1. Critical Chain Project Management
BCS Nottingham & Derby
Winter School 2006

2. Steven Wray, BA, MBA, MBCS, C Eng
Phone: web:

3. What makes a Project ? One end-point
At least two tasks, linked by dependency
Significant inherent unpredictability in how long the tasks will take.

4. What do we want from Project Management ?

5. What do we want from Project Management ?
Reliable on time in full to budget delivery performance
More revenue, more Profit, happy customers
A stable plan
More Productive use of resources
Simple, objective measures of Project progress
Shorter meetings, better informed stakeholders - less waste, more productivity
Simple, objective measures of Project health status Shorter meetings, better informed stakeholders - less waste, more productivity
Clear signals for when corrective action is - and is not - necessary
Better directed recovery efforts - less waste, more productivity
Direction for ongoing improvement efforts
The future brings more revenue, more profit, happier customers than the present

6. What is our normal experience from today's way of Project Management ?

7. What is our normal experience from today's way of Project Management ?
Reliable on time in full to budget delivery performance ?
Or A continuous struggle with time, cost and scope ?
A stable plan
Or Repeated rescheduling ?
Simple, objective measures of Project progress ?
Or Clarity at the start and end, thick fog in between ?
Simple, objective measures of Project health status ? Or Subjective assessments compounded by human factors ?
Clear signals for when corrective action is - and is not - necessary ?
Or Intervening too much too early, and too little too late ?
Direction for ongoing improvement efforts ?
Or "We'll improve our methods when things get better"

8. 'Normal' Practice in the planning phase
We identify the tasks in the Project and specify the resources needed for each one
We allocate to each task sufficient time that we are confident will allow it to be completed with those resources. That is, the time the task should take on average, plus some contingency to give us the confidence we seek
We apply task dependencies, and work out the longest path of tasks in the Project
The time along this path is the time-line of the Project

9. Normal practice in the execution phase
As long as every task completes on time (within its contingency), its successors will be started on time
As soon as any task finishes late (outside its contingency), its successors will start late, and this normally means they will finish late
In order to rescue a Project which shows any lateness, we have to squeeze the remaining tasks in the Project
Typically we have to compromise on time, cost or scope and reschedule

10. The Estimating Dilemma
If I allow more time for every task in the plan, each task is less likely to be late, but the Project end date will be later...
If I allow less time, the end date will be earlier, but the Project is more likely to overrun
BUT I have to deliver the Project on time

11. How long should we allow in the plan for a task ?
Some staff work more quickly than others
Sometimes staff are distracted or interrupted
Sometimes necessary resources are delayed
Some staff are risk-averse in their commitments
Some organisations reinforce risk-aversion

12. How long do we allow in the plan for a task ?
The average time the task ought to take an average performer who focuses on it
PLUS The time we expect to be spent on distractions
PLUS A contingency time to take account of:
The spread between average and low performers
Our uncertainty in the average time
Our uncertainty in the time for distractions
How risk-averse we are or have to be

13. Some simple maths
If we set our estimates so that we are 90% sure that any one task will be completed on time
If we have 20 tasks in our Project
The Probability that all the tasks
will be on time is: = 12%
For 50 tasks, the Probability of all on time is: = 1%

14. Emphasising
Doing things by the text-book, with 20 tasks, each of which we are 90% sure will complete on time, we have an 88% probability of being late for the Project
With 50 tasks, its a lot worse: its a 99% probability of being late for the Project

15. What if we change our estimating to a 95% confidence level ?
NB This will inflate the time for every task maybe by % because we will need more contingency
For 20 tasks the probability of being late is now 64% (was 88%)
For 50 tasks we are late now 92% (was 99%)
We have very much extended our Project time-line, and increased our chances of success from 12% to 36% for the small Project, and from 1% to 8% for the large Project

16. Surely, there's a better way...
Plan A - invest our energy in reducing the extent of the variability:
Allowing longer in Project planning stage for preparing estimates
Training staff in estimating
Use of formal estimating methods
Measuring progress (CSC tools) and feeding results back into estimating practice
More detailed specifications
Less flexibility over changes to specifications
Training the staff better in their job content
Using individual performance measures to identify poor performers
Keeping projects short (c 6 months), breaking larger undertakings into several short Projects
Doing this can help, but doesn't solve the problem

17. Plan B - Coping behaviours
Project Managers fight to be assigned the most viable Projects
Project Managers fight for the best staff
Project Managers fight to keep the Project scope down
Project Managers exploit changes in scope to unduly extend timelines and budgets
Project Managers sandbag Project plans to create headroom
Project Managers quit long Projects well before the delivery date
Project Managers disregard targets they know to be impossible
Staff work double shifts in the final weeks / months
Dumping the blame elsewhere
Doing these may help the individual, but not the organisation

18. Plan C: Approach the problem in a different way
We can reduce variability, but we cannot eliminate it, because it is inherent to the nature of a Project
We must manage the variability that remains

19. How we handle variability in Critical Chain
We do not build in any contingency at the Task level
We move all the contingency to the Project level - we call this the Completion Buffer
Individual Tasks can now be late without affecting the completion date of the Project
The Project due date is protected as long as the accumulated lateness along any one chain is less than the completion buffer

20. What difference does this make to our probability of being late ?
Under 'normal' practice, if any task is later than its contingency allows, we have a problem
Under Critical Chain, we only have a problem if the total lateness exceeds the total contingency
This second condition is much less likely than the first [ Law of averages / Central limit theorem] and increasingly so as the number of tasks increases

21. The Completion Buffer
A Buffer is a block of time which protects a deliverable from being affected by delays upstream. The Completion Buffer protects the Project completion date
Over the course of the Project we expect our buffers to be used up, in proportion to progress made

22. Scarcity of Resources
In putting together the plan, we must take into account scarcity of resources
In particular, if two tasks want exclusive use of the same resource, at the same time, they have to be staggered
This affects the plan in a similar way to the task dependencies

23. Scarcity of Resources Task C depends on both A and B
Each task uses a different resource
Task A – 10 d
Task C – 10 d
Task B – 10 d
Project Time required - 20 d

24. Scarcity of Resources Task C depends on both A and B,
Both A and B need exclusive use of the same resource
Task A – 10 d
Resource conflict
Task C – 10 d
Task B – 10 d
Project Time required - 30 d

25. The Critical Chain
We identify the longest chain of dependent tasks by resource through the Project - this is the Critical Chain, at the end we place the Completion Buffer
The time taken to complete the Project is the time taken to complete the Critical Chain
Any delay in the Critical Chain delays the Project completion

26. Completion Buffer Task A Completion Buffer Task C Task B
Committed end date

27. In Practice Project duration held constant The buffer is 25-33% of
Task A
Task C
Task B
Project duration held constant
Task A
Completion Buffer
Task C
Task B
The buffer is 25-33% of
chain length

28. Feeding Chains
All the other chains of tasks we call Feeding Chains , because each one at some point feeds into the Critical Chain
Every task in the Project is part of either the Critical Chain or a Feeding Chain

29. Feeding Buffers We must not allow anything to delay the Critical Chain
We must protect the critical chain from being delayed by lateness in the Feeding Chains
We start the feeding chains a little early, and insert a block of time to decouple the Critical Chain from each Feeding Chain
We call these blocks of time Feeding Buffers

30. Feeding Buffers
Task A
Completion Buffer
Task C
Task B FB
Task D

31. Planning Phase Summary
There is no contingency at task level
The Project due date is protected by the a block of time called the Completion Buffer
The Critical Chain is the longest chain of tasks through the Project
All other chains of tasks are Feeding Chains
We place Feeding Buffers to decouple the Critical Chain from the feeding chains

33. Execution phase....
We have a great plan - what can happen in execution ?

34. Critical Chain in the Execution phase....
No multi-tasking - when someone starts a task they stick to it until it's completed

35. Bad Multi-tasking
Whenever I put down one task and pick up another, I lose productive time
How much time is lost switching depends on how deep or shallow the task in hand is
Putting a stop to multi-tasking in effect creates extra capacity

36. More Bad Multi-tasking
If we have two people, each available 50% to our Project, and they have to work together, they are effectively 25% available
If we have four such people, it's effectively 6%, so we'll wait on average 8 working days to get them together for half a day
Real-life case: Ten team leaders, each on 50% availability: Out of two Project meetings held, 3 came to both, 5 to one or the other, 2 to neither

37. Very Bad Multi-tasking
When someone stops doing a task on the Critical Chain, and starts doing something else, they are delaying the entire Project

38. Critical Chain in the Execution phase....
No multi-tasking - when someone starts a task they stick to it until it's completed
We begin each task as soon as resource is available and prerequisite tasks are complete
The timings in the plan are for planning, not a commitment on execution

39. Critical Chain in the Execution phase....
No multi-tasking - when someone starts a task they stick to it until it's completed
We begin each task as soon as resource is available and prerequisite tasks are complete
We finish each task as soon as we can
Early finishes on Critical Chain tasks bring forward the whole Project
Early finishes on Feeding Chains increase the protection of the Critical Chain
Sometimes we call these three together 'Roadrunner' style

40. Summarising Practical differences...
Planning phase:
The Project is analysed into the Critical Chain and Feeding Chains
Contingency is aggregated into a Completion Buffer protecting the Project end-date, and Feeding Buffers protecting the Critical Chain
Execution Phase
No Multi-tasking
Early finish / allowing early start of following tasks
Subordination to the Critical Chain

41. Measures and Management
How do we know how the Project is doing ?

42. Measures and Management
Making less progress than planned will eat into the Completion buffer
Making more progress than planned will add to the Completion buffer A C B
At day 5, task A has 8 days remaining (of 10) - Completion Buffer is eroded by 3 days
Task D is completed - no effect on Completion Buffer D

43. Measures and Management
Question 1: How many days work until the Project is completed ?
Answer = the number of days left on the Critical Chain
It is the time on the Critical Chain that determines the time required to complete the Project

44. Measures and Management
Question 2: How certain are we about the answer to Question 1 ?
Answer = the proportion of the Completion Buffer that we have left, compared to the proportion of the Critical Chain still to do
The Completion Buffer protects the end date. The less (more) it is eroded, the less (more) the end date is at risk

45. Corrective Action
We compare the percentage of the Completion Buffer Remaining (%CBR) with the percentage of the Critical Chain Remaining (%CCR)
We set trigger points for corrective action, for example:
When the ratio %CBR / %CCR is 1or more, Project status is GREEN - Watch
When %CBR / %CCR is between 1 and 2/3, Project status is AMBER - Prepare a recovery plan
When %CBR / %CCR is less than 2/3, Project status is RED - Implement recovery plan

46. Measures in 2-D 0 % Completion Buffer Remaining 100 % 100 %
Critical Chain Remaining
0 %

47. Don't overreact to buffer erosion
We expect our buffer to be used up over the course of the Project
Our date is not threatened if the buffer is used up in proportion to progress
If we have 2/3 of the completion buffer left and only 1/3 of the Project to do we are doing fine
Our date is threatened if the buffer is used up disproportionately
If we have 2/3 of the Project still to do but have only 1/3 of the completion buffer left we have a problem

48. Measures Summary We have simple, objective measure of Project progress
We have a simple, objective measure of Project health status
We have a simple rule for triggering - and not triggering - corrective action
We can redefine the Project progress meeting as the Buffer Management Meeting

49. Buffer Management Meeting
Attendees: Project Manager, Project Sponsor / Owner, Task Managers, Resource Managers
Agenda:
Reminder of what tasks are on the Critical Chain.
Review Project status ( % Critical Chain outstanding).
Review Completion buffer status (Red, Amber, Green).
If necessary, initiate corrective actions.
Review Feeding buffers status (Red, Amber, Green). If necessary, initiate corrective actions.
Review tasks in progress to ensure earliest completion in full.
Review tasks not started to ensure earliest start where appropriate.

50. Using Buffer Management to drive ongoing improvement
Buffer Management measures are fact-based and objective
Buffer Management meetings highlight buffer erosion / Project delays
Preventing the causes of delay will speed up your Projects
Your process of ongoing improvement is simply to eliminate the causes of delay by following up on the issues highlighted in Buffer Management meetings
As your Projects run faster and more reliably, continue to eliminate more and more causes of delay

51. How Does Critical Chain help our Project Management ?
Aggregated contingency and 'Roadrunner' style
 Effective due-date protection and extra effective capacity
 More reliable on time in full to budget delivery performance
Identification of Critical Chain and Feeding Chains  Focus
Buffers  Flexibility  A stable plan
Buffer measures
 Objectivity and clarity
 Better focused meetings, better directed recovery efforts, better informed stakeholders, less waste and more productivity
 Less encouragement of 'coping behaviours‘
Buffer Management
 Focus for ongoing improvement efforts

52. Without CCPM
If the plan is not based on the Critical Chain, it may be infeasible
If the Critical Chain is not known, the Project Manager cannot focus on it
Without contingency the plan is not robust
If contingency is all in the task estimates, it's still not robust it’s just longer, and there is no sense of urgency
Without feeding buffers, an early completion will not help the end date, because the next task has to wait for its other prerequisites
With multi-tasking and interruptions > 25% capacity is wasted
Interruptions on Critical or Feeding Chains delay Project Completion
Measures are backward-looking or misdirect attention
Improvement processes lack focus

53. Multi-Project Pipelines
The Goal is to maximise Project throughput over some timeframe
The constraint is one of the resources available
The pipeline can be overcommitted
Resources can be used on the wrong Project
Projects can delay one another

54. Multi-Project Pipelines
Starting point is that each Project has a fully defined CCPM plan, and
We have a defined set of global resources
Assumption that one of the resource constraints dominates the others over the timeframe (Pacing Resource)
Execute a single pipeline plan which is feasible and robust

55. Example Which is the Pacing Resource ?
We run the engineering department of a manufacturing company making custom products
Each product ordered is a new variation on a few standard designs
Typically, for each product ordered, we spend 5 days on the specification, 10 days on the design, 2 days on the test plan, and 3 days on the manual
We have 2 people who do specifications, 3 who do designs, one test planner and one manual-writer
Which is the Pacing Resource ?
How many Products can we deal with in a 50 day quarter ?

56. Example Specification: 2 x 50 = 100/5 gives 20 products
We run the engineering department of a manufacturing company making custom products
Each product ordered is a new variation on a few standard designs
Typically, for each product ordered, we spend 5 days on the specification, 10 days on the design, 2 days on the test plan, and 3 days on the manual
We have 2 people who do specifications, 3 who do designs, one test planner and one manual-writer
Specification: 2 x 50 = 100/5 gives 20 products
Design: 3 x 50 = 150, 150/10 gives 15 products
Test Plans: 1 x 50 / 2 = 25 products
Manuals: 1 x 50 /3 = 17 products
Design = Pacing Resource

57. Example What is the consequence if:
We run the engineering department of a manufacturing company making custom products
Each product ordered is a new variation on a few standard designs
Typically, for each product ordered, we spend 5 days on the specification, 10 days on the design, 2 days on the test plan, and 3 days on the manual
We have 2 people who do specifications, 3 who do designs, one test planner and one manual-writer
What is the consequence if:
The test planner is off for two weeks ?
One of the designers is off for two weeks ?
The documentation task for a product overruns by 50% ?
The design task for a product overruns by 50% ?
The specification task for a product overruns by 50% ?

58. Answers
Loss of output on the pacing resource has a permanent, pervasive effect
Loss of output on the other resources has a temporary, local effect
We need to protect the Pacing Resource

60. Planning the Pipeline Stagger Projects on the Pacing Resource
Buffer the Pacing Resource
A feasible and robust due-date for each Project

61. Priorities in the pipeline
In order of net profit per hour of time on Pacing Resource
In sequence of strategic priority
Committed Projects first, then new Projects
Look at the effects of different sequences

62. Product 793
Schedule
Spec
Design
Test plan /
Manual
Pacing Resource
Schedule RB RB RB
Design
792
Design
793
Design
794 RB
Product 794
Schedule
Test plan /
Manual
Spec
Design

63. Execution Phase Hierarchy of subordination:
Never interrupt the Pacing Resource
Only interrupt a Critical Chain task to start the Pacing Resource
Only interrupt a Feeding Chain task for a Critical Chain task

64. Measures in 2-D 0 % 3 5 Completion Buffer Remaining 2 4 1 100 % 100 %
Critical Chain Remaining
0 %

65. Buffer Management
Management team (Project Managers, Resource Managers) looks at:
Pacing Resource schedule
Resource Buffer status
Critical Chains vs Completion Buffers picture
Resources: best resources allocated to most important Projects ?
Pacing Resource tasks in Progress - early completions ?
Pacing Resource tasks due to start - early starts ?
Record buffer erosion to focus improvement effort

66. Summary - Multi- Project
Start with all Projects fully-defined in CCPM
Identify Pacing Resource
Load the pipeline by staggering Projects on the Pacing resource
Buffer the Pacing Resource
Apply hierarchy of subordination
Manage by Buffer Management
Use Buffer Management to drive improvement

67. Without CCPM If we haven't identified the Pacing Resource:
our pipeline may be infeasible
we will waste capacity
Without a resource buffer, the pipeline won't be robust
Without good measures, management is unfocused or wrongly focused
Without Buffer Management, improvement is unfocused

68. In Practice The logic of CCPM works
Many success stories: A50, Lucent, Phillips, US Navy
Implementation is not a trivial undertaking
As CCPM brings Projects under control, the constraint moves to management
Aggressive reductions in cycle time are both possible and necessary

69. Books "Critical Chain" by Eli Goldratt 0-88427-153-6
"Critical Chain Project Management" by Lawrence P Leach ISBN
"Enterprise-Focused Management" by Ted Hutchin ISBN

70. Questions ?