1. ELC 347 project management
Day 21

2. Agenda Integrative Project Assignment 7 Posted
Part 4 corrected, feedback sent, both teams need revision and clarification
Part 5 Due Nov 24 (page 342)
Any of the first five sections can be resubmitted for rescoring prior to finals week. The recorded score will the average of the original score and the score on the resubmitted section.
Assignment 7 Posted
Due Nov. 24
Today will discuss Critical Chain Project Scheduling

3. Schedule for rest of semester
Nov 17
Chap 11
Nov 20
Group work
Nov 24
Quiz 3
Through Chap 11
IP part 5 Due
Assignment 7 due
Dec 1
Project ‘s 5 & 6
Dec 4
Group Work
Assignment 8 due
Dec 8
Chap 12
IP Part 6 due
Dec 11
Chap 13 & 14
Dec 10 AM
Quiz 4
Through chap 14
IP Project’s due
© 2007 Prentice-Hall, Inc

4. Critical Chain Project Scheduling
Chapter 11
© 2007 Pearson Education

6. BAE Systems

7. Theory of Constraints & Critical Chain Project Scheduling
A constraint limits system output.
The Goal – Goldratt
TOC Methodology
Identify the constraint
Exploit the constraint
Subordinate the system
Elevate the constraint
Repeat the process

8. Dropping a marble
Top left
Top right
Bottom left
Center

9. Dr J Edwards Deming

10. Variation Common Cause Inherent in the system Special Cause
Due to a special circumstance
Managers should
Understand the difference between the two
Not adjust the process if variation is common cause
Not include special cause variation in risk simulation
Not aggregate discrete project risks

12. CCPM and the Causes of Project Delay
How safety is added to project activities
Individual activities overestimated
Project manager safety margin
Anticipating expected cuts from management
time
25%
50%
80%
90%
Gaussian Distribution

13. Wasting Extra Safety Margin
The Student Syndrome
Immediate deadlines
Padded estimates
High demand
Failure to pass along positive variation
Other tasks
Overestimation penalty
Perfectionism
Multitasking
Path Merging

15. Critical Chain Solutions
Central Limit Theorem
V∑ = n * V , SD2 = V,
Standard deviation of the sum is less than the sum of the standard deviations!
Aggregating risk leads to reduced risk

16. Activity durations estimated at 50% level
Buffer reapplied at project level
Goldratt rule of thumb (50%)
Newbold formula (2σ)
Feeder buffers for non-critical paths

19. CCPM Original 50% Probability Activity Duration A 10 5 B 6 2 C 14 7 DE 8 3 F 12
Total 52 24
New estimate = 23 + (52-24)/2 = 37

20. CCPM Changes Due dates & milestones eliminated
Realistic estimates – 50% level not 90%
“No blame” culture
Subcontractor deliveries & work scheduled ES
Non critical activities scheduled LS
Factor the effects of resource contention
Critical chain usually not the critical path
Solve resource conflicts with minimal disruption

23. Critical Chain Solutions
Bob
Feeder Buffer
ProjectBuffer
Buffers protect constraints and prevent delays

25. Critical Chain Project Portfolios
Drum – system-wide constraint that sets the beat for the firm’s throughput
Drum – person, department, policy, resource
Capacity constraint buffer – safety margin between projects
Drum buffer – extra safety before the constraint

26. Applying CCPM to Project Portfolios
Identify the drum
Exploit the drum
Prepare a schedule for each project
Determine priority for the drum
Create the drum schedule
Subordinate the project schedules (next slide)
Elevate the capacity of the drum
Go back to step 2

27. Subordinating Project Schedules
Schedule projects based on drum
Designate critical chain
Insert capacity constraint buffers
Resolve any conflicts
Insert drum buffers so the constraint is not starved

29. CCPM Critiques No milestones used
Not significantly different from PERT
Unproven at the portfolio level
Anecdotal support only
Incomplete solution
Overestimation of activity duration padding
Cultural changes unattainable