con strain t (th e lon gest path ) will seem to sh ift du e to flu ctu ation s in project activity perform an ce. Bu t at an y tim e, on ly on e con trols th e actu al tim e to com plete th e project. Applyin g th e scien tific m eth od to th is basic u n derstan din g of TOC leads to m an y prin ciples. William Dettm er posed th e followin g list [13]:
1. System th in kin g is preferable to an alytical th in kin g in m an agin g ch an ge an d solvin g problem s. 2. An optim al system solu tion deteriorates after tim e as th e system ’s en viron m en t ch an ges. A process of on goin g im provem en t is requ ired to u pdate an d m ain tain th e effectiven ess of a solu tion . 3. If a system is perform in g as well as it can , n ot m ore th an on e of its com pon en t parts will be. If all parts are perform in g as well as th ey can , th e system as a wh ole will n ot be. The system optimum is not the sum of the local optima. 4. System s are an alogou s to ch ain s. Each system h as a weakest lin k (con strain t) th at u ltim ately lim its th e su ccess of th e en tire system . 5. Stren gth en in g an y lin k in th e ch ain oth er th an th e weakest on e does nothing to im prove th e stren gth of th e wh ole ch ain . 6. Kn owin g wh at to ch an ge requ ires a th orou gh u n derstan din g of th e system ’s cu rren t reality, its goal, an d th e m agn itu de an d direction of th e differen ce between th e two. 7. Most of th e u n desirable effects with in a system are cau sed by a few core problem s. 8. Core problem s are alm ost n ever su perficially apparen t. Th ey m an ifest th em selves th rou gh a n u m ber of u n desirable effects (UDEs) lin ked by a n etwork of effect→cau se→effect.
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9. Elim in ation of in dividu al u n desired effects gives a false sen se of secu rity wh ile ign orin g th e u n derlyin g core problem . Solu tion s th at do th is are likely to be sh ort-lived. Solu tion of a core problem sim u ltan eou sly elim in ates all th e resu ltin g UDEs. 10. Core problem s are u su ally perpetu ated by a h idden or u n derlyin g con flict. Solu tion of core problem s requ ires ch allen gin g th e assu m ption s u n derlyin g th e con flict an d in validatin g at least on e. 11. System con strain ts can be eith er ph ysical or policy. Ph ysical con strain ts are relatively easy to iden tify an d sim ple to elim in ate. Policy con strain ts are u su ally m ore difficu lt to iden tify an d elim in ate, bu t th ey n orm ally resu lt in a larger degree of system im provem en t th an th e elim in ation of a ph ysical con strain t. 12. In ertia is th e worst en em y of a process of on goin g im provem en t. Solu tion s ten d to assu m e a m ass of th eir own , wh ich resists fu rth er ch an ge. 13. Ideas are n ot solu tion s. TOC is a relatively you n g th eory an d on e th at is u n dergoin g con tin u ou s im provem en t. A few years ago, th e m eth od to locate wh at to ch an ge in a system relied on discoverin g th e core problem , as illu strated by th e above list. Th e core problem is a problem th at, if rem oved, wou ld begin to cau se th e system to ch an ge u n desired effects in to desired effects. In oth er fields, it is called th e root cau se. Th ere h as been a gradu al sh ift to defin e a core con flict in stead of a core problem . Th is sign ifican t step in th e th eory claim s th at m ost of th e u n desired effects in a system flow from an u n resolved, or at least u n satisfactorily resolved, con flict or dilem m a. Su bstitu tin g th e term core conflict for core problem in to th e precedin g list (except for item 10) m akes it reflect cu rren t u n derstan din g. Item 10 in th e list was th e earlier statem en t of th e cu rren t u n derstan din g. Th e idea of a core con flict u n derlyin g system u n desired effects m u st rest on th e th ou gh t th at people wou ld ch an ge th e system to elim in ate u n desired effects if th ey kn ew h ow an d if th ey were able to m ake th e ch an ges. If u n desired effects persist in a system , som eth in g is preven tin g th e system design ers or operators from ch an gin g th e system to elim in ate th e u n desired effect. Th e core con flict idea h elps to iden tify th at som eth in g.
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2. 3. 1
Th e th ro u g h p u t w o rl d
Dr. Goldratt fou n d th at, m ost of th e tim e, system con strain ts trace back to a flawed policy, rath er th an to a ph ysical con strain t. In The Goal [14], h e dem on strated th at policy con strain ts derived from a flawed system of accou n tin g. Accou n tin g system s in u se today were developed arou n d th e tu rn of th e cen tu ry an d h ave ch an ged little sin ce (twice th e h istory of project m an agem en t system s). Wh en th ey were developed, th ey were based on assu m ption s (n o lon ger listed) abou t th e design of bu sin ess en terprises. Dr. Goldratt defin ed th e old accou n tin g system as th e “cost world,” becau se it operates on th e assu m ption th at produ ct cost is th e prim ary way to u n derstan d valu e an d m ake bu sin ess decision s. Th at requ ires th e allocation of m an y expen ses to produ cts, th rou gh elaborate produ ct-cost sch em es, like activity-based costin g. Su ch sch em es are fu ll of assu m ption s, an d often lead to erron eou s u n derstan din g an d decision s. Dr. Goldratt defin ed a n ew way of accou n tin g, wh ich h e called th e “th rou gh pu t world.” It rests on th ree defin ition s: ◗ Throughput: All th e m on ey m ade from sellin g a produ ct (reven u e
m in u s raw m aterial cost); ◗ Inventory: All th e m on ey tied u p in fixed assets to en able th e
th rou gh pu t (th e prim ary differen ce h ere is th at fixed assets an d in ven tory are treated th e sam e); ◗ Operatingexpense: All th e m on ey spen t to produ ce th e th rou gh pu t.
Major accou n tin g au th orities arou n d th e world h ave en dorsed th is m eth od, bu t it h as been slow to pen etrate th e m ain stream . Th e cost world was n ot bad wh en it was developed, arou n d th e tu rn of th e twen tieth cen tu ry. At th at tim e, big bu sin ess (wh ich design ed it) con sisted prim arily of plan ts with very large capital in vestm en ts, for exam ple, resou rce in du stries, steel, railroads, an d, a little later, au tom obile m an u factu rin g, represen tin g fixed cost. At th at tim e, th in gs were tou gh for labor, wh ich was a variable cost. Labor was m ostly applied to u n skilled jobs an d was plen tifu l an d easy to replace. Th erefore, it was easy to vary th e workforce with dem an d. Today, th e skilled workforce is m u ch less variable, an d th e tradition al fixed costs are m u ch less fixed. Th e con cept of allocatin g costs to labor or
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produ cts always requ ires m an y arbitrary assu m ption s. Th ose assu m ption s, often lon g forgotten , in flu en ce th e bu sin ess decision s m ade u sin g th e cost accou n tin g practices. Th e th rou gh pu t world corrects th ose errors an d focu ses all decision s on th e goal of th e com pan y, th at is, to m ake m on ey n ow an d in th e fu tu re. All decision s an d m easu res relate to th e global goal an d often lead to differen t decision s th an th ose dictated by th e cost world. For exam ple, in th e cost world, m an agers m easu re operatin g efficien cies of local workstation s. Fin an cial people cou n t in ven tory as a com pan y asset. If th ey do n ot n eed workers to produ ce produ ct for cu stom er n eed, th en th ey produ ce produ ct for in ven tory, in creasin g efficien cy to m ake th em selves an d th eir local plan t look good. Un fortu n ately, th e plan t does n ot m ake m on ey on in ven tory. In ven tory costs m on ey to m ake (raw m aterials) an d to store. So it h u rts cash flow an d redu ces disposable cash at th e plan t. Ou r accou n tin g system says it is good, bu t it is bad for bu sin ess. Th en , wh en you get arou n d to sellin g th e in ven tory (wh ich is good), it redu ces you r assets (wh ich looks bad). Th at does n ot seem to m ake m u ch sen se to m e. On th e oth er h an d, wh at is n orm ally con sidered th e biggest com petitive edge in kn owledge in du stries? People. Wh at are people on th e accou n tin g system ? Expen ses. Th ey look bad. Th ey are th e first th in gs you wan t to get rid of if bu sin ess looks bad; keep th e assets, drop th e expen ses. Du m p you r ability to m ake m on ey n ow an d in th e fu tu re, keep you r h ardware, wh ich costs you m on ey. An effective way to evalu ate th e m ean in g of th e dilem m a facin g m an agers is to apply on e of th e th in kin g process tools in ven ted by Dr. Goldratt: th e “evaporatin g clou d.” Figu re 2.9 illu strates th e th rou gh pu t world–cost world evaporatin g clou d. Block A represen ts a com m on objective all m an agers sh are. Blocks B an d C are requ irem en ts to ach ieve th at objective. You read th e clou d “To m an age properly, m an agers m u st con trol cost.” Th en you read th e lower bran ch , “To m an age properly, we m u st protect th rou gh pu t.” So far so good. Focu s on th rou gh pu t requ ires u n derstan din g an d con trollin g th e wh ole system to optim ize th rou gh pu t. Th e m ost im portan t effect of th rou gh pu t world th in kin g is th at it requ ires focu s on th rou gh pu t as th e m u ch preferred path to system im provem en t. Lookin g at h ow th rou gh pu t, in ven tory, an d operatin g expen se affect n et profit an d ROI leads to
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B Control cost
D Manag e rs have p re ssure to manag e accord ing to the cost world
C Prote ct thoug hp ut
D′ Manag e rs have p re ssure to manag e accord ing to the throug hp ut world
A Manag e e ffe ctive ly
Fig u r e 2.9 The thr oug hp ut wor ld –c ost wor ld e va p or a ting c loud e xp ose s the m a na g e r ’s d ile m m a .
an im m ediate con clu sion th at th rou gh pu t is th e m ost im portan t variable. Im provem en ts in th rou gh pu t are u n bou n ded, wh ile im provem en ts in operatin g expen se an d in ven tory (or in vestm en t) are lim ited. Cost world th in kin g leads to a piecem eal view of each part of th e produ ction system . Costs add algebraically. Th e cost world leads to focu s on operatin g expen se. You can redu ce operatin g expen se in an y part of th e system , an d th e operatin g expen se redu ction s add u p. Th is th in kin g leads to en tity D, with th e logic, “To con trol cost, m an agers h ave pressu re to m an age accordin g to th e cost world.” Th at is, m an agers are forced to down size an d cu t costs, even if th ey kn ow profits in su bsequ en t years will su ffer. Man agin g to cu t costs often con flicts with m an agin g to in crease th rou gh pu t. Today, m an y com pan ies focu s on th e cost-cu ttin g side of th e clou d. Th e win -win solu tion to th e clou d will both con trol costs an d in crease th rou gh pu t. Goldratt argu es th at su ccess toward th at solu tion requ ires focu sin g first on th rou gh pu t, becau se cost will becom e less an d less im portan t as th rou gh pu t in creases. 2. 3. 2
Th e p ro d u c ti o n s o l u ti o n
Dr. Goldratt’s first career was as a developer of com pu ter software for factory m an agem en t. He bu ilt a very su ccessfu l bu sin ess, an d h is clien ts were qu ite satisfied with th e software; it gave th em m u ch m ore detailed in form ation abou t wh ere th in gs were in th eir factories. He n oticed after a wh ile, h owever, th at th ey were n ot m akin g an y m ore m on ey u sin g h is
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software. He th ou gh t abou t th at an d realized th at h e h ad to derive th e basic prin ciple from a focu s on th e goal of a for-profit com pan y, th at is, to m ake m on ey n ow an d in th e fu tu re. Th e goal correspon ds to Dr. Dem in g’s m ean in g of th e aim of a system . Dr. Goldratt’s books, m ost n otably h is in itial in tern ation al best seller, The Goal, dem on strated h ow h e in ven ted an d u sed TOC to develop th e elegan t dru m -bu ffer-rope m eth od for con trollin g produ ction . Th e dru m -bu ffer-rope m eth od is elegan t becau se it is m u ch sim pler th an th e earlier m eth ods of produ ction m an agem en t th at attem pted to con trol th e produ ction system th rou gh detailed com plexity. Th e dru m -bu fferrope system focu ses on th e dyn am ics of th e produ ction system . Figu re 2.10 illu strates a produ ction system . Com pare it to Figu re 2.4; n ote th at Figu re 2.10 represen ts th e in n er workin gs of th e overall bu sin ess system depicted by Dr. Dem in g. Produ ction is a su bsystem of th e overall bu sin ess system , ju st as th e circu latory system is a su bsystem of th e h u m an body. Th e “dru m ” is th e processin g capability of th e con strain t. It determ in es th e overall th rou gh pu t of th e produ ction process. Recall th at Proce ss ste p s Work flow
Buffe r (inve ntory)
Bottle ne ck
Ship Mate r ial re le ase
Rop e (information)
Drum (b ottle ne ck p roce ss rate )
Fig u r e 2.10 Dr um -b uffe r -r op e is the solution to op e r a ting a p r od uc tion fa c ility using TOC . This solution op e r a te s to the g lob a l op tim um (the syste m g oa l) a nd a c c ounts for the c om b ina tion of sta tistic a l fluc tua tions a nd d e p e nd e nt e ve nts.
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th rou gh pu t is th e differen ce between sales reven u e an d raw m aterial cost. To exploit (m ake m axim u m u se of) th e con strain t in term s of th rou gh pu t, you h ave to release th e correct work in to th e system at th e proper tim e to n ever starve th e con strain t an d also to n ot overload it. Overloadin g th e con strain t (th at is, produ cin g m ore th an it can process) creates excess in process in ven tory (piles of in com plete work in fron t of th e con strain t). Th e “rope” tran sm its in form ation from th e dru m to th e release of work, in order to n ever starve th e con strain t an d to lim it th e bu ild-u p of in ven tory. Th e “bu ffer” is deliberate placem en t of in -process in ven tory to accou n t for statistical flu ctu ation s in th e process system . Mach in es break, go ou t of align m en t, or som etim es n eed u n plan n ed m ain ten an ce. People do n ot always sh ow u p on tim e an d do n ot work to a con stan t rate. Th e bu ffers accou n t for th ose flu ctu ation s. In The Goal, Dr. Goldratt u sed th e backgrou n d of a factory th at produ ces h ardware produ cts; h owever, th e gen eral n atu re of Figu res 2.1 an d 2.4 works for an y kin d of system . Th e ou tpu t is an yth in g an organ ization does th at it sen ds ou tside. Ou tpu t in clu des scien tific research resu lts, services of an y kin d, meetin gs, travel arran gem en ts, reports, legal aid, software produ cts, or an y oth er ou tpu t of an y profit or n on profit organ ization . Th e system s in clu de govern men t. Non profit an d govern m en t system s obviou sly h ave a goal (aim) th at is differen t from th at for profit bu sin ess. Figu res 2.4 an d 2.10 are static pictu res of a produ ction system . Th e system stays fixed. In pu ts flow th rou gh th e system , con vertin g to ou tpu ts. Th e flow th rou gh th e system is n ot u n iform . Each step in th e processes h as som e am ou n t of variation , often referred to as statistical flu ctu ation s. Becau se workstation s down stream of oth er workstation s n eed th e parts from th e u pstream workstation s, th ey are depen den t on th e u pstream workstation . Th e com bin ation of depen den t even ts an d statistical flu ctu ation s is an im portan t issu e in m an agin g th e overall system , especially at th e con strain t. A system design ed with capacity for steps u pstream of th e con strain t equ al to capacity of th e con strain t can n ot produ ce at th e capacity of th e con strain t. Th e reason is th at u pstream flu ctu ation s add u p, leadin g to periodic starvin g of th e con strain t. Th e con strain t can n ever m ake u p th e lost produ ction , becau se it is th e con strain t of th e system . Th erefore, in an optim u m system , all u pstream workstation s m u st h ave excess capacity.
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Likewise, all workstation s down stream of th e con strain t m u st h ave capacity th at exceeds th e capacity of th e con strain t. Oth erwise, th ey can n ever m ake u p an y down side flu ctu ation s in th eir perform an ce relative to th e perform an ce of th e con strain t. Most of th e tim e, th ey operate at th e capacity of th e con strain t (th e dru m for th e system ), bu t th e excess capacity allows th em to catch u p wh en n ecessary. Th at m ean s all n on bottlen eck m ach in es in a produ ction facility sh ou ld spen d som e of th eir tim e n ot workin g. Th at reason in g exten ds to th e con clu sion th at a system operatin g with each step at optim u m efficien cy can n ot be an efficien t system . Most people in tu itively believe th at operatin g each part of a system at m axim u m efficien cy cau ses th e system to operate at m axim u m efficien cy. You can see th at an optim u m system h as to feed th e bottlen eck at its capacity an d process th e down stream parts at th e bottlen eck’s average processin g rate. Th at m ean s th at, on average, every n on bottlen eck process m u st operate at lower efficien cy th an th e bottlen eck, in order to h ave reserve capacity to m ake u p for flu ctu ation s. Th is u n derstan din g is a m ajor reason th at TOC is able to m ake su ch im m ediate im pact, on ce people u n derstan d it. Man agers design an d operate m ost cu rren t system s with ou t th e critical u n derstan din g of TOC. Th ey work to cu t costs everywh ere, in clu din g th e capacity of th e con strain t. Th ey work to im prove efficien cy everywh ere, in clu din g workstation s u pstream of th e con strain t th at m ay cau se th e con strain t to work on th in gs th at do n ot tran slate to sh ort-term th rou gh pu t. On ce th ey u n derstan d th e th eory, iden tify th e con strain t, an d im prove its th rou gh pu t, th e system th rou gh pu t in creases im m ediately. Th e com pu ter system s th at Dr. Goldratt was sellin g before h e in ven ted TOC, as well as all oth er factory con trol system s, failed to accou n t for th e im pact of th e system con strain t com bin ed with th ese statistical flu ctu ation s an d workstation depen den cy. Becau se th e actu al flu ctu ation s are statistical, th ey are u n predictable. You can predict on ly th e gen eral beh avior over a period of tim e an d m an y item s th at flow th rou gh th e system . Th erefore, th e sch edu les produ ced by th e com pu ter system s were ou tdated an d in correct as soon as th ey were produ ced. No won der th e sch edu le did n ot cau se th e system to m ake m ore m on ey. No won der th at addin g m ore detail to project plan s does n ot m ake projects m ore su ccessfu l.
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In Critical Chain , Dr. Goldratt exten ded th e con cept of dru m -bu fferrope to project plan n in g an d perform an ce. It is n ot a direct exten sion , becau se project work on activities m oves th rou gh tim e, wh ile in a produ ction facility th e parts m ove th rou gh fixed workstation s. Th e sam e con strain t ph en om en a apply to projects. Th e com bin ation of statistical flu ctu ation s an d depen den t even ts exists in a project. Cu rren t com pu ter plan n in g an d con trol m eth ods do n ot con sider th ose flu ctu ation s.1 Th erefore, m an y of th e sam e ph en om en a take place in projects th at took place in produ ction before dru m -bu ffer-rope, th at is, late delivery, lon ger an d lon ger delivery tim es, resou rces n ot available wh en n eeded, an d so on . More detailed plan n in g or m ore soph isticated com pu ter program s can n ot correct th ose problem s becau se of th e stru ctu re of th e project reality. You do n ot redu ce u n certain ty by cu ttin g u p tasks. (Rem em ber th e fifth -disciplin e law abou t eleph an ts.) More detailed plan s in crease static com plexity bu t do n ot h elp deal with dyn am ic variation du e to u n certain estim ates. For a project, th e critical ch ain is th e con strain t. It is th e focu s for m an agem en t of th e system . Th e bu ffers are tim e bu ffers in stead of m aterial. (Actu ally, in produ ction th e ph ysical m aterial bu ffers relate to tim e also. A pile of a certain size provides a certain tim e of protection for th e m ach in e th at works on th e pile.) Project bu ffer m an agem en t is sim ilar to th e produ ction cou n terpart. Cou n terparts to th e rope are th e followin g: ◗ Release of activities for work based on gettin g th e in pu t from th e
u pstream activity; ◗ Critical ch ain resou rce bu ffers; ◗ Th e decision s m ade in bu ffer m an agem en t.
Man y people are u n able to apply TOC u n derstan din g to th eir work. Th ey can see from The Goal h ow to apply it to a ph ysical produ ction system bu t can n ot see it in th eir system , wh ich m ay be a service bu sin ess, research an d developm en t, n on profit organ ization , or govern m en t agen cy. Th ere is n o basis for th e distin ction ; th e th eory applies to an y
1. Man y com pu ter tools h ave been developed to an alyze th e u n certain ty in estim ates. Th ey are in clu ded in som e “prem iu m ” software, an d available as add-on s to oth er software. In both cases, h owever, th ey are u su ally n ot u sed as day-to-day plan n in g an d con trol tools.
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system . Goldratt’s It’s Not Luck [15] sh ows h ow TOC tools apply to m arketin g, person al career plan n in g, an d person al issu es at h om e. Experien ce dem on strates th at even in produ ction system s, th e con strain t u su ally tu rn s ou t to be a policy, n ot th e ph ysical bottlen eck. The Goal [14] dem on strated th at relative to fin an cial an d sales policies. Con sider a service bu sin ess th at an swers teleph on e calls from cu stom ers. A com m on m easu re for su ch services is th e n u m ber of calls per h ou r h an dled by each person . Th e goal of th e system does n ot relate to th e n u m ber of calls, bu t to som e effect from an swerin g th e calls, for exam ple, satisfied cu stom ers or orders. Calls h ave statistical flu ctu ation s in th eir len gth , an d th ey arrive at ran dom tim es. Su ppose you are a cu stom er an d wan t to order m an y th in gs. Sh ou ld th e operator keep you on th e lin e an d th u s get m arked down for fewer calls per h ou r? How lon g will you wait for an operator to an swer before you call a com petitor? As th e m an ager of th is service, h ow do you decide wh en you get m ore operators? If you h ave excess operators (to h an dle lon ger calls an d th e variation s in wh en calls arrive), th at m ean s you r efficien cy goes down , even th ou gh th e th rou gh pu t for th e com pan y m ay go u p far m ore th an th e added operatin g expen se. Wh at is th e con strain t to th is system ? Con sider an oth er case represen tative of m an y in tern al fu n ction s in a com pan y, th e h u m an resou rce fu n ction . Wh at is you r departm en t goal, an d h ow does it relate to th e com pan y goal? How do you m easu re ou tpu t to en su re you are con tribu tin g to th e com pan y goal? Do you kn ow wh ere th e com pan y con strain t is, an d h ow h u m an resou rces m igh t in flu en ce it? Dr. Goldratt defin ed several n ecessary con dition s for ach ievin g th e goal of a com pan y. On e of th ose is to “satisfy an d m otivate em ployees n ow an d in th e fu tu re,” a con dition th at directly affects th e th rou gh pu t of th e com pan y. Hu m an resou rces clearly affect th at n ecessary con dition . Hu m an resou rces also affect operatin g expen se in several ways, in clu din g th eir own con tribu tion (cost) an d th e effect th ey m ay h ave on com pan y salaries an d ben efits th rou gh salary an d ben efit policies an d u n ion agreem en ts. 2. 3. 3
F i v e fo c u s i n g s te p s
Havin g realized th e goal of th e system an d th e fact of a con strain t, Dr. Goldratt in ven ted five focu sin g steps as a process to get th e m ost ou t of a system , in term s of th e system goal. Figu re 2.11 su m m arizes th e five steps.
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1 Id e ntify the syste m's constraints.
2 De cid e how to e xp loit the syste m's constraints.
3 Sub ord inate eve rything e lse to the ab ove d e cision.
4 Elevate the syste m's constraints.
5 Doe s a ne w constraint limit throug hp ut?
Ye s
Do not allow ine rtia to cause a syste m constraint.
Fig u r e 2.11 The five foc using ste p s r e p r e se nt the TOC a p p r oa c h to ong oing im p r ove m e nt.
2.3.3.1
Ste p 1 : Id e n tify th e s y s te m ’s c o n s tr a in ts
To im prove th e system in term s of th e goal, you h ave to iden tify wh at is h oldin g it back. You h ave to decide wh at to ch an ge. Th e system ’s con strain t is like th e weakest lin k of a ch ain : No m atter wh at you do to im prove oth er lin ks in th e ch ain , th e ch ain does n ot becom e stron ger u n til you im prove th e stren gth of th e weakest lin k. It is eviden t th at you h ave to fin d th e weakest lin k before you can im prove it. In a project m an agem en t system , th e weakest lin k can be an ywh ere: in th e project m an agem en t process, in com pan y m an agem en t policies, in
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an y of th e su pply ch ain s, in work procedu res, in th e m easu rem en t system , or in com m u n ication . Becau se a project does n ot h ave ph ysical form u n til it is well u n der way, th e con strain t often is n ot eviden t. System s th eory describes wh y an d h ow sym ptom s m ay occu r a lon g tim e after th e action s th at cau sed th em . (See th e laws of th e fifth disciplin e, in Su bsection 2.2.1.1.) You also kn ow th at th e sym ptom s m ay appear somewh ere oth er th an th e cau se, th rou gh ch ain s of effect→cau se→effect. Th erefore, stu dy of wh y projects h ave gon e wron g m ay n ot iden tify th e actu al cau se of th e sym ptom s. TOC iden tifies th e con strain t of a n on produ ction system as a core con flict. Like an y con strain t, th e core con flict is th e prim ary cau se of th e reason s th at th e system is n ot perform in g better. It is th e root cau se of on e or m ore u n desirable effects in th e system . To elim in ate u n desirable effects, you h ave to first iden tify th e core con flict. 2.3.3.2
Ste p 2 : De c id e h o w to e x p lo it th e s y s te m ’s c o n s tr a in ts
Exploitin g th e system con strain t is gettin g th e m ost ou t of th e weakest lin k of th e ch ain . Th ere are u su ally a variety of ways to do th at. For exam ple, in a produ ction facility, on e way to im prove th rou gh pu t of th e produ ction system is to ch an ge th e way th e system pu ts th in gs th rou gh th e bottlen eck (con strain t). It m u st en su re th at policies m axim ize u sin g th e con strain t in term s of th e goal. For exam ple, en su rin g th e qu ality of parts en terin g th e bottlen eck preven ts th e bottlen eck from wastin g tim e on defective parts. Th e sch edu le en su res th at produ cts with th e closest delivery date com plete first. For a n on produ ction system , you h ave to decide h ow to elim in ate th e core con flict an d en su re th at you ch an ge th e n ecessary parts of th e system so th e n atu ral effect→cau se→effect th at resu lts from th e ch an ges will ach ieve th e desired effects. In step 2, you are decidin g wh at to ch an ge to. 2 . 3 . 3 . 3 Ste p 3 : Su b o r d in a te e v e r y th in g e ls e to th e d e c is io n m a d e in s te p 2
Step 3 is th e key to focu sin g you r effort. Wh ile su bordin atin g, you m ay fin d m an y assu m ption s th at seem to in h ibit doin g th e righ t th in g. For exam ple, in The Goal, Alex Rogo discovers m an y m easu rem en t con strain ts (efficien cies) th at wou ld preven t h im from doin g th e righ t th in gs,
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if h e paid atten tion to th em . Th e accou n tin g system valu ed fin ish edgoods in ven tory as an asset, an d it m ade h is fin an cial reports look good to bu ild in ven tory. In fact, m akin g an d storin g in ven tory cost m on ey an d can plu g u p th e system ’s con strain t, delayin g work th at wou ld oth erwise go directly to a cu stom er an d create in com e. Likewise, m easu rin g workstation s by efficien cies cau ses people to bu ild parts for produ cts th at are n ot goin g to sell im m ediately, cau sin g cash ou tlay for parts, an d possibly plu ggin g th e system con strain t, again affectin g produ cts th at cu stom ers wan t an d th at wou ld lead to im m ediate in com e. Becau se project m an agem en t h as been in existen ce for over 40 years with little ch an ge, is it n ot likely th at th ere are som e assu m ption s, policies, or artificial con strain ts th at do n ot work well an y m ore? Is it possible th at som e of th e m easu res u sed to m an age a project actu ally m ake it less likely to m eet th e goal? Step 3 is th e first part of decidin g h ow to cau se th e ch an ge. 2.3.3.4
Ste p 4 : Ele v a te th e s y s te m ’s c o n s tr a in ts
Step 4 is th e im plem en tin g part of h ow to cau se th e ch an ge. It is often th e m ost difficu lt part to do, n ot becau se of th e ph ysical work, bu t becau se of th e ch an ges it dem an ds in h ow people look at th in gs. After all, th ey h ave been doin g th in gs th e oth er way for a lon g tim e, with ou t qu estion in g th eir assu m ption s. People n atu rally defen d wh at th ey h ave always don e. Som etim es, th is defen siven ess preven ts u s from even con ceivin g of differen t ways of doin g th in gs. It always m akes it difficu lt to im plem en t som eth in g n ew. Ch apter 10 discu sses h ow to overcom e th e five layers of resistan ce. 2.3.3.5 s te p 1
Ste p 5 : If a c o n s tr a in t is b r o k e n in s te p 4 , g o b a c k to
As you con tin u e to elevate th e cu rren t con strain t, you always even tu ally u n earth an oth er con strain t. It m ay be lu rkin g a few capacity percen tage poin ts above th e cu rren t con strain t, or you m ay be able to im prove th e system m an y ten s of percen tage poin ts before you u n cover th e n ext real con strain t. Th is is n ot a problem , it ju st provides a n atu ral strategy to follow in im provin g a system : Always focu s on th e cu rren t con strain t. Th at is th e optim u m con tin u ou s im provem en t strategy. A stron g cau tion follows th e five focu sin g steps: Do n ot let m an agem en t’s in ertia becom e th e system ’s con strain t.
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Th e th i n k i n g p ro c e s s
Dr. Goldratt design ed th e “th in kin g process” to an swer th ree qu estion s: ◗ Wh at to ch an ge? ◗ Wh at to ch an ge to? ◗ How to effect th e ch an ge?
Th e process steps lin k, so th e ou tpu t of each step provides th e in pu t for th e n ext step. Figu re 2.12 illu strates th e overall th in kin g process flow an d iden tifies th e prim ary tools. Dr. Goldratt developed th e tools n ecessary to apply th e th in kin g process. In addition to th eir u se in th e th in kin g process, th e tools (oth er th an th e cu rren t-reality tree an d th e fu tu re-reality tree) h ave stan d-alon e application . Th is ch apter describes th e tools, bu t m ost of th em are n ot u sed u n til n ear th e en d of th is book, to keep th e text accessible to readers wh o m ay n ot be in terested in learn in g m ore abou t TOC bu t wou ld like to im prove th eir projects. Th e text does m ake exten sive u se of th e evaporatin g clou d, th e m ost elegan t stan d-alon e TOC tool. Th e fin al ch apter dem on strates application of th e th in kin g process to create CCPM. Dettm er [13] provides an effective description an d set of procedu res to apply th e th in kin g process.
Curre nt re ality
Future re ality
Cloud
What to chang e ?
What to chang e to?
Pre re q uisite tre e (cohe re nt strate gy)
Transition tre e (synchronize d tactics)
Action!
How to cause the chang e ?
Fig u r e 2.12 G old r a tt’s thinking p r oc e ss le a d s fr om und e sir e d e ffe c ts, thr oug h the c or e p r ob le m , to suc c e ssful im p le m e nta tion.
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Most people fin d th e list of TOC th in kin g process tools an d associated acron ym s in tim idatin g at first. Most people requ ire two to th ree weeks of in ten sive train in g an d practice to be able to solo with th e th in kin g process an d u su ally several years of application s to becom e proficien t. Noreen , Sm ith , an d Mackey [16] reported th at, even after su ch train in g, on ly a lim ited n u m ber of people are able to create sign ifican t solu tion s. (Th eir book is som ewh at dated, an d th e process, tools, an d train in g h ave ch an ged sign ifican tly sin ce th eir su rvey. I am n ot aware, h owever, of m ore recen t su rvey data.) You do n ot n eed to u n derstan d th e TOC tools to su ccessfu lly apply CCPM. Th e reason for describin g th em at th is poin t is to let you kn ow th at CCPM was developed as a robu st th eory an d su bjected to exten sive critical discu ssion before it was pu t to th e test. 2.3.4.1
C u r r e n t-r e a lity tr e e
Th e cu rren t-reality tree (CRT) is a logical effect→cau se→effect m odel of th e existin g system th at con n ects a core con flict to a set of u n desired effects. Relatin g all (or m ost) of th e u n desired effects of th e system to a sin gle core con flict focu ses on th e leverage poin t of th e system , iden tifyin g wh at to ch an ge. Gu idelin es for scru tin y (in Popper’s words, “critical discu ssion ”) of th e CRT lead to team agreem en t on th e effect→cau se→effect relation sh ips th at cau se th e system u n desired effects. In oth er words, it leads to agreem en t on th e righ t problem . Th e CRT iden tifies th e policies, m easu res, an d beh aviors th at con tribu te to cu rren t reality. You read th e CRT from th e bottom u p u sin g IF-THEN logical statem en ts. 2.3.4.2
Ev a p o r a tin g c lo u d
Th e evaporatin g clou d an d th e gu idelin es for its com m u n ication an d u se defin e an d aid resolu tion of con flicts an d dilem m as. You can con sider it a fixed-form at h orizon tal tree of n ecessity. You read th e evaporatin g clou d from left to righ t, u sin g “To h ave X, you m u st first h ave Y” n ecessity logic. Dr. Goldratt’s evaporatin g clou d is a good tool to u n earth th e u n derlyin g beliefs or m in dsets th at cau se con flicts an d dilem m as. Figu re 2.13 presen ts a gen eral version of th e evaporatin g clou d in term s of beliefs an d action s. (I h ave com e to u n derstan d th is is as th e m ost basic represen tation of th e evaporatin g clou d.) Th e clou d describes two views of reality or two argu m en ts (in th e logical argu m en t sen se).
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B Be lie f 1
D Action sug g e ste d b y b e lie f 1
C Be lie f 2
D′ Action sug g e ste d b y b e lie f 2
A Common g oal
Fig u r e 2.13 G old r a tt’s e va p or a ting c loud p r ovid e s a tool to r e solve c onflic ts a nd d ile m m a s.
Con sider D an d D’ as two con flictin g proposition s abou t h ow to ach ieve th e goal. One argument is this: “To have A, I must have B. To have B, I must have D’.” The other argument is: “To have A, I must have C. To have C, I must have D’.” Thus, even with a common goal, there are two logical ways to get there. The beliefs may be compatible with each other, or they may not. The actions are not compatible. If they were, there would not be a conflict. Th e process to resolve th e evaporatin g clou d is as im portan t as th e con stru ct. Usu ally on e side con stru cts th e clou d, with a pretty clear view of wh at th e altern ative action s are (e.g., D, D’). Th e con stru ctor side can u su ally com e u p with a belief th at con n ects th eir proposition . Th ey can on ly gu ess at th e oth er side’s belief. (As n oted, n eith er side m ay really u n derstan d its u n derlyin g belief.) Th e con stru ctor side presen ts th e clou d to th e oth er side, readin g th e oth er side first. Wh en readin g th e oth er side, th e con stru ctor side m akes clear th at it on ly gu essed at C an d accepts an y revision proposed by th e oth er side. Th e con stru ctor side th an reads its side, n otin g, “No won der we h ave a disagreem en t.” Th ey th en su ggest, “Let’s search for solu tion s th at will give u s A, B, an d C an d n ot worry abou t D an d D’. Th is is a win -win solu tion . Let’s try to iden tify som e assu m ption s th at u n derlie th e arrows in th is diagram an d see if we can com e u p with a way to in validate on e or m ore of th ose assu m ption s an d get to ou r win -win solu tion .” 2.3.4.3
Fu tu r e -r e a lity tr e e
Th e fu tu re-reality tree (FRT) defin es th e system you wan t to ch an ge to. Th e FRT system con verts all th e u n desired effects of cu rren t reality in to th eir cou n terpart desired effects. It iden tifies th e ch an ges th at you h ave to
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m ake in cu rren t reality to cau se th e desired effects an d provides th e effect→cau se→effect logic from th ose ch an ges to th e desired effects. Th e FRT iden tifies th e feedback n ecessary to m ain tain th e fu tu re reality after th e action s m ade to create th e in jection s are n o lon ger active. You read th e FRT from th e bottom u p u sin g IF-THEN logical statem en ts. 2.3.4.4
Ne g a tiv e b r a n c h
Th e n egative bran ch (NBR) aids diagn osis an d resolu tion of sin gle u n desired effects. It is a tool to iden tify an d elim in ate or correct poten tial u n in ten ded con sequ en ces from th e ch an ges you m ake in th e system . It is a little tree (th u s a bran ch ) con n ectin g som e kn own effect to th e u n desired effect. Gu idelin es for scru tin y an d bu y-in by affected people are th e sam e as for th e CRT an d th e FRT. Wh en u sed in th e th in kin g process, th e NBR starts by assu m in g su ccessfu l application of on e of th e in jection s m ade to create th e FRT. You read th e NBR from th e bottom u p, u sin g IF-THEN logical statem en ts. 2.3.4.5
Pr e r e q u is ite tr e e Th e prerequ isite tree (PRT) provides a syn ch ron ized logical plan to ach ieve a team objective. It creates team bu y-in to th e in term ediate objectives n ecessary to reach a h igh er level objective, su ch as an in jection on th e FRT. It m akes u se of people’s n atu ral ability to iden tify obstacles to ach ievin g objectives an d creates a logical sequ en ced plan to overcom e all th e obstacles. You read th e PRT from th e top down , u sin g “To h ave X, we m u st first h ave Y” n ecessity logic. 2.3.4.6
Tr a n s itio n tr e e
Th e tran sition tree (TRT) provides clear in stru ction s for action s to ach ieve th e objectives specified on a PRT or an y objective. It is a logical way to write an effective procedu re. Th e TRT specifies th e action s, th e reason th e action is n eeded, th e resu lt expected from th e action , th e logic for expectin g th e action to create th e desired resu lt, an d th e logic for th e sequ en ce of th e action s. You read th e TRT from th e bottom u p, u sin g IF-THEN logical statem en ts. 2. 3. 5
Re s i s ta n c e to c h a n g e
Dr. Goldratt developed a m odel h e called th e six layers of resistan ce to describe th e person al aspects of resistan ce to ch an ge. Precedin g
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com m en ts n otwith stan din g, th is is a powerfu l m odel wh en con sidered in th e con text of th e th in kin g process, or system an alysis, th at precedes decidin g h ow to cau se th e ch an ge. Th is m odel su pplem en ts—n ot replaces—th e system an alysis. Dr. Goldratt’s six layers of resistan ce are defin ed som ewh at like th e followin g (h e always ch an ges th em a little bit):
1. “Not m y problem !” (Wh en con fron ted with a problem , people frequ en tly ten d to blam e oth ers for th e problem an d at least disclaim respon sibility or accou n tability to correct th e problem .) 2. Not agreein g with th e direction of th e solu tion . (People ten d to wan t to stay with in existin g pattern s. If th e th in g did n ot work last tim e, it m u st be becau se we did n ot u se it righ t. Let’s try h arder n ext tim e.) 3. Not agreein g with th e specifics of th e solu tion . 4. “Yes, bu t….” (It will cau se som e u n in ten ded n egative con sequ en ce, e.g., m an agem en t or th e cu stom er will take away ou r bu ffers.) 5. “It’ll n ever work h ere.” (Th ey believe obstacles to im plem en tation are u n iqu e to th eir en viron m en t.) 6. Un specified fear th at preven ts m ovin g ah ead. (Paradigm lock.) Dr. Goldratt stated th at people u su ally traverse th e m odel in th e sequ en ce listed. If th ey get partway alon g an d feel stu ck or lose u n derstan din g, th ey ten d to drop all th e way back to layer 1, rath er th an ju st rem ain in g stu ck on th e h igh er level layer of resistan ce.
2. 4
Su m m a ry
Th is ch apter sh owed h ow th in kin g from th ree related m an agem en t disciplin es com bin es to im prove th e gen eric system for project m an agem en t. Th ere is con siderable overlap between th ese disciplin es an d little disagreem en t on fu n dam en tal valu es an d prin ciples. I h ope you agree from th is ch apter th at:
72
C r itic a l C ha in Pr oje c t Ma na g e m e nt ◗ Th e PMBOK Gu ide describes a com preh en sive project system
(cu rren t th eory). ◗ Th e prin ciples an d practices of TQM an d TOC provide tools to
im prove th e th eory. ◗ TQM an d TOC both operate with Dr. W. Edwards Dem in g’s poin ts
of profou n d kn owledge: appreciation for a system , u n derstan din g of variation , a th eory of kn owledge, an d u n derstan din g of psych ology. ◗ Th e PMBOK Gu ide an d su pportin g literatu re do n ot differen tiate
between special cau se variation an d com m on cau se variation . Given th e topological sim ilarity of th e project system to th e produ ction system (Ch apter 1) an d th e TOC solu tion th at vastly im proved produ ction system s, a sim ilar TOC solu tion to th e project system m ay rem ove m an y of th e u n desired effects. ◗ TOC provides a logical process to im prove a system , an swerin g th e
qu estion s “Wh at to ch an ge?” “Wh at to ch an ge to?” an d “How to cau se th e ch an ge?” ◗ Th e TOC five focu sin g steps provide th e steps to im plem en t th e
im provem en t process: Iden tify th e con strain t, exploit th e con strain t, su bordin ate everyth in g else to th e con strain t, elevate th e con strain t, an d if th e con strain t is broken , go back to step 1. ◗ Im provem en t to th e project system m u st first iden tify th e system
con strain t (core con flict) leadin g to th e u n desired effects of th e presen t project system (or cu rren t th eory). Th e core con flict will iden tify wh at to ch an ge. ◗ Th e TOC th in kin g process leads to th e n ew system design or wh at to
ch an ge to. ◗ Th e TOC six layers of resistan ce are u sefu l for defin in g th e fin al
ph ase of project system im provem en t, h ow to cau se th e ch an ge. Th e problem defin ition in Ch apter 1 an d th e th eory backgrou n d in th is ch apter set th e stage to develop an im proved th eory for project plan n in g an d con trol. TOC provides on e tool set, an d it provides a strategy to apply th e tools of TQM for th at pu rpose.
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Referen ces [1] Hen dricks, K. B., an d V. R. Sin gh al, “Don ’t Cou n t TQM Ou t—Eviden ce Sh ows Im plem en tation Pays Off in a Big Way,” Quality Progress, April 1999. [2] Dem in g, W. E., Out of the Crisis, Cam bridge: MIT Press, 1982. [3] Dem in g, W. E., The New Economics, Cam bridge: MIT Press, 1993. [4] Sen ge, P., The Fifth Discipline, New York: Dou bleday, 1990. [5] Brooks, F. P., The Mythical Man Month: Essays on Software Engineering, Readin g, MA: Addison -Wesley, 1995. [6] Hardin , G., Filters Against Folly, New York: Vikin g, 1985. [7] Popper, K. R., Objective Knowledge, An Evolutionary Approach , Oxford: Claren don Press, 1979. [8] Sh ewh art, W. A., Statistical Method, New York: Dover, 1986. [9] Skin n er, B. F., Science and Human Behavior, Lon don : Th e Free Press, Collier Macm illan , 1953. [10] Koh n , A., Punished by Rewards, Boston : Hou gh ton Mifflin , 1993. [11] Herzberg, F., Work and the Nature of Man , Clevelan d: World Pu blish in g, 1966. [12] Goldratt, E. M., What Is This Thing Called the Theory of Constraints, and How Should It Be Implemented?, Croton -on -Hu dson , NY: North River Press, 1990. [13] Dettm er, H. W., Eliyahu M. Goldratt’s The Theory of Constraints, A Systems Approach to Continuous Improvement, Milwau kee, WI: ASQC Qu ality Press, 1997. [14] Goldratt, E. M., The Goal, Great Barrin gton , MA: North River Press, 1984. [15] Goldratt, E. M., It’s Not Luck , Great Barrin gton , MA: North River Press, 1994. [16] Noreen , E., D. Sm ith , an d J. T. Mackey, The Theory of Constraints and Its Implications for Management Accounting, Great Barrin gton , MA: North River Press, 1995.
C HAP TER
3 Conte nts 3.1 De c id ing wha t to c ha ng e
Th e d i re c ti o n o f th e s o l u ti o n
3.2 Towa r d a c or e d ile m m a 3.3 Towa r d d e sir e d e ffe c ts
3. 1
3.4 Solution fe a sib ility (e vid e nc e )
Th e m ost im portan t decision you m ake wh en you go abou t im provin g an yth in g is wh at to ch an ge. Everyth in g else follows from th at decision . If you decide to ch an ge som eth in g th at is n ot th e con strain t of th e system , you m ost likely will n ot affect th e system . You cou ld m ake it worse, by m akin g a n ew con strain t m ore restrictive th an th e old con strain t. Bu t you can n ever m ake th e system better by im provin g a n on con strain t. Th rou gh ou t m y career I h ave witn essed dozen s of organ ization stru ctu re ch an ges, all attem ptin g to im prove th e perform an ce of th e organ ization . Non e of th em ever did. I h ave also witn essed several attem pts to im prove project m an agem en t th rou gh im proved software, m ore train in g, or m ore procedu res th at failed to ach ieve sign ifican t perform an ce im provem en t. In each case, th e ph ysical ch an ge was accom plish ed—boxes on th e organ ization al ch art, people train ed, software pu rch ased (an d even u sed), books of
3.5 De te r m ining wha t to c ha ng e to 3.6
Sum m a r y
Re fe r e nc e s
D e c i d i n g w h a t to c h a n g e
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procedu res—bu t project perform an ce rem ain ed abou t th e sam e. (Of cou rse, th ere was also a lot of ch an gin g ou t th e m an agers.) TOC tau gh t m e th at th at can on ly m ean th at th e solu tion s did n ot attack th e system con strain t. Th e on e experien ce I h ad th at did resu lt in sign ifican t ch an ge in clu ded m an y of th e featu res of th e critical ch ain solu tion . In retrospect, th at ch an ge wou ld h ave been m u ch m ore su ccessfu l if it h ad h ad th e fu ll th eory an d process of CCPM. 3. 1. 1
D e fi n i n g th e p ro je c t m a n a g e m e n t s y s te m
Th e goal or aim of th e project system is to deliver project resu lts th at satisfy all project stakeh olders. Th at requ ires deliverin g th e prom ised scope on or before th e prom ised delivery date an d at or u n der th e estim ated cost. Figu re 3.1 sh ows a black box view of th e project system th at clarifies th e system goal, iden tifies th e system in pu ts an d ou tpu ts, an d leads to th e m easu res th at aid con trollin g th e system to ach ieve th e goal. 3. 1. 2
P ro je c t fa i l u re a s th e u n d e s i re d e ffe c t
Th e th eory of kn owledge leads u s to defin e a n ew problem to im prove th e project system . Com parin g prediction s of th e cu rren t project system (th e th eory) with reality h elps to defin e th e problem . Un desired effects differ from th e desired effects n ecessary to su pport th e goal of su ccessfu l projects. Constraints
Plan
Exe cute
Proje ct sp e cification
Me asure Proje ct re sult
Control
Re source s
Fig u r e 3.1 The b la c k b ox vie w of the p r oje c t syste m p r oc e sse s inp uts to p r od uc e outp uts tha t sa tisfy the syste m g oa l.
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UDEs are th e th in gs we do n ot like abou t th e cu rren t system . A good way to ch eck th em is to u se th is lead-in : “It really both ers m e th at ….” You r list of UDEs m ay n ot in clu de som e of th ese, an d it m ay in clu de oth ers. Feel free to add or delete as n ecessary. ◗ Projects frequ en tly overru n sch edu le. (If th ey cou ld pu t a m an
on th e m oon in less th an 10 years, h ow com e m y projects always overru n ?) ◗ Projects frequ en tly overru n bu dget. (How h ard is it to con trol cost
to wh at we kn ow we h ave?) ◗ Projects frequ en tly h ave to com prom ise on scope to deliver on tim e
an d with in bu dget. (Wou ldn ’t it be n ice ju st on ce to com plete a project righ t th e first tim e?) ◗ Projects h ave too m an y ch an ges. (Look, th e resu lt we wan t h as n ot
ch an ged, so wh y am I always sign in g ch an ge approvals?) ◗ In a m u ltiproject com pan y, projects frequ en tly figh t over resou rces.
(You wan t who, for how lon g, to work on ly on what?) ◗ Project du ration s get lon ger an d lon ger. (See first item .) ◗ Man y projects are can celed before th ey are com pleted. (A billion
h ere, a billion th ere, an d before lon g we are talkin g a lot of m on ey.) ◗ Project work creates h igh stress on m an y participan ts. (Th e XXX
project brin gs you greetin gs.) TQM an d TOC h elp u s to u n derstan d th at UDEs are a direct resu lt of th e project system we are cu rren tly u sin g. Even th ou gh th ey are n ot in ten ded effects, persisten ce of th e UDEs for som e tim e dem on strates th at th ey are robu st effects of th e system . Th at m ean s th in gs elsewh ere in th e system are cau sin g th e UDEs. Becau se th e UDEs are observed on all types of projects in all types of bu sin esses in m an y types of cu ltu res, we can con clu de th at project type, bu sin ess type, an d cu ltu re are n ot prim ary factors or in flu en ces th at cau se th ese resu lts. TOC leads u s to su spect th at th ere is som e u n derlyin g con flict or dilem m a th at is com m on to all th e en viron m en ts th at exh ibit th ese effects. To decide wh at to ch an ge, you first h ave to iden tify th is dilem m a: th e con strain t of th e cu rren t system . A com m on practice is to tigh ten th e screws wh en perform an ce fails to m eet expectation s. Th at is, do wh atever you were doin g, on ly h arder.
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(In san ity h as been described as doin g m ore of wh at you h ave been doin g an d expectin g a differen t resu lt.)
3. 2
To w a rd a c o re d i l e m m a
Th e origin al TOC th in kin g process m eth od wen t directly from th e UDEs to create a CRT, a system m odel of th e cu rren t reality th at was cau sin g th e UDEs. Th e procedu re started with an y two UDEs an d bu ilt a logical con n ection between th em . It th en added on e UDE at a tim e, fillin g in th e logic u n til all th e UDEs were con n ected in a system represen tation of cu rren t reality. After a process of wh at Popper wou ld call critical discu ssion , th e an alyst wou ld select an UDE as th e core problem an d proceed to an alyze it as th e resu lt of a con flict. Th at led to an in itial ch an ge to begin th e design of a n ew system , wh ich n o lon ger created th e UDEs an d in fact created th eir opposin g desired effects. Th e process worked, bu t it was h ard an d len gth y. A recen t in n ovation , wh ich Dr. Goldratt in dicated was su ggested to h im by som eon e else (bu t wh om h e did n ot iden tify), m ade th e process m ore direct an d seem in gly easier to operate by m ore people. Th e revised m eth od selects th ree of th e UDEs an d an alyzes each of th em as stem m in g from a con flict. It th en con siders th e th ree con flicts togeth er, to defin e an u n derlyin g core con flict. Fin ally, th e revised m eth od u ses th e core con flict to con stru ct th e m odel of cu rren t reality, sh owin g h ow th e core con flict leads to all (or m ost) of th e UDEs in th e system . Th e process con clu des with iden tification of th e in itial ch an ge n ecessary to begin to revise th e system to a fu tu re reality free of th e UDEs. Th e followin g discu ssion follows th is m odel for th ree of th e project system dilem m as. 3. 2. 1
Lo n g e r a n d l o n g e r p ro je c t d u ra ti o n
Most people agree th at projects seem to take lon ger an d lon ger. I ask stu den ts, “Does everyon e kn ow wh at con tin gen cy is?” All participan ts u su ally sign al th at th ey do in deed u n derstan d it. Th en I ask som eon e to defin e it. A lot of wigglin g in place u su ally follows th e qu estion , bu t even tu ally som eon e offers an an swer alon g th e lin es of “extra tim e or m on ey to h an dle th e u n expected.” I th en ask, “Extra com pared to wh at?” More pu zzled expression s. I refer to Figu re 3.2 as an exam ple of th e variation in task perform an ce (wh ich th ey h ave seen du rin g a previou s estim atin g
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79
Conting e ncy
0.9 0.8 0.7
Cumulative comp le tion p rob ab ility
0.6 0.5 0.4
Re lative comp le tion p rob ab ility
0.3 0.2 0.1 0 0
0.5
1 1.5 Sche d ule d d uration
2
2.5
Fig u r e 3.2 Va r ia tion in e stim a te s for the tim e to p e r for m a ta sk he lp s d e fine c onting e nc y.
exercise) an d ask, “Isn ’t it a h u ge differen ce if you add con tin gen cy to th e 50% probable task estim ates, as com pared to addin g it to th e 90% probable task estim ate?” Th ey all agree an d u n derstan d th at th e word contingency can h ave a vast differen ce in mean in g, depen din g on h ow you ch oose to in terpret th e base. I offer an operation al defin ition : “Con tin gen cy is th e differen ce between a 50% probable estim ate an d a 90% probable estim ate.” If you do n ot like th at defin ition , you are welcom e to ch an ge it. Ju st be su re th at th e people you are dealin g with u se th e sam e m ean in g. Everyon e wan ts to h ave a su ccessfu l project. On e n ecessary con dition to a su ccessfu l project is to h ave th e project com plete on sch edu le. To h ave projects com plete on sch edu le, every task on th e critical path m u st com plete on sch edu le. To h ave every task on th e critical path com plete on sch edu le, we m u st plan each task to in clu de th e con tin gen cy (as previou sly defin ed), becau se we kn ow th at th ere is u n certain ty in task perform an ce. Th at is th e on ly way to do it with th e cu rren t CPM. Fu rth er, becau se you fin d ou t th e critical path on ly by estim atin g all th e project tasks an d con n ectin g th e n etwork, you h ave to in clu de con tin gen cy in all th e task estim ates. Project m an agers gen erally agree th at th ey wan t people to keep th eir com m itm en ts an d deliver on th eir task delivery date. People gen erally
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agree th at, in th eir organ ization s, people wh o com plete tasks on tim e are good perform ers, an d people wh o do n ot com plete on tim e are con sidered poor perform ers. Th ey ackn owledge th at wh en project m an agers ask for in pu t on task tim es, th ey wan t con tin gen cy in clu ded in th e estim ates. Usu ally, th ere is also pressu re to plan to com plete projects as soon as possible. In com petitive bid situ ation s, th e bidder th at can com plete soon er u su ally h as an edge. Everyon e kn ows th at plan n in g to com plete th e project soon er ten ds to redu ce project cost, th ereby h elpin g m ake a com petitive bid. For th ose perform in g R&D projects, th e im pact of a sh orter developm en t m ay be th e differen ce between th e su ccess an d th e failu re of th e project. For deadlin e-driven projects, a sh orter plan tim e u su ally alleviates th e pressu re to start n ow. For all th ose reason s, in order to plan a su ccessfu l project, th e project m an ager m u st h ave a sh orter critical path for th e project. To h ave a sh orter critical path for th e project, th e project m an ager m u st h ave sh orter task estim ates th at do n ot in clu de con tin gen cy. Figu re 3.3 is th e evaporatin g clou d for th at dilem m a. Of cou rse, we can n ot h ave both 50% probable task estim ates an d h igh -probability task estim ates; th u s, th ere is a con flict. In m an y en viron m en ts, th at con flict plays ou t by th e task estim ators proposin g h igh -probability estim ates an d m an agem en t, in clu din g th e project m an ager, redu cin g th ose estim ates as a ch allen ge or “stretch ” goal. Th e tim e cu ts u su ally do n ot h ave a m eth od to ach ieve th e tim e redu ction —th ey are arbitrary. Usu ally, people kn ow th at m an agem en t still expects th em to ach ieve th e low-probability task tim es. Th ey go in to th e sch edu le as fixed dates, an d m an agem en t will requ est statu s relative to th at date.
B Ke e p my d e live ry commitme nt
D Includ e conting e ncy in task time s
A Short p roje ct d uration C Re d uce the cr itical p ath time
Fig u r e 3.3
Ta sk tim e c onflic t.
D′ Do not includ e conting e ncy
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Task perform ers ten d to accept th e ch allen ge. Th ey really h ave n o option . Th ere is con siderable pressu re to be a team player an d to do you r part. Su bcon tractors often h ave th e sam e pressu re—m eet th e redu ced tim e or we will give th e work to som eon e else. Experien ced people ju stify acceptin g th e situ ation as a m an agem en t-dictated version of th e ch icken gam e. (Rem em ber th ose 1950s teen age rebellion m ovies in wh ich two drivers raced toward a cliff or toward each oth er to see wh o wou ld veer off or stop first?) People on a project kn ow th at wh at is h appen in g to th em is also h appen in g to every oth er task on th e project. If th ey agree to th e tim e cu t, it is likely th at reality will strike som e oth er project task before it gets th em , cau sin g m an agem en t to ch icken ou t an d exten d th e project tim e. Th at gives th em th e tim e th ey n eed to com plete th eir task on tim e, so th ey can win in th e system . If they were to object to the time cut, they would lose immediately because management would brand them as nonperformers or nonsupporters. They have no choice in the real world of power politics. 3. 2. 2
P ro je c ts fre q u e n tl y o v e rru n s c h e d u l e
Wh en asked wh y projects overru n sch edu les, people u su ally say th e projects start ou t fin e, bu t som ewh ere alon g th e way a sn ag develops th at begin s to pu sh on e or m ore deliverables later an d later. Everyon e kn ows th at it takes on ly on e task to be late on th e critical path to m ake th e wh ole project late. As th e sh ift begin s to h it th e plan , m an agem en t tries to solve th e problem cau sin g th e sh ift, u su ally divertin g resou rces an d m akin g ch an ges in th e project plan to cost m ore an d m ore em ph asis on th e part of th e plan th at is slippin g. Th e people workin g on th e sn ag u su ally feel a lot of pressu re to get th eir part of th e project solved an d th erefore pu t in a lot of extra tim e an d feel con siderable stress. Th ese are often th e resou rces in m ost dem an d in th e com pan y, so pu ttin g m ore tim e on th e project in trou ble leads th em to n eglect th e oth er projects th ey were su pposed to be workin g on , cau sin g oth er projects to slip as well. Wh en asked wh y th at h appen s, people respon d with two gen eral types of an swers. On e type of an swer focu ses on th e specific problem with th e specific project th at is m ost recen t in m em ory (often still in trou ble). Th ey u su ally blam e it on poor perform an ce by th e grou p respon sible for th at part of th e project. Th e secon d type of respon se is m ore gen eral, blam in g th e problem on th e ten den cy of stereotype task perform ers to u n derestim ate or on m an agem en t’s settin g arbitrary com pletion dates.
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How often do people com plete activities an d pass th eir work on early? How often do th ey com plete activities for less th an th e bu dgeted activity cost? You m igh t fin d th at occu rs less frequ en tly th an you wou ld expect, if th e estim ates were tru ly 90% probable estim ates. Even with skewed distribu tion s, tasks sh ou ld com plete early a su bstan tial percen tage of th e tim e. Figu re 3.4 illu strates typical resu lts for actu al tim es th at project tasks, com pared to th eir plan n ed du ration . Figu re 3.4 sh ows th at m ost tasks com plete exactly on th e du e date; often , as m an y as 80% com plete on th e du e date. Th at is n ot con sisten t with th e task com pletion tim e estim ate presen ted earlier. Poten tial cau ses for little positive variation in activity du ration or cost in clu de th e followin g. ◗ People work diligen tly to m ileston e dates an d do n ot u n derstan d a
desire to h ave th e work com pleted early. ◗ Estim ates are m u ch less probable th an were believed, leavin g little
poten tial for positive variation s. ◗ Th e work expan ds to fill all available tim e an d bu dget. 6
Numb e r of re sults
5 4 3 2 1 0 0
0.5
1 1.5 Actual activity time Sche d ule d time
2
2.5
Fig u r e 3.4 The d istr ib ution of a c tua l ta sk c om p le tion tim e d iffe r s fr om the e stim a te d istr ib ution a nd shows a r e m a r ka b le p e r c e nta g e of c om p le tions r ig ht on the d ue d a te .
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◗ Belief th at th e n ext activity wou ld n ot be ready to u se it an yway. ◗ In m ost organ ization s, th ere are sign ifican t pen alties (th reaten ed or
real) for com pletin g activities late. Bu t wh at are th e “rewards” for com pletin g activities early? Have you ever seen an y of th e followin g: ◗
Man agem en t gives th e produ ct a m ore detailed review th an th ey wou ld if you com pleted it n ear th e du e date an d forces you to m ake u n n ecessary ch an ges.
◗
Th e redu ced bu dget for th e perform in g organ ization leads to h igh er overh ead rates an d, in extrem e cases, down sizin g.
◗
Redu ced credibility in th e perform er’s activity du ration an d cost estim ates leads to in creased pressu re to redu ce estim ates.
Th ose factors add to th e psych ological reason s th at cau se projects to lose m u ch of th e poten tial positive varian ce. Project m an agers assign tasks an d train people to respon d to specific m ileston e dates. Th u s, even if th ey are don e early, th ey m igh t h old on to th e produ ct u n til th e du e date. Wh y n ot? Man agem en t u su ally does n ot take an y advan tage of early com pletion or reward th e task perform ers if th ey do deliver early. If th e resou rce perform in g th e work is paid in accordan ce with th e tim e th ey spen d on th e task, th ey are in cen tivized to u se u p all th e resou rces au th orized. If you r project u ses a cost reim bu rsem en t con tract with th em (th e u su al practice for resou rces in th e com pan y an d for certain types of extern al resou rces), th ey m ay even be in cen tivized to slow down th e work to get overtim e pay or m ore total reven u e from th e project. If on e resou rce gets its activity don e early, wh at is th e ch an ce th at th e n ext critical resou rce down th e lin e is ready to h op to an d start workin g on its activity? If it is a critical resou rce, it is in dem an d an d h as lim its on availability. It does n ot seem likely th at th e n ext resou rce will be able to work on th e activity u n til th e date th ey h ad plan n ed for it. Th erefore, th e positive varian ce is lost an d wait tim e is in trodu ced. Th at m ean s th at th e actu al sch edu le tim e grows du e to activity depen den ce. All of th at leads to th e secon d con flict, illu strated in Figu re 3.5. Th e u pper path refers to th e perform in g resou rce. To be a su ccessfu l team m em ber, I m u st con tribu te to early com pletion of th e project. To con tribu te to early com pletion of th e project, I m u st tu rn work in early. On th e
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B Contr ib ute to e arly comp le tion
D Tur n in work e arly
C Sufficie nt time in ne xt p roje ct
D′ Do not tur n in work e arly
A Succe ssful te am me mb e r
Fig u r e 3.5
The c onflic t und e r lying p r oje c t sc he d ule ove r r uns.
lower bran ch , to be a su ccessfu l team m em ber, I m u st h ave su fficien t tim e in m y task estim ates to com plete m y com m itm en ts. To com plete m y com m itm en ts, I m u st tu rn in task early. Th e obviou s an swer is th at I can always do extra ch ecks an d im prove th e qu ality of m y project task resu lt wh en it looks as if I m igh t fin ish early. Even if I did fin ish early an d tu rn it in to m y m an ager to be ch ecked prior to su bm ittin g it to th e project, th e m an ager (a very bu sy person ) likely wou ld n ot look at it u n til it is du e an yway. 3.2.2.1
Stu d e n t s y n d r o m e
Did you always stu dy for exam s weeks ah ead, so you cou ld go to bed early th e n igh t before? Did you always write you r papers to get th em don e at least a week before th e deadlin e, to avoid th e gap in th e library wh en all th e books on th e topic are ou t, an d to get to th e college com pu ters before everyon e else was on th em all n igh t? Well, it is probably n ot n ews to you th at m ost people h ave a ten den cy to wait u n til tasks get really u rgen t before th ey work on th em . Th at is especially tru e for bu sy people in h igh dem an d, th at is, all th e m ost im portan t people th e project m an ager is cou n tin g on to get th e critical path work don e on tim e. Figu re 3.6 sh ows th e typical work pattern of m an y people. Th ey do less th an a th ird of th e work on an activity du rin g th e first two-th irds of th e activity du ration . Th ey th en do two-th irds of th e work du rin g th e last th ird of th e activity du ration . Wh ere are th ey m ore likely to fin d th ey h ave a problem to com plete th e activity in th e rem ain in g tim e, du rin g th e
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Mile stone d ate
Stud e nt synd rome p e rformance Effort
Activity time
Fig u r e 3.6 Pe op le p e r for m m ost a c tivitie s, a nd m ost p e op le follow the stud e nt synd r om e p e r for m a nc e c ur ve .
first th ird of th e effort or du rin g th e last th ird? If th ey are workin g above 100% capacity already to com plete two-th irds of th e work in on e-th ird of th e tim e, th ere is n o ch an ce to keep to th e activity du ration by a little extra effort. Wh at is th e ch an ce th ey can recover from an u n an ticipated problem , like a com pu ter crash ? Stu den t syn drom e beh avior resu lts in little ch an ce of seein g th e positive side of activity du ration variation . Th e effects described above m ake it u n likely we cou ld take advan tage of positive variation , even if we did see it. No won der projects rarely com plete early! Th e reality is th at relative activity du ration n orm ally sh ows a skewed distribu tion , with a m ean well above th e average activity tim e. Th at is on e reason wh y we often see overru n s on activity tim e bu t rarely see u n derru n s. Most project m an agem en t gu idan ce recom m en ds th at project m an agers u se an early start sch edu le. Th at m ean s startin g all n on critical path activities earlier th an is n ecessary to m eet th e sch edu le date. People workin g on th ose activities kn ow th ere is slack in th eir activity. How does th at in flu en ce th e u rgen cy th ey feel in workin g on th e activity? 3. 2. 3
M u l ti ta s k i n g
Now assu m e th at th e sch edu le system dem an ds th at people workin g on th e project start on activities as soon as possible an d report th e task start to
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th e project m an ager. Fu rth er assu m e th ey split th eir tim e du rin g th e day even ly to th e th ree activities. Wh en do th ey com plete? If we assu m e th at n o tim e is lost from droppin g each activity every day an d gettin g back in to it th e n ext day, n on e of th e activities is com plete u n til th e th ird week. Mu ltitaskin g h as in creased th e activity du ration for all th ree projects to th ree weeks. Th ey h ave delayed th rou gh pu t on th e first project for two weeks an d on th e secon d for on e week. Figu res 3.7 an d 3.8 illu strate th e m u ltitaskin g con flict an d its effects. Wh ile m ost people will ackn owledge th at situ ation , m an y argu e, “It is ju st n ot realistic to do oth erwise. We h ave to satisfy m u ltiple n eeds.” Th ey
B De monstrate ‘can-d o’ attitud e
D Acce p t ne w tasks
C Me e t my commitme nts
D′ Comp le te committe d work
A Succe ssful care e r
Fig u r e 3.7
The m ultita sking c onflic t. One unit of throug hp ut
Task A
One unit of throug hp ut
Task B
One unit of throug hp ut
Task C
Task A Task B Task C Thre e units of throug hp ut
Fig u r e 3.8 Multita sking d e la ys a ll p r oje c ts. It a lso justifie s using the long e r ta sk tim e s in futur e p la ns.
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agree with logic th at dem on strates th at m u ltitaskin g is a poor (perh aps th e worst) way to m eet m u ltiple n eeds. Th ey ackn owledge th at it deliberately lowers th eir person al th rou gh pu t con tribu tion . (An d th at is still with ou t accou n tin g for th e fact th at leavin g an d retu rn in g to tasks u su ally affect th e total tim e n ecessary to com plete th e task an d often th e qu ality of th e produ ct.) Neverth eless, m an y people fin d it extrem ely difficu lt to ch an ge su ch beh avior. Pu rveyors of tim e m an agem en t tools work to resolve th is person al con flict at th e person al level. Marris con ten ds th at beh avior su ch as m u ltitaskin g is a social effect of th e m ore powerfu l u sin g th e less powerfu l to sh ield th em from u n certain ty [1]. In oth er words, m an agem en t takes advan tage of th e lower level resou rces in th e organ ization by creatin g th e pressu re to work on its latest idea, leadin g to m u ltitaskin g.
3. 2. 4
C o re c o n fl i c t l e a d i n g to UD Es
You can com bin e th e th ree con flicts to obtain th e u n derlyin g core con flict leadin g to all th ree con flicts exam in ed. Becau se th e con flicts derived from th e th ree startin g UDEs, resolvin g th e core con flict sh ou ld h ave a desirable im pact on all th ree of th e UDEs an alyzed. Becau se th e project system is a con n ected system , th e core con flict m ay con tribu te to th e oth er UDEs as well. Figu re 3.9 illu strates developm en t of th e core con flict. Th e goal of th e th ree con flicts is com m on : project su ccess. Th e top path of th e clou d illu strates th e logic th at leads to each in dividu al, an d th erefore each in dividu al task in th e project, to work toward its own su ccess. To h ave a su ccessfu l project, each task m u st perform as plan n ed. For each task to perform as plan n ed, each task perform er m u st do wh atever it takes for in dividu al task su ccess. Th e lower path illu strates th e logic th at leads to workin g toward project su ccess. For th e project to su cceed, each part of th e project m u st con tribu te to overall project su ccess. To con tribu te to overall project su ccess, each task m u st su bordin ate to th e overall project. Th at core con flict is th e com m on con flict Dr. Dem in g referred to, in wh ich workin g for each part of th e system does n ot lead to an effective system . It is th e con flict iden tified as a prin ciple in TOC: An optim u m system can n ot h ave each part of th e system as an optim u m . Worse yet, th e core con flict sets u p a win -lose situ ation between all th e project
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B1 Ke e p my de live ry commitme nt A1 Shor t proje ct duration A2 Succe ssful te am me mb e r A3 Succe ssful care e r A Succe ssful p roje ct
C2 Re duce the critical path time B3 De monstrate ‘can-do’ attitude
D′2 Do not turn in work e arly D3 Acce pt new tasks
B De monstrate ind ivid ual succe ss
D Includ e conting e ncy in e ach task e stimate
C Satisfy clie nts and manag e me nt b y d e live r ing the most scop e for the le ast cost in the shorte st time
D′ Do not includ e conting e ncy in e ach task e stimate
C3 Me e t my commitme nts B2 Contribute to e arly comple tion C1 Re duce the critical path time
Fig u r e 3.9
D1 Include continge ncy in task time s
D′3 Comple te committe d work D2 Turn work in e arly D′1 Do not include continge ncy
The c or e c onflic t und e r lie s a ll thr e e c onflic ts.
workers an d th e project m an agem en t. No won der th at projects are so stressfu l to all con cern ed; n o won der so m an y projects fail. Figu re 3.10 illu strates h ow th e core con flict leads to all th e UDEs. It im plies th at th e core con flict is a h igh -leverage part of th e project system . A solu tion (n ew th eory) th at resolves th e core con flict differen tly can in flu en ce th e wh ole system in a way th at ten ds to m ove th e UDEs to th eir desirable cou n terpart. Th e logic illu strated by Figu re 3.10 is in com plete. It is on ly a n otion al con n ection between som e part of th e core con flict an d th e UDE. At th is poin t, if you accept th at th e core con flict u n derlies m ost of or all th e UDEs of th e project system , you m ay be willin g to con sider th e begin n in g of th e solu tion direction . How do we kn ow th at th is is the core con flict an d n ot th e resu lt of som e biased an alysis? After all, real experts in project m an agem en t h ave
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UDE-8 Proje ct work cre ate s hig h stre ss on many p articip ants
UDE-7 Many p roje cts are cance le d b e fore they comp le te
UDE-4 Proje cts have too many chang e s
UDE-2 Proje cts fre q ue ntly ove rrun b ud g e t
UDE-3 Proje cts fre q ue ntly d e live r le ss than the full scop e
UDE-1 Proje cts fre q ue ntly ove rrun sche d ule
UDE-6 Proje ct d urations g e t long e r and long e r
UDE-5 Proje cts fig ht ove r re source s
Core conflict
Fig u r e 3.10
The c or e c onflic t le a d s to a ll the syste m UDEs.
been workin g on th e problem for years, an d th is is n ot th e resu lt th ey h ave com e u p with . Usu ally, th ey say it is som e form of n ot effectively
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im plem en tin g th e project m an agem en t system rou gh ly defin ed by th e PMBOKTM . Oth ers claim it is all abou t th e project leader. You can n ever prove th at it is the core problem . In a dyn am ic system (ch icken →egg→ch icken ), th ere u su ally are on ly circu lar correlated effects. You n eed an effective startin g poin t to ch an ge su ch a system . Bu t becau se th e system is com pletely in tercon n ected, startin g an ywh ere will affect th e wh ole system . To carry th e exam ple fu rth er, in th e past breeders affected th e ch icken an d egg system by selectin g th e ch icken s th ey wou ld breed. Now, th ey can directly affect th e gen es in th e egg. Th e th in kin g process is lookin g for a core con flict th at seem s to h ave th e m ost—or at least a lot of—im pact on th e UDEs of th e system . Th e core con flict is a h ypoth esis abou t th e system . It is a th eory. To fin d ou t if it works better th an oth er th eories, you h ave to su bject it to critical review an d, u ltim ately, test. Th e test m u st predict som eth in g h appen in g with th is th eory th at does n ot h appen with th e old th eory.
3. 3 3. 3. 1
To w a rd d e s i re d e ffe c ts Re s o l v i n g th e c o re c o n fl i c t
Resolvin g th e core con flict requ ires iden tifyin g on e or m ore assu m ption s th at can be m ade in valid by ch an gin g th e system . Assu m ption s u n derlie each arrow of th e core con flict. Th e critical ch ain m eth od arises from attackin g th e assu m ption th at addin g con tin gen cy to each task is th e on ly way to m an age u n certain ty. Dr. Goldratt was u n iqu ely position ed to develop th e critical ch ain solu tion for projects. Th e critical ch ain solu tion com es from recogn izin g th at th e variation in task perform an ce an d depen den t even ts is at th e root of th e beh avior of th e cu rren t system . He h ad trem en dou s su ccess in applyin g th e solu tion for produ ction m an agem en t h e described in The Goal [2]. He kn ew th at in m ost cases th e u n certain ty in project du ration estim ates is m u ch larger th an th e variation in produ ction processes. He also kn ew th at in m an y cases th e task depen den cies in projects were equ al to or greater th an th e depen den cies th at exist in produ ction . It is n atu ral th at h e wou ld look at projects from th is perspective to fin d th e assu m ption to attack. In The Goal, Dr. Goldratt describes th e im pact of variation an d depen den t even ts in th e saga of Herbie. He u sed th e scen ario of a troop of
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boy scou ts on a h ike th rou gh th e woods. Th e trail is n arrow, so n o scou t can pass th e scou t in fron t of h im . As th ey h ike, th e lin e grows lon ger an d lon ger. Alex Rogo, ou r h ero in The Goal an d th e troop leader for th is weeken d, realizes wh at is h appen in g. Th e speed of th e scou ts is n ot th e sam e. Th ere are statistical flu ctu ation s in h ow fast th e scou ts walk. Each is depen den t on th e scou t in fron t of h im an d th e on e beh in d h im . Th ese flu ctu ation s cau se th e len gth of th e lin e to grow con tin u ou sly. Herbie tu rn s ou t to be th e slowest boy scou t, th e con strain t. Th e gaps in th e lin e com pare to in ven tory in a m an u factu rin g plan t. For a project, th e gaps in th e lin e of boy scou ts com pare to tim e. If th e n ext resou rce is n ot ready to start wh en a predecessor activity com pletes early, th e project loses tim e. We lose th e positive varian ces in statistical flu ctu ation s. Th at is like a faster boy beh in d a slower on e; h e can catch u p bu t n ot pass. Th e lin e grows in len gth . Th is is worse in a project th an in a m an u factu rin g case. In m an u factu rin g, th e in ven tory is u sed even tu ally. In a project, th e tim e is lost forever. Th ere is n o con servation of tim e. Th e direction of th e solu tion Goldratt proposed follows from h is TOC produ ction solu tion . Th e first step is to iden tify th e con strain t of th e project system . His focu s on th rou gh pu t led h im to focu s on th e tim e it takes to com plete th e project. Th e lon gest path th rou gh th e project is th e eviden t con strain t. At first look, th is is th e critical path . How th en to exploit th e critical path ? Dr. Goldratt, wh o h olds a Ph .D. in ph ysics, kn ows statistics an d kn ows a lot abou t th e clou dy beh avior of m u ch of reality. He kn ows th at th e on ly way to take advan tage of statistical kn owledge is th rou gh dealin g with n u m bers of even ts. Dem in g an d Sh ewh art before h im h ad poin ted ou t th at scien ce can n ot m ake prediction s abou t a sin gle in stan ce of a statistical even t. Th at leads to a sim ple (in retrospect) in sigh t: Con cen trate th e u n certain ty for m an y of th e tasks of th e project at th e en d of th e project in a bu ffer. Th e bu ffer h as a direct cou n terpart in h is produ ction solu tion , wh ere bu ffers of in -process in ven tory are strategically placed in fron t of m ach in es to preven t th em from ru n n in g ou t of work. Con cen tratin g con tin gen cy in th e bu ffer brin gs alon g two sign ifican t bon u ses. Th e first bon u s is a sh orter plan . It is a m ath em atical fact th e varian ces of th e su m of sam ples from a series of in depen den t distribu tion s add. Th e varian ce is th e squ are of th e stan dard deviation . Th e stan dard deviation is proportion al to th e am ou n t of variation in a sin gle task. In oth er words, th e u n certain ty in th e su m of tasks is th e squ are root of th e
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su m of th e squ ares of th e in dividu al variation . Wh ile attem ptin g to protect th e com pletion date of each task in a project, each task h ad to in clu de its own allowan ce for u n certain ty. Th ose allowan ces add u p down th e path . Wh en we take th e allowan ces ou t of each task an d pu t th em at th e en d of th e path , th ey add as th e squ are root of th e su m of th e squ ares, a m u ch sm aller total am ou n t. Figu re 3.11 illu strates h ow th at works for a very sim ple case. Th e reason is eviden t. Som e of th e tasks sh ou ld overru n , som e sh ou ld u n derru n . Th e distribu tion of th e su m n eed n ot be as large as th e su m of th e in dividu al variation s becau se som e will can cel ou t. A secon d statistical fact com es in to play with th is strategy. Th e cen tral lim it th eorem of statistics states th at th e distribu tion of sam ples from a variety of in depen den t distribu tion s ten ds toward a n orm al distribu tion . A n orm al distribu tion is a sym m etrical distribu tion . It does n ot h ave th e lon g tail to th e righ t th at m an y in dividu al task distribu tion s m ay h ave. Th at m ean s con cen tratin g con tin gen cy at th e en d of a path redu ces th e likelih ood th at it will be overru n by a large am ou n t. A key part of th e direction of th e solu tion Goldratt proposed, th en , is to u se average task com pletion tim es in th e plan an d to add an aggregated bu ffer at th e en d of th e plan for overall project con tin gen cy. 3. 3. 2
Th e re s o u rc e c o n s tra i n t
Elim in atin g con tin gen cy from th e in dividu al task estim ates an d con trollin g it at th e project (path or ch ain ) level appears to directly resolve Task 1
Task 1
Task 2
Task 2
Task 3
Task 3
Task 4
Task 4
We ne e d le ss time this way, b e cause of our p rofound knowle d g e und e rstand ing of var iation!
Fig u r e 3.11 C onc e ntr a ting c onting e nc y a t the e nd of the p a th r e q uir e s le ss tota l p r oje c t tim e .
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th e first two con flicts th at led to th e core con flict. It does n ot resolve th e m u ltitaskin g problem . To avoid m u ltitaskin g with in a sin gle project, you h ave to elim in ate dem an ds on th e resou rces to m u ltitask. To avoid m u ltitaskin g in an en viron m en t with m u ltiple projects, you h ave to eith er elim in ate th e dem an d or give th e resou rces a way to h an dle th e m u ltiple dem an ds with ou t m u ltitaskin g an d with ou t n egative rein forcem en t. In th e past, I n ever qu estion ed th e proposition th at an acceptable way to rem ove resou rce con ten tion is to first iden tify th e critical path an d th en level resou rces. Resou rce levelin g m oves arou n d tasks in th e plan to m atch th e resou rce dem an d for each resou rce (e.g., en gin eers) to th e su pply. My literatu re search did n ot reveal th e basis for th e proposition th at you can first fin d th e critical path an d th en level. I su spect—bu t h ave n o proof—th at m ay be a resu lt of tech n ological evolu tion . It is possible to calcu late a project m an u ally to fin d th e critical path . Th ere is n o sim ple algorith m to create an optim u m resou rce-leveled critical path . Th u s, it is difficu lt to resou rce level even a m odestly com plex project plan m an u ally. Th e relatively expen sive an d slow com pu ters th at existed at th e tim e of th e growth of CPM an d PERT did n ot len d th em selves to doin g a lot of calcu lation . Th e idea th at you cou ld u se th e com pu ter to calcu late th e critical path , lay ou t th e n etw ork, an d th en deal w ith th e poten tial resou rce con strain t seem s logical en ou gh . It m ay even h ave been th at, for projects u sin g CPM an d PERT, resou rces w ere less often a con strain t. Th ey cou ld fin d th e critical path an d th en determ in e an d satisfy th e resou rce dem an d. Cu rren t project m an agem en t software operates by startin g with th e activity stru ctu re (critical path ) an d on ly th en con siders th e lim ited resou rces available for th e project. Project m an agem en t software iden tifies th e critical path by lin kin g th e project activities in a logical way an d th en m easu rin g th e lon gest tim e th rou gh th e n etwork of activities, assu m in g n o resou rce con strain ts. Th e project m an ager in pu ts resou rce availability. Th e software th en allocates th e resou rces th rou gh variou s sch em es bu t u su ally first to th e critical path an d th en to th e path s th at are n earest to th e critical path in tim e du ration (m in im u m slack activities first). People wh o h ave stu died resou rce allocation kn ow th at th is does n ot always give th e optim u m sch edu le. People h ave proposed variou s h eu ristics, an d som e program s provide a large n u m ber of selection s. Th e on ly way to fin d th e optim u m am on g th ose option s is trial an d error. Critical ch ain sch edu lin g resolves th e dilem m a.
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Con sider, for exam ple, th e m in iproject illu strated in Figu re 3.12 an d determ in e th e critical path th rou gh th e project. Th e project h as th ree path s, all of wh ich h ave two activities with differen t tim e du ration , as sh own . Wh at wou ld we com e u p with as th e critical path ? Th e lower path , th at is, activity C1 followed by activity C2, is lon gest. Th e project sh ou ld com plete in 65 days. We con firm ed th is sim ple calcu lation with Microsoft Project. Now, let u s m ove from th e world of u n lim ited resou rces to th e world of reality. Figu re 3.13 sh ows th e resou rces n eeded an d for each activity. Th ere is on ly on e clear resou rce an d on e crossh atch ed resou rce for th e project. Wh en people work on th e activity, th ey h ave to work fu ll tim e. Wh at will ou r critical path sch edu le n ow say for th e earliest com pletion tim e? If you cam e u p with 160 days, you are applyin g resou rce levelin g th e way m ost com pu ter program s do. We tested with Microsoft Project an d got th e sam e an swer. You first apply a con flictin g resou rce to th e critical path . You n ext apply it to th e activity with th e least slack, in th is case, B1.
A1
A2(45) B1(25)
B2(30) C2
C1(60)
75
Fig u r e 3.12
50
25
Exa m p le p r oje c t shows r e sour c e c onflic t.
Cr itical p ath re source load ing alg or ithms usually allocate re source s first to p ath with “le ast slack;” this me ans cr itical p ath first.
C1(60)
A2(45)
A1 B1(25)
150
0
B2(30)
C2
100
50
Fig u r e 3.13 Re sour c e loa d ing the c r itic a l p a th for the p r oje c t yie ld s a sc he d ule of 160 d a ys.
0
The direction of the solution
95
Oh , did you ch eck th e crossh atch ed resou rce also? Does you r solu tion look like Figu re 3.13? Now, see if you can ou tsm art th e com pu ter. Look at Figu re 3.14 an d see if you can fin d a better way to sequ en ce th e activities th at will redu ce th e overall project tim e. You are n ow con siderin g both th e activity logic an d th e resou rce con strain t. Con siderin g th e resou rce logic with th e task stru ctu re redu ced th e critical path tim e to 95 days. Microsoft Project allowed u s to m ove th e tasks to accom plish th at an d con firm ed th at it resu lts in resou rce levelin g. Allocatin g resou rces u sin g th e com m on critical path m eth od can lead to excessively lon g sch edu les. Th u s, Goldratt’s secon d key in sigh t is to defin e th e project critical ch ain in stead of th e critical path . Th e critical ch ain in clu des both th e task an d th e resou rce con strain t.
3. 4
So l u ti o n fe a s i b i l i ty (e v i d e n c e )
Usin g th e scien tific m eth od as th e th eory of kn owledge leads to selectin g th e preferred th eory th rou gh critical discu ssion an d test. Com parin g critical ch ain to critical path , we see m ore con ten t in th e critical ch ain th eory becau se it: ◗ Provides an explicit m eth od to m an age com m on cau se u n certain ty; ◗ Explicitly resolves th e resou rce con strain t.
Popper n oted th at a n ew th eory sh ou ld con tain an d explain th e old [3]. With u n lim ited resou rces, th e critical ch ain is th e sam e path as th e Using your own log ic and intuition re d uce s the sche d ule to 95 d ays. (No chang e s d ue to many asp e cts of Cr itical chain sche d ule s ye t.)
A2(45)
A1
B1(25)
B2(30) C1(60)
150
100
50
Fig u r e 3.14 Using log ic to wor k out the c r itic a l c ha in r e d uc e s the p r oje c t le a d tim e to 95 d a ys.
C2
0
96
C r itic a l C ha in Pr oje c t Ma na g e m e nt
critical path . With a resou rce con strain t, th e critical ch ain is an acceptable solu tion to th e resou rce-leveled critical path . Th u s, critical ch ain con tain s th e critical path solu tion . Popper su ggested th at th e prim ary m eth od of testin g a n ew th eory be th rou gh critical discu ssion . Su ch discu ssion ch ecks th e n ew th eory again st th e old, lookin g for logical dedu ctive reason in g an d eviden ce su pportin g th e su pposition s (assu m ption s) m ade in th e n ew th eory an d th e old th eory. Su m m arizin g th e reality of th e scien tific m eth od, Popper states [3]:
1. In du ction , th at is, in feren ce based on m an y observation s, is a m yth . It is n eith er a psych ological fact, n or a fact of ordin ary life, n or on e of scien tific procedu re. 2. Th e actu al procedu re of scien ce is to operate with con jectu res: to ju m p to con clu sion s, often after on e sin gle observation . 3. Repeated observation s an d experim en ts fu n ction in scien ce as tests of ou r con jectu res or h ypoth eses, th at is, as attem pted refu tation . Th is ch apter developed th e reason in g beh in d th e way Goldratt defin ed th e problem with th e cu rren t th eory. It does n ot explain th e ju m p to h is proposed direction for th e solu tion : im proved m an agem en t of u n certain ty. It is u n likely th at oth ers with ou t h is kn owledge an d experien ce cou ld h ave m ade th e sam e ju m p. Th e origin al PERT m eth od an d su bsequ en t work with project sim u lation s are eviden ce th at oth ers were aware of th e u n certain ty problem . Th e cu rren t kn owledge base lu m ps th e u n certain ty in predictin g each project task in th e area of risk m an agem en t, addin g eviden ce th at people u n derstan d th e n eed to deal with it. However, n on e of th e cu rren t solu tion s m ake u n certain ty m an agem en t part of th e basic project system in th e m an n er of critical ch ain . Critical ch ain explain s th e reason s for sch edu le overru n th rou gh th e reality of statistical flu ctu ation s (u n certain ty or variation ), depen den t even ts, an d h u m an beh avior. Th e CPM th eory does n ot address th at reality; it u ses determ in istic du ration s an d start an d stop dates for each activity in th e sch edu le. Com bin in g th at tech n ical assu m ption with h u m an beh avior leads to sch edu le overru n . Sch edu le overru n leads to cost overru n an d redu ces th e delivered scope. Perh aps m ost im portan t, th e n ew
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th eory explain s h ow th e CPM th eory, th rou gh th e win -lose approach to task sch edu lin g, cau ses m u ch of th e psych ological h arm in project system s. Th e resou rce con strain t is every bit as real as th e task predecessor con strain t. It is a n ecessary con dition to perform th e task. Th e critical path m eth od assu m es th at an acceptable solu tion to th e resou rce con strain t is to first fin d th e u n restrain ed critical path an d th en assess th e im pact of th e resou rce con strain t. Pu t an oth er way, determ in ation of th e critical path assu m es th at resou rces are n ot th e con strain t. Or it assu m es in fin ite resou rces. We cou ld fin d n o referen ces describin g th e reason in g beh in d th at assu m ption . Goldratt fou n d it easy to n otice th is im plicit assu m ption becau se it was m ade as an explicit assu m ption in th e produ ction system m odels h e h ad worked with [4]. Th is ch apter dem on strated by exam ple h ow th e CPM to resolve th e poten tial resou rce con strain t cou ld lead to poor plan s. Th e larger con cern from a TOC perspective is th at th e m eth od th erefore n ever iden tifies th e real con strain t to th e project. It is a sim ple an d logical step to defin e th e critical ch ain as th e com bin ation of th e two poten tial con strain ts on th e lon gest path to com plete th e project. Ch apter 1 presen ted selected su ccessfu l eviden ce th at th e critical ch ain m eth od creates th e desired effects. (It is selected in th e sen se th at it is n ot an exh au stive listin g; th at does n ot m ean we selected on ly th e positive resu lts!) By th is tim e, h u n dreds of projects of differen t types, in differen t bu sin esses, an d in cu ltu res arou n d th e world h ave su ccessfu lly applied critical ch ain . I am n ot aware of an y cases in wh ich project failu re h as been attribu ted to critical ch ain . I am aware of several cases in wh ich im plem en tation failed to ach ieve th e ch an ges n ecessary for critical ch ain , an d th e project system con tin u ed to operate th e old way. Ch apter 9 addresses th at in detail.
3. 5
D e te rm i n i n g w h a t to c h a n g e to
Resolvin g th e core con flict provides a n ecessary ch an ge to th e system to begin to m ove toward th e desired effects. Th e desired effects for th e project system , derived from th e cu rren t-reality UDEs, are th ese: ◗ Projects always com plete on or before th e sch edu led com pletion
date;
98
C r itic a l C ha in Pr oje c t Ma na g e m e nt ◗ Projects com plete with in or for less th an th e bu dget; ◗ Projects always deliver th e fu ll scope; ◗ Projects h ave few ch an ges; ◗ Projects h ave n eeded resou rces with ou t in tern al figh ts; ◗ Project du ration s get sh orter an d sh orter; ◗ All projects com plete; ◗ Project work creates win -win solu tion s for all stakeh olders.
Th e ch an ges to resolve th e core con flict provide a m eth od to m an age u n certain ty an d ackn owledge th e reality of th e resou rce con strain t th at affects m an y projects. Th e ch an ges by th em selves are n ot su fficien t to create all th ose desired effects. Wh ile th e solu tion to th e core con flict explicitly con siders th e project system an d addresses variation , it does n ot address all th e psych ological elem en ts th at affect project perform an ce. Su bsequ en t ch apters provide th e com plete solu tion leadin g to all th ese desired effects, an d Ch apter 11 provides th e com plete logical developm en t of th e fu ll solu tion .
3. 6
Su m m a ry
Th is ch apter iden tified th e core con flict for project m an agem en t system im provem en t as th e way th e project system m an ages u n certain ty. Specific poin ts m ade in developin g th at th eory are: ◗ Un desired effects defin e th e problem with th e presen t project
m an agem en t th eory. ◗ Th e core con flict for th e cu rren t project m an agem en t system is th e
con flict between protectin g each task du ration in th e project versu s protectin g th e en tire project. ◗ Th e project system solu tion (n ew th eory) m u st overcom e th e core
con flict of th e existin g project system by attackin g a key assu m ption in presen t system s: h ow to m an age u n certain ty.
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◗ A m eth od to m an age u n certain ty u sin g ideas sim ilar to th ose th at
su cceeded in im provin g produ ction perform an ce m ay provide a direction for th e solu tion . ◗ Th e direction of th e solu tion sh ou ld be to m an age u n certain ty by
con cen tratin g con tin gen cy in to bu ffers at th e en d of ch ain s of tasks. ◗ Becau se th e resou rce con strain t is equ al to th e task logic con strain t,
th e lon gest path th rou gh th e project, th e critical ch ain , sh ou ld in clu de both . ◗ A growin g body of em pirical eviden ce dem on strates th e feasibility
of th e critical ch ain project m an agem en t m eth od for all types of projects. Note th at m an agin g u n certain ty is n ot th e sam e as kn owin g abou t u n certain ty or an alyzin g u n certain ty. People kn ew abou t u n certain ty lon g before projects began . Th ere are m an y m eth ods to an alyze u n certain ty. Both kn owledge an d an alysis are n ecessary to m an age, bu t th ey are n ot su fficien t. You are m an agin g on ly wh en you take action s th at drive th e system to th e goal. Ch apter 4 derives th e fu ll system to do th at.
Referen ces [1]
Marris, P., The Politics of Uncertainty, Lon don : Rou tledge, 1996.
[2]
Goldratt, E. M., The Goal, Great Barrin gton , MA: North River Press, 1984.
[3]
Popper, K. R., Objective Knowledge, An Evolutionary Approach , Oxford: Claren don Press, 1997, p.144.
[4]
Goldratt, E. M., Theory of Constraints, Great Barrin gton , MA: North River Press, 1994.
C HAP TER
4 Conte nts 4.1 Fr om syste m r e q uir e m e nts to syste m d e sig n
The complete single-project solution
Th e c o m p l e te s i n g l e p ro je c t s o l u ti o n
4.2 De ve lop ing the c r itic a l c ha in solution 4.3 Exp loiting the p la n using b uffe r m a na g e m e nt 4.4 Fe a tur e s (m or e or le ss) fr om PMBOK 4.5
Sum m a r y
Re fe r e nc e s
T
h is ch apter describes th e process to develop th e sin gle-project m an agem en t system to satisfy th e system requ irem en ts iden tified in th e previou s ch apters an d fu rth er defin ed h erein . Alth ou gh presen ted as a forward m ovin g process from requ irem en ts to design , th e actu al process, as in n early all design s, was iterative. Th at is, variou s design solu tion s were proposed an d tested again st th e requ irem en ts u n til a su itable workin g system resu lted.
4 . 1 F ro m s y s te m re q u i re m e n ts to s y s te m d e s i g n 4. 1. 1
Re q u i re m e n ts m a tri x
Table 4.1 illu strates th e requ irem en ts for an effective project m an agem en t system , followin g th e m eth od of Joseph Ju ran [1]. Table 4.1 presen ts th e requ irem en ts in a h ierarch y,
101
102
C r itic a l C ha in Pr oje c t Ma na g e m e nt Ta bl e 4. 1(a )
Overall Requ irem en ts for a Project System to Con vert th e In pu t of a Project Resu lt Specification an d Produ ce an Ou tpu t of a Com pleted Project Resu lt Prim ary Re quire m e nt
Se c ondary Re quire m e nt
Te rtiary Re quire m e nts
De fine the proje ct syste m
Proje ct syste m goal
De fine the proje ct syste m goal to comple te proje cts that make mone y for the company, now and in the future (for profit companie s)
—
Proje ct syste m b oundary
De fine the proje ct syste m b oundary starting with custome r ne e ds and e nding with a satisfie d custome r
—
Account for unde rstanding of variation
1. Account for common cause variation in 1. proje ct proce sse s 2. Provide a me ans to se parate and de al 1. with spe cial cause variation
—
Use TOC to de sign the syste m
1. Ide ntify the proje ct constraint 2. Exploit the proje ct syste m constraint 3. Sub ordinate e ve rything e lse
—
Include knowle dge of psychology in the syste m de sign
1. Align proje ct syste m ne e ds with 1. individual psychological ne e ds 2. Align individual re wards with proje ct 1. syste m ne e ds
—
Enab le continuous improve me nt of the proje ct syste m (a the ory of knowle dge )
1. De fine and standardize proce sse s 2. Me asure proce ss pe rformance 3. Asse ss proce ss pe rformance 4. Improve proce sse s
startin g with th e top-level n ecessary con dition s for project perform an ce. Th ese con dition s in clu de th e th ree tech n ical requ irem en ts for th e project (scope, cost, an d sch edu le) an d th e requ irem en t for stakeh older satisfaction . Th e table is segm en ted to m ake it easier to read an d u n derstan d: th e first segm en t provides gen eral system requ irem en ts, th e secon d segm en t provides project n ecessary con dition requ irem en ts, an d th e th ird section provides stakeh older requ irem en ts. Project stakeh olders always in clu de at least th e project cu stom er an d th e project team an d m ay in clu de m an y oth ers, for exam ple, su bcon tractors, stockh olders, regu lators, n eigh bors, or govern m en t. Th e secon d an d th ird colu m n s of th e table illu strate th e secon d- an d th ird-level requ irem en ts derived from th e top-level requ irem en ts. Requ irem en ts at th e lower levels m ay vary for differen t types of projects; th ese are gen eral requ irem en ts.
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Ta bl e 4. 1(b)
Necessary Con dition s for a Project System to Con vert th e In pu t of a Project Resu lt Specification an d Produ ce an Ou tpu t of a Com pleted Project Resu lt Prim ary Re quire m e nt
Se c ondary Re quire m e nt
Te rtiary Re quire m e nts
De live r the proje ct re sult to the spe cification (scope )
De live r all of the spe cifie d fe ature s
1. Satisfy all the physical 1. re quire me nts for the spe cifie d 1. fe ature s 2. Satisfy all the functional 1. re quire me nts for the spe cifie d 1 .fe ature s 3. Satisfy all the ope rational 1 .re quire me nts for the spe cifie d 1. fe ature s
—
Satisfy all the fe ature quality re quire me nts
Satisfy all the fe ature quality re quire me nts
De live r the proje ct re sult on time (sche dule )
De live r the proje ct re sult on time (sche dule )
Comple te the proje ct on the quote d comple tion date
—
—
Comple te inte rme diate mile stone s on the quote d comple tion date s
De live r the proje ct re sult for the e stimate d cost
Total cost
1. Comple te the e ntire proje ct for 1. the quote d maximum cost 2. Do not spe nd more than 1. spe cifie d maximums on 1. sub cate gorie s of the total cost
—
Satisfy proje ct cash flow re quire me nts
Do not e xce e d proje ct e stimate d cash flow re quire me nts
It is u n likely th at you wou ld gen erate an iden tical list of project requ irem en ts. Th e lists in Table 4.1 in clu de elem en ts of th e PMBOK elem en ts from m y own experien ce an d elem en ts specifically derived from th e solu tion we are abou t to presen t. Th is feedback of th e solu tion to th e requ irem en ts is part of reality. On ly by defin in g an d critically assessin g a proposed solu tion do we really u n derstan d th e problem . In particu lar, before Goldratt an d con siderin g th e basis of critical ch ain , I wou ld n ot h ave in clu ded accou n tin g for com m on cau se variation am on g project requ irem en ts. In stead, I wou ld h ave com bin ed it with project risk m an agem en t, as PMBOK does. Th e table of project requ irem en ts is n ot—an d n ever can be—com plete. It is a con jectu re, a basis for criticism an d im provem en t. For exam ple, I am n ot satisfied th at th e requ irem en ts com pletely em brace profou n d kn owledge, especially a kn owledge of psych ology. I presen t it
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C r itic a l C ha in Pr oje c t Ma na g e m e nt Ta bl e 4. 1(c )
Stakeh older Requ irem en ts for a Project System to Con vert th e In pu t of a Project Resu lt Specification an d Produ ce an Ou tpu t of a Com pleted Project Resu lt Prim ary Re quire m e nt
Se c ondary Re quire m e nt
Te rtiary Re quire m e nts
Satisfy unique individual proje ct stake holde r ne e ds, in addition to those liste d in (a) and (b )
Proje ct clie nt
1. Solicit and spe cify all 1. re quire me nts ne ce ssary to 1. de live r a satisfactory final product 2. Provide e vide nce of me e ting the 1 .proje ct spe cifications 3. Provide information during the 1. proje ct to e nab le de cisions that 1. may affe ct the b alance of the 1. proje ct 4. Re spond to re que sts for change s
—
Proje ct te am
1. Cle ar scope de finition 2. Cle ar re sponsib ility and authority 1. assignme nt 3. Proje ct plan spe cifying who has to 1. do what b y whe n 4. Fe e db ack to control pe rformance 1. to plan 5. Me thod to control inte rface s with 1. othe r te am me mb e rs 6. Me thod to raise and re solve 1. issue s during proje ct 1. pe rformance 7. Change control proce ss
as a good en ou gh set of requ irem en ts to bin d togeth er CCPM an d start u s on a n ew path of project system im provem en t to address th e difficu lties raised in Ch apter 1. 4. 1. 2
Su m m a ry o f s i n g l e -p ro je c t c ri ti c a l c h a i n
Figu re 4.1 illu strates th e key featu res of th e sin gle-project critical ch ain solu tion th at satisfy th e fu n ction al requ irem en ts for th e project system . Th e illu strated featu res h igh ligh t th e differen ces between CCPM an d critical path plan n in g an d m an agem en t. Th ose essen tial featu res are: ◗ Defin in g th e critical ch ain as th e lon gest path th rou gh th e project
con siderin g both th e task logic an d th e resou rce con strain t;
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2. Re source conflicts re move d 1. Re d uce d task time s
A
B
RB
C
RB
RB
RB A
B
3. Cr itical chain 5. Re source b uffe rs
E
C
8. Buffe r manag e me nt
D
C 4. Proje ct b uffe r
7. ‘Late ’ start 6. Fe e d ing b uffe r Time
Fig u r e 4.1 Ke y fe a tur e s of the c r itic a l c ha in solution d e live r p e r for m a nc e to the p r oje c t syste m r e q uir e m e nts.
◗ Rem ovin g resou rce con ten tion from th e project plan before select-
in g th e critical ch ain ; ◗ Developin g th e plan with 50-50 task estim ates, aggregatin g u n cer-
tain ty in to th e bu ffers at th e en d of task ch ain s (bu ffer illu strated as a sh ock absorber); ◗ Protectin g m ergin g path s with feedin g bu ffers (wh ile con tin u in g
th e elim in ation of resou rce con flicts); ◗ Addin g resou rce bu ffers to en su re th at critical ch ain resou rces are
available wh en n eeded; ◗ Usin g th e project an d feedin g bu ffers as m easu res to con trol project
perform an ce. Th e n ext section describes each of th ose featu res in greater detail. Fou r essen tial beh avior ch an ges are requ ired to u se CCPM effectively: ◗ Man agem en t m u st en cou rage th e u se of 50-50 task tim es by n ot
pressu rin g people to perform to 50-50 estim ated du ration s. ◗ Man agem en t m u st en able people to focu s on on e task at a tim e.
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C r itic a l C ha in Pr oje c t Ma na g e m e nt ◗ Resou rces m u st focu s on on e task at a tim e an d pass on th e resu lts as
soon as th e task is com plete (roadru n n er beh avior). ◗ Everyon e m u st u se th e plan an d th e bu ffer reports to decide wh at to
work on n ext. Alth ou gh th ose beh avior ch an ges are sim ple, th ey are n ot n ecessarily easy to im plem en t. (Ch apter 9 covers im plem en tation .)
4. 2
D e v e l o p i n g th e c ri ti c a l c h a i n s o l u ti o n
Th is section describes th e sin gle-project critical ch ain featu res in term s of th e TOC focu sin g steps (described in Section 2.3.3).
4. 2. 1
I d e n ti fy i n g th e p ro je c t c o n s tra i n t
Defin in g th e con strain t of a project in term s of th e sch edu le derives from th e im pact th at sch edu le h as on project cost an d project scope. In depen den t variables th at in flu en ce a project resu lt in clu de th e dem an ded scope, th e project system defin ition , an d th e resou rces available to work on th e project. Th e project system ou tpu ts are depen den t variables (delivered scope, cost, an d sch edu le). As sch edu le in creases with fixed deliverable scope, cost u su ally in creases. As scope in creases with fixed cost (or resou rces), sch edu le ten ds to in crease. As scope in creases with fixed sch edu le, cost ten ds to in crease. Th erefore, it is appropriate to focu s first on deliverin g th e project on tim e. Th e eviden t con strain t of a project is th e ch ain of tasks th at takes th e lon gest to com plete. To perform an y task on a project, two th in gs are n ecessary: th e task in pu t from a predecessor an d th e resou rce to perform th e task. (Th e predecessor m ay sim ply be a start au th orization for th e first task in a ch ain of project tasks.) Th e defin ition of th e critical path does n ot explicitly address th e poten tial resou rce con strain t. Section 3.3.2 described wh y th e critical ch ain is th e sin gle-project con strain t. Th e critical ch ain is sim ply “th e sequ en ce of depen den t even ts th at preven ts th e project from com pletin g in a sh orter in terval. Resou rce depen den cies determ in e th e critical ch ain as m u ch as do task depen den cies.” Figu re 4.2 illu strates a typical critical path project sch edu le. Th e letters represen t u n iqu e resou rces. For th is illu stration , assu m e th ere is on ly on e
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107
Cr itical p ath
Re source
A
B
A B
C E
C D
C
Time
Fig u r e 4.2 c onstr a int.
The c r itic a l p a th d oe s not a c c ount for the r e sour c e
resou rce correspon din g to each letter, th at is, on ly on e A resou rce, on ly on e B resou rce, an d so on . Eviden tly, we wou ld fail to m eet th e sch edu le on th e project, becau se each resou rce can do on ly on e task at a tim e. Figu re 4.3 m oves tasks to elim in ate th e overlap of resou rce dem an ds. In a m an n er sim ilar to m an y com pu ter algorith m s for resou rce levelin g, we first give th e resou rce to th e path with least float; u su ally with th e in itial critical path . Note th at wh en we are don e, all path s h ave float, so th ere is n o critical path defin ed as th e path with zero float. (Com pu ter software packages treat th at resu lt differen tly. Som e keep th e in itial critical path defin ition . Som e defin e on ly th e last task as critical. I h ave n o idea wh at th ey do abou t th e critical path as th e project progresses an d th e critical path is su pposed to ch an ge.) More im portan tly, th e in itial critical path is n ot th e con strain t to com pletin g th e project. Becau se th e resou rce con strain t is often a sign ifican t project con strain t, th e TOC m eth od of project plan n in g always con siders it (Figu re 4.4). If you r organ ization does n ot h ave resou rce con strain ts (or h as in fin ite resou rces), th e critical ch ain will be th e sam e in itial task path as th e critical path . Th at is an im portan t fact in verifyin g th e in tegrity of th e critical ch ain m eth od; it con tain s th e critical path m eth od as a special case, at least in regard to defin in g th e critical ch ain .
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Re source leve le d cr itical (?) p ath A
B
C C
A E
B
D
C Time
Fig u r e 4.3 Re m oving r e sour c e c onflic ts usua lly c r e a te s g a p s in the c r itic a l p a th.
A
B
C C
D
Fig u r e 4.4 The c r itic a l c ha in inc lud e s b oth the r e sour c e a nd ta sk log ic c onstr a int to c om p le ting the p r oje c t on tim e or soone r .
Th e PMBOK Gu ide defin ition of critical path states th at th e critical path m ay ch an ge du rin g th e perform an ce of th e project. Th at occu rs wh en project tasks experien ce com m on cau se variation an d redefin e th e lon gest zero float path to com plete th e project. Based on ou r kn owledge of variation , th at m ean s we sh ou ld expect th e apparen t critical path to ch an ge frequ en tly. Dr. Dem in g n oted th at on e of th e m ore seriou s m istakes m an agers can m ake is to treat com m on cau se variation as if it were special cau se variation . Th at PMBOK Gu ide defin ition of critical path (an d im plem en tation in m an y project m an agem en t system s) in stitu tion alizes th at m istake. It does n ot en able th e project team to focu s on th e con strain t to th e project bu t cau ses th em to m ake th e error of ch asin g an ever ch an gin g critical path . As Dr. Dem in g illu strated w ith th e fu n n el experim en t, th at alw ays m akes th e project system perform an ce w orse.
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Th e critical ch ain does n ot ch an ge du rin g project perform an ce, partly a m atter of defin ition bu t m ostly a resu lt of th e overall critical ch ain plan con stru ction procedu re an d th e su bordin ation step. 4. 2. 2
Ex p l o i ti n g th e c o n s tra i n t
Havin g defin ed th e critical ch ain as th e con strain t to perform in g th e project faster, you sh ou ld n ow look to exploit th e con strain t. Th at m ean s redu cin g both th e plan n ed tim e an d th e actu al project perform an ce tim e. CCPM exploits th e critical ch ain u sin g an u n derstan din g of variation . Th is is wh ere Dr. Goldratt’s u n iqu e focu s on statistical flu ctu ation s an d depen den t even ts leads to a sign ifican t departu re from m ost cu rren t project system s. Dr. Goldratt’s recogn ition of variation is n ot u n iqu e; bu t h is solu tion applied to th e project m an agem en t system is in n ovative. Dr. Dem in g n oted th at m an agers often m ake m an y system s worse by n ot u n derstan din g th e fu n dam en tal differen ce between com m on cau se an d special cau se variation . He also n otes, “I sh ou ld estim ate th at in m y experien ce m ost trou bles an d m ost possibilities for im provem en t add u p to proposition s som eth in g like th is: 94% belon g to th e system (respon sibility of m an agem en t), 6% special.” It is n ot n ews th at projects h ave com m on cau se variation in th e perform an ce tim e of tasks. Alth ou gh th e tim e to perform in dividu al project tasks m ay be in depen den t of each oth er, project task n etworks defin e task depen den ce. By th e defin ition of th e project logic, th e su ccessor task can n ot start u n til th e predecessor task is com plete (for th e m ost frequ en t fin ish -to-start task con n ection ). Th e TOC im provem en ts for produ ction take advan tage of (exploit) th e reality of statistical flu ctu ation s an d depen den t even ts. Section 3.3.1 described h ow con cen tratin g con tin gen cy at th e en d of th e critical ch ain accom plish es th at. Com m on cau se variation in task perform an ce is n ot an exception al even t, su ch as discrete project risk even ts. PERT attem pted to estim ate th e im pact of com m on cau se variation by u sin g th ree task du ration estim ates bu t for a variety of reason s did n ot su cceed. Th e PMBOK Gu ide an d literatu re still m ake m en tion of PERT in th is fash ion , alth ou gh it is little u sed today. PERT diagram s, as referred to in m u ch of th e project literatu re an d in m an y project software packages are sim ply a way to sh ow th e project n etwork logic in depen den t of th e tim e scale, n ot an application of
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th e th ree tim e estim ates. Som e projects u se m eth ods su ch as sim u lation an d Mon te Carlo an alysis to assess th e im pact of task du ration an d cost u n certain ty. Wh ile th ose m eth ods propose a way to estim ate u n certain ty, th ey do n ot pose an effective system atic m eth od to m an age it. CCPM accou n ts for com m on cau se variation as an essen tial elem en t of th e project m an agem en t system . Th e process rem oves iden tifiable special cau ses of variation , in clu din g resou rce u n availability an d com m on resou rce beh avior pattern s, in clu din g th e stu den t syn drom e an d m u ltitaskin g. CCPM project m an agers u se resou rce bu ffers to iden tify an d en su re availability of resou rces on th e critical ch ain . 4.2.2.1
Ex p lo itin g p r o je c t ta s k e s tim a te s
CCPM seeks to u se best estim ate, or 50% probable, in dividu al task tim e estim ates. Th e CCPM project m an ager recogn izes th at actu al in dividu al task perform an ce tim es in clu de com m on cau se variation an d does n ot criticize task perform ers for in dividu al task du ration perform an ce. Ch apter 3 n oted th at m ost project m an agers attem pt to accou n t for in dividu al task com m on cau se variation by addin g con tin gen cy tim e in to each estim ate. (Recall from Ch apter 3 th at th e operation al defin ition of contingency in th is book is th e differen ce between th e 90-95% probable estim ate an d th e 50% probable estim ate.) Th ey u su ally do n ot specify th e existen ce or am ou n t of th at con tin gen cy tim e. People estim atin g task tim es for a project u su ally do so believin g th at th e project m an ager wan ts low-risk task tim es, perh aps a probability of 80% to 95% com pletion on or less th an th e task du ration estim ate. Figu re 3.2 illu strated th at th at estim ate is two or m ore tim es th e 50% probable estim ate. In m ost project en viron m en ts, people feel good if th ey com plete a task by th e du e date an d feel bad if th ey overru n th e du e date. Th at rein forces th eir attem pts to estim ate h igh -probability com pletion tim es. Dem in g’s m en tor, Walter A. Sh ewh art, m ade th e followin g observation [2]: It sh ou ld be n oted th at th e statistician does n ot attem pt to m ake an y verifiable prediction abou t on e sin gle estim ate; in stead, h e states h is prediction in term s of wh at is goin g to h appen in a wh ole sequ en ce of estim ates m ade u n der con dition s specified in th e operation al m ean in g of th e estim ate th at h e ch ose.
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Th at view clarifies wh y attem pts to deal with u n certain ty for in dividu al task estim ates are fru itless. Som e experien ced project m an agers say th at people ten d to give optim istic estim ates (i.e., too sh ort). Th ey base th at con ten tion on rem em berin g th e in stan ces in wh ich projects h ad difficu lty m eetin g th e delivery date. Gen eralizin g th e observation does n ot h old u p u n der exam in ation for several reason s. First, exten sive psych ological research dem on strates th at people ten d to seek pleasu re an d avoid pain . In m ost project en viron m en ts, people get pleasu re an d avoid pain by com pletin g tasks on th e du e date. Hardly an yon e wan ts to be kn own as th e person wh o can be cou n ted on to deliver late. It is n ot reason able to expect people to solicit pain by system atically givin g “optim istic” estim ates. Secon d, people rem em ber selectively. Th ey easily rem em ber worstcase ou tcom es (pain ) bu t n ot n ecessarily all th e tim es th in gs wen t to th eir advan tage. Most people feel th at th ey always pick th e slowest lin e in a ban k or su perm arket, bu t cou ld th at really be tru e? People also ten d to forget predecessors leadin g to th e ou tcom e (as in th e stu den t syn drom e), a m en tal feat th at h as two in terestin g effects: ◗ Project m an agers selectively rem em ber th e in stan ces in wh ich
task du ration estim ates were exceeded an d th erefore wan t to add con tin gen cy of th eir own . ◗ Task perform ers ten d to add tim e to th eir n ext estim ate.
Th ird, if u n derestim atin g task du ration s were th e predom in an t fact, n early all projects wou ld be late. Assu m in g th at m ost of th e poten tial positive variation in task tim es is retu rn ed to th e project (eviden ce su ggests oth erwise), th e m ergin g of task path s en su res a very low probability of su ccess if in dividu al estim ates are less th an 50% probable. (Real project beh avior is, of cou rse, con fou n ded by con trol action s taken du rin g project perform an ce. Th ose con trol action s m ay h elp or h in der overall com pletion tim e perform an ce.) Wh ile m an y projects do fail to m eet sch edu le, ou r observation s in dicate th at a su bstan tial portion ach ieve th e sch edu led project en d date. Alm ost all projects to create bid proposals com plete on tim e. Nearly all m ajor m eetin gs com e off as plan n ed with few problem s. Th e Olym pics
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h ave n ot yet been delayed becau se of late project com pletion . (Th e stadiu m in Atlan ta cau sed an xiou s m om en ts bu t was ready n on eth eless.) Mileston e perform an ce in on e large project dem on strated th at th e task perform an ce data con form ed closely with Dr. Goldratt’s prediction th at abou t 80% of th e task m ileston es are ach ieved exactly on sch edu le, with on ly on e or two soon er an d th e rest later, in clu din g a few sign ifican tly later. Th e project con sisted of abou t 30 large su bprojects, som e of wh ich con tain ed sm aller su bprojects. My experien ce sh ows project plan s from a variety of organ ization s (n u m berin g in th e h u n dreds) eith er fail to specify wh at probability an d con fiden ce of estim ate is expected for task du ration estim ates or fail to provide a qu an titative basis for th e estim ate. Th e PMBOKTM Gu ide adm on ish es project m an agers to provide th ose estim ates bu t provides little gu idan ce on wh at to do with th em . Con stru ction projects are som ewh at of an exception , h avin g access to exten sive qu an titative data. For exam ple, th e National Construction Estimator [3] u ses an exten sive database an d lists m an y poten tial con tribu tors to com m on cau se u n certain ty in th e estim ates. Th e gu ide states th at m an y of th ese u n certain ty item s h ave ran ges of several ten s of percen tage poin ts of th e cost estim ate. Th erefore, in m an y cases, th ey h ave th e sam e poten tial im pact on sch edu le. 4 . 2 . 2 . 2 Ex p lo itin g s ta tis tic a l la w s g o v e r n in g c o m m o n c a u s e v a r ia tio n
Ch apter 3 described h ow CCPM can an d does exploit th e statistical law of aggregation by protectin g th e project from com m on cau se u n certain ty of th e in dividu al tasks in a task path with bu ffers at th e en d of th e path . Bu ffers appear as tasks in th e project plan bu t h ave n o work assign ed to th em . 4.2.2.3
Ex p lo itin g r e s o u r c e a v a ila b ility
On e of th e leadin g alleged cau ses of late projects is th at resou rces are n ot available or n ot available in su fficien t qu an tity wh en th ey are n eeded. CCPM requ ires a m ech an ism to preven t th e critical ch ain tasks from startin g late or takin g lon ger du e to th e resou rce. Th e selected m eth od is to u se a resou rce bu ffer to provide in form ation to th e critical ch ain resou rces abou t wh en th ey will be n eeded.
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Th e resou rce bu ffer is differen t from th e project bu ffer an d feedin g bu ffers in th at it does n ot occu py tim e in th e project n etwork. It is an in form ation tool to alert th e project m an ager an d perform in g resou rces of th e im pen din g n ecessity to work on a critical ch ain task. Note th at in h eren t in th e critical ch ain idea is th at you can n ot determ in istically sch edu le resou rces. Becau se each task perform an ce will vary, an y forward determ in istic sch edu le is an u n certain estim ate. You establish th e lead tim e n ecessary for each resou rce on th e critical ch ain of th e project an d u se th e project m easu rem en t an d con trol process to alert th e resou rce as th e tim e of actu al task perform an ce approach es. You can u se m u ltiple n otification s (e.g., at on e m on th , on e week, an d two days), differen t tim es for differen t resou rces, or a stan dard tim e. You m ay ch oose to u se altern ative m eth ods for su bcon tracted resou rces, su ch as con tract rewards or pen alties for deliverin g to a specified lead tim e or du ration . 4. 2. 3
Su b o rd i n a ti n g m e rg i n g p a th s
Most projects h ave m u ltiple task path s. All task path s m u st m erge in to th e critical path by th e en d of th e project, if for n o oth er reason th an as a m ileston e th at iden tifies project com pletion . Usu ally, th e path m erges ten d to con cen trate n ear th e en d of th e project. On e reason is th at assem bly or test operation s ten d to occu r n ear th e en d of a project, requ irin g m an y elem en ts to com e togeth er. Th e followin g statem en t dem on strates h ow th at becom es a prim ary cau se of th e well-kn own project tru th : “Man y projects complete 90% in th e first year, an d com plete th e last 10% in th e secon d year.” Figu re 4.5 illu strates th e filterin g effect of m ergin g path s. Th e su ccessor task can n ot start u n til th e latest of th e predecessor tasks is com plete. Th e m ergin g of task path s creates a filter th at elim in ates positive flu ctu ation s an d passes on th e lon gest delay. Th e reason is th at m ergin g task path s m ean s th at all th e feedin g path s are requ ired to start th e su ccessor task. Th erefore, th e su ccessor task can n ot start u n til th e latest of th e m ergin g tasks com pletes. Con sider a task on th e project critical path th at requ ires th ree separate in pu ts in order to start. Th at is frequ en t in assem bly operation s an d in m an y project resu lts, su ch as a m ajor sh ow or m eetin g even t wh ere everyth in g h as to be ready on open in g day. Usu ally, th ere are m an y m ore th an th ree in pu ts. However, even with th ree, if each h as a 50% ch an ce of bein g don e in th e estim ated tim e, th e probability th at
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15 d ays late Path A Cr itical chain
On sche d ule Path B 15 d ays ahe ad of sche d ule
15 d ays late
Path C
Me rg e d p ath
Fig u r e 4.5 Me r g ing p a ths c a use c r itic a l c ha in d e la y if a ny of the fe e d ing c ha ins is d e la ye d .
at least on e is late is over 88% ! Even if each in dividu al task h ad a 90% probability of com pletion , th e probability of at least on e bein g late is still 30% , or n early on e ou t of th ree. CCPM protects th e critical ch ain from poten tial delays by su bordin atin g critical ch ain feedin g path s: placin g an aggregated feedin g bu ffer on each path th at feeds th e critical ch ain . Figu re 4.6 illu strates th e placem en t of th e feedin g bu ffers. It in clu des path s th at m erge with th e critical ch ain at th e en d of th e project. Th e feedin g bu ffer provides a m easu rem en t an d con trol m ech an ism to protect th e critical ch ain . Th e figu re also illu strates h ow th e bu ffers absorb th e late path s. Th at in n ovation im m u n izes th e critical ch ain from poten tial delays in th e feedin g path s. It also provides a m ean s to m easu re th e feedin g path s, wh ile keepin g focu s on th e critical ch ain . 15 d ays late
20 d ay b uffe r
Path A
Buffe r Cr itical chain
On sche d ule Path B
Buffe r 15 d ays e arly
Start 5 d ays e arly
Path C
Me rg e d Path
Fig u r e 4.6 Fe e d ing b uffe r s a b sor b fluc tua tions in c r itic a l c ha in fe e d ing p a ths.
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Ta s k p e rfo rm a n c e Ele v a tin g d a te -d r iv e n p e r fo r m a n c e
Th e prim ary local optim u m of sign ifican ce in project m an agem en t is th e estim ate of each in dividu al task tim e. If m an agem en t ju dges th e perform er of each task based on com pletin g th eir task on th e estim ated m ileston e date (local optim a), wh at does th at do to th e overall project com pletion tim e (system optim a)? Section 3.2.2 described th e ph en om en a th at work to en su re th at few tasks get reported as don e early. Most get reported as don e on sch edu le. Critical ch ain project plan s provide dates on ly for th e start of task ch ain s an d th e en d of th e project bu ffer. For th e rest of th e project, th e plan provides approxim ate start tim es an d estim ated task du ration . Critical ch ain project m an agers do n ot criticize perform ers wh o overru n estim ated task du ration s, as lon g as th e resou rce (a) started th e task as soon as th ey h ad th e in pu t, (b) worked 100% on th e task (n o m u ltitaskin g), an d (c) passed on th e task ou tpu t as soon as it was com pleted. Th ey expect 50% of th e tasks to overru n . 4 . 2 . 4 . 2 Ele v a tin g ta s k p e r fo r m a n c e b y e lim in a tin g m u ltita s k in g
Mu ltitaskin g is th e perform an ce of m u ltiple project tasks at th e sam e tim e. Som e people refer to it as th e fraction al h ead cou n t; it is m u ch like ru bbin g you r stom ach an d pattin g you r h ead at th e sam e tim e. People actu ally m u ltitask by dividin g ou t tim e between th e m u ltiple tasks. People m igh t do th is du rin g th e cou rse of th e day by workin g on on e project in th e m orn in g an d on e in th e aftern oon . Most people th in k of m u ltitaskin g as a good way to im prove efficien cy. It en su res everyon e is bu sy all th e tim e. Often , I h ave to wait for in pu ts or for som eon e to call back before I can get on with a task. Mu ltitaskin g m akes good u se of th at tim e. Dr. Goldratt dem on strated in The Goal h ow focu s on local efficien cy cou ld dam age th e overall perform an ce of a system . He u sed th e exam ple of robots operated all th e tim e to sh ow h igh efficien cy. In th e case of produ ction , th at leads to produ cin g excess in ven tory an d m ay plu g th e con strain t with work n ot n ecessary for cu rren t orders, in creasin g operatin g expen se an d delivery tim es with n o positive ben efit to th e com pan y as a wh ole.
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If m u ltitaskin g is a n orm al way of bu sin ess in a com pan y, th ree weeks becom es th e n orm al task du ration for a task. Perform an ce data su pport th at in flated task du ration . If th is is a critical ch ain task, th e practice directly exten ds th e du ration of th e project. Most com pan ies adm it to en cou ragin g exten sive m u ltitaskin g. CCPM seeks to elim in ate th at type of m u ltitaskin g by elicitin g 100% focu s on th e project task at h an d by all resou rces su pportin g th e project. Th u s, elim in atin g fraction al h ead cou n ts is a prim ary con sideration in plan n in g a critical ch ain project. Elim in atin g resou rce con ten tion with in th e plan elim in ates th e pressu re to m u ltitask on a sin gle project. I am often asked, “Isn ’t it a m an ager’s job to m u ltitask?” or “Wh at if I am h eld u p on on e project task?” My an swer is to clarify th at th ere can be good m u ltitaskin g. Bad m u ltitaskin g is m u ltitaskin g th at exten ds th e du ration of a project task. As lon g as you position you rself an d you r project work to avoid bad m u ltitaskin g, you are con tribu tin g you r best to th e project team . 4. 2. 5
Ea rl y s ta rt v e rs u s l a te fi n i s h
Exten sive stu dies h ave evalu ated th e desirability of u sin g early start sch edu les or late fin ish sch edu les. Project m an agers believe th at early start sch edu les redu ce project risk by gettin g th in gs don e early an d th at late fin ish sch edu les accom plish th e followin g: ◗ Redu ce th e im pact of ch an ges on work already perform ed; ◗ Delay th e project cash ou tlay; ◗ Give th e project a ch an ce to focu s by startin g with fewer sim u ltan e-
ou s task ch ain s, allowin g th e project team an d processes to com e u p to speed. Mu ch project m an agem en t gu idan ce recom m en ds th at project m an agers u se an early start sch edu le. Man y sch edu le com pu ter program s u se th e early start sch edu le as th e defau lt. Early start m ean s perm ittin g all th e n on critical path tasks to start earlier th an is n ecessary to m eet th e sch edu le date. People workin g on th ose tasks kn ow th ere is slack in th eir task. How does th at in flu en ce th e u rgen cy th ey feel in workin g on th e task? Does it en cou rage or discou rage th e stu den t syn drom e?
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CCPM u ses late start for all project tasks. Note th at th e feedin g bu ffers provide an explicitly sized bu ffer to protect th e overall project from late com pletion s in th e feedin g path s. Th at m axim izes th e advan tages to th e project, wh ile en su rin g project sch edu le protection . I am often asked, “Yes, bu t wh at does it h u rt to start early if I h ave th e resou rce?” I an swer by agreein g th at on ce you u n derstan d th is th eory, if it does n ot h u rt an yth in g, by all m ean s do it. TOC requ ires th at people u se th eir kn owledge an d in tu ition .
4 . 3 Ex p l o i ti n g th e p l a n u s i n g b u ffe r m anag e m e nt Measu res drive action s th at m ove you toward th e goal. In The Haystack Syndrome, Dr. Goldratt n otes [4]: Th e first th in g th at m u st be clearly defin ed is th e overall pu rpose of th e organ ization —or, as I prefer to call it, th e organ ization ’s goal. Th e secon d th in g is m easu rem en ts. Not ju st an y m easu rem en ts, bu t m easu rem en ts th at will en able u s to ju dge th e im pact of a local decision on th e global goal.
Figu re 4.7 illu strates th e cybern etic view of m easu res u sed by Dr. Joseph Ju ran . Th e sen sor m akes th e m easu re in block 2. An u m pire
1 Proce ss
Outp ut
Data
Action
4 Actuator
2 Se nsor
De cision
3 Goal
Re q uire me nt
4 Ump ire
Fig u r e 4.7 Dr . Jose p h Jur a n d e p ic ts m e a sur e m e nt a s p a r t of a c ontr ol syste m .
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(block 4) com pares th e ou tpu t of th e process as reported by th e sen sor to th e goal for th e process. Th e u m pire m akes a decision to cau se an action , m odifyin g th e process to ch an ge ou tpu t an d m in im ize th e gap. Th at is h ow all con trol system s work an d is th e in ten t of project m easu rem en t system s, in wh ich th e goal in clu des th e tech n ical requ irem en ts, cost, an d sch edu le for th e project. In The Haystack Syndrome, Dr. Goldratt defin es data as “every strin g of ch aracters th at describes som eth in g, an yth in g, abou t ou r reality” [4]. He defin es in form ation as “th e an swer to th e qu estion asked.” Dr. Goldratt su ggests th at th e in form ation system sh ou ld in corporate th e decision . Th e im proved m easu rem en t system for CCPM follows th e practice establish ed by Dr. Goldratt for produ ction operation s. It u ses bu ffers (i.e., tim e) to m easu re task ch ain perform an ce. Recall th at th e en d of th e project bu ffer is a fixed date: th e project delivery date. For bu ffer m an agem en t pu rposes, you also fix th e en ds of th e feedin g bu ffers. You determ in e project bu ffer pen etration by askin g people workin g on tasks, “Wh en will you be don e?” Th at allows you to project forward u sin g th e down stream task du ration estim ates to predict h ow m u ch of th e bu ffer wou ld be u sed u p if th ey com plete at th at tim e. You size th e bu ffers based on th e len gth of th e task ch ain th ey project. Bu ffer sizin g u ses th e u n certain ty in th e du ration of th e critical ch ain tasks to size th e project bu ffer. Likewise, u n certain ty in th e du ration of th e feedin g ch ain tasks determ in es th e size of each critical ch ain feedin g bu ffer (CCFB). CCPM sets explicit action levels for decision s. Th e decision levels are in term s of th e bu ffer size, m easu red in days:
1. With in th e first th ird of th e bu ffer: Take n o action . 2. Pen etrate th e m iddle th ird of th e bu ffer: Assess th e problem an d plan for action . 3. Pen etrate th e fin al th ird: In itiate action . Th ose m easu res apply to both th e project bu ffer an d th e CCFBs. Figu re 4.8 sh ows an exam ple of u sin g th e bu ffers. Th e th ree Xs sh ow th ree poten tial am ou n ts of bu ffer pen etration correspon din g to th e above criteria. Project team s m on itor th e project bu ffer an d each CCFB at th e appropriate tim e in tervals for th e project, u su ally weekly bu t at least m on th ly.
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1/ 3
2/ 3
3/ 3
No action X Plan
CCFB-1
X Act
CCFB-2
Fig u r e 4.8
X
Buffe r p e ne tr a tion p r ovid e s a c tion d e c isions.
You can u pdate th e bu ffers in a relatively sh ort weekly m eetin g or u se E-m ail statu s reports. For th is tool to be fu lly u sefu l, th e bu ffer m on itorin g tim e m u st be at least as frequ en t as on e-th ird th e total bu ffer tim e. If th e bu ffers are n egative (i.e., th e latest task on th e ch ain is early relative to sch edu le date) or less th an on e-th ird th e total bu ffer late (e.g., less th an 10 days if th e total bu ffer is 30 days), you do n ot n eed to take action . If exten ded du ration s pen etrate th e bu ffer between on e-th ird an d twoth irds, th e project team sh ou ld plan action s for th at ch ain to accelerate th e cu rren t or fu tu re tasks an d recover th e bu ffer. If th e task perform an ce pen etrates th e bu ffer by m ore th an two-th irds th e bu ffer size, th e project team sh ou ld take th e plan n ed action . Th rou gh th is m ech an ism , bu ffer m an agem en t provides a u n iqu e an ticipatory project m an agem en t tool with clear decision criteria. Project m an agers u pdate th e bu ffers as often as th ey n eed to sim ply by askin g each of th e perform in g tasks h ow m an y days th ey estim ate to th e com pletion of th eir task. Th ey do th at with ou t pressu re or com m en t on th e estim ate. Th ey expect th e estim ates to vary from day to day an d som e of th e tasks to exceed th e origin al du ration estim ates. As lon g as th e resou rces are workin g on th e tasks with th e CCPM task perform an ce paradigm , m an agers evalu ate th em positively, regardless of th e actu al du ration . An en h an cem en t in th e u se of th e bu ffer for lon g critical ch ain s is to plot tren ds for bu ffer u tilization , as sh own in Figu re 4.9. Th e bu ffer m easu re th en becom es fu n ction ally sim ilar to a con trol ch art an d can u se sim ilar ru les. Th at is, an y pen etration of th e red zon e requ ires action . Fou r poin ts tren din g su ccessively in on e direction requ ire action .
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C r itic a l C ha in Pr oje c t Ma na g e m e nt Proje ct b uffe r 1 Act 2/ 3
x
Plan
x
1/ 3 0x
Fig u r e 4.9
x
x
x
x x x
x Time
Plotting tr e nd s of b uffe r p e ne tr a tion m a y a id a na lysis.
People h ave su ggested th at project m an agers also m on itor bu ffer pen etration as a percen tage of critical ch ain u se. Th e idea is th at th e m an ager sh ou ld n ot u se u p th e project bu ffer too early in th e project. Tren din g bu ffer pen etration h as several advan tages over th at approach . Perh aps th e m ost im portan t advan tage is th at it is sim pler to in terpret. A secon d advan tage, especially im portan t if th e project task processes are n ot in statistical con trol, is th at tren din g preserves th e tim e h istory of th e data. Th at is im portan t in form ation to h elp im prove con trol of th e processes. Updatin g th e bu ffers requ ires th at you m ain tain project statu s versu s you r plan in term s of th e tasks com pleted. It is also a u sefu l direct m easu re of project perform an ce.
4. 4
F e a tu re s (m o re o r l e s s ) fro m P M B O K
Th e u n iqu e featu res of CCPM do n ot m ake u p a su fficien t system to satisfy th e project system requ irem en ts iden tified at th e begin n in g of th is ch apter. Th e PMBOK Gu ide seem s to provide all th e n ecessary addition al featu res to m eet th e com plete system requ irem en ts. Followin g Ju ran , I h ave prepared a featu re an d requ irem en t correlation m atrix to exam in e h ow th e CCPM featu res an d selected featu res an d processes from th e PMBOK Gu ide com bin e to provide th e com plete set of iden tified project system requ irem en ts. (Th e table is too large for pu blication in book form at; see [5].) It h elped to iden tify th e followin g set of PMBOK Gu ide featu res as th e prim ary on es n ecessary to deliver to th e requ irem en ts given in Table 4.1. Th e correlation table also leads to clarification of th e requ irem en ts th at pertain to each featu re an d th erefore su pports developin g th e featu re.
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Th e followin g featu res, wh ich are (m ostly) con tain ed in an d explain ed in th e PMBOK Gu ide are n ecessary to satisfy th ese requ irem en ts: 4. 4. 1
P ro je c t c h a rte r
Th e project ch arter au th orizes th e in itial project team to prepare th e project work plan . It iden tifies th e overall project deliverable, project stakeh olders, overall project respon sibilities, an d oth er param eters n ecessary to create an effective project work plan . 4. 4. 2
P ro je c t w o rk p l a n
Th e project work plan iden tifies th e scope, bu dget, sch edu le, respon sibilities, an d resou rce requ irem en ts for th e project. It m ay also specify oth er project requ irem en ts an d plan s to ach ieve th em , su ch as qu ality, safety, an d regu latory plan s. It m u st con tain or referen ce th e operation al procedu res for th e project. Key elem en ts of th e project work plan in clu de th e WBS, respon sibility assign m en t, m ileston e sequ en cin g, work packages, an d th e project n etwork. 4.4.2.1
W o r k b r e a k d o w n s tr u c tu r e
Th e WBS is th e fram ework to defin e project scope. It defin es project scope h ierarch ically, from th e com plete project level to th e work package level. Work packages com plete th e h ierarch y by specifyin g th e project tasks n ecessary to deliver th e scope. 4.4.2.2
Re s p o n s ib ility a s s ig n m e n t
Respon sibility assign m en t design ates th e in dividu als respon sible to accom plish deliverables on th e WBS. Respon sibility assign m en t m u st occu r at th e work package level an d m ay be assign ed at h igh er levels. Respon sibility assign m en t n orm ally con fers th e au th ority to perform th e work an d accou n tability for deliverin g th e scope to th e bu dget an d sch edu le for th e project deliverable. Th e person respon sible for a work package does n ot h ave to be a task perform er, th at is, a resou rce on a task. 4.4.2.3
Mile s to n e s e q u e n c in g
Mileston e sequ en cin g is a tool to go from th e h ierarch ically form atted WBS to a logical project plan . It provides th e m ajor sequ en ce of project
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tasks for u se by work package m an agers to lin k th e in pu ts an d ou tpu ts of th eir work packages. (Th is elem en t is n ot described in th e PMBOK Gu ide, bu t it is covered in Ch apter 5.) 4.4.2.4
Work p ackag e s
Work packages defin e th e plan to produ ce project deliverables at th e lowest level. Work packages con tain th e scope defin ition for th e deliverable of th e work package an d th e plan to produ ce th e deliverable. Th is plan in clu des defin in g th e project tasks, th e logic for th e tasks, an d th e lin kage of th e work package tasks to oth er elem en ts of th e work plan ; u su ally to m ileston es on th e m ileston e sequ en ce ch art. Work packages m ay lin k to tasks in oth er w ork packages as w ell, bu t th is lin kage u su ally can n ot occu r on th e first draft becau se all w ork packages are plan n ed sim u ltan eou sly. Work packages also iden tify th e estim ated task du ration an d resou rce requ irem en ts an d th e assu m ption s n ecessary to su pport th ose estim ates. 4.4.2.5
Pr o je c t n e tw o r k
Th e project n etwork logically con n ects all th e tasks n ecessary to com plete th e project. Th e project tasks m u st iden tify th e resou rces n ecessary to perform th e task with in th e estim ated task du ration . Th e n etwork in clu des all th e tasks from all th e work packages, an d iden tifies th e critical ch ain , th e project bu ffer, an d th e CCFBs. It provides start dates for each ch ain of tasks an d th e com pletion date for th e en tire project. It is th e basis for su bsequ en t perform an ce m easu rem en t an d con trol.
4. 4. 3
P ro je c t m e a s u re m e n t a n d c o n tro l p ro c e s s
CCPM defin es an im proved sch edu le m easu rem en t an d con trol process. Most projects also requ ire a tech n ical qu ality con trol process, an d m an y projects also requ ire a cost con trol process. Th e correlation m atrix [5] also iden tified a n eed for processes to en su re project resu lt qu ality an d provide m ech an ism s for con tin u ou s im provem en t. Th e scope of th is text does n ot address th e process to en su re project qu ality resu lts. Irelan d [6] provides an overview of a satisfactory process to m eet th ose requ irem en ts.
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P ro je c t c h a n g e c o n tro l
Th e project m easu rem en t an d con trol process will, from tim e to tim e, trigger th e n eed for action to com plete th e project su ccessfu lly. In addition , u n fu lfilled assu m ption s m ade at th e start of th e project, as-fou n d con dition s th at differ from in itial assu m ption s, or ch an ges in th e clien t’s dem an ds m ay requ ire ch an ges in th e rem ain der of th e project. Project ch an ge con trol defin es a process to in corporate an d com m u n icate th ose ch an ges to all m em bers of th e project team . 4. 4. 5
P ro je c t ri s k m a n a g e m e n t
Project risk m an agem en t h an dles poten tial cau ses of special cau se variation . Becau se th e PMBOK Gu ide does n ot differen tiate between com m on cau se variation an d special cau se variation , it addresses both u n der th e realm of project risk m an agem en t. CCPM addresses com m on cau se variation directly in th e project system an d th u s con fin es project risk m an agem en t to special cau se variation . (See Ch apter 11.)
4. 5
Su m m a ry
Th is ch apter developed th e project system requ irem en ts an d described th e critical ch ain system featu res an d key su pportin g PMBOK system featu res design ed to satisfy th ose requ irem en ts. Key system featu res are as follows: ◗ Th e critical ch ain iden tifies th e project con strain t. ◗ Exploitin g th e critical ch ain u tilizes u n certain ty m an agem en t in th e
form of redu ced task plan du ration s an d a project bu ffer. ◗ Exploitin g th e critical ch ain requ ires resou rce bu ffers. ◗ Feedin g ch ain s an d resou rce efficien cy are su bordin ated to th e
critical ch ain with CCFBs. ◗ Critical ch ain projects rely prim arily on bu ffer m an agem en t for
project con trol. ◗ Addition al featu res from th e PMBOK Gu ide are n ecessary to
com plete an effective project m an agem en t system .
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Th ese h igh -level system featu res are n ecessary an d su fficien t to satisfy th e requ irem en ts.
Referen ces [1]
Ju ran , J. J., Juran on Planning for Quality, New York: Th e Free Press, 1988.
[2]
Sh ewh art, W. A., Statistical Method from the Viewpoint of Quality Control, New York: Dover, 1986 (origin ally pu blish ed in 1939).
[3]
Kiley, M. D., 1997 National Construction Estimator, Craftsm an Book Com pan y, 1996.
[4]
Goldratt, E. M., The Haystack Syndrome, Croton -on Hu dson , NY: North River Press, 1990.
[5]
www.Advan ced-projects.com .
[6]
Irelan d, L. R., Quality Management for Projects and Programs, Upper Darby, PA: PMI, 1991.
C HAP TER
5 Conte nts 5.1 Pr oje c t initia tion p r oc e ss
Sta rti n g a n e w p ro je c t
5.2 The p r oje c t c ha r te r 5.3 Sta ke hold e r e nd or se m e nt
5. 1
5.4 The wor k b r e a kd own str uc tur e
Th e project in itiation process en su res th at all th e con dition s n ecessary for project su ccess are m et. It starts with an agreem en t by all th e project stakeh olders on th e expected project resu lts an d en ds with a clear u n derstan din g of wh o is respon sible an d accou n table to do wh at an d by wh en to ach ieve th ose resu lts. Figu re 5.1 illu strates th e overall process to su ccessfu lly in itiate a project. It starts with th e project ch arter, an often overlooked bu t n ecessary part of an y project. It en ds with a project work plan th at is su fficien t to start work on th e project. Th e PMBOK Gu ide [1] con siders th e project in itiation process in a m ore restricted sen se th an does th is ch apter. It iden tifies th e ou tpu ts of project in itiation as project ch arter, project m an ager assign m en t, project con strain ts, an d project assu m ption s. Wh ile th is text in clu des all th ose item s, we exten d project in itiation all th e way th rou gh in itiatin g project work to an effective work plan .
5.5 Re sp onsib ility a ssig nm e nt 5.6 Mile stone se q ue nc ing 5.7
Wor k p a c ka g e s
5.8 The p r oje c t wor k p la n 5.9 A p la nning a nd c ontr ol p olic y 5.10 C ha ng e m a na g e m e nt 5.11
Pr oje c t c losur e
5.12
Sum m a r y
Re fe r e nc e s
P ro je c t i n i ti a ti o n p ro c e s s
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1 De cid e to START a p roje ct
4 Assig n re sp onsib ility
2 Pre p are p roje ct charte r
3 Deve lop work b re akd own structure
6 Pre p are work p ackag e s
7 Inte g rate p roje ct cr itical chain work-p lan
5 Build mile stone se q ue nce
8 Deve lop p roje ct r isk manag e me nt p lan
Fig u r e 5.1
5. 2
9 Proje ct work p lan
The p r oje c t initia tion p r oc e ss.
Th e p ro je c t c h a rte r
A project ch arter is a brief written statem en t to en able th e assem bly of an effective team to plan th e project. Th e defin ition goes well beyon d th e ch arter described in th e PMBOK Gu ide, in clu din g su m m arizin g th e wh o, wh at, wh en , wh ere, wh y, an d h ow. It n orm ally sh ou ld in clu de all th e elem en ts described by CH2MHILL [2] as essen tial: ◗ Vision ; ◗ Pu rpose; ◗ Mem bersh ip; ◗ Mission ; ◗ Organ ization al lin kage; ◗ Bou n daries; ◗ Team an d in dividu al respon sibilities;
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◗ Measu res of su ccess; ◗ Operatin g gu idelin es.
Th e prim ary distin ction to m ake between th e project ch arter an d th e project work plan is th at th e ch arter au th orizes developm en t of th e work plan .
5. 3
Sta k e h o l d e r e n d o rs e m e n t
Th ere is a differen ce between bein g in volved an d bein g com m itted. Con sider a bacon an d egg breakfast: Th e ch icken is in volved; th e pig is com m itted. Th e idea of en dorsem en t is to get everyon e wh o m ay h ave an im pact on you r project com m itted to you r plan at th e begin n in g. All too often , project participan ts with a direct effect on project su ccess, su ch as th e cu stom er or sen ior m an agem en t, get th e idea th at th ey do n ot h ave a key role in creatin g project su ccess an d in stead set th em selves u p in a role to ju dge rath er th an create. Th at is a h igh -probability precu rsor to project failu re. Th e project team m u st en su re th at all parties th at h ave a poten tial im pact on project su ccess en dorse th e project to th e degree n ecessary to en su re project su ccess. Th ere are m an y ways to accom plish th at. On e requ irem en t to obtain en dorsem en t is to be su re th at you r team h as listen ed to an d addressed th e n eeds of each of th e stakeh olders. Usu ally, you sh ou ld obtain form al en dorsem en t of both th e project ch arter an d th e project work plan . In som e in stan ces, th e project con tract m ay h elp to fu lfill on e of th ose roles. If you do n ot h ave a sign ed con tract for you r project, it is a good idea to get th e clien t to be an “au th or” for th e project ch arter an d th e project work plan , even if you write it for th em .
5. 4
Th e w o rk b re a k d o w n s tru c tu re
Th e WBS provides a com m on fram ework for plan n in g an d con trollin g th e work to be perform ed. It provides a com m on , ordered fram ework for su m m arizin g in form ation an d for qu an titative an d n arrative reportin g to cu stom ers an d m an agem en t. Th e WBS u ses a h ierarch ical breakdown of project deliverables. Th is breakdown is in ten ded to provide m ore
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m an ageable pieces of work an d a fram ework for overall operation an d con trol of th e project. Critical ch ain project m an agem en t texts su ggest u sin g a TOC tool, th e PRT (see Figu re 11.5 for an exam ple), to create th e WBS [3]. Th e idea is to start with th e en d item or an in term ediate objective an d ask th e team , “Wh at obstacles preven t u s from ach ievin g th is objective?” On ce you h ave th e list of obstacles, ask th e team to state con dition s th at wou ld overcom e th e obstacles. Th en lin k th ose con dition s in a logical sequ en ce. Th is m eth od en su res a coh eren t strategy an d syn ch ron ized tactics to overcom e th e obstacles iden tified by th e team . For very large projects, you cou ld create layers of PRTs, correspon din g to layers in th e WBS. Un fortu n ately, th e sim plified m eth od for creatin g th e PRT described by Goldratt in It’s Not Luck [3] is n ot appropriate to gen erate a project WBS. Th e reason is th at th e PRT on ly en su res th at certain n ecessary con dition s are m et, th ose n ecessary to overcom e th e obstacles th at th e team iden tifies. Th e m eth od does n ot en su re in clu sion of all deliverables su fficien t to deliver th e project resu lt. Dettm er describes a m odified m eth od to en su re both n ecessity an d su fficien cy [4]. Kerzn er provides th e followin g criteria for a WBS: “Th e project m an ager m u st stru ctu re th e work in to sm all elem en ts th at are m an ageable, in th at specific au th ority an d respon sibility can be assign ed; in depen den t or with m in im u m in terfacin g with an d depen den ce on oth er on goin g elem en ts; in tegratable, so th e total package can be seen ; an d m easu rable, in term s of progress” [5]. A properly prepared WBS sh ou ld facilitate th e followin g: ◗ En su rin g better u n derstan din g of th e work; ◗ Plan n in g of all work; ◗ Iden tifyin g en d produ cts an d deliverables; ◗ Defin in g work in su ccessively greater detail; ◗ Relatin g en d item s to objectives; ◗ Assign in g respon sibility for all work; ◗ Estim atin g costs an d sch edu les; ◗ Plan n in g an d allocatin g com pan y resou rces; ◗ In tegration of scope, sch edu le, an d cost;
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◗ Mon itorin g cost, sch edu le, an d tech n ical perform an ce; ◗ Su m m arizin g in form ation for m an agem en t an d reportin g provid-
in g traceability to lower levels of detail; ◗ Con trollin g ch an ges.
Th e WBS u su ally h as levels assign ed, for exam ple: Level 1: Total program Level 2: Su m m ary cost accou n ts A Level n – l: Work package Level n : Activity In som e cases, th ese term s h ave differen t m ean in gs. In particu lar, in m an y cases th e work package is th e lowest level of work assign m en t, restricted to on e resou rce provider per work package. Th e WBS also h as a n u m berin g system th at provides a u n iqu e n u m ber to every piece of work defin ed. Th e n u m bers u su ally follow th e h ierarch y of th e levels, with th e lowest level correspon din g to a ch arge n u m ber for collection of cost. Project m an agers u se differen t approach es to su bdivide a total project in to a WBS. Th e m ost preferred is a produ ct-orien ted WBS (as sh own later, in Table 5.1), in wh ich each work package produ ces a defin able, m easu rable ou tpu t. Th e collection u pward th en m ay follow fu n ction al lin es or, for m ajor pieces of h ardware (in clu din g facilities), su bsystem s an d system s. Th e m ost im portan t aspect of th e WBS is th at it be com preh en sive. Becau se it is th e basis for all plan n in g an d cost estim atin g, n oth in g sh ou ld be left ou t. Also, if th e project fu n din g decision is goin g to be based on cost, it is im perative th at th e WBS n ot be redu n dan t. Th at is, each activity sh ou ld appear in on ly on e work package. Man y com pan ies u se tem plates to create WBSs for sim ilar projects, wh ich can be a u sefu l resou rce to get started. However, tem plates sh are a m ajor sh ortcom in g with oth er ch ecklists in th at th ey ten d to provide a degree of com fort an d som etim es stifle th in kin g beyon d th e item s in th e ch ecklist. Th e project m an ager h as to be vigilan t n ot to allow tem plates to
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con strain th e th in kin g to en su re th at all requ ired work is covered in th e WBS. Som etim es clien ts (especially govern m en t clien ts) will dictate a WBS stru ctu re, u su ally becau se th ey h ave a n eed to com pare across projects by differen t con tractors or for differen t types of pu rch ases. Th at is a legitim ate clien t n eed an d m u st be h on ored. Th e project m an ager still m u st en su re th at all project work is covered, th at th ere are n o redu n dan cies, an d th at respon sibility assign m en ts are u n iqu e an d appropriate. Do n ot con fu se th e WBS with th e project or com pan y organ ization stru ctu re. Alth ou gh work m ay align with th e organ ization , it does n ot h ave to. Th e on ly requ irem en t is th at at th e lowest level, on e in dividu al h as clear respon sibility an d au th ority for th e work perform ed. More im portan t, th e WBS m u st defin e th e deliverables for th e project, n ot th e fu n ction s n ecessary to deliver th e scope. Th ere are m an y opin ion s on h ow to organ ize a com pan y for project m an agem en t. Becau se m ost project m an agers do n ot h ave th e lu xu ry to redesign th e com pan y for th eir project, we will n ot address th e overall com pan y organ ization . Project m an agers u su ally do h ave th e flexibility an d au th ority to design th eir WBS, select th eir project m an agem en t team , an d assign respon sibility an d au th ority. Followin g Dr. Dem in g’s idea to u se th e overall process flow for a com pan y as an organ izin g prin ciple, an altern ative we recom m en d is th at th e project team be organ ized arou n d th e WBS. An oth er altern ative is to place som eon e respon sible for th e critical ch ain an d for each of th e CCFBs. Sin ce it is u n likely th at th e WBS was organ ized th at way, th e project m an agem en t team m ay cross-cu t th e respon sibilities of th e work package m an agers. Th at places th e project m an agem en t team respon sibility on th e con n ection s between work packages an d activities, th e m ost vu ln erable part of a project.
5. 5
Re s p o n s i b i l i ty a s s i g n m e n t
Respon sibility assign m en t en su res th at every elem en t on th e WBS is own ed by som eon e. It u sed to be th e fash ion to create a respon sibility assign m en t m atrix, wh ich places th e WBS on on e side an d th e organ ization stru ctu re orth ogon al to it. Th e m atrix is sparse if you design ate on ly th e person respon sible for th e specific WBS elem en t, an d for an
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organ ization of reason able size it is too large for people to h an dle. It also is h ard to u se. Fin ally, a respon sibility assign m en t m atrix is difficu lt to ch an ge if a com pan y ch an ges its organ ization . A su perior represen tation is th e lin ear respon sibility m atrix, wh ich lists th e WBS elem en ts in th e first colu m n , th e respon sible person (n ot organ ization elem en t) in th e secon d colu m n , an d an yth in g else you wan t in su bsequ en t colu m n s. Th e lin ear respon sibility m atrix is easy to develop an d m ain tain . You can look at it on a com pu ter screen , prin t it on regu lar paper, an d bin d it in th e plan so everyon e can u se it. It also can con vey m u ch m ore in form ation . Table 5.1 is a sim ple exam ple of a lin ear respon sibility m atrix.
5. 6
M i l e s to n e s e q u e n c i n g
Th e WBS defin es th e scope of th e project deliverables an d th e key processes n ecessary to provide th e deliverables (e.g., design ), bu t it provides n o in form ation on th e sequ en ce of project tasks. Th e project plan m u st logically sequ en ce all th e project tasks. For a sm all project (i.e., 50 tasks or fewer), you can go directly from th e WBS to a task list an d lin k th e tasks u sin g project sch edu lin g software. For a project with a larger n u m ber of tasks, th at approach does n ot work. Th e n u m ber of task lin kages rapidly becom es too large to lin k even a WBS-ordered task list. You n eed an in term ediate step to facilitate gen eratin g th e project task logic. An effective way to aid developin g th e logic is first to iden tify th e m ajor project ph ases, in term s of key m ileston es for th e project. Figu re 5.2 Ta bl e 5. 1
Exam ple of a Lin ear Respon sibility Matrix WBS Num be r
De live rable
Re s pons ible Pe rs on
Note s
1
De sign package
Karl Sagan
—
1.1
Syste m e ngine e ring
Karl Sagan
Le ad for inte gration de sign re vie ws
1.2
Hardware de sign
Charle s Me tcalf
—
1.3
Software de sign
Simon Ligre e
—
2
First prototype de live re d
Mary Rile y
—
3
Syste m te sts
John Jone s
—
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1
2
3
4
5
1.1
2.1
3.1
4.1
5.1
2.2
3.2
4.2
3.3
4.3
3.4 3.5
Fig u r e 5.2 The ke y m ile stone s d e fine a “b a c kb one ” for p r oje c t ta sk se q ue nc e s.
illu strates an exam ple of th e stru ctu re of a key m ileston e ch art. Each m ileston e m u st h ave a specific deliverable assign ed to it. Th e m ileston e sequ en ce ch art does n ot in clu de dates. Dates resu lt from th e in tegrated sch edu le; th ey are n ot in pu ts to it u n less it is a project with a defin itive en d date, su ch as a proposal su bm ission or a m eetin g, su ch as th e Olym pics. Th en ask wh at is n ecessary to com plete each of th e m ajor m ileston es an d bu ild a list of su pportin g m ileston es u n der each key m ileston e. Th e resu ltin g m ileston e sequ en ce ch art, worked join tly by all th e key project team m em bers, provides a basis for developin g an d sequ en cin g th e tasks defin ed in th e work packages. It provides m an y of th e lin kage poin ts to tie th e work packages togeth er. You can u se th e m ileston e sequ en ce as a su pplem en tal tool for project m easu rem en t. Man y organ ization s establish project decision gates as key poin ts for project reviews, su ch as com pletion of th e system en gin eerin g or com pletion of th e first prototype test for developm en t projects or com pletion of th e con ceptu al design for con stru ction projects. Expect to fin d th ose m ajor m ileston es on th e critical ch ain for th e project. Man agem en t an d clien ts often like to u se m ileston es as in dicators of project su ccess on perform an ce to sch edu le. If you pu t th e m ileston es on th e critical ch ain of th e project plan , th ere is a very low probability th at
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th ey will be com pleted on tim e; th erefore, perform an ce is su bject to m isin terpretation by people wh o do n ot yet u n derstan d th e critical ch ain process. In th at case, we recom m en d addin g a project bu ffer to each m ajor m easu rem en t m ileston e an d reportin g u sin g th e en d of th e m ileston e bu ffer as th e m ileston e com m itm en t date. Figu re 5.3 illu strates th at idea. You sh ou ld still con trol th e project to th e overall project bu ffer.
5. 7
Wo rk p a c k a g e s
Work packages provide th e basis for th e project n etwork, sch edu le, an d cost estim ate. Th ey are con tracts between th e project m an ager an d th e work perform ers. Th ey are th e sou rce docu m en ts for in pu ts to th e in tegrated cost sch edu le plan for th e project. Work packages con tain th e scope to be delivered, specification s or referen ce to specification s, codes, an d stan dards for th e deliverables, th e activity logic, activity resou rce estim ates, an d th e basis for th e activity resou rce estim ates. Th e design of work package docu m en tation can greatly in flu en ce th e ease an d qu ality of th e project plan n in g. It is th e poin t at wh ich m ost en gin eers begin to com plain abou t too m u ch paper. Th e design of th e work package process m u st be sim ple an d u ser frien dly. Figu re 5.4 illu strates th e project logic in pu t, an essen tial part of th e work package. Th is represen tation in clu des task title, du ration , an d resou rce requ irem en ts on th e logic sketch . Com bin ed with th e assu m ption s an d deliverables (scope statem en t), th e logic sketch (su bn et or “fragn et”) delivers th e in form ation n ecessary for a project plan . “Promise d ” inte rme d iate mile stone d ate Start of p roje ct Mile stone b uffe r
Task
Task
Task
End of p roje ct
1
Task
Proje ct b uffe r
Comp le te mile stone inp uts Time
Fig u r e 5.3 If your or g a niza tion use s m ile stone s to jud g e p r oje c t p r og r e ss, you m ust p ut a b uffe r in fr ont of the m .
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Work p ackag e WBS numb e r:______ Work p ackag e title :______________ Work p ackag e manag e r:__________ Date :_______________
Work p ackag e d e live rab le s:
Work p ackag e assump tions:
Task x (y d ays) 3.1
RES QTY
Task x (y d ays)
Task x (y d ays)
Task x (y d ays)
Task x (y d ays)
RES QTY
RES QTY
RES QTY
RES QTY
Task x (y d ays)
Task x (y d ays)
RES QTY
RES QTY To WP xx, task yy
1
Fig u r e 5.4 The wor k p a c ka g e log ic p r ovid e s e sse ntia l inp ut to c r e a te the p r oje c t p la n.
Elem en ts on th e WBS are assign ed to people to plan an d m an age. Th ose in dividu als u su ally h ave a title, su ch as work package m an ager or cost accou n t m an ager. Th ey are u su ally tech n ical experts in th e su bject m atter of th at portion of th e WBS. Th ey m u st defin e th e detailed work scope, establish th e task sequ en ce, an d estim ate th e task resou rce requ irem en ts. Th ey are respon sible for iden tifyin g th e lin ks between th eir work packages an d oth er work packages in th e program . Th ey also su pply th e ju stification for th e resou rce estim ates. 5. 7. 1
As s u m p ti o n s
Every project plan is based on assu m ption s. No m atter h ow m u ch detail you pu t in to th e project specification s, th ere is always a lower level of assu m ption s u n derlyin g th at detail. Project plan s sh ou ld iden tify th e assu m ption s n ecessary to provide reason able estim ates of th e project task
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param eters: resou rces requ ired an d task du ration . For exam ple, an assu m ption for a con stru ction sch edu le m ay relate to th e weath er: “No m ore th an six days of ou tside work lost du e to in clem en t weath er.” An assu m ption m igh t address action s ou tside th e direct con trol of th e project, for exam ple, “Perm it review tim e by regu latory agen cy n ot to exceed 30 days.” Iden tify th ose assu m ption s du rin g developm en t of th e work packages. Try to cou n ter two frequ en t ten den cies in writin g assu m ption s. On e ten den cy is to assu m e everyth in g rath er th an do th e n ecessary plan n in g work. Th at can lead to lon g lists of assu m ption s, wh ich can be su m m arized as, “We’re n ot respon sible for an yth in g.” Lim it you r assu m ption s to th ose n ecessary to create an effective plan . An oth er ten den cy is to write assu m ption s in th e n egative, th at is, to specify wh at th e project will n ot do or wh at is n ot in th e scope of th e project, rath er th an specify project deliverables. A better tactic is a positive gen eral statem en t th at says, “Project deliverables in clu de on ly th e specified item s.” 5. 7. 2
P ro je c t l o g i c
Th e m ost im portan t part of th e work package docu m en tation is th e n etwork in pu t. Note th at th e n etwork in pu t does n ot carry dates. It provides activity du ration an d logic an d ties th e resou rce requ irem en ts to th e activities. Th e reason th at dates are n ot pu t on th e n etwork is th at th e dates can n ot be developed u n til th e n etwork is pu t togeth er an d th e critical ch ain developed. I h ave seen several com pan ies pu t th e project in pu t form at in to th e h an ds of bu dget person n el wh o create form s th at are bu dget requ est spreadsh eets. Plan n ers h ave to separately develop th e sch edu le an d figu re ou t h ow to m ake th em m atch . Use th e work package as design ed an d let th e com pu ter determ in e th e sch edu le an d spread th e bu dgets for you . Task dates an d bu dget spreadsh eets are ou tpu ts from th e in tegrated cost sch edu le system , n ot in pu ts. (Of cou rse, in critical ch ain we are n ot in terested in m ost of th e task dates an yway; all we are in terested in is th e start date of ch ain s of tasks an d th e com pletion date of th e project.) Th e project logic defin es th e n ecessary sequ en ce of tasks to ach ieve th e project resu lt. Work packages are sim ply sm all projects; each requ ires its own logic. You m u st lin k tasks so th e ou tpu t of on e task is th e in pu t of th e n ext task. Th e m ost com m on task logic lin ks th e fin ish of on e task to th e start of th e n ext. Th e m ost com m on relation sh ips or lin ks are:
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C r itic a l C ha in Pr oje c t Ma na g e m e nt ◗ Finish-to-start (FS). Often called th e predecessor-su ccessor relation -
sh ip, it clearly illu strates h ow th e ou tpu t of on e task is requ ired as th e in pu t to start th e n ext task in th e sequ en ce. ◗ Start-to-start (SS) (with a lag). Use th is relation sh ip wh en two tasks
can be carried ou t sim u ltan eou sly, on ce th e first task h as created som e am ou n t of ou tpu t for th e secon d task to work on . For exam ple, you m ay h ave to create m an y copies of som eth in g th at requ ires th ree steps. Rath er th an sch edu le all th ree steps for every copy, you pu t in on e task for each of th e steps titled som eth in g like “Step 1 for 100 copies of x, step 2 for 100 copies of x,” an d so on , with each step lagged by th e am ou n t of tim e n ecessary to com plete th e first item . ◗ Finish-to-finish (FF). Use th is relation sh ip wh en th in gs m u st en d u p
at th e sam e tim e bu t m ay h ave differen t start tim es. Most com pu ter sch edu lin g software offers a h ost of oth er possible con strain ts, in clu din g fixed-date con strain ts. Use su ch oth er con strain ts as little as possible. Dates sh ou ld be an ou tpu t of you r n etwork, n ot an in pu t to it. Ch eck you r project logic, con siderin g th e followin g poin ts: ◗ Does each task h ave a clearly defin ed ou tpu t? ◗ Are th e predecessors to each task n ecessary to start th e task? ◗ Are th e predecessors to each task su fficien t to perform th e task? ◗ Do th e tasks (collectively) provide for all th e project deliverables as
ou tpu ts (com pare to th e WBS)? ◗ Do th e tasks specify th e n ecessary resou rces? ◗ Do th e tasks h ave u n n ecessary date con strain ts? ◗ Are all th e m ileston es on th e m ileston e sequ en ce ch art in clu ded? ◗ Are th e resou rces th at determ in e task du ration workin g at 100%
u tilization ? ◗ Do all th e project n etw ork path s tie in to th e en d of th e proj-
ect? (If n ot, tie th em in at least to a m ileston e for “Project Com plete.”)
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Ch apter 6 describes h ow to create th e critical ch ain plan from th is resou rce-loaded project n etwork. 5. 7. 3
Ho w m a n y ta s k s ?
Man y project plan s con tain th ou san ds of in dividu al tasks. On ly rarely sh ou ld project plan s exceed a few h u n dred activities. Gu idan ce on h ow m an y tasks to in clu de u su ally su ggests breakin g down tasks to very sm all tim e du ration s, to facilitate project reportin g by task com pletion rath er th an u sin g estim ates of percen tage com pleted or tim e rem ain in g. Con sideration of th e pu rpose of th e project plan an d TOC leads to recom m en din g th at project plan s be as detailed as you n eed to su ccessfu lly ru n you r project, bu t n o m ore. Project plan s are n ot a su bstitu te for detailed design in form ation . You can always h ave a h ierarch y of plan s, in wh ich n o in dividu al plan con tain s m ore th an a few h u n dred activities. Th e prim ary reason to lim it th e n u m ber of tasks in a project plan is th at overall u n certain ty does n ot ju stify too m u ch detail. Too m u ch detail in creases th e work to create an d m ain tain th e plan an d th e probability of errors in th e plan . Few people, even with stu dy, can u n derstan d a plan with m ore th an a h u n dred activities. Becau se th e n u m ber of poten tial lin ks in a plan in creases expon en tially with th e n u m ber of tasks, it is h igh ly u n likely th at a plan with even a h u n dred activities will be error free. Con sider th e fact th at th e average size of a task (in term s of dollars, total path tim e, or total resou rce tim e) is th e in verse of th e n u m ber of tasks in th e plan . Th erefore, th e average size of a task in a plan with on e h u n dred activities is 1% of th e total project. Sin ce m ost of th e tasks can be estim ated with accu racy n o better th an ten s of percen tage poin ts, it m akes little sen se to divide th e project in to sm aller an d sm aller pieces. People often su ggest th at an in su fficien tly detailed plan is a cau se of project failu re. Wh en projects do fail, it is u su ally in th e ran ge of m an y ten s, several h u n dreds, or even th ou san ds of percen tage poin ts, n ot fraction s of a percen tage poin t. It is n ot logical to con clu de th at plan s with on e h u n dred or m ore activities are n ot detailed en ou gh to preven t project failu re. You are n ot likely to fin d m issin g pieces th at add to h u n dreds of percen tage poin ts by su bdividin g ch u n ks th at average on ly 1% of th e total. Th e problem is elsewh ere, as is th e solu tion . More tasks do in crease th e am ou n t of effort requ ired to develop th e project plan . A given plan n in g effort spread over m ore tasks m ean s less
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effort per task. Th at is m ore likely to lead to a less accu rate plan , n ot a m ore accu rate plan . If you h ave th e ability to pu t in m ore plan n in g effort, you sh ou ld apply it to lookin g at th e spaces between th e tasks an d con siderin g th e resou rces an d processes with in th e tasks, rath er th an addin g tasks to th e project plan . For statistical reason s, th ere is valu e in en su rin g th at th e critical ch ain of th e plan con tain s at least ten activities. Th at in creases th e ch an ces th at statistical flu ctu ation s will ten d to offset each oth er. Also, n o sin gle activity du ration sh ou ld exceed abou t 20% of th e critical ch ain . If on e task dom in ates th e critical ch ain , th at task is m ore su bject to variation an d m ore at risk from in accu rate estim ates of th e tim e to com plete. Con sider defin in g in term ediate deliverables to divide a dom in an t task. On th e oth er h an d, if you h ave m an y tasks on a path , an d several tasks in sequ en ce u se th e sam e resou rce, con sider com bin in g th e tasks an d defin in g th e fin al deliverable as th e task ou tpu t. Th e above con sideration s (n u m ber an d relative size of activities) also apply to feedin g ch ain s as well as to th e critical ch ain , bu t th ey are less im portan t on feedin g ch ain s becau se th e feedin g ch ain is protected by both th e feedin g bu ffer an d th e project bu ffer. 5. 7. 4
Ac ti v i ty d u ra ti o n e s ti m a te
Ch apter 3 dem on strated th e im portan ce of th e activity du ration estim ate. Wh en startin g with critical ch ain , solicit task du ration as you h ave always don e. Do n ot ask for th e average du ration for each activity. People do n ot h ave an in tu itive sen se of average an d will ten d to give you an estim ate th ey are com fortable with , n o m atter wh at you ch oose to call it. If you ask for th e “average,” you will h ave trou ble gettin g a sh orter estim ate to represen t th e average. Make su re th at all work estim ates in clu de 100% effort on th e task. If th ey do n ot, redu ce th e task du ration , keepin g th e work (person -h ou rs or person -days) th e sam e. In oth er words, if th e task h ad an en gin eer at on e-h alf tim e for 10 days, redu ce th e du ration to 5 days, with th e en gin eer workin g fu ll tim e. On ly after you h ave th e in itial “n orm al” estim ates sh ou ld you go back an d requ est “average” estim ates, u sin g a qu estion like, “How qu ickly cou ld you perform th is task if you h ad all th e in pu ts you n eeded at th e start an d if everyth in g wen t righ t?” If you do n ot get a sign ifican tly redu ced estim ate, you m u st work with th e estim ators to u n derstan d th eir
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reason s. You n eed a differen ce between th e average estim ate an d th e low-risk estim ate to gen erate th e project bu ffer. Addin g a project bu ffer to low-risk estim ates n eedlessly exten ds a project sch edu le. 5. 7. 5
Un c e rta i n ty re v i s i te d
Project m an agers face a con flict over u n certain ty of estim ates. On e pressu re com es from m an agem en t or a clien t wh o says, “If you r u n certain ty is over X % , you m u st h ave n ot don e a good job estim atin g.” (Wh o kn ows wh at basis th ey h ave for th is?) Hu m an bein gs are by n atu re in clin ed to overcon fiden ce in th eir prediction s. Th e discu ssion h ere treats u n certain ty in cost an d task du ration as if th ey are in terch an geable, wh ich th ey are wh en th e work is perform ed by people or resou rces (e.g., ren ted m ach in es) ch arged on a u n it or tim e basis. Th at is, cost equ als th e rate ($ per u n it) tim es th e n u m ber of u n its. Th erefore, u n certain ty in th e cost (% ) is th e sam e as th e u n certain ty in th e u se (% ). Likewise, becau se th e du ration is th e n u m ber of u n its m u ltiplied by th e tim e per u n it, th e u n certain ty in th e du ration (% ) is directly proportion al to th e u n certain ty in th e cost (% ). Becau se projects are, by defin ition , on e of a kin d an d first of a kin d, we rarely h ave statistical in form ation to qu an tify u n certain ty in estim ates or task perform an ce. Con sider wh at we do kn ow abou t u n certain ty. Ask som eon e to give you an estim ate on a n ew h ou se. He or sh e m igh t start by sayin g som eth in g like, “Wh at are you r specification s?” Perm an en t h ou ses in th e Un ited States today ran ge in price from $30,000 to m illion s of dollars. Th e m ost im portan t qu estion abou t a h ou se is, “Wh ere is it?” Secon d m ost im portan t is, “How big is it?” Even with th ose specification s fixed, prices per squ are foot can ran ge over a factor of 2, depen din g on type of con stru ction , in terior fin ish in g, an d so on . An d th en , th e price can vary by at least 10% for h ou ses with iden tical specification s, location , an d con dition , depen din g on h ow m u ch th e seller h as in vested, h ow good a n egotiator th e bu yer is, th e gen eral m arket in th e area, th e seller’s m otivation , an d oth er factors. So we can n ot get too close on a h ou se. How m u ch does a car cost? Sam e rou tin e. Even absolu tely iden tical n ew cars can vary by at least ±10% for two pu rch asers, in th e sam e town , at th e sam e tim e. A best-sellin g project m an agem en t book (wh ich I ch oose n ot to referen ce ou t of ch arity) says, “Th e first type of estim ate is an order-ofm agn itu de an alysis, wh ich is m ade with ou t an y detailed en gin eerin g
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data. Th e overall an alysis m ay h ave an accu racy of ±35% with in th e scope of th e project.” (An d I th ou gh t “order-of-m agn itu de” m ean s a factor of 10.) After a few in term ediate steps, th at text states, “Th e defin itive estim ate, also referred to as detailed estim ate, h as an accu racy of ±5% .” Wait a m in u te. We ju st agreed th at th e actu al cost of iden tical existin g an d very well-kn own item s, au tom obiles, can vary by twice th at am ou n t at th e sam e tim e an d place. How cou ld we possibly expect an estim ate of a lesser kn own en tity to h ave twice th e accu racy? An oth er sou rce [6] claim s in a table th at for low-risk projects work package estim ates h ave overall u n certain ty of 2% ; th e su btasks, 5% ; th e task, 10% ; th e project, 20% ; an d th e program , 35% . Th at is, th e sou rce claim s th at as we com bin e in dividu al estim ates of lower u n certain ty, we get a h igh er overall u n certain ty—a repeal of th e laws of statistics. It is in terestin g to fin d th rou gh a review of m an y project m an agem en t books th at th e sam e cost accu racy estim ates keep appearin g, bu t th ey are n ever referen ced to sou rce m aterial. Th e on ly sou rce m aterial referen ced relates to con stru ction cost estim atin g gu ides, wh ich provide som e accu racy estim ates qu ite in con sisten t with th e project an d program cost estim ates stated. For exam ple, th e 1997 National Construction Estimator states (boldface is in th e origin al): Estim atin g is an Art, n ot a scien ce. On m an y jobs, th e ran ge between h igh an d low bid will be 20% or m ore. Th ere’s room for legitim ate disagreem en t on wh at th e correct costs are, even wh en com plete plan s an d specification s are available, th e date an d site are establish ed, an d labor an d m aterial costs are iden tical for all bidders. [7]
Obviou sly, oth er projects, su ch as R&D or in form ation tech n ology (IT) projects can h ave m u ch h igh er u n certain ty th an con stru ction projects with detailed specification s. Fin ally, I cou ld fin d n o books th at provide an operation al defin ition of th e m ean in g of th e accu racy as ±35% . I m ay th in k th at is th e varian ce, you m ay th in k it is th e extrem e valu e, or 99% probability n u m ber (assu m in g a n orm al distribu tion , wh ich is probably in correct for cost estim ates). If m y u n derstan din g is correct, it m ean s th at accordin g to you r defin ition , th e accu racy is ±115% . (Well, perh aps n ot m in u s th at am ou n t!) Can we be su re we u n derstan d th e sam e m ean in g?
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We all kn ow of several large projects th at h ave overru n th eir in itial sch edu le an d cost estim ates by two to th ree tim es (see Ch apter 1, if you n eed som e rem in ders) an d perh aps even som e th at spen t all th e project m on ey an d th en were can celed, with n oth in g to sh ow for it. Wh ile th e m u ltibillion dollar govern m en t projects in evitably com e to m in d first, plen ty of large com m ercial projects h ave th e sam e perform an ce h istory. Does th at m ean th ere is a system atic bias to u n derestim ate? Research by m ajor con stru ction firm s an d experien ce with critical ch ain projects dem on strate th at projects th at com plete on sch edu le u su ally do so with in or n ear th e origin al cost. (Th at is n ot tru e if th e sch edu le was m ain tain ed th rou gh exten sive overtim e.) Projects th at overru n do n ot begin to see th at th ey are in trou ble u n til a sign ifican t portion (m on ey or tim e) of th e origin al plan h as been expen ded, u su ally on e-h alf to two-th irds of th e origin al estim ate. Th is is th e ph ase of a project in wh ich th e expen ditu re rate is at a m axim u m . Exten din g th e project du ration at th e m axim u m rate creates a disproportion ately large im pact on project cost. If th e project beh avior is as was h ypoth esized in Ch apter 2, th at is n o credit for positive varian ces; it takes on ly on e late task on th e critical path to m ake a project late. An d, becau se all th e m on ey is spen t on th e tasks as well becau se of th e “u se it or lose it” paradigm , th e sch edu le exten sion sh ou ld lead to a cost overru n . (Based on th e above, it m ay lead to a very large overru n .) Th e large cost overru n s are n ot, h owever, part of th e n ew critical ch ain paradigm , becau se th e critical ch ain m eth od explicitly rem oves th e sou rces of th e overru n s. Expect sign ifican t differen ces between th e low-risk estim ate to perform a sin gle task an d th e average estim ate for th at task. If people su ggest th at differen ce is on ly a few percen tage poin ts, th ey do n ot u n derstan d th e reality of variation . Explore th e basis for th e estim ate. You sh ou ld fin d th at th e average task du ration estim ates are on th e order of on e-h alf to on e-th ird th e low-risk estim ates for th e in dividu al task du ration .
5. 7. 6
C o s t b u ffe r
If cost is im portan t, th e project work plan sh ou ld in clu de a cost estim ate, in clu din g a cost bu ffer. Size th e cost bu ffer for th e project con siderin g th e project risks an d accu racy of th e estim ates. If you are u sin g project
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software for you r cost estim ate, keep in m in d th at you h ave estim ated each task at its 50-50 probability. Expect to u se a sign ifican t part of th e feedin g an d project bu ffer. You h ave to in clu de an estim ate for th at u se, wh ich is th e cost bu ffer. You are better off u sin g a sin gle aggregated project cost bu ffer for th e sam e reason s you are better off u sin g a sin gle aggregated project tim e bu ffer. You get th e statistical advan tages of in depen den t estim ates an d th e psych ological advan tage of n ot h avin g it associated with specific tasks. Keep in m in d th at you are accou n tin g for two kin ds of u n certain ty:
1. Bias, wh ich cou ld su m for all th e activities su bject to th e bias; 2. Statistical flu ctu ation s, wh ich will su m as th e squ are root of th e su m of th e squ ares for all th e in depen den t cost elem en ts. Bias in clu des th e fact th at th e variation s in cost estim ates ten d to be skewed distribu tion s. Th at is, m ost work package m an agers h ave been train ed to spen d all th e m on ey in th eir work package so th ey do n ot get less n ext tim e. You r estim ate of h ow su ccessfu l you are at ch an gin g th at paradigm sh ou ld in flu en ce you r estim ate of th e cost bu ffer. Vigder an d Kark perform ed a recen t stu dy on software projects an d n oted: “A n u m ber of th e projects we in vestigated were largescale system s, in volvin g m ore th an fou r years du ration an d m ore th an 100 person -years of effort. With ou t exception , th e costs of all th ese projects were seriou sly u n derestim ated” [8]. Th ey n ote th e followin g as som e of th e reason s: ◗ Th e com plexity of large-scale system s. Com plexity does n ot
in crease lin early with lin es of code, bu t rath er expon en tially. ◗ Th e larger a system an d th e fu rth er in to th e fu tu re its delivery,
th e m ore difficu lt it is to correctly an d com pletely specify all th e requ irem en ts. Su ch cost overru n s seem to be am plified for large system s. ◗ Th e lon ger th e du ration between in itial requ irem en ts an d delivery,
th e m ore likely th at th ere will be ch an ges in th e requ irem en ts. Th at can occu r du e to ch an gin g u ser expectation s, ch an ges to th e en viron m en t in wh ich th e system is to be in stalled, or n ew
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project person n el with differen t views on wh at th e requ irem en ts sh ou ld be. ◗ Lon g project du ration m ean s th at tech n ology advan ces m ay ou t-
strip th e in itial requ irem en ts. Most of th ese factors do n ot seem to be con fin ed to software projects. You sh ou ld con sider th em wh en estim atin g th e bu ffer size to cover bias in th e estim ates. Based on th at in form ation , th e bias portion of th e cost bu ffer sh ou ld rarely be less th an 10% of th e total estim ated cost. Un less you h ave a h istorical track record to su bstan tiate estim ate accu racy for you r specific project an d en viron m en t, 10% sh ou ld be th e m in im u m cost bu ffer size. It often sh ou ld be m u ch larger. Th e bu ffer size for flu ctu ation s sh ou ld con sider th at you rarely will get th e advan tage of work package u n derru n s (estim ated at th eir average du ration s), bu t you sh ou ld con sider th e statistical com bin ation of th e positive varian ces. If you h ave a dom in an t work package in term s of total project cost an d u n certain ty, th e u n certain ty in th at work package sh ou ld size th e statistical part of th e cost bu ffer. If you r work packages are sim ilar in size an d you h ave several of th em , u se th e squ are root of th e su m of th e squ ares to size th e statistical con tribu tion to th e cost bu ffer. If th e cu stom er is dissatisfied with th e size of th e cost bu ffer, con sider “rollin g wave” plan n in g. Th is m eth od ph ases th e plan , with a h igh er level of detail an d lower level of u n certain ty associated with better-kn own tasks an d less detail with m ore u n certain ty for later ph ases of th e project. Th e rollin g wave m eth od adds detail to th e fu tu re plan periodically, as it is better defin ed. 5. 7. 7
B a s i s fo r c o s t e s ti m a te s
Th e cost estim ate basis is part of th e work package docu m en tation . It is an extrem ely im portan t elem en t of plan n in g for cost-plu s con tracts an d for m an y govern m en t con tracts. It is also th e su bject of m ost difficu lty for m an y en gin eers. Th ey h ave n o trou ble estim atin g resou rce n eeds. Th ey ju st can n ot seem to tell you h ow th ey cam e u p with th at particu lar n u m ber, oth er th an providin g a m ean in gless ph rase, su ch as “en gin eerin g ju dgm en t” or “past experien ce.” Th ose ph rases are m ean in gless an d
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in su fficien t. You m igh t start th e qu estion by askin g th e assu m ption s th ey u sed to com e u p with th e estim ate. Profession al estim ators h ave n o trou ble com in g u p with th e estim ate basis. You u su ally get it with ou t askin g. Th ey will refer to gu ides, previou s experien ce (specific), an d qu otes from ven dors or oth erwise su bstan tiate th e n u m bers u sed. It is u su ally qu ite sim ple to provide th e basis for an y kin d of h ardware (e.g., 500 feet of 4-in ch pipe at $1.85/ ft.; ref. Joe’s plu m bin g teleph on e qu ote to Jim A, 3.15.96). Th ere are books of cost estim atin g factors for rou tin e con stru ction , software codin g, an d oth er specific types of skills. Th e poin t is to defin e th e estim ate basis well en ou gh so th at later on , if ch an ges are proposed, you can clearly defin e wh at was in th e in itial scope an d wh at was n ot.
5. 8
Th e p ro je c t w o rk p l a n
Th e project work plan , som etim es called th e project plan or project m an agem en t plan (PMP), pu ts th e elem en ts developed in th e precedin g section s in to a form accessible to all th e project participan ts. It is th e key to com m u n ication with in th e project. It m ay in clu de or m ake referen ce to a n u m ber of oth er elem en ts for larger projects, su ch as: ◗ Topical plan s, su ch as qu ality, safety, procu rem en t, staffin g, en vi-
ron m en tal, or system s en gin eerin g; ◗ Project com m u n ication gu idelin es an d project reportin g, in clu din g
docu m en t distribu tion an d approvals; ◗ Work procedu res; ◗ Specification s an d stan dards; ◗ Ch an ge con trol procedu re.
For larger projects su bject to ch an ges, you m u st place th e key elem en ts of th e project work plan in to a system th at en su res people work on ly to th e latest approved version of th e plan . An effective plan n in g an d con trol policy sh ou ld in clu de som e elem en ts of th e followin g plan n in g an d con trol policy.
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A p l a n n i n g a n d c o n tro l p o l i c y
All program s an d projects m u st be plan n ed an d con trolled in accordan ce with a project m an agem en t plan prepared in com plian ce with th e followin g m in im u m requ irem en ts: ◗ Plan n in g m u st clearly relate cost an d sch edu le to th e scope of work. ◗ Plan n in g m u st be based on th e cu rren t best estim ate of th e even tu al
cost, sch edu le, an d scope of work. ◗ Scope, sch edu le, an d cost estim ates m u st be written . Th e basis for
th e estim ates m u st be docu m en ted an d su sceptible to in depen den t review. ◗ Plan in g sh ou ld cover th e en tire du ration of an activity or to som e
defin ed plan n in g h orizon for projects th at h ave n o fixed en d poin t. ◗ Plan n in g preparation m u st in volve perform in g organ ization s to a
degree su fficien t to perm it m ean in gfu l resou rce plan n in g. ◗ Plan s m u st be u sed as th e basis for con trol. Con trol m u st in clu de a
com parison of actu al perform an ce again st plan n ed perform an ce, with appropriate action th resh olds. ◗ Plan s m u st be kept cu rren t, reflectin g statu s an d approved ch an ges
in scope, sch edu le, bu dget, an d oth er im portan t factors. Th e followin g list is a sam ple ou tlin e for a relatively large an d com plex project’s m an agem en t plan . Use on ly th e parts appropriate for you r n eeds.
1. Work Scope a. Pu rpose of project b . Objectives c. Deliverables/ en d produ cts d . Key m ileston es e . Requ irem en ts f.
Key assu m ption s
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2. WBS 3. Organ ization , respon sibilities, an d au th ority a. In terorgan ization al b . In traorgan ization al c. Tem porary organ ization 4. Sch edu les 5. Bu dgets an d cost estim ate basis 6. Resou rce m an agem en t a. Labor b . Equ ipm en t c. Materials an d su pplies d . Ph ysical facilities 7. Materials m an agem en t 8. Qu ality a. Codes, stan dards (e.g., ISO 9000), an d regu lation s b . Au th orities c. Procedu res d . Records 9. Safety 10. Secu rity 11. Man agem en t con trol 12. Reportin g requ irem en ts a. Man agem en t reports b . Tech n ical reports c. Pu blic in form ation
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13. Con figu ration m an agem en t 14. Ch an ge con trol process 15. System en gin eerin g 16. En viron m en tal protection 17. Data qu ality 18. Operation al defin ition s 19. Appen dixes a. Tech n ical data b . Su pport exh ibits c. Work package docu m en tation d . Procedu res e . Ch an ge con trol board ch arter Becau se th e project plan on a large project can get qu ite large, con sider keepin g it in an electron ic version , available to all team m em bers. Always keep th e u p-to-date project sch edu le prin ted in h ard copy an d readily available th rou gh ou t th e project work areas.
5. 10
Chang e m anag e m e nt
Ch an ge m an agem en t en su res th at on ly ch an ges approved by th e project m an ager are im plem en ted on th e project. Th e m ost im portan t fu n ction of ch an ge con trol is to en su re th at everyon e w orkin g on th e project is w orkin g to th e sam e plan , in clu din g th e sam e scope of w ork an d detailed project requ irem en ts. Oth er fu n ction s of ch an ge con trol in clu de: ◗ Makin g su re people work on on ly approved ch an ges; ◗ Assessin g th e im pact of ch an ges on cost or sch edu le before decidin g
to im plem en t th em ; ◗ En ablin g billin g of th e cu stom er for cu stom er-directed ch an ges;
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C r itic a l C ha in Pr oje c t Ma na g e m e nt ◗ Providin g a record of ch an ges; ◗ Providin g traceability to th e origin al project baselin e.
For larger projects, ch an ge con trol m ay be part of you r project qu ality system . For sm aller projects, it m ay be a m em o from th e project m an ager approvin g th e ch an ge an d iden tifyin g th e latest version of th e specification s an d project plan .
5. 11
P ro je c t c l o s u re
Project plan s often n eglect closu re of th e project. Project closu re in clu des dealin g with th e en tire project adm in istrative, facility, an d person n el issu es as th e project is fin ally com pleted. It u su ally in volves fin al billin g, disposition of project records, an d closin g th e project office. For organ ization s th at perform m u ltiple projects, it also sh ou ld in clu de a “lesson s learn ed” assessm en t, to im prove processes on fu tu re projects.
5. 12
Su m m a ry
Th is ch apter provided th e process an d tools n ecessary to create an effective project work plan . ◗ Th e project ch arter is a n ecessary precu rsor to a su ccessfu l project
plan th at effectively m eets all project stakeh older requ irem en ts. ◗ Th e work breakdown stru ctu re logically defin es th e gen eral project
work scope an d provides th e fram ework for respon sibility assign m en t. ◗ Th e stakeh older en dorsed project work plan defin es th e scope,
sch edu le, respon sibilities, an d bu dget for th e project. ◗ Project n etworks sh ou ld be as sim ple as possible to perform th e
project. ◗ Th e project plan requ ires a correct, resou rce-loaded logic n etwork
to develop th e sch edu le. ◗ Dates are ou tpu ts from th e logic n etwork, n ot in pu ts.
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◗ If cost is im portan t to you r projects, in clu de a cost bu ffer in th e cost
estim ate. ◗ Requ est task du ration estim ates in itially, ju st as you h ave in th e
past, an d th en go back to requ est average tim es for th e critical ch ain plan . ◗ Most projects requ ire a ch an ge con trol process. ◗ All project plan s sh ou ld con sider project closu re as part of th e plan .
Adju st th e degree of detail you pu t in to th e project plan an d th e degree of form ality you pu t in to th e project docu m en ts to m atch th e stakeh older an d team m em ber n eeds. In gen eral, larger, lon ger, an d govern m en t projects requ ire m ore detail an d m ore form ality. Less experien ced team s m ay also requ ire m ore docu m en tation an d train in g.
Referen ces [1]
Du n can , W. R., et al., A Guide to the Project Management Body of Knowledge, Upper Darby, PA: Project Man agem en t In stitu te, 1996.
[2]
CH2MHILL, Project Delivery System: A System and Process for Benchmark Performance, CH2MHILL, Den ver, CO, 1996.
[3]
Goldratt, E. M., It’s Not Luck , Great Barrin gton MA: North River Press, 1994.
[4]
Dettm er, H. W., Goldratt’s Theory of Constraints, Milwau kee, WI: ASQC, 1997.
[5]
Kerzn er, H., Project Management: A Systems Approach to Planning, Scheduling, and Controlling, 4th ed., New York: Van Nostran d, 1992.
[6]
Kerzn er, H., Project Management: A Systems Approach to Planning, Scheduling, and Controlling, 6th ed., New York: Joh n Wiley & Son s, 1998, Table 14-12, p. 745.
[7]
Kiley, M. D., an d A. Marqu es, 1997 National Construction Estimator, Craftsm an Book Com pan y, 1997.
[8]
Vigder, M. R., an d A. W. Kark, “Software Cost Estim ation an d Con trol,” NRC-CNRC (Nation al Research Cou n cil Can ada), NRC No. 37166, Feb. 1994.
C HAP TER
6 Conte nts 6.1
The p r oc e ss
6.2 The “g ood e noug h” c onc e p t
D e v e l o p i n g th e (s i n g l e -p ro je c t) c ri ti c a l c h a i n p l a n
6.3 Exa m p le s a nd p r a c tic e 6.4 Buffe r a nd thr e shold sizing 6.5
C ost b uffe r
6.6 Me thod s to c r e a te the p la n 6.7 Exte r na l c onstr a ints 6.8 Re d uc ing p la nne d tim e (a .k.a . d ic ta te d e nd d a te s) 6.9 Ente r p r ise wid e r e sour c e p la nning 6.10 Fr e q ue ntly a ske d q ue stions 6.11
Sum m a r y
T
h is ch apter first presen ts th e overall process to create th e sin gle-project critical ch ain plan an d th en takes you th rou gh exam ples an d exercises to practice th e ideas. It is im portan t to u n derstan d th e ideas before you begin to u se com pu ter sch edu le aids to develop critical ch ain project plan s.
6. 1
Th e p ro c e s s
Th e basic steps of th e process to create a sin gle critical ch ain project sch edu le follow. We h ave written th e procedu re assu m in g th at you are n ot u sin g a critical ch ain com pu ter sch edu lin g tool su ch as ProCh ain or Con certo. Workin g som e n etworks by h an d h elps you to u n derstan d th e problem th e com pu ter is solvin g. Th at will aid greatly wh en you are diagn osin g u n expected resu lts.
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1. Iden tify th e critical ch ain . a. Lay ou t th e late-fin ish n etwork of tasks. Th e tasks m u st iden tify th e tim e du ration estim ate (50-50 tim e) an d prim ary resou rce requ irem en ts. (For tasks with m u ltiple resou rces, iden tify th e prim ary resou rce you believe will be a con strain t. If th ere are several con strain t resou rces, break th e task u p for each prim ary resou rce.) b . If you do n ot h ave resou rce con ten tion in you r project, go to step 1(f). c. Iden tify th e con ten tion you will resolve first. Th at sh ou ld be th e con ten tion n earest project com pletion or th e on e th at sh ows th e m ost con flict. If several con ten tion s sh ow abou t th e sam e am ou n t of poten tial con flict, ch oose th e first on e you com e to workin g backward from th e en d of th e sch edu le. d . Rem ove resou rce con ten tion by resequ en cin g tasks earlier in tim e. (Do n ot worry abou t creatin g n ew con flicts with th is step; you will resolve th ose in sequ en ce.) e . Retu rn to th e en d of th e sch edu le an d follow step 1(d) for th e n ext resou rce. As you resolve con flicts for th e n ext resou rce, you m u st m ain tain th e lack of th e con flict for th e resou rces you resolved earlier. Repeat u n til all iden tified resou rce types are resolved. f.
Iden tify th e critical ch ain as th e lon gest ch ain of depen den t even ts.
2. Exploit th e critical ch ain . a. Review you r plan to determ in e if th ere are obviou s ways th at resequ en cin g can sh orten th e overall project du ration . If so, do it. Do n ot spen d a lot of tim e trial an d error testin g variou s solu tion s. You will u su ally get a good en ou gh solu tion on you r first or secon d try. b . Add th e project bu ffer to th e en d of th e critical ch ain . c. Add resou rce bu ffers to th e critical ch ain .
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3. Su bordin ate th e oth er tasks, path s, an d resou rces to th e critical ch ain . a. Protect th e critical ch ain by addin g CCFBs to all ch ain s th at feed th e critical ch ain . Size th e bu ffers u sin g th e lon gest precedin g path . (Note: All n on critical ch ain s feed th e critical ch ain to com plete th e project. If ch ain s go directly to th e project bu ffer, th ey also n eed CCFBs.) b . Resolve an y resou rce con ten tion s created by addin g feedin g bu ffers th rou gh resequ en cin g tasks earlier in tim e. c. Move earlier in tim e an y depen den t tasks precedin g th ose m oved. 4. Elevate (sh orten ) th e lead tim e of th e project by u sin g added resou rces for certain win dows of tim e to break con ten tion . 5. Go back to step 1, iden tify th e critical ch ain . Do n ot allow in ertia to becom e th e con strain t. A critical ch ain plan sch edu les (i.e., assign s dates) on ly to th e start of th e ch ain s an d th e com pletion of th e project. Avoid pu blish in g an d discu ssin g in dividu al task start an d com plete dates—th ey are m ean in gless. For th at reason , you m ay wan t to con sider talkin g abou t th e critical ch ain plan , rath er th an th e critical ch ain sch edu le.
6. 2
Th e “ g o o d e n o u g h ” c o n c e p t
“Good en ou gh ” is an im portan t idea in developin g critical ch ain project plan s. No proven effective algorith m exists for resou rce levelin g to en su re an optim u m sch edu le. Th e procedu re for developin g th e critical ch ain plan en su res th at th e plan you bu ild will be good en ou gh . Th at m ean s th e overall len gth of th e sch edu le will close to th e sh ortest or optim u m sch edu le path . Close m ean s with in a sm all part (25% or less) of th e project bu ffer. Becau se reality will ch an ge m an y assu m ption s, an d we can n ot explicitly predict th e resu lts of statistical flu ctu ation s, th at is “good en ou gh .”
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C r itic a l C ha in Pr oje c t Ma na g e m e nt
Ex a m p l e s a n d p ra c ti c e Sm a l l e x a m p l e
Th is section presen ts a sm all exam ple to work in to a critical ch ain . Figu re 6.1 illu strates th e plan in a con ven tion al critical path display, with th e early-start sch edu le. Th e first n u m ber on each bar is th e WBS task iden tification . Th e n u m ber in paren th eses is th e task du ration , in days. Note th at task 3 depen ds on th e com pletion of tasks 1.2 an d 2.2. Followin g th e procedu re, in Figu re 6.2 we first cu t th e task tim es to th e 50-50 estim ate an d pu sh all th e tasks to th e latest tim e possible, con siderin g th e n etwork depen den cy. Next, in Figu re 6.3, we add th e project bu ffer an d th e feedin g bu ffer. Becau se all tasks u se th e sam e resou rce, we do n ot n eed to add resou rce bu ffers to th is project. Now con sider th e sam e sm all project with resou rce con ten tion . Figu re 6.4 sh ows th e u n scaled n etwork of tasks with a PERT ch art represen tation of th e project. Th e n etwork sh ows th e differen t resou rces as colors. You can th in k of th e colors as differen t skills, e.g., en gin eers, m u sician s, or equ ipm en t operators.
1.1 (30)
1.2 (20) 3 (30)
2.1 (20)
Slack
2.2 (10)
80 d ays
Fig u r e 6.1
A sim p le p r oje c t illustr a te s a nor m a l e a r ly-sta r t sc he d ule .
1.1(15)
1.2 (10) 3 (15) 2.1 (10)
2.2 (5) 40 d ays
Fig u r e 6.2 The fir st ste p to c r e a te the c r itic a l c ha in r e d uc e s the ta sk tim e s a nd or g a nize s ta sks to a la te -finish sc he d ule .
Developing the (single-project) critical chain plan
155
Cr itical chain 1.1 (15)
1.2 (10) 3 (15)
2.1 (10)
2.2 (5)
PB-20
FB 40 d ays 60 d ays
Fig u r e 6.3
With no r e sour c e c onte ntion, just a d d b uffe r s.
1 Re d
15 d ays
2.1 3 Blue
3
1.2
1.1
2 Gre e n
10 d ays
5 15 d ays Mag e nta
2.2 10 d ays
Fig u r e 6.4 (c olor s).
4 Gre e n
5 d ays
The sa m e p r oje c ts with sp e c ific r e sour c e a ssig nm e nts
We lay th e n etwork ou t, with all th e tasks pu sh ed as late as possible. In th is case, all we h ave to do is add a start-as-late-as-possible con strain t to task 2.1 (Figu re 6.5). Next, rem ove th e resou rce con flict, workin g backward from th e en d of th e project. Figu re 6.6 illu strates th e two ways we cou ld resolve th e green resou rce con ten tion . Note th at each sch edu le sh ows a n ew depen den cy for th e resou rce con strain t. Wh ich resolu tion ch oice is better? You m ay in itially th in k th at th e lower ch oice is better, becau se it is a sh orter sch edu le. With th e lower ch oice, th e two ch ain s are th e sam e len gth , so we cou ld ch oose eith er on e as th e critical ch ain . Add th e project bu ffer an d CCFB to each option an d see wh at h appen s (Figu re 6.7).
156
ID 1 2 3 5
Fig u r e 6.5
1.2
10 d ays
2.1
10 d ays
2.2
5 d ays
3
Jan 16, '00 Jan 23, '00 S M W F S T T
S
Jan 30, '00 Fe b 6, '00 M W F S T T
S
Gre e n Blue
15 d ays
The fir st ste p p ushe s ta sks to the la te finish.
Gre e n Mag e nta
C r itic a l C ha in Pr oje c t Ma na g e m e nt
4
Jan 2, '00 Jan 9, '00 Task name Duration S M W F S T T 15 d ays Re d 1.1
2 3 4 5
Jan 2, '00 Jan 9, '00 Task name Duration S M W F S T T 15 d ays Re d 1.1 10 d ays 1.2 2.1
10 d ays
2.2
5 d ays
3
15 d ays
1.1
15 d ays
1.2
10 d ays
2.1
10 d ays
Jan 16, '00 Jan 23, '00 S M W F S T T
S
Jan 30, '00 Fe b 6, '00 M W F S T T
Gre e n Blue Gre e n Mag e nta
6 7 8 9 10 11
3
5 d ays
Gre e n Blue Gre e n
15 d ays
Alte r na tive wa ys to r e solve r e sour c e c onflic t.
Mag e nta
157
Fig u r e 6.6
2.2
Re d
S
Developing the (single-project) critical chain plan
ID 1
158
ID 1 2 3 4
6 7
Fig u r e 6.7
1.1
'99 S
W
Jan 9, '00 S T M
Jan 23, '00 T S
W
Fe b 6, '00 S T M
F
Fe b 20, '00 T S
W
Mar 5, '00 S T M
Re d Gre e n
1.2 2.1
F
Blue
FB 2.2 3
Gre e n
Mag e nta
PB
The fir st c hoic e r e sults in a p la nne d c om p le tion d a te of Ma r c h 7, 2000.
C r itic a l C ha in Pr oje c t Ma na g e m e nt
5
Task name
Developing the (single-project) critical chain plan
159
Figu re 6.8 illu strates th e critical ch ain plan for th e first ch oice of rem ovin g con flict for th e green resou rce. Th e critical ch ain com prises all th e project tasks except task 2.1. Th e bu ffers are sized as 50% of th e feedin g ch ain s. (In a case like th is, we recom m en d a m odification of th at later for th e feedin g bu ffer.) Th e two ch oices of critical ch ain from th e first resou rce resolu tion option both lead to th e sam e overall len gth of sch edu le. Both also create th e situ ation in wh ich th e n on critical ch ain is lon ger th an th e critical ch ain after th e addition of th e feedin g bu ffer. Th at is all righ t; we ju st h ave th e extra lead tim e for th e n on critical ch ain path s. Th at often h appen s wh en a sch edu le starts with two or m ore path s of n early equ al len gth . If you are n ot com fortable with th is m eth od, you m ay m ove th e excess feedin g bu ffer (i.e., th e am ou n t th at wou ld pu sh th e n on -critical ch ain earlier th an th e critical ch ain ) to ju st in fron t of th e project bu ffer. Wh en you u se bu ffer m an agem en t, act as if all th e feedin g bu ffers were togeth er at th e en d of th e feedin g ch ain . An y of th ose path s is su itable for th e plan becau se th e differen ces are sm all com pared to th e project bu ffer. It often works ou t a little better to resolve con ten tion by m ovin g th e lon ger of th e two or m ore tasks backward in tim e. That tends to keep the critical chain the longest chain, thereby increasing the project buffer and adding to the immunity of your project. Lay ou t th e exercise as a critical ch ain plan , with all th e appropriate bu ffers. In Figu re 6.9, th e first lin e in each box represen ts th e task n u m ber. Th e secon d lin e represen ts th e resou rce, by color. Th e th ird lin e represen ts th e (already redu ced) task tim e, in days. (See th e last qu estion in Section 6.10 for th e approxim ate len gth of th e sch edu le you sh ou ld h ave obtain ed. Note th at a good en ou gh sch edu le is with in a sm all part of th e project bu ffer of th e sch edu le given in th e back of th e book.) 6. 3. 2
La rg e e x a m p l e
Figu re 6.10 presen ts th e task n etwork for th e large exam ple. Th e top lin e of each box is th e iden tifier for th e task; th e color relates to a specific resou rce; an d th e n u m ber at th e bottom of each box represen ts th e task du ration , in days. Th e task du ration s h ave already been cu t by 50% . Lay ou t th e critical ch ain plan for th is project. Th e first step is to lay ou t th e late-fin ish sequ en ce of tasks. To do th at, you h ave to con vert th e n etwork plan to tasks th at give th e plan n ed du ration . Figu re 6.11 sh ows th e project laid ou t with Microsoft Project 98
160
Jan 2, '00 Jan 9, '00 ID Task name Duration S M W F S T T 1 1.1 15 d ays Re d 2 1.2 10 d ays 3
2.1
10 d ays
4
2.2
5 d ays
5
FB
8 d ays
6
3
15 d ays
7
PB
22 d ays
9
1.1
15 d ays
10
FB
8 d ays
Jan 16, '00 Jan 23, '00 S M W F S T T
S
Jan 30, '00 Fe b 6, '00 M W F S T T
Fe b 13, '00 Fe b 20, '00 Fe b 27, '00 Mar 5, '00 S M W F S T T S M W F S T T
S
M
Gre e n
Blue Gre e n Mag e nta
8
1.2
10 d ays
2.1
10 d ays
13
2.2
14
3
15 d ays
15
PB
22 d ays
5 d ays
Gre e n Blue Gre e n Mag e nta
Fig u r e 6.8 The se c ond r e sour c e r e solution c hoic e le a d s to the sa m e le a d tim e for the two c hoic e s of c r itic a l c ha in a nd c om p le tion on Ma r c h 10, 2000.
C r itic a l C ha in Pr oje c t Ma na g e m e nt
11 12
Re d
Developing the (single-project) critical chain plan A-2 Re d 15
A-4 Gre e n 10
C-2 Blue 15
C-4 Gre e n 5
E-2 Blue 15
E-4 Gre e n 5
G-2 Re d 15
G-4 Blue 15
Fig u r e 6.9
161
B-6 Mag e nta 10
Proje ct comp le te
F-6 Mag e nta 5
Sm a ll e xe r c ise .
A-1 Mag e nta 5
A-2 Black 10
A-3 Gre e n 15
A-4 Re d 10
B-2 Mag e nta 10
B-3 Blue 10
B-4 Re d 5
C-3 Blue 15
C-4 Gre e n 10
D-3 Blue 20
D-4 Gre e n 5
Fig u r e 6.10
A-5 Mag e nta 20
A-6 Re d 15
C-5 Re d 15
C-6 Mag e nta 5
Proje ct comp le te
La r g e e xa m p le . (Task tim e s alre ad y re d uce d .)
u sin g th e as-late-as-possible con strain t. Th e calen dar is set to work th rou gh th e weeken ds. Work from th e en d of th e project forward in tim e to rem ove th e resou rce con ten tion . Th e first con flict is between two tasks u sin g red, A-6 an d C-5. Becau se th e A path is th e critical path , it u su ally m akes sen se to give it th e resou rce first, wh ich m ean s m ovin g th e A path forward in tim e, an d th e B path alon g with it, as illu strated on th e followin g page. Figu re 6.12 sh ows th e plan with th e con ten tion rem oved.
162
ID 1
Task name A-1
Aug ust Se p te mb e r Octob e r Duration Pre d e c. 4 7 10 13 16 19 22 25 28 31 3 6 9 12 15 18 21 24 27 30 3 6 9 12 15 18 21 24 27 30 5 d ays Mag
A-2
10 d ays 1
A-3
15 d ays 2
4
A-4
10 d ays 3
5
A-5
20 d ays 4,9
6
A-6
15 d ays 5
7
B-2
10 d ays
8
B-3
10 d ays 7
9
B-4
5 d ays 8
10
C-3
15 d ays
11
C-4
10 d ays 10
12
C-5
15 d ays 11,15
13
C-6
14
D-3
15
D-4
5 d ays 14
16
Comp.
0 d ays 6,13
Fig u r e 6.11
Black Gre e n Re d Mag e nta Re d Mag e nta Blue Re d Blue Gre e n Re d
5 d ays 12 20 d ays
Mag Blue
La r g e e xa m p le tim e -sc a le d log ic illustr a te s r e sour c e c onte ntion.
Gre e n
10/ 19
C r itic a l C ha in Pr oje c t Ma na g e m e nt
2 3
i
Task name A-1 A-2 A-3 A-4 A-5 A-6 B-2 B-3 B-4 C-3 C-4 C-5 C-6 D-3 D-4 Comp.
Re solving the initia l (A6-C 5) r e d -r e sour c e c onte ntion.
163
Fig u r e 6.12
Aug ust Se p te mb e r Octob e r Nove mb e r Duration Pre d e . 4 7 10 13 16 19 22 25 28 31 3 6 9 12 15 18 21 24 27 30 3 6 9 12 15 18 21 24 27 30 2 5 8 11 14 5 d ays Mag 10 d ays 1 Black 15 d ays 2 Gre e n 10 d ays 3 Re d 20 d ays 4,9 Mag e nta 15 d ays 5 Re d 10 d ays Mag e nta 10 d ays 7 Blue 5 d ays 8 Re d 15 d ays Blue 10 d ays 10 Gre e n 15 d ays 11,15,6 Re d 5 d ays 12 Mag 20 d ays Blue 5 d ays 14 Green 11/ 10 0 d ays 6,13
Developing the (single-project) critical chain plan
ID 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
164
C r itic a l C ha in Pr oje c t Ma na g e m e nt
Th e n ext con flict is green (C4 an d D4), followed by blu e (C3 an d D3). Becau se th ose path s an d tasks will n ot be on th e critical ch ain , an d both are th e sam e len gth , th e order is som ewh at arbitrary. You th en h ave to rem ove th e red con flict (A-4 an d B-4), an d so on . Th is first rou n d of con flict rem oval leads to th e project plan sh own in Figu re 6.13. You can n ow select th e critical ch ain an d size th e project bu ffer. Th e critical ch ain com prises tasks A-1, A-2, A-3, A-4, B-4, A-5, A-6, C-5, an d C-6, wh ich add u p to 100 days. We sh ou ld set th e project bu ffer size as 50 days, for an overall plan n ed lead tim e of 150 days for th e project. Next, you h ave to add th e CCFBs. Th e tasks th at feed th e critical ch ain are B-4, C-4, an d D-4. Workin g backward, we can add th e feedin g bu ffer for D-4 (22 days). Th at creates som e n ew con flicts. C-4 requ ires a 22-day feedin g bu ffer also. We h ave to do D-4 before we do C-4, so if D-4 is late, it will sh ow u p in th e bu ffer from C-4. Th e fin al step is to add th e resou rce bu ffers. (We cou ld h ave added th em im m ediately after iden tifyin g th e critical ch ain bu t did n ot, sim ply to keep th e ch art clearer u n til we were don e.) Th e fin al plan (Figu re 6.14) sh ows th e resou rce bu ffers as boxed Rs. Th e bu ffer goes with th e task im m ediately above it. Th is com pletes th e feasible an d im m u n e plan . 6. 3. 3
La rg e e x e rc i s e
Lay ou t th e exercise in Figu re 6.15 as a critical ch ain plan , with all th e appropriate bu ffers. As in th e sm all exercise, th e first lin e in each box represen ts th e task n u m ber. Th e secon d lin e represen ts th e resou rce, by color. Th e th ird lin e represen ts th e (already redu ced) task tim e, in days. (See th e last qu estion s in Section 6.10 for th e approxim ate len gth of th e sch edu le you sh ou ld h ave obtain ed.) Note th at a good en ou gh sch edu le is with in a sm all part of th e project bu ffer of th e sch edu le given in Section 6.10. You can fin d a pictu re of th e com pleted plan on Advan cedprojects.com .
6. 4
B u ffe r a n d th re s h o l d s i z i n g
Bu ffer sizin g determ in es th e overall du ration of you r project an d th e degree of overall con tin gen cy in clu ded in th e plan . Th e bu ffer th resh olds for action determ in e th e frequ en cy with wh ich you will act. We u su ally
Task name A-1 A-2 A-3 A-4 A-5 A-6 B-2 B-3 B-4 C-3 C-4 C-5 C-6 D-3 D-4 Comp.
Aug ust Se p te mb e r Octob e r Nove mb e r Pre d . 4 7 10 13 16 19 22 25 28 31 3 6 9 12 15 18 21 24 27 30 3 6 9 12 15 18 21 24 27 30 2 5 8 11 14 17 20 23 26 29 Mag
1 2 3 4,9 5
Black Gre e n Re d Mag e nta Re d Mag e nta
7 8,4 8 10 11,15,6 12
Blue Re d Blue Gre e n Re d Mag Blue
14 13
Re solving othe r r e sour c e c onte ntions.
Green
11/ 15
165
Fig u r e 6.13
Duration 5 d ays 10 d ays 15 d ays 10 d ays 20 d ays 15 d ays 10 d ays 10 d ays 5 d ays 15 d ays 10 d ays 15 d ays 5 d ays 20 d ays 5 d ays 0 d ays
Developing the (single-project) critical chain plan
ID 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Duration 5 d ays
2
A-2
10 d ays
1
Black
3
A-3
15 d ays
2
R
166
Aug ust Se p te mb e r Octob e r Nove mb e r De ce mb e r January Pre d e c. 1 8 15 22 29 5 12 19 26 3 10 17 24 31 7 14 21 28 5 12 19 26 2 9 16 23 30
Task name A-1
ID 1
Mag
4
A-4
10 d ays
3
5
A-5
20 d ays
4,10
6
A-6
15 d ays
5
7
B-2
10 d ays
8
B-3
10 d ays
7
10 d ays
8
Gre e n
R
Re d
R
R
Mag e nta
FB B-4
5 d ays
11
C-3
15 d ays
8
12
C-4
10 d ays
11
13
FB
12 d ays
12
14
C-5
15 d ays
6,13,18
15
C-6
5 d ays
16
D-3
20 d ays
17
D-4
5 d ays
18
FB
12 d ays
17
19
PB
50 d ays
15
4,9
R Blue
Re d Blue Gre e n
Re d
14
Mag Blue
16,12
Gre e n
R
Fig u r e 6.14 Id e ntific a tion of the c r itic a l c ha in a nd the a d d ition of fe e d ing a nd r e sour c e b uffe r s c r e a te the c r itic a l c ha in p la n.
1/ 18
C r itic a l C ha in Pr oje c t Ma na g e m e nt
9 10
Cr itical chain
Re d Mag
Developing the (single-project) critical chain plan A-1 Gre e n 4
B-3 Black 8
C-1 Gre e n 5
Fig u r e 6.15
A-5 Gre e n 15
A-6 Re d 15
C-5 Blue 6
E-3 Mage nta 10
E-5 Blue 28
F-3 Mage nta 20
F-5 Blue 14
F-7 Mage nta 7
167
A-7 Mage nta 20
A-9 Re d 18
D-7 Black 9
D-9 Re d 6
Proje ct comp le te
F-9 Re d 10
La r g e e xe r c ise .
set bu ffer th resh olds as a percen tage of th e bu ffer, so th e bu ffer size in flu en ces th e actu al sen sitivity of th e bu ffer triggers. 6. 4. 1
Sta ti s ti c a l b a c k g ro u n d
Recom m en dation s on bu ffer sizin g u se statistics to develop relatively sim ple ru les with a su pportin g th eoretical basis. Dr. Goldratt recom m en ds sizin g th e project bu ffer an d feedin g bu ffers to on e-h alf th e bu ffered path task len gth . Th at is, do n ot in clu de gaps in th e ch ain wh en you are sizin g bu ffers. Th e bu ffers are th ere to protect th e project from u n certain ty in perform in g th e tasks on th e ch ain . Goldratt’s m eth od con siders th e statistical ru le govern in g th e addition of u n certain ties th at are in depen den t even ts. Th e statistical ru le says th at th e u n certain ty of th e su m of th e even ts is m u ch less th an th e su m of th e u n certain ty for each even t. Th at is sen sible, becau se you sh ou ld expect som e variation s to be positive an d som e to be n egative. Con sider Dr. Goldratt’s recom m en dation in con text with h is recom m en dation to sim ply cu t activity tim es in h alf. Math em atical ju stification of h is recom m en dation requ ires several addition al assu m ption s, som e of wh ich we h igh ligh t h ere. His recom m en dation u su ally will lead to larger bu ffers th an th e m eth od described n ext, a reason able th in g to do wh en you are begin n in g to deploy critical ch ain . Th e spread in a distribu tion is proportion al to th e stan dard deviation , σ or sigm a. Th e spread of th e distribu tion represen tin g th e su m (in ou r
168
C r itic a l C ha in Pr oje c t Ma na g e m e nt
case, th e bu ffer) equ als th e squ are root of th e su m of th e squ ares of th e in dividu al distribu tion s. (Do n ot worry if you are n ot a statistics bu ff an d can n ot follow th is. You can do fin e with critical ch ain u sin g Goldratt’s sim ple recom m en dation or sim ply by followin g th e procedu re we give below. You do n ot h ave to kn ow th is th eory to h ave it work for you .) If you m ake a few assu m ption s, you can com e u p with a relatively sim ple way to m ake u se of you r kn owledge of th e variation in estim ates to size th e project an d feedin g bu ffers. Projects u su ally do n ot h ave m u ch in form ation abou t th e actu al distribu tion of th e task perform an ce tim e. (Exception s m igh t in clu de repetitive projects, su ch as con stru ction , in wh ich exten sive cost data exist.) However, you can u su ally place bou n ds on th e task tim e, correspon din g to som e u pper an d lower lim its of th e tim e it will take. If you assu m e you r estim atin g m eth od yields abou t th e sam e m ean in g for th e u pper an d lower lim its on m ost of th e project tasks, you can th en say th at th e differen ce between th e u pper an d lower lim its, D, is som e m u ltiple of th e stan dard deviation . You m ay n ot kn ow if it represen ts two or six stan dard deviation s; you are on ly assu m in g th at wh atever it is, it is abou t th e sam e for all th e tasks you estim ate with th e sam e m eth od. Th en , with ou t even h avin g to defin e th e lim its precisely, you can size th e bu ffer to protect th e wh ole ch ain of tasks to th e sam e degree we previou sly were protectin g each activity. You take th e squ are root of th e su m of th e squ ares of th e Ds. Th e resu lt is always less th an addin g th e Ds. For exam ple, con sider a ch ain of fou r tasks, each two weeks lon g. Two weeks is ou r stan dard low-risk estim ate. On e week is ou r 50-50 estim ate. So D equ als 1. Th e critical path ch ain is, th erefore, eigh t weeks. Th e critical ch ain tasks add u p to fou r weeks. Becau se D equ als 1, D squ ared also equ als 1. Th e su m of D squ ared is th en 4, an d th e squ are root of 4 is 2. Addin g th e two-week bu ffer to th e fou r-week task ch ain gives a project du ration estim ate of six, com pared to eigh t for th e critical path . In th is case, th e squ are root of th e su m of th e D-squ ared m eth od gives th e sam e resu lt as Dr. Goldratt’s sim plified m eth od. Th at always h appen s for fou r equ allen gth tasks, wh ere D is h alf th e task du ration , th at is, n ot very often . 6. 4. 2
P ro je c t b u ffe r s i z e
Size th e project bu ffer u sin g th e squ are root of th e su m of th e squ ares m eth od. Determ in e th e D valu e for each task as th e differen ce between
Developing the (single-project) critical chain plan
169
th e in itial task du ration estim ate an d th e redu ced estim ate. Th e followin g gu idelin es will h elp en su re an effective bu ffer: ◗ Seek to h ave at least 10 activities on th e critical ch ain . Reason: Th e
m ore activities in th e critical ch ain , th e m ore effective th e su m of th e squ ares an d cen tral lim it th eorem . ◗ Do n ot allow an y on e activity to be m ore th an 20% of th e critical
ch ain . Reason: Th e u n certain ty of on e large activity will dom in ate th e ch ain , leavin g little possibility for th e oth er tasks in th e ch ain to m ake u p overru n s on th e dom in an t task. ◗ Do n ot allow th e project bu ffer to be less th an 25% of th e critical
ch ain . Reason: Ch ain s with m an y tasks of u n iform len gth m ay calcu late a relatively sm all bu ffer, providin g in adequ ate protection . 6. 4. 3
F e e d i n g b u ffe r s i z e
Size th e feedin g bu ffers u sin g th e squ are root of th e su m of th e squ ares m eth od. Determ in e th e D valu e for each task as th e differen ce between th e in itial task du ration estim ate an d th e redu ced estim ate. If th ere are fewer th an fou r tasks in th e feedin g ch ain , m ake su re th e feedin g bu ffer is at least equ al to th e lon gest activity in th e feedin g ch ain . 6. 4. 4
B u ffe r tri g g e r p o i n ts
We set th e bu ffer trigger poin ts to plan for m an agem en t con trol action an d to in itiate th e action . Both trigger poin ts m u st be set to m in im ize false sign als an d to en su re th at action is taken wh en n eeded. It does n ot dam age project perform an ce directly to plan for project ch an ges th at are n ot m ade. Th u s, th ere is less n egative im pact from too low a th resh old for th e project plan (yellow) trigger poin t. You m ay do sign ifican t dam age to you r project, h owever, if you set th e action (red) trigger too low an d take u n n ecessary con trol action s. Project ch an ges, wh ich in clu de con trol action s, will likely cau se con fu sion an d delay th e project. We su ggest settin g th e triggers at on e-th ird an d two-th irds of th e bu ffer. Becau se project tasks are n ot always in a provable state of statistical con trol, we recom m en d th at you track bu ffer pen etration over tim e. If you are trackin g th e bu ffer over tim e, you m ay wan t to in stitu te som e addition al con trol ch art triggers, su ch as fou r poin ts in a row ten din g toward th e trigger poin t. Do n ot m ake th e trigger logic too com plex.
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Som e people su ggest th at th e trigger poin ts sh ou ld be relative or dyn am ic. Th at is, th e triggers sh ou ld requ ire less pen etration early in th e project. Th e logic is th at early in th e project people m ay be in clin ed to u se u p th e bu ffer. Th at fear, h owever, m ost often is baseless. Usu ally, th ere is n egative bu ffer pen etration early in th e project. We su ggest you tren d th e bu ffers an d m ake decision s as you deem n ecessary. Be m in dfu l th at too m an y con trol action s h ave a n egative effect on project perform an ce. Set th e bu ffer triggers for feedin g bu ffers at th e sam e percen tage of bu ffer pen etration as for th e project bu ffer. 6. 4. 5
Re s o u rc e b u ffe r s i z e
Size resou rce bu ffers to th e n eeds of th e resou rce provider. Th e size sh ou ld depen d on th e qu an tity of th e resou rce, th e len gth of th e resou rce’s u su al task, an d special con sideration s su ch as requ ired train in g, travel, or oth er lead tim e. For su bcon tractors, con sider m akin g th e resou rce bu ffer a fin an cial in cen tive to en su re a lead tim e. Becau se profits are a sm all percen tage of reven u e, you are often able to greatly in crease delivery reliability by dou blin g th e su ppliers’ profit if th ey deliver on tim e, wh ich sh ou ld cost on ly a sm all percen tage of th e su bcon tract. A recen t pu blic exam ple is th at of th e con tractor wh o rebu ilt an overpass on th e San ta Mon ica Freeway, th at was destroyed in an earth qu ake, an d fin ish ed over a m on th early du e to a sign ifican t reward.
6. 5
C o s t b u ffe r
Use a cost bu ffer if you r bu sin ess is sen sitive to project cost. Organ ization s th at u se th rou gh pu t accou n tin g an d in tern al projects (e.g., in tern ally fu n ded R&D) m ay n ot requ ire a cost bu ffer. Size th e cost bu ffer takin g in to con sideration th e am ou n t rem oved from th e project plan wh en th e activity du ration s were redu ced. You can u se th e su m of th e squ ares to size th e requ ired bu ffer, wh ere th e Ds are th e cost redu ction of each task. Th at will give a project bu dget, in clu din g a cost bu ffer, th at is sign ifican tly less th an th e origin al bu dget. If you r organ ization u ses cost an d sch edu le con trol reportin g or project plan s to su m u p organ ization al resou rce dem an ds, add th e cost bu ffer in to th e project plan . We recom m en d you pu t it all in to th e project bu ffer.
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If you u se oth er m ean s for global resou rce plan n in g, you can pu t it in th e bu ffer as a leveled fixed cost. If you u se th e in dividu al project plan s to project resou rce dem an d, you m u st pu t in a resou rce distribu tion represen tative of th e aggregated project. For exam ple, divide th e people resou rces to represen t th e sam e percen tage in th e bu ffer as th ey are in th e plan .
6. 6
M e th o d s to c re a te th e p l a n
People h ave su ccessfu lly u sed a variety of m eth ods to m ake an d con trol critical ch ain plan s. In itial critical ch ain projects all u sed som e type of m an u al m eth od. Keep in m in d th at we are cau tion in g again st pu ttin g too m an y tasks in a critical ch ain plan (i.e., a critical ch ain plan sh ou ld h ave n o m ore th an a few h u n dred activities, preferably fewer th an 100).
6. 6. 1
M a n u a l m e th o d
Th e sim plest an d m ost com m on ly u sed m eth od to m an u ally create a plan is to u se th e PERT ch art form at an d sticky n otes. Th e procedu re follows:
1. Fill ou t a sticky n ote for each task, con tain in g th e task ID, title, du ration (redu ced), an d con trollin g resou rces. (You m ay wan t to u se color codin g to iden tify th e task du ration con trollin g resou rce.) On th e left of th e n ote, in dicate th e tasks th at provide n eeded in pu t. 2. Lay th e n otes ou t on a board or table accordin g to th e task logic an d followin g th e rou gh tim e logic (th is is called a tim e-ph ased PERT or a tim e-ph ased logic diagram ). 3. Rem ove resou rce con ten tion s. 4. Iden tify th e critical ch ain . 5. Add sticky n otes for th e project an d feedin g bu ffers. 6. Size th e feedin g bu ffers. 7. Calcu late th e critical ch ain u sin g a forward pass. Startin g with th e in itial task, write th e start tim es on th e lower left of th e n ote an d
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th e com pletion tim e (start tim e plu s du ration ) on th e lower righ t corn er.
8. Calcu late th e feedin g path s u sin g a backward pass from wh ere th ey en ter th e critical ch ain . 9. Remove an y remain in g resou rce con ten tion an d revise th e calcu lation . 10. Iden tify th e location s for th e resou rce bu ffers. 11. Size th e resou rce bu ffers. Th is process is n ot difficu lt for projects with 10 to 50 tasks. It gets h arder after th at. You m ay refin e th e m eth od by cu ttin g ou t colored paper bars to represen t each task. Th e len gth of th e bar represen ts task len gth , an d th e bar color represen ts th e task du ration con trollin g resou rce. Th at sim plifies th e resou rce con ten tion steps an d su bsequ en t calcu lation . It obviou sly requ ires a little m ore u pfron t preparation . Large projects h ave u sed th is m eth od su ccessfu lly with over 500 tasks. Usin g a m agn etic sch edu lin g board is an oth er way to im plem en t th e sam e idea. 6. 6. 2
C ri ti c a l p a th s o ftw a re
You can u se critical path software to plan an d m an age critical ch ain projects. Most software packages h ave su fficien t option s to su pport you in levelin g th e resou rces an d u sin g late start on th e feedin g ch ain s. You always start from th e sam e place: with a project logic con tain in g th e redu ced task tim es an d resou rce requ irem en ts. You sh ou ld en su re (wh en n ecessary) th at you h ave selected th e appropriate option s to m ain tain th e fixed task du ration th at you in pu t an d th at you h ave selected option s to late-start each path . Som etim es, you can do th at globally. Oth er tim es, you can pu t con strain ts on th e first task on each path th at cau ses all th e down stream tasks to late-start. (You n eed to experim en t an d u n derstan d wh at you r software does to th ose option s or con strain ts du rin g resou rce levelin g.) Most critical path software provides option s for th e algorith m to perform resou rce levelin g. You can experim en t with th em . Th e critical
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ch ain m eth od does n ot depen d on th e algorith m you u se. It sim ply requ ires th at th e fin al plan h ave rem oved all resou rce con ten tion with in th e sin gle project. Usu ally, you can do resou rce levelin g m an u ally an d view th e fin al resou rce allocation s by task. After in itially levelin g resou rces, you m u st iden tify th e critical ch ain . We su ggest you add lin ks to th e plan to cau se th e resou rce levelin g to stay in place. You can th en rem ove oth er con strain ts th at you r software m ay h ave added to im plem en t resou rce levelin g (e.g., som e software adds fixed task start-date con strain ts to im plem en t resou rce levelin g). If you do add logic con n ection s, you th en sh ou ld be able to calcu late th e sch edu le an d h ave th e critical path equ al th e critical ch ain . Make su re th e critical ch ain you iden tify really is th e con strain t of you r project. Som etim es an in adverten t logic con n ection resu lts in tasks on th e critical ch ain th at can n ot or sh ou ld n ot determ in e th e du ration of you r project. (We call su ch a con n ection a m ath em atical critical path / ch ain .) Adju st logic or task du ration to cau se th e critical ch ain to be a legitim ate con strain t to you r project. (Note again th at th ere m ay be two n early equ al len gth path s vyin g for th e critical ch ain . We su ggest you ch oose th e on e th at you feel h as h igh er u n certain ty or th at m akes m ost u se of a poten tially capacity-con strain ed resou rce.) Th e distribu tion of tasks on th e critical ch ain m u st provide effective im m u n ity from variation in an y on e task. Th ere are two sim ple gu idelin es for doin g th at.
1. Make su re th e critical ch ain com prises at least 10 tasks (u n less you r project is very sm all). 2. Make su re n o sin gle critical ch ain task com prises m ore th an abou t 20% of you r critical ch ain or m ore th an 50% of you r project bu ffer. Next, add th e feedin g bu ffers an d th e project bu ffer. You add th ese as tasks, with ou t resou rce requ irem en ts. Rem em ber to tie in th e feedin g bu ffers as predecessors to th e critical ch ain task at th e poin t th ey join th e critical ch ain . Th en rech eck th e resou rce levelin g an d m ake an y fin al adju stm en ts. (Addin g th e feedin g bu ffers u su ally requ ires redoin g som e am ou n t of resou rce levelin g.)
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C ri ti c a l c h a i n s o ftw a re
Critical ch ain software au tom ates m ost or all of th e process. Several software packages are cu rren tly available, an d we u n derstan d th at m ost m ajor project m an agem en t software will be addin g th e capability over th e n ext year. Th e m ost widely available software cu rren tly u sed is ProCh ain , an add-on to Microsoft Project. Con certo is an oth er cu rren tly available produ ct.
6. 7
Ex te rn a l c o n s tra i n ts
Projects m ay h ave extern al con strain ts, wh ich can in flu en ce th e project lead tim e an d wh ich are n ot u n der th e con trol of th e project team . Regu lation s, in spection s, an d perm its often fall in to th is category. Extern al con strain ts m ay be in tern al to th e com pan y, su ch as an oth er division th at h as to provide an essen tial com pon en t. Th e five focu sin g steps provide a m eth od to deal with extern al con strain ts. First, you m u st iden tify th em as con strain ts (or as poten tial con strain ts) an d deal with th em accordin gly. If th ey are on ly poten tial con strain ts, you can deal with th em u n der project risk m an agem en t. If you feel th at th e likelih ood for a poten tial con strain t becom in g an actu al con strain t is large, you m ay wan t to m ake su re th at it is on th e critical ch ain . Th e secon d step is to exploit th e con strain t. In th e case of regu lation s an d perm its, th at u su ally requ ires providin g a h igh assu ran ce th at all su bm ission s to th e regu lators m eet th eir n eeds com pletely. Th at m ay requ ire addition al resou rces u pfron t. You sh ou ld con sider, h owever, th at an y delay in th e project critical ch ain sh ou ld be valu ed for th e bu rn rate of th e en tire project or th e expected daily retu rn u pon com pletion of th e project. You m ay elect to h ire experts in th e particu lar area to h elp en su re su ccess. Th ere m ay be portion s of th e project th at can be exem pted from th e con strain t. Th e th ird focu sin g step su bordin ates everyth in g else to th e con strain t. Th at m ay requ ire doin g addition al scope or in vestin g addition al m an agem en t tim e to en su re good workin g relation sh ips to an y people or agen cies th at m ay becom e an extern al con strain t, as it is n ot u su ally u n der you r con trol. It is im probable you wou ld elect to elevate an extern al con strain t.
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6 . 8 Re d u c i n g p l a n n e d ti m e (a . k . a . d i c ta te d e n d d a te s ) Project m an agers are often asked to accelerate sch edu les. With CCPM, th ere m ay be a ten den cy to look at th e ju icy project bu ffer an d su ggest th at redu cin g th e bu ffer is a pain less way of redu cin g th e plan n ed project lead tim e. Redu cin g th e project bu ffer h as n o im pact on project execu tion tim e; it on ly redu ces th e ch an ces th at you will m eet you r prom ised lead tim e an d cau ses excessive bu ffer triggers. Excessive bu ffer triggers dam age project perform an ce. Th erefore, do not cu t th e project bu ffer.
6 . 8 . 1 Ac c e l e ra ti o n w i th o u t c o s t i m p a c t (e x p l o i t a n d s u b o rd i n a te to th e c o n s tra i n t)
Several sen sible m eth ods can redu ce project lead tim e. Preferred option s do n ot in crease cost. Two prim ary option s are to get addition al resou rces wh en resolvin g con ten tion s cau sed th e lead tim e to be in creased an d to look in side th e tasks for batch in g opportu n ities. You m ay n eed on ly a sh ort tim e of an addition al resou rce to m ake a sign ifican t im provem en t in th e project overall lead tim e. If th ere is a way to obtain th e addition al resou rce, th is m eth od can redu ce th e overall project lead tim e at n o addition al cost, sin ce you h ad to perform th e tasks for th e sam e in dividu al du ration s, th at is, you do n ot ch an ge th e task work (person -days). You can redu ce th e project bu ffer if su ch a ch an ge redu ces th e len gth of th e critical ch ain . Batch in g occu rs wh en a task in clu des m ore th an on e ph ysical ou tpu t. For exam ple, a task m ay in clu de m akin g a n u m ber of certain parts u sed in th e fin al assem bly. Th e parts m ay be iden tical or differen t an d are n ot lim ited to h ardware. Th ey m igh t in clu de differen t tech n ical produ cts, su ch as drawin gs, parts lists, or reports, or even differen t people, su ch as h irin g people to staff on e sh ift at a tim e. Th e su ccessor task m ay be able to start wh en th e first of th e predecessor ou tpu ts is available. In th at case, you can break u p th e task in to sm aller pieces to better sh ow th e real workflow. You r plan can also sh ow th at type of relation sh ip as a task start-to-start depen den ce, with a lag. Altern atively, you can sh ow it as a fin ish -to-fin ish task logic. Wh ich ever way you ch oose, you r m an agem en t process sh ou ld en su re th at perform ers u n derstan d an d focu s Roadru n n er perform an ce (i.e., start th e task as
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soon as in pu t is available, focu s on it 100% u n til don e an d pass on you r resu lt) on each in dividu al task ou tpu t. Th ey m u st keep th e sequ en ce n eeded to realize th e assu m ption s m ade in you r plan . If batch in g in volves a sign ifican t n u m ber of parts, you m ay wan t to in voke a su pplem en tal m eth od to track an d con trol th e parts th rou gh th e repetitive process. Th e critical ch ain plan wou ld sh ow th e process as a sin gle activity, for exam ple, “Process 37 parts.” On e effective m eth od u ses th e lin e-of-balan ce m eth od, com bin in g featu res of operation al process con trol with project m an agem en t. Th e lin e-of-balan ce m eth od plan s th e tim e for each part to traverse th e process flow, creatin g an expected n u m ber of parts th rou gh each step at a given tim e (th e lin e of balan ce). Trackin g com pares th e actu al parts th rou gh each process step to th e lin e of balan ce. 6 . 8 . 2 Ac c e l e ra ti o n w i th i n c re a s e d ra w m a te ri a l c o s t (e l e v a te th e c o n s tra i n t)
You can also redu ce project tim e by exercisin g h igh er-cost altern atives. For exam ple, you can u se overtim e or h ire addition al tem porary resou rces (wh ich u su ally cost m ore). You m ay be able to pu rch ase com pon en ts with a h igh er cost bu t a sh orter lead tim e. You m ay be able to u se h igh er prem iu m s for early su bcon tract delivery. TOC su ggests th at con sideration s of in creased cost com pare th e addition al operatin g expen se to th e im pact on project th rou gh pu t. Th e th rou gh pu t of project acceleration (per day) is th e valu e of th e wh ole project (per day). Com pare th e cost of in creased raw m aterial cost to th e th rou gh pu t in crease from th e acceleration . If th e th rou gh pu t in crease exceeds th e cost in crease, you sh ou ld elevate th e con strain t.
6. 9
En te rp ri s e w i d e re s o u rc e p l a n n i n g
You can u se en terprisewide sch edu lin g tools to iden tify to th e resou rce m an agers th e an ticipated win dow an d du ration of tasks th ey h ave to su pport. Resou rce m an agers m u st bu y in to u n derstan d th at th e dates are n ot m ean in gfu l; we focu s on win dows of perform an ce an d task du ration estim ates. Th e resou rce m an agers can th en assess if th eir lon gterm aggregate dem an d requ ires m ore or fewer resou rces an d allocate resou rces based on th e criteria.
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F re q u e n tl y a s k e d q u e s ti o n s
Som etim es, abn orm al th in gs seem to h appen , an d qu estion s arise. Th is section addresses th ose situ ation s an d qu estion s. ◗ After we add the feeding buffers, noncritical chains start earlier than the
critical chain. Why?
Th at can h appen an d sh ou ld n ot be a cau se for con cern . Start th e project with th e n on critical ch ain . Be su re to u se a resou rce bu ffer on th e first task on th e critical ch ain . An altern ative m eth od relocates th e excess feedin g bu ffer (i.e., th at wh ich pu sh es th e feedin g path before th e critical ch ain ) ju st ah ead of th e project bu ffer. ◗ When we add the feeding buffer to a noncritical chain with a critical chain
task as a logical predecessor, it pushes the critical chain task back, creating a gap in the critical chain.
If th e ch an ge requ ired is a sm all percen tage of th e project bu ffer, m ake th e critical ch ain feedin g bu ffer a little sm aller th an th e bu ffer sizin g in dicates. For oth er cases, con sider wh ere th e n on critical ch ain feeds th e critical ch ain an d th e relative variability of th e two ch ain s. You m ay also relocate th e excess feedin g bu ffer to ju st before th e project bu ffer. Rem em ber, we are su bordin atin g everyth in g else to th e critical ch ain . In gen eral, gaps in th e critical ch ain sh ou ld h appen on ly becau se of a com pan y con strain t resou rce. Gaps in th e plan do n ot m ean you sh ou ld h ave a gap in perform an ce. ◗ Why do we not connect the other chains by their resource and path
dependencies?
It is n ot n ecessary, an d attem pts to add th at level of detail do n ot im prove project perform an ce. Flu ctu ation s will occu r, so attem ptin g to con trol every depen den t ch ain is n ot possible. Th e CCFBs an d th e u se of bu ffer m an agem en t provide th e n ecessary an d su fficien t con trol. ◗ Our schedules have thousands of tasks, so there is no way to plan the project
without an effective computer program.
Qu estion you r assu m ption s. Is it logical to assu m e th at in creasin gly detailed com plexity in a project plan will m ake th e project m ore
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likely to su cceed? Can a project m an ager really m an age th ou san ds of tasks? Does h avin g th ou san ds of tasks im prove th e ability to m an age, or does th e system becom e so com plex th at it can n ever h ave m ean in gfu l accu rate data? How im portan t can it be to h ave tasks as sm all as a fraction of 1% of th e total project? (With 100 tasks, th e average task size is already down to 1% of th e overall project. Wh o can estim ate th at well?) We recom m en d th at you con fin e project sch edu les to a few h u n dred tasks, at m ost. If m ajor su bassem blies (e.g., an aircraft en gin e) requ ire sch edu les of th eir own at a lower level, u se th at approach . (We are workin g th e project m an agem en t system h ere, n ot detailed design s or bills of m aterials.) Experien ce dem on strates th at th e m ore detailed tasks th ere are in th e sch edu le, th e m ore often th e sch edu le h as to be revised an d th e greater th e probability of error. Th at leads to lon g tu rn arou n d tim es for sch edu le u pdates an d th e loss of con trol. ◗ We are halfway through the project and have not penetrated the project
buffer. Can we cut the project buffer in half ?
Cu ttin g th e project bu ffer does n ot redu ce th e project actu al perform an ce tim e. It redu ces th e ch an ce th at th e project will deliver su bstan tially early. You r project bu ffer statu s gives you dyn am ic prediction s of project com pletion tim e. Th ere is n o reason in tern al to th e project to redu ce th e project bu ffer. If extern al n eeds requ ire you to redu ce th e project bu ffer, you can replan th e project at an y tim e. Rem em ber, th e project bu ffer protects th e wh ole project. All n on critical ch ain s m erge to th e critical ch ain before th e project is com plete. Before you redu ce th e project bu ffer, ch eck all CCFBs to m ake su re th at th e u n u sed feedin g bu ffer len gth is at least 50% of each feedin g ch ain u n com pleted path len gth . If th e feedin g bu ffers are all in tact by th at am ou n t, th ere is n o problem with redu cin g th e project bu ffer to 50% of th e rem ain in g len gth of th e critical ch ain . In essen ce, you are startin g a n ew project at th e tim e of th e u pdate. ◗ We have tasks in our project plan over which we have no control. What
should we do?
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Regu lator or clien t review of project ou tpu ts often creates th at situ ation . You can con trol wh at you give th em an d wh en you give it to th em , bu t you can n ot (directly) con trol th eir work processes. In th is case, workin g with you r stakeh olders, as described in Ch apter 1, will provide great ben efit. You can in flu en ce h ow lon g th eir review takes an d lim it poten tial rework by u sin g th e effort n ecessary to en su re th at you u n derstan d th eir requ irem en ts an d produ ce a qu ality produ ct for th eir review. If you are a sign ifican t part of th eir workload, you can h elp th eir focu s by staggerin g you r su bm ission s to h elp th em avoid m u ltitaskin g. Oth er u n iqu e situ ation s dem an d u n iqu e solu tion s. In th ose in stan ces, u se th e five-step focu sin g process (see Section 2.3.3). ◗ Our management/client has specificintermediate milestones they want us to
schedule a date for and meet. What do we do?
Th is can occu r for a n u m ber of reason s, in clu din g coordin ation with oth er parts of a larger project. We kn ow of cases in wh ich project paym en t is tied to satisfactory com pletion of m ileston es. If satisfyin g m ileston es creates th rou gh pu t for you r com pan y, we recom m en d plan n in g m ileston e accom plish m en t as a project of its own . You can th en u se th e m u ltiproject m eth od to lin k th e projects. If satisfyin g th e m ileston es is sim ply a trackin g tool, we su ggest you first try to con vin ce m an agem en t or th e clien t th at bu ffer reports are actu ally a better tool. Failin g th at, we su ggest you protect th e m ileston es with a m ileston e bu ffer. Size th e m ileston e bu ffer as a project bu ffer, bu t do n ot u se it for project con trol. ◗ Our client does not want our result early, because we are a subassembly
to their project, and they do not want to have to store our input. What do we do?
Use th e critical ch ain process to sch edu le th e start of you r activity ch ain s to satisfy th e clien t n eeds. Usu ally, th at will m ean you can delay som e activity starts. ◗ What are the answers to the two exercises in Section 6.3?
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Th ere are m u ltiple satisfactory solu tion s to each exercise. If you r resu lts com e with in abou t 15% of th e project bu ffer to th e total lead tim es given below, th ey are good en ou gh . Critic al Chain Le ng th
6. 11
Proje c t Buffe r
Total Proje c t Le ad Tim e
Small e xe rcise
50
25
82
Larg e e xe rcise
107
47
154
Su m m a ry
Th is ch apter described h ow to create a critical ch ain plan for a sin gle project. Th e steps u p th rou gh creatin g a logic diagram with low risk du ration estim ates do n ot ch an ge from th e referen ce PMBOK approach . Th e critical ch ain steps are as follows. ◗ Estim atin g task du ration for th e critical ch ain plan is often on e of
th e m ost ch allen gin g im plem en tation problem s. Be su re you create a plan with con ven tion al du ration estim ates before you ask for 50-50 estim ates. ◗ Th e critical ch ain plan process is well defin ed an d easy to u se to
create a “good en ou gh ” plan . ◗ Project an d feedin g bu ffer sizin g an d trigger poin ts determ in e th e
degree of project protection an d frequ en cy of con trol action . ◗ Size resou rce bu ffers to sen d effective sign als to resou rces on
im pen din g n eed. ◗ Th e (option al) cost bu ffer provides aggregated cost protection in th e
sam e way th at th e project bu ffer protects th e sch edu le. ◗ You can u se altern ative m eth ods to create an d track th e criti-
cal ch ain plan , ran gin g from m an u al m eth ods to critical ch ain software. ◗ Th e TOC five focu sin g steps (iden tify, exploit, su bordin ate, elevate,
avoid in ertia) provide a fram ework for resolvin g en viron m en t an d project specific issu es.
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Con stru ctin g a critical ch ain plan is a relatively sm all addition to th e work n ecessary to con stru ct an effective critical path plan . It m ay be less work an d create a m ore accu rate plan , if you sign ifican tly redu ce th e n u m ber of activities in you r plan . Th e extra in vestm en t is well worth th e gain .
C HAP TER
7 Conte nts 7.1 Id e ntifying the m ultip r oje c t c onstr a int 7.2 Exp loiting the m ultip r oje c t c onstr a int 7.3 Fe a tur e s of m ultip r oje c t c r itic a l c ha ins 7.4 Intr od uc ing ne w p r oje c ts to the e nte r p r ise 7.5
Sum m a r y
De ve loping th e e n te rp ri s e m u l ti p ro je c t c ri ti c a l c hain plan 7 . 1 I d e n ti fy i n g th e m u l ti p ro je c t c o n s tra i n t Th e critical ch ain is th e con strain t for a sin gle project. Wh at is th e con strain t of an en terprise th at perform s m u ltiple projects? How do you pu t th e critical ch ain s of m u ltiple projects togeth er in a way th at iden tifies th e con strain t of th e en terprise to produ ce projects th at m eet th e th ree n ecessary con dition s an d do it in a way th at allows focu s on in creasin g th e project th rou gh pu t of th e en terprise? Wh at is it th at con strain s th e en terprise from com pletin g m ore projects or com pletin g th e existin g projects m ore qu ickly? Con sider a m ore fam iliar referen ce en viron m en t with wh ich m ost people are fam iliar: m owin g a lawn . Con sider th e am ou n t of grass cu t as th e cou n terpart to com pleted projects. Wh at h appen s wh en th e grass is too
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lon g or wh en you try to pu sh th e lawn m ower too fast? It bogs down an d often stalls. Th e sam e th in g h appen s if too m an y projects are pu sh ed in to a m u ltiproject en viron m en t with ou t con siderin g th e capability of th e con strain t to perform th e projects. If you pu sh too m an y projects in to th e system , it will bog down an d stall. People will work h ard, bu t projects will take a lon g tim e to com plete (th e en gin e is stalled m u ch of th e tim e), an d a lot of m an agem en t effort goes in to restartin g th e en gin e an d clean in g ou t th e debris. It will seem as if th ere are n ever en ou gh of th e key resou rces n ecessary to com plete th e projects. With th e lawn m ower, you u se th e feedback from th e system to adju st th e rate of processin g. You listen an d slow down th e lawn m ower as th e en gin e begin s to slow down . Or you raise th e cu ttin g h eigh t, so you m atch th e processin g rate to th e feed of th e work. Figu re 7.1 illu strates a critical path m u ltiproject scen ario. Th e colors in th e bars represen t resou rces. Usin g con ven tion al low-risk activity estim ates an d con siderin g th ree-project m u ltitaskin g, each activity du ration is 90 days. In m ost organ ization s, th e m an agers of th e th ree projects wou ld rarely work togeth er. Each wou ld work with th e m an agers of th e resou rces to try to get th e resou rces th ey n eeded. In th is worstcase exam ple, all th e resou rce n eeds overlap. If th ere is on ly on e of each resou rce, each project h as to sch edu le assu m in g on e-th ird of th e resou rces tim e to work on its project. Th at situ ation is called th e fraction al h ead cou n t. I h ave m ade a poin t of askin g grou ps of project m an agers (m an y of wh om belon g to th e Project Man agem en t In stitu te, in clu din g certified project m an agem en t profession als), “How m an y of you rou tin ely resou rce-level you r project plan s?” (Resou rce loadin g m ean s iden tifyin g th e resou rces n eeded for each task; resou rce levelin g is rem ovin g th e con flicts in wh ich dem an d exceeds su pply.) My u n official su rvey in dicates th at on ly abou t 5% of project m an agers rou tin ely resou rce-level th eir plan s. In oth er words, th e situ ation is u su ally worse th an I assu m ed above: Th ey do n ot even kn ow wh ere th e overlaps occu r. I th en ask th em , “Wh y n ot?” Most n eed som e proddin g, bu t u su ally th e an swer is on e of two th in gs: (1) It is n ot worth it, becau se m an agem en t will ch an ge everyth in g an yh ow, or (2) it m akes th e sch edu le too lon g. Fin ally, I ask h ow m an y of th em h ave in fin ite resou rces at th eir disposal. So far, n on e h as in fin ite resou rces.
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Som e com pan ies do ch eck resou rce availability across all projects. Th ey th en argu e to in crease resou rces. Th at is m ovin g to th e elevate stage of TOC, before com pletin g th e iden tify, exploit, an d su bordin ate steps—a very expen sive strategy. Con siderin g th at an d th e Figu re 7.1 project, assu m in g th ese projects are all th e sam e, th e resou rces h ave to be divided am on g th e th ree projects; even if you h ave on ly on e resou rce of each type. Th u s, eith er th e project plan s assu m e th is m u ltitaskin g, or th e projects are n ot goin g to com plete on tim e du e to th e n ecessity for m u ltitaskin g. Eviden tly, on e of th e resou rces is th e capacity con strain t of th e system . You first h ave to iden tify th e com pan y capacity con strain t resou rce. Th at is m ost often a certain type of person , bu t it m ay be a ph ysical or even a policy con strain t. Th e com pan y con strain t resou rce becom es th e dru m for sch edu lin g m u ltiple projects. Th e term in ology com es from Dr. Goldratt’s produ ction m eth odology, in wh ich th e dru m sets th e beat for th e en tire factory. In ou r exam ple, th e dru m set th e beat for all th e com pan y projects. Th in k of th e dru m m er on a galleon . Wh at h appen s if even on e rower gets ou t of beat? Th e project system becom es a pu ll system becau se th e dru m sch edu le determ in es th e sequ en cin g of projects. You pu ll projects forward in tim e if th e dru m com pletes project work early. You delay su bsequ en t projects wh en th e dru m is late. For th at reason , projects in a m u ltiproject en viron m en t also requ ire bu ffers to protect th e dru m , to en su re th at th ey n ever starve th e capacity con strain t for work. You also m u st sch edu le th e projects to en su re th at th ey are ready to u se th e dru m resou rce, sh ou ld it becom e available early. Figu re 7.2 illu strates th e CCPM m eth od. Com pared to th e previou s critical path case, you redu ce each activity tim e to 15 days to elim in ate th e th ree-tim es m u ltitaskin g an d to u se 50% probable du ration estim ates. You iden tify th e resou rce su pplyin g activities 2 an d 3 as th e capacity con strain t resou rce. You exploit th e resou rce by syn ch ron izin g th e projects u sin g th at resou rce as th e dru m . You su bordin ate to th e resou rce by addin g capacity bu ffers between th e projects. Th e capacity bu ffers en su re th at th e capacity con strain t resou rce is available for th e su bsequ en t project. Figu re 7.2 sh ows th e CCPM plan com pletin g th e th ree projects (in clu din g th e project bu ffer) n ear th e en d of Au gu st 1998. It sh ows th e first two projects com pletin g even earlier. Com pare th at to th e critical ch ain m u ltiproject plan s of Figu re 7.1, all of wh ich are sch edu led to
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C C PM m ultip le p r oje c t p la n r e d uc e s p r oje c t d ur a tion a nd inc r e a se s p r oje c t thr oug hp ut.
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Fig u r e 7.2
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com plete in May of 1999. Based on wh at you h ave learn ed for sin gle projects, you can expect th e CCPM projects to be early. Based on global project experien ce, you sh ou ld expect th e critical path projects to be late, for even th ese exten ded sch edu les. Note th at syn ch ron izin g th e projects th is way elim in ates resou rce con ten tion for all resou rces, n ot ju st th e dru m resou rce. Th at h appen s in th e exam ple becau se th e projects are iden tical. Wh ile m ost m u ltiproject en viron m en ts do n ot h ave iden tical projects, syn ch ron izin g projects to th e dru m u su ally elim in ates som e, if n ot all, resou rce con ten tion . Resou rce m an ager prioritization of resou rces accordin g to th e pen etration of project bu ffers resolves rem ain in g resou rce con ten tion s. Th is is a m ajor sim plification com pared to attem pts to m icrom an age a wh ole en terprise, wh ich n ever work. By n ow, you sh ou ld u n derstan d wh y th is is a h opeless exercise. All th e activity du ration s are estim ates. Non e of th e activities sh ou ld take th e exact am ou n t of tim e plan n ed. An y sch edu le produ ced for all resou rces across all projects is fiction . It is on ly on e possibility ou t of m illion s of possible com bin ation s of project statu s an d resou rce availability. In stead, th e critical ch ain process u ses bu ffer m an agem en t to dyn am ically allocate resou rces. CCPM allows for su ch variation with th e resou rce bu ffers an d feedin g bu ffers with in each project. Th is process also in clu des th e ability to absorb th e n atu ral variation in th e bu ffers. It is a real-world con trol system . TOC leads to an u n derstan din g th at all resou rces oth er th an th e con strain t m u st h ave excess capacity. Th ose u pstream of th e con strain t resou rce m u st h ave excess capacity to en su re th at th e con strain t resou rce is n ever starved for work, wh ich wou ld waste its capacity. In a project, th at m ean s we h ave to bu ffer to en su re th at we provide th e con strain t resou rce with th e in pu t it n eeds. Resou rces down stream of th e con strain t m u st h ave m ore capacity th an th e con strain t to deal with flu ctu ation s in th eir own ou tpu t an d th at of resou rces between th em selves an d th e con strain t resou rce. Th ey m u st en su re th at th ey always deliver th e con strain t resou rce-processin g rate to th e com pletion of th e project(s). In a project, th at is th e con cern of th e project, n ot of th e con strain t resou rce. Wh ile projects th eoretically can h ave resou rce dem an ds in an y order, th ere ten ds to be a sim ilarity in th e order with in a com pan y, based on th e type of projects th ey operate. For exam ple, m an y projects will h ave a design ph ase, procu rem en t ph ase, con stru ction ph ase, an d in itial operation ph ase. Th u s, th e sequ en ce of dem an ds on resou rces ten ds to be
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sim ilar, alth ou gh th e u sage m ay vary su bstan tially from project to project. Th e gen eral idea carried over from m an u factu rin g is th at th e fu rth er a resou rce is from th e con strain t resou rce in th e plan sequ en ce, th e m ore excess capacity an d/ or th e larger bu ffer it n eeds to n ot affect th e overall lead tim e.
7. 2
Ex p l o i ti n g th e m u l ti p ro je c t c o n s tra i n t
Th e con strain t resou rce becom es th e dru m for th e com pan y projects (like th e dru m m er on th e an cien t galleon s settin g th e pace for th e rowers). Th erefore, th e procedu re to exploit th is resou rce is as follows:
1. Iden tify th e com pan y con strain t resou rce. Th e com pan y con strain t resou rce sh ou ld be th e resou rce th at determ in es th e greatest am ou n t of critical ch ain du ration on you r projects. It u su ally will be apparen t as th e resou rce th at is frequ en tly in sh ort su pply an d is often called on to u se overtim e. If several resou rces exh ibit th e sam e beh avior, select on e based on th e u n iqu e con tribu tion of you r com pan y. Oth erwise, select th e on e u su ally dem an ded n earest th e begin n in g of a project. 2. Exploit th e com pan y con strain t resou rce. a. Prepare th e critical ch ain sch edu le for each project in depen den tly. b . Determ in e th e project priority for access to th e con strain t resou rce. c. Create th e con strain t resou rce m u ltiproject sch edu le: th e dru m sch edu le. Collect th e con strain t dem an ds for each project an d resolve con ten tion s am on g th e projects to m axim ize com pan y th rou gh pu t. In oth er words, com plete m ost projects early. 3. Su bordin ate th e in dividu al project sch edu les. a. Sch edu le each project to start based on th e con strain t resou rce sch edu le.
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b . Design ate th e critical ch ain as th e ch ain from th e first u se of th e con strain t resou rce to th e en d of th e project. c. In sert capacity con strain t bu ffers (CCBs) between th e in dividu al project sch edu les, ah ead of th e sch edu led u se of th e con strain t resou rce. Th at protects th e dru m (con strain t) sch edu le by en su rin g th e in pu t is ready for it. d . If in sertion of th e CCBs in flu en ces th e con strain t resou rce sch edu le, resolve con ten tion s. e . In sert dru m bu ffers in each project to en su re th at th e con strain t resou rce will n ot be starved for work. Place th em im m ediately precedin g th e u se of th e con strain t resou rce in th e project. 4. Elevate th e capacity of th e con strain t resou rce. 5. Go back to step 2 an d do n ot let in ertia becom e th e con strain t. Section 7.3 describes th e featu res of th is process.
7. 3 7. 3. 1
F e a tu re s o f m u l ti p ro je c t c ri ti c a l c h a i n s P ro je c t p ri o ri ty
You m u st prioritize all on goin g projects before you create th e dru m sch edu le. Th e priority is for on e pu rpose: to set th e priority for u se of th e dru m resou rce. You r m eth od for settin g th e priority m ay con sider a n u m ber of factors, bu t th e prim ary factor from TOC is to prioritize to m axim ize th e com pan y th rou gh pu t per u se of th e con strain t. If you h ave a direct m easu re of project th rou gh pu t, you can actu ally u se th at ratio to set th e priority, th at is, divide th e project th rou gh pu t (u su ally in dollars) by th e dru m resou rce dem an d (u su ally in person -h ou rs or person -days). Legitim ate reason s for oth er con sideration s in settin g th e project priority sh ou ld con sider th e com pan y goal. For exam ple, it m ay be advan tageou s to give h igh er priority to you r best cu stom ers, con siderin g you r n eed to m ake m on ey in th e fu tu re.
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Se l e c ti n g th e d ru m re s o u rc e
Th e dru m resou rce m u st be sh ared across all projects you con sider part of th e m u ltiproject en viron m en t. Th at is th e defin ition of a m u ltiproject en viron m en t. Larger com pan ies m ay h ave several in depen den t project grou pin gs th at sh are resou rces with in th e grou p, bu t n ot across grou ps. On ly in th is case sh ou ld you h ave m u ltiple dru m s. Resou rces often appear as con strain ts. Th e com pan y capacity con strain t som etim es m ay seem to float. Th e basic TOC m akes it u n likely th at th ere is in fact m ore th an on e con strain t (u n less you h ave an u n stable system !). Statistical flu ctu ation s can m ake tem porary capacity con strain ts. For exam ple, su ppose a n u m ber of projects h appen to dem an d a particu lar resou rce at on e tim e, exceedin g th e resou rce capability. Th at is a statistical occu rren ce, an d you sh ou ld expect it to h appen . It does n ot m ake th e resou rce a com pan y capacity con strain t. It does m ean th e project plan an d con trol system h as to h an dle it, even if on ly th rou gh th e in dividu al bu ffers already added. Th ere is also som e flexibility in resou rce su pply, for exam ple: ◗ Usin g overtim e or askin g people to defer tim e off; ◗ Segm en tin g th e work to en su re th at you are properly exploitin g th e
poten tial con strain t; ◗ Su bordin atin g oth er work th at does n ot produ ce im m ediate
th rou gh pu t. However, m an y com pan ies h ave a ch ron ic resou rce con strain t: th e departm en t th at is always on overtim e or th e on e th at always seem s late. Presu m ably, th at departm en t h as been perm itted to occu py th at position becau se of som e policy or oth er reason th at proh ibits providin g en ou gh of th e resou rce to m eet all dem an ds. If two or m ore resou rces seem to con ten d for th e h on or, pick th e resou rce dem an ded n ear th e begin n in g of projects. Th at leaves you th e option to ch an ge you r m in d later if n ecessary. We can call th is th e capacity con strain t resou rce becau se it in flu en ces overall com pan y perform an ce. Th ere m u st be a reason th at we can n ot easily in crease th e su pply of th at resou rce, wh ich is th e com pan y bottlen eck an d th erefore m u st becom e th e dru m for all th e projects. Becau se th e pu rpose of selectin g th e dru m resou rce is to stagger th e start of th e projects an d avoid overloadin g th e system , it u su ally does n ot m atter m u ch if you select th e wron g resou rce as th e dru m . You will still
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get som e degree of project staggerin g. As lon g as you ch oose a relatively h igh ly loaded resou rce th at you can n ot easily elevate, you are likely to get a large ben efit. Project perform an ce will h elp you focu s on th e correct dru m resou rce over tim e. It is far better to get on with th e dru m sch edu le with th e wron g resou rce th an to con tin u e to operate th e old way wh ile agon izin g over th e actu al dru m resou rce. Man y criteria h ave been proposed to iden tify th e dru m resou rce. With project plan s, you do h ave th e total resou rce dem an d, an d you sh ou ld kn ow you r total resou rce on h an d. You cou ld select th e dru m by th e h igh est ratio of dem an d to available staff. Use th is m eth od on ly if you h ave som e reason to believe both n u m bers for all th e projects. Dr. Goldratt does n ot recom m en d th is m eth od for produ ction becau se h e claim s th e data are n ever very good. Th at m ay also be tru e for projects. If you u se th is m eth od, m ake su re th e resou rce selected is n ot easily elevated, for exam ple, by h irin g con tractors or tem porary staff. To ach ieve th e m axim u m effect of staggerin g th e projects, th e dru m resou rce sh ou ld be th e resou rce th at con trols th e largest am ou n t of critical ch ain tim e on you r projects. Th is resou rce m ay vary from project to project. If, like m an y com pan ies, you r projects ten d to follow a repetitive pattern (e.g., from en gin eerin g to con stru ction to operation ), you m ay fin d on e resou rce th at dom in ates critical ch ain tim e. Selectin g th e dru m resou rce m akes it m ost likely th at you will rem ove resou rce con ten tion for all th e oth er resou rces in th e project. Av o id a s s ig n in g r e s o u r c e s b y in d iv id u a l n a m e
Man y com pan ies ch oose to iden tify resou rces by in dividu al n am es. Th ey feel th at th e resou rces are so h igh ly specialized th at th ey can n ot do oth erwise. If th at is tru e, you h ave n o oth er option . I will say th at you r com pan y is at h igh risk, h owever, if you r total m u ltiproject th rou gh pu t is con trolled by on e or m ore in dividu als wh o, if th ey leave or get sick, will brin g all projects to a h alt. Con sider th is situ ation as part of you r project risk m an agem en t approach . Th e preferred approach is to assign resou rces by type in you r plan s an d th en h ave th e resou rce m an ager assign specific in dividu als as a task com es u p to be perform ed. Th e defin ition of a resou rce type m u st assu re th at an y person with th at design ation cou ld do th e tasks assign ed to th at resou rce type. Th e prim ary advan tage to assign in g resou rces by type is th at th e larger th e resou rce pool, th e m ore advan tage you h ave to
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dyn am ically assign resou rces to projects as th e activities dem an d. Th at applies to all resou rces, n ot ju st th e dru m resou rce. You can , wh en th e task allows it, fu rth er accelerate tasks by assign in g m ore th an on e resou rce of th e type to th e task. 7. 3. 3
Th e d ru m s c h e d u l e
Th e dru m sch edu le is th e plan for allocatin g th e dru m resou rce across all projects. It is u su ally m an aged by th e m an ager wh o h as respon sibility for th e dru m resou rce. Th e dru m sch edu le is th e prim ary determ in an t of th e system capability to process projects. It sets th e start date for each project. Th e dru m m an ager n eeds th e dru m resou rce dem an ds for each project an d th e project priority to create th e dru m sch edu le. Th e in dividu al critical ch ain project plan s determ in e th e du ration , earliest tim e, an d relative tim es for each of th e dru m -u sin g activities in each of th e projects. Figu re 7.3 illu strates th e dru m resou rce dem an d from th ree projects, position ed from h igh est priority on th e bottom to th e lowest priority at th e top. Th e dru m sch edu le m u st fit in all th ree projects wh ile n ot exceedin g th e capability of th e dru m resou rce, assu m ed to be two resou rce u n its for th is exam ple. Note th at th e dru m resou rce u se can n ot be sch edu led earlier th an sh own on Figu re 7.3. Th at is becau se oth er activities on th e projects h ave to feed th e dru m resou rce u sin g activities. Th ese are th e earliest tim es th at th e projects cou ld u se th e dru m resou rce.
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Th e m eth od is to pu sh th e lower priority projects later in tim e u n til th ey fall in u n der th e resou rce su pply. Th at creates th e dru m sch edu le. Note th at wh en you are sch edu lin g th e dru m , th e task du ration taken from th e in dividu al project sch edu les is th e average du ration . Becau se you will wan t a low risk of n ot h avin g th e dru m resou rce available, you m u st allow tim e in th e dru m sch edu le for lon ger th an average actu al du ration . You accom plish th at by in clu din g th e CCB in th e dru m sch edu le. Figu re 7.4 illu strates th e resu ltin g dru m sch edu le. 7. 3. 4
Th e c a p a c i ty c o n s tra i n t b u ffe r
Th e CCB en su res th at th e con strain t resou rce is available wh en it is n eeded by th e project. It is placed between th e u se of th e con strain t resou rce in th e prior project an d th e first u se of th e resou rce in th e project you are sch edu lin g. It does n ot take lead tim e ou t of th e project you are sch edu lin g, bu t it defin es th e start date for th e resou rce-u sin g activity. You size th e capacity con strain t bu ffer u sin g th e du ration of th e activity in th e prior project. If you h ave two estim ates for th at activity du ration , th e bu ffer is sim ply th e differen ce between th e two estim ates. In oth er words, th e dru m sch edu le allows for th e u se of low-risk estim ates for th e dru m resou rce. 7. 3. 5
Th e d ru m b u ffe r
Numb e r of d rum re source
Th e dru m bu ffer en su res th at th e dru m resou rce h as in pu t to work on wh en it is n eeded in th e project. In th at respect, th e dru m bu ffer is a Push the ove rflow late r in time , until you can “d rop it in” to start with a CCB CCB B
B A
A
C
B A
Drop into ne xt slot C
C start d ate d e te rmine d b y “b acking up ” from this p oint: the constraint use d ate A & B can start imme d iate ly
Fig u r e 7.4 Dr um sc he d ule a c c om m od a te s a ll p r oje c t d e m a nd s, inc lud ing C C Bs.
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feedin g bu ffer. You place it in th e project sch edu le im m ediately prior to th e activity u sin g th e dru m resou rce. It directly affects th e project start date an d lead tim e, if it is on th e critical ch ain . Th e dru m bu ffer is u su ally on th e critical ch ain , bu t it is n ot n ecessary th at it be on th e critical ch ain . Size th e dru m bu ffer as if it were a feedin g bu ffer, u sin g th e u pstream activity path . You can u se th e ru le-of-th u m b sizin g m eth od (i.e., 50% of th e precedin g ch ain ), or you can u se th e squ are root of th e su m of th e squ ares m eth od (see Section 6.4). Som e h ave su ggested sizin g th e dru m bu ffer u sin g an arbitrary lead tim e; su ch as 14 days. I do n ot u n derstan d th e basis for th at recom m en dation , oth er th an it stem s from a con cern th at m an agem en t m ay h ave a ten den cy to pu t m u ltitaskin g pressu re on th e dru m resou rce. Becau se a properly sized dru m bu ffer will u su ally h ave th e activity in pu t ready before th e dru m resou rce is available, th at m ay ten d to pu t pressu re on th e dru m resou rce to m u ltitask or h astily com plete th e prior task. Eith er of th ose beh aviors wou ld h ave n egative con sequ en ces. Avoid th em . 7. 3. 6
P ro je c t s c h e d u l e s
On ce you h ave th e dru m sch edu le, you create th e in dividu al project sch edu les by align in g th e start of th e project to m atch u p th e dru m -u sin g activity. In oth er words, you work backward from th e dru m -u sin g activity to sch edu le th e start of th e project. Becau se you h ad to h ave th e project critical ch ain sch edu le with a tim e-n ow start date to create th e dru m sch edu le, th at am ou n ts to delayin g th e start of som e project by th e am ou n t you h ad to delay th e dru m resou rce–u sin g activity to fit it in to th e dru m sch edu le, plu s th e dru m bu ffer. You th en sch edu le th e rest of th e project down stream from th e dru m -u sin g activities.
7. 4
I n tro d u c i n g n e w p ro je c ts to th e e n te rp ri s e
New projects can arrive in a m u ltiproject en viron m en t at an y tim e. You will h ave a list of prioritized projects an d a dru m sch edu le, an d you will kn ow th e statu s of all th e on goin g projects. You h ave to fit th e n ew project in to th e system . Th e on ly way to sch edu le a n ew project is th rou gh th e dru m sch edu le. To do th at, m an agem en t first m u st decide wh ere th e n ew project fits in to th e project priority. It m ay be th e lowest priority, if m an agem en t
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Numb e r of d rum re source
prefers th e first-in , first-ou t priority m eth od, or it m ay fit h igh er th an som e of th e on goin g projects. For exam ple, if th e n ew project is for an im portan t cu stom er, m an agem en t m ay wan t to place it h igh er in th e priority th an in -h ou se projects. You th en m u st prepare th e critical ch ain sch edu le for th e n ew project, to determ in e wh en (in relative tim e) it will dem an d u se of th e dru m resou rce. You can th en fit th at resou rce dem an d in to th e proper sequ en ce in th e dru m sch edu le. Th e dru m sch edu le determ in es th e start tim e for th e project by backin g u p from th e tim e th e dru m resou rce will be available for th e n ew project. If th e n ew project is placed at h igh er priority th an som e of th e on goin g projects, th e sch edu le of th e on goin g projects will ch an ge. Th at can lead to an in terru ption of work. Use com m on sen se wh en in terru ptin g project work— for exam ple, do n ot in terru pt n early com pleted tasks or tasks th at do n ot h ave im m ediate resou rce dem an d from an oth er project. Man agem en t sh ou ld con sider th e poten tial im pact of su ch in terru ption s wh en placin g a n ew project at h igh er priority th an an on goin g project. Figu re 7.5 illu strates th e in trodu ction of a h igh er priority project in to a dru m sch edu le. You first pu t it in to th e sch edu le assu m in g th at th e project started righ t away bu t above th e n ext lower priority project. Pu t projects of lower priority th an th e n ew project above th e n ew project. Th en , you fit in th e dru m u se as best you can , as illu strated in Figu re 7.6. Th at m ay lead to su spen din g som e on goin g projects. If you do su spen d on goin g projects, do so wisely— for exam ple, do n ot stop n early com plete tasks with ou t com pletin g th e task resu lt. Time now
C
C
Othe r tasks on D p roje ct B
D
B A
A
B A
Earlie st p ossib le d e mand for re source (from D p roje ct p lan)
Fig u r e 7.5 A ne w p r oje c t (D) is a d d e d to the d r um d e m a nd a nd jud g e d b y m a na g e m e nt to ha ve hig he r p r ior ity tha n a n ong oing p r oje c t.
Numb e r of d rum re source
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Time now No imp act on C CCB
B
B A
C
A
Sche d ule d start of D p roje ct
B A
CCB
C D
Earlie st availab le , without imp acting A or B
Fig u r e 7.6 Re solving the d r um d e m a nd se ts the sc he d ule for the d r um r e sour c e in e a c h p r oje c t, inc lud ing the ne w p r oje c t.
Always keep in m in d th at th e worst possible priority decision is to n ot m ake a priority decision , to en cou rage everyon e to “ju st do you r best.” Th at in evitably will lead to m u ltitaskin g an d th e worst perform an ce on all th e projects.
7. 5
Su m m a ry
Th e critical ch ain for a sin gle project is u su ally n ot th e con strain t for an en terprise perform in g m u ltiple projects. It is n ecessary to iden tify th e m u ltiproject con strain t, an d go th rou gh th e focu sin g steps to adapt th e CCPM process to firm s with m u ltiple projects. Wh en you iden tify th e m u ltiproject con strain t an d u se it to sch edu le projects, it is th e dru m for you r organ ization . ◗ Th e dru m
resou rce is th e con strain t in a m u ltiple-project en viron m en t.
◗ Man agem en t m u st select th e dru m resou rce an d prioritize all
projects for access to it. ◗ Th e CCB en su res th at th e dru m resou rce is available wh en it is
n eeded. ◗ Th e dru m bu ffer en su res th at th e dru m resou rce is n ot starved for
in pu t.
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C r itic a l C ha in Pr oje c t Ma na g e m e nt ◗ In dividu al project critical ch ain plan s operate to th e start tim es
developed from th e dru m sch edu le, in clu din g th e CCB an d th e dru m bu ffer. ◗ Man agem en t m u st in trodu ce n ew projects to th e system th rou gh
th e dru m sch edu le by first assign in g th e priority relative to on goin g projects an d th en sch edu lin g th e dru m -u sin g activities. Practical application s of CCPM h ave dem on strated th e greatest gain s in m u ltiproject en terprises. Th e reason is th at th ose en viron m en ts u su ally requ ire everyon e to m u ltitask m u ch of th e tim e. Elim in ation of m u ch of th e bad m u ltitaskin g h as th e greatest im pact on overall en terprise project th rou gh pu t.
C HAP TER
8 Conte nts 8.1 Buffe r m a na g e m e nt 8.2
The c ost b uffe r
8.3 Qua lity m e a sur e m e nt 8.4 Re sp onse s to b uffe r sig na ls 8.5
The c ost wor ld
8.6 C ha ng e c ontr ol a c tions 8.7
M e a s u re m e n t a n d c o n tro l
Sum m a r y
Re fe r e nc e s
M
easu res drive action s th at m ove you toward th e goal. In The Haystack Syndrome [1], Dr. Goldratt n otes: Th e first th in g th at m u st be clearly defin ed is th e overall pu rpose of th e organ ization —or, as I prefer to call it, th e organ ization ’s goal. Th e secon d th in g is m easu rem en ts. Not ju st an y m easu rem en ts, bu t m easu rem en ts th at will en able u s to ju dge th e im pact of a local decision on th e global goal.
For a project in a profit-m akin g com pan y, th e project goal h as to relate to th e com pan y goal, wh ich is to m ake m on ey n ow an d in th e fu tu re. In th is book, I h ave presu m ed th at perform in g a project to m eet th e cu stom er’s n eeds for th e bu dgeted cost on or before th e com m itted delivery date will su pport th at goal. For a project in a n ot-for-profit organ ization , in clu din g both private an d govern m en t 199
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organ ization s, th e gen eral statem en t of th e goal can be con verted to perform in g th eir m ission n ow an d in th e fu tu re (u n less th at m ission is to elim in ate som e problem ). For th at goal to be operation al, h owever, you h ave to con vert it in to a m easu rable qu an tity so you can dig down an d defin e local m easu res for decision m akers in th e organ ization . On ce a project h as begu n , th e project m an ager’s decision s focu s on h ow to deliver tech n ical qu ality on tim e an d for or u n der th e estim ated cost. Project-level decision s in clu de th e followin g: ◗ Disposition of m aterial th at is n ot u p to specification s (in clu din g, for
R&D projects, n ot gettin g th e h oped-for resu lt); ◗ Requ ests for addition al tim e or m on ey to com plete activities; ◗ Requ ests to add scope (som eday, m aybe even a requ est to redu ce
scope!); ◗ Un an ticipated resou rce con flicts; ◗ Late activities th at m ay th reaten th e delivery date; ◗ Un an ticipated extern al in flu en ces like acciden ts, weath er, n ew
regu lation s, an d u n fu lfilled assu m ption s (e.g., soil con dition s dictatin g a n eed to pu t in pilin gs before con stru ction ); ◗ Recovery from m istakes.
In th e followin g list of wh at effective m easu res m u st do, th e first six were iden tified by Dr. Joseph Ju ran [2]. Effective m easu res m u st: ◗ Provide an agreed-on basis for decision m akin g; ◗ Be u n derstan dable; ◗ Apply broadly; ◗ Be su sceptible of u n iform in terpretation (i.e., be easy for everyon e
to u n derstan d th e sam e way); ◗ Be econ om ic to apply; ◗ Be com patible with existin g design of sen sors; ◗ Provide early warn in g of th e n eed to act; ◗ Deliver con trol data to th e person wh o m u st act; ◗ Be sim ple.
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Th e CCPM m easu rem en t an d con trol system is design ed to satisfy th ose requ irem en ts.
8. 1
B u ffe r m a n a g e m e n t
Th e m easu rem en t system for CCPM follows th e practice establish ed in dru m -bu ffer-rope. It u ses bu ffers to m easu re critical ch ain plan perform an ce. Section 4.3 recom m en ded explicit action levels for decision s. Th e project bu ffer is th e m ost im portan t m on itorin g tool. Th e resou rce bu ffer protects th e critical ch ain from resou rce u n availability. Th e resou rce bu ffer sh ou ld trigger a two-way com m u n ication between th e project m an ager an d th e resou rce m an ager to en su re th at th e resou rce will be available wh en it is n eeded. Th e project m an ager tells th e resou rce m an ager, “Based on presen t statu s, we will n eed resou rce x in y days.” Th e resou rce m an ager respon ds, “Based on cu rren t resou rce u se, th at resou rce will/ will n ot be available.” Th e resou rce bu ffer sh ou ld be large en ou gh to allow for altern ative action s in th e even t th ere will be problem s with resou rce availability. Man agin g th e feedin g bu ffers protects th e overall sch edu le from delays in m ergin g path s, in clu din g path s th at m erge at th e project bu ffer. Do n ot u se resou rce bu ffers on n on critical ch ain s. In stead, protect th e project from n on critical ch ain activity delay by both th e CCFB an d th e project bu ffer. Action criteria for th e CCFBs are th e sam e as for th e project bu ffer. In th e m u ltiproject en viron m en t, treat th e dru m bu ffer like an y feedin g bu ffer. You do n ot h ave to m easu re th e CCB, wh ich was u sed to sch edu le th e project start tim e an d n ot as a dyn am ic m easu rem en t.
8. 1. 1
Sta tu s re p o rti n g
Bu ffer reportin g depen ds on realistic estim ates of h ow m an y days are left to com plete a task. Th ere is often a ten den cy to report “on sch edu le” u n til th e du e date arrives. With th e critical ch ain m easu rem en t system , th at am ou n ts to su btractin g th e total du ration estim ate from th e days spen t. You sh ou ld qu estion estim ates th at are repeatedly on sch edu le. A u sefu l aid to estim atin g is to ask people, particu larly on th e critical ch ain or on feedin g ch ain s with sign ifican t bu ffer pen etration , to explain th e basis for
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th eir estim ated n u m ber of days rem ain in g. For exam ple, “Th is task was sch edu led to gen erate abou t 300 lin es of code in 30 days. Th e 300 lin es still look abou t righ t. We gen erated on ly 100 lin es in th e first 15 days, bu t th at in clu ded layin g ou t th e form at an d relation sh ips. Th erefore, we sh ou ld be able to com plete th e rem ain in g 200 lin es in well u n der 20 days; I n ow estim ate 15. We h ave abou t 5 days of testin g to do at th e en d. So, we h ave abou t 20 days rem ain in g.” Th e m ore u se you m ake of qu an titative m easu res of task statu s, an d u se th ese to forecast task com pletion , th e m ore effective you r project con trol. 8. 1. 2
Th e b u ffe r re p o rt
Clien ts always wan t to kn ow h ow th eir project is goin g. Project m an agem en t u su ally wan ts to keep th e clien t separate from th e people perform in g th e work for a variety of reason s. Reason s in clu de th e clien ts distu rbin g th e work flow, workers m istakin g clien t in pu t as direction to ch an ge th e project, an d th e clien t receivin g in accu rate in form ation by askin g people qu estion s to wh ich th ey do n ot really kn ow th e an swer (everybody likes to h elp). Most of u s are aware of th e organ ization filter effect. I on ce h ad a boss tell m e h e believed th at n oth in g im portan t got th rou gh two layers of m an agem en t. I u sed to th in k h e was a pessim ist. I n ow th in k h e was an optim ist. Th e sam e th in g h appen s to written in form ation as it passes u p th e ch ain . Th at is, can did in form ation is often filtered ou t of written reports. Th erefore, clien ts u su ally are n ot con ten t with dealin g with form al reports or tran sm ission s th rou gh th e form al reportin g system . On e of th e best ways to keep clien ts directly in form ed with accu rate in form ation is to in vite th em to you r project statu s m eetin gs. I recom m en d th at every project h ave weekly an d m on th ly statu s m eetin gs. Th e m eetin gs m u st be h igh ly in form ative an d tigh tly focu sed to th e n eeds of th e atten dees. I recom m en d a fixed agen da an d th e rapid pu blication of m in u tes followin g th e m eetin gs (h ou rs at m ost). In addition to th e task statu s, th e agen da sh ou ld in clu de review of action s from th e previou s m eetin g, review of th e project risk list, an d statu s of an y ch an ge con trol requ ests. Bu ffer sign als sh ou ld create action item s on th e action list. Most projects requ ire som e type of form al reportin g, m ost often on a m on th ly basis. With today’s com pu ters an d th e soph isticated project con trol program s, it is m u ch too easy to create very large reports. (Th e
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cartoon strip “Dilbert” illu strates th e problem with large reports by h avin g Dilbert’s boss u se a th ick project report as a footrest.) Project reportin g sh ou ld h elp th e project, n ot dem an d oth erwise scarce project resou rces. Th erefore, th e reports sh ou ld be focu sed on th e cu stom er’s n eed for th e report. Figu re 8.1 illu strates a sim ple form at for project reportin g. Th e report sh ou ld con tain th e m in im u m in form ation n ecessary to m eet th at n eed an d h ave a on e-page execu tive su m m ary th at tells it all. Th e project team is often overlooked as th e recipien ts of project reports. Th ey rarely h ave th e tim e to read th ick reports an d often do n ot Proje ct:_________________________________________
Date :____________________________
Proje ct Manag e r:________________________________ Ove rall status: Ove rall status:
___% of Cr itical Chain Activitie s Comp le te ___% of Cr itical Chain Activitie s Planne d Comp le te
Days
15 10 5 0 −5 −10
Proje ct b uffe r p e ne tration:
5
15
10
20
We e ks
Dollars (thousand s)
Days
Issue s or conce r ns:
15 10 5 0 −5 −10
Cr itical chain fe e d ing b uffe rs p e ne tration:
5
10
15
20
We e ks
Cost b uffe r p e ne tration 1,001 50 0 −50
3
5
7
9
11 13 15 17 19 21 23 25 We e ks
Proje ct q uality status: This month # of corr. actions ne e d e d # of corr. actions close d Dollars Days Quality
Fig u r e 8.1 tr e nd s.
Chang e control actions: Previous month
Pr ior
This month
Previous month
Numb e r sub mitte d Numb e r ap p rove d $ chang e s Sche d ule imp act
Exa m p le of a p r oje c t sta tus r e p or t tha t p lots b uffe r
Pr ior
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h ave access to th em . Let’s h ope th at situ ation is im provin g with person al com pu ters an d in tran ets; th ere is little excu se for prin tin g large-volu m e project reports today. Th ere is n o excu se for failin g to m ake th e in form ation available to project participan ts. I recom m en d th at large projects in clu de a form al process of reportin g back to th e project participan ts m on th ly. On a large project, you m ay n ot wan t all of th e project team at th e m on th ly project con trol m eetin g, bu t on a sm all project, it m ay be appropriate to in vite everyon e. Plot tren ds of bu ffer u tilization are illu strated in Figu res 4.9 an d 8.1. Th e bu ffer m easu re is fu n ction ally sim ilar to a con trol ch art, an d you can u se sim ilar decision ru les. Th at is, an y pen etration of th e red zon e requ ires action . Fou r poin ts tren din g su ccessively in on e direction requ ire action . Tren din g is im portan t if you r processes th at produ ce project task resu lts are n ot in statistical con trol. Sh ewh art n otes th at th e tren d in form ation is even m ore im portan t in su ch cases [3]. 8. 1. 3
Re s o u rc e u s e o f b u ffe r re p o rts
Resou rces an d resou rce m an agers h ave to see th e bu ffer reports from all th e projects th ey su pport. Resou rce m an agers u se th e bu ffer reports to m ake decision s on assign in g resou rces. In addition to th e resou rce bu ffer triggers, th e resou rce m an agers u se th e bu ffer reports to decide th e priority to dyn am ically assign specific resou rces to tasks. Th e criteria are: ◗ Critical ch ain tasks h ave priority over n on critical ch ain tasks. ◗ For two com petin g critical ch ain tasks, th e on e with th e m ost
relative project bu ffer pen etration h as priority. ◗ For two com petin g n on critical ch ain tasks, th e on e with th e m ost
relative feedin g bu ffer pen etration h as priority. ◗ For equ al bu ffer pen etration , th e project with th e n earest en d date
h as priority. Resou rces can u se th e bu ffer reports an d th e sam e criteria to m ake decision s between m u ltiple tasks th at h ave been assign ed to th em . Th e overridin g ru le is to en gage in roadru n n er beh avior for wh ich ever task you work on .
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Th e c o s t b u ffe r
For m an y projects, cost is as im portan t as sch edu le. For som e projects, cost m ay be an absolu te con strain t. In su ch cases, it is u sefu l to exten d th e bu ffer idea to m an age cost to bu dget. Sizin g th e cost bu ffer requ ires con siderin g a n u m ber of factors. First, you sh ou ld accou n t for th e fact th at you h ave n ot bu dgeted for th e u se of th e sch edu le bu ffers. Wh ile start delays will n ot directly tran slate to cost, addition al activity du ration tim es u sed by people workin g to com plete th e activity will in crease cost. You sh ou ld in clu de at least 50% of th e tim e bu ffers in to th e cost bu ffer, at an appropriate cost rate related to th e ch ain th ey protect. Altern atively, you cou ld add th e am ou n ts rem oved u sin g th e su m of th e squ ares m eth od, if you believe th at th ere is n o bias in th e in dividu al cost estim ates. Th at is, th e cost bu ffer equ als th e squ are root of th e su m of th e squ ares of th e cost rem oved from each project activity. Note th at th is m eth od is su bject to th e sam e con sideration s th at apply wh en you u se th e su m of th e squ ares to size tim e bu ffers. For exam ple, for m an y n early equ al cost activities, th is m eth od m ay yield a m u ch sm aller bu ffer. Secon d, you m u st con sider th e u n iqu e aspects of each project th at affect you r ability to estim ate accu rately. For exam ple, if you are estim atin g u n iqu e m aterials or m aterials su bject to wide price variation s, you sh ou ld con sider th at wh en sizin g th e cost bu ffer. Fin ally, take advan tage of u sin g an aggregated cost bu ffer, wh ich su bstan tially redu ces th e total cost bu ffer requ irem en t. It also redu ces th e ten den cy to u se it or lose it, wh ich sets in if you in clu de cost con tin gen cy in each activity. As with sch edu le, becau se of h u m an beh avior, projects do in clu de cost con tin gen cy. Th e on ly con cern is if you h ave a readily iden tified aggregated con tin gen cy u n der th e con trol of th e project m an ager or h idden con tin gen cy at th e discretion of each task perform er. Never attem pt to operate with a cost bu ffer of less th an 10% of th e estim ated project cost. Th e reason is th at th ere is always som e bias in project cost estim ates. You can always forget som e th in gs an d som etim es u n derestim ate th in gs. Project reviews will u su ally rem ove an y addition al u n n eeded item s in th e cost estim ate an d en su re th at in dividu al cost estim ates are n ot u n realistically h igh .
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8. 2. 1
C o s t b u ffe r p e n e tra ti o n
Pen etration of th e cost bu ffer provides th e global in form ation you n eed to drive cost decision s. Th e m easu re is cost bu ffer pen etration in dollars, an d th e action levels are th e sam e as for th e tim e bu ffers. Take n o action in th e first th ird of th e bu ffer, plan for action s in th e secon d th ird of th e bu ffer, an d take action s wh en you pen etrate th e th ird th ird of th e cost bu ffer. Th e cost bu ffer in clu des two elem en ts: th e n et effect of approved project ch an ges an d th e differen ce to date between actu al cost an d plan n ed cost for th e work perform ed. You can n ot com pare actu al project cost to plan n ed project cost versu s tim e to calcu late bu ffer pen etration . Th e reason is th at actu al cost to date in clu des actu al sch edu le perform an ce, an d plan n ed cost to date is based on th e sch edu led activity perform an ce. Becau se of variation , actu al sch edu le perform an ce n ever m atch es sch edu led perform an ce. Use th e earn ed valu e m eth od to determ in e cost bu ffer pen etration . As described in Ch apter 3, earn ed valu e was developed precisely to separate ou t th e two con tribu tors to th e differen ce between cost an d estim ate on a project: sch edu le perform an ce an d cost perform an ce. Earn ed valu e defin es th ree term s: ◗ Actu al cost of th e work perform ed (ACWP), wh ich is sim ply h ow
m u ch you h ave spen t to date on th e project, broken down to elem en ts of th e project. ◗ Bu dgeted cost of work sch edu led (BCWS), wh ich is th e tim e-
ph ased bu dget for th e project. ◗ Bu dgeted cost of work perform ed (BCWP), wh ich is th e earn ed
valu e. You credit activities with a portion (from zero to 100% ) of th e bu dgeted cost for th e activity. (Note th at th e actu al cost to perform th e task does n ot m atter to BCWP or earn ed valu e.) Th e on ly n ew term h ere is BCWP. ACWP is sim ply th e cost to date. BCWS is th e bu dgeted cost to date. Th e differen ce between ACWP an d BCWS is th e spen din g varian ce. Spen din g varian ce is m ade u p of two parts: th e cost varian ce an d th e sch edu le varian ce. Use th e cost varian ce to determ in e cost bu ffer pen etration : CV = BCWP − ACWP
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Most com pu ter sch edu lin g software in clu des th e capability to calcu late th e earn ed valu e, or accu m u lated BCWP. Th e ACWP is you r actu al project cost as of a given date. Two of th e earn ed valu e m easu res are th e sam e as critical path cost m easu res, th at is, th e BCWS an d th e ACWP. Earn ed valu e really in trodu ces on ly on e n ew m easu re. Most earn ed valu e practition ers con sider BCWP a sch edu le statu s in dicator. Un less you h ave all you r bu dget in form ation loaded in to you r sch edu le file, th at requ ires processin g th e activity statu s data with th e bu dget file. Norm ally, th at can n ot h appen m ore frequ en tly th an th e accou n tin g system ru n s, so it u su ally is m on th ly. Th e delay is a problem in m an y projects, becau se it tu rn s sch edu le statu s in to h istory. It m akes th e wh ole job of project m an agem en t equ ivalen t to drivin g you r car by lookin g th rou gh th e rearview m irror. Most projects h ave little trou ble com in g u p with com parable BCWP an d ACWP for direct labor h ou rs or cost. Man y projects an d com pan ies do h ave trou ble ach ievin g com parable valu es for m aterial costs. Th e problem s com e from delays, accru als, an d com m itm en ts. Few com pan ies are yet able to com pile effective actu al cost reports m ore frequ en tly th an m on th ly an d m ore qu ickly th an a week or two after th e en d of th e m on th . Tim e lags m ay be greater for su bcon tract work. Un less a project is very lon g, a sign ifican t portion of th e project tim e or bu dget m ay be expen ded before th e project m an ager sees it in cost reports. Mu ltiyear govern m en t projects h ave to work to an n u al bu dgets as well as overall project bu dgets; th u s, th e six-week delay can represen t 10% of th e an n u al bu dget. Material costs m ay in clu de con tract labor. Th e reason project con trol system s h ave difficu lty is th at th e fin an cial system s often lag actu al m aterial expen ditu res. Make su re you accou n t for th at in determ in in g cost bu ffer pen etration . Th e accru al problem occu rs becau se you often do n ot get billed for lon g lead-tim e m aterials as th ey are bu ilt by th e su pplier; you get th e bill u pon delivery an d u su ally take a m on th or m ore to pay for it. You r sch edu le system u su ally spreads th e cost for th e m aterial over th e tim e from placin g th e order to delivery, som etim es m an y m on th s. You r fin an cial system does n ot accou n t for th e cost u n til it is paid in on e lu m p su m som e tim e after th e actu al delivery. To accou n t for th at, som e com pan ies estim ate accru als an d in clu de th em in th e project ACWP.
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Accru als are estim ates of wh at you owe on th e m aterial. Un fortu n ately, accru al system s are n otoriou sly in accu rate an d often h ave a delay of th eir own . Material com m itm en ts are th e total valu e of sign ed con tracts n ot recogn ized as costs in you r accou n tin g system . You m ay h ave bu dgeted $10,000 for som e piece of equ ipm en t an d th en sign ed a con tract of $15,000, becau se th at is th e best price you cou ld get at th e tim e you placed th e order. You r cost varian ce sh ou ld in clu de th e differen ce as soon as you sign th e con tact, becau se you r project will see th e cost. In m ost fin an cial system s, you will n ot see th e differen ce u n til th e costs are accru ed over tim e, or u n til th e paym en t is actu ally m ade. Som e project m an agem en t system s preven t you from ch an gin g th e bu dget to accou n t for th e differen ce. You m ay h ave to accou n t for th e differen ce between com m itted m aterial cost an d actu al m aterial cost separately an d add it to you r cost bu ffer pen etration .
8. 3
Q u a l i ty m e a s u re m e n t
Irelan d describes th e fu n dam en tals of project qu ality m an agem en t [4]. CCPM does n ot directly affect th e requ irem en ts or processes n ecessary for project qu ality con trol. TOC places a prem iu m on process an d produ ct qu ality becau se of th e im portan ce to th e com pan y goal. TOC is a process of on goin g im provem en t. Qu ality system s su ch as th ose prescribed in ISO 9000 are com pletely com patible with CCPM. In The Haystack Syndrome, Dr. Goldratt described an effective m easu re of qu ality as dollar-days [1]. Dollar-days are th e accu m u lation of th e dollars of im pact for each day an item does n ot m eet th e requ irem en ts. Dollar-days pu t th e correct focu s on qu ality of produ ct. Th e tech n ical m easu res of produ ct qu ality do n ot relate directly to eith er th e project or com pan y goal an d th e n ecessary con dition s. You m easu re tech n ical perform an ce by con form an ce to cu stom er requ irem en ts, as defin ed in th e cu stom er requ irem en t lists or oth er specification s, stan dards, or sou rces of produ ct requ irem en ts. Su ch diverse m easu rem en t u n its do n ot give u s an u n derstan din g of th e im portan ce of qu ality. Th e qu ality assu ran ce fu n ction u su ally h as th e lead to m easu re an d report on qu ality con form an ce to plan , bu t a preven tive approach to qu ality requ ires all project participan ts to plan h ow n ot to m ake defective
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produ ct. You n eed a m easu re th at correctly portrays th e cost of poor qu ality an d in cen tivizes preven tion of qu ality defects. Dollar-days en cou rage qu ality perform an ce on a project. If on e activity m u st reject an in pu t th at does n ot m eet qu ality stan dards, th e produ ct goes to th e qu ality departm en t, wh ich accu m u lates th e dollar-days u n til th e produ ct is passed on to th e activity th at cau sed th e defect. (Th e activity th at rejected th e produ ct does n ot get credited with dollar-days.) Dollar-days can h elp you provide th e n ecessary in cen tive to produ ce qu ality deliverables from each activity. As soon as an activity com pletes an d passes on th e work resu lt, th e dollar-days are passed on to th e su ccessor activity. Th e dollar-days con tin u e to grow u n til th e excess activity tim e recovers. Down stream activities will realize it is n ot fair to pen alize th em for th e overru n s of du ration by predecessor activities; n everth eless, in m ost cases, th ey will be a little m ore m otivated to get th eir activity don e an d pass on th e h ot potato. Wh at are th e dollars to assign to th e dollar-day com pu tation ? Several ch oices com e to m in d. Th e daily bu rn rate of th e activity is th e low en d. Th e overall project cost is th e h igh en d. For activities on th e critical ch ain an d for activities on th e feedin g ch ain s, on ce th ey h ave con su m ed th e project bu ffer, th e total project cost seem s appropriate. Th at will cau se im m ediate focu s in th e righ t place. For activities on feedin g ch ain s th at h ave n ot u sed u p th e project bu ffer, th e valu e of th e ch ain wou ld seem appropriate.
8. 4 8. 4. 1
Re s p o n s e s to b u ffe r s i g n a l s Sc h e d u l e b u ffe r e x c e e d s fi rs t th i rd
Th is is a sign al th at th e sch edu le bu ffer m ay h ave been violated, affectin g th e overall project sch edu le. At th at level, you m u st plan ways to recover th e sch edu le on cu rren t or down stream activities on th e ch ain . Th ere are fou r gen eral ways to redu ce path tim e: Ch an ge th e activity logic, in crease resou rces, redu ce scope, or im prove th e process for th e activity. Table 8.1 lists ideas to carry ou t th ree of th ose fou r m eth ods. Ch an gin g th e activity logic u su ally m ean s pu ttin g m ore activities in parallel. If you ch oose to do th at, be su re to assess th e n eed for addition al feedin g bu ffers.
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C r itic a l C ha in Pr oje c t Ma na g e m e nt Ta bl e 8. 1
Ideas to Help Redu ce Sch edu le Bu ffer Pen etration Me thods to Inc re as e Re s ourc e s
Me thods to Re duc e Sc ope
Me thods to Im prove the Proc e s s
Hire additional staff
Sub contract part of the scope
Change activity logic (e .g., go from finish-to-start to finish-tofinish) Examine the activity logic for ways to re duce b atch size s
Bre ak up the activity to use a more dive rse kind of staff
Re vise re quire me nts
Provide improve d tools
Authorize ove rtime (for lab or)
De fe r re quire me nts to late r in the proje ct
Ob tain e xpe rt assistance
Sub contract lab or
—
Use proce ss improve me nt tools, e spe cially cycle time analysis
8. 4. 2
C o s t b u ffe r e x c e e d s fi rs t th i rd
Th is is a sign al th at th e overall project m ay overru n th e bu dget. You m u st plan ways to redu ce cost (Table 8.2). Depen din g on th e tren d an d th e in dication s an d projection s from th e cost bu ffer, you m ay in itiate action before exceedin g th e secon d th ird of th e cost bu ffer. Ta bl e 8. 2
Ideas to Help Redu ce Cost Bu ffer Pen etration Me thods to Inc re as e Re s ourc e s
Me thods to Re duc e Sc ope
Me thods to Im prove the Proc e s s
Use lowe r cost staff
Sub contract part of the scope
Change activity logic (e .g., go from finish-to-start to finish-to-finish)
Use more productive staff
Re vise re quire me nts Ne gotiate
Provide improve d tools
Use compe titive b idding for sub contracts
De fe r re quire me nts to late r in the proje ct
Ob tain e xpe rt assistance
Pe rform make -b uy analysis on planne d sub contracts and on activitie s that might b e sub contracte d at re duce d cost
Look for activitie s that can b e de le te d
Use proce ss improve me nt tools, e spe cially cycle time analysis
—
Look for costs that may not b e ne ce ssary to me e t the custome r’s re quire me nts
—
Measurement and control 8. 4. 3
211
D o l l a r-d a y s q u a l i ty i n c re a s i n g
Th is m ean s th at th e qu ality process is n ot effective. You n eed to perform problem solvin g to discover an d correct th e core problem . You m u st h ave th e qu ality process well defin ed an d in con trol for problem solvin g to be effective.
8. 4. 4
Sc h e d u l e b u ffe r e x c e e d s s e c o n d th i rd
Th is is th e sign al to im plem en t th e action you h ad plan n ed. Depen din g on th e ch an ges n ecessary to im plem en t recovery, you m ay n eed to adju st th e project plan , u sin g you r form al project ch an ge m an agem en t procedu re. If you ch an ge th e project logic, su ch as goin g to fin ish -to-fin ish logic in stead of start-to-fin ish logic, ch an ge th e plan accordin gly. Ch an ges su ch as au th orizin g overtim e or u sin g con tract labor sh ou ld n ot requ ire a ch an ge to you r plan .
8. 4. 5
C o s t b u ffe r e x c e e d s s e c o n d th i rd
Th is is th e sign al to im plem en t th e action you h ad plan n ed. You n eed n ot ch an ge th e plan for cases in wh ich actu al cost sim ply exceeded th e estim ate, an d you in ten d to absorb th em in th e cost bu ffer. As for th e oth er sign als, if you r plan requ ires ch an ges in th e project logic or scope, you sh ou ld im plem en t a form al project ch an ge alon g with im plem en tin g th e action .
8. 5
Th e c o s t w o rl d
I discu ss cost-world m easu res becau se m an y critical ch ain project m an agers will be requ ired to report to a cost-world accou n tin g system , at least for a wh ile. Th e gen eral poin t I wan t to m ake is th at u sin g CCPM will n ot preven t you from reportin g to cost-world m easu res. Typical m easu res em ployed on projects for cost an d sch edu le m an agem en t in clu de th e followin g: ◗ Mileston e statu s: Days early or days late; ◗ Activity statu s: Projection of ability to deliver on th e m ileston e date,
at th e bu dgeted activity cost;
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C r itic a l C ha in Pr oje c t Ma na g e m e nt ◗ Critical path statu s: Projection of tim e to com plete th e project; ◗ Actu al cost versu s bu dget statu s: Com parison of actu al cost to
bu dget cost an d estim ate to com plete th e project. Som e project m an agers u se som ewh at m ore soph isticated m easu res, especially on larger projects. For exam ple, th ey plot m ileston e com pletion on con trol ch arts or report an d do som eth in g with slack tim e on n on critical path s. Wh en you are m an agin g to th e critical path , it is n orm al to evalu ate th e activity statu s, m ileston e statu s, progress on th e critical path , an d overall cost to overall bu dget. Usu ally data are available to m on itor cost to bu dget at lower levels of a WBS th an th e total project. Activity statu s is n orm ally gath ered in real tim e by th e project m an ager at statu s m eetin gs with work package m an agers. Actu al cost data u su ally h ave som e delay, sin ce m ost accou n tin g system s ru n th e costs on ly m on th ly. Th e cost data u su ally com e directly from th e accou n tin g system , with wh ich m an agers in th e com pan y are fam iliar. Recall th at wh en you resou rce-level a critical path , it is n o lon ger th e critical path . Th e critical path is actu ally th e resou rce-depen den t ch ain s you h ave created. It is th e de facto critical ch ain . Un fortu n ately, it u su ally is n ot tracked th at way after resou rce levelin g. Th u s, th e critical path project m an ager loses focu s. Man y people apply th e critical project m an agem en t software to u pdate th e plan to date. Th at allows delay in an y path to create a n ew critical path . Worse, it adds th e delay to th e calcu lation of float for all th e oth er project path s. Th u s, if th e project recovers th e apparen t lost tim e on th e n ew critical path , it is likely th at delay h as been in trodu ced in th e oth er path s workin g to th e delayed sch edu le. Som e will argu e th at com parin g th e statu sed sch edu le to th e baselin e sch edu le preven ts th at u n desirable effect. My experien ce is th at m ost people in su ch en viron m en ts focu s on th e du e date listed in th e statu sed project sch edu le. CSCSs (cost sch edu le con trol system s), in trodu ced in th e early 1960s as a m eth od to determ in e appropriate progress paym en ts on projects, were exten ded to attem pt to resolve a fu n dam en tal problem in project m an agem en t: Cost an d tim e are n ot in th e sam e u n its of m easu re. Alth ou gh th e prim ary pu rpose of CSCSs was to provide a basis for con tract paym en ts on govern m en t con tracts, m an y organ ization s adopted
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th em as a project m an agem en t tool. CSCSs defin e m easu res for sch edu le perform an ce (tim e) in term s of dollars. CSCSs also com pu te varian ces as differen ces between th e n u m bers an d in dices as ratios of th e varian ces to th e plan m easu res. I described th e cost varian ce as a u sefu l m easu re of cost bu ffer pen etration . CSCSs also develop an oth er m easu re, in appropriately titled th e sch edu le varian ce, th at m easu res th e cost differen ce du e to actu al versu s plan n ed sch edu le perform an ce. It is a cost m easu re, n ot a sch edu le m easu re. Wh ile it provides a defin ition of th e oth er part of th e differen ce between actu al cost to date an d sch edu led bu dget to date, it h as little valu e as a sch edu le in dicator becau se it weigh ts sch edu le perform an ce by th e cost of th e tasks. It can give en tirely m isleadin g in form ation on actu al sch edu le perform an ce. You sh ou ld n ot u se it. CSCSs calcu late all th ree of th e m easu res (BCWS, ACWP, BCWP) down to th e fin est level of detail determ in ed for project m easu rem en t an d roll th em u p to th e total project. Man y of th e projects th at h ave su ffered th e gran dest sch edu le slips an d cost overru n s h ave h ad th e m ost soph isticated CSCSs. Mileston e statu s (in clu din g critical path m ileston e statu s) is a direct m easu re of th e project sch edu le statu s, available to th e project m an ager im m ediately as th e project is sen sed. Most project m an agers ascertain m ileston e statu s at least weekly, eith er in a m eetin g or th rou gh a sim ple reportin g process. Now th at m ost projects are h ooked u p on e-m ail, th e statu s reports can be com piled in real tim e. Pu ttin g sch edu le statu s in term s of dollars is n ot m ean in gfu l. Sch edu le varian ce is fu rth er con fou n ded by th e ability to accou n t for BCWP a variety of ways an d an y rollu p likely will be a com bin ation of m an y ways. BCWP m akes n o distin ction between activities on th e critical path / ch ain an d th ose n ot on th e critical path / ch ain . Th e actu al m ean in g in term s of th e sch edu le is su bstan tial. As n oted earlier, th e actu al cost im pact of activities on th e critical ch ain (th e project bottlen eck) cou ld be th e wh ole cost of th e project for th e time lost, n ot ju st th e cost of th e in dividu al activity. Fin ally, CSCS u su ally creates som e in dices, essen tially th e percen tage of varian ce. Th at presu m ably was to allow con stan t com parison th rou gh a project life an d between projects. Bu t th ere are differen t ways to calcu late th at valu e. On e m eth od even goes so far as to recalcu late a tim e from th e sch edu le varian ce (sch edu le varian ce divided by project expen ditu re rate) to represen t som e type of average project sch edu le perform an ce in
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days. Th e n u m bers requ ire m ore calcu lation an d are m ean in gless in term s of project decision m akin g. Th e prim ary problem with CSCSs is th at th ey violate th e first focu sin g step. Rath er th an fin din g an d focu sin g on th e con strain t, CSCSs requ ire atten tion to each activity based on its cost. Th ey are th e u ltim ate costworld defocu sin g device. If you m u st report to a CSCS m easu rem en t system , keep in m in d th at th e m easu res will sh ow project com pletion wh ere you sh ow th e en d of th e project bu dget. You r critical ch ain project com pletion is at th e en d of th e project bu ffer. On e way you can recon cile th at differen ce is to pu t th e cost bu ffer in to an activity th at represen ts th e project bu ffer. With th e critical ch ain m easu rem en t system , you m on itor progress alon g th e critical ch ain by th e com pleted critical ch ain activities an d with th e project bu ffer an d critical ch ain feedin g bu ffers. Every day, you gath er th e data, wh ich h ave clear m ean in g, m easu red in tim e. You also m on itor actu al cost as in th e critical path m eth od, so data are available as soon as th e fin an cial system cran ks it ou t.
8. 6
C h a n g e c o n tro l a c ti o n s
Section 4.4 described th e n eed for form al project ch an ge con trol. Th e project m an agers sh ou ld approve an y ch an ges to th e plan . You sh ou ld h ave a form to aid trackin g ch an ges an d a n u m berin g system so you can be su re you are always workin g to th e latest version of th e plan . In an ideal world, th e plan wou ld n ever ch an ge. In th e world m ost people are com in g from , it ch an ges all th e tim e. You likely will be som ewh ere in between in you r in itial efforts. You h ave to decide on criteria th at con stitu te a ch an ge to th e plan . Followin g are som e th ou gh ts for you r con sideration : ◗ A change in the plan logic (e.g., add a task, delete a task, change to the
predecessor or successor on a task) should be considered a change. ◗ A sign ifican t ch an ge in scope of a task (you h ave to defin e signifi-
cant) sh ou ld be con sidered a ch an ge. ◗ A sign ifican t ch an ge in th e task resou rce estim ate or in th e iden tifi-
cation of th e resou rce sh ou ld be con sidered a ch an ge. It m ay be n ecessary to rech eck th e critical ch ain .
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◗ Overru n or u n derru n of a task estim ated du ration is n ot a ch an ge. ◗ Overru n or u n derru n of a task estim ated cost is n ot a ch an ge. ◗ Project, feedin g, an d cost bu ffer action triggers m ay cau se plan
ch an ges to recover. You r ch an ge con trol process sh ou ld operate fast. You m ay h ave a ch an ge con trol board, in clu din g you r cu stom er wh en appropriate, to expedite ch an ge approval. Keep in m in d th at you sh ou ld focu s on m an agin g th e project to th e plan , n ot on m an agin g th e plan . Do n ot, for exam ple, m ake ch an ges to you r bu ffers based on actu al perform an ce to date.
8. 7
Su m m a ry
CCPM u ses progress alon g th e critical ch ain an d bu ffer reportin g as th e prim ary real-tim e predictive m easu rem en t tool. Con sider clien ts an d project team m em bers as cu stom ers of you r project reportin g an d con trol system . Bu ffer reportin g h as to be tim ely to be effective; you sh ou ld statu s an d report bu ffers at least weekly an d en su re th at th e in form ation is available to u sers with in a day. ◗ Weekly project an d feedin g bu ffer m on itorin g an d reportin g pro-
vides a proactive real-tim e decision tool for project con trol. ◗ Th e resou rce bu ffer is a two-way com m u n ication device between
th e project an d resou rce m an agers to en su re resou rce availability on th e critical ch ain . ◗ Resou rces an d resou rce m an agers u se th e bu ffer report for dyn am ic
resou rce assign m en t decision s. ◗ If cost is im portan t, u se th e cost bu ffer to m easu re an d con trol. ◗ Bu ffer m an agem en t m in im izes th e n egative im pacts of excessive
project ch an ges u sin g bu ffer tren ds an d triggers related to statistical process con trol. ◗ Con ven tion al project ch an ge con trol m eth ods are n ecessary to
h an dle scope ch an ges an d im pacts of special cau se variation .
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CCPM u sers h ave fou n d im plem en tation of bu ffer m an agem en t to be relatively sim ple an d very effective.
Referen ces [1]
Goldratt, E. M., The Haystack Syndrome, Croton -on Hu dson , New York: North River Press, 1990.
[2]
Ju ran , J. J., Juran on Planning for Quality, New York: Free Press, 1988.
[3]
Sh ewh art, W. A., Statistical Method from the Viewpoint of Quality Control, New York: Dover Pu blication s, 1986 (origin ally pu blish ed in 1939).
[4]
Irelan d, L. R., Quality Management for Projects and Programs, Upper Darby, PA: PMI, 1991.
C HAP TER
9 Conte nts 9.1 Im p le m e nta tion m od e l 9.2
Vision of the e nd
Im p l e m e n ti n g th e c h a n g e to c ri ti c a l c h a i n
9.3 Im p le m e nta tion the or y 9.4 G old r a tt’s r e sista nc e m od e l 9.5 To p ilot or not to p ilot? 9.6
Pla n the c ha ng e
9.7
Move a he a d !
9.8 Me a sur e a nd c ontr ol im p le m e nta tion 9.9 Wha t if im p le m e nta tion p r og r e ss sta lls? 9.10
Sum m a r y
Re fe r e nc e s
M
an y com pan ies th at h ave n ever in trodu ced ch an ge in to th eir organ ization su ccessfu lly im plem en t CCPM in a sh ort period of tim e. Th ese su ccessfu l com pan ies requ ire less th an th ree m on th s to get all projects plan n ed an d syn ch ron ized an d to begin to see th e ben efits of im proved project perform an ce an d redu ced stress on project team s. Su ccess stories in clu de all types of projects an d a wide ran ge of organ ization size. People report sign ifican t su ccess im plem en tin g CCPM for sin gle projects after h avin g read an earlier version of th is book or h avin g atten ded a two-day in trodu ctory train in g class. Un fortu n ately, som e organ ization s th at claim to h ave attem pted critical ch ain for on e stated reason or an oth er gave it u p. Th at h as h appen ed on both sin gle projects an d in m u ltiple-project organ ization s. Th e
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followin g presen ts a process proven to work in both sin gle-project an d m u ltiproject organ ization s.
9. 1
I m p l e m e n ta ti o n m o d e l
Figu re 9.1 illu strates th e basic project m odel to im plem en t CCPM. Im plem en tation is a project. Th e en d vision requ ires operatin g to th e critical ch ain paradigm . Im plem en tation plan s vary in con ten t an d scope depen din g on th e specific organ ization . For exam ple, a sin gle-project im plem en tation u su ally in volves on ly th e direct project team an d u su ally can be accom plish ed by th e leadersh ip of th e project m an ager. Mu ltipleproject im plem en tation can be m u ch m ore in volved, requ irin g th e active su pport of all in volved project team s an d resou rces. Th e first th ree steps of im plem en tation are th e sam e for all projects: You h ave to ch arter th e im plem en tation project, gain en dorsem en t of th e project stakeh olders, an d prepare th e project work plan . Stakeh older en dorsem en t is th e m ost im portan t part of an im plem en tation project. People approach process ch an ge with cau tion . Th e record of su ccessfu l ch an ge is n ot good. Dalziel an d Sch oon over n oted, “Tech n ocratic leaders … focu s exclu sively on ou tcom es with ou t con siderin g th e con cern s of em ployees wh o m u st im plem en t an d su stain ch an ge” [1]. Man y project m an agers (m yself in clu ded) are tech n ocratic leaders an d th erefore su bject to th at blin d spot. Dalziel an d Sch oon over go on to n ote th at “th is perspective frequ en tly resu lts in sh ort-term gain s, u n foreseen pitfalls, an d lon g-term resen tm en ts.” Th e tech n ical aspects of CCPM are n ot ch allen gin g to an y organ ization th at h as basic project m an agem en t capability. Man y organ ization s
1 Charte r p roje ct
2 End orse p roje ct
3 Pre p are p roje ct workp lan Y-mod ify
5 Me asure and control p roje ct to b uffe r re p ort
Fig u r e 9.1
6 Chang e ?
N
4 Pe rform p roje ct
N
7 Comp le te ?
Im p le m e nta tion p r oc e ss flowc ha r t.
Y
8 Close p roje ct
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with ru dim en tary project m an agem en t capability h ave been able to u se critical ch ain im plem en tation as th e focu s to im prove overall project su ccess. CCPM is n ot so m u ch an advan ced project m an agem en t m eth od as it is a differen t—an d better—m eth od. CCPM is a m an agem en t system ch an ge. Im plem en tation m u st address all aspects of th e system . Figu re 9.2 illu strates th e so-called seven -S (strategy, system s, staff, style, skills, stru ctu re, an d sh ared vision an d valu es) m odel (wh ich I u n derstan d was developed by McKin zie, bu t wh ich h as been m odified by m an y au th ors sin ce). Dr. Steph en Covey m odifies th e m odel to fu rth er em ph asize th e people part of it an d calls it th e PS paradigm [2] (th e P stan ds for people). Th ese m odels provide a system defin ition for ch an ge. Con sider th e seven -S m odel for you r organ ization as you plan im plem en tin g critical ch ain . You m ostly m u st m ake su re th at you r ch an ge plan does n ot overlook som e facts abou t you r organ ization th at m ay block im plem en tation or cau se u n in ten ded con sequ en ces. Th ere is n o reason to ch an ge th e stru ctu re of you r organ ization to im plem en t CCPM. Organ ization s ran gin g from fu ll project to fu ll m atrix h ave su ccessfu lly im plem en ted CCPM. Th e seven -S m odel is in com plete (deliberately so, as with all m odels). Dem in g em ph asized th e n eed for m an agers to con sider elem en ts n orm ally con sidered ou tside th e bu sin ess system , su ch as cu stom ers, su ppliers, an d even com petitors. Fu rth er, th e seven -S m odel is static. All
Strate gy
Structure
Syste ms Share d vision and value s
Skills
Staff
Style
Fig u r e 9.2 The se ve n-S m od e l p r ovid e s a syste m d e finition for c ha ng e p la nning .
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bu sin ess organ ization s are com plex, dyn am ic, an d adaptive system s. Th at m ean s th ey are con stan tly ch an gin g. Man agem en t’s problem is to lead th e ch an ges th at will h appen in a positive direction . Th e process to ach ieve an y goal requ ires effective feedback m ech an ism s to adju st actu al perform an ce to plan . Box 5 in Figu re 9.1 sh ows m easu rem en t an d con trol. Bu ffer m an agem en t works to determ in e if you are accom plish in g th e im plem en tation project relative to sch edu le, as in an y project. Also, as in an y project, you n eed qu ality resu lts m easu rem en ts to en su re th at th e resu lt ach ieved an d passed on from on e task to th e n ext satisfies deliverable requ irem en ts. In th is case, qu ality resu lts in clu de som e soft m easu res, su ch as h ow people are feelin g abou t th e ch an ge to CCPM an d som e real dialog on ch allen ges people are h avin g m akin g it work. Most organ ization s requ ire beh avior ch an ges to im plem en t CCPM. Wh ich ch an ges you r organ ization requ ires depen d on wh at beh aviors you r organ ization cu rren tly exh ibits. Table 9.1 su m m arizes typical beh aviors an d th e beh aviors dem an ded by CCPM. Use th e tables as criteria to ju dge h ow you are doin g. Ta bl e 9. 1(a )
Sen ior Man agem en t’s Beh avior Ch an ges Chang e
Curre nt Be havior
Future Be havior
Committing only to fe asib le de live ry date s
Some time s committing to arb itrary de live ry date s de te rmine d without conside ration of syste m capab ility to de live r
Committing only to de live ry date s with a critical chain plan and (if multiple proje cts), afte r se que ncing through the drum sche dule
Eliminating inte rruptions
Inse rting spe cial re que sts into the syste m with no asse ssme nt of syste m capab ility to re spond; some time s place de mands for routine administrative work ab ove proje ct work (e .g., salary re vie ws)
Prioritizing all re que sts using b uffe r re port
Se tting proje ct priority (only for multiple proje cts)
Not se tting cle ar proje ct priority or changing proje ct prioritie s
Se tting proje ct prioritie s, including the priority of ne w proje cts re lative to ongoing proje cts
Se le cting drum re source (only for multiple proje cts)
Giving no conside ration to syste m constraint
Se le cting the drum re source to b e use d for se que ncing the start of proje cts and cre ating the drum sche dule
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Ta b l e 9 . 1 (a ) (c o n tin u e d ) Chang e
Curre nt Be havior
Future Be havior
Se le cting drum manage r and approving proje ct se que ncing (only for multiple proje cts)
Starting e ach proje ct inde pe nde ntly as funding is availab le
Drum manage r cre ating drum sche dule ; se nior manage me nt approving; proje ct manage rs sche duling proje cts to the drum
Proje ct status
Looking ove r shoulde rs
Buffe r re port
Ta bl e 9. 1(b)
Resou rce Man agers’ Beh avior Ch an ges Chang e
Curre nt Be havior
Future Be havior
Se tting re source priority
Assigning re source s on a first-come , first-se rve d priority or atte mpt to me e t all ne e ds b y multitasking
Assigning re source s using the b uffe r re port
Re source planning
Planning re source s b y name and task
Planning re source s b y type and assign to tasks as the y come up using the b uffe r re port priority
Early comple tion
Turning in tasks on due date
Turning in tasks as soon as the y are comple te
Eliminating multitasking
Ensuring re source e fficie ncy b y assigning to multiple tasks at the same time
Ensuring re source e ffe ctive ne ss b y e liminating b ad multitasking
Re source b uffe rs
Re source s planne d far ahe ad and not availab le whe n ne e de d
Using re source b uffe rs and b uffe r re port to dynamically assign re source s to tasks
Ta bl e 9. 1(c )
Project Man agers’ Beh avior Ch an ges Chang e
Curre nt Be havior
Future Be havior
50% task duration e stimate s
Proje ct manage rs se nding me ssage that the y e xpe ct due date s to b e me t
Proje ct manage rs first ge tting low-risk task duration and the n ge tting ave rage duration; using task unce rtainty to size b uffe rs
Date -drive n to task-drive n
Providing start and finish date s for e ach task and monitoring progre ss to finish date s
Providing start date s only for chains of tasks and comple tion date only on the proje ct b uffe r
Fe e db ack on task duration ove rruns
Manage me nt providing ne gative fe e db ack whe n tasks ove rrun due date s
Manage me nt providing positive fe e db ack and he lp if re source s pe rform to roadrunne r paradigm
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C r itic a l C ha in Pr oje c t Ma na g e m e nt Ta b l e 9 . 1 (c ) (c o n tin u e d )
Chang e
Curre nt Be havior
Future Be havior
Proje ct status
Varying; ofte n using e arne d value as the sche dule me asure
Buffe r re port (including a cost b uffe r)
Proje ct change s
Varying; ofte n sub mitte d to minimize minor variance s
Whe n trigge re d b y b uffe r re port
Re sponse to manage me nt de mands for shorte r sche dule
Arb itrary task duration cuts
Adding re source s or making proce ss change s to ge t a fe asib le and immune sche dule
Early start
Starting tasks as e arly as possib le
Starting task chains as late as possib le , b uffe re d b y fe e ding b uffe rs
Se que nce proje cts (only for multiple proje cts)
Starting proje ct as soon as funding is availab le
Sche duling proje ct start using drum sche dule
Assigning re source s dynamically according to critical chain priority and b uffe r re port
Ge tting re source s as soon as proje ct funding is availab le and holding re source s until the y cannot possib ly b e use d any more on the proje ct
Ge tting re source s only whe n ne e de d and re le asing as soon as task is comple te
Ta bl e 9. 1(d)
Su bcon tractors’ Beh avior Ch an ges Chang e
Curre nt Be havior
Future Be havior
De live ring to le ad time s
De live ring to due date s
De live ring to le ad time s
Shorte ning le ad time s
De live ring to due date s
Shorte ning le ad time s
Ta bl e 9. 1(e )
Cu stom ers’ Beh avior Ch an ges Chang e
Curre nt Be havior
Future Be havior
Eliminating proje ct scope change s
Custome rs spe nding little time initially e stab lishing re quire me nts and the n introducing late change s
Estab lishing re quire me nts as part of the proje ct work plan; changing as little as possib le with formal change control
Supporting use of proje ct b uffe r
Custome rs inte rpre ting continge ncy as fat
Custome rs unde rstanding the ne e d for b uffe rs to re duce proje ct le ad time and e nsuring proje ct succe ss
Eliminating arb itrary date mile stone s
De manding arb itrary date mile stone s
Using plan to se t mile stone s
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Box 6 in Figu re 9.1 is wh ere you com pare progress to plan an d determ in e if you n eed to take m an agem en t action . It in clu des both progress to th e work plan an d progress to th e soft m easu res. Som e com pan ies like to pu t togeth er a steerin g grou p to m on itor progress an d h elp th e im plem en tation project m an ager. Box 7 in Figu re 9.1 is sim ply wh ere you m ark tasks as com plete. Several featu res of CCPM m ake it easier to im plem en t th an m an y ch an ges people attem pt to m ake in organ ization s: ◗ Nobody loses, becau se you take away th e win / lose aspect of task
du ration estim ates. ◗ Man y win , becau se of th e redu ction in pressu re to m u ltitask
an d th e feelin g of accom plish m en t th at follows su ccessfu l task an d project com pletion . ◗ It is sim ple, com pared with th e m ore-an d-m ore-detailed approach
or th e im plem en tation of com plex earn ed valu e reportin g system s. ◗ Resu lts feed back rapidly in th e weekly project m eetin g. You do n ot
h ave to wait for com pan y cost reports. ◗ Un fortu n ately, n ot everyon e will feel th at th ere is en ou gh of a n eed
to ch an ge an yth in g, an d oth ers m ay fear th at th ey h ave som eth in g to lose. Section 9.2 describes som e strategies for dealin g with su ch poten tial obstacles.
9. 2
Vi s i o n o f th e e n d
If you do n ot kn ow wh ere you are goin g, you will n ot kn ow wh en you get th ere. Lau n ch in g critical ch ain im plem en tation with ou t a clear pictu re of su ccess is like lau n ch in g an arrow in to th e air; it will com e to earth “you kn ow n ot wh ere.” You can represen t th e en d vision in a variety of ways. A pictu re u su ally h elps; m an y people respon d better to visu al stim u li th an to oth er in pu ts. Con sider pu ttin g togeth er you r own pictu re of you r organ ization operatin g to th e critical ch ain paradigm . For en gin eers, th at pictu re m ay look a lot like a diagram . To project m an agers, it m ay be a pictu re of a sim plified Gan tt ch art, sh owin g th e featu res of critical ch ain plan s. To people-orien ted m an agers it wou ld in clu de people. I prefer to describe
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th e en d vision in term s of th e beh avior n ecessary to operate critical ch ain projects su ccessfu lly.
9. 3
I m p l e m e n ta ti o n th e o ry
Ch an ge m an agem en t th eories abou n d. Mu ch of th e literatu re starts with th e reason s ch an ge attem pts fail. Failu re m ean s th at plan n ed ch an ge does n ot ach ieve som e desired goal. Ch an ge goes on in all organ ization s. It ju st is n ot th e ch an ge wan ted by th e book au th ors or th e people th ey asked. Th e th eories rarely agree on th e reason s ch an ges fail to ach ieve th e goal. As was th e case with project m an agem en t, th at sh ou ld give u s pau se to su spect th at th e au th ors are m issin g a deeper system ic cau se.
9. 3. 1
Th e ru l e o f 3 -4 -3
Th e followin g an ecdotal observation s are exam ples of th e parables th at form th e basis for m u ch m an agem en t th eory. A speaker at a recen t m an agem en t con feren ce brou gh t u p th e ru le of 3-4-3. He said h e learn ed it from a Japan ese colleagu e wh en th ey were stu dyin g th e application of Kaizen (Japan ese for “con tin u ou s im provem en t”), th e su bject of h is talk. Th e referen ce m ean s th at in attem ptin g to in trodu ce n ew ideas in to an y organ ization , abou t 3 ou t of 10 people will catch on im m ediately an d begin to im plem en t. An oth er 3 ou t of 10 will rem ain clu eless an d u n in terested in ju st abou t an yth in g an d everyth in g, forever. Th e m iddle 4 of 10 will beh ave in exactly th e way you m igh t expect m iddle-of-th e-roaders to act—th ey will wait an d see an d gradu ally com e aboard, as th e ch an ge becom es th e organ ization al n orm . Th e tim e for organ ization al ch an ge to take place depen ds, of cou rse, on both th e ch an ge an d th e organ ization . For exam ple, I read th at it took th e British Arm y 125 years to accept th e recom m en dation th at foot soldiers sh ou ld wear asym m etric sh oes (i.e., on e for th e left foot an d on e for th e righ t foot). Ju st im agin e com plain ts of th e su pply sergean ts: “Hey, you gu ys wan t m e to be efficien t. An d n ow you wan t m e to dou ble m y in ven tory! Th in k of h ow h ard it is goin g to be to keep th e left an d righ t sh oes of th e sam e size togeth er, all th e way from m an u factu rin g, th rou gh distribu tion an d su pply, to th e soldiers. Costs will go u p. Delivery will be h arder to m ain tain . An d th e soldiers will n ever be able to pu t th em
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on ; you h ave m ade th in gs twice as com plicated!” Th at argu m en t, or som eth in g like it, m u st h ave h eld ou t for th ose 125 years. In scien ce, it is n ow gen erally accepted th at it takes at least a gen eration (i.e., 25 years) for a n ew basic scien tific th eory to replace th e old. (Som e su ggest at least two gen eration s.) Th e believers of th e old th eory h ave to die before th e n ew th eory can take place. Of cou rse, th at is for ou r n ew an d en ligh ten ed age. Th ey u sed to pu t people like Galileo in jail. Before th at, it was “off with h is h ead!” You can u n derstan d wh y th e scien tific revolu tion took su ch a lon g tim e to bu ild u p steam (in both th e ph ysical an d figu rative m ean in g of th e word.) Ben n is iden tifies th ree grou ps of ch an ge strategies [3]: ◗ Em pirical an d ration al strategies, assu m in g th at people will follow
th eir ration al self-in terest; ◗ Norm ative re-edu cative strategies, assu m in g th at ch an ge requ ires
alteration s in organ ization al stru ctu re, in stitu tion al roles, an d in stitu tion al relation sh ips; ◗ Power strategies, requ irin g com plian ce to th e leaders’ will.
He fu rth er describes eigh t types of ch an ge program s th at derive from th ose strategies: ◗ Exposition an d propagation ; ◗ Elite corps; ◗ Hu m an relation s train in g; ◗ Staff; ◗ Sch olarly con su ltation ; ◗ Circu lation of ideas; ◗ Developm en tal research ; ◗ Action research .
All eigh t types of ch an ge program s as well as th e th ree strategies seek to u se kn owledge to gain som e desirable en d. Most of th e strategies rely on ration ality. Ben n is n otes th at kn owledge abou t som eth in g does n ot au tom atically lead to effective action . He con clu des by observin g:
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Som etim es, th e ch an ges brou gh t abou t sim ply fade ou t, becau se th ere are n o carefu lly worked ou t procedu res to en su re coordin ation with oth er in teractin g parts of th e system . In oth er cases, th e ch an ges h ave backfired an d h ave to be term in ated becau se of th eir con flict with in teractive u n its. In an y case, a good deal m ore h as to be learn ed abou t th e in terlockin g an d stabilizin g ch an ges so th at th e total system is affected.
In recen t years, bu sin ess ch an ge advocates h ave often focu sed on th e n eed for organ ization al cu ltu re ch an ge to precede sign ifican t perform an ce im provem en t. Th ey often su ggest th at it takes m an y years, perh aps 8 to 12, to accom plish sign ifican t cu ltu re ch an ge in organ ization s. Th at is on e of th e reason s a lot of bu sin esses fail before th ey can accom plish n ecessary ch an ge. Non e of th ose description s, wh ile possibly com pletely correct, reach es even th e correlation level of scien tific th in kin g. For every an ecdote som eon e relates, som eon e else can provide an altern ative story th at is th e exception th at proves th e ru le. Man y com pan ies grow to very large size with in th e sh ortest tim e fram e discu ssed (8 to 10 years).
9. 3. 2
Ap p re c i a ti o n fo r a s y s te m
Con siderin g an organ ization as a dyn am ic system m oves ou r th in kin g beyon d correlation an d in to th e realm of scien tific th in kin g. You can u se a m odel of th e cu rren t system to determ in e wh at ch an ges will affect th e system th e way you wan t. Dyn am ic m odels are im portan t becau se bu sin ess system s are dyn am ic. Th e laws of th e fifth disciple (discu ssed in Ch apter 2) apply. On e of th e m ost im portan t an d difficu lt to appreciate laws is th at cau ses an d effects are displaced in tim e an d space. Th at m ean s th e effect you observe in Milwau kee today m ay be du e to som e m an agem en t action taken in Tam pa last year, n ot du e to th e n ew m an ager th at ju st cam e aboard in Milwau kee. Th e n ew m an ager sim ply correlates in tim e an d space with th e effect you are observin g. No on e seriou sly believes th at th e ou tcom e of th e Su per Bowl cau ses th e stock m arket to do an yth in g, bu t every year th e m edia discu ss rem arkable correlation s. Correlation of effects in dyn am ic system s m akes determ in ation of cau se difficu lt. Th e defin ition of cau se an d effect is th at th e effect in variably follows wh en th e cau se is presen t. (Th e effect m ay also be presen t
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with ou t th e cau se in qu estion if it can also follow from addition al cau ses.) Th e cau se of effects in dyn am ic system s m ost often is th e system stru ctu re, n ot a specific even t. Most people h ave difficu lty gain in g an in tu itive appreciation for th at. Con sider ch icken s an d eggs. Th e qu estion “Wh ich cam e first?” is m ean in gless in a dyn am ic system th at in clu des ch icken s an d eggs. Th ey coexist. Th eir n u m bers correlate in tim e. Th at is, everyth in g else bein g equ al, th e m ore ch icken s you h ave, th e m ore eggs you get. It is tru e th at ch icken s cau se eggs. It is tru e th at eggs cau se ch icken s. Th u s, en tity cau sality is com pletely circu lar, wh ich is fin e in a dyn am ic system . Based on th e “Wh ich cam e first?” clich é, it does n ot appear to be in tu itive. Depen din g on th e system , it m ay or m ay n ot follow th at th e m ore eggs you get, th e m ore ch icken s you get. Som eon e m ay be eatin g a lot of eggs. Th at wou ld be part of th e system stru ctu re an d wou ld sign ifican tly affect th e n u m ber of ch icken s over tim e. Th e th in kin g process th at Goldratt recom m en ds m odels reality with a cau se-an d-effect tree, th e CRT. Th is tree stru ctu re allows for th e in clu sion of n on lin ear effects an d dyn am ic feedback. It does n ot provide a way to test an d u n derstan d th e relative im portan ce of system en tities an d relation sh ips dyn am ically, bu t treatm en t of th e feedback loops (”m ore an d m ore” en tity statem en ts in th e m odel) attem pts to provide a qu alitative u n derstan din g of th e im pact. Th e m eth od h elps plan a m ove from cu rren t reality to a desired m odel of fu tu re reality (th e FRT) by iden tifyin g a core con flict. Th e core con flict plays a cen tral role in m an y of th e cu rren t system ’s u n desirable effects. Th e con flict is on e of th e drivin g forces th at m ain tain th e system in equ ilibriu m . Goldratt’s th in kin g process always provides a startin g poin t for plan n in g ch an ge an d u su ally selects on e of th e m ore in flu en tial parts of th e system to begin th e ch an ge. Som e system th in kers iden tify th e in flu en tial parts of th e system as leverage poin ts. Th ey u su ally in volve a feedback loop. Th e m ost effective feedback loops in organ ization s in volve th e perform an ce m easu rem en t an d reward system s. Th e core con flict often in volves a m easu rem en t or policy of th e system . It always in flu en ces th e beh avior of people in th e system . Th e th in kin g process m eth od th en su rfaces u n derlyin g assu m ption s to iden tify a startin g poin t to m odify th e system . Even tu ally, th e process looks to in stall feedback loops in to fu tu re reality to accelerate m ovem en t to fu tu re reality, an d to m ain tain th e system in th e n ew equ ilibriu m .
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Gen eral system th eory an d system dyn am ics teach u s th at feedback loops are on e of th e m ost im portan t elem en ts for u n derstan din g an d in flu en cin g system beh avior over tim e. Feedback loops are th e forces th at m ain tain th e system in equ ilibriu m an d can be u sed to drive th e system to n ew equ ilibriu m . Measu rem en t system s m ake u p th e prim ary feedback loops th at drive bu sin ess system beh avior.
9. 3. 3
Re s i s ta n c e to c h a n g e
Resistan ce to ch an ge is an essen tial featu re of an y stable system . (Please read th at sen ten ce th ree m ore tim es.) Open system s are on ly tem porarily stable becau se th e dyn am ic forces actin g on th e system , both in tern al an d extern al, are n early in balan ce. Resistan ce to ch an ge is n ot in h eren tly good or bad. You can ju dge resistan ce to ch an ge as good if you wan t to m ain tain certain ch aracteristics of a system . For exam ple, you m ay be pleased th at you r system m ain tain s a focu s on cu stom er service th rou gh good tim es an d bad. You m ay ju dge resistan ce to ch an ge as bad if you are attem ptin g to elim in ate u n desirable beh avior or to m ove to n ew levels of perform an ce. Regardless of you r ju dgm en t on th e m atter, th e system will n atu rally resist ch an ge. Figu re 9.3 illu strates ju st a few of th e in terrelated forces th at exist in an y bu sin ess system . Forces are both in tern al an d extern al to th e bu sin ess system . Th e forces th em selves are in terrelated in a com plex system stru ctu re. Attem pts to ch an ge an y part of th e system affect all parts of th e system to varyin g degrees. Becau se of th e lin ked stru ctu re, th e n et resu lt of th ose forces will ten d to restore th e system to its previou s state followin g an y distu rban ce. Organ ization al resistan ce to ch an ge is often difficu lt to distin gu ish from in dividu al resistan ce to ch an ge. Wh en th in gs are n ot goin g as h oped or n ot goin g fast en ou gh , people often wan t to search ou t an d m otivate th e gu ilty. Un fortu n ately, su ch search es are fru itless. How m an y people do you kn ow wh o really wan t to lose weigh t, qu it sm okin g, or ch an ge som e oth er person al beh avior, bu t seem u n able to do it? Or, if th ey were able to do it, were u n able to su stain th e progress th ey m ade? Do you really dou bt th eir desire or m otivation to m ake th e ch an ge? Do th ey n ot h ave th e skills? Will h aran gu in g th em m ore cau se it to h appen ? Sen din g th em to train in g? Fredrick Hertzberg observed, “Wh en a m an kicks a dog, it is th e m an th at is m otivated.”
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Knowle d g e History
Skills
Le ad e rship
Re lationship s
Structure
Communication
Busine ss syste m
Fe e d b ack
Cap ab ility
Me asure s
Facilitie s
Re source s
Re ward s Proce d ure s
Policie s
Fig u r e 9.3 Busine ss syste m s e xist in a fie ld of inte r r e la te d for c e s, whic h na tur a lly p ush b a c k on a tte m p ts to c ha ng e the syste m .
Th e obstacles to organ ization s m akin g ch an ge are th e very th in gs th at m akes th em wh at th ey are in th e first place. Th e stru ctu re of th e system determ in es th e reaction th at will h appen wh en you try to pu sh a stable system in on e direction . You will activate th e restrain in g forces th at h elped keep th e system in balan ce wh ere it was. For exam ple, con sider an organ ization th at wan ts to becom e m ore efficien t. It m ay ch oose to elim in ate excess resou rces. TOC teach es th at an efficien t system can m ain tain on ly th e con strain t at fu ll efficien cy. All oth er resou rces m u st h ave protective capacity to operate th e system efficien tly. In oth er words, all oth er resou rces m u st operate at lower efficien cy, so th e system can operate at m axim u m efficien cy. Un less th e com pan y h as a good grou n din g in TOC, it will n ot u n derstan d th e n ecessary protective capacity an d will cu t in to n ecessary capacity. Th at will m ake its system less efficien t. Th e system will resist th e im properly im posed attem pt to ch an ge it. In som e cases, du e to som e of th e laws of
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system dyn am ics, th e system m ay appear to be m ore efficien t for a few qu arters. Th at is becau se th ere was excess in ven tory in th e system , wh ich can m ake u p for th e h aph azard cu ttin g of capacity. On ce th at is u sed u p, th e system will begin to fail. You h ave to con sider resistan ce to ch an ge at both th e in dividu al an d th e organ ization levels. 9. 3. 4
Ps y c holog y
Several properties of th e h u m an m in d lead to in dividu al beh avior th at seem s to resist ch an ge. B. F. Skin n er describes on e of th e m ore powerfu l m ech an ism s. Skin n er asserted (with exten sive scien tific data) th at m u ch h u m an beh avior com es from wh at h e called operan t con dition in g [4]. Pu t sim ply, th at m ean s you con tin u e to do wh at gives positive rewards, learn to avoid doin g th in gs th at do n ot lead to positive rewards (rein forcem en t), or do th in gs th at h elp you avoid n egative rewards. Skin n er n otes, “A rein forcin g con n ection n eed n ot be obviou s to th e in dividu al rein forced.” Figu re 9.4 is m y ren dition of a con trol system view of Skin n er’s m odel. It starts with a n eed, wh ich is in flu en ced by th e person ’s cu rren t state, in clu din g deprivation or satiation relative to th e goal. Com parison of th at n eed to th e person ’s u n derstan din g of h is or h er cu rren t situ ation (perceived reality) yields a gap th at, if large en ou gh , m otivates a person to action . Action seeks to ch an ge reality to close th e gap. Th e sen sor, wh ich m ay be th e five sen ses or m ore rem oved m eth ods of gain in g data, feeds back in form ation abou t th e effect th at th e action h as on reality. If th e ch an ge is positive (redu cin g th e gap or oth erwise su pplyin g a reward), it stren gth en s th e ch an ces th at th e person will repeat th e beh avior.
Se nsor
Ne e d (g oal)
Pe rcieve d re ality
Re ality
Action
Fig u r e 9.4
Gap (d r ive )
C ontr ol syste m vie w of hum a n a c tions (b e ha vior ).
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Operan t con dition in g m u st som eh ow be stored in th e brain . Becau se it defin es a (perh aps ru dim en tary) m odel of th e world (if I do th is, th en I get th at), you can con sider it a belief abou t h ow th e world works. Su ch beliefs m ay be con sciou s or u n con sciou s. Research dem on strates th at th ese beliefs h ave oth er im pacts on th e m odel. Figu re 9.5 illu strates th at beliefs affect wh at you pay atten tion to, h ow you in terpret wh at you sen se (perception ), wh at you r m otivation s (n eeds) are, an d th e decision s you m ake on h ow to act in th e world so as to in crease rewards an d decrease n egative rein forcers. Th at in flu en ce is m ostly u n con sciou s. In oth er words, you see it becau se you believe it. Th e m odern view is th at ou r m in ds operate as pattern recogn ition devices. We h ave a won derfu l ability to in fer th e au tom obile in th e pictu re by lookin g at on ly a sm all fragm en t of th e pictu re. We often can n am e th at tu n e in th ree n otes. It is rem arkable, wh en you th in k abou t it. Section 2.2.3.2 described h ow beliefs act to focu s ou r atten tion , an d adju st ou r perception of reality by actin g as a kin d of in form ation filter. It is reason able to assu m e th at, at an y poin t in tim e, people operatin g in an en viron m en t h ave tu n ed th eir beh avior to th e en viron m en t. Pu t an oth er way, feedback th rou gh operan t con dition in g cau ses th em to beh ave in
Atte ntion
Motivation
Be lie fs
Pe rce p tion Se nsor
Ne e d (g oal)
Pe rce ive d re ality
Re ality
Gap (d r ive )
Action De cisions
Be lie fs
Fig u r e 9.5
Be lie fs a ffe c t m a ny p a r ts of our inte r na l c ontr ol p r oc e ss.
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ways th at m axim ize rewards in th e cu rren t en viron m en t. Ch an ges in th e reward system th reaten th at position . Fu rth erm ore, Skin n er dem on strated th at extin gu ish in g beh avior establish ed by operan t con dition in g can take a lon g tim e. Th e organ ism will con tin u e to em it th e old beh avior, wh ich is n o lon ger rein forced, som etim es for th ou san ds of tries. Oth er aspects of psych ology, or h ow ou r m in ds work, are also im portan t to u n derstan d th e system you are attem ptin g to ch an ge. On e is th e availability bias. Psych ological experim en ts repeatedly dem on strate th at people are relatively poor ju dges of probability. Th ey focu s on th e in form ation th ey h eard or saw last or wh at im pressed th em th e m ost, in stead of th e probability itself. For exam ple, you m ay h ear statem en ts like, “All scien tists (program m ers, en gin eers, etc.) ten d to u n derestim ate h ow lon g it will take to do a task.” Wh en pressed for data, people adm it to h avin g little. Data an alyses often prove oth erwise. Most project tasks are reported as com plete on th e du e date (a m iracu lou s occu rren ce, by th e way, provin g th e existen ce of date-driven beh avior). People also ten d to be very overcon fiden t in th eir ability to estim ate probabilities.
9. 3. 5
P a ra d i g m l o c k
A paradigm is a belief. People often h old beliefs at su ch a fu n dam en tal level th at th ey do n ot even realize th ey h old th e belief. Hidden paradigm s, or beliefs, in flu en ce ou r th in kin g. Con sider a sim ple on e th at m an y people pay little atten tion to. Th e n orm al practice in critical path project plan n in g is to create th e critical path sch edu le an d th en perform resou rce levelin g. Most people accept th at practice with ou t qu estion . Th ey believe it to be acceptable, becau se th ey were tau gh t it as th e m eth od to plan projects. It seem s logical an d h arm less. Th ey do n ot th in k to qu estion it. After all, if you spen d th e tim e to qu estion everyth in g, you will n ot h ave tim e to learn an yth in g. However, th ey sh ou ld h ave asked th ese qu estion s: ◗ Wh y does a critical path plan con n ect tasks in a project sch edu le
on ly by ou tpu t to in pu t to start with ? Th e tasks n eed both th e predecessor in pu t an d th e resou rce to begin th e task. Th ey are equ ally im portan t. ◗ Wh at h appen s to th e critical path after a project plan h as been
resou rce-leveled? Is it th e sam e tasks as before? Th e previou s
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critical path th rou gh th ese tasks n ow h as slack, becau se tim e h as been added to oth er path s by th e resou rce bein g given to th e critical path task first. Th e defin ition of th e critical path was th e path with n o slack. Man y people recogn ize th e secon d qu estion . People fin d th at resou rce levelin g sign ifican tly exten ds th e project sch edu le, som etim es beyon d th e du e date. Th erefore, th ey ch oose to go back to th e n on leveled sch edu le, with th e th ou gh t th at th ey can som eh ow m ake it work. Th ey th en iden tify on e of th e cau ses of project failu re as “in su fficien t resou rces.” A paradigm sh ift is a ch an ge in a belief. Paradigm sh ifts, wh en th ey h appen , h appen su dden ly. People sh ift a belief from on e pattern to an oth er in an in stan t. Un fortu n ately, paradigm sh ifts do n ot h appen with ease. People are often stu ck in a paradigm lock. Th ey can u n derstan d th e ben efits of ch an gin g th eir beh avior—perh aps even th eir belief—bu t som eh ow th ey ju st can n ot do it. Project m an agers an d resou rces kn ow th at th e du ration s people pu t in to sch edu les are h igh ly u n certain . It is illogical to assign start an d stop dates to h u n dreds or th ou san ds of tasks lin ked togeth er in a sch edu le. Neverth eless, th ey ju st can n ot bu y th e idea th at you can live with ou t doin g th at. Th ey are locked in to th e determ in istic date paradigm . Ted Hu tch in , an associate of th e Goldratt In stitu te wh o resides in th e Un ited Kin gdom , stu died th e issu e of paradigm lock in bu sin ess as part of h is m aster’s th esis. He bu ilt th e evaporatin g clou d to describe th e dilem m a faced by m an y m an agers wh o feel a n eed to im plem en t ch an ge. He in terviewed over 350 people in 14 com pan ies, in volvin g 40 to 50 in dividu al clou ds, to develop h is u n derstan din g. Figu re 9.6 illu strates Hu tch in ’s paradigm lock clou d. Readin g from A to B, “To ach ieve m y goals, I m u st m ain tain con trol of m y life. To m ain tain con trol of m y life, I m u st m ain tain m y cu rren t paradigm with respect to X.” Readin g th e lower bran ch , “To ach ieve m y goal, I m u st overcom e th e con strain ts th at block m e. To overcom e th e con strain ts th at block m e, I m u st ch an ge m y paradigm with respect to X.” Xs to fill in th e clou d in clu de th e followin g:
1. People (scien tists, en gin eers, program m ers, etc.) always u n derestim ate h ow a lon g a task sh ou ld take.
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B Maintain control of my life
D Maintain my curre nt p arad ig m with re sp e ct to…
C De al with the constraints that b lock me
D′ Chang e my curre nt p arad ig m with re sp e ct to…
A Achieve my g oal
Fig u r e 9.6 Hutc hin’s p a r a d ig m loc k c loud d e sc r ib e s the d ile m m a m a ny p e op le fa c e .
2. I am likely to be pu n ish ed in m y perform an ce review if I deliver after th e sch edu led du e date of m y task. 3. Th ere is n o credit for tu rn in g work in early. 4. Th e soon er th e team starts work on m y project, th e soon er th ey will com plete m y project. 5. More detail im proves th e accu racy of m y project plan . 6. Projects n eed to iden tify resou rces by n am e in order to h ave people accou n table. 7. Project plan s h ave to elim in ate resou rce con ten tion across all projects to en su re th at th e projects can com plete as plan n ed. 8. Th ere is n o way to plan for addition al dem an ds, su ch as m ain ten an ce of prior produ ct releases. An im portan t featu re of th e paradigm lock clou d is th at th e cross con n ection s, th at is, B-D’ an d C-D, con flict. I feel th at I can n ot m ain tain con trol of m y life if I ch an ge m y cu rren t paradigm . I gen erally can in tellectu ally accept th at I can n ot deal with th e con strain t th e blocks m e if I m ain tain by cu rren t paradigm . Th u s, I am stu ck with n owh ere to go.
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Th e paradigm lock is on e reason th at im plem en tation of critical ch ain m ay fail to su cceed. People m ay gain th e kn owledge of critical ch ain , h ave th e n ecessary skills to perform th e beh avior, an d yet n ot take action . Th e prim ary fear th at m an agers express in m an y en viron m en ts is th at th ey will n ot be able to get th e team or oth er m an agers in th e organ ization to m ake th e ch an ge with th em . Th ey say, “We don ’t h ave th e tim e to im plem en t critical ch ain an d m eet our m an ager’s dem an ds!” Th ey fear th ey will be ou t ah ead of everyon e else an d th erefore su bject to failu re, em barrassm en t, an d pu n ish m en t. It is certain ly correct th at th e first attem pts at im plem en tin g th e ch an ges dem an ded by th e CCPM will be som ewh at u n stable at first an d n ot as su ccessfu l as later im plem en tation , wh en people h ave h ad a ch an ce to experien ce wh at correct beh avior really is. Th e prim ary fear th at resou rces express in m an y en viron m en ts is th at m an agem en t will n ot really ch an ge an d will criticize or pu n ish th em if th ey are late on project tasks. Th ey also fear th at m an agem en t will attem pt to exploit (in a n egative sen se) an y im provem en t in worker effectiven ess, pu ttin g th em righ t back wh ere th ey were before, perh aps with a larger workload. Th ere is n o m agic way to break th e paradigm lock clou d. Psych ological research reveals som e ideas th at work som e of th e tim e. For exam ple, m ost au th ors agree th at tech n ical discu ssion s h ave little effect. Man y agree th at m etaph ors work m ore frequ en tly. A body of eviden ce su pports th e effectiven ess of m etaph ors. Th e biggest paradigm ch an ge in all of h u m an h istory, th e growth of Ch ristian ity, was su pported by th e u se of parables, wh ich are m etaph ors. Th e sam e m ay be tru e for th e growth of oth er large grou ps, becau se of brain ph ysiology an d psych ology. Th e reason m etaph ors seem to work is th at th ey sn eak by ou r in tern al perceptu al featu res th at strive to keep ou r in tern al belief system in tact. Dr. Goldratt on ce u sed th e m etaph or of a parach u te ju m per at th e door of th e airplan e. Th e ju m per h ad gon e th rou gh all th e train in g, in clu din g tower ju m ps on a lin e. Bu t it is a wh ole differen t m atter to ju m p ou t th e door of th e airplan e at a h igh altitu de. Class exercises can h elp with weakly h eld paradigm s. I lead an experim en t in classes to dem on strate th e in effectiven ess of m u ltitaskin g. Everybody gets it. However, th at does n ot m ean it always ach ieves th e desired beh avior ch an ge. Exercises do n ot overcom e th e fear th at atten ds m akin g th e ch an ge in th e real work en viron m en t. Exercises do n ot overcom e th e
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daily feedback of th e work en viron m en t. Th e on e th in g th at con sisten tly works to im plem en t critical ch ain is for th e leaders to lead. Th at does n ot m ean ju m p ou t th e door an d h ope th e team follows. (Th ey will n ot!) It m ean s to join h an ds an d ju m p togeth er. Cu lbert addresses paradigm lock as a m ajor cau se of apparen t resistan ce to ch an ge, n otin g: “Wh at is fu n dam en tally n ecessary is th at you u n derstan d th at distin ct in terests an d m otives exist an d are th e drivin g force beh in d people’s participation an d th at th ese are n eith er kn own to you n or u n der you r con trol” [5]. In oth er words, you m ay n ot h ave a gen eral case of paradigm lock, you m ay h ave m an y cases with differen t paradigm s. Cu lbert describes th e h ypoth esis u n derlyin g h is th esis as th e artifact of m in d in sigh t: “Organ ization is an artifact of th e m in d th at views it.” Th at h ypoth esis is in lin e with Figu re 9.4. As a direct con sequ en ce, h e su ggests, “th e people wh o are targets of th e advice are less in clin ed to experien ce advice as valu able cou n sel an d m ore in clin ed to see it as resistan ce an d self-in terested an d agen da-biased opposition to h ow th ey wan t to proceed.” In oth er words, it is you wh o is resistin g, n ot th em ! Cu lbert con clu des, “Th ere is n o form u la for produ cin g th is type of ch an ge, n o m atter h ow vivid an d com pellin g th e data an d life situ ation s you ’ve got at h an d.” In oth er words, th ere is n o repeatable solu tion to paradigm lock. Dr. Goldratt’s evaporatin g clou d is a good tool to u n earth th e u n derlyin g beliefs or m in dsets th at separate agen das. It is n ot in fallible, an d it does n ot work all th e tim e. Bu t it works often an d is easy to u se on ce you u n derstan d it. It is on e way to break seriou s paradigm lock th at th reaten s you r im plem en tation . Figu re 9.7 presen ts a gen eral version of th e evaporatin g clou d in term s of beliefs an d action s. (I h ave com e to u n derstan d th is is as th e m ost basic represen tation of th e evaporatin g clou d.) Th e clou d describes two views of reality or two argu m en ts (in th e logical argu m en t sen se). Con sider D an d D’ as two con flictin g proposition s abou t h ow to ach ieve th e goal. On e argu m en t is, “To h ave A, I m u st h ave B. To h ave B, I m u st h ave D.” Th e oth er argu m en t is, “To h ave A, I m u st h ave C. To h ave C, I m u st h ave D’.” Th u s, even with a com m on goal, th ere are two logical ways to get th ere. Th e beliefs m ay be com patible with each oth er, or th ey m ay n ot. Th e action s are n ot com patible. If th ey were, th ere wou ld n ot be a con flict. Th e process to resolve th e evaporatin g clou d is as im portan t as th e con stru ct. Usu ally on e side con stru cts th e clou d, with a pretty clear view
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B Be lie f 1
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D Action sug g e ste d b y b e lie f 1
A Common g oal C Be lie f 2
D′ Action sug g e ste d b y b e lie f 2
Fig u r e 9.7 G old r a tt’s e va p or a ting c loud p r ovid e s a tool to e xp ose a nd r e solve d iffe r e nt p a r a d ig m s.
of wh at th e altern ative action s are (e.g., D, D’). Th e con stru ctor can u su ally com e u p with a belief th at con n ects th e proposition . Th ey can on ly gu ess at th e oth er side’s belief. (As n oted, n eith er side m ay really u n derstan d its u n derlyin g belief.) Th e con stru ctor presen ts th e clou d to th e oth er side, readin g th e oth er side first. Wh en readin g it, th ey m ake it clear th at th ey on ly gu essed at C an d accept an y revision proposed by th e oth er side. Th e con stru ctor th en reads th eir side, n otin g, “No won der we h ave a disagreem en t,” an d th en su ggests, “Let’s search for solu tion s th at will give u s A, B, an d C an d n ot worry abou t D an d D’.” Th at is a win -win solu tion . Let’s try to iden tify som e assu m ption s th at u n derlie th e arrows in Figu re 9.7 an d see if we can com e u p with a way to in validate on e or m ore of th ose assu m ption s an d get to ou r win -win solu tion .” From h ere, a con crete exam ple m ay serve well. CCPM th eory asserts th at project plan s sh ou ld h ave relatively few tasks, certain ly n o m ore th an a few h u n dred. A com m on assertion is, “We n eed m ore detail in ou r project plan s.” Figu re 9.8 illu strates on e evaporatin g clou d to specify th at con flict. Read th e top bran ch of th e clou d, “To h ave su ccessfu l projects, we m u st h ave plan s con sisten t with ou r estim atin g u n certain ty. To h ave plan s con sisten t with ou r estim atin g u n certain ty, we m u st h ave less detailed plan s.” Read th e lower bran ch of th e clou d, “To h ave su ccessfu l projects, we m u st h ave con trol over all parts of th e project th at m ay affect su ccess. To h ave con trol over all parts of th e project th at m ay affect su ccess, we n eed to h ave m ore detailed plan s.” Now, begin th e search for assu m ption s th at u n derlie th e arrows. Assu m ption s exist u n der all th e arrows. You read assu m ption s th is way:
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B Plans consiste nt with our e stimating unce rtainty
D Le ss d e taile d p lans
C Control ove r all p arts of the p roje ct that may imp act succe ss
D′ More d e taile d p lans
A Succe ssful p roje cts
Fig u r e 9.8 The e va p or a ting c loud r e p r e se nting a c onflic t on the le ve l of d e ta il r e q uir e d in a p la n.
“To h ave A, we m u st h ave B because of assumption .” You are lim ited on ly by you r creativity in com in g u p with wh at th e assu m ption s are. A list of exam ples (on ly on e per arrow) follows. ◗ B-to-A arrow: Plan s with m ore detail th an ou r accu racy diffu se
focu s on th e im portan t item s. ◗ D-to-B arrow: Ou r estim atin g u n certain ty is on th e order of ten s of
percen tage poin ts, in dicatin g plan s sh ou ld on ly h ave ten s of tasks, an d ou r plan s already h ave h u n dreds of tasks. ◗ D-to-D’ arrow: We can n ot h ave both m ore detailed plan s an d less
detailed plan s. ◗ C-to-A arrow: Missin g details are wh at m akes projects fail. (Th e
devil is in th e details.) ◗ D’-to-C arrow: More detailed plan s im prove con trol.
On ce you h ave th e list of assu m ption s, you can search for solu tion s th at wou ld m ake th e assu m ption false. Som etim es, you fin d th at th e assu m ption is false an d n eeds n o action . If both sides agree, th e clou d evaporates. Oth er tim es, th ere is valu e in defin in g th e opposite of th e assu m ption as a “flyin g-pig” in jection . Flyin g-pig in jection s are solu tion s th at wou ld work, bu t you do n ot kn ow h ow you wou ld cau se th em to h appen . (It is like tryin g to teach a pig to fly. It does n ot work, an d it an n oys th e pig.) You h ave to “grou n d” th e flyin g pig. An exam ple m igh t be, in respon se to th e th ird assu m ption
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(D-to-D’ arrow): “We h ave both m ore detailed plan s an d less detailed plan s.” It m ay n ot be obviou s h ow you m igh t accom plish th at. On e way wou ld be to h ave h ierarch ical project plan s, wh ere th e plan s at an y level do n ot con tain excessive detail relative to th e u n certain ty. Th is “grou n ds” you r flyin g pig. Th e presen ter of th e clou d does n ot su ggest th e in jection to break it. Th e pu rpose is bu y in to a win -win solu tion . Th at is best ach ieved wh en th e target person com es u p with a solu tion you fin d acceptable, th at is, it satisfies th e com m on goal an d you r belief. If th ey com e u p with it an d you like it, n oth in g m ore is requ ired to m ake it so. Th is m eth od often works to break paradigm locks.
9. 4
G o l d ra tt’s re s i s ta n c e m o d e l
Dr. Goldratt developed a m odel h e calls th e six layers of resistan ce to describe th e person al aspects of resistan ce to ch an ge. It is a powerfu l m odel wh en con sidered in th e con text of th e th in kin g process, or system an alysis, th at precedes h ow to cau se th e ch an ge. Th e m odel su pplem en ts—n ot replaces—th e system an alysis. Section 2.3.5 listed Dr. Goldratt’s six layers of resistan ce. Th e 3-4-3 m odel gen erally describes h ow in ten sely people will experien ce th e layers of resistan ce. 9. 4. 1
O v e rc o m i n g l a y e rs 1 , 2 , a n d 3
A large h istory of learn ers dem on strates th at a two-day train in g session is su fficien t to brin g m ost people th rou gh layer 3. Class exercises th at en able people to experien ce, in a laboratory settin g, th e im pact of th e critical ch ain paradigm seem to be an essen tial part of th e su ccess of th e session s. A sm all n u m ber of people seem to stru ggle with layers 4 an d 5 du rin g th e experien tial session s, bu t th ey do n ot seem to revert to layer 1. Th ey rem ain stu ck at layer 4 or 5. 9. 4. 2
O v e rc o m i n g l a y e r 4
Layer 4 always com es ou t ju st as soon as people begin to create th eir first real critical ch ain plan s for th eir organ ization s. Despite cou n sel in train in g to act oth erwise, m an y people go ou t an d ask for 50% estim ates from th e perform in g resou rces. Th ey th en fin d th at th eir critical ch ain plan is
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lon ger th an th eir (resou rce-u n leveled) critical path plan an d beyon d m an agem en t’s du e date before th ey add th e project bu ffer. Th at leads to con stern ation an d often stops progress. Th e project plan n ers pu t th em selves in to th e pickle. I cau tion th em in train in g th at people do n ot kn ow th e real differen ce between a 50-50 estim ate an d a low-risk estim ate, wh ich experien ce h as dem on strated m an y tim es. For th at reason , people will give you an estim ate wh en asked an d ch aracterize it as th e type of estim ate you asked for. If you start by askin g for 50-50 estim ates, people will believe th at is wh at th ey gave you . You will n ow h ave a difficu lt tim e gettin g th eir agreem en t to a plan with sh orter du ration th an th e on es th ey h ave fram ed in th eir m in ds as 50-50 estim ates. Th is is a case wh ere you really do go all th e way back to layer 1 of resistan ce. People often brin g u p fears abou t poten tial u n in ten ded con sequ en ces of im plem en tin g critical ch ain as a reason n ot to proceed. I en cou rage th em to con sider su ch poten tials an d to th en design a way th at preven ts or m itigates th e u n in ten ded con sequ en ce. However, experien ce dem on strates th at it is n ot a good idea to plan to preven t all poten tial occu rren ces of u n in ten ded con sequ en ce before you start. As Presiden t Eisen h ower said, “Noth in g wou ld ever be attem pted if all objection s h ad to first be overcom e.” For exam ple, a frequ en t con cern is th at if you su cceed to im plem en t m u ltiproject critical ch ain , som e cu stom ers will receive m ore of th e ben efit of project acceleration th an oth ers will. Even th ou gh all th e projects will get don e qu icker th an an y did before, som e people are con cern ed th at less acceleration will cau se som e cu stom ers to be u n h appy. I origin ally m arveled at expressin g th at con cern , becau se th e on ly im plied solu tion is to n ot im plem en t critical ch ain , th at is, to en su re th at all cu stom ers get th eir resu lts equ ally late. Of cou rse, th ere are oth er solu tion s. You m igh t n ow ask, “Are th ere ways I can m ake u se of m y n ewfou n d ability to deliver early an d satisfy all m y cu stom ers?” Most people, after gettin g over th e sh ock of h avin g to respon d positively to a n egative con cern th ey raised, are able to th in k u p several ways. For exam ple, offerin g acceleration at a prem iu m price or sim ply begin n in g to deliver early again st n orm al lead tim es. Su ch strategies am ou n t to m arket segm en tation . Som e cu stom ers ju dge respon siven ess by wh en you start projects rath er th an by wh en you fin ish . Con tractors to th e U.S. govern m en t m ost
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often express th ose con cern s. In su ch cases, th e clien t gets in volved in m an y details of project perform an ce. Man y con tracts, for exam ple, requ ire data su bm ission s x days after th e con tract h as been sign ed. On ce again , h avin g su rfaced, th is con cern gives you th e in form ation you n eed to preven t or m itigate it from bein g a problem for you or you r cu stom er. It is n ever a reason to forego th e ben efits offered by CCPM. Alth ou gh I always deal with th e issu e in two-day train in g session s, layer 4 u su ally com es ou t again du rin g im plem en tation as som e form of “Wh at if (m an agem en t, th e clien t) cu ts m y bu ffer, takes away m y bu ffer, or sim ply ju dges m y su ccess relative to th e start of th e bu ffer?” Su ccessfu l im plem en tation s h ave n ever h ad th at problem in reality, bu t explain in g th at to people stan din g on th e precipice does n ot brin g su fficien t peace of m in d to u n lock th eir paradigm an d cau se th em to leap.
9. 4. 3
O v e rc o m i n g l a y e r 5
Th e m ost com m on m an ifestation of layer 5 is th at m an agem en t will n ot ch an ge. I dealt with th is with a clien t as I was writin g th is paragraph . Man agem en t h as a system of qu ality gates, or m ileston es, th at m u st be ach ieved to com plete th eir projects. Th ey also h ave a reportin g system to in form m an agem en t of progress to th ose m ileston es. Th e reportin g system requ ires specific dates for each m ileston e an d reportin g to each date on ce a m on th . Th e respon se to m y su ggestion to take th is to m an agem en t an d poin t ou t th e in con sisten cy with th e critical ch ain paradigm was m et with , “I am n ot goin g to su ggest to th em th at th ey ch an ge th eir m easu rem en ts. Th ey won ’t listen to m e.” Th at person is n ow on a path to overcom e th at obstacle, su ccessfu lly I am su re. Equ ally often , it is th e cu stom er wh o will n ot ch an ge. Or it m ay be th e regu lators. Often , it is oth er organ ization al elem en ts. Th e evaporatin g clou d is a u sefu l tool to overcom e th e obstacles th at becom e real du rin g im plem en tation . Con sider goin g back to Presiden t Eisen h ower’s view—n oth in g wou ld ever be accom plish ed if all objection s h ad to be overcom e first.
9. 4. 4
O v e rc o m i n g l a y e r 6
Som e h ave su ggested th at th e first five layers of resistan ce are th e active ph ase, in wh ich people feel safe to raise objection s. After all of th e
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objection s h ave been an swered, th ey h ave n o recou rse bu t to go in to passive resistan ce. Th at is, th ey seem to su pport th e idea, th ey ju st do n ot do it. People u se wh at Argyris called “skilled in com peten ce” to avoid ch an ge (wh ich h e called “organ ization al learn in g”) [6]. For example, they make certain things are implicitly undiscussable in the organization and then cover it up by making its undiscussability undiscussable. Argyris reports that his research shows nearly all people hold these theories-in-use and that: In dividu als m ay u n kn owin gly provide u s with distorted in form ation , an d th ose sam e in dividu als m ay h esitate to en gage in th e dialogu e th at is requ ired to explore th e possibility of su ch distortion s. If we persist in explorin g th ese issu es, practition ers m ay becom e defen sive—th is defen siven ess leadin g, in tu rn , to n ew distortion s, both recogn ized an d u n recogn ized. [6]
Th e m ost effective m ean s of com batin g layer-6 resistan ces is to ju st m ove ah ead an d listen a lot. Wh en leadersh ip follows th e im plem en tation plan an d expects oth ers to follow it, followin g th e CCPM beh avior pattern s h as n ot been difficu lt. You h ave to start th e positive feedback loop of project su ccess. Th e feedback loop will su stain th e projects, an d th at will su stain th e im plem en tation .
9. 5
To p i l o t o r n o t to p i l o t?
Th e secon d m ost com m on respon se offered by organ ization s con siderin g ch an gin g to critical ch ain is, “Let’s try a pilot project.” (Th e m ost com m on is, “Can you sh ow eviden ce of com pan ies ju st like u s th at h ave tried th is an d su cceeded?” Th at from people wh o wan t to becom e leaders of th eir in du stry, ju st as lon g as th ey follow everyon e else. Go figu re.) Th ey h ope th at th e pilot project will h elp th em redu ce th e risk of fu ll-scale im plem en tation . Figu re 9.9 illu strates th e pilot project evaporatin g clou d. Th e u pper bran ch su pports th e desire for th e pilot project, wh ile th e lower bran ch su pports n ot doin g th e pilot project. Som e of th e assu m ption s u n der th e arrows of th is clou d in clu de: ◗ B-to-A arrow: Th ere m ay be som eth in g u n iqu e abou t ou r en viron -
m en t th at in validates th e th eory an d th e experien ce of oth ers.
Implementing the change to critical chain B Assure that the me thod will work in our syste m b e fore r isking full-scale imp le me ntation
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D Pe rform p ilot p roje ct
A Succe ssful syste m imp rove me nt C Achieve all of the imp rove me nt b e nfits, as soon as p ossib le , on as many p roje cts as p ossib le
Fig u r e 9.9
D′ Do not p e rform p ilot p roje ct
The p ilot p r oje c t d ile m m a .
◗ D-to-B arrow: We can n ot an ticipate or work ou r way th rou gh th e
th in gs th at m igh t block ou r im plem en tation or cau se u n in ten ded con sequ en ces. ◗ D’-to-C arrow: Th e pilot project does n ot allow for th e m u ltiproject
ben efits. ◗ D’-to-C arrow: Th e pilot project will delay th e ben efits to oth er
projects. ◗ D’-to-C arrow: Th e pilot project will n ot cau se beh avior ch an ge for
resou rces su pportin g both th e pilot project (with CCPM) an d oth er projects u sin g past practice. Pilot projects som etim es su cceed. Th ey can su cceed for several reason s, in clu din g th at th e im m ediately precedin g projects were su ch dism al failu res th at sh eer ch an ce (or regression to th e m ean , for th e statistician s am on g you ) m akes it likely th at th e n ext project will su cceed, n o m atter wh at you ch an ge or do n ot ch an ge. In addition , you m ay witn ess th e Hawth orn e effect, n am ed after th e Western Electric Com pan y’s Hawth orn e Works, n ear Ch icago, wh ere som e early scien tific m an agem en t experim en ts took place. It describes th e respon se of people broken ou t an d given special treatm en t. Th e experim en ts ch an ged th in gs abou t produ ction . Wh atever th ey ch an ged seem ed to im prove perform an ce.
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Even u n doin g th e th in gs th ey did previou sly seem ed to cau se in creased produ ctivity. In du strial psych ologists attribu te th at respon se to th e desire of a team th at is sign aled ou t for special treatm en t to try h arder to give m an agem en t wh at th ey wan t. In oth er words, if th e pilot project su cceeds, people are ju stified in sayin g, “So wh at?” Wh en pilot projects do su cceed, it is still n ecessary to im plem en t CCPM for th e oth er projects in th e organ ization . In a m u ltiproject organ ization , th e largest beh avior ch an ges h ave yet to be en cou n tered. You can u se th e precedin g clou d an d assu m ption s, or you can bu ild you r own clou d u sin g you r in terpretation of B. In eith er case, u se th e evaporatin g clou d m eth od with th e pilot project proposer. Th at is, read th em th e u pper part of th e clou d first an d ask for th eir words to revise B. Th en read th e lower part an d state th e dilem m a clearly. Th en ask for h elp on a logical resolu tion , sh ow in g h ow to develop an d read assu m ption s. Fin ally, solicit su ggestion s (altern atives, or, in TOC lan gu age, poten tial in jection s) th at m ay fu lfill both B an d C. Go prepared w ith in jection s th at you w ou ld fin d satisfactory, so you can accept th em if th e oth er side su ggests th em . Do n ot, h ow ever, offer you r in jection . If th e oth er side does n ot com e u p w ith an idea righ t aw ay, leave it w ith th em for a few days before you com e back to it. Th en solicit th eir th ou gh ts again . Several poten tial in jection s m ay lead to win -win solu tion s. ◗ Use th e critical ch ain im plem en tation project itself as th e pilot
project. ◗ Perform th e pilot project in th e spirit of plan -do-ch eck-act, th at is, a
rapid prototype as part of th e plan for fu ll-scale im plem en tation . ◗ In vest bu y-in effort at th e begin n in g to iden tify poten tial con cern s
u n iqu e to you r en viron m en t an d plan preven tive or m itigatin g action s as part of th e im plem en tation project risk m an agem en t plan .
9. 6 9. 6. 1
P l a n th e c h a n g e En d o rs e th e i m p l e m e n ta ti o n p ro je c t
En dorsem en t m ean s gettin g th e stakeh olders to agree in th e begin n in g th at th ey are willin g to assist as n ecessary to effect th e ch an ge to CCPM.
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Wh ile in som e in stan ces it m ay be en ou gh to h ave people say, “I don ’t h ave a problem with th at,” in m ost cases you n eed m ore th an perm ission . You n eed a willin gn ess to ch an ge on th eir part. Stakeh olders in clu de th e project team s, project m an agers, resou rce m an agers, sen ior m an agem en t, clien ts, an d su ppliers. Th ere m ay be m ore stakeh olders im portan t to you r im plem en tation ; perh aps even stockh olders. Som etim es, you m ay wan t to obtain th e en dorsem en t before you h ave th e project ch arter. In oth er cases, you m ay wan t to u se a draft of th e project ch arter as you r veh icle for en dorsem en t. 9. 6. 2
C h a rte r th e i m p l e m e n ta ti o n p ro je c t
Figu re 9.10 is a sam ple critical ch ain im plem en tation project ch arter. Try to keep you rs to on e page an d focu s it on th e n eeds of th e project stakeh olders. 9. 6. 3
C re a te th e i m p l e m e n ta ti o n p ro je c t w o rk p l a n
Th e project work plan is th e n ext step after th e project ch arter an d in clu des th e followin g: ◗ Detailed specification of th e project scope; ◗ A WBS to organ ize th e project scope; ◗ Assign m en t of respon sibility to th e WBS; ◗ A resou rce-loaded (critical ch ain ) project sch edu le; ◗ Th e project bu dget; ◗ Defin ition of th e project team ; ◗ Procedu res for operation of th e project team ; ◗ Plan s for project closeou t.
Figu re 9.11 illu strates th e WBS for th e project to im plem en t CCPM. Th e WBS reflects th e ch an ges n ecessary for CCPM. Th e PRT con sidered both resou rce beh avior an d th e tech n ical in jection s of critical ch ain , in clu din g th e followin g: ◗ Project plan s follow th e TOC paradigm (i.e., 50% task tim es, critical
ch ain , an d properly sized bu ffers).
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Proje ct Charte r Proje ct: Imp le me nt Cr itical Chain Proje ct Manag e me nt Revision: 0 Date : 2/ 6/ 99 Ap p rove d b y:_____________________ Proje ct Purp ose The cr itical chain p roje ct manag e me nt (CCPM) imp le me ntation p roje ct will install CCPM for manag e me nt of all p roje cts p e rforme d b y the Southwe ste r n Division of ACME Prod ucts Sup p ly Corp oration.
Custome r and Stake hold e rs The p r imary ind ivid ual custome r for this p roje ct is Wiley E. Coyote , d ire ctor of ACME Prod ucts, Southwe ste r n Division. The custome r g roup is all e mp loye e s, includ ing manag e rs, of the d ivision. Clie nt custome r involve me nt, such as R. Runne r, can b e includ e d in this p roje ct if clie nt involve me nt is ne ce ssary to imp le me ntation.
Proje ct Te am Cynthia Stand ish is the p roje ct d ire ctor. She will se le ct thre e to five te am me mb e rs, as ne ce ssary, to assist in p lanning, sche d uling, and othe r imp le me ntation p roje ct activitie s. All manag e rs in the d ivision are to sup p ort the imp le me ntation p roje ct as re q uire d .
Scop e This p roje ct includ e s all the p lanning, p roce d ure d eve lop me nt, training, and software tools ne ce ssary and sufficie nt to install CCPM into the d ivision. It d oe s not includ e te chnical work on the p roje cts nor work with the p roje ct custome rs.
Sche d ule The use of CCPM is e xp e cte d to b e sub stantially comp le te within 90 d ays of the ap p roval of this charte r. Quarte rly p rog re ss revie ws are to b e he ld for the following thre e q uarte rs (i.e ., the final one on Fe b ruary 6, 2000).
Cost The ove rall cost of this p roje ct, includ ing e xp e nd iture s for training (not includ ing e mp loye e time ), consulting sup p ort, p roce d ure d eve lop me nt, and the software tool, shall not e xce e d $250,000 without ad d itional manag e me nt author ization. Cost associate d with the re p lanning of p roje cts using CCPM and b uffe r manag e me nt are not includ e d in this cost, b e cause they are p art of the re sp e ctive p roje cts.
Sp e cial Consid e rations Proce d ure s and software tools should comp ly with comp any format and comp uting cap ab ility.
Acce p tance _____________________________, Proje ct Manag e r Fig u r e 9.10
Sa m p le c r itic a l c ha in im p le m e nta tion p r oje c t c ha r te r .
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Cr itical chain imp le me nte d
1 Imp le me ntation p lan
1.1 Charte r d eve lop e d 1.2 Workp lan issue d
1.3 Pe rformance monitore d
2 Proce d ure s and tools
3 Be havior chang e d
2.1 Sche d ule tool
3.1 Pe op le traine d
2.2 Cr itical chain p roce d ure s imp le me nte d
3.2 Drum sche d ule manag e d
2.3 Ind ivid ual p roje cts p lanne d
3.3 Buffe rs manag e d
Fig u r e 9.11 The WBS to im p le m e nt C C PM id e ntifie s the wor k p a c ka g e d e live r a b le s.
◗ Th e dru m m an ager creates th e dru m sch edu le to accom m odate
m an agem en t’s project priority. ◗ Project m an agers sch edu le projects to th e dru m sch edu le. ◗ Resou rces work to th e roadru n n er paradigm . ◗ Resou rces provide accu rate in pu t to th e bu ffer report. ◗ Every m an ager does bu ffer m an agem en t.
Th e work plan tasks developed followin g th e WBS m u st create th ose resu lts. Con sider th e seven -S m odel an d th e actu al beh avior in you r organ ization to com plete you r plan . Try to separate fact from fiction . For exam ple, m an y people in itially believe th at all tasks in th eir organ ization are u n derestim ated. Th at is often in an organ ization with exten sive
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m u ltitaskin g an d in terru ption s. In som e cases, th ey h ave data on actu al reported task com pletion for previou s projects. It u su ally requ ires on ly a qu ick ch eck to fin d th at th ey are sim ilar to m ost organ ization s, sh owin g exten sive date-driven beh avior. Th e sam ple WBS in Figu re 9.11 also con siders th e layers of resistan ce. Experien ce dem on strates th at two-day critical ch ain train in g can effectively overcom e layers 1, 2, an d 3 of resistan ce. WBS elem en t 3.1 th u s in clu des th e plan tasks to overcom e th ose layers of resistan ce. Th e work plan elem en ts su pportin g WBS elem en t 1.2 m u st overcom e layers 4 an d 5. A work plan task to iden tify obstacles an d poten tial n egative con sequ en ces is on e way to accom plish th at, bu t it h as a poten tial n egative ou tcom e. WBS elem en ts 2.2, 2.3, 3.2, an d 3.3, on ce com pleted, give eviden ce th at resistan ce layer 6 h as been overcom e, bu t th ey do n ot explicitly overcom e layer 6. Notice th at th e WBS in Figu re 9.11 focu ses on th e requ ired beh avior ch an ge, n ot on ch an ges in th e u n derlyin g beliefs or cu ltu re. Th at accom plish es th e m ost direct ch an ge, alth ou gh it m ay n ot lead to lastin g ch an ge. Wh ile som e of th e feedback from CCPM is self-rein forcin g, it is legitim ate, in m an y organ ization s, to fear th at m an agem en t’s exploitation of th e m eth od will exten d to exploitation in a n egative sen se, for exam ple, overloadin g th e dru m resou rce. If you r organ ization is m isalign ed with th e prin ciples u n derlyin g TOC, you sh ou ld take th is opportu n ity to begin th e cu ltu re an d belief ch an ges you n eed to con tin u e with on goin g im provem en t. Oth erwise, im provem en t will stop as soon as th e im plem en tation project en ds. Th e respon sibility m atrix sh ows respon sibility for each of th e work packages in th e WBS. You can assign respon sibility at m u ltiple levels in th e WBS, bu t you m u st assign it to th e lowest, or work-package, level. Note th at th e person respon sible for th e work package is n ot n ecessarily th e sam e as th e resou rces requ ired to perform th e work con tain ed in th e work package. Th e respon sible an d accou n table work package m an ager m ay be on e of th e resou rces th at works on th e project an d m ay sh ow u p in th eir own work package an d in oth er work packages. Work package m an agers plan an d estim ate th e work package an d th en are accou n table to m an age its perform an ce. Figu re 9.12 illu strates a sch edu le for im plem en tin g CCPM. It is in th e critical ch ain form at, as illu strated by th e ProCh ain software–m odified
Implementing the change to critical chain ID 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Task name 1 1 Imp le me ntation p lan 1.1 Charte r d eve lop e d Deve lop charte r Distr ib ute charte r 1.2 Workp lan issue d Draft workp lan Distr ib ute workp lan Revise workp lan to CC FB 1.3 Pe rformance monitore d Plan p e rformance monitor ing Monitor p e rformance PB 2 Proce d ure s & tools 2.1 Sche d ule tools De cid e sche d ule tools Acq uire sche d ule tools Train to sche d ule tools 2.2 CC PROCs imp le me nte d Issue PLAN PROC FB Issue me asure & control PROC FB 2.3 Ind ivid ual p roje cts p lanne d Plan ind ivid ual p roje cts 3 Be havior chang e d 3.1 Pe op le traine d Two-d ay training Imp le me ntation se ssion Road runne r training Buffe r manag e me nt training 3.2 Drum sche d ule manag e d Se le ct d rum Pr ior itize p roje cts Deve lop d rum sche d ule FB| Deve lop d rum sche d ule Sche d ule ind ivid ual p roje cts 3.3 Buffe rs manag e d Buffe r me e ting sch & ag e nd a Initial b uffe r me e ting
249
Jan 2, '00 Jan 9, '00 Jan 16, '00 Jan 23, '00 Jan 30, '00 Fe b 6, '00 Fe b 13, '00 Fe b 2 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 2 4 6 8 10 12 14 16 18 20 22
S A P A
S P
P A P S S
P
P,S,A P,S,A P,S,A P,S,A P,S P,S P,S P S P,S
Fig u r e 9.12 C r itic a l c ha in p la n to im p le m e nt c r itic a l c ha in, shown in Pr oC ha in G a ntt for m a t.
Microsoft Project Gan tt ch art. Th e form at illu strates all th e tasks on th e project bu t iden tifies th e critical ch ain tasks by sh ade. Man y of th e plan bars are split h orizon tally, wh ich su pports sh owin g statu s on th e Gan tt ch art as th e project progresses. It also sh ows th e tasks th at can be perform ed early with ou t an adverse resou rce con flict on th e project. Do n ot start th ose tasks early in a m u ltiproject en viron m en t, becau se you m ay cau se u n n ecessary sch edu le con flicts du rin g project perform an ce. Th e letters adjacen t to th e bars in dicate a specific type of resou rce. Th is ch art sh ows on ly th e en d dates of th e bu ffers. Th e plan , startin g on Jan u ary 2, 2000, predicts com pletion (en d of th e project bu ffer) on Febru ary 12. Th e project an d feedin g bu ffers are 50% of th e precedin g ch ain . Notice th at th e project plan does n ot develop th is critical ch ain plan
250
C r itic a l C ha in Pr oje c t Ma na g e m e nt
u n til abou t h alfway th rou gh th e project; it is th e ou tpu t of task 8, “revise work plan to critical ch ain .” Th e plan assu m es n eed for critical ch ain train in g, th e software tool, an d train in g on th e software tool before com pletin g th e critical ch ain plan . You m ay ch oose to gen erate a critical ch ain plan from th e ou tset. However, n ote th at th e critical path plan , wh ich you wou ld h ave u sed prior to th e critical ch ain plan , h as a later com pletion date with ou t a bu ffer. Note th at th e WBS elem en ts in clu de from on e to fou r tasks. Th at is by n o m ean s a lim it; work packages often h ave u p to 25 tasks. Becau se th e com plete critical ch ain plan m akes it som ewh at difficu lt to focu s on th e critical ch ain (especially if you can n ot see th e color differen ce), m ost project software allows you to filter th e project tasks to display on ly th e critical ch ain tasks. Figu re 9.13 illu strates th e critical ch ain for ou r im plem en tation project. Notice th at th e critical ch ain in clu des both resou rce an d path depen den cy. (Th e critical path plan previou sly referred to did n ot in clu de levelin g of th e resou rces an d th erefore wou ld h ave h ad resou rce con flicts.) 9. 6. 4
P l a n to p re v e n t o r m i ti g a te i m p l e m e n ta ti o n ri s k s
Project risk m an agem en t seeks to con trol poten tial cau ses of special cau se variation of h igh probability an d con sequ en ce. Th e project plan m on itors an d m ay in clu de preven tion or m itigation plan n in g for cau ses
Jan 2, '00
ID 3 4 6 7 12 16 17 18 25 28 29 30 31 37 40
Jan 9, '00 Jan 16, '00 Jan 23, '00 Jan 30, '00 Fe b 6, '00 Fe b 13, '00
Task name 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 2 4 6 8 10 12 14 16 18 S Deve lop charte r A Distr ib ute charte r P Draft workp lan A Distr ib ute workp lan P Monitor p e rformance P De cid e sche d ule tools A Acq uire sche d ule tools P Train to sche d ule tools P Plan ind ivid ual p roje cts P,S,A Two-d ay training P,S,A Imp le me ntation se ssion P,S,A Road runne r training Buffe r manag e me nt training P,S,A P Sche d ule ind ivid ual p roje cts P,S Initial b uffe r me e ting
Fig u r e 9.13 The im p le m e nta tion p r oje c t c r itic a l c ha in id e ntifie d b y filte r ing the vie w for c r itic a l c ha in ta sks illustr a te s b oth p a th a nd r e sour c e d e p e nd e nc y.
Implementing the change to critical chain
251
of su fficien tly h igh probability or con sequ en ce. Th ose special cau ses of variation are very organ ization specific. Start by assessin g th e risk u sin g wh atever tools are appropriate to th e m agn itu de of th e project an d com fortable to you r team . You r plan can in clu de a ru dim en tary level of risk assessm en t if you r projects are sm all an d pose n o h ealth , safety, or en viron m en tal risks. Ch apter 10 provides an effective m eth od for a wide ran ge of projects an d is appropriate for critical ch ain im plem en tation . Th e oth er en d of th e risk assessm en t spectru m can in clu de m u ltim illion -dollar probabilistic risk assessm en ts perform ed by team s of Ph .D.-level scien tists, en gin eers, an d legal an d bu sin ess experts. Critical ch ain im plem en tation is at th e low en d of th e risk spectru m . It does n ot affect th e su ccess of on goin g projects in a n egative way, even if th ey do n ot ach ieve th e critical ch ain ben efits.
9. 7
Move ahe ad!
Havin g com pleted all you r plan n in g, you are stan din g at th e precipice of Goldratt’s layer 6. At th is poin t, th e on ly way you are goin g to leave th e airplan e is to h old h an ds an d ju m p. Th e followin g tables lay ou t th e steps n ecessary to im plem en t CCPM in a large, m u ltiproject en viron m en t. Scale th e steps to fit you r n eeds. You r team can accomplish all th e action s listed in Table 9.2 in a on e-day meetin g. Th e m eetin g best follows a two-day worksh op in wh ich all th e mangers learn the critical chain theory. It is a mistake to separate the twoday workshop from the implementation meeting, because people forget training rapidly if it is not immediately reinforced by application in the field. Table 9.3 lists th e steps n ecessary to begin im plem en tation . You r leadersh ip session m ay h ave iden tified th e n eed for addition al train in g. Deliver th is train in g on an as-n eeded basis an d do n ot let it delay proceedin g with steps 4 an d 5 of th e process. You m u st perform steps 3, 4, an d 5 with each in dividu al project team . Th e plan n in g session s sh ou ld n ot take m ore th an a few weeks in total. If th ere are m an y projects, you m ay n eed to h ave m u ltiple facilitators so th is ph ase does n ot drag ou t. Table 9.4 lists th e steps n ecessary to com plete th e im plem en tation ph ase an d m ove in to fu ll-scale operation with th e CCPM process. Bu ffer reportin g sh ou ld be in itiated with in th ree weeks of th e in itial leadersh ip train in g, or th e project will flou n der. People will begin to forget wh at th ey
252
C r itic a l C ha in Pr oje c t Ma na g e m e nt Ta bl e 9. 2
Im plem en t Ph ase 1 Ste p
Re s pons ible Party
Ac tion
Output
1
Facilitator
Plan a se ssion with the le ade rship te am and inform the m of the age nda
Me e ting sche dule and age nda
2
Facilitator
Brie f the te am on the multiproje ct solution
Knowle dge
3
Le ade rship
Le ade rship te am ide ntifie s the constraint re source (drum) for the organization
Constraint (drum) re source ide ntifie d
4
Facilitator
Pre se nt (b rie fly) b uffe r manage me nt
Knowle dge
5
Le ade rship
Assign re sponsib ility for b uffe r re porting
Re sponsib ility assignme nt
6
Proje ct manage rs
Commit to track and manage to b uffe rs
Commitme nt
7
Le ade rs
Se le ct initial proje ct for CCPM
Proje ct list
8
Le ade rs, proje ct manage rs
Commit to duration for individual proje ct CCPM plans and first b uffe r re ports
Plan
9
Le ade rs
Commit to plan all future proje cts using CCPM
Commitme nt
10
Le ade rs
De te rmine proje ct priority (or se que nce for the drum re source )
Proje ct priority list
11
Le ade rs
Assign re sponsib ility to cre ate the CCPM plans
Individual critical chain proje ct plans
12
Le ade rs
De cide on the CCPM sche dule tool
Sche dule tool, proce dure
13
Le ade rs
Ide ntify who re quire s what training
Training matrix
14
Top le ade r
Commit to formally announce CCPM (duration)*
Commitme nt le tte r, e -mail, or me e ting
15
Proje ct and re source manage rs
Commit to communicate CCPM to pe ople (duration)*
Individual communication
16
Drum re source manage r
Commit to b uilding the drum sche dule (duration)*
Drum sche dule
17
Proje ct manage rs
Commit to we e kly b uffe r me e tings
We e kly b uffe r me e tings
18
Facilitator
Ge t commitme nt for follow-up se ssion
Follow-up se ssion
*Inse rt the numb e r of days e stimate d in the action.
learn ed abou t critical ch ain , an d im plem en tation su ccess ch an ces will dwin dle.
Implementing the change to critical chain
253
Ta bl e 9. 3
Im plem en t Ph ase 2: In dividu al Project Critical Ch ain Plan s Ste p
Re s pons ible Party
Ac tion
1
Facilitator
De live r two-day workshops
Knowle dge
2
Traine r
Train software use rs (if ne ce ssary)
Software skill
3
Proje ct manage rs
Ve rify or cre ate individual proje ct plans suitab le for critical chain plans, including normal (low-risk) task duration e stimate s
Individual proje ct critical path plans
4
Re source s
De te rmine ave rage task durations
Input data to cre ate plan (including b uffe r sizing)
5
Proje ct manage rs
Cre ate the individual critical chain plans, including sizing all b uffe rs
Individual proje ct critical chain plans (start date s not ye t stagge re d)
Output
Ta bl e 9. 4
Im plem en t Ph ase 3: Dru m Sch edu le an d Project Sch edu les Ste p
Re s pons ible Party
Ac tion
Output
1
Drum manage r
Cre ate initial drum sche dule
Drum sche dule
2
Proje ct manage rs
Sche dule individual proje cts
Proje ct sche dule s
3
Traine r
Train re source s in roadrunne r b e havior and using b uffe r re port to se t the ir individual work priority
Knowle dge
4
All proje ct te am me mb e rs
Initiate re source b uffe r re porting and manage me nt
Buffe r re ports and action plans
On ce you h ave m oved in to in itial im plem en tation , you will fin d a h ost of item s th at requ ire clarification an d issu es th at requ ire resolu tion . You n eed an on goin g process to en su re th at qu estion s are an swered prom ptly, an swers com m u n icated to all team m em bers with a n eed (or desire) to kn ow, an d th at you prom ptly resolve issu es. Th is process can be part of you r m easu rem en t an d con trol process.
9. 8
M e a s u re a n d c o n tro l i m p l e m e n ta ti o n
Measu rem en t an d con trol of th e CCPM im plem en tation project provide th e system feedback n ecessary to m ove you r project m an agem en t system
254
C r itic a l C ha in Pr oje c t Ma na g e m e nt
to th e n ew equ ilibriu m state an d keep it th ere. You r team m u st in stall a positive feedback loop to cau se th e ch an ge. Weekly bu ffer m eetin gs are th e prim ary veh icle for th at feedback. Th ey are you r lever to lift th e world. Addition al feedback du rin g im plem en tation in clu des th e followin g: ◗ Prioritizin g th e projects sets a clear basis for decision m akin g. ◗ Th e dru m sch edu le an d staggerin g of project starts u sin g th e dru m
sch edu le elim in ate m u ch of th e seriou s resou rce con ten tion for th e project team s. ◗ Bu ffer m an agem en t provides a clear decision -m akin g tool to allo-
cate resou rces between projects. ◗ Project resou rces are expected to work on on e project task at a tim e
an d en cou raged by m an agem en t to protect th is m ode of operation . ◗ Project resou rces are n ot pu lled away for h igh er priority projects. ◗ Project ch an ges an d su bsequ en t rework are redu ced du e to later
starts an d earlier project com pletion . ◗ Project ch an ges are redu ced becau se th e critical path does n ot
ch an ge. ◗ Project ch an ges are redu ced becau se th e bu ffer m an agem en t
th resh olds for action are m u ch wider th an toleran ces u su ally placed on project perform an ce variation . Man agem en t can en h an ce th e effect of th ose n atu ral feedback resu lts by assu rin g com m u n ication th rou gh ou t th e project perform an ce system . Man y n atu ral feedback loops will h elp keep th e CCPM system stable in its n ew state, in clu din g: ◗ Workers experien ce less stress (a positive feedback) wh en m u lti-
taskin g is rem oved. ◗ Project team s experien ce positive feedback from su ccessfu lly com -
pletin g projects. ◗ Man agem en t experien ces positive feedback for in creased project
su ccess. ◗ Management experiences positive feedback for increased profitability.
Implementing the change to critical chain
255
Wh ile som e of th e h igh er level feedback resu lts start as soon as th e projects begin to perform to th e critical ch ain plan , an d m an agem en t begin s to m odel th e n ew beh aviors, th e feedback is relatively weak u n til th e projects begin to com plete. On ce m an agem en t h as plan n ed an d sequ en ced th e projects, th eir prim ary roles are to: ◗ Participate in th e bu ffer m an agem en t process; ◗ En su re th at an y n ew projects posed for in clu sion in to th e system
are prioritized an d fit in to th e dru m sch edu le.
9. 9
Wh a t i f i m p l e m e n ta ti o n p ro g re s s s ta l l s ?
Som etim es, im plem en tation projects stall. Th at som etim es occu rs n ear th e begin n in g of th e project bu t m ay occu r at an y tim e. People atten d th e train in g session s an d m eetin gs an d create th e work plan . Th ey th en seem to com pletely forget abou t it in th e cold ligh t of th e n ext Mon day m orn in g. Th ey im m ediately drop back in to th e beh avior pattern s dem an ded an d rewarded by th e cu rren t system . Sym ptom s in clu de com plain ts th at “we are too bu sy to do critical ch ain ” or th at th e software or procedu res are n ot workin g righ t or th at m an agers are n ot “walkin g th eir talk.” You can expect on e con sisten t sym ptom : No on e blam es h im self or h erself. Th at is resistan ce layer 6 in action . If you h ave been workin g on th e im plem en tation for m ore th an th ree m on th s an d are n ot essen tially th ere an d begin n in g to get th e positive feedback, you are stu ck. You n eed to dig in to you r organ ization ’s policies, m easu rem en ts, an d beh avior to fin d ou t wh ere you are stu ck an d im plem en t a rem edy to rem ove th e block. I can n ot give you a gen eric solu tion becau se all organ ization s are differen t. However, based on Dr. Dem in g’s assertion s th at 96% of organ ization problem s are cau sed by m an agem en t (seem in gly con firm ed by m y own observation s), I can su ggest th at you start by lookin g at you r leadersh ip.
9. 10
Su m m a ry
Th is ch apter reviewed th e th eory of organ ization ch an ge an d provided a practical plan for im plem en tin g critical ch ain in a m u ltiproject
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C r itic a l C ha in Pr oje c t Ma na g e m e nt
organ ization . You can im plem en t it on sin gle projects with a sim pler plan . Key poin ts presen ted in th is ch apter are: ◗ Effective ch an ge plan s h arn ess organ ization dyn am ics (i.e., positive
feedback loops) to accelerate th e ch an ge. ◗ Sen ior m an agem en t leadersh ip is th e critical su ccess factor for
m u ltiproject CCPM im plem en tation . ◗ Use you r project process to im plem en t th e ch an ge to CCPM:
ch arter, en dorse, work plan , perform , an d close. ◗ Pilot projects are best avoided for critical ch ain im plem en tation . ◗ Hu m an s an d organ ization s try to m ain tain equ ilibriu m (i.e., appear
to resist ch an ge). You r im plem en tation plan sh ou ld an ticipate an d plan for th is. ◗ Move ah ead!
CCPM im plem en tation is greatly aided by an organ ization ’s u n derstan din g of TOC an d a su ccessfu l ch an ge h istory of adoptin g n ew practices. Organ ization s also h ave su cceeded th e oth er way: u sin g CCPM im plem en tation as th e catalyst for wider learn in g abou t TOC.
Referen ces [1]
Dalziel, M. M., an d S. C. Sch oon over, Changing Ways, A Practical Tool for Implementing Change Within Organizations, New York: Am acom , 1988.
[2]
Covey, S. R., Principle-Centered Leadership: Teaching People How to Fish , Provo, Utah : In stitu te for Prin ciple-Cen tered Leadersh ip, 1990.
[3]
Ben n is, W. G., K. D. Ben n e, an d R. Ch in , The Planning of Change, New York: Holt, Rin eh art, an d Win ston , 1969.
[4]
Skin n er, B. F., Science and Human Behavior, Lon don : Th e Free Press, Collier Macm illan , 1953.
[5]
Cu lbert, S. A., Mind-Set Management, The Heart of Leadership, New York: Oxford Un iversity Press, 1996.
[6]
Argyris, C., an d D. A. Sch on , Organizational Learning II, Theory Method, and Practice, Readin g, MA: Addison -Wesley, 1996.
C HAP TER
10 Conte nts 10.1 De fining p r oje c t r isk m a na g e m e nt
P ro je c t ri s k m anag e m e nt
10.2 Risk m a na g e m e nt p r oc e ss 10.3
Id e ntifying r isks
10.4 Pla nning to c ontr ol r isks 10.5
Sum m a r y
Re fe r e nc e s
P
roject risk m an agem en t seeks to m an age an d con trol th e risk of project su ccess to an acceptable level. Project risk deals with th e risk to project su ccess in term s of scope, cost, an d sch edu le, in clu din g cu stom er satisfaction . Oth er processes deal with oth er risks, su ch as h ealth an d safety risk an d en viron m en tal risk. Project risk m an agem en t seeks to con trol risks beyon d th e scope of you r project plan an d beyon d you r circle of con trol. Project risk m an agem en t is part of th e project plan n in g process, becau se you m u st decide on a cou rse of action to in clu de in you r project plan based on th e relative risk. Wh en ever you m ake a project assu m ption , you are m akin g a project risk decision becau se you are assu m in g th at reality in th e fu tu re will follow you r assu m ption . If you r assu m ption does n ot com e tru e, you h ave a project risk even t.
257
258
C r itic a l C ha in Pr oje c t Ma na g e m e nt
Project m an agers h ave several option s for dealin g with project risk even ts, in clu din g: ◗ Expen din g effort to preven t th e occu rren ce of th e risk (e.g., lim itin g
th e u se of flam m able m aterials to preven t a poten tial fire); ◗ Iden tifyin g an d m on itorin g risk triggers (e.g., weath er m on itors); ◗ Takin g preven tive action s th at m ay redu ce th e poten tial con se-
qu en ces of th e risk, sh ou ld th e even t occu r (e.g., spill con trol dikes); ◗ Pu rch asin g in su ran ce; ◗ Plan n in g for m itigation in case a risk even t occu rs (e.g., fire depart-
m en t); ◗ Tran sferrin g th e risk (e.g., su bcon tractin g); ◗ Acceptin g th e risk. ◗ Lim itin g th e risk (e.g., settin g allowan ces).
Critical ch ain sim plifies con ven tion al project risk m an agem en t becau se it n eed deal on ly with special cau se risks. Th e CCPM process provides th e n ecessary an d su fficien t process an d tools to deal with com m on cau se risks to sch edu le an d cost an d to scope in som e degree. Th e project qu ality process is also a risk m an agem en t tool, protectin g th e project from scope risk. Th e PMBOK [1], its m ore detailed su pport in form ation [2], an d m u ch of th e project literatu re (e.g., [1–4]) fail to discrim in ate between com m on cau se variation an d special cau se variation wh en addressin g project risk. We n oted in Ch apter 3 th at Dr. W. Edwards Dem in g, th e fath er of TQM, described th at as a fatal error. Th e problem with n ot differen tiatin g is th at m an agem en t will take action wh en th ey sh ou ld n ot an d n ot take action wh en th ey sh ou ld. Dem in g n otes a project exam ple [5]: En gin eers in m an y establish m en ts are allowed a deviation of 10 per cen t between estim ated cost of a project, an d actu al cost. Th e 10 per cen t com es from stargazin g: n o basis wh atsoever for it.… Th e con trol lim its sh ow th at th e n atu ral variation of th e differen ces on th ese 20 projects was 21 percen t above an d below th e estim ated cost.
Project risk management
10. 1
259
D e fi n i n g p ro je c t ri s k m a n a g e m e n t
Risk h as two com pon en ts: th e probability of a risk even t an d th e im pact to th e project. Risk types in clu de th e followin g: ◗ Program risk: Risks th at m ay cau se clien t dissatisfaction , in clu din g
risk th at th e clien t n eed is n ot kn own , th at th e fu ll scope to fill th e n eed is n ot kn own , or th at project assu m ption s m ay n ot com e tru e. ◗ Bu sin ess risk: Im pact th e project m ay h ave on th e rest of th e bu si-
n ess, in clu din g fin an cial risk an d risk to th e com pan y repu tation . ◗ Cost risk: Poten tial to affect th e project beyon d on e-th ird th e
project cost bu ffer. ◗ Sch edu le risk: Poten tial to affect th e project beyon d on e-th ird of
th e project sch edu le bu ffer or beyon d a feedin g bu ffer. ◗ Health an d safety risk: Poten tial for in ju ry to th e project team or
pu blic beyon d th e risks rou tin ely accepted by th e pu blic. ◗ En viron m en tal risk: Poten tial to affect th e project n ecessary con di-
tion s (scope, sch edu le, cost) as a con sequ en ce of som e en viron m en tal im pact. ◗ Regu latory risk: Poten tial to affect th e project n ecessary con dition s
(scope, sch edu le, cost) as a con sequ en ce of som e regu latory im pact, su ch as a n ew design requ irem en t, con strain t, or delay.
10. 2
Ri s k m a n a g e m e n t p ro c e s s
Figu re 10.1 illu strates th e project risk m an agem en t process. It starts with iden tifyin g th e risks you r project m ay en cou n ter. Risk assessm en t m ay be qu an titative or qu alitative. Qu an titative risk assessm en t tools in clu de failu re m odes an d effects an alysis (FMEA), Mon te Carlo an alysis, project sim u lation , PERT, probabilistic safety assessm en ts (PSA), an d m an agem en t oversigh t or risk tree (MORT). I focu s on qu alitative risk assessm en t becau se th e data u su ally are n ot available to ju stify qu an titative risk assessm en t; an d su pplyin g n u m bers ten ds to yield a false sen se of believability.
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C r itic a l C ha in Pr oje c t Ma na g e m e nt
1 Id e ntify p ote ntial r isk eve nts
5 Preve nt r isk eve nt
2 Estimate the r isk p rob ab ility 3 Estimate the r isk imp act
4 Analyze r isks
6 Plan for mitig ation
7 Insure ag ainst r isk 4 Id e ntify p ote ntial r isk tr ig g e rs
Fig u r e 10.1
10. 2. 1
8 Monitor for r isk tr ig g e rs
The p r oje c t r isk m a na g e m e nt p r oc e ss.
Th e ri s k m a tri x
Table 10.1 illu strates th e basic risk m an agem en t m atrix. It su m m arizes th e risk, th e assessm en t of th e risk, an d th e plan n ed action s to m on itor, preven t, or m itigate th e resu lts of th e risk. Th e con ten t in th e table is for illu stration on ly; you r con ten t sh ou ld be m u ch m ore specific to you r project. However, I do en cou rage you to follow th e lead of com bin in g like risks to keep th e overall len gth of th e list to a reason able n u m ber of item s. Defin e wh at a reason able n u m ber of item s is based on th e overall risk an d size of you r project. Relatively sm all projects (i.e., less th an a few m illion dollars an d u n der on e year) sh ou ld n ot h ave a risk list in excess of 10 item s. If you r list for a project of th is size ju st seem s to h ave m an y m ore h igh -im pact, h igh -con sequ en ce risks, ask you rself if you really wan t to do th at project! Th e colu m n s in Table 10.1 start with a description of th e poten tial risk even t. You can start with a list of m an y specific even ts th at people can im agin e an d th en lu m p th em togeth er for su bsequ en t an alysis. You can also categorize risks in term s of th e probability an d poten tial im pact, th e n ext two colu m n s. Th at is, you m ay h ave on e even t for low-im pact n atu ral even ts an d an oth er for large-im pact n atu ral even ts. Th e reason to do th at is th at th e two types of even ts will lead to differen t m itigation strategies. Th e fifth colu m n in Table 10.1 lists th e triggers to m on itor. Th ey are th e item s you sh ou ld frequ en tly assess to see if you sh ou ld ch an ge you r
No.
Ris k Eve nt
Probability
Proje c t Im pac t
Trig g e r to Monitor
Pre ve ntion Ac tions
Mitig ation Ac tions
1
Natural e ve nt
Low
High
We athe r re ports, tre nds
Plan outside work during dry se ason
Use te nts and tarps ove r work are as, dike s around facility, high-wind de sign, se ismic de sign, pumps for rain and floods
2
Fire
Low
High
Fire pre ve ntion inspe ctions; alarm syste m
Use noncomb ustib le s, fire proof storage cab ine ts
Install fire suppre ssion ASAP
3
Te chnical de ve lopme nt
Me dium
Me dium
De ve lopme nt te sts and gate s
Institute quality proce ss
Use alte rnative te chnology
4
Re gulatory impact
Me dium
Me dium
Exce ssive que stions or no action from re gulators
Employ face -to-face discussions with re gulators; use consultants to pre pare applications
Form task te am to re spond to cause s of de lay or de nial
5
Supplie r de lay
High
Me dium
Late contracts; de laye d de live ry
Institute late -de live ry pe naltie s; che ck supplie r de live ry re fe re nce s
Use alte rnative supplie rs, alte rnative e quipme nt
Project risk management
Ta bl e 10. 1
Th e Risk Matrix
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risk assessm en t or activate you r con tin gen cy plan s. Of cou rse, you sh ou ld try to com e u p with leadin g in dicators wh en ever possible. Colu m n s 6 an d 7 of Table 10.1 are th e m ost im portan t: listin g th e action s you will take to preven t or m itigate th e poten tial risk. Preven tion an d m itigation m ay work on eith er th e even t probability or th e even t im pact. For exam ple, a spill-con trol dike redu ces th e poten tial im pact of a spill, bu t n ot th e probability. On th e oth er h an d, a dou ble-wall tan k redu ces th e probability of a spill. Action s to preven t th e risk sh ou ld becom e part of you r project work plan . Action s to m itigate m ay requ ire action s in you r project work plan to plan for m itigation , su ch as train in g or pu rch asin g em ergen cy su pplies. 1 0 . 2 . 2 I n c o rp o ra ti n g ri s k a s s e s s m e n t i n to th e p ro je c t p ro c e s s
You r risk assessm en t is on ly as valu able as wh at you do with it. Listin g risks m igh t give you am m u n ition to say, “I told you so.” It also open s you to th e qu estion , “An d wh y didn ’t you do an yth in g abou t it?” You m u st take action on th e iden tified risks to h ave an y resu lt from you r risk an alysis. You m ay ch oose to u se a con sisten t approach to applyin g th ose altern atives, su ch as listed in Table 10.2.
10. 3
I d e n ti fy i n g ri s k s
10. 3. 1
Ri s k l i s t
You can u se a variety of m eth ods to iden tify risks. On e m eth od starts with th e assu m ption s you r team felt n ecessary to develop project work Ta bl e 10. 2
Gu idelin e for Processin g Poten tial Risk Even ts
Cons e que nc e of Ris k
Probability of Ris k Hig h
Me d ium
Low
Hig h
Pre ve nt e ve nt; re duce conse que nce s; plan to mitigate ; monitor
Plan to mitigate ; monitor
Plan to mitigate ; monitor
Me d ium
Pre ve nt; plan to mitigate ; monitor
Plan to mitigate ; monitor
Monitor
Low
Monitor
Monitor
Ignore
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estim ates. Each of th e assu m ption s represen ts a risk of n ot bein g tru e. You can u se ch ecklists, su ch as th ose in clu ded in PMBOK [2]. You can u se com pu ter assistan ts, su ch as in clu ded in som e software offerin gs [6]. You can sim ply get you r project team togeth er an d brain storm a list to start with . You can evalu ate th e problem s en cou n tered by previou s sim ilar projects. Com in g u p with th e list is u su ally th e easy part. You will n ever be able to predict th e fu tu re, so you will n ever be able to com e u p with a com plete project risk list. It wou ld be in fin itely lon g an yway an d n ot very u sefu l to you r team . In stead, you sh ou ld obtain a represen tative list of th e types of risks likely to con fron t you r specific project du rin g its tim e of execu tion . Table 10.3 iden tifies categories of risk, an d lists exam ples u n der each category. You can fin d ch ecklist of poten tial risks in th e project m an agem en t literatu re. In vite u pdates to th e list as th e project proceeds: addition s, deletion s, an d m odification s. 10.3.1.1
Pr o je c t a s s u m p tio n s
Man y of you r project assu m ption s m ay tran slate to project risks if th e assu m ption s do n ot com e tru e. For exam ple, you r assu m ption th at regu latory perm it reviews will take 60 days low-risk an d 30 days average du ration m ay becom e a risk if th e reviews take lon ger th an two-th irds you r project bu ffer. You m ay h ave reason to expect th at th e reviews cou ld take m u ch lon ger based on recen t experien ce with th e sam e regu latory agen cy on an oth er project.
Ta bl e 10. 3
Exam ples of Project Risk Even ts (After [2]) Exte rnal Unpre dic table
Exte rnal Pre dic table
Inte rnal Nonte c hnic al
Re gulatory
Marke t
Manage me nt
Natural hazards
Ope rational
Sche dule
Sab otage
Financial
Cost
Te c hnic al
Le g al
Ge ne ral
Te chnology change s
Lice nse s
First-of-a-kind
De sign
Contracts
Re mote site
Pe rformance
Lawsuits
Fore ign culture
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On th e oth er h an d, you sh ou ld gu ard again st too m an y project assu m ption s. You n eed to en su re th at a ru le of reason applies in specifyin g both th e project assu m ption s an d th e associated risks. 10.3.1.2
C h e c k lis ts
Ch ecklists often h elp to iden tify risks you m igh t oth erwise overlook, bu t th ey h ave two in h eren t problem s: ◗ Ch ecklists m ay su ggest risks th at are n ot sign ifican t to you r project
bu t th at becom e believable on ce su ggested. ◗ Checklists can lead to overconfidence that you have considered every-
thing important, limiting your search for things beyond the checklist. 10.3.1.3
Pla n s c r u tin y
You sh ou ld scru tin ize you r plan by askin g, “Wh at cou ld go wron g?” in each of th e m ajor steps to aid in developin g you r risk list. You can let th e list get relatively lon g wh ile you are preparin g it; you will con solidate it in th e n ext step. 10.3.1.4
C o n s o lid a tio n
If you r risk list begin s to get lon g, grou p like item s to con solidate th e risk list before goin g on to select th e risk action s. You r pu rpose is to com e u p with a reason able set of risk item s to m an age. In creasin g th e detail of th e risk list does n ot in crease its accu racy. Th ere are an in fin ite n u m ber of poten tial risk even ts, so you can n ever list th em all. It is far m ore im portan t th at you captu re th e im portan t types of risks an d pu t in place th e appropriate in form ation an d respon se system to deal with th e risks th at do arise. You lose focu s if th e list of in dividu al risk even ts becom es too lon g. It is im possible to plan realistic action s to preven t or m itigate th e effects of too lon g a list. Try to lim it th e list to, at m ost, a few ten s of item s. For m ost reason able size projects (i.e., less th an abou t $10 m illion an d on e or two years in du ration ), th e list sh ou ld be less th an 10 item s (if n ot, you probably sh ou ld n ot be doin g th e project).
10. 3. 2
C l a s s i fy i n g ri s k p ro b a b i l i ty
Make an estim ate of th e probability of each risk even t actu ally occu rrin g du rin g th e life of you r project to decide on a ration al plan to m an age th e
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risks. You do n ot wan t to spen d a large am ou n t of you r project resou rces gu ardin g again st low-probability even ts. On the other hand, you want to prevent events that are likely to occur and be prepared to handle some events even if they are unlikely, if the potential consequence is large enough. Bern stein n otes, “Th e essen ce of risk m an agem en t lies in m axim izin g th e areas wh ere we h ave som e con trol over th e ou tcom e wh ile m in im izin g th e areas wh ere we h ave absolu tely n o con trol over th e ou tcom e an d th e lin kage between effect an d cau se is h idden from u s” [7]. He goes on to n ote th at in su ran ce is available on ly wh en th e law of large n u m bers is observed, th at is, wh ere th e laws of ch an ce work in favor of th e in su ran ce com pan y or gam blin g in stitu tion . Th e very n atu re of risk, th en , en su res th at we are dealin g with relatively low-probability even ts to start with . People’s ability to estim ate probability is n otoriou sly poor [8–10]. Wh en con siderin g probability, m ost people are su bject to n u m erou s logical biases an d errors. Un fortu n ately, research dem on strates people are likely to be u n ju stifiably con fiden t in th eir erron eou s “kn owledge.” I will ju st list th e com m on errors h ere to m ake you aware of th em . Overcom in g th ese biases an d errors is th e topic of an oth er book. ◗ Failure to understand how probabilities combine. Th e probability of two
in depen den t even ts is th e produ ct of th e probabilities of th e in dividu al even ts. Becau se probabilities are always n u m bers less th an 1, th e probability of th e two even ts is always lower th an th e probability of eith er sin gle even t. ◗ Failure to consider the base rate. Th e base rate error fails to con sider th e
distribu tion in th e popu lation . For exam ple, con sider a bead drawn from a popu lation of 90% wh ite beads an d th e probability of correctly iden tifyin g a wh ite bead in dim ligh t of 50% . A person looks at a bead u n der th ose con dition s, an d says “black bead.” Wh at is th e probability th at th e bead was black? Most people an swer 50% . Th e correct an swer is on ly 5% . ◗ Availability. Th e availability error gives u n ju stified bias toward
wh atever com es to m in d, u su ally becau se of recen t rem in der bu t also becau se it is som eth in g th ou gh t to be typical. ◗ Failure to understand the law of large numbers. People rou tin ely accept
sm all sam ples as in dicative of a larger popu lation an d fail to u n derstan d th at th e varian ce in sm all sam ples ten ds to be m u ch larger th an th e varian ce in larger sam ples or th e popu lation .
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C r itic a l C ha in Pr oje c t Ma na g e m e nt ◗ Representativeness error. People m istake “m ore typical” for “m ore
probable.” For exam ple, people will claim th at a description of wom an is m ore likely to be “a sch ool teach er” th an “a workin g wom an ,” based on a description th at in clu des traits people associate with sch oolteach ers. Th is an swer is wron g becau se “workin g wom en ” also in clu des m ore wom en th an ju st wom en sch oolteach ers, th erefore it is m ore likely th at sh e wou ld be a workin g wom an th an a sch oolteach er. ◗ Anchoring. People ten d to n ot deviate m u ch from in itial position s
pu t forth by oth ers or th em selves, especially in regard to n u m bers. Th at bias also allows grou ps to sign ifican tly in flu en ce each oth er. If you wan t in depen den t in pu t, you h ave to seek in depen den t in pu t an d n ot h ave on e person review an oth er’s work. ◗ Confirmation bias. On ce people h ave m ade a statem en t or a decision ,
th ey ten d to look for in stan ces th at con firm th at decision . Un fortu n ately, con firm atory cases h ave n o valu e in scien tific proof. People sh ou ld look for in stan ces th at wou ld discon firm th eir h ypoth esis. Th at bias often resu lts in worth less tests. Effective tests m u st always seek to discon firm th e h ypoth esis. You can u se th at list to critically review you r list of risk even ts an d you r categorization in term s of probability an d im pact. Ask, “Are we m akin g th is error?” 10.3.2.1
Hig h p r o b a b ility
Do n ot h ave an y item s on you r risk list th at exceed a 50% probability of occu rrin g du rin g th e life of you r project. Cou n t on item s with a greater th an 50% probability an d in clu de th em in you r project assu m ption s an d baselin e plan . Con sider defin in g h igh risk as less th an a 50% ch an ce of h appen in g du rin g th e life of th e project bu t m ore th an a m oderate risk, wh ich you m igh t defin e as ran gin g from a 5% to 15% ch an ce. 10.3.2.2
Mo d e r a te p r o b a b ility
Th e cop-ou t defin ition is th at moderate-probability risk even ts are less th an h igh probability an d greater th an low probability. Th ey are even ts th at m ay occu r du rin g th e life of you r project, bu t you wou ld n ot bet on th em h appen in g (at least, you wou ld wan t very favorable odds on th e bet).
Project risk management 10.3.2.3
267
Lo w p r o b a b ility
Low-probability risks in clu de risks u n likely to occu r du rin g th e life of you r project (i.e., less th an a 5% ch an ce of h appen in g), down to a very low probability, perh aps on th e order of 1% or less. You r project design m ay h ave to accou n t for risks of lower probability du rin g th e life of th e project resu lt, su ch as earth qu akes or extrem e weath er, bu t th at is n ot th e topic of project risk assessm en t. Exception s m ay in clu de in su ran ce for even ts su ch as extrem e weath er (e.g., h u rrican e, fire, an d flood) on a con stru ction project.
10. 3. 3
C l a s s i fy i n g ri s k i m p a c t
To defin e th e risk, you m u st classify th e risk im pact becau se risk is th e produ ct of probability m u ltiplied by im pact. You cou ld qu alify im pact in term s of th e overall project sch edu le an d cost or of th e expected retu rn on in vestm en t for th e project. CCPM provides a u n iqu e m easu re of classifyin g th e risk im pact in term s of th e project bu ffers for tim e an d cost. Th e bu ffer size is an in dicator of th e com m on cau se risk in th e project an d th erefore is a reason able basis to m easu re special cau se variation . Som etim es fidu ciary respon sibility m ay requ ire in su ran ce for risks with ch an ces greater th an or equ al to 1 in 1,000. 10.3.3.1
Hig h im p a c t
High im pact is an yth in g th at cou ld cau se an im pact in excess of th e project bu ffer on sch edu le or in excess of th e cost bu ffer on cost or oth erwise resu lt in clien t or project team dissatisfaction . 10.3.3.2
Mo d e r a te im p a c t
Moderate im pact is an im pact th at wou ld con su m e on th e order of two-th irds of you r project bu ffers or all of you r feedin g bu ffers bu t at least on e-th ird of th e respective bu ffers. 10.3.3.3
Lo w im p a c t
Low-im pact con sequ en ces wou ld n ot exceed on e-th ird of you r project sch edu le or cost bu ffers an d wou ld n ot be a sign ifican t con cern to you r clien t or project team .
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10. 4
P l a n n i n g to c o n tro l ri s k s
10. 4. 1
Ri s k m o n i to ri n g
Plan on m on itorin g for th e risks you elect to keep in you r risk m an agem en t list. Th at m ean s you sh ou ld, at a m in im u m , review th e list with th e team m em bers at you r weekly project m eetin gs an d ask th e qu estion if an y of th e risk triggers seem s to be im m in en t. Som etim es, you m ay n eed m ore form al m on itorin g for th e risk triggers. 10. 4. 2
P re v e n ti o n
Risk preven tion activities you h ave elected to im plem en t becom e part of you r project plan . All you h ave to do to en su re th at th ey are in place is to follow th rou gh on you r project m easu rem en t an d con trol process. 10. 4. 3
M i ti g a ti o n p l a n n i n g
Plan s for risk m itigation sh ou ld also be part of you r project plan . In clu de rou tin e activities n ecessary to en su re th e viability of you r risk m itigation plan s, su ch as fire in spection s or em ergen cy drills, as part of you r project m on itorin g an d con trol process. You n eed n ot in clu de su ch periodic or on goin g activities as specific activities in you r project n etwork.
10. 5
Su m m a ry
Project risk m an agem en t con trols special cau se variation th rou gh m on itorin g, preven tion , m itigation , or in su ran ce. ◗ CCPM sim plifies project risk m an agem en t by elim in atin g th e n eed
to address com m on cau se variation . CCPM risk m an agem en t addresses on ly special cau ses of variation . ◗ You m u st in clu de a risk m an agem en t process in you r project work
plan . You sh ou ld scale th e im plem en tation of risk m an agem en t to overall project risk. ◗ Project risks m u st iden tify th e risk even t, th e probability of th e
even t occu rrin g, an d th e poten tial im pact or con sequ en ce of th e risk even t to th e project.
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◗ Th e CCPM project plan h elps to defin e th e relative risk in term s of
th e project bu ffers. ◗ Th e project team m u st decide am on g option s, in clu din g preven -
tion , m itigation , in su ran ce, m on itorin g, an d ign orin g risks. Risk m on itorin g, preven tion , an d preparation s for m itigation sh ou ld be part of you r project plan . You sh ou ld assign specific respon sibility to m on itor risks th rou gh ou t th e perform an ce of th e project an d u pdate you r risk plan s as appropriate.
Referen ces [1] Du n can , W. R., et al., A Guide to the Project Management Body of Knowledge, Upper Darby, PA: Project Man agem en t In stitu te, 1996. [2] Widem an , R. M., Project and Program Risk Management, A Guide to Managing Project Risk and Opportunities, Upper Darby, PA: Project Man agem en t In stitu te, 1992. [3] Meredith , J. R. an d S. J. Man tel, Project Management, A Managerial Approach , New York: Wiley, 1985, pp. 68–71. [4] Wysocki, R. K., R. Beck, Jr., an d D. B. Cran e, Effective Project Management, New York: Wiley, 1995. [5] Dem in g, W. E., The New Economics, Cam bridge: MIT Press, 1993. [6] RiskTrak, Risk Services & Tech n ology, Am h erst, NH. [7] Bern stein , P. L., Against the Gods, The Remarkable Story of Risk , New York: Wiley, 1996. [8] Kah n em an , D., P. Slovic, an d A. Tversky, Judgment Under Uncertainty: Heuristics and Biases, Cam bridge: Cam bridge Un iversity Press, 1982. [9] Belsky, G., an d T. Gilovich , Why Smart People Make Big Money Mistakes, And How to Correct Them , New York: Sim on & Sch u ster, 1999. [10] Ru sso, J. E., an d P. J. H. Sch oem aker, Decision Traps: The Ten Barriers to Brilliant Decision Making, and How to Overcome Them , New York: Sim on & Sch u ster, 1989.
C HAP TER
11 Conte nts 11.1 Ap p lying G old r a tt’s thinking p r oc e ss to p r oje c t m a na g e m e nt 11.2 tr e e
C ur r e nt r e a lity
11.3 tr e e
Futur e r e a lity
11.4
Pr e r e q uisite tr e e
11.5
Tr a nsition tr e e
11.6 The m ultip r oje c t p r oc e ss 11.7
Futur e d ir e c tions
11.8
Sum m a r y
11.9
C losur e
Re fe r e nc e s
Th e TO C th i n k i n g p ro c e s s a p p l i e d to p ro je c t m a n a g e m e n t
T
h is ch apter in tegrates th e rest of th is book an d describes th e process u sed to th in k th rou gh project m an agem en t an d develop th e critical ch ain process. On e of Dr. Dem in g’s obstacles to im provem en t is a ten den cy on th e part of m an y m an agers to “search for exam ples.” He states, “My an swer to su ch en qu iries (i.e., for exam ples ‘ju st like u s’) is th at n o n u m ber of exam ples of su ccess or of failu re in th e im provem en t of qu ality an d produ ctivity wou ld in dicate to th e en qu irer wh at su ccess h is com pan y wou ld h ave” [1]. He n otes fu rth er: “Th e qu estion is n ot wh eth er a bu sin ess is su ccessfu l, bu t wh y? An d wh y was it n ot m ore su ccessfu l? … It is n ecessary to u n derstan d th e th eory of wh at on e wish es to do or m ake.” Th is text presen ted th e CCPM th eory you n eed, in clu din g som e of th e su pportin g TOC, TQM, an d PMBOK prin ciples. Th e Goldratt th in kin g
271
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process provides a tool to captu re all of th at reason in g. It is u p to you to pu t it to work.
1 1 . 1 Ap p l y i n g G o l d ra tt’s th i n k i n g p ro c e s s to p ro je c t m a n a g e m e n t Th e th in kin g process, described in Ch apter 2, is Goldratt’s attem pt to en able th e rest of u s to create th e in n ovative system solu tion s th at h e developed. Th e process starts with a m odel of cu rren t reality an d en ds with a plan to create a preferred fu tu re reality. It is a logical process th at depen ds h eavily on critical review an d bu y-in to th e m odels. In seem in g con trast to Dem in g’s assertion , I claim ed in Ch apter 2 th at you do n ot n eed to u n derstan d TOC tools to su ccessfu lly apply CCPM. Th e con flict clou d evaporates by u n derstan din g th e u n derlyin g assu m ption s of CCPM expressed th rou gh ou t th is book. Th e u n derstan din g of “wh y it is su ccessfu l” m ay be su fficien t for you r application . Com parin g th e assu m ption s iden tified in th is book to you r organ ization ’s reality m ay en able you to adapt th e process as n ecessary. Certain featu res of th e process (e.g., elim in atin g bad m u ltitaskin g) appear to be so robu st th at you are likely to experien ce positive resu lts with CCPM even if you r im plem en tation does n ot m atch th e textbook represen tation provided h ere. Organ ization s th at are relatively flexible (wh ich som e call “early adopters”) h ave su cceeded in deployin g critical ch ain with ou t kn owin g th e th in kin g process an d with on ly an overview kn owledge of TOC tools. I h ad th e fortu n ate experien ce to see an early version (Au gu st 1994) of th e th in kin g process applied to project m an agem en t developed by Dee Jacob of th e Avrah am Goldratt In stitu te (AGI). It in clu ded th e th in kin g of Jacob, Dr. Goldratt, an d oth ers at th e In stitu te. It h ad all th e essen tials presen ted in cu rren t th in kin g for sin gle-project critical ch ain . It m ade sen se to m e in view of m y years of project experien ce. Th e ch an ges from 1994 to th e cu rren t process are m in or in su bstan ce an d h ave m ore to do with displayin g th e resu lts th an th ey h ave to do with th e essen tial project m an agem en t system . Th e in itial m eth od did n ot in clu de th e cu rren t u n derstan din g of m u ltiproject critical ch ain . Dr. Goldratt h ad devoted on ly a cou ple of pages to m u ltiple-project resou rce con ten tion in Critical Chain , pu blish ed in 1997 [2]. From m y view, th e sign ifican ce of th e m u ltiproject solu tion was
The TOC thinking process applied to project management
273
really discovered an d developed by Ton y Rizzo of Lu cen t Tech n ologies, wh o h as n ot yet pu blish ed it on h is own . In th at regard, th e resu lt seem ed to actu ally lead th e process to develop it. Un fortu n ately, few people seem to h ave th e in clin ation to en gage in th e deep th in kin g an d scru tin y n ecessary to follow th e th in kin g process. Noreen , Sm ith , an d Mackay describe som e early resu lts with train in g in th e th in kin g process [3]. Th eir resu lts sh ow poor application after th e early Jon ah train in g. (Jon ah train in g is th e n am e th at AGI u ses for train in g in th e th in kin g process, followin g th e beh avior of th e ch aracter Jon ah in Goldratt’s first book, The Goal [4].) My (n on scien tific) poll over th e last several years leads m e to believe th at th ose fin din gs wou ld n ot ch an ge su bstan tially today. Th at is, few people apply th e th in kin g process after th e Jon ah train in g, an d fewer yet create breakth rou gh solu tion s. Th ere are even som e reason s to believe th at creative solu tion s n ever proceed in th e in h eren tly in du ctive path im plied by th e th in kin g process [5, 6]. Popper an d DeBon o m igh t agree th at people like Goldratt, in reality, leap to a n ew h ypoth esis an d th en u se th e th in kin g process to ju stify it. Man y people h ave followed th rou gh to develop th e th in kin g process represen tation s for TOC gen eric solu tion s, su ch as produ ction an d project m an agem en t. Th e trees provide better an d better u n derstan din g of th ose system s an d m ay aid fu rth er im provem en t. Th ey m ay also in h ibit fu rth er im provem en t, becau se th ey ten d to pu t bou n daries arou n d th e problem . Un derstan din g th e th in kin g beh in d critical ch ain m ay h elp you discern if you r system con form s to th e assu m ption s abou t cu rren t reality m ade in th e process to develop critical ch ain . If you r system differs in su bstan tial ways, you m ay h ave to m odify th e fu tu re system an d th e in jection s to get a fu tu re reality th at works for you . Th e trees created as part of th e th in kin g process are relatively com plex an d th u s n ot appropriate for pu blication in book form at. You can fin d th em on th e Advan ced Projects In stitu te In tern et site: www.advan ced-projects.com .
11. 2
C u rre n t re a l i ty tre e
Th e CRT describes th e system as it is today to h elp fin d th e core con flict. Th e core con flict is a root cau se of m an y UDEs. You start th e CRT process
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with UDEs, wh ich are th ose th in gs th at really both er you abou t th e cu rren t reality. For exam ple, “It really both ers m e th at projects overru n th e sch edu le.” (Ch apter 3 described UDEs for project m an agem en t.) You th en select th ree of th e UDEs to develop a core con flict. You do th at by developin g each UDE con flict an d th en com bin in g th e th ree con flicts to discern th e u n derlyin g gen eric con flict th at leads to all th ree. Ch apter 3 also illu strated th e com bin ation of evaporatin g clou ds for project m an agem en t. Th e CRT drives th e cau se to a core con flict th at leads to m ost (an d u su ally all) of th e UDEs. A core con flict is n ot the core con flict. It is an im portan t con flict an d th erefore a good h igh leverage place to focu s on ch an gin g th e system . Figu re 11.1 illu strates th e base of th e project system CRT, con tain in g th e core con flict developed in Ch apter 3 (see Figu re 3.9). It illu strates th e clou d in su fficien cy tree form at, h igh ligh tin g th e assu m ption s th at lead to th e con flict. Readin g from th e bottom , “If everyon e wan ts projects to su cceed, an d if in creasin g com petition drives m an agers an d clien ts to dem an d projects to get th e m ost scope for th e least cost with in th e sh ortest sch edu le, th en su ccessfu l projects m u st deliver in creased scope an d redu ced cost an d sch edu le.” Con tin u in g u p th e tree, “If su ccessfu l projects m u st deliver in creased scope an d redu ced cost an d sch edu le, an d if th e on ly way to redu ce th e sch edu le of critical path plan s is to redu ce th e du ration of tasks on th e critical path , an d th e on ly way to redu ce cost is to redu ce task cost, th en th ere is pressu re to redu ce each task estim ate.” You can read th e righ t side of Figu re 11.1 u p to en tity 9, wh ich states, “Th ere is pressu re to in clu de con tin gen cy in each task estim ate.” In clu din g con tin gen cy con flicts with redu cin g task estim ates, th u s leadin g to th e figh ts th at su rrou n d project plan n in g. Note th at I left ou t th e “m ore an d m ore” statem en ts. Th ey com e abou t as you traverse th e tree over an d over in th e sam e organ ization . Note wh ere som e of th e UDEs, wh ich are con clu sion s farth er u p in th e tree, feed in to th e en tities at th e base of th e tree, su ch as UDE-1, 2, an d 3 feedin g all th e way down to en tity 9. Figu re 3.10 illu strated th e n otion al con n ection of th e UDEs th at flow from th e base of th e tree. Th e logic of th e tree is n ot eviden t at th is su m m ary level. Th e actu al tree in clu des m an y steps of in terven in g logic th at describe h ow organ ization al beliefs an d action s lead from on e UDE to th e n ext. Th e key poin t of Figu re 3.10 is th at all th e UDEs in th e tree are cau sally related an d derive from th e core con flict.
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10 The re are fig hts ove r the e stimate s to includ e in p roje ct p lans
+ 7 The re is p re ssure to re d uce e ach task e stimate
9 The re is p re ssure to includ e (more and more ) conting e ncy in e ach task e stimate
+
+
6 The only way to re d uce the sche d ule of cr itical p ath p lans is to re d uce the d uration of tasks on the cr itical p ath, and the only way to re d uce cost is to re d uce task cost
8 Re source s know they have to account for unce rtainty in task e stimate s d ue to common cause var iation in task p e rformance
3 Succe ssful p roje cts must d e live r incre ase d scop e and re d uce d cost and sche d ule
5 Each re source must comp le te its task to scop e , cost, and sche d ule e stimate s
+
+ 2 Incre asing comp e tition d r ive s manag e rs and clie nts (more and more ) to d e mand p roje cts to g e t the most scop e for the le ast cost within the shorte st sche d ule
Fig u r e 11.1 c onflic t.
UDE-1 UDE-2 UDE-3
1 Eve ryone wants p roje cts to suce e d
4 Most comp anie s jud g e p roje ct re source (includ ing sub contractors) p e rformance b ase d on d e live ry of full scop e within cost and time e stimate s
The p r oje c t m a na g e m e nt C RT b a se id e ntifie s the c or e
Th e gen eric project m an agem en t CRT can n ot represen t you r en viron m en t. I h ave worked with com pan ies th at h ave started from very m atu re project m an agem en t system s as well as with com pan ies with a sim plistic approach to project plan n in g an d con trol. In terestin gly, it seem s th at organ ization s with th e sim plistic approach es are m ore able to adapt to CCPM. (Som e argu e th at an y degree of disciplin e wou ld h ave h elped as m u ch . I dispu te th at claim becau se th ese are all h igh ly m u ltitasked en viron m en ts, an d con ven tion al project m an agem en t wou ld on ly exacerbate th at problem .) It is n ot u n u su al to fin d people wh ose idea of a project plan is a Gan tt ch art with n o task logic, an d on ly a fin al du e date dem an ded by som eon e ou tside th e project organ ization . In a few m on th s,
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it is possible to lead th ose people to h ave effective critical ch ain project plan s, bu ffer m an agem en t, an d a growin g sen se of su ccess. On th e oth er h an d, I h ave worked with organ ization s th at h ave very detailed project plan s (with th ou san ds of activities) th at, after six m on th s, are still u n able to resou rce-load th eir plan s. In on e case, th e organ ization n eglected to address th e fact th at th e parts of th e organ ization n ecessary to develop th e com plete project reported (collectively) to 13 differen t vice presiden ts in th e organ ization , 12 of wh om were n ot bou gh t in to th e ch an ges n ecessary to im plem en t CCPM. Gu ess wh ich VP was replaced th ree m on th s in to th e process. I th in k you can predict th e resu lt. 11. 2. 1
P o l i c i e s , m e a s u re s , a n d b e h a v i o r
It is often u sefu l to explicitly con sider th e im pacts th at policies an d m easu res h ave on beh avior an d h ow th at beh avior affects cu rren t reality. Policies an d m easu res are often th e con strain t of system s like project m an agem en t. For exam ple, en tity 4 of th e CRT, “Most com pan ies ju dge project resou rce perform an ce based on delivery of fu ll scope with in cost an d tim e estim ates” m ay be reflected by perform an ce appraisal policies an d m easu res. Very often , com pan ies h ave efficien cy m easu res an d policies th at rein force m u ltitaskin g. You sh ou ld con sider you r com pan y’s policies th at m ay rein force th e gen eric CRT. 11. 2. 2
Fe e d b a c k l o o p s
Th e detailed CRT logic con tain s feedback loops. For exam ple, Figu re 11.1 illu strated UDEs 1, 2, an d 3 feedin g in to en tity 9 at th e base of th e CRT. Th at circu lar n atu re of real system s both ers som e people, wh o th in k in term s of cau se-effect reason in g an d wan t to kn ow, “Wh ich com es first, th e ch icken or th e egg?” In th e real world of dyn am ic system s, it is an on goin g circu lar pattern th at evolves over tim e. Th at is on e reason th at people lookin g for root cau se often get th e wron g an swer; th e cau se is th e overall stru ctu re of th e system , n ot an in dividu al en tity. All variables in th e system ch an ge in a correlated way (alth ou gh often with tim e delays). Th e feedback loops are often wh ere you can fin d th e m ost leverage to ch an ge th e system an d th u s are worth con siderin g explicitly. You r m easu rem en t system s alm ost always con stitu te a feedback loop (if th ey do n ot, wh y are you m akin g th e m easu rem en t?). Th e prim ary feedback key to CCPM is m an agem en t’s reaction to task perform an ce relative to
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estim ated 50-50 du ration s. Man agem en t’s respon se to bu ffer reportin g is also critical.
11. 2. 3
Sc ru ti n y
Scru tin y critically reviews th e produ cts of th e th in kin g process. It is th e prim ary way to determ in e if th e h ypoth esis of th e th in kin g process con n ects with reality better th an altern ative processes. (Th e secon dary m eth od is th e tried-an d-tru e m eth od of scien tific experim en tation , som eth in g th at is difficu lt to do with system s as com plex as projects.) Ch apter 2 described h ow, u sin g th e scien tific m eth od kn own as th e TOC th eory of kn owledge, you can n ever prove th e tru th of an y assertion or h ypoth esis. Th e best you can h ope to do is, th rou gh critical review, assu re you rself th at on e h ypoth esis describes reality better th an an oth er. Scru tin y provides th e th in kin g process critical review. You do it by su bjectin g each produ ct of th e th in kin g process to th e categories of legitim ate reservation . I learn ed th ese categories from th e partn ers an d associates at AGI, bu t I su spect th ey h ave som e prior sou rce in logic. Un fortu n ately, Dr. Goldratt does n ot u se referen ces in h is books, an d AGI does n ot referen ce th e sou rce of m u ch of th eir m aterial. Dettm er [7] is th e on ly sou rce I am aware of wh o h as pu blish ed th ese categories, bu t h e refers to AGI as th e sou rce. Th e categories of legitim ate reservation are th ese: ◗ Clarity. Does everyon e u n derstan d th e m ean in g of th e words in th e
en tity? ◗ Entity existence. Is th ere eviden ce to su pport or refu te th e existen ce of
th e en tity in reality? ◗ Causality existence. Is th ere eviden ce to su pport th e claim of cau sal-
ity? (Th is eviden ce is u su ally of th e form th at th e effect always exists wh en th e cau se is presen t an d n ever exists wh en th e cau se is n ot presen t.) ◗ Cause insufficiency. Do oth er en tities also h ave to be presen t to cau se
th e stated effect? ◗ Additional cause. Can th e effect exist with ou t th e stated cau ses bu t
in stead in th e presen ce of oth er cau ses? (Th e good en ou gh TOC
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prin ciple su ggests you lim it you r m odel to cau ses th at represen t at least on e-th ird of th e effect in stan ces.) ◗ “House on fire” (or cause-effect reversal). “If th ere is sm oke, th en th ere
is fire” is a com m on expression th at does n ot reflect cau sality, even th ou gh it is expressed as “If-th en .” Th e accu rate statem en t is, “If I see sm oke, th en I kn ow th at th e h ou se is on fire.” Th e sm oke, h owever, does n ot cau se th e h ou se to be on fire. ◗ Predicted effect. Wou ld th e existen ce of th e en tity also cau se som e
oth er effect? Does th at oth er effect exist in reality? ◗ Tautology. Ayn Ran d’s fam ou s “A is A.” Or, as th e story goes,
Joe: “Blowin g a h orn every day keeps eleph an ts ou t of m y livin g room .” Dan : “How do you kn ow th at?” Joe: “Do you see an y eleph an ts in m y livin g room ?” Detectin g th e logic error is som etim es h ard. How m an y people call th ose psych ic h otlin es? Jon ah s su bject each th in kin g process tree to critical review for com plian ce with th ose criteria. If you th in k gettin g people to th in k th rou gh th e trees is difficu lt, try goin g th rou gh th e review process on each en tity an d cau sality in th e tree. Most people fin d it agon izin g. Un fortu n ately, th ere does n ot appear to be a better altern ative. 11. 2. 4
B u y -i n
Th e people wh o will deploy th e resu lts of th e th in kin g process h ave to agree with it to th e exten t th at th ey are willin g to m ake or tolerate (depen din g on th eir location an d effect on th e system ) th e ch an ges it requ ires to m ove to fu tu re reality. Un fortu n ately, experien ce dem on strates th at logic rarely in flu en ces people’s beliefs. As Ch apter 9 described, if you do n ot ch an ge beliefs, you are u n likely to su cceed in ch an gin g beh avior for th e lon g term . You m ay cau se a tem porary effect, bu t th e system will, over tim e, swin g back to wh ere it was before you started. Bu y-in seeks to ach ieve su fficien t agreem en t to m ake th e in jection s n ecessary for fu tu re reality. You will n ot ach ieve com plete ch an ges in belief at th e ou tset, bu t if th e fu tu re reality con tain s su fficien t positive feedback to m eet th e real n eeds of th e people wh o in flu en ce th e system ,
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th e feedback will take over drivin g th e system . You can ach ieve th at with som e people by leadin g th em th rou gh th e th in kin g process. Experien ce, h owever, dem on strates th at it is th e rare sen ior m an ager wh o will focu s lon g en ou gh to follow th at th rou gh . Th u s, you will n eed to u se specially design ed tools, presen tation s, an d dialog to reach th ose people. I h ave fou n d th at m ost people in tu itively appreciate th e logic an d u se of th e evaporatin g clou d. You can even get sen ior m an agers to listen to th e th ree clou ds th at lead to CCPM an d to bu y in to th e core con flict an d th en to th e n ecessary in jection s. A powerfu l m eth od to en h an ce bu y-in is to first solicit th e UDEs of th ose you n eed to agree an d in clu de on e or two of th eir UDEs in to you r CRT. Dem on stratin g h ow th e system cau ses th eir UDEs u su ally su cceeds in brin gin g abou t bu y-in , n ot on ly to th e CRT bu t also to th e in jection s you propose to create fu tu re reality.
11. 3
F u tu re re a l i ty tre e
Th e FRT describes wh at to ch an ge to. It is you r vision of th e fu tu re. Fu tu re reality does n ot exist wh en you start to m ake th e ch an ges to elim in ate th e UDEs of cu rren t reality. Th e ou tpu ts of th e FRT are th e in jection s we h ave to create for fu tu re reality to exist. In jection s are effects th at, if in place, will cau se fu tu re reality. In jection s are n ot (gen erally) action s; you develop action s as part of h ow to cau se th e ch an ge. 11. 3. 1
D e s i re d e ffe c ts
Start th e FRT by ch an gin g each UDE in to its opposite desired effect (DE). Figu re 11.2 illu strates th e m ap of DEs for a su ccessfu l project m an agem en t system , in clu din g an in dication of wh ere th e in jection s tie in . 11. 3. 2
I n je c ti o n s
In jection s are th e ch an ges you will m ake to th e system . Th e FRT con n ects you r in jection s to th e desired effects of fu tu re reality. You th en m eth odically work th rou gh th e tree, determ in in g wh ere in jection s are n ecessary to create th e fu tu re reality. Developin g effective in jection s is th e m ost creative stage of th e th in kin g process. Experien ced TOC experts like to word in jection s as com pleted effects, kn owin g th at th ey will often h ave
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DE-8 Proje ct work cre ate s win-win solutions for all stake hold e rs
DE-7 All p roje cts comp le te succe ssfully
DE-4 Proje cts have fe w chang e s DE-2 Proje cts comp le te for or le ss than the b ud g e t
DE-3 Proje cts always d e live r the full scop e
DE-1 Proje cts always comp le te on or b e fore the sche d ule d comp le tion d ate
DE-6 Proje ct d urations g e t shorte r and shorte r
DE-5 Re source has ne e d e d re source s without inte r nal fig hts
Inje ctions Fig u r e 11.2 the FRT.
The DE m a p illustr a te s the r e la tionship of the DEs in
to develop a n u m ber of action s to ach ieve th e in jection s. Collectively, th e in jection s will create a fu tu re reality in wh ich all th e DEs exist.
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Th e total list of in jection s for th e sin gle project are as follows. ◗ Redu ce du ration estim ates to 50-50 estim ates. Project m an agers
iden tify th e project’s n etwork of activities an d path s by u n bu ffered tim e an d by resou rce. Activity du ration s are n orm al estim ates, wh ich we kn ow to be h igh probability. ◗ Elim in ate resou rce con ten tion s an d iden tify th e critical ch ain .
Project m an agers iden tify th e critical ch ain as th e lon gest ch ain of depen den t even ts, in clu din g resolvin g resou rce con ten tion s. Th is is th e first focu sin g step. ◗ In sert a project bu ffer sized an d placed to aggregate critical ch ain
con tin gen cy tim e (in itially 50% of th e critical ch ain path len gth ). Th is is on e step to exploit th e con strain t. ◗ Protect th e critical ch ain from resou rce u n availability by resou rce
bu ffers. Project m an agers correctly place resou rce bu ffers to en su re th e arrival of critical ch ain resou rces. Th is is a secon d step to exploit th e con strain t. ◗ Size an d place feedin g bu ffers on all path s th at feed th e critical
ch ain . Project m an agers u se th e feedin g bu ffers to im m u n ize th e critical ch ain from accu m u lation of n egative variation s on th e feedin g ch ain s. Th is su bordin ates th e oth er project path s to th e con strain t. ◗ Th e plan sch edu les activities to start as late as possible, protected by
bu ffers. Th is in jection h elps to fu rth er su bordin ate th e oth er path s to th e con strain t by allowin g th e critical ch ain (u su ally) to start first, with at m ost a few oth er path s. ◗ Resou rces deliver roadru n n er perform an ce (elim in ate m u ltitaskin g
an d th e stu den t syn drom e). Th e resou rces work as qu ickly as possible an d as soon as possible on th eir activities an d pass th eir work on as soon as th ey com plete. Th is in jection begin s to elevate th e con strain t. ◗ Th e project m an ager provides resou rces with activity du ration s an d
estim ated start tim es, n ot m ileston es. Th is in jection h elps to break th e cu rren t win -lose paradigm associated with gettin g work don e by th e m ileston e date. It aids in en cou ragin g resou rces to pass on th eir work wh en don e. It aids in elevatin g th e con strain t.
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C r itic a l C ha in Pr oje c t Ma na g e m e nt ◗ Th e project m an ager u ses bu ffer m an agem en t to con trol an d plan .
Th e project an d feedin g bu ffers provide th e in form ation to th e project m an ager wh en to plan for recovery an d wh en to take recovery action s. It also aids in elevatin g th e con strain t. Figu re 11.3 illu strates th e in jection s in th e sequ en ce th ey m u st occu r. Nu m erou s logical steps su pplem en t th e in jection s to lead to th e DEs.
11. 3. 3
F u tu re re a l i ty tre e
Th e FRT becom es th e gu ide for ch an ge. As you im plem en t in jection s on th e FRT, you u se it to m on itor if you are ach ievin g th e DEs. You can also u se th e FRT as a resou rce to derive u n in ten ded con sequ en ces of th e proposed ch an ges. Note th at ch an ges th at occu r faster or larger th an predicted by you r FRT are also a cau se for reassessm en t, sin ce you m ay h ave m issed som e featu re of th e cau salities. Th e FRT provides a ch eck on th e CRT. You will often discover addition al cau salities th at exist in cu rren t reality as you develop th e FRT. Becau se th e FRT focu ses on th e fu tu re, it is n ot n ecessary to go back an d revise th e CRT. Th e bottom of th e FRT starts with th e in jection s su m m arized earlier. Each in jection in clu des adjacen t en tities th at describe wh y we n eed th e in jection an d th e logic explain in g h ow th e in jection satisfies th e n eed.
11. 3. 4
Fe e d b a c k l o o p s
Th e FRT con tain s th e feedback loops to m ove th e system to th e n ew state an d keep it stable. Th e project FRT exh ibits a n u m ber of feedback loops, som e of th em with sh ort delays an d som e of th em with lon ger delays. Th e sh ort-delay loops h elp to establish th e system in th e first place, an d th e lon g-delay feedback loops h elp to keep it stable. On e feedback loop illu strates th e con trol effect of bu ffer m an agem en t. Wh en th e project m an ager acts to restore a bu ffer to less th an two-th irds pen etration , th at will cau se som e activities to perform in a sh orter tim e. An oth er feedback loop sh ows th at as team s bu ild con fiden ce by com pletin g projects su ccessfu lly with CCPM, th ey act to fu rth er redu ce overall plan n ed lead tim e.
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Inje ction-9 Proje ct manag e r use s b uffe r manag e me nt to control to p lan
Inje ction-7 Re source s d e live r road runne r p e rformance (e liminate multitasking and stud e nt synd rome )
Inje ction-8 Proje ct manag e r p rovid e s re source s with activity d urations and e stimate d start time s, not mile stone s
Inje ction-3
Inje ction-6
Inse rt a p roje ct b uffe r size d and p lace d to ag g re g ate cr itical chain conting e ncy time
The p lan sche d ule s activitie s to start as late as p ossib le , p rote cte d b y b uffe rs
Inje ction-4
Inje ction-5
Prote ct the cr itical chain from re source unavailab ility b y re source b uffe rs
Size and p lace fe e d ing b uffe rs on all p aths that fe e d the cr itical chain
Inje ction-2 Eliminate re source conte ntion and id e ntify the cr itical chain
Inje ction-1 Re d uce d uration e stimate s to 50-50
Fig u r e 11.3 the FRT.
Inje c tion m a p id e ntifie s the se q ue nc e of inje c tions for
Experien ce in dicates th at th e project feedback loop activates lon g before th e first project com pletes, leadin g to fu rth er redu ction s in th e in itial project lead tim e. Th at is likely du e to in creased con fiden ce as th e first part of th e project sh ows little difficu lty perform in g to th e critical ch ain sch edu le. Th e project m an ager con tribu tes by n ot criticizin g th ose
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wh o do overru n redu ced du ration task tim es, as lon g as th ey exh ibit roadru n n er perform an ce.
1 1 . 3 . 5 Un i n te n d e d c o n s e q u e n c e s (a . k . a . n e g a ti v e b ra n c h e s )
Un in ten ded con sequ en ces are u n desired resu lts th at occu r from th e action s we take. In a sen se, th ey are an equ al an d opposite reaction to wh atever action we h ave taken on th e system . Som etim es (rarely, it seem s), u n in ten ded con sequ en ces can be good. Often , h owever, th ey are n ot good. For th at reason , we call th e tool u sed to u n derstan d an d preven t or m itigate th e poten tial n egative effects a n egative bran ch . Th e distin ction between obstacles an d n egative bran ch es is th at obstacles preven t you from ach ievin g th e fu tu re reality or am bitiou s goal you h ave set. Negative bran ch es com e abou t becau se you h ave su cceeded in creatin g th e in jection you in ten ded to create. Th e in jection , com bin ed with oth er factors in cu rren t reality (or, som etim es, n ew factors also created in fu tu re reality), con spire to cau se a n egative ou tcom e. Th e m ajor resou rce for iden tifyin g poten tial n egative bran ch es is th e people wh o review you r FRT. Th ey h ave th e in tu ition to u n derstan d h ow th e ch an ges you are goin g to create m ay in teract with th eir reality to create an u n in ten ded con sequ en ce. Figu re 11.4 illu strates a poten tial n egative bran ch dealin g with th e com m on ly voiced con cern th at if you m ake th e safety tim e in th e sch edu le eviden t, people will wan t to cu t it. People u su ally in clu de both cu stomers an d m an agemen t th at is more sen ior. Th e project m an agem en t literatu re addresses th at con cern , often with a cau tion to “keep you r safety time h idden .” Th at h ardly seems like a profession al way to ru n a bu sin ess! You first bu ild th e tree to con n ect from th e in jection s expected to cau se th e u n desired effect to th e stated u n desired effect. Th e n egative bran ch is a su fficien cy tree, ju st like th e CRT an d FRT, an d is read “If-th en .” By th is time, we tru st you h ave su fficien t com fort with th e con stru ction to read th e tree. You mu st ch eck th e tree to en su re th at th e en tities an d cau salities exist an d th at th e logic is com plete an d su fficien t. Th e n ext step in u sin g th e n egative bran ch is to fin d an in jection th at w ill preven t th e n egative effect. You do th at by exam in in g th e bran ch an d locatin g th e poin t at w h ich it tu rn s n egative. In th is case, en tity 602, “Th e cu stom er w an ts lead tim e redu ced by cu ttin g bu ffer tim es,” is
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Inje ction Custome rs are convince d that they ne e d the b uffe rs to insure that they me e t the ne w ne e d e d d ue d ate
Und e sire d e ffe ct-2 Inje ction Custome rs are is convince d that utilizing ad d itional re source s for the p reviously conflicting activitie s is the b e st way to me e t the ir ne e d
The re is a p rob le m in me e ting p roje ct d ue d ate
603
604 Most of the time p roje cts will use a sig nificant p art of the p roje ct b uffe r
Proje ct manag e rs are force d to cut the p rote ction time they ne e d to immunize the d ue d ate and le ad time
Assump tion
602
Be cause the custome rs se e cutting b uffe rs as the b ig g e st and most op p ortune way to me e t the ir ne e d
Custome rs want le ad time re d uce d b y cutting the b uffe r time s
600 Proje ct manag e rs hig hlig ht how much p rote ction time is in the sche d ule , which was p reviously hid d e n
Proje ct manag e rs sufficie ntly size and corre ctly p lace ag g re g ate d b uffe r (fe e d ing b uffe r) that p rote cts the constraint from the unce rtainty affe cting the ad d itional p athway’s p e rformance
601 The re are time s the custome rs ne e d to sp e e d up the sche d ule
Proje ct manag e rs sufficie ntly size and corre ctly p lace an ag g re g ate d b uffe r that p rote cts the p roje ct d ue d ate (p roje ct b uffe r) from the unce rtainty affe cting the constraint's p e rformance
Fig u r e 11.4 The ne g a tive b r a nc h id e ntifie s p ote ntia l ne g a tive e ffe c ts fr om the c ha ng e s we m a ke . Tha t e na b le s us to p r e ve nt uninte nd e d c onse q ue nc e s.
wh ere th is bran ch tu rn s n egative. You th en assess poten tial assu m ption s u n der th e cau sality arrows th at feed th at en tity. In th is case, sin ce on ly
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on e cau sality feeds en tity 602, you h ave to look at on ly two arrows. Note th at sin ce th e con n ection s from 600 an d 601 to 602 in clu de an and, elim in atin g eith er 600 or 601 resu lts in elim in atin g th e effect, 602. Th at is th e m ean in g of th e and. You n eed both feedin g en tities for th e effect to follow . In th is in stan ce, en tity 601 appears to be a fact of life, so th ere wou ld be little advan tage to qu estion in g th e assu m ption s su rrou n din g its existen ce or cau sality. Th ere are assu m ption s in th e cau sality between 600 an d 602, th e m ost obviou s on e, as n oted on th e tree, “Becau se th e cu stom er sees cu ttin g bu ffers as th e biggest an d m ost opportu n e way to m eet th eir n eed.” Th at is likely to be a tru e assu m ption wh en th e cu stom er (wh ich m ay be in tern al m an agem en t) does n ot u n derstan d th e ideas beh in d CCPM. On ce you h ave an assu m ption , you can propose altern ative in jection s th at m ake th e assu m ption n o lon ger correct or applicable. Two are presen ted on th e figu re. Eith er in jection sh ou ld do th e job of elim in atin g th e assu m ption an d th erefore preven tin g th e UDE of th is n egative bran ch . Take you r ch oice. Th e n egative bran ch procedu re follows:
1. Iden tify th e poten tial u n desired effect of con cern . 2. Iden tify th e in jection you su spect leads to th e u n desired effect. 3. Bu ild a su fficien cy tree to con n ect logically th e in jection to th e UDE. 4. Scru tin ize th e logic in th e tree (bran ch ) by readin g it alou d to oth ers an d h avin g th em agree to th e logic. 5. Determ in e wh ere th e bran ch first tu rn s n egative. 6. Expose th e assu m ption s u n der th e arrows feedin g th e first n egative en tity on th e bran ch . 7. Iden tify in jection s th at will in validate th e assu m ption s an d th erefore preven t th e n egative effect. It is, of cou rse, possible th at th e in jection s you propose to trim th e n egative bran ch m ay th em selves lead to u n in ten ded con sequ en ces. If so, exam in e th e n ew n egative bran ch es before com pletin g th e strategy.
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An in jection is n ot a plan . It is n ot even a coh eren t strategy. Goldratt su ggests th e followin g tools for su ch pu rposes.
11. 4
P re re q u i s i te tre e
Th e PRT is a tim e-ph ased tree of th e effects th at we m u st cau se for th e FRT to resu lt. You assess each in jection on th e FRT to determ in e th e obstacles th at m u st be overcom e for th e in jection to exist. You create in term ediate objectives (IOs) to overcom e th e obstacles an d logically lin k th em in a tim e sequ en ce with th e in jection s. Figu re 11.5 illu strates th e PRT for th e first critical ch ain in jection . Th e obstacles are sh own in th e h exagon s. You read th e PRT from th e top down as follows: “In order to redu ce du ration estim ates to 50% probable estim ates, we m u st h ave people u n derstan d th at th ey are expected to ach ieve on ly th e sh orter du ration 50% of th e tim e an d th at th e feedin g an d project bu ffers protect th e project, becau se m ost people feel th at th eir du ration estim ates are already too sh ort.” Alth ou gh som e of th e statem en ts m ay get a little lon g, th is represen tation provides a coh eren t sequ en ce for th e ch an ges an d th e basis for th e overall sequ en ce. Th e ph rases “In order to,” “we m u st,” an d “becau se” con n ect each set of blocks on th e tree. Readin g th e tree ou t lou d is a good way to ch eck th e logic. Add each n ew in jection to th e overall PRT to accom plish fu tu re reality. Each in jection m u st h ave a tran sition tree (TRT) to im plem en t th e action s n ecessary to ach ieve th e in jection s an d/ or IOs th at bu ild to th e in jection s. Th e PRT also h as stan dalon e u tility as a tool to plan an d ach ieve am bitiou s goals. Dr. Goldratt illu strates its u se for th at pu rpose in Its Not Luck [8]. It h as great power to get a team to iden tify all th e obstacles th ey foresee at th e begin n in g of a project an d to create a plan based on overcom in g all th ose obstacles. You h ave to u se cau tion in developin g th e PRT obstacles, th ou gh , becau se a team m ay ten d to create false obstacles in th e face of fu tu re ch an ge th at m ay affect th em . You h ave to en su re th at th ey h ave bou gh t in to creatin g th e objective of th e PRT before you solicit obstacles. I h ave fou n d th at on CCPM im plem en tation , people rarely follow th rou gh on PRTs created early in th e process. Th ey qu ickly fin d th at m an y of th e
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Inje ction 1 Re d uce d uration e stimate s to 50% p rob ab le e stimate s
Ob stacle 1-3 Ob stacle 1-2
Pe op le may not work as hard to achieve d urations that they fe e l are unre alistic
Most p e op le fe e l that the ir d uration e stimate s are alre ad y too short
Inte rme d iate ob je ctive 1-2 Pe op le und e rstand that they are only e xp e cte d to achieve the shorte r d uration 50% of the time , and that the fe e d ing and p roje ct b uffe rs p rote ct the p roje ct
Inte rme d iate ob je ctive 1-3 Pe op le acce p t that manag e me nt's e xp e ctations for the amount of work they p ut in will not chang e
Ob stacle 1-1 Pe op le fe ar that manag e me nt will hold the m accountab le for the re d uce d d uration
Inte rme d iate ob je ctive 1-1 Pe op le trust that manag e me nt will not hold the m accountab le for the re d uce d d uration use d in the cr itical chain p lan, as long as they e xhib it road runne r b e havior
Fig u r e 11.5 The TRT id e ntifie s the a c tions, e ffe c ts, a nd log ic to a c hie ve the IOs. It p r ovid e s c le a r instr uc tions.
perceived obstacles do n ot exist. Th ey also fin d th at th e real obstacles did n ot get on th e PRT, som etim es becau se th e organ ization cu ltu re an d atten dees in th e session did n ot m ake it safe to discu ss th e real obstacles. It is m u ch m ore effective to go on with im plem en tation plan n in g as presen ted in Ch apter 9 an d deal with th e real obstacles as th ey arise.
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11. 5
289
Tra n s i ti o n tre e
Th e TRT provides th e tim e-ph ased action plan to ach ieve th e effects on th e PRT. Th e TRT ties th e action s to th e logic for doin g th em an d provides clear in stru ction s to th ose wh o perform th e activities. You can also u se it to m easu re progress in term s of th e EFFECTS produ ced, n ot th e perform an ce of th e action . Th e TRT h as broad application for ach ievin g an y effect you wish . (For exam ple, you can u se TRTs to get bu y-in to th e th in kin g process resu lts.) Figu re 11.6 illu strates a TRT for on e of th e project m an agem en t system in jection s. Th e tree creates th e first IO on th e PRT in Figu re 11.5. Create th e TRT for on ly two levels of th e PRT at a tim e, startin g from th e bottom . As you com plete th e IOs at on e level, create th e TRT for th e n ext h igh er level. You read th e TRT from th e bottom u p, th e sam e way you read th e CRT an d th e FRT. For exam ple, startin g on th e bottom of Figu re 11.6: “If people will first look for in con sisten cies in th e written com pan y reward system , th en th e written com pan y reward system m u st align with critical ch ain beh avior. If th e written com pan y rewards system m u st align with critical ch ain beh avior, an d if we revise com pan y policies to reward 50% estim ates an d roadru n n er beh avior, an d if wh en people see it in writin g, th ey will su spect th at a real ch an ge is possible, th en policies su pport critical ch ain beh avior of 50% estim ates an d roadru n n er beh avior.” Th e TRT describes th e logic for each action an d wh y we expect th e action to create th e desired effect. Som e argu e th at th e logic is so obviou s, it n eed n ot be written down . Often wh at is obviou s to on e person is n ot obviou s to an oth er. Th e TRT h as proved to be an effective tool for com m u n icatin g clear in stru ction s. It reflects wh y you are takin g th e action s you take. Th e TRT also h as stan dalon e u tility as a way to presen t procedu res.
11. 6 11. 6. 1
Th e m u l ti p ro je c t p ro c e s s M u l ti p ro je c t c u rre n t re a l i ty tre e a d d i ti o n s
Th e m u ltiproject en viron m en t adds th e followin g addition al UDEs: ◗ Man agem en t com m its to project dates th at are u n ach ievable. ◗ Project m an agers figh t over resou rces.
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C r itic a l C ha in Pr oje c t Ma na g e m e nt
Inte rme d iate ob je ctive 1-1 Pe op le trust that manag e me nt will not hold the m accountab le for the re d uce d d uration use d in the cr itical chain p lan, as long as they e xhib it road runne r b e havior
Action 3 Manag e me nt p articip ate s in b uffe r me e ting s; d oe s not p re ssure for me e ting e stimate s; and e ncourag e s road runne r b e havior
Action log ic Ne e d Manag e me nt must “walk the talk”
Whe n p e op le se e manag e me nt carrying throug h on the commitme nt, they will b e g in to trust
Se q ue nce log ic Re sult Manag e me nt is on re cord committing to make chang e s
Action 2 Manag e me nt make s visib le commitme nt to revise the me asure me nt syste m to the ne e d s of cr itical chain
Ne e d Manag e me nt must commit to chang e the ir b e havior
Re sult Policie s sup p ort cr itical chain b e havior of 50% e stimate s and road runne r b e havior
Action 1
Ne e d
Revise comp any p olicie s to re ward 50% e stimate s and road runne r b e havior
The wr itte n comp any re ward syste m must alig n with cr itical chain b e havior
Pe op le will ultimate ly look for evid e nce that manag e me nt is “walking the talk”
Action log ic Whe n p e op le he ar the ir own manag e rs commit, they will b e g in to b e lieve that the syste m will chang e
Se q ue nce log ic Pe op le will se cond look for manag e me nt commitme nt to chang e
Action log ic Whe n p e op le se e it in wr iting, they will susp e ct that a re al chang e is p ossib le
Se q ue nce log ic Pe op le will first look for inconsiste ncie s in the wr itte n comp any re ward syste m
Fig u r e 11.6 d own.
Re a d the PRT for p r oje c t m a na g e m e nt fr om the top
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◗ People h ave to work on m u ltiple tasks for m u ltiple projects. ◗ People are pressu red by project m an agers to com plete th at project
m an ager’s task first. ◗ People are forced to work exten sive an d u n com pen sated overtim e.
You sh ou ld n ot fin d it difficu lt to exten d th e logic from th e sin gle project CRT to derive th ese effects, if th ey exist in you r en viron m en t. Th e base of th e CRT (core con flict) n eed n ot ch an ge.
11. 6. 2
M u l ti p ro je c t fu tu re re a l i ty tre e a d d i ti o n s
Th e m u ltiproject FRT requ ires addin g th e followin g in jection s:
1. Iden tify th e dru m resou rce for th e organ ization . 2. Identify the priority of projects for scheduling of the drum resource. 3. Develop project start an d com pletion dates from th e in dividu al project plan s an d th e dru m resou rce sch edu le. 4. In sert a capacity con strain t bu ffer between th e u se of th e dru m resou rce on projects. 5. In sert a dru m bu ffer u pstream of th e u se of th e dru m resou rce in each project. Th e m u ltiple project FRT requ ires all th e logic an d in jection s from th e sin gle project FRT to feed FRT in jection s 3 an d 5.
11. 6. 3
M u l ti p ro je c t p re re q u i s i te tre e a d d i ti o n s
Th e m u ltiproject PRT th erefore requ ires addin g th e followin g IOs:
1. Th e dru m resou rce is selected. 2. Th e dru m m an ager is iden tified. 3. In itial project priorities are assign ed.
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4. Man agem en t com m its to n ew project com pletion dates on ly after decidin g th e n ew project priority (relative to on goin g projects), developin g th e n ew project plan , an d sch edu lin g th rou gh th e dru m resou rce. Th e im plem en tation process presen ted in Ch apter 9 in clu des th ose PRT requ irem en ts.
11. 7
F u tu re d i re c ti o n s
TOC an d TQM provide th e tools for on goin g im provem en t to you r project m an agem en t process an d to you r en tire en terprise. Th e TOC five focu sin g steps provide a strategy to con tin u e im provem en t on a system . In addition , you can expan d th e defin ition of th e system to widen th e im pact. For exam ple, th e an alysis to develop CCPM left ou t sign ifican t parts of th e PMBOK. Th e rem ain in g parts can be im proved as well, in clu din g h u m an resou rce m an agem en t an d project qu ality. Th ose areas are am en able to th e th in kin g process to discover th e core con flict an d provide a plan for effective im plem en tation . An oth er direction for im provem en t is to look in to th e process steps in m ore depth , in particu lar th e processes th at create th e tech n ical plan an d th e processes th at create th e task resu lts. You can view th em as produ ction processes or as projects. I person ally feel th at th e greatest im provem en ts lie in im provin g m an agem en t processes. I see a con tin u in g tren d toward m ore an d m ore in effective m an agem en t as people in appropriately apply tech n ological tools su ch as pagers, cell ph on es, an d e-m ail. More an d m ore in terru ption s m ean less an d less focu s, leadin g to a fren zied pace an d little accom plish m en t. I see th e im age of a fibrillatin g h eart th rash in g away wh ile produ cin g n o ou tpu t. Man y m an agers I m eet with today h ave th eir fu ll workday sch edu led for th em by oth ers’ m eetin gs. If th ey can n ot m an age th em selves, h ow can th ey expect to effectively lead oth ers? Most of th e workers in th eir grou ps report in creasin g m u ltitaskin g, lon ger an d lon ger work weeks, an d m ore an d m ore pressu re. Th e real prom ise of TOC lies in th e im pact on people wh o work in TOC organ ization s. As in som e of th e su ccessfu l TQM organ ization s, people report a sen se of order an d h ope. People report greatly in creased
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work ou tpu t with m u ch less tim e spen t an d greatly redu ced fru stration . More an d m ore, TOC organ ization s tran slate th ese gain s in to th e bottom lin e for all th e bu sin ess stakeh olders.
11. 8
Su m m a ry
Th e th in kin g process provides th e in tegration tool to expose th e wh y an d h ow to im prove project m an agem en t. It clarifies th e beliefs an d assu m ption s beh in d th e th eory, m akin g th em accessible for fu tu re im provem en t. Key poin ts from th e TOC th in kin g process application to project m an agem en t are: ◗ Th e core con flict, leadin g to all project UDEs, is between th e
in dividu als an d th e project m an agem en t system . ◗ Th e core con flict derives from h ow th e project system m an ages (or
fails to m an age) u n certain ty by allocatin g con tin gen cy. ◗ Th e con strain t for sin gle projects is th e critical ch ain , th e lon gest
path th rou gh th e project con siderin g both th e project task logic an d th e resou rce con strain t. ◗ A system to exploit th at con strain t aggregates in dividu al task
u n certain ty in to bu ffers at th e en d of activity ch ain s. ◗ Bu ffer m an agem en t provides a real-tim e in form ation (th e an swer
to th e qu estion asked) system to effectively m an age projects to com plete on or before th e sch edu led en d of th e project bu ffer. ◗ Th e system con strain t in a m u ltiproject en viron m en t is a resou rce
sh ared across m u ltiple projects (th e dru m resou rce). ◗ Exploitin g th e m u ltiproject resou rce con strain t requ ires elim in at-
in g bad m u ltitaskin g of all project resou rces. ◗ You m u st su bordin ate resou rce efficien cy m easu res to th e m u lti-
project con strain t. (Note th at all resou rces oth er th an th e dru m m u st h ave excess capacity.) You sh ou ld m odify th e m odel as n ecessary to m atch th e specific requ irem en ts of you r en viron m en t. So far, th e gen eric in jection s h ave proved to be robu st over a wide ran ge of project en viron m en ts. Specific
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deploym en t (e.g., im plem en tation plan , PRT, TRT) varies. Experien ce to date dem on strates th at effective leadersh ip an d a good im plem en tation plan are th e critical factors to su ccessfu lly im plem en t CCPM.
11. 9
C l o s u re
I do n ot con ten d th at CCPM is Th e Next Big Th in g (TNBT) [9] in project m an agem en t, m u ch less for m an agem en t in gen eral. As I n oted from th e begin n in g, it is n ot even th e com plete project m an agem en t system ; you n eed to h ave all parts iden tified th rou gh th e PMBOKTM . CCPM provides a fresh look at th e project system with a n u m ber of elem en ts th at h ave su rvived both critical review an d field experim en ts, com pared with th e baselin e critical path m eth od. In th e words of m an y TOC experts, it h as proved “good en ou gh ” to su bstan tially im prove project perform an ce on m an y types of projects in m an y en viron m en ts. Perh aps m ost sign ifican t, th e people workin g in th e CCPM en viron m en t con sisten tly report redu ced stress an d in creased joy in work, even th ou gh th ey are produ cin g m ore. So far, all organ ization s in wh ich th e m an agem en t h as tru ly com m itted to deploy CCPM h ave su cceeded in gettin g su bstan tial resu lts, far exceedin g th e effort expen ded to m ake th e ch an ge. It does n ot take a lot of m an agem en t tim e, u su ally th ree days u p fron t to learn an d plan th e ch an ge an d a few m in u tes a week to review an d act on bu ffer reports. Resu lts sh ou ld be visible in th ree m on th s. Th e m an agem en t tim e in vestm en t pays back rapidly th rou gh redu ced n eed for resou rce battles, project ch an ges, an d expeditin g. Organ ization s th at try to ju st train th e team or perform a sin gleproject pilot in a m u ltiproject organ ization are less su ccessfu l. Th ey frequ en tly see little im pact after six m on th s. Th ey h ave con vin cin g explan ation s as to wh y th ey h ave n ot yet con verted to critical ch ain plan s an d wh y th ey are n ot issu in g an d actin g on bu ffer reports. Th e reason for th is bi-m odal resu lt is th at CCPM requ ires som e sign ifican t (even if sim ple) ch an ges in m an agem en t beh avior. You will ach ieve th e ben efits of CCPM on ly if m an agem en t beh avior follows th e CCPM m odel. It is a deligh tfu l experien ce to go to TOC m eetin gs an d h ear people report th eir accom plish m en ts with pride an d a sen se of relief. Th e on ly lam en t I h ave h eard from people in TOC organ ization s is on e I repeat
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m yself, “I wish h ad learn ed th is 25 years ago.” I close with th is qu estion : “Can you afford to h ave you r com petitors su ccessfu lly deploy CCPM before you do?”
Referen ces [1]
Dem in g, W. E., Out of the Crisis, Cam bridge: MIT Press, 1982.
[2]
Goldratt, E. M., Critical Chain , Great Barrin gton , MA: North River Press, 1997.
[3]
Noreen , E., D. Sm ith , an d J. T. Mackey, The Theory of Constraints and Its Implications for Management Accounting, Great Barrin gton , MA: North River Press, 1995.
[4]
Goldratt, E. M., The Goal, Croton -on -Hu dson , NY: North River Press, 1984.
[5]
Popper, K., Objective Knowledge, An Evolutionary Approach , Oxford Un iversity Press, 1972.
[6]
DeBon o, E., Lateral Thinking, Creativity Step by Step, New York: Harper & Row, 1970.
[7]
Dettm er, H. W., Eliyahu M. Goldratt’s The Theory of Constraints, A Systems Approach to Continuous Improvement, Un iversity Bookstore, 1995 (n ow available th rou gh ASQC Press).
[8]
Goldratt, E. M., Its Not Luck , Great Barrin gton , MA: North River Press, 1994.
[9]
Pin to, J. K., “Som e Con strain ts on th e Th eory of Con strain ts: Takin g a Critical Look at th e Critical Ch ain ,” Project Man agem en t In stitu te, PM Network , Au gu st 1999, pp. 49–51.
Li s t o f a c r o n y m s a n d a b b re v i a ti o n s A CWP
actu al cost of th e work perform ed
BCWS
bu dgeted cost of work sch edu led
BCWP
bu dgeted cost of work perform ed
C/ SCSC CCB CCFB CCPM
cost/ sch edu le con trol system criteria capacity con strain t bu ffer critical ch ain feedin g bu ffer critical ch ain project m an agem en t
CPM
critical path m eth od
CRT
cu rren t reality tree
CSCS
cost sch edu le con trol system
CV
cost varian ce
DE
desired effect
D OD F&OR
Departm en t of Defen se fu n ction al an d operation al requ irem en ts
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FMEA
failu re m odes an d effects an alysis
FRT
fu tu re reality tree
GA O
Govern m en t Accou n tin g Office
MORT
m an agem en t oversigh t or risk tree
N A SA
Nation al Aeron au tics an d Space Adm in istration
N BR PERT
n egative bran ch Program Evalu ation an d Review Tech n iqu e
PMBOK
Guide to the Project Management Body of Knowledge
PMP
project m an agem en t plan
PRT
prerequ isite tree
PSA
probabilistic safety assessm en ts
ROI
retu rn on in vestm en t
SOW
statem en t of work
SV
sch edu le varian ce
TOC
th eory of con strain ts
TQM
total qu ality m an agem en t
TRT
tran sition tree
UD E
u n desirable effect
WBS
work breakdown stru ctu re
G l o s s a ry A ctivity Th e lowest level of th e work breakdown stru ctu re (WBS); a packet of work th at form s th e basic bu ildin g block of a plan or a n etwork. A ctivity n e tw o rk depen den cy. A ctu al co st
A n etwork m ade u p of two or m ore activities with
Th e actu al m on ey spen t in perform in g an activity so far.
A ctu al co st o f w o rk p e rfo rm e d (A CWP) cost.
The CSCS term for actual
A d d itio n al cau se re se rvatio n A reservation applied to a th in kin g process tree su ggestin g th at th ere m ay be an addition al cau se th at creates an effect at least on e-th ird of th e tim e. Ban an a Title for th e logical “an d” on a th in kin g process tree, represen ted by a flat oval con n ectin g th e cau sality arrows to be “an ded.” Bar ch art
See Gantt chart.
Bo d y o f k n o w le d ge A docu m en t produ ced by th e Project Man agem en t In stitu te th at defin es areas of kn owledge th at m ake u p th e disciplin e of project m an agem en t.
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Bo ttle n e ck Th e con strain t in a produ ction flow process; th e lim itin g capacity process step; th e critical ch ain in a sin gle-project bottlen eck. A com pan y m ay also h ave com pan y resou rce con strain ts. Bu d ge t Th e plan n ed cost for a project; BCWS. It also m ay in clu de a cost bu ffer or a bu dget con tin gen cy. Bu d ge te d co st o f w o rk p e rfo rm e d (BCWP) Earned value of work don e, equ al to th e am ou n t th at was bu dgeted for th e activities com pleted. Bu d ge te d co st o f w o rk sch e d u le d (BCWS) The value of work that sh ou ld h ave been com pleted by th e cu rren t date accordin g to th e baselin e plan . Bu ffe r Tim e or bu dget allowan ce u sed to protect sch edu led th rou gh pu t, delivery dates, or cost estim ates on a produ ction process or project. Bu ffers are sized based on th e u n certain ty in th e protected grou p of activities. Th erefore, th e sch edu le bu ffers are n ot th e sam e as float or slack th at occu rs as an acciden t of th e activity logic in critical path sch edu les. Bu ffe r p e n e tratio n Th e am ou n t of th e bu ffer th at h as been u sed u p by actu al progress in th e project. C/ SCSC
See cost/schedule control system criteria.
Cap acity co n strain t bu ffe r (CCB) Bu ffer placed between projects or in th e dru m sch edu le to sequ en ce projects in a m u ltiproject en viron m en t. Cap acity co n strain t re so u rce In a m u ltiple project en viron m en t, th e resou rce th at is m ost often overloaded. Cate go rie s o f le gitim ate re se rvatio n (CLR) for trees created by th e th in kin g process.
A set of logical tests
Cau sality re se rvatio n Qu estion in g if an effect at th e h ead of a cau sality arrow in a th in kin g process tree is an u n avoidable con sequ en ce of th e en tity or en tities at th e tail of th e arrow. Cau se An en tity th at in evitably leads to a certain resu lt (effect). Cau sality is determ in ed if th e predicted effect is always presen t wh en th e cau se is presen t an d n ever presen t wh en it is n ot. Cau ses m ay be sin gle or m ay requ ire oth er con dition s to lead to th e effect.
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Clarity re se rvatio n On e of th e legitim ate reservation s for scru tin izin g th in kin g process trees. It m ean s th e reviewer does n ot fu lly u n derstan d th e en tity. Clo u d (e vap o ratin g) A fixed-form at n ecessity tree u sed to develop win -win solu tion s to action altern atives or con flictin g wan ts. Th e action altern atives are best expressed as opposites, for exam ple, “Do D; do n ot do D.” Th e clou d h as five en tities an d arrows (see thinking process). You iden tify th e assu m ption s u n derlyin g th e arrows to resolve th e clou d an d develop in jection s th at will in validate th e assu m ption an d th erefore in validate th e arrow an d “dissolve” th e clou d. Co m m o n cau se
A sin gle en tity th at cau ses several effects.
Co m m o n cau se variatio n Variation of process ou tpu t th at is with in th e capability of th e process, an d th erefore n ot assign able to a special cau se. Also called natural variation. Co n flict re so lu tio n d iagram (CRD ) ratin g clou d. Co n strain t
An altern ative title for evapo-
A process or process step th at lim its th rou gh pu t.
Co re p ro ble m A prim ary cau se of m ost of th e UDE sym ptom s in you r system . You iden tify th e core problem as an en try poin t on you r CRT th at traces, in cau se-effect-cau se relation sh ips, th rou gh at least twoth irds of th e UDEs, an d th at you h ave th e stam in a an d en ergy to ch an ge. Co m m u n icatio n Th e effective tran sm ission of in form ation so th at th e recipien t u n derstan ds clearly wh at th e sen der in ten ds. Com m u n ication m edia take several form s: oral, written , textu ral, n u m eric, graph ic, body lan gu age, paper, electron ic, ph ysical, an d so on . In sh ort, brin g togeth er an d effectively con trol th ose th in gs th at n eed in terrelatin g for th e project to be properly assessed, con figu red, an d im plem en ted. Co m m u n icatio n cu rre n t re ality tre e (CCRT) A special form of th e cu rren t reality tree developed to com m u n icate th e tree for bu y-in . It displays th e clou d for th e system at th e bottom an d bu ilds to th e u n desired effects. Co m m u n icatio n fu tu re re ality tre e (CFRT) A special form of th e fu tu re reality tree developed for bu y-in of a specific grou p of people. It
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sh ows th e con n ection between th e in jection s an d specific ben efits for th e grou p addressed. Co n flict m an age m e n t Th e art of m an agin g con flict effectively. In th e th in kin g process, con flict m an agem en t in volves th e evaporatin g clou d, com m u n ication tran sition trees, an d, for ch ron ic con flicts, th e n egative bran ch . Co n strain ts In a project, th e gen eric term for factors th at affect th e possible start an d fin ish dates of an activity, in clu din g logic an d im posed dates. In th e th eory of con strain ts, th e factor th at lim its th e system from obtain in g m ore th rou gh pu t. Co n tin ge n cy Th e differen ce between a 90-95% probable estim ate an d a 50% probable estim ate. Co re co n flict
Th e con flict th at leads to th e core problem .
Co re p ro ble m A problem th at cau ses at least two-th irds of th e u n desired effects in a cu rren t reality tree an d th at you h ave th e stam in a an d en ergy to reverse. Th e core problem is often th e root cau se of a n u m ber of root cau ses or th e com m on cau se. Co rre ctive actio n A process for correctin g defects by iden tifyin g th e defect, assign in g respon sibility, perform in g cau sal an alysis, plan n in g a resolu tion , an d im plem en tin g th e resolu tion . Co st bu ffe r Th e fin an cial con tin gen cy added to a project to protect th e overall project cost. As with sch edu le bu ffers, it is best to accu m u late all th e in dividu al activity cost con tin gen cies in to on e, th at will be m u ch sm aller th an th e su m of th e in dividu al bu ffer. Co st sch e d u le co n tro l syste m (CSCS) A system for evalu atin g th e work com pleted on a project as a basis for progress paym en ts. Th e prim ary in n ovation is th e u se of BCWP, th at is, th e estim ate for an activity, as th e m easu re of work com pleted. Co st/ sch e d u le co n tro l syste m s crite ria (C/ SCSC) In 1967, th e U.S. Departm en t of Defen se defin ed a stan dard for th e u se of earn ed valu e an alysis in defen se projects. C/ SCSC h as sin ce been adopted m u ch m ore widely an d is su pported by m ost plan n in g software.
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Co st varian ce Th e valu e of th e work don e less th e actu al cost of th e work don e, th at is, BCWP–ACWP. A n egative n u m ber sh ows th at th e project is cu rren tly over bu dget. Co st w o rld A bu sin ess perspective th at focu ses on redu cin g cost as th e path to bu sin ess su ccess. Th e cost world is typified by a belief th at cost savin gs are additive. CPM Th e critical path m eth od, th e origin al in n ovation in u sin g n etworks an d defin in g a critical path th rou gh th e n etwork. Critical activity
An activity on th e critical ch ain .
Critical ch ain Th e lon gest set of depen den t activities, with explicit con sideration of resou rce availability, to ach ieve a project goal. Th e critical ch ain is not th e sam e as wh at you get from perform in g resou rce allocation on a critical path sch edu le. Th e critical ch ain defin es an altern ate path th at com pletes th e project earlier by resolvin g resou rce con ten tion u pfron t. Critical ch ain fe e d in g bu ffe r (CCFB) A tim e bu ffer at th e en d of a project activity ch ain th at feeds th e critical ch ain . Critical ch ain p ro je ct m an age m e n t (CCPM) A project m an agem en t system th at addresses all th e UDEs from th e project m an agem en t CRT. It in clu des a critical ch ain plan , th e flu sh m easu rem en t tool, bu ffer m an agem en t, an d roadru n n er task perform an ce. Critical ch ain re so u rce bu ffe r (CCRB)
See resource flag.
Critical ch ain sch e d u le A late fin ish plan con trolled by th e critical ch ain , in clu din g a project bu ffer, critical ch ain feedin g bu ffers, an d resou rce bu ffers. Critical p ath Th e lon gest sequ en ce of activities in a n etwork. Usu ally, bu t n ot always, a sequ en ce with zero float. Th e critical path is an acciden t of arith m etic. It m ay be th e lon gest sequ en ce of activities, bu t th ere m ay be oth ers th at h ave su ch m in im al float as to be in con sequ en tial. It also does n ot accou n t for resou rce con strain ts. On ce resou rce levelin g h as been perform ed, slack an d th e critical path are n o lon ger valid calcu lation s. (All path s u su sally con tain gaps.) Th e Project Man agem en t
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In stitu te’s defin ition of critical path n otes th at it ch an ges as th e project progresses. CSCS
Cost sch edu le con trol system .
Cu rre n t re ality tre e (CRT) A logical represen tation of th e cu rren t bu sin ess system u n der an alysis, dem on stratin g h ow th e core con flict con n ects to th e system UDEs. CV D ata reality.
See cost variance. An y strin g of ch aracters th at describes som eth in g abou t ou r
D e p e n d e n cy lin k s Th e variou s types of lin k con n ectin g activities in a preceden ce n etwork; in clu de fin ish to start, start to start, fin ish to fin ish , an d start to fin ish . D e p e n d e n t e ve n ts Even ts or effects th at are related in m agn itu de, tim e, or som e oth er factor su ch th at th ey in flu en ce each oth er or h ave a com m on cau se in flu en ce; even ts in wh ich th e ou tpu t of on e even t in flu en ces th e in pu t to an oth er even t. D e sire d e ffe ct (D E) Th e positive effect you wan t to h ave in fu tu re reality to replace you r u n desired effect of cu rren t reality. D o llar-d ays Th e in tegration of th e produ ct of daily cash flow (in m in u s ou t) tim es th e n u m ber of days. See flush. D ru m Th e resou rce selected for sequ en cin g of projects. See capacity constraint resource. In produ ction , it is th e bottlen eck processin g rate, wh ich is u sed to sch edu le an en tire plan t. D ru m bu ffe r A bu ffer placed in a project plan to en su re th at th e com pan y con strain t is n ot starved. Also kn own as a con strain t resou rce bu ffer, strategic resou rce bu ffer, or con strain t bu ffer. D ru m -bu ffe r-ro p e Meth od for produ ction sch edu lin g. Th e dru m is th e capacity of th e plan t con strain t an d is u sed to set th e overall th rou gh pu t sch edu le. Th e bu ffers are in -process in ven tories strategically located to elim in ate starvin g th e con strain t du e to statistical flu ctu ation s. Th e rope is th e in form ation con n ection between th e con strain t an d m aterial release in to th e process.
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D u ratio n
Th e am ou n t of elapsed tim e an activity is estim ated to take.
Early fin ish d ate Th e earliest date by wh ich an activity can fin ish . Calcu lated du rin g th e forward pass of critical path an alysis. Early start d ate Th e earliest date by wh ich an activity can start. Calcu lated du rin g th e forward pass of critical path an alysis. Earn e d valu e Th e valu e of th e work don e in wh ich valu e is calcu lated in term s of th e baselin e cost. Kn own as BCWP in th e C/ SCSC. Earn e d valu e an alysis Th e an alysis of project progress in wh ich th e actu al m on ey spen t is com pared to th e valu e of th e work ach ieved. See also cost/schedule control systems criteria. Effe ct
An en tity represen tin g th e resu lt of on e or m ore cau ses.
Efficie n cy A m easu re of th e speed an d effectiven ess with wh ich a resou rce delivers a particu lar skill; a m easu re of h ow m u ch tim e resou rces ch arge to projects versu s u n billable tim e. Ele vate TOC term for in creasin g th e th rou gh pu t capability of th e system con strain t. For projects, th at u su ally m ean s addin g resou rces. En tity
A con dition th at exists.
En try p o in t An en tity on a su fficien cy tree th at h as n o cau ses (arrows) leadin g in to it. Erro n e o u s in fo rm atio n
A wron g an swer to th e qu estion asked.
Estim ate at co m p le tio n project.
Th e cu rren t estim ated total cost of th e
Estim ate to co m p le te (ETC) An estim ate of th e tim e or effort requ ired to com plete th e activity. Estim atin g for activities. ETC
Th e process of developin g th e plan n ed cost an d du ration
See estimate to complete.
Evap o ratin g clo u d
See cloud.
Ex iste n ce re se rvatio n Mean s, “prove it”; can be applied to an en tity or a cau sality arrow in a th in kin g process tree.
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Ex p lo it TOC term for en su rin g th at th e system m akes m ost effective u se of a con strain t in term s of th e system goal. Ex te rn al co n strain t Con strain ts th at act on activities in a n etwork from ou tside th e n etwork, typically regu lation s, im posed dates, or an en viron m en tal con dition . Fe e d in g bu ffe r
See critical chain feeding buffer (CCFB).
Fin ish to start A type of depen den cy lin k in preceden ce n etworks th at in dicates th at th e start of th e su ccessor activity m ay n ot occu r u n til th e predecessor activity h as fin ish ed. Five fo cu sin g ste p s Th e five-step process to iden tify an d elevate con strain ts. (See Ch apter 1.) Flo at A m easu re of th e tim e flexibility available in th e perform an ce of an activity. Available in th ree flavors: total float, free float, an d in depen den t float. Th e m in im u m am ou n t of tim e by wh ich an activity will be exten ded du e to factors ou tside th e project m an ager’s con trol. See slack. Fre e flo at Th e am ou n t of tim e an activity m ay be delayed with ou t cau sin g delay to su ccessor activities. FRT
Fu tu re reality tree.
Fu tu re re ality tre e (FRT) to desired effects.
A su fficien cy tree con n ectin g in jection s
Gan tt ch art A ch art sh owin g a list of activities represen ted by bars th at are proportion al in len gth to th eir du ration . Th e bars are position ed alon g a h orizon tal tim e scale. Go al
See Jonah.
Ho ck e y stick Th e sh ape of a cu rve th at is relatively flat an d th en rises rapidly, represen tin g, for exam ple, th e am ou n t of effort on e pu ts ou t as a deadlin e approach es. Ho u se -o n -fire re se rvatio n Origin al defin ition based on th e logic statem en t, “If th ere are sm oke an d fire en gin es, then th e h ou se is on fire.” Th e sm oke an d fire en gin es are n ot th e cau se of th e h ou se bein g on fire, bu t rath er cau se u s to kn ow th at th e h ou se is on fire. Becau se th e th in kin g process trees are effect-cau se-effect trees, h ou se-on -fire is n ot correct.
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Id e n tify Th e first step of th e TOC focu sin g process, con sistin g of iden tifyin g th e system con strain t. In fo rm atio n
An an swer to th e qu estion asked.
In je ctio n An action or effect th at will be created in th e fu tu re to ch an ge system perform an ce. In te grate d p lan project.
A plan com bin in g cost an d sch edu le to com plete a
In te rm e d iate o bje ctive (IO) An action or effect th at is a n ecessary prerequ isite to an in jection or an oth er IO. In valid d ata in form ation .
Data th at is n ot n eeded to dedu ce th e specific desired
In ve n to ry All th e in vestm en t in th e equ ipm en t n ecessary to con vert raw m aterial in to th rou gh pu t. Jo n ah A title bestowed on th ose wh o com plete th e AGI Jon ah cou rse an d are th erefore prepared to go forth an d replen ish th e rain forests with trees. A leadin g ch aracter in Dr. Goldratt’s book The Goal. Jon ah is a teach er an d leader in th e Socratic tradition . Late -fin ish d ate Th e latest date by wh ich an activity can fin ish . Calcu lated du rin g th e backward pass of critical path an alysis. All activities in a critical ch ain sch edu le u se th is date, except th ose m oved forward in tim e to resolve resou rce con ten tion . Le ad e rsh ip
Doin g th e righ t th in gs an d gettin g oth ers to follow.
Lin k e d p ro je cts Term u sed in som e com pu ter packages to in dicate projects th at u se a com m on set of resou rces. Lo gic lin k
See dependency links.
Lo gic lo o p A circu lar sequ en ce of depen den cy lin ks between activities in a n etwork. Me an Th e average of a grou p of data, also called th e first m om en t of th e data. In a distribu tion skewed to th e righ t, like m ost du ration an d cost estim ates, th e m ean is h igh er th an th e m edian . Me d ian
Th e m iddle valu e in a grou p of ordered data.
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Me rge n o d e A n ode in a n etwork diagram in wh ich two or m ore lin ks or activities m erge. Mile sto n e An activity of zero du ration th at represen ts a sign ifican t deliverable or stage of th e project. Mile sto n e p lan A plan th at con tain s on ly m ileston es th at h igh ligh t key poin ts in th e project. Mu ltip ro je ct m an age m e n t Th e art an d scien ce of m an agin g m u ltiple projects th at are, in som e way, in tercon n ected. Th ese m ay be logic con n ection s or, m ore likely, u se of com m on resou rces. Mu ltitask in g “sam e” tim e.
Perform in g m ore th an on e project activity at th e
N e ce ssary co n d itio n 1 Satisfy cu stom ers n ow an d in th e fu tu re. (A n ecessary con dition to m eet th e goal of an y en terprise.) N e ce ssary co n d itio n 2 Satisfy an d m otivate em ployees n ow an d in th e fu tu re. (A n ecessary con dition to m eet th e goal of an y en terprise.) N e ce ssity tre e A logic tree in wh ich each item at th e tail of an arrow m u st exist for th e item at th e h ead of th e arrow to exist, becau se of som e assu m ption or obstacle represen ted by th e arrow. Need goal.
Th e requ irem en t(s) th at m u st be m et to ach ieve an objective or
N e gative bran ch A su fficien cy logic tree (poten tial FRT) stem m in g from an in jection ; wh ich m ay lead to UDEs. N e tw o rk A diagram in wh ich th e logical relation sh ips between activities are sh own in eith er activity on arrow or preceden ce form at. N e tw o rk an alysis Gen eric term for an alyzin g n etworks in clu din g PERT an d critical path an alysis. Node Th e start an d en d of activities in an activity on an arrow n etwork or th e activity box in a preceden ce n etwork. Obstacle
An en tity th at preven ts an effect from existin g.
Op e ratin g e x p e n se in to th rou gh pu t.
All th e m on ey it costs to con vert raw m aterial
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Pe rce n tage co m p le te A n u m ber estim atin g th e am ou n t of an activity th at is fin ish ed; on e of th e ways of allocatin g BCWP. Pe rfo rm an ce m e asu re m e n t Meth od u sed to relate ph ysical progress ach ieved with cost statu s; iden tifies wh eth er cost varian ces are du e to differen ces in th e valu e of th e work bein g perform ed bein g too expen sive or u n der bu dget. In th at way, it is possible to determ in e if a project is ah ead, on , or beh in d bu dget. See earned value analysis. PERT
See program evaluation and review technique.
Pe ssim istic d u ratio n Th e lon gest of th e th ree du ration s in th e th ree-du ration tech n iqu e or PERT. Plan Gen eric term u sed for a statem en t of in ten tion s wh eth er th ey relate to tim e, cost, or qu ality in th eir m an y form s. PMI
Project Man agem en t In stitu te.
PMP
Project m an agem en t plan .
Pre d e ce sso r An activity th at logically precedes th e cu rren t activity. See also successor. Pre d icte d e ffe ct re se rvatio n On e of th e categories of legitim ate reservation s; m ean s, “th at en tity can ’t be righ t, becau se if it existed we wou ld see an oth er predicted effect.” Pre re qu isite tre e (PRT) A logic tree represen tin g th e tim e ph asin g of action s to ach ieve a goal, con n ectin g in term ediate objectives with effects th at overcom e obstacles. Th e PRT is read, “to h ave entity at head of arrow, we m u st h ave entity at tail of arrow becau se of obstacle.” Prio rity Mean s of defin in g th e order in wh ich activities will be sch edu led du rin g resou rce sch edu lin g. Pro bability Usu ally u sed in th e con text of risk as a m easu re of th e likelih ood of a risk occu rrin g. Pro ble m
Gap between wh at we wan t an d wh at we h ave.
Pro ce ss Sequ en ce of in tercon n ected activities, each of wh ich h as an in pu t an d an ou tpu t.
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Pro gram Portfolio of projects selected an d plan n ed in a coordin ated way so as to ach ieve a set of defin ed objectives, givin g effect to variou s (an d often overlappin g) in itiatives an d/ or im plem en tin g a strategy; altern atively, a sin gle large or very com plex project or a set of oth erwise u n related projects bou n d by a bu sin ess cycle. Pro gram e v alu at io n an d re v ie w t e ch n iqu e (PERT) Netw ork sch edu lin g tool, in itially distin gu ish ed from CPM by allowin g an d u sin g th ree activity-du ration estim ates. Pro gram m an age m e n t Th e selection an d coordin ated plan n in g of a portfolio of projects so as to ach ieve a set of defin ed bu sin ess objectives an d th e efficien t execu tion of th ose projects with in a con trolled en viron m en t su ch th at th ey realize m axim u m ben efit for th e resu ltin g bu sin ess operation s. Pro gram m an age r Th e in dividu al respon sible for day-to-day m an agem en t of th e program . Pro gram p lan A plan for a program of projects; distin gu ish ed from a program m an agem en t plan in th at a program plan n eed n ot su pply th e m an agem en t system s. Pro gre ss re p o rtin g Process of gath erin g in form ation on work don e an d revised estim ates, u pdatin g th e plan , an d reportin g th e revised plan . Pro je ct A tem porary m an agem en t en viron m en t created to ach ieve a particu lar bu sin ess objective th rou gh th e con trol an d coordin ation of logistical an d tech n ical resou rces. Pro je ct bu ffe r Tim e bu ffer placed at th e en d of th e critical ch ain in a project sch edu le to protect th e overall sch edu le. Pro je ct m an age m e n t Th e m an agerial task of accom plish in g a project on tim e, with in bu dget, an d to tech n ical specification . Th e project m an ager is th e sin gle poin t of respon sibility for ach ievin g th at. Pro je ct m an age r Th e person appoin ted to take day-to-day respon sibility for m an agem en t of th e project th rou gh ou t all its stages. Qu ality Accordin g to Dr. Joseph Ju ran , “fitn ess for u se”; defin ed in term s of both a lack of defects an d produ ct featu res. Ph illip Crosby defin ed it as “con form an ce to cu stom er requ irem en ts.” W. Edwards Dem in g
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stated, “A produ ct or service possesses qu ality if it h elps som ebody an d en joys a good an d su stain able m arket.” Re qu ire d d ata in form ation .
Th e data n eeded by th e decision procedu re to derive
Re so u rce En tity th at perform s project work, com prisin g people, con tractors, an d m ach in es. Re so u rce bu ffe r Flag placed on th e critical ch ain to en su re th at resou rces are available wh en n eeded to protect th e critical ch ain sch edu le. Th e flag is in su ran ce of resou rce availability an d does n ot add tim e to th e critical ch ain . It takes th e form of a con tract with th e resou rces th at en su res th eir availability, wh eth er or n ot you are ready to u se th em th en , th rou gh th e latest tim e you m igh t n eed th e resou rce. Often called a critical ch ain resou rce bu ffer (CCRB). Re so u rce le ve lin g Th e process of resch edu lin g activities su ch th at th e requ irem en t for resou rces on th e project does n ot exceed resou rce lim its. Re so u rce lim it Th e am ou n t of a particu lar resou rce available to th e project at a poin t in tim e. Risk Th e com bin ation of probability an d con sequ en ce of an u n desired ou tcom e. Project risk u su ally den otes u n desired ou tcom e relative to th e project scope, cost, or sch edu le. Oth er risks som etim es im portan t to projects are safety, en viron m en t, bu sin ess, an d secu rity risks. Ro o t cau se an UDE.
Th e cau se th at, if ch an ged, will preven t recu rren ce of
Ro p e Th e in form ation flow from th e dru m (bottlen eck or con strain t resou rce) to th e fron t of th e lin e (m aterial release) th at con trols plan t produ ction . Sch e d u le
Collection of reports sh owin g th e tim in g of activities.
Sch e d u le varian ce Valu e of th e work don e less th e valu e of th e work th at sh ou ld h ave been don e, th at is, BCWP – BCWS. A n egative n u m ber sh ows th at th e task is beh in d sch edu le. Wh en rolled u p for m u ltiple tasks, it sh ows n oth in g or erron eou s in form ation abou t project sch edu le perform an ce.
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Sch e d u lin g
Applyin g start an d fin ish dates to project tasks.
Scru tin y In spection of a tree to en su re th at n on e of th e categories of legitim ate reservation applies an d th at all th e en tities are n ecessary to con n ect th e u n desired effects. Slack Free tim e in a critical path sch edu le resu ltin g from path s sh orter th an th e critical path . See float. Sp e cial cau se variatio n an assign able cau se.
Variation in th e ou tpu t of a process th at h as
Statistical flu ctu atio n s Com m on cau se variation s in ou tpu t qu an tity or qu ality, in clu din g activity du ration an d cost. Stu d e n t syn d ro m e Th e n atu ral ten den cy of m an y people to wait u n til a du e date is n ear before applyin g fu ll en ergy to com plete an activity. Also see hockey stick. Su fficie n cy tre e A tree con stru ction in wh ich th e existen ce of th e en tities at th e tail of th e arrow m akes th e existen ce of th e en tity at th e h ead of th e arrow an u n avoidable resu lt. Su bo rd in ate Th e th ird step in th e TOC five-step focu sin g process, placin g con sideration s n ot related to th e com pan y goal at lower im portan ce th an item s th at directly affect th e system ’s ability to ach ieve th e goal. Su cce sso r An activity th at logically su cceeds th e cu rren t activity. See also predecessor. Syste m A n etwork of in terdepen den t com pon en ts th at work togeth er to accomplish th e aim of th e system. With ou t an aim , th ere is n o system . Task
A term u su ally syn on ym ou s with activity.
Th e o ry o f Co n strain ts (TOC) A system th eory developed by Dr. Eliyah u Goldratt an d first pu blish ed in h is book The Goal. Th e m ost basic statem en t of th e th eory is th at th e ou tpu t of a system is lim ited by a con strain t. Th in k in g p ro ce ss Th e five-step process th at iden tifies wh at to ch an ge, wh at to ch an ge to, an d h ow to cau se th e ch an ge. Th e sequ en ce of
Glossary
313
steps starts with th e CRT; goes th rou gh th e evaporatin g clou d, FRT, an d PRT; an d resu lts in th e TRT. Th ro u gh p u t cost.
All th e m on ey cu stom ers pay m in u s th e raw m aterial
Tran sitio n tre e (TRT) Plan th at specifies th e effects to be ach ieved, th e startin g con dition s, th e action s n ecessary to create th e effects, th e logic of wh y th e action will create th e effect, an d th e logic for th e sequ en ce of th e effects. Varian ce (statistical) A m easu re of th e dispersion of a sam ple an d an estim ate of th e stan dard deviation of a popu lation . Wan t Th e effect th at on e believes m u st exist to satisfy a n eed, becau se of som e set of assu m ption s. WBS
Work breakdown stru ctu re.
Wo rk bre ak d o w n stru ctu re (WBS) A tree diagram th at breaks a project down in to in creasin g levels of detail. Th e lowest level of th e work breakdown stru ctu re com prises work packages.
Ab o u t t h e a u t h o r
L
arry Leach is th e prin ciple of Qu ality System s, a m an agem en t con su ltin g firm . Qu ality System s focu ses on applyin g su ccessfu l an d logical bu sin ess tools to h elp clien ts im prove th eir work processes an d m an agem en t system s. Qu ality system s specializes in leadin g th e im plem en tation of th e n ew Critical Ch ain m eth od of project m an agem en t. Prior to fou n din g Qu ality System s, Larry worked at th e Vice Presiden t level in several Fortu n e 500 com pan ies, an d was a System s An alysis Division Director for th e U. S. Departm en t of En ergy. Larry’s 25 years of experien ce as a project m an ager in clu des projects ran gin g from Research an d Developm en t to con stru ction . Larry leach h as m asters degrees in both Bu sin ess Man agem en t an d Mech an ical En gin eerin g from th e Un iversity of Idah o an d th e Un iversity of Con n ecticu t, respectively. He was awarded a m em bersh ip in Tau Beta Pi, th e En gin eerin g Hon orary Society wh ile earn in g h is u n dergradu ate degree an d th e Steven s In stitu te of Tech n ology. Mr. Leach is a m em ber of th e Project Man agem en t In stitu te an d th e Am erican Society for Qu ality Con trol. He h as pu blish ed m an y papers on related topics in h is field, an d in addition to pu blish in g th e Critical Chain Project Management (Artech Hou se, 2000), h e is th e self-pu blish ed au th or of th e The Critical Chain Project Manager’s Fieldbook.
315
Inde x A Absolu te-deadlin e projects, 6 Acceleratin g sch edu les, 175–76 with in creased raw m aterial cost, 176 with ou t cost im pact, 175–76 See also Sch edu les Accou n tin g “cost world,” 56 “th rou gh pu t world,” 56–58 Accru al problem , 207 Activity du ration estim atin g, 138–39 little positive du ration in , 82–83 m u ltitaskin g an d, 86 Actu al cost of work perform ed (ACWP), 206, 207 An ecdotal data, 6–8 Assu m ption s, 134–35 Availability bias, 50
B Batch in g, 175, 176 Beh avior ch an ges, 220–22
cu stom er, 222 project m an ager, 221–22 resou rce m an ager, 221 sen ior m an agem en t, 220–21 su bcon tractor, 222 See also Im plem en tation Better On lin e Solu tion s (BOS), 26 Bias, 142, 232 Bu dget, 4 Bu dgeted cost of work perform ed (BCWP), 206, 207 Bu dgeted cost of work sch edu led (BCWS), 206, 207 Bu ffer m an agem en t, 62, 117–20, 201–4 bu ffer report, 202–4 dru m bu ffer, 201 feedin g bu ffer, 201 resou rce bu ffer, 201 statu s reportin g, 201–2 Bu ffer reports, 202–4 ben efits of, 202 bu ffer u tilization tren ds, 204 frequ en cy, 215 illu strated, 203 resou rce u se of, 204
317
318
Bu ffers capacity con strain t (CCB), 194 cost, 141–43, 170–71, 205–8, 210, 211 dru m , 194–95 effective, en su rin g, 169 feedin g, 166 for lon g critical ch ain s, 119 m ileston e, 133 m on itorin g, 118–19 pen etration tren ds, plottin g, 120 project, 173, 178 resou rce, 166 sch edu le, 209–10, 211 size of, 118, 119 th resh old, 164–67 trigger poin ts, 169–70 u pdatin g, 119, 120 u tilization tren ds, 204 Bu ffer sign als, 209–11 cost bu ffer exceeds first th ird, 210 cost bu ffer exceeds secon d th ird, 211 dollar-days qu ality in creasin g, 211 sch edu le bu ffer exceeds first th ird, 209–10 sch edu le bu ffer exceeds secon d th ird, 211 Bu ffer sizin g cost bu ffer, 170, 205 defin ed, 164 dru m bu ffer, 195 feedin g bu ffer, 169, 281 process, 168–69 recom m en dation s on , 167 resou rce bu ffer, 170 statistical backgrou n d, 167–68 Bu sin ess risk, 259 Bu y-in , 278–79 defin ed, 278 en h an cin g, 279 See also Cu rren t-reality tree (CRT)
C r itic a l C ha in Pr oje c t Ma na g e m e nt
C Capacity con strain t bu ffer (CCB), 194 Cau sality existen ce, 277 Ch an ge bu sin ess, 226 FRT as gu ide for, 282 m an agem en t, 147–48 organ ization al, 224 plan n in g, 219, 244–51 program types, 225 resistan ce to, 228–30 strategies, 225 Ch an ge con trol action s, 214–15 criteria, 214–15 process operation , 215 Clarity, 277 Com m on cau se variation CCPM an d, 110, 123 defin ed, 45 statistical laws govern in g, 112 in task perform an ce, 109 See also Variation Con certo, 151, 174 Conjectural Knowledge, 50–51 Con strain ts as-late-as-possible, 161 broken , 66 elevatin g, 66 exploitin g, 65, 109–13 extern al, 174 iden tifyin g, 64–65, 106–9 m easu rem en t, 65–66 m u ltiproject, 183–90 policy, 63 resou rce, 92–95, 108 task logic, 108 Con tin gen cy con cen tratin g, in bu ffer, 91 con cen tratin g, at en d of path , 92
Index defin in g, 79 elim in atin g, 92–93 Con trol process, 230–31 Core con flict, 55 defin ed, 87 as h ypoth esis, 90 leadin g to UDEs, 87–90 m easu rem en t, 227 resolvin g, 90–92, 97 resu lt of, 88–90 u n derlyin g, 88 Correlation m atrix, 122 Cost bu ffer, 141–43, 170–71 aggregated, 205 bias portion of, 143 exceeds first th ird, 210 exceeds secon d th ird, 211 operation , 205 pen etration , 206–8 pen etration , redu cin g, 210 sizin g, 141–42, 143, 170, 205 u se of, 170 See also Bu ffers Cost estim ate basis, 143–44 Cost m an agem en t, 33–34 Cost risk, 259 Cost sch edu le con trol system s (CSCS), 17 cost/ tim e m easu rem en t u n its an d, 212–13 in dices, 213–14 m easu re calcu lation , 213 problem s, 214 varian ce com pu tation , 213 Cost world, 56, 58, 211–14 defin ed, 56 m easu res, 211–14 view from , 58 Critical Chain, xvi, 17, 22, 62, 272 Critical ch ain as con strain t, 62 critical path com parison , 95
319
exploitin g, 152 feedin g path s, 114 iden tifyin g, 152, 166 im plem en tation , 217–56 m ergin g path s an d, 114 plan , m u ltiproject, 183–98 plan , sin gle-project, 151–81 project perform an ce an d, 109 resou rce con strain t, 108 sin gle project, 104–6 software, 174 su m m ary, 104–6 task logic con strain t, 108 th in kin g beh in d, 273 workin g ou t with logic, 95 Critical ch ain feedin g bu ffer (CCFB), 118 Critical ch ain project m an agem en t (CCPM) beh avior ch an ge requ irem en ts, 105–6 ben efits, 23–25 com m on cau se variation an d, 110, 123 decision levels, 118 expectation s, 23 im plem en tin g, 217–56 m an agem en t th eory ch an ges an d, xvi–xvii m an agers, 110 m easu rem en t system , 118 m u ltiproject plan , 186–87 m u ltitaskin g an d, 116 practical application s of, 198 requ irem en ts, 48 su ccess exam ples, 25–26 su m m ary, 294–95 See also Project m an agem en t Critical ch ain solu tion con strain t exploitation , 109–13 developm en t, 106–17 early start vs. late fin ish , 116–17
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Critical ch ain solu tion (con tin u ed) key featu res, 105 m ergin g path su bordin ation , 113–14 project con strain t iden tification , 106–9 task perform an ce, 115–16 Critical path critical ch ain com parison , 95 in itial, 107 PMBOK Gu ide defin ition , 108 project sch edu le, 106–7 resou rce con flict rem oval an d, 108 resou rce loadin g, 94 software, 172–73 Critical-path m eth od (CPM), 25, 96 Cu rren t-reality tree (CRT), 68, 227, 273–79 base illu stration , 275 bu y-in , 278–79 defin ed, 273 feedback loops, 276–77 FRT as ch eck for, 282 gen eric, 275 m u ltiproject addition s, 290–91 policies, m easu res, beh avior, 276 process, 273–74 scru tin y, 277–78
D Data an ecdotal, 6–8 qu an titative, 8–11 Dem in g, Dr. W. Edwards, 34–36, 53, 109 14 poin ts for m an agem en t, 35–36 bu sin ess system sketch , 38 fatal error, 258 TQM an d, 34
C r itic a l C ha in Pr oje c t Ma na g e m e nt
Desired effects (DEs), 97–98, 279 in FRT, 280 list of, 97–98 Dettm er, William , 54–55 “Do m ore better,” 17–19 Dru m bu ffer, 194–95 defin ed, 194–95, 197 m an agem en t, 201 sizin g, 195 See also Bu ffers Dru m -bu ffer-rope m eth od, 59–62 Dru m resou rces allocatin g, 193 con trollin g critical ch ain tim e, 192 defin ed, 197 illu strated, 194 selectin g, 191–93 u se, 193 Dru m sch edu le, 193–94 Dyn am ic m odels, 226
E Early start sch edu le, 85, 116–17 illu stration , 154 See also Sch edu le Effective m easu res, 200 Ein stein , Albert, 52 En terprisewide resou rce plan n in g, 176 En tity existen ce, 277 En viron m en tal risk, 259 Estim ation , 19–21 accu racy, 19, 20 activity du ration , 138–39 effort, 21 project task, exploitin g, 110–12 u n certain ty, 19, 20 Evaporatin g clou d, 68–69, 236–38 flyin g pig in jection s, 238–39 illu strated, 237
Index represen tin g con flict, 238 resolvin g, 236–37 Execu tion , righ t, 22–23 Extern al con strain ts, 174
F Failu re m odes an d effects an alysis (FMEA), 259 Feedback im plem en tation , 254 Feedback loops, 42 CRT, 276–77 FRT, 282–84 im portan ce of, 228 n atu ral, 254 Feedin g bu ffers, 166 addin g, 173, 177 m an agin g, 201 placin g, 281 sizin g, 169, 281 trigger poin ts, 170 See also Bu ffers Fifth Discipline, xv Fin ish -to-fin ish (FF), 136 Fin ish -to-start (FS), 136 Flyin g-pig in jection s, 238–39 Focu sin g steps, 63–66, 174, 292 elevate system con strain t step, 66 exploit system con strain t step, 65 iden tify system con strain ts step, 64–65 if con strain t is broken step, 66 illu strated su m m ary, 64 su bordin ate everyth in g to decision step, 65–66 See also Th eory of Con strain ts (TOC) Fu n ction al an d operation al requ irem en ts (F&OR), 33 Fu tu re direction s, 292–93
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Fu tu re reality tree (FRT), 69–70, 227, 279–87 as ch eck for CRT, 282 defin ed, 279 desired effects, 279, 280 feedback loops, 282–84 as gu ide for ch an ge, 282 in jection s, 279–82 m u ltiproject addition s, 291 sequ en ce of in jection s, 283 u n in ten ded con sequ en ces, 284–87
G Gn att ch art, 275 Goals com pan y, 63 feedback m ech an ism s an d, 220 procu rem en t organ ization , 43 satisfyin g, 4 The Goal, xv–xvi, 3, 90–91, 115, 273 cost world, 56 dru m -bu ffer-rope m eth od, 59–62 policy con strain ts, 56, 63 Goldratt, Dr. E.M., 56–63, 109 cost world, 56, 58 evaporatin g clou d, 236–38 focu sin g steps, 63–66 qu ality m easu rem en t, 208–9 resistan ce m odel, 239–42 six layers of resistan ce, 70–71 th in kin g process, 67–70 th rou gh pu t world, 56–58 TOC, 3, 52–71 “Good en ou gh ” con cept, 153 Guide to the Project Management Body of Knowledge. See PMBOK Gu ide
322
H Harris, 25–26 Hawth orn e effect, 19 The Haystack Syndrome, 117–18, 199, 208 Health / safety risk, 259 Herzberg, Frederick, 48 High -probability risks, 266 Hon eywell Defen se Avion ic System s (DAS), 25 “Hou se on fire,” 278 Hu tch in , Ted, 233–34
C r itic a l C ha in Pr oje c t Ma na g e m e nt
defin ed, 279 plan s/ strategies an d, 287 sequ en ce for FRT, 283 total list of, 281–82 TRT an d, 287 In tegration m an agem en t, 32 Israeli aircraft in du stry, 26 It’s Not Luck, 63, 128
J Jacob, Dee, 272 Ju ran , Dr. Joseph , 117, 200
I Im plem en tation , 217–56 begin n in g steps, 251, 253 beh avior ch an ges an d, 220–22 CCPM featu res for, 223 com pletion steps, 251, 253 feedback, 254 in itial, 253 m easu re an d con trol, 253–55 m odel, 218–23 ph ase 1, 252 ph ase 2, 253 ph ase 3, 253 process flowch art, 218 risks, preven tin g/ m itigatin g, 250–51 sch edu le, 248–49 seven -S m odel an d, 220 stall, 255 th eory, 224–39 vision of th e en d an d, 223–24 Im plem en tation project ch arter, 245 en dorsin g, 244–45 work plan creation , 245–50 In jection s, 279–82
L Late fin ish sch edu le, 116–17, 156 pu sh in g tasks to, 156 sequ en ce layou t, 159 See also Sch edu les “Laws of th e fifth disciplin e,” 39–41 Leverage, 41–42 Lin ear respon sibility m atrix, 131 Lin e-of-balan ce m eth od, 176 Low-probability risks, 267 Lu cen t Tech n ologies, 25
M Magn etic sch edu lin g board, 172 Man agem en t oversigh t or risk tree (MORT), 259 Material costs, 207, 208 Measu rem en ts cost world, 211–14 CRT an d, 276 qu ality, 208–9 Mergin g path s critical ch ain delay an d, 114
Index filter, 113 su bordin atin g, 113–14 Microsoft Project, 94–95, 159–61, 174, 249 Mileston es in term ediate, 179 perform an ce, 112 statu s, 213 Mileston e sequ en cin g, 121–22, 131–33 defin ed, 131 m ileston e bu ffers, 133 as su pplem en tal tool, 132 See also Project work plan Moderate-probability risks, 266 Mon te Carlo an alysis, 259 Mu ltiproject critical ch ain plan , 183–98 capacity restrain t bu ffer, 194 CCPM m eth od, 186–87 con strain t exploitation , 189–90 con strain t iden tification , 183–89 dru m bu ffer, 194–95 dru m resou rce selection , 191–93 dru m sch edu le, 193–94 featu res, 190–95 project in trodu ction an d, 195–97 project priority, 190 project sch edu les, 195 project syn ch ron ization , 188 scen ario, 185 su m m ary, 197–98 See also Critical ch ain ; Sin gleproject critical ch ain plan Mu ltiproject process, 289–92 CRT addition s, 290–91 FRT addition s, 291 PRT addition s, 291–92 Mu ltitaskin g, 85–87 activity du ration an d, 86 avoidin g, 93 bad, 116
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CCPM an d, 116 elim in atin g, 115–16 project delay an d, 86 “My Saga to Im prove Produ ction ,” 22–23
N Negative bran ch (NBR), 70, 284–86 defin ed, 284 iden tifyin g, 284 illu strated, 285 procedu re, 286 The New Economics, 53 Newton ’s laws, 51–52 Non critical ch ain s, 177
O “Of Clou ds an d Clocks,” 43 Operan t con dition in g, 47, 49
P Paradigm lock, 232–39 clou d, 233–34 cross con n ection s, 234 defin ed, 233 Paradigm sh ifts, 233 Perform an ce m ileston e, 112 roadru n n er, 281 task, 113, 115–16 Pilot projects, 242–44 assu m ption s, 242–43 evaporatin g clou d, 242–43 in jection s, 244 su ccess, 243–44 PMBOK Gu ide, 1–2, 10, 11, 31–34
324
PMBOK Gu ide (con tin u ed) com m u n ication s area, 34 critical path defin ition , 108 defin ed, 31 fatal error, 258 featu res from , 120–23 h u m an resou rces area, 34 in tegration area, 32 kn owledge areas, 31, 32 perspective, 29 processes, 31 procu rem en t area, 34 project ch an ge con trol, 123 project ch arter, 121 project in itiation process, 125 project m easu rem en t an d con trol process, 122 project risk m an agem en t, 123 project work plan , 121–22 psych ology an d, 50 qu ality area, 34 risk area, 34 scope area, 32–33 su m m ary, 72 tim e area, 33–34 Policies con strain ts, 56, 63 CRT an d, 276 plan n in g/ con trol, 145–47 Popper, K.R, 50–51 Prerequ isite tree (PRT), 70, 287–88 defin ed, 287 illu strated, 288 m u ltiproject addition s, 291–92 obstacle developm en t, 287 readin g, 287, 288 for WBS creation , 128 “Prin ciples for th e Tran sform ation of Western Man agem en t,” 35–36 Priority, project, 190, 196
C r itic a l C ha in Pr oje c t Ma na g e m e nt
Probabilistic safety assessm en ts (PSA), 259 Problem cau se, 12–16 CSCS, 214 defin in g, 4–23 righ t, 10 ProCh ain , 151, 174 Produ ction operation s, 2–3 solu tion , 58–63 as su bsystem , 59 system , fixed, 60 TOC im provem en ts, 109 Profou n d kn owledge defin ed, 36 elem en ts, 36, 37 Program Evalu ation an d Review Tech n iqu e (PERT), 31, 96, 109, 259 Program risk, 259 Project bu ffer, 173, 178 Project ch arter, 121, 126–27 defin ed, 126 elem en ts, 126–27 im plem en tation , 245, 246 project work plan vs., 127 Project closu re, 148 Project con dition s defin ed, 4 illu strated, 4 reason s for n ot m eetin g, 12 Project du ration lon ger, 78–81 redu ced, 23–24 u n certain ty, 90 Project failu re cau ses, 15–16 rate, 1 reason s for, 12–13 u n certain ty an d, 21–22
Index as u n desired effects, 76–78 Project in itiation , 125–49 illu strated, 126 PMBOK Gu ide, 125 process, 125–26 stakeh older en dorsem en t, 127 WBS, 127–30 Project-level decision s, 200 Project logic, 135–37 ch eckin g, 136 defin ed, 135 relation sh ips, 136 Project m an agem en t bu ffer, 62, 117–20, 201–4 bu sin ess, 11–12 cost, 33–34 im provin g, 10–11 in tegration , 32 laws of, 7–8 risk, 34, 257–69 scope, 32–33 sim plified, 24 software, 93 su ccessfu l, 11 system defin ition , 76 th in kin g process application to, 272–73 tim e, 33–34 See also Critical ch ain project m an agem en t (CCPM) Project m an agem en t plan (PMP). See Project work plan Projects absolu te-deadlin e, 6 goals, satisfyin g, 4 in trodu cin g, to en terprise, 195–97 m easu rem en t, sim plified, 24 pilot, 242–44 prioritizin g, 190, 196 produ ction operation s vs., 2–3 relative-deadlin e, 6
325
sim u lation , 259 software, 10 staggerin g, 192 startin g, 125–49 th rou gh pu t, in creased, 25 types of, 5–6 u n certain ty, 19–22 Project su ccess, 3–4 exam ples, 25–26 factors, 13, 14 factors/ in flu en ce ch art, 15 im provin g, 23 pilot, 243–44 plan n in g, 80 Project system , 37–43 black box view of, 76 desired effects, 97–98 destru ction , 42–43 dyn am ics, 39–41 elem en ts, 37 h ow good is, 5–11 n ecessary con dition s for, 103 operation , 38 overall requ irem en ts for, 102 perform an ce, im provin g, 23 perspectives, 29–30 PMBOK, 29–30 pu ll system , 186 requ irem en ts, 101–4 Project team con flict with , 43 in creased, satisfaction , 24 project bu ffer m on itorin g, 118 Project work plan , 121–22, 144 defin ed, 144 im plem en tation , 245–50 large project elem en ts, 144 m ileston e sequ en cin g, 121–22, 131–33 ou tlin e, 145–47 plan n in g/ con trol policy, 145–47
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Project work plan (con tin u ed) project ch arter vs., 127 project n etwork, 122 respon sibility assign m en t, 121, 130–31 work breakdown stru ctu re, 121 work packages, 122, 133–44 Psych ology, 46–50 availability bias, 50 beliefs, 49 bias, 232 con sideration s, 49–50 con trol system , 46–47 im plem en tation an d, 230–32 PMBOK Gu ide an d, 50 rein forcem en t, 46 rewards, 47–49
Q Qu ality m easu rem en t, 208–9 Qu an titative data, 8–11
R Regu latory risk, 259 Relative-deadlin e projects, 6 Requ irem en ts gen eral system , 102 m atrix, 101–4 overall, 102 stakeh older, 102, 104 tech n ical, 102 Resistan ce m odel, 239–42 layer 4, overcom in g, 239–41 layer 5, overcom in g, 241 layer 6, overcom in g, 241–42 layers 1, 2, 3, overcom in g, 239 layers, 70–71
C r itic a l C ha in Pr oje c t Ma na g e m e nt
Resistan ce to ch an ge, 228–30, 248 good/ bad an d, 228 in dividu al, 230 organ ization al, 228, 230 Resou rce bu ffers, 113, 166 m an agem en t, 201 sizin g, 170 See also Bu ffers Resou rce con strain t, 92–95, 97 capacity, elevatin g, 190 critical ch ain , 108 m u ltiproject, 189–90 Resou rces assign in g, by in dividu al n am e, 192–93 assign in g, by type, 192 availability, exploitin g, 112–13 bu ffer report u se, 204 capacity of, 188 con flict resolu tion altern atives, 157 down stream , 188 dru m , selectin g, 191–93 exploitin g, 189–90 plan n in g, en terprisewide, 176 su pply flexibility, 191 Respon sibility assign m en t, 121, 130–31 defin ed, 130 lin ear respon sibility m atrix, 131 See also Project work plan Respon sibility m atrix, 248 Rewards, 47–49 Risk(s) bu sin ess, 259 ch ecklists an d, 264 con trollin g, 257, 268 cost, 259 en viron m en tal, 259 even t exam ples, 263 even t processin g, 262
Index h ealth an d safety, 259 iden tifyin g, 262–67 im pact, 267 m itigation , 268 m on itorin g, 268 option s for dealin g with , 258 poten tial, 260 preven tion , 268 program , 259 regu latory, 259 sch edu le, 259 triggers, 260 types, 259 Risk assessm en t, 251 in corporatin g, in to project process, 262 qu alitative, 259 qu an titative, 259 Risk list, 262–64 ch ecklists an d, 264 con solidation , 264 even t exam ples, 263 len gth y, 264 plan scru tin y an d, 264 project assu m ption s an d, 263–64 Risk m an agem en t, 34, 103, 257–69 critical ch ain sim plification of, 258 defin ed, 257 essen ce of, 265 im plem en tation , 250–51 m atrix, 260–62 PMBOK Gu ide, 123 process, 259–62 su m m ary, 268–69 See also Risk(s) Risk probability, 264–67 estim ation ability, 265 estim ation failu re, 265–66 h igh , 266 low, 267 m oderate, 266
327
See also Risk(s) Ru le of 3-4-3, 224–26
S Sch edu le bu ffer exceeds first th ird, 209–10 exceeds secon d th ird, 211 pen etration , redu cin g, 210 See also Bu ffers Sch edu le overru n s, 81–85 con flict u n derlyin g, 84 cost overru n s an d, 96 stu den t syn drom e an d, 84–85 Sch edu le risk, 259 Sch edu les acceleration , 175–76 CCPM im plem en tation , 248–49 critical ch ain plan , 153 critical path , 106–7 defin ed, 4 dru m , 193–94 early start, 85, 116–17, 154 late fin ish , 116–17, 156 m easu rem en t, 122 project, 195 statu s, 213 with th ou san ds of tasks, 177–78 Scien tific m eth od defin ed, 51 exam ple, 51 TOC an d, 54–55 Scope defin ed, 4 m an agem en t, 32–33 Scru tin y, 277–78 critical review, 277 defin ed, 277 reservation categories, 277–78 Seven -S m odel, 219, 247
328
Sh ewh ard, Walter A., 110 Sin gle-project critical ch ain plan , 151–81 bu ffer an d th resh old sizin g, 164–70 Sin gle-project critical ch ain plan (con tin u ed) cost bu ffer, 170–71 creation m eth ods, 171–74 critical ch ain software, 174 critical path software, 172–73 en terprise resou rce plan n in g, 176 extern al con strain ts, 174 frequ en tly asked qu estion s, 177–80 “good-en ou gh ” con cept, 153 large exam ple, 159–64 large exercise, 164 m an u al m eth od, 171–72 plan n ed tim e, redu cin g, 175–76 process, 151–53 sm all exam ple, 154–59 sm all exercise, 161 su m m ary, 180–82 See also Critical ch ain ; Mu ltiproject critical ch ain plan Skin n er, B.F., 46, 47, 49, 230 Software, 10 critical ch ain , 174 critical path , 172–73 project failu re, 10 Solu tion com plete sin gle, 101–24 direction of, 75–99 feasibility, 95–97 produ ction , 56–63 righ t, 16–23 tren ds, 16 u n certain ty m an agem en t, 22 Special cau se variation , 45 Stakeh older requ irem en ts, 102, 104 Start-to-start (SS), 136
C r itic a l C ha in Pr oje c t Ma na g e m e nt
Statem en ts of work (SOW), 33 Statistical flu ctu ation s, 142 Statu s reports, 201–2, 215 Stu den t syn drom e, 84–85
T Tam perin g, 45 Task perform an ce, 115–16 date-driven , elevatin g, 115 elevatin g, by elim in atin g m u ltitaskin g, 115–16 variation , 113 Tasks accu racy, 19 com pletion tim e distribu tion , 82 distribu tion of, 173 du ration estim ation , 180 estim ation , 19, 110–12, 180 lim itin g, 137 logic con strain t, 108 n o con trol over, 178–79 size, 137 tim e con flict, 80 Tau tology, 278 Th eory of Con strain ts (TOC), 3, 29, 52–71 core con flict, 55 defin ed, 52 focu sin g steps, 63–66, 174, 292 illu strated, 52, 53 im pact of, 61 im provem en t, 55 perspective, 30–31 ph ysical ch ain , 53 prom ise of, 292–93 pu rpose, 53 scien tific m eth od an d, 54–55 su m m ary, 72 th in kin g process, 67–70 Th eory of kn owledge, 18, 50–52
Index u n derstan din g, 52 validity ch eckin g, 51 Th in kin g process, 67–70 applied to project m an agem en t, 272–73 cu rren t-reality tree (CRT), 68 evaporatin g clou d, 68–69 fu tu re reality tree (FRT), 69–70, 227 illu strated, 67 n egative bran ch (NBR), 70 prerequ isite tree (PRT), 70 qu estion s an swered by, 67 train in g resu lts, 273 tran sition tree (TRT), 70 See also Th eory of Con strain ts (TOC) Th rou gh pu t world, 56–58 defin ition s, 56 error correction , 57 evaporatin g clou d, 58 Tim e m an agem en t, 33–34 Tim e-scaled logic, 162 Total qu ality m an agem en t (TQM), 29, 34–52 leverage, 41–42 perform an ce exam ples, 34 perspective, 30 psych ology, 46–50 su m m ary, 72 system , 37–43 system destru ction , 42–43 system dyn am ics, 39–41 th eory of kn owledge, 50–52 u n in ten ded con sequ en ces, 42 variation / u n certain ty an d, 43–46 Tran sition tree (TRT), 70, 289–90 application , 289 defin ed, 289 illu strated, 290 readin g, 289 stan dalon e u tility, 289
329
Trigger poin ts, 169–70 for feedin g bu ffers, 170 logic, 169–70 settin g, 169–70 See also Bu ffers
U Un certain ty, 19–22, 139–41 bias, 142 con cen tratin g, 91 in cost/ task du ration , 139 effect, 21 estim ate, 20 m an agin g, 22 project du ration , 90 project failu re an d, 21–22 statistical flu ctu ation s, 142 task du ration , 48 types of, 142 u n derstan din g, 43–46 work package, 139–41 Un desirable effects (UDEs), 76–78 for core con flict developm en t, 274 core con flict leadin g to, 87–90 defin ed, 77 list of, 77 n otion al con n ection of, 274 u n derstan din g, 77 Un in ten ded con sequ en ces, 284–87 defin ed, 284 good/ bad, 284 n egative bran ch , 284–86
V Variation com m on cau se, 45, 109, 110 discrim in ation , 46 special cau se, 45 u n derstan din g, 43–46
330
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W
for project to im plem en t CCPM, 245, 247 PRT creation of, 128 Work packages, 122, 133–44 activity du ration estim ate, 138–39 assu m ption s, 134–35 cost bu ffer, 141–43 cost estim ate basis, 143–44 defin ed, 133 docu m en tation design , 133 logic, 134 n u m ber of tasks, 137–38 project logic, 135–37 u n certain ty an d, 139–41 See also Project work plan
What Is This Thing Called Theory of Constraints, and How Should it Be Implemented?, 53 Work breakdown stru ctu re (WBS), 32, 121, 127–30 creation with tem plates, 129 criteria, 128 defin ed, 127 elem en ts, 134 facilitation , 128–29 h ierarch ical breakdown , 127–28 levels, 129 n u m berin g system , 129