Critical Chain and Advanced Agile

2015-01-06 The complete Overview

Critical Chain

results Reliability Throughput

100%

100% 50%

250%

170% 75%

Kingmedia Webdesign

P&G Pharma

HP digital cameras

Boeing Aerospace

von Ardenne plant engin.

Celesa Group (IT/SAP)

1&1 Internet AG

HP digital cameras

Kingmedia Webdesign

Von Ardenne plant engin.

P&G pharma

1&1 Internet AG

testimonials:

vistem.eu / realization.com

Do these symptoms exist in your organization?

• Deadlines are missed - or additional work becomes necessary

• Your project lead times are too long - or at least longer than

those of your competitors

• Project managers start projects ASAP in order to secure the

resources they need

• Bad multi-tasking (tasks being interrupted) is common practice

• The best strategy for team leaders is to spread resources as

evenly as possible across projects - or accept any priorities

change that it doesn't matter?

You'll find around 350 such symptoms … … but only two causes!

• too much work in

progress (WIP)

• local optimization – buffer in each work packages

– desynchronization due to lack

of operational priorities

cause and effect graph of problems in project management

of a global internet service provider

Intervention #1

L:C100 load to capacity = 100% in the constraint team

The workload at the constraint

can never exceed the actual

capacity - Little's Law.

Other teams will have some

"protective capacity".

How many constraints

do you have?

Sorry – there is only ever one constraint

no constraint = complex and chaotic

one constraint = simple and robust

10

Team A

Team D

Team F

Team G

100% Auslastung

10

Team A

Team D

Team F

Team G

100% Auslastung

10

Team A

Team D

Team F

Team G

100% Load to capacity

… overload – too much WIP!

100%

load per team

team

s

Situation:

• too much WIP

overload projects

Resource Conflicts …

100%

load per team

team

s

Situation:

• too much WIP

• many resource conflicts

* real (typical) distribution of an IT Company

… “perfect” load!

100%

load per team

team

s

Situation:

• too much WIP

• many resource conflicts

Situation:

• perfect WIP

• all the other teams have

protective capacity

Situation:

• perfect WIP

• protective capacity

• over capacity gets

visible

… visible hidden capacities!

100%

load per team

team

s

* there are different ideas how to achieve that

** compared to the physical real due date

A

… Focus on the Constraint > Flow!

100%

load per team

team

s

B

A

find the constraint „B“

CFDs are a good indicator …

remove any waste from the

constraint

no administration, full kit

subordinate to the constraint

WIP control, staggering

add capacity

move capacity from A to B

search for next constraint

the 5-focus-steps of flow-based

steering*:

* Theory of Constraints – E. Goldratt

staggering = strategic priority

if the constraint is not overloaded,

all the other teams cannot be

overloaded

from the perspective of the

stakeholder it looks like each

project has top priority

Intervention #2

50%/50% Buffer ½ - cut buffer in half

Move buffer from individual

tasks to the end (50%)

and cut buffer in half (50%)

Is there a single word

for “finishing early”?

The psychology of estimates

• typically 50% of

task duration is

buffer

• Early completions

are absorbed

• Delays are passed

on

relative

probability

opt. pes. 0%

max.

typ. estimate

Reasonable estimate

50%

real.

§1 Parkinson‘s Law

§2 Student Syndrome

§3 Murphy

Aggregation of risks – less buffer needed

possible

lead time

reduction

Critical Chain Project Plans

• Buffer to

project end

• Cut buffer

by half

buffer

50% buffer

Intervention #3

LCC:BC longest critical chain to buffer consumption

Project status is the ratio

between progress on the Critical

Chain and buffer consumption

Do you know the color

“watermelon green”?

Example of project status of a big project …

Status = Progress to buffer consumption

Due date secured against disruptions

works for all process models: „classic“/CCPM, SCRUM, Kanban, Drum-Buffer-Rope

Bu

ffe

r c

on

su

me

d

Progress on Critical Chain

0 –

10%

10 –

20%

20 –

30%

30 –

40%

40 –

50%

50 –

60%

60 –

70%

70 –

80%

80 –

90%

90 –

100%

0 – 10%

10 – 20%

20 – 30%

30 – 40%

40 – 50%

50 – 60%

60 – 70%

70 – 80%

80 – 90%

90 – 100%

01/06

17/06

27/08

22/10

Project launch 01 Jun

Project deadline 10 Nov

End of the Critical

Chain (Plan-0)

12 Oct

Buffer 29 days

Length Critical Chain 133 days

… more real life examples!

… become an expert in reading fever charts

Project status according to Critical Chain:

• See at a glance if the project is on target!

• If measures are effective, the curve keep in yellow!

• One look at the portfolio shows the projects truly in danger!

• Objective traffic light system!

• Full operational effect – the 'reddest' project gets resources

everyone checks for correct status

• See buffer consumer at a glance!

• No more To Do list follow ups!

• Status meetings are simple

and solution-oriented.

Side effects:

• People talk to each other

• Real project plans

• Risk protection in the portfolio

• Operational priorities – no plan,

no resources

• No more arguments

• Minimal time needed to manage

Project Portfolio

Portfolio Controlling

Synchronized cooperation of all teams on the most endangered project

Creativity in problem solving and focus on results

Complete the most important task as efficiently as possible

Target: all projects on time

Risks are balanced over the whole portfolio

Bu

ffe

r c

on

su

me

d

Progress on Critical Chain

0 –

10%

10 –

20%

20 –

30%

30 –

40%

40 –

50%

50 –

60%

60 –

70%

70 –

80%

80 –

90%

90 –

100%

0 – 10%

10 – 20%

20 – 30%

30 – 40%

40 – 50%

50 – 60%

60 – 70%

70 – 80%

80 – 90%

90 – 100%

Project A

Project B

Project C Project D

… more from day to day practice

Operational Prioritization

progress on Critical Chain against buffer consumption

the worst project gets to priority

Project B

Project A NOW

66% 75%

80% 25%

The task manager‘s view – truly simple

The task manager has all info necessary to do their job and decide in favor of the company

The Three Interventions

• 50%/50% Buffer cut durations and buffer cut in half

• LCC:BC longest critical chain to buffer consumption

• L:C100 load to capacity < 100% in constraint team

Take the existing multi-project management system

and add three "simple" interventions:

max.

load/capacity 1 2 3 4

1

2

4

3

Lead time Throughput

min.

Operation Diagram of a

Project Organization

Mazda CCPM Results • Between -32% and

-38% reduced effort

per project

• 50% development

duration

• Turnaround on

Mazda‘s bottom line

results achieved in

2013

max.

load/capacity 1 2 3 4

1

2

4

3

Lead time Throughput

min.

-50%

PLT

+45%

throughput ca.

-30-38%

effort

Mazda

25% initial speed up … less average effort per project

shorter lead times, higher throughput and reliable due dates

Sources of effort reduction:

• higher quality less reworking

• less bad Multi-tasking focused work, fewer set-up times

• focus on buffer over consumer measures to get flow to the right level continuous improvement

• better synchronization faster concepts and faster problem solving

• less reporting team lead, developer and project manager get capacity

• fewer escalations about operational priorities

• project manager can concentrate on clarifying project order, conceptual work

• obstacles get clear there is capacity to solve them focused kaizen

• easier and faster decisions less latency reduced effort to solve problems

• less communication needed more focused

• ….

Intervention multi-project management optimal flow by controlling work in

progress, staggering, fast strategic priority decisions and portfolio control highly reliable due dates

Situation:

• Bad multi-tasking

• Thin spread of resources

• Start ASAP

• Desynchronization

• Delays

Causes:

• Too much work in progress

• Ignoring Little‘s Law

Mechanism:

• Identify the constraint

• Stagger at the constraint

• Reduce WIP

• Reduce lead time

DBR management

Project #1

#2

Project #4

drum with capacity „3“

Project #3

#

5

Lead time Follow up

Bu

ffe

r c

on

su

me

d

Progress on Critical Chain

0 –

10

%

10 –

20%

20 –

30%

30 –

40%

40 –

50%

50 –

60%

60 –

70%

70 –

80%

80 –

90%

90

– 1

00

%

0 – 10%

10 – 20%

20 – 30%

30 – 40%

40 – 50%

50 – 60%

60 – 70%

70 – 80%

80 – 90%

90 – 100%

Project A

Project B

Project C Project D

Intervention single project management

highest reliability by buffering the critical project milestone, using progress against buffer consumption to operationally manage the resources comply with due dates Situation:

• Early completions are rare

• Delays are passed on

• Due dates slide/move

• Watermelon traffic lights

• Many traffic lights

• Job floor priorities unclear

Causes:

• Ignoring deviations in estimates

• Ineffective operational traffic light

Mechanism:

• Each estimate contains buffer.

Aggregate and reduce buffer

• Resources assigned based

on urgency

• Balanced portfolio

Critical Chain Management

Buffer

50% Buffer

Bu

ffe

r c

on

su

me

d

Progress on Critical Chain

0 –

10%

10 –

20%

20 –

30%

30 –

40%

40 –

50%

50 –

60%

60 –

70%

70 –

80%

80 –

90%

90 –

100%

0 – 10%

10 – 20%

20 – 30%

30 – 40%

40 – 50%

50 – 60%

60 – 70%

70 – 80%

80 – 90%

90 – 100%

01.06

17/06

27/08

22/10

Intervention Agile flexibility, innovation, product differentiation new future business

Situation:

• Waterfall development

• Long feedback cycles

• „Over-the-Wall“

• Very remote client

Causes:

• was efficient in fairly stable

environments

Mechanism:

• Include client in the team

• Feedback loops

• Break up into sub tasks

• Simplify management

• Combine with CCPM

Reliable/Ultimate Scrum

… we know how to

optimally combine

agile and classic!

Critical Chain and Agile Framework

Project #1

#2

Project #4

PIPELINE

Project #3

5 stakeholder

„priority board“

team

• fast feedback on situation

• in red zone – focus on buffer recovery

• Self-responsibility and management is empowered

• continuous improvement

new projects

today

56%

37%

Layer

1

Mu

lti p

roje

ct

Layer

2

Sin

gle

pro

ject

Layer

3

su

bta

sk

s

Buffer Consumption

per Team

focused Kaizen

KVP

• transparently informed • quick overview • operational real status • confidence in team is improved

Critical Chain and Agile Framework

Project #1

#2

Project #4

PIPELINE

Project #3

5 stakeholder

„priority board“

team

• fast feedback on situation

• in red zone – focus on buffer recovery

• Self-responsibility and management is empowered

• continuous improvement

new projects

today

56%

37%

Layer

1

Mu

lti p

roje

ct

Layer

2

Sin

gle

pro

ject

Layer

3

su

bta

sk

s

Buffer Consumption

per Team

focused Kaizen

KVP

• transparently informed • quick overview • operational real status • confidence in team is improved

team

• fast feedback on situation • in red zone – focus on buffer regain • Self-responsibility and management

is empowered

„Critical Chain on a Page“

(5) project view

stakeholders

• transparently informed • quick overview • operational real status • confidence in team is improved

progress

status “green” (4) faster progress

than buffer consumption

portfolio view (6)

progress & status reporting

status “red” slower progress

than buffer consumption

buff

er

consum

ptio

n

(2) aggregate buffer at the project end

probability of estimates

• every estimate

is wrong

• every estimate

has buffer in it duration

typical

estimate

reasonable estimate 50/50%

#1 longest chain of work packages

#2 with 50% buffer highlighted (green)

#3 with buffer aggregated at the end

#4 with 50% of buffer reduced

resulting buffer

~33% of the

duration

Critical Chain Project Plan (3)

33% dedicated

buffer before the

fixed due date

due date

today

56%

37%

progress buffer

consumption

(1) Work in Progress is under control

P3 P2

P1

P1

project

pipeline

P2

P3 Critical Chain …

… complements your existing project

management. It builds on the fact that there is always

a constraint and staggers projects (1) in order to determine realistic

due dates. Critical Chain aggregates the buffers from individual tasks

at project end and uses the "insurance effect" among others to

considerably reduce the buffer (2), leading to a tighter schedule with a

critical chain and a buffer (3). Progress and buffer consumption create

a true operational project traffic light (4). The chart progress (5) supports

effective project management. All charts together (6) enable decision

makers to manage the portfolio.

Critical Chain acts as a catalyst, allowing

all existing good ideas, work processes

and methods to take full effect.

target

<10%

red

The Change

• how to create fast and

reliable change?

The meta constraint …

… management attention

• if a project has the attention of

top management it works!

• if you make many changes at

once, the effects are slower!

• if you make many changes at

once, you won‘t know which

one worked!

• if you make many changes at

once, everybody has excuses!

Step-by-Step

• if management attention is the

constraint – step by step

change is the solution

• if you do a change step by step

you can fully focus on the

effects and use the Deming

cycle

… Initial success as the engine for change

• every change initially

takes effort

• the point is to quickly

achieve a result

freeze

• this initial result

creates momentum

to get over the

hump! Time

Performance

Baseline

Freeze!

four phases of a reliable change …

freeze - flow, capacity & trust

prepare control to keep the flow

activate flow control - stabilize

continuous improvement

Strategy & Tactics … step by step

Process of continuous improvement …

• Where are the

buffer over

spender?

• Where are the

weak points?

Our successes …

u.a.

… more testimonials

Lufthansa aircraft

maintenance

+45% throughput

lead times cut in half

B2B web software

Kingmedia

+60% throughput

Plant construction

Von Ardenne -

Lead times reduced

from 21 to 6 months

Japan – organizations using CCPM are favored for public

building projects. Over 80% use CCPM.

Motorway

construction -

40% reduced

lead times

and costs

… scientifically proven

And if you want to find out more,

You can send an e-mail to Wolfram.Mueller@vistem.eu

or call: +49 171 565 182

Additional Details to Advanced Agile …

• Reliable Scrum

• Ultimate Scrum

Learning Agile!

Scrum glossary

• Scrum (derived from rugby formation scrummage)

„Backlog“ „Sprints“ „Release“ • more or less specific list of

work packages (Stories)

• the size of a story is defined in

story points

• can increase or decrease in

the course of a release

• the Product Owner is

responsible for the Backlog

• iterations lasting between 2 and 3

weeks

• start of Sprint: the team selects as

many Stories from the Backlog as it

thinks it can handle

• end of Sprint: review of how many

Story Points were completed; this is

the Burn Down or Velocity

• the Team is responsible for its Velocity

• in Scrum Teams there is

a Release after each

Sprint

• In practice, several

Sprints can often be

combined in one

Release

Disadvantages of Scrum …

• Backlog open – can increase / decrease at any time

• Anything incomplete is included in the next Sprint

• No due date commitments – „it‘s done when it‘s done“

• Product Burndown Chart only knows deadline met / missed

• Circular developments

• …

Step 1 of 3: Reliable Scrum

• just short …

• … it‘s all about work in progress

The right questions – the right solutions

• How big is your backlog really?

• How high is your throughput / velocity?

• How high is your probability of success in

reality?

1. 6-10 Sprints = one release

2. Stories assign to the release

3. Add missing stories

4. Catch up missing estimates

5. Split up big Stories (>42)

6. Chase MoSCoW across the Jordan

7. 3 point estimate backlog

8. determine true average velocity

9. 3 point estimate velocity

probabilty of success

worst real best

#2 velocity

* convolution

operator

time

#3 probability over time absolute

80%

reasonable

due date

#1 amount of story points

in the backlog

best real worst

Probability of Success

Variables:

• Backlog

• Time

• Velocity

absolute probability of success

Likelihood of success

• Bring Stories in order according priority

• Keep cutting Backlog until 80% probability is achieved

• Bring stakeholders on board

• Negotiate deadline/resources/scope

until saleable product achieved

Team has sufficient

probability of success

Stakeholders know exactly

what they’re getting –

no ambiguity!

… Well? What‘s the status of your project?

• Watermelon green!

ooops – but there is a buffer!

with real probability of

success

a bit of buffer in the

backlog

a bit of buffer in the

velocity

a real project buffer =

Progress > buffer consumption > traffic light

Progress >

buffer consumption

= green

Progress <

buffer consumption

= red

Scrum with traffic light …

• Burn-Down-Chart

with buffer

• Traffic light status

via progress

against buffer

consumption

product burn down chart

56%

37%

estimated time

to completion

due date

progress to

da

y

buffer

consumption

30% 25

%

In process …

35%

85%

In process …..

56%

37%

In process …….

Buffer

consum

ed

Progress

59%

82%

In process ………

72%

78%

In process ………..

80%

92%

In process ………….

93%

85%

In process ……………

100%

91%

In process ……………..

End result …

• Backlog = project order clarified

• Stakeholders know what they’re getting

• Transparency about progress

• Product Owner able to manage

• Fear eliminated – high velocity

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 20% 40% 60% 80% 100%

Pu

ffe

rve

rbra

uch

Fortschritt

Fieberkurve das Fallbeispiels

Sprin

t #5

Sprin

t #8

example of a fever curve

• in Sprint #5 started with

reliable scrum

• in Sprint #8 buffer reduced

because of too much speed

bu

ffe

r co

nsu

mptio

n

progress (burn down)

one more fever chart … … compared with burn down chart

Which of the diagrams show the urgency better?

Step 2 of 3: Ultimate Scrum

• just short …

• … it‘s all about speed – the shortest possible lead time

Flow!?

Who knows Mr. Little?

• Little’s Law has no mercy

• Multi-tasking causes context switches, desynchronization etc.

• more WIP longer lead times …

Rules for increasing the pipeline?

Pipeline

Workload

100%

100% capacity

Additional switching effects

and missing aggregation

LIMIT the WORK IN PROGRESS!!!!!

Henry Ford (1913)

Taiichi Ohno (1953)

a „typical“ Task Board …

to prevent

him from

beeing

punished

a so

called

kanban

board

with a

lot of

WIP

• How can I get a group of boy scouts to walk to the finish line together as quickly as possible?

• Problem: they all walk at different speeds!

3. Generation - DBR - E. Goldratt (1984)

buffer

drum

rope

DBR in „production“ or „agile“

A

100 new

projects

C D

100 50

B

100 finished

projects

rope = signal

buffer

drum

Product

Backlog

[Stories]

finished

Tasks

Ultimate Scrum

Task

Buffer

[Tasks] developing review

breaking

stories up

into tasks

if number of tasks

below alarm threshold

select new story

alarm threshold just high

enough to get a new story

broken down into tasks

but no higher than half

the number of developers

if a developer is running

out of tasks a new one

can be drawn as an

exception – after

removing all impediments

if no starvation occurs,

the selection of new tasks

can be inhibited until

impediments arise

Drum-Buffer-Rope

(3rd generation agile)

if a task is finished

select new task

Drum

Rope

Buffer

Just-In-Time

cumul. in/out flow

Result …

• Minimal number of

open work

packages

• minimal lead time

• Problems are visible

immediately

• There is time to

solve problems

• Task lead time < 1

day

1

2

Daily stand up …

1 2

3

4

The goal is to have fewer open tasks

than developers! in this case there were 12 tasks open for 8 developer

Product

Backlog

[Stories]

finished

Tasks

Ultimate Scrum

Task

Buffer

[Tasks] developing review

breaking

stories up

into tasks

if number of tasks

below alarm threshold

select new story

alarm threshold just high

enough to get a new story

broken down into tasks

but no higher than half

the number of developers

if a developer is running

out of tasks a new one

can be drawn as an

exception – after

removing all impediments

if no starvation occurs,

the selection of new tasks

can be inhibited until

impediments arise

Drum-Buffer-Rope

(3rd generation agile)

if a task is finished

select new task

Drum

Rope

Buffer

Just-In-Time

cumul. in/out flow

Reliable Scrum

Two monitors – three indicators …

#1 stay in yellow-green! > www.Reliable-Scrum.info

#2 keep open tasks

to a minimum

#3 turn the curve up!

Our Sweet Spot …

SAFe

US

single

CCPM

multi

CCPM

3 Layer

PPF

1

>100

product development management

Partner

multi

CCPM

3 Layer

PPF

US

single

CCPM

class.

Agile

Scala

bili

ty

Team

s/I

nitia

tives

Production Project • Many small tasks

• Fairly similar

• Generally independent

• „continuous flow“

• Diverse tasks

• High scattering

• Hard interdependencies

• Deadline

• external partners

SAFe – Scalable Agile Framework,

UR – Ultimate Scrum, CCPM – Critical Chain

3 Layer PPF – fully integrated Product and Project Framework

And if you want to find out more,

You can send an email to Wolfram.Mueller@vistem.eu

or call: +49 171 565 182