1 Critical Chain Project Management  A modern approach to dealing with uncertainty in project management (an alternative to PERT)  Developed by Goldratt (1997) to apply concepts from the “Theory of Constraints” to project management  The fundamental principle is to identify and protect the only thing that is critical – the overall project completion time Background

2 Critical Chain Project Management  When individual tasks have slack built into them to deal with uncertainty, this slack proliferates and Parkinson’s Law applies.  The proliferation of slack is due to: - poorly aligned incentives, sandbagging - need to allow for urgent external distractions - conservative use of statistics - assumption that all tasks may take longer than expected  As a result, projects routinely (a) take longer than necessary to complete and (b) fail to meet due dates. Critique of Traditional Project Management

3 Critical Chain Project Management 1. Build the project schedule without safety time, i.e. use 50th percentile estimates of task durations. 2. Drop the notion of due dates and accept the possibility of delays. 3. Identify and protect critical resources (and don’t worry so much about noncritical resources). 4. Aggregate all the required safety time in a project buffer at the end of the critical path. Eight Principles

4 Critical Chain Project Management 5. For the critical resources, identify their lead (i.e., startup) times. This information defines resource buffers. 6. Fast and slow completion of tasks will tend to cancel out, at least in part, enabling a reduction (possibly better than 50%) in the project buffer size. 7. For noncritical activities, the only priority occurs where they feed into the critical chain. Protect these points with feeding buffers. 8. The project is controlled by buffer management, instead of due dates. Monitor the amount of time remaining in buffers, and if necessary trigger contingency plans. See Patrick (1998). Eight Principles (cont.)

5 Critical Chain Buffers Project buffer End days1 day Task C2 5 days

6 Calculating Project Buffer Size For those “who want a scientific approach to sizing buffers....” For task k on the critical chain, we can calculate the required project buffer using the following formula, assuming that the project will be completed within worst-case duration estimates around 90% of the time, and is the most pessimistic estimate of task k’s duration: For example 1, the buffer is: Sqrt[( ) 2 +( ) 2 +(7-5.00) 2 +(7-4.33) 2 ]=9.51 Like PERT, uses only longest path

7 Critical Chain Project Management 1. Overestimation of task durations, and application of Parkinson’s Law, are not widespread problems. Some empirical studies support this view. 2. Shortening deadlines reduces task managers’ motivation. 3. There is no scientific basis for setting buffer sizes. 4. It is not clear how much of a feeding buffer to allocate to different successor tasks when there is more than one. Critique of CCPM

8 Critical Chain Project Management 5. Buffer calculations based on resource leveling output may be inaccurate, since this is a hard problem to solve. 6. What if the critical chain changes during the execution phase? 7. Buffers tend to clutter up Gantt charts and create confusion. 8. Resource buffer information obtained from outside contractors may not be reliable (especially if they are unusually busy). See Raz et al. (2003) Critique of CCPM (cont.)