Point of view: Critical Chain

Our point of view about Critical Chain Project Management

The performance of many companies is conditioned by the success of their projects, whatever their nature: merger / acquisition, new product development, operational performance, implementation of information systems, etc.

For some companies, projects even constitute their core business: aeronautical construction, railway maintenance, etc.

However, it is clear that 3 times out of 4, projects experience cost overruns and/or delays, or even abandonments or complete failures. 

Based on this reality and the simple but unfortunately frequent observation that traditional project management methods cannot prevent these performance deviations, or worse lead to them, Eli Goldratt sought to design, more than 20 years ago, a new method which consists in planning projects and executing them differently, to reduce their durations and generate new competitive advantages.

Critical Chain Project Management brings substansive results

 

Critical Chain Project Management (CCPM) has evolved over the last decades, since 1997 when Eli Goldratt first wrote his book. Thousands of companies now use it and draw tremendous benefits from it.

 

There is an increasing number of companies reaching this kind of results. Thanks to the Theory of Constraints and Critical Chain principles, we will see that they all focus on solving problems and issues that are in fact very common to many industries and environments. 

 

 “Advanced Multi-Project Management” - 2013 - Gerald I. Kendall & Kathleen M. Austin, p. 95

 

Average Results 

Project durations 

-39 %

Number of finished projects

+70 % 

E. Goldratt delivers a set of solutions that provide program managers with more complete and responsive means to plan and then manage projects as well as possible, and increase their chances of success

A useful approach : project dilemmas

 

Do you know the rule of π (pi)? This is a funny rule often referred to when talking about budget estimates, duration estimates or resource needs. According to this rule any of these estimates should be multiplied by pi (~3,14) to guess what the real number will be.

 

It is not just a joke since almost half of projects finish late, and are overwhelmed by budget and resource overruns, without satisfying the initial scope and all the features they commited to and were supposed to deliver.

 

 

Original Study

%Projects 

on-time

%Projects 

on-scope

%Projects on-budget

Wellington Study

The state of project management survey 2016

68 %  69 %  69 % 

PMI

Pulse of the Professions 2016 

49 % 52 %  53 %

The great project management survey 2015

61 % 56 % 64 %
Average 59 % 62 % 62 %
Critical Chain presents itself as a method constructed from a set of elements well known to many theorists, having been the subject of numerous writings and debates for more than 30 years, but they lacked the consistency brought by the Theory of Constraints.

An approach to solve fundamental problems

 

Why do projects take so long? Is it possible to put a name on underlying causes, common to many environments?

 

The Critical Chain approach, derived from Goldratt's Theory of Constraints, puts forward several causes to projects' delays and bring relevent solutions to these problems.These causes are common to many industries, so the approach remains relevent in many companies. 

 

Of course, there is no magic and the solution does not solve all your problems, but it can be used as an opportunity to deal with other very specific problems, inherent to one's company. The method offers a powerful lever to change.

 

 

Companies often have to cope with the same issues:

  • Too much work-in-process, some resources are overloaded, inducing lots of waiting times and multitasking.
  • Multitasking, an abyss for productivity often decreasing it by more than 30%.
  • Estimates and milestones considered as commitments though uncertainty is high, encouraging people to negociate additional time for their tasks.
  • Margins added to face contingency problems, but invisible and taboo, so monitoring is hard, priorities are wandering and the Student syndrome and the Parkinson's law happen.
  • Hard times to synchronize the efforts of various resources. Priorities are different and everybody waits.
  • Tasks are forgotten, inputs are missing, anticipation is low.
Anyone who is working on projects and is concerned about on-time delivery should care about CCPM.*

 

 

 

Take time to go faster with CCPM

 

 

The problems mentionned before are related to a lack of time to focus. People should not be blamed for this lack of focus, but the work organization should be addressed.

 

In particular, resources are often spread thin to deal with all the work-in-process. Either because there are too many projects at the same time, or because the work is not scheduled and not made visible. 

 

Giving the time they need to individuals in order to make the teams faster is what the Critical Chain method is helping to do. 

 

 

Freeze, staggering and levelling are the various techniques the Critical Chain uses to artificially reduce the work-in-process. It helps the managers and the teams to focus on less subjects, reducing waiting queues to go faster. The method shows that local efficiency and keeping people busy all day long is not the goal, it kills synchronization and generates too much waiting times.

 

Accelerating projects means reducing their critical chain duration. So the method shows how to plan a project, optimizing the schedule and the resource needs. Then projects can be executed and monitored, using batons or "mascots" to foster a relay race on the critical chain tasks. 

 

The method takes into account uncertainty through buffer management. The drifts are under control and the visibility is excellent, thanks to the fever chart. 

 

Last but not least, Full kitting avoids wasting the teams' time: checking that all the inputs are available and ready before starting a task/a phase/a project is of great use.

 

Depending on the needs, some aspects will be preferred to others, but what is important is to endeavour to reduce lead times, lowering, scheduling and monitoring the work-in-process.

 

Everybody gets a benefit from CCPM: new business opportunities, better control for managers, less stress and pressure for project resources and better quality and safety.

 

 

 

The Critical Chain method benefits from various new developments

 

The method, as introduced by Goldratt in his book Critical Chain, shows how to shrink one project's duration, but provided only a short insight on how to manage a portfolio of projects.

 

Since Critical Chain, in 1997, many answers and solutions have been developped. The Fever Chart is a good example of the tools that appeared after the book. Many software are available today to schedule and monitor projects according to the method principles, and new ideas keep emerging.

 

Let's mention hybrid solutions, mixing Critical Chain and Agile techniques. For example some software allow to create 2-tier plans, one macro plan to identify the Critical Chain and focus the efforts, and a second tier for subtasks lists, used to organize the queues, make work visible and delegate day-to-day task management, while ensuring synchronization.

 

The Critical Chain is a better way to plan and execute projects, but it does not say anything about how to choose and improve the quality of projects. It should be combined with other approaches like Agile for software development, Lean Engineering and Design For Six Sigma to design new products. Don't forget project management basics from the PMI, like risk management, which are made easier to use once the project environment has been cleared. The fires are extinguished, the firefighters can become builders again.

 

It would be dangerous to think that mastering this method is equivalent to having all the means to control and succeed in a project, but it really helps dealing with other key success factors:

 

  • involvement and mobilization of employees,

  • management's support,

  • role definition, responsibilities and working with different actors,

  • communication,

  • anticipation and risk management,

  • management of interfaces,

  • ...

However, we are convinced that the Critical Chain approach
currently remains the only option to be able to finish projects on time.

 

Any change, in particular those brought by the Critical Chain, implies questionning.

Thus, and as with any new method or innovation, experience shows that the success of the implementation of this approach lies as much in the application of its principles and concepts, as in the support of employees, which cannot only be a simple training on the method.

  * Source: April 2016 http://www.gartner.com/document/3281117