saving time with ccpm -...

Saving time with CCPMCritical Chain Project Management

NIET ELK PROJECT LOOPT UIT !

Freek de Ruiter

Presentatie ikdoeprojecten community

10 mei 2011

© Logica Business Consulting 2011. All rights reserved No. 2

Why do we want to save time ?

Saving time with Critical Chain Project Management

© Logica Business Consulting 2011. All rights reserved

Product life cycles are getting shorter

Improving due date performance and reducing lead time enlargesfinancial benefits

Finishing a project ASAP means:

• Reduced Time to Market

• Cost reduction

CCPM promises:

• 80% due date performance in a portfolio

• 25% lead time reduction of a project


Why saving time with CCPM ?

No. 3


Freek de Ruiter is a member of the NL TOC Network and has becomean enthusiast expert on Critical Chain Project Management.

Being Principal Consultant Business & Project Management at Logica, he specializes on the domains planning, scheduling and tracking

No. 4Saving time with Critical Chain Project Management

Presented to you by Freek de Ruiter


• What is CCPM?

• Improving portfolio performance

• How does CCPM work?

• Plenty of time to save

• CCPM planning

• CCPM execution

• Multi-project CCPM

• Summary

• When or why will CCPM not work

• Results


Agenda


• An IT development method like Agile

• An improvement method like Lean and SixSigma

• A project management method like PRINCE 2

• A program management method like MSP

• Just a planning “trick”

• A way to solve all your problems (“Haarlemmer oil” / “Silver Bullit”)


What CCPM is not:

No. 6


The elaboration of the TOC body of thought on project management:

TOC = Theory of Constraints

Books by Eli Goldratt:

• The goal

• Critical Chain

• Inherent Simplicity The Choice


What is CCPM ?

No. 7

Isaac Newton: “Nature is exceedinglysimple and

harmoniouslywithin itself”


“Doing the right things right”

1) Select the right (order of) projects:

“Front end” PPM: portfolio alignment with company business objectives, is not covered in this presentation, but probably is the most import factor in improving portfolio performance

2) Execute the projects as efficiently as possible:

• By providing max. throughput of the system using “Multi-project” CCPM

• This flow is the one and only consideration!

• If you manage to keep projects on time and budget, you do not needto change or stop projects (based on predictions Earned ValueAnalysis can provide)


Improving portfolio performance


• Plan projects with buffers

• Reducing work in progress (WIP)

• Active execution of projects

• Monitoring the right points of attention

• Unambiguous priority system

“Plan tasks as late as possible to avoid unnessecary work in progress, but monitor the start of planned tasks and the finish of tasks in progress daily, by means of the buffer penetration mechanism.”


How does CCPM work ?

Plenty timeto save


• Safety too high

• Tasks start too late

• Tasks end too late

• Productivity loss of bad multi-tasking

• Waiting on decisions


Time to save


Project member estimates: minimum of 3 days work and tells his team lead: “ready in a week!”

Another project member estimates for a follow up action a week too

Team lead schedules the activities and tells his project manager thathe needs 12 days, to prevent that delay of the 1st activity causesdelay of the 2nd activity.

Project manager reports to the steering committy to count on 3 weeks for that cluster, because before the activities can start first anothercluster……


Safety to high


A deadline influences in a negative way

3 days work? 5 days available?

I can postpone working on this task, which I do not like to start, to the day after tomorrow!

On day 4 Murphy strikes: 2 days extra needed!

Possibly increasing the lead time of the project


Tasks start too late (student syndrome)


Time planned will always be filled with work

3 days work? 5 days available?

I immediately start working on this task that I like to work on

Ready after 3 days, no reward for being ready, adding all kinds of “nice to haves” for 2 days

Loss of productivity and possibly waisting an opportunity to reduce the lead time of the project


Tasks end too late (Parkinsons law No. 1)

© Logica Business Consulting 2011. All rights reserved No. 15Saving time with Critical Chain Project Management

Productivity loss of bad multi-tasking

Task A

Task B

Task C

Tasks assigned to

person

3 days

3 days

3 days

Ideally: Task A Task B Task C

3 days 3 days 3 days

OK? B BA AC C

6 days

6 days

6 days

In reality minimally

BBA AC C

7 days

7 days

7 days

Productivityloss

Shift of end date task A

Shift of end date task B


• Not much space in management agendas

• Disagreement on priorities

But on top of that:

• Managers miss information because the decision making process is notenough known to the non-decisionmakers

Consequences:

• More waiting on decisions

• More loss of productivity

• More increase of the project lead time

• More loss of motivation

Looking back in retrospective, any decision, always based on the knowledge at a certain time, could have been replaced by another, unfortunately neverenabling a 100% certain analysis of the consequences of that replacement


Waiting on decisions

CCPM planningSingle project

No. 18© Logica Business Consulting 2011. All rights reserved

Start with basic planning on skill level



Critical Path



Resource allocation of individuals



Overallocation!



Also overallocation in the skill based planning



Overallocation solved, but multitasking meansmore work!



Resource leveling can cause switching once



Multi-tasking eliminated, resource contentionremoved, ready to apply CCPM planning



Critical Chain is not Critical Path




• Reducing WIP






How does CCPM work ? (repeated)


• Where protection needed?

• How much?

• Only this way setbacks can be compensated by pleasant surprises


Plan projects with buffers

No. 28


Step 1:Remove 50% safety from the individual tasks



Step 2:Add buffers with 50% of the removed safety



Step 3: start non-critical tasks ALAP




• Reducing WIP








Result of the 3 CCPM planning steps



Cautious?Result of removing only 25% safety from tasks



Very cautious?Result of not removing any safety at all



50% - 50% - 50% approach is proven best CCPM practice in a multiproject arena!


CCPM executionSingle project



• Reducing WIP








• Resource allocation of individuals

• Buffer management

• The following scenario is an example of possible events

Execution



Start of project on 9/11/09



Monday 16/11: Analist 1 reports status finished with4 hours extra work done, Designer 1 reports 4 hoursextra work to do.


Progress in week 1


Analyst 2 and Designer 2 report work finish conform schedule, Developer reports having started 1 daylater because of sickness.


Progress in week 1


Feedbuffer consumption 50% with branche 80%complete, Projectbuffer consumption 13% withCritical Chain 30% complete.


Progress in week 1


Monday 23/11: Designer 1 reports work finished conform newschedule, Developer reports finished product 2 with 8 hoursextra work done and 16 extra hours to be done on product 1.


Progress in week 2


Feedbuffer consumption 50% with branch 100%complete, Projectbuffer consumption 50% withCritical Chain 50% complete


Progress in week 2



• Reducing WIP








Developer reports 1 day later “probably readymiddle next week”, which means projectbuffer consumption 75% with Critical Chain 50% complete.


Progress in week 2 + 1 day


Projectmanager helps Developer with problem and skipping superfluous work , project buffer consumption back on 50%


Progress in week 2 + 1 day


Monday 30/11: Developer reports progressaccording to new schedule, project buffer consumption 50% with Critical Chain 75% complete


Progress in week 3


Monday 7/12, integration test finished with 8 hoursextra work, acceptance test starting today.


Progress in week 4


Wednesday 9/12: Acceptance test finished after2 days, project buffer consumption of 66,67%


Progress in week 5


Project finished before deadline



Project finished in less hours than baselines



Project finished under budget


Multi-project CCPM


Staggering:

• Single CCPM planned projects

• Projects in order of finish date (priority)

• Indentify drum tasks/resources (= key resources)

• Remove resource contention of key resources on drum tasks

• Replan all tasks of all projects before and after tasks of keyresources

Multi project CCPM planning



Single CCPM planned projects



Identify drum tasks/resources



Remove resource contention of key resources on drum tasks



Replan all tasks of all projects before/aftertasks of key resources



• Project organization with competence pools:

• Taskmanagers are working for more than 1 project

• Resources are working for a taskmanager

• Unambigous priority rules

• Highest priority for task which causes highest penetration of the projectbuffer of the project with the highest priority

• Highest priority for project with highest penetration of its projectbuffer in relation to its completeness of the Critical Chain

• The project waiting with the highest priority in the pipeline is only to bestarted when one of the projects in execution is finished


Multi-project CCPM execution

No. 61



• Reducing WIP








Highest prority for which project ?


T1 T2 T3

PBProject W18: 60% penetration

Just 1 Task

PB Project W14: 90% penetration

Summary


• Plan projects with buffers (feed buffers and project buffers)

• Reducing WIP (starting tasks ALAP)


• Monitoring the right points of attention (with buffermanagement)



Every day:

How much time is needed to complete this task in progress?

No progress? Where is this task waiting on?


How does CCPM work ? (summary)


Buffermanagement is the key element


Okay Plan Act

0% 33% 66% 100%

Percentage Use of Buffer

Percentage (Non) Critical Chain to go

100% 67% 33% 0%

Traffic light status Buffers in combination with %-CC to go

x x

?


No wait time on the Critical Chain

Only safety where it is needed

Do not question the priority algorithm

Personal preferred implementation for single-project CCPM:

• Estimates and safety in consultation with team members (e.g. taskshave only 50% chance to finish on time)

• Reward the right performance (which is not always finishing yourtask on the time estimated on a 50% chance to do that!)

Personal preferred implementation for multi-project CCPM:

• Take 50% safety from tasks, put 50% of this safety in buffers

• Consider portfolio performance as achievement of all the resources


Focus on the project/portfolio, not on the tasks

WA ?


• If you keep believing “this is too good to be true”

• Because companies do not want/need to change

• With the attitude “not invented here”

• Because CCPM needs professional planning practises to start with

• No reliable enough estimates

• No committment from management


When or why does CCPM not work ?

No. 69


Saving time and money:

Projects theoretically always ready on due date or earlier

On-site observed average due date performance: 80%

Theoretical lead time reduction is 33%

On-site observed average lead time reduction: 25%


Results


Logica project “Inname en Mengerij Denkavit Frankrijk”, realisedmargin 41,2%, planned margin 15,6%, delivery 3 weeks earlier thanplanned

Implementations by partner Blue Jonah, most impressive (see figureslast slide): Nationale Nederlanden IT divison(http://www.bluejonah.com)

Implementations by software company Realization (Concerto tooling) (http://www.realization.com)

Numerous other implementations to be found on the internet


References

Logica Business Consulting is the consulting division of the Logica group, a leading IT and business services company, employing 40,000 people. It provides business consulting, system integration, and IT and business process outsourcing services.

Logica Business Consulting has a network of 3,500 consultants located throughout Europe. Our consultants help drive the success of clients’ transformation projects. They stand apart through their European culture, ability to work closely with clients, and unique blend of sector-based, functional and technological expertise. More information is available at www.logica.com/consulting

Thank you

Logica Business Consulting NL Prof. W.H. Keesomlaan 14 1183 DJ Amstelveen The Netherlands www.logica.com/consulting

Contact: Freek J. de Ruiter Principal Consultant Business & Project Management Support T: +31 (0) 20 503 3000 E: [email protected]

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