Maximizing Profitability Part 33

Earlier we demonstrated how by simply eliminating multi-tasking, significant gains can be made in project completion rates, but we still have to address the impact of the Student Syndrome and Parkinson’s Law. We know that both of these behaviors work to lengthen the time required to complete projects. Remember how excess safety is imbedded into traditional project management plans? Resources estimate task times and add in their own protection against disruptions caused primarily by Murphy. Knowing that this safety exists, resources then delay starting work on their tasks until the due date is close. Even if the resources don’t delay the task starts and finish early, these early finishes are not reported and passed on. So how does CCPM deal with these two behaviors?

While CPM relies on individual task durations as well as scheduled start and completion dates, CCPM does not. The focus is no longer on finishing individual tasks on time, but rather starting and completing these tasks as soon as possible. So how does this work? Like CPM, CCPM still gathers estimates on individual tasks and identifies its own version of the Critical Path. Unlike CPM, CCPM considers competing resources (i.e. the same resource has to work on different tasks) and makes them a part of the critical path. Let’s look at an example of how CPM and CCPM identifies the critical path.

CPM defines the critical path as the longest path of dependent tasks within a project. That is, tasks are dependent when the completion of one tasks isn’t possible until completion of a preceding task. The critical path is important because any delay on the critical path will delay the project correspondingly. The figure below is an example of a series of tasks which must be completed in a project with the critical path highlighted in grey. Traditional project management determines the critical path by looking at the task dependencies within the project. Task A2 can only be initiated after A1 is completed. Task B3 can only be performed after completion of B2 and C2 only after C1. Task D1 can only be performed after completion of A2, B3 and C2. Using CPM the critical path would have been identified as C1-C2-D1 and the project completion estimate would have been 29 days (i.e. 8d+12d+9d).

In addition to task dependencies there are also resource dependencies that CPM fails to recognize. What if, in our example, tasks A2 and B3 are performed by the same resource? Is the critical path different? In the figure below we see the new critical path that includes a provision for resource dependencies and as you can see the new critical path is 5d+10d+10d+9d or 34 days. So the minimum time to complete this project is now 34 days. In our opinion, the failure to consider resource dependencies is one of the key reasons why project completion rates are so terrible. The simple implication of incorrectly identifying the critical path, which we will now refer to as critical chain, is the project team will never be able to complete their project on time without heroic efforts, adding additional resources, overtime or a combination of all three. The practical implication of incorrectly identifying the real critical chain is that the focus will be on the wrong tasks. Is this any different than focusing on non-constraints in our earlier discussion on TOC?

We said earlier that safety is imbedded within each task as a way to guard against the uncertainties of Murphy. Critical Chain takes a completely different approach by assuming that Murphy’s uncertainty will happen in every project. Unlike CPM, CCPM removes these safety buffers within each task and pools them at the end of the project plan to protect the only date that really matters, the project completion date. There are many references that explain the details of how CCPM does this, but here’s a simple example to explain it. Basically we have removed all of the protection from individual task estimates which we estimate to be 50 % of the original estimate. The figure below demonstrates the removal of this safety. So now, the length of the critical chain is no longer 34 days, but rather 17 days. But instead of just eliminating the safety buffer, we want to place it where it will do the most good…..at the end of the project to protect the due date. This isn’t exactly how this works, but for presentation purposes to demonstrate the theory behind CCPM it will suffice.

The figure below is this same process, but this time the safeties that we removed are added to the end of the project to act as a cushion to Murphy’s inevitable attach. So the question now becomes, how do we utilize this buffer and how does it improve the on-time completion of the project?

Suppose task A2 takes 7 days instead of the 5 days that are in the plan? In a traditional project management environment, this would be cause for panic. In a CCPM environment we simply consume two days from the project buffer and we’re still on schedule. Suppose now, for task B3, we only take 3 days instead of the planned 5 days. We simply add the gain of 2 days back into the project buffer. In traditional CPM, delays accumulate while any gains are lost. This is a significant difference! The project buffer protects us from delays. For non-critical chain tasks, or subordinate chains such as C1-C2 from our example, we also can add feeding buffers to assure that they are completed prior to negatively impacting/delaying the critical chain.

One of the key differences between CPM and CCPM is what happens at the task level. In traditional project management each task has a scheduled start and completion date. CCPM eliminates the times and dates from the schedule and instead focuses on passing on tasks as soon as they are completed, much like a runner in a relay race passing the baton. This function serves to eliminate the negative effects of both the Student Syndrome and Parkinson’s Law from the equation and permits on-time and early finishes for projects. In order for this to work effectively, there must be a way to alert the next resource to get ready in time.

In my next blog posting, we’ll discuss how Goldratt’s 5 Focusing Steps apply to project management and how we track progress on both CPM and CCPM to demonstrate why CCPM offers a much more reasonable way to do so.