Critical Chain Project Management to cope with uncertainty

Critical Chain Project Management(CCPM) is an approach for managing project, initially developed by M. Goldratt and based on the Theory of Constraints(TOC) applied to project management. It has adquired increased importance since it has been proved to be an effective method to ensure project completed on time, reduction of project completition time, and increased resource productivity. The basics principle are: avoiding multi-tasking, focus on the critical chain tasks, aggregate all safety time to handle uncertainty

This article illustrates the theory behind the method, its application, [a comparison with the critical path method], and its limitation.

Critical Chain Project Management(CCPM) is a method to plan, execute, manage, and control both single and multi projects, which emphasizes the effects of resource allocation and activity duration uncertainty. CCPM is an outgrowth of the Theory of Constraints(TOC) and was introduced in 1997 in Eliyahu M. Goldratt’s book, “Critical Chain” in response to many projects resulted in larger duration, increased cost, and less derivable than expected.

The Critical Chain method mainly differs from the traditional methodology, deriving from Critical Path, in how uncertainty is handled.

Theory of Constraints

Since CCPM applies TOC’s concepts to project management, it is useful to understand the reasoning behind the theory.

TOC is a systems-management philosophy, originally applied to production system, based on the principle that any system must have a constraint that limits its output. If there were no constraints, system output would either rise indefinitely or would fall to zero. Therefore, a constraint( or bottleneck) limits any system with a nonzero output.

A system’s constraint may be physical (e.g. materials, machines, people, demand level) or managerial which hinders the system to achieve better performance.

At first, “before we can deal with the improvement of any section of a system, we must first define the system’s global goal; and the measurements that will enable us to judge the impact of any subsystem and any local decision, on this global goal.”. Then in order to improve the system’s performance, the limiting constraint must be found and improvement efforts should be placed on elevating the capacity of that constraint.

Goldratt defined the “five focusing steps” as an continuous improvement process:

1. Identify the system's constraint(s) 2. Decide how to exploit the system's constraint(s) 3. Subordinate everything else to the above decision 4. Elevate the system's constraint(s) 5. If, in the previous steps, the constraint has been broken, go back to step 1, and do not allow inertia to cause a system's constraint

The five steps process permits to identify the most detrimental constraint. When the latter is solved, the next constraint needs to be identified and addressed. Therefore, it is a continuous improvement process.