Critical Chain Project Management

Critical Chain Project Management (CCPM) is a method of managing projects, where the attention is focused on the resources needed to execute various project tasks. In comparison to traditional project management methods that have its origins in critical path and PERT algorithms, where the emphasis is put on the order of tasks and strict schedules. The typical critical chain project network attempt to keep resources levelly loaded, but requires that they are flexible in start times. Additionally a quick switch between tasks and task chains is desirable to make sure the project is on schedule.

History

CCPM was developed by Eliyahu M. Goldratt and introduced in 1997 in his book, Critical Chain. Critical Chain Project Management is founded in algorithms and methods obtained from the Theory of Constraints.

The use of Critical Chain Project Management has been acknowledged with making projects 10 to 50 % faster and/or cheaper than traditional methods such as GANTT, CPM, PERT etc., which were developed and popularised from 1910 to around 1950.

According to studies of traditional project management methods by Standish Group and others, only 44% of projects typically finish on time. Projects are on average completed in 2.2 times the duration that was planned originally and 1.9 times of the budgeted cost. In general 70 % of projects are incapable of meeting the planned scope i.e. technical content delivered. 30 % are even cancelled before completion. It is against these statistics that CCPM looks to improve the circumstances of project management.

Theory of Constraints

Theory of Constraints is a description of how repetitive production systems, with the factor that every system exhibits a certain constraint and overall system performance can only be enhanced by improving the performance of the particular resource constraining the system.

Concept

Using traditional project management methods, around 30% of the lost time and/or resources are typically used in wasteful techniques such as bad multitasking, student syndrome, in-box delays and/lack of prioritization.

In project management, the critical chain is the sequence of both precedence- and resource-dependent terminal elements that prevents a project from being completed in a shorter time, given finite resources. If resources are available in unlimited quantities at all times, in that case the project’s critical chain is identical to its critical path.

Critical chain are used as an alternative to critical path analysis. There are four dominant features that differentiate critical chain from critical path. Those four are:

1. The use of (implicit) dependencies between resources. These dependencies can often be found by checking the resource requirements, yet they are not included in the project network.
2. The inherent lack of quest for an optimal solution. Typically a sufficient solution is the goal. This comes down to firstly, that there is no analytical method that computes the absolute optimal (shortest) critical chain. Secondly, there is an default uncertainty in effect, where estimates are by nature more volatile than the eventual difference between a optimal and near-optimal solution.
3. Identification and insertion of buffers; project buffer, feeding buffers and resource buffers.
4. The critical chain method monitors project progress and overall status by looking at the consumption rate of buffers rather than single task performance across from the schedule.

Critical Chain Project Management does planning by aggregating the amount of safety time included in separate tasks within the project to buffers. This is done to keep up the due-date performance and avoid wasting the given safety time to circumstances like Parkinson’s Law and inefficiently synchronized integration.

Critical Chain Project Management make use of buffer management instead of earned value management, EVM, to measure the performance of a given project. This is done on the basis that earned value management can give a false picture of the status, because a clear distinction isn’t made between progress on the project constraint (critical chain) and progress on non-constraining factors. In order to determine the size of project or resource buffers, the Event Chain Methodology can be utilized.

Planning

Similarly to the critical path method, the planning phase is initiated by the creation of a project plan or work breakdown structure. The plan is typically designed working backwards from a requested completion date with each task starting as late as possible.

Each task is given a duration. In the implementation of CCPM, through software or other solutions, it is common to designate a best guess duration and a safe guess duration, which is deemed to be highly probable. Another way to implement it is by assigning a fixed percentage to be removed and aggregated into the buffers.

Resources are then given to each task. The plan is resource leveled, i.e. start and finish dates are adjusted based on resource constraints to achieve balance, by utilizing the durations set. The longest sequence of tasks that lead from beginning to the end of the project is identified as the critical chain.

Critical chain project management then applies buffers to monitor project schedule and financial performance. The variance duration between safe and best guess estimates are buffered at the end of the project. In a similar fashion, buffers are collected at the end of each sequence of tasks that feed into the critical chain. Typically the date at the end of the project buffer is used as the delivery date to external stakeholders.

An alternative method for estimating duration over the project is by using probability-based quantification using fx Monte Carlo simulation. In can give a more broaden or in-depth perspective on certain areas of interest depending on the use case.

Execution

Entering the execution phase is possible after the plan is complete. The project network is fixed and the size of the buffers are locked down and used to monitor the project schedule and overall performance and should therefore not be changed during the project.

With little to no slack in the duration of individual tasks, resources are motivated to spend time on the task at hand in order to complete it and then hand it off to the next person. The goal is to mitigate poor multitasking. One initiative is to provide prioritized information to all resources. A relay race works as an analogy. While each component in the project is encouraged to proceed as fast as possible, they should be focused on the current task and finishing it as fast as possible without distractions. The analogy is even realized in some cases by have physical baton being used to signal critical chain work is performed and shouldn’t be interrupted. The result is minimizing the tendency to delay work. This is in contrast to traditional project management where tasks are mainly monitored against deadlines. In Critical Chain Project Management, it is encouraged to proceed as fast as possible, without attention to a given deadline.

Planning task duration at 50% probability, there is an intrinsic pressure on resources to finish critical chain tasks as quickly as possible.

Monitoring

Proponents of Critical Chain Project Management typically deem monitoring as the greatest advantage of using the method. Tasks will inevitably vary in duration from the opening 50% estimate, which in turn removes the reason to force tasks to complete “on time”. Monitoring the buffers created during the planning stage will give a more useful result by utilizing chart or graphs that shows how much the buffer has been used as a function of the project completion. If buffer usage is little to none, the project must be on target. If buffer usage is exceeding the pace of the project, leaving insufficient amounts at the end, corrective actions must be taken to recover or stear the project on right course. Similarly if buffer usage are surely done faster than project progress, ultimately resulting in late completion, relevant measures must be taken.

Related Material

Critical Path Method Event Chain Methodology

Discussion

Critical view of Critical Chain Methodology

References

[1] Willy Herroelen, Roel Leus (2001), "On the merits and pitfalls of critical chain scheduling".

[2] Tzvi Raz, Robert Barnes, Dov Dvir (2003) "A Critical Look at Critical Chain Project Management".

[3] Graham K. Rand (2000) "Critical chain: the theory of constraints applied to project management".

[4] Shanlin Yang, Lei Fu (2014) "Critical chain and evidence reasoning applied to multi-project re-schedule in automobile R&D process".

[5] Herman Steyn (2000) "An investigation into the fundamentals of critical chain project scheduling".

[6] Herman Steyn (2002) "Project management applications of theory of constraints beyond critical chain scheduling".