1. Critical Chain IOM580 Hiroshi Ochiumi 1

2. High Probability of Budget Overruns Time Overruns Compromising the Content 2

3. Reason for Project Delays Official –Weather –Government –Vendors –..always someone else’s fault Unofficial –Unrealistic Schedule –Forced to choose cheap (and unreliable) vendor –Vendor progress report unreliable –Wasteful meeting –Too many emergencies 3

4. Reason for Project Delays Uncertainty 4

5. Three Project Scenarios 5

6. 6

7. Which is more significant? Budget Overrun Overdue P62: “They try to cut the budget by a few percent and cause the payback period to double.” 7

8. Cost World vs. Throughput World “The only way to achieve good cost performance is through good local performance everywhere.” “There is no way to achieve good throughput performance through good local performance everywhere.” 8

9. Tons/hour story The way you measure = The way you manage 9

10. Safety is Wasted. If a task is finished earlier, –They may not report. –Resource is not yet available for next job. A delay in one step is passed in full to the next step. An advance made in one step is usually wasted. The Student Syndrome 10

11. Multi Tasking 11

12. Multi Tasking 12

13. Option to Trade Lead Time with Money Impact of Delay Subcontractors make money on changes 3month delay can bankrupt real estate developer Capable subcontractor can include in the contract –guaranteed lead time –penalty 13

14. Critical Chain Dependencies between steps can be a result of a path or a result of a common resource. 14

15. How to Approach Don’t waste the time allotted for the CP. Project Buffer Feeding Buffer Progress is measured only on CP. Eliminate the Student Syndrome –Trim Safety –Now people are not sure if they can finish on time –It also eliminates multi tasking 15