Friday, October 18, 2013

Focus and Leverage Part 263

This is the final posting on the comparison of two distinctly different project management methods........the Critical Path Method (CPM) and the Critical Chain Method (CCPM).  In this final posting on these two methods we will look at how CCPM tracks the status of both individual projects and how an entire portfolio of projects is tracked.  We'll also present some ideas on how to make your project management experience more fruitful.  I hope you've enjoyed this series of posts.

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 Critical Chain Completed versus % of Project Buffer consumed.  Figure 8 is an example of such a chart.  In this chart we see that roughly 55 % of the critical chain has been completed while only roughly 40 % of the project buffer has been consumed, thus indicating that this project is actually a bit ahead of schedule.

Figure 8
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, but not yet implemented.  Vertical rises such as that demonstrated in Figure 8 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 should 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, we also recommend calculating a project index by dividing the % of critical chain completed into the % 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 55% divided by 40% or 0.727.  This ratio says that this project is progressing nicely with no concern for the project being late.

Figure 9
With any good 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 9 is an example of this view and one can see at a glance that 4 of the projects (Projects 1, 4, 5 and 6) need immediate attention (they are in the red zone), 2 projects (Projects 3 and 8) need a plan developed to reduce the rate of buffer consumption (yellow zone) and 2 (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, it does not mean that the project will automatically be late.  It only means that if expeditious action isn’t taken to reduce the buffer consumption rate, the project could be late.

The net effect of CCPM will be 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 keys to success using CCPM revolve 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 owned 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 successful.

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, we also recommend that each week 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.  And again, if problems and issues need to be escalated to keep the project on schedule, leadership must play this vital role.

CCPM is the single best tool for planning and executing projects.  In addition to the example I used to start this series of posting (i.e. scheduled maintenance of aircraft), major progress using CCPM can be seen in the construction industry, R & D, and many other industry types.  So back to posting 258 and how we did applying CCPM to the helicopters for the Aviation MRO Contractor.  We did five separate helicopter platforms using CCPM and the minimum cycle time improvement was 40% while one platform's cycle time was reduced by 60%.  The customer, the United States Army, was absolutely thrilled!!

Bob Sproull












No comments: