Sunday, May 13, 2012

Focus and Leverage Part 110

In an earlier posting, I explained that in traditional project management (i.e. CPM) project progress is tracked by calculating the percentage of individual tasks completed and then comparing that percentage against the due date.  To me the problem with this method is that we aren’t considering the estimated durations that are left to complete.  As a result, it’s nearly impossible to know exactly how much time is remaining to complete the project.  Using this method to track progress, it’s not uncommon to see 90 % of a project completed relatively quickly only to see the remaining 10 % take just as long.  In fact, looking at the number or percentage of tasks completed instead of how much of the critical path has been completed only serves to give a false sense of conformance to the schedule.  If all task durations were of equal length, this method might work, but they are not.

CCPM measures the progress of a project much differently and in so doing allows the project to make valuable use of early finishes.  Critical chain uses something called a Fever Chart which is simply a run chart of % of the Critical Chain complete versus % of Project Buffer consumed.  Figure 10 is an example of such a chart.  In this chart we see that approximately 55 % of the critical chain has been completed while only 40 % of the project buffer has been consumed.  At this rate we can conclude that this project is slightly ahead of schedule. 

  Figure 1

The green, yellow and red areas of the fever chart are visual indicators of how the project is progressing.  If the data point falls within the green area of the chart, the project is progressing well and may even finish early.  If the data point falls into the yellow zone, there is cause for concern and plans should be developed to take action if necessary.  Vertical rises indicate that buffer is being consumed at too fast a rate relative to how the project is progressing.  If a data point falls into the red zone, then the plan we developed must now be executed.  But even if the entire amount of project buffer is consumed at the completion of the project, the project is still on time and not late.

In addition to using the fever chart, I also recommend calculating a project index by dividing the percent of critical chain completed into the percent of the project buffer consumed.  As long as this ratio is 1.0 or less, then the project will come in on-time or early. In our example this ratio would be 40% divided by 55% or 0.727.  This ratio says that this project is progressing nicely with no concern for the project being late.

With most CCPM software, we can also see a portfolio view of the fever chart that tells us the real time status of all projects in the system.  Figure 2 is an example of this view and one can see at a glance that four (4) of the projects (Projects 1, 4, 5 and 6) need immediate attention (they are in the red zone), two (2) projects (Projects 3 and 8) need a plan developed to reduce the rate of buffer consumption (yellow zone) and two (2) projects (Projects 2 and 7) are progressing nicely (in the green zone).  Having this view enables the Project Manager to see at a glance where to focus his or her efforts.  It is important to understand that just because a project enters the red zone, does not mean that the project will automatically be late.  It only means that if prompt action isn’t taken to reduce the buffer consumption rate, the project could be late.

Figure 2

The net effect of CCPM will always result in a significant decrease in cycle time with a corresponding increase in the throughput rate of completed projects using the same level of resources.  In fact, ii is not unusual for project cycle times to be reduced by as much as 40 to 50%! These cycle time reductions and throughput increases translate directly into improved on-time delivery of projects as well as significant revenue increases.

The key to success using CCPM revolves around utilization of the true subject matter experts (SME’s).  That is, by developing a core team comprised of 70-80% employees actually executing projects (i.e. SME’s) and permitting them to develop the ultimate design solution, the resulting implementation will be believed, owned and used by the people performing the work.  This ownership translates directly into making sure the solution will work.  Without this level of involvement and approval authority to develop the applied action plans, CCPM will simply not be as successful as it could or should be.

Another key to successful project management application are a series of regular meetings intended to escalate and resolve any problems that surface during the project execution.  These include daily “walk-arounds” by the Project Manager with the SME’s to determine the progress of the project so that problems can be surfaced and escalated if the Project Manager cannot resolve them him or herself.  In addition, I also recommend that each week or two there must be what is referred to as an Operation’s Review in which each individual project is reviewed for progress by the leadership team.  Again, if problems and issues need to be escalated to keep the project on schedule, leadership must play this vital role.

Clearly, Critical Chain Project Management has demonstrated its superiority over the predominant Critical Path Method in a variety of industry settings with reported cycle time improvements in the neighborhood of 40 to 50%.  And with project completion rates above 90%, it is no wonder why organizations that rely on project completions as their revenue source are flocking to CCPM.  Organizations like the Department of Defense (DoD) where rapid maintenance of aircraft and other military vehicles is paramount to success, software development companies have had incredible success using CCPM versus CPM.  So if your organization is a project based one with multiple projects, CCPM will take you to a new level of success.

In my next posting we’ll look at why it’s important not to push more projects into your organization and why staggering projects is a better way.  In other words, sometimes in order to speed up, we must slow down.

Bob Sproull

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