In this posting we'll review an additional TOC methodology used for improving the completion rate of projects. We'll do this by comparing TOC's version of project management to one of the most commonly used project methods.
3. Critical
Chain Project Management (CCPM)
– Most companies today are using the more traditional Critical Path Method
(CPM) for executing projects. The
problems experienced using this method are typically projects being completed later than the promised due date, and when they do get completed, a high percentage of them are over
budget with the original scope reduced. CPM uses
estimated task durations with well-defined individual task start and completion dates. Typically progress is measured by a
percentage of tasks completed against the projected delivery date. The problem with tracking a project like this
is that not all tasks have the same duration and the tasks resources have a
tendency to choose easier tasks to work on so that their tracking metric looks
good (i.e. cherry-picking). Using this metric to track
progress, it’s not uncommon to see 90 % of the project completed fairly quickly,
only to see the remaining 10 % dragging-on endlessly.
In addition, when the project is being
planned, resources responsible for completing tasks add excessive amounts of protective safety to the estimated
durations to guard against variation and uncertainty. When this happens, the
final delivery date is a reflection of these inflated task durations.
Another problem with CPM is that resource
contentions are not considered when calculating the critical path of the
project. The critical path in CPM is
defined as the longest path of dependent tasks meaning that a task can’t be
started until the previous one has been completed.
As a result, when given multiple projects to work on, the resource is
forced to use a behavior known as "bad multi-tasking." Bad
multi-tasking occurs because the resource is forced to split time between the multiple
projects that have been assigned in order to show progress on each of the assigned projects. That is, because the resource wants to
demonstrate progress on all of the assigned projects, they will work on one project
for a while, then switch to the next assigned project and so on. Bad multi-tasking leads to significantly longer project
cycle times.
One of the principal problems associated with
CPM is what happens when a task is completed.
Because estimated task durations, with a well-defined task start and completion dates, are used to develop the CPM schedule,
there is no provision for accommodating tasks that are finished ahead of schedule. Because of this, a behavioral phenomenon
known as Parkinson’s Law rears its ugly head.
Parkinson’s Law states that work expands to fill the available time, so
the resource will use all of the time allotted to the task. They do this because their credibility is on
the line, meaning that if they said 5 days and the task was completed in only 3
days, they would be expected to duplicate this on subsequent projects. So even if a task is completed early, it is
not reported as such.
Another behavior that comes into
play is what Goldratt dubbed the Student Syndrome.
Because the task estimator knows that he or she has loaded the task duration estimate with
a protective safety buffer (as much as 50% of the task duration), there is a
tendency to procrastinate the start of the task. And when Murphy strikes, and we know he will, the task can be
delayed which causes delays in the project.
The consequence of these two behaviors is that early finishes are not
passed on, but delays are.
Once again, TOC offers a different approach
to project management known as Critical Chain Project Management (CCPM) and the differences between CCPM
and CPM are enormous. Like CPM, sequential
project tasks are laid out and durations for each are estimated. However, because we know that these duration
estimates are many times in the neighborhood of 50% overstated, CCPM removes
the task durations from the plan and then pools a portion of the withdrawn safeties to create
a project buffer. This buffer is
calculated based upon a certain percentage of the removed safety time (i.e. approximately
half of the task duration time estimates). This
project buffer is similar to how a bank account works with deposits and
withdrawals. By that I mean, if a task
takes longer than planned, time can be withdrawn from the project buffer. Likewise, if the task is completed faster than
the planned time, the time saved is added back to the project buffer. CCPM also includes a feeding buffer which
protects the planned completion dates for tasks not located on the critical chain.
CCPM also has a different way of tracking
projects than the way CPM does. CCPM uses a graphical display called a fever chart to provide an early
warning when the project is stalled. The
fever chart is much like a run chart in that along the x-axis we see the
percent of the critical chain completed while on the y-axis we use the percent
of the project buffer consumed. The fever chart has three different color zones to indirectly indicate the rate of buffer consumption. If you
divide the percent of critical chain completed into the percent of project
buffer consumed you will have an index that indicates how the project is
progressing. If this ratio is less than
or equal to 1.0 (green zone), the project will either be completed on time or early. If the ratio is greater than 1.0 (yellow or red zone depending upon how high the index value is), then a plan
must be developed and executed to recoup the lost time or the project will
definitely be late.
Another stark difference between CPM and CCPM
is how resource contentions are handled.
CCPM considers these contentions when it calculates its own version of
the Critical Path called the Critical Chain.
Unlike CPM, CCPM considers both task dependencies and resource contentions
when developing the project plan. This
acknowledgement of resource contentions helps negate the multi-tasking problem
we see with CPM.
CCPM also addresses the two behavioral
phenomena spoken about earlier, Parkinson’s Law and the Student Syndrome. CCPM uses a relay race mentality whereby as
soon as a task is completed on the critical chain, the baton is immediately
passed on to the next resource. Because
of this relay race mentality, unlike CPM, early finishes are passed on with the
saved time deposited back into the project buffer. Delays to the project are minimized because
of the existence of the project buffer.
So what kind of results should you expect to see with
CCPM? When using CCPM it is not uncommon
to observe a 30 to 50% reduction in the time required to complete a project
compared to that same project using CPM.
On-time completion rates are typically 90% or greater and projects
typically finish on scope and on or below budget.
Bob Sproull
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