week11 slides

Mgt 610 Strategic Perspectives on Project Management

(c) 2013, Thomas Lechler and David Keeney. All rights reserved. For academic use only. 1

Session 11

Effort Perspective: Critical Chain

Multi Project Management

Dr. Thomas Lechler Babbio Center 416

Phone: (201) 216-8174 FAX: (201) 216-5385

email: [email protected]



Session 11: Course Pointer

Shareholder

Value

Output

Value

Stakeholder

Value Effort

Value

Critical

Chain



Session 11: Evidence

1. How to solve resource conflicts in a multi project

environment?

2. What is the leverage to raise the efficiency in a multi project

environment?

3. How to control projects with CC?

4. How to manage risks with CC?



Topics and Objectives

• Analyzing Critical Chain Multi Project Management

• Understanding perceptions of effort which influence

the project portfolio’s value

• Understanding the portfolio as a time-dependent,

throughput-constrained chain of value

• Scheduling effort in a project portfolio as a time-

dependent chain of value

• Integrating changes to effort without destroying the

project portfolio’s structural integrity

• Risk Management with Buffers

• Improving effort value



Session 11: Agenda

• Introduction

• Basic Problems

• Multi-Project Management

• Critical Chain Multi-Project Management

• CC Summary

• CC Buffer Management

• CC Risk Management



Basic Problem: Multi-Project Context

Samples: USA: 172 Projects (112 succ., 50 fail.)

GER: 448 Projects (257 succ., 191 fail.)

Correlation Coefficients Resource Conflicts

Success Criteria GER USA

Efficiency -.20 -.26

Effectiveness -.15 -.19

Customer Satisfaction -.21 -.21

Business Results -.20 -.19

MEANS 4.4 4.1

• Many projects suffer under resource conflicts

• Resource conflicts have negative impact



Basic Problems: Projects Systems

• A collection

– links in isolation

• how tasks and projects

are viewed traditionally

• A system

– Links interacting

• A constraint

– Limits system

performance



Basic Problems: Project Management Practice

• What is the worst thing we can do as a project

manager? As a manager of project managers?

• What causes more harm, more delay, to our

projects than any other project practice? (A

practice so evil our competitors should bribe us

to do it…)



Basic Problem: The “Evils” of Multitasking

Multitasking:

• The practice of assigning one person concurrently to two or more tasks, and expecting them to make progress on all of them!

• Resources will be fully utilized! – Everyone busy all the time

• Is this an effective way to manage projects? – Is there an alternative?



Multi-Project Mgt.: Typical Environment

2

1

2|01|0

a e hdc

3

0|0

20 daysb f i

a cb

a cb

ed f

ed f

h i

h i

20 days

20 days

g

g

g

j

j

j

•3 projects, 10 tasks, and 3 resources…

•How long will it take?

•When will we get some benefits?



Multi-Project Mgt.: Multitasking

1

2

2|0 4|0 6|01|0 5|0

a e hdc

3

3|00|0

48 days

50 days

52 days

b f i

a cb

a cb

ed f

ed f

h i

h i

g

g

g

j

j

j

• Constraint:

• Limited Resources

• Lead-time of all projects take at least 48 days

• No benefits until when?



Multi-Project Mgt.: No Multitasking

1

2

2|01|0

a e hdc

3

3|00|0

20 days

28 days

36 days

b f i

a cb

a cb

ed f

ed f

h i

h i

g

g

g

j

j

j

4|0

• Constraint:

• Limited Resources

• No Multitasking

• All projects finish sooner

• Benefit stream arrives earlier



Multi-Project Mgt.: The Cost of Multitasking

1

2

2|01|0

a e hdc

3

3|00|0

20 days

28 days

36 days

b f i

a cb

a cb

ed f

ed f

h i

h i

g

g

g

j

j

j

4 44 daysa cb ed f h ig j

4|0 5|0


• Would you rather have three projects,

or five projects — for no additional cost?



Multi-Project Mgt.: Basic Conflict of Multitasking

We have limited

resources

A

Deliver the

maximum value

from projects

B

Start work on a new

project

C

Complete work on my

current project

D'

Don't switch to

new project task

D

Switch to new

project task

To make progress, a

project must have

resources

Interrupting work

causes it to take

longer

Project don't deliver

value until they

finish

"We'll get more

done if we maximize

the amount of work

being done"

"We'll get more

done if we maximize

the rate that work is

finished"

Adding or removing

one person from a

project makes no

apparent difference...

To focus, we have to

prioritize projects...

and postpone some

© 2000 ZULTNER & COMPANY

In order to be

successfulwe must...

A resource can

only work on one

task at a time

long-term

short-term



CC: The Required Paradigm Shift

• We must change from – A local view of productivity

• Any resource working is productive

– “If they aren’t working, get them work to do!”

• The productivity of the organization is just the sum of the productivity of the resources

• Therefore, ask everyone to work all the time, and judge them accordingly

– To a global (holistic) view of productivity • Judge the performance of the system

– How many projects did we deliver this year?



CC: Applying Lean Production

• Lean production uses the same paradigm: – Choke the release of materials to the floor

– Only work when you have an order • Otherwise, sit idle

– Do not work to produce inventory, or increase “efficiencies”

– Concentrate on rapid product throughput

• Now, time to apply the lean paradigm… in Multi-Project Environments



CC: Maximizing Project Throughput

1

2

2|01|0

a e hdc

3

3|00|0

20 days

28 days

36 days

b f i

a cb

a cb

ed f

ed f

h i

h i

g

g

g

j

j

j


4|0 5|0


wait

wait

16 days

8 days

24 days

32 days

wait

wait

•Projects must WAIT

•Because we have a system…



CC: Drum Buffer Concept

•Five resources, that can work at the rate indicated

– Which resource determines the throughput of the system?

• Which is the constraint?

– How much should the other resources produce?

• Why? You don’t want them to sit idle do you?

14 13 10 15 12

a b c d e

Production chain example:




• In any system, there is a limiting factor: the constraint

• How can we make sure the constraint always has work?

14 13 10 15 12

bottleneck

a b c d e




•If the constraint (limiting resource) is idle, throughput is lost for the entire system

•All non-constraint resources have excess capacity, and this excess capacity is required for maximum throughput: it is protective or sprint capacity

14 13 10 15 12

buffer

bottleneck

a b c d e



CC: The Drum-Buffer-Rope

• In a production system, the maximum throughput is achieved by

managing the constraint

• The Theory of Constraints’ solution for production is “drum-buffer-

rope” (a style of lean production)

14 13 10 15 12

buffergate

rope

a b c d e

bottleneck

drum

Drum-Buffer-Rope



CC: The Drum Resource Schedule

gate

drum

x y z 1

x y z 2

drum buffer

x y z 3

drum bufferproject

queue

project pipeline



CC Summary: How does Critical Chain work?

• 1. Elimination of multi-tasking

– The #1 enemy of productivity causes delays of at

least 15-25% between all projects in an organization

Critical Chain Multi-project management

• 2. Better management of variation (risk)

– The invisible waste of safety within every project is at

least 15-25%

Critical Chain Single project management



CC Summary: Critical Chain PM

• Critical Chain Project Management – Builds upon traditional project management methods

• Builds upon WBS and uses network techniques differently

– Provides a systems approach for managing multiple projects sharing a set of resources

• Improved system throughput (more projects out in a year without adding more resources)

– Provides a simple, visible, and powerful way to manage priorities of multiple projects

• A superior base for solving priority conflicts

– Explicitly takes variation (risk) into account

• Efficiency! (reduces time-to-market)



CC Summary: Critical Chain basic elements

• Project Planning:: rigorous network building and resource placement

• Project Synchronization: drum schedule and staggered release of new projects

• Project Scheduling: critical chain and aggregated buffers (pooled safety)

• Resource Behavior: aggressive task times and instant starts (relay runner)

• Project Control: buffer management



Causes of Schedule Risk #1 : Multitasking

16

5

A

5

6

FB14

B

7

12

9

FB6

C

PB

8

10

PB

8

5

PB

3

FB5

2|04|06|0 5|0 3|0 1|0 0|0

3

sharedresource

delay!

delay!



CC Summary: Critical Chain PM

• There are two components to implement:

– On an individual project

(independently)

• SINGLE PROJECT implementation

– On the entire set of projects in your organization

(sharing a set of resources)

• MULTI-PROJECT implementation

• You should do both,

as the benefits are additive



CC Summary: Critical Chain Benefits

• You can shorten the duration of all projects in your

portfolio:

– minimum 15-25% reduction

• 15% on small projects, 25% on large projects

– no added resources (and less overtime!), no sacrifice

of value or features, no increase in risk, no cutting of

quality

• And dramatically increase the likelihood of delivery on or

before the committed end date

• And increase your project throughput (deliver more

projects with a given set of resources)



CC Planning vs. Execution

A major break from the past:

– Traditionally, the way you plan a project is also

how you execute and control the project: by the

schedule

– In Critical Chain, you plan the project with a

resource-constrained critical chain with buffers,

according to a drum schedule

– But the execution and control is done with

buffer management



CC Buffer Management

How do we monitor and control Critical Chain

projects?

• Buffer Management

– Buffers revisited

– Using the buffers

– Buffer status



CC Buffer Management: How are we doing?

At points 1, 2, and 3, will we make our deadline?

5 16START

2|04|06|07|0 5|0 3|0 1|0 0|0

Copyright ?2000 by Richard Zultner

5 5 5 5 5 5 5 5 5

14

11

9

8 tasks

to go 5 5 5 5 5 5 5

5 5 5 5 5

5 5 5

5 tasks

3 tasks

5

2

1

3



CC Buffer Management: What about 3 Zones?

Can we divide the original buffer into thirds, and use

the red, yellow, and green zones to help?

5 16START

2|04|06|07|0 5|0 3|0 1|0 0|0

Copyright ?2000 by Richard Zultner

5 5 5 5 5 5 5 5 5

14

11

9

8 tasks

to go 5 5 5 5 5 5 5

5 5 5 5 5

5 5 5

5 tasks

3 tasks

5

2

1

3



CC Buffer Management: Do 3 Zones work?

The last task, in two

cases:

– 10 days is required,

far more than 2/3s

• False OK signal

– 1 day is required, far

less than 1/3

• False danger

signal

So when does the 3 Zone

rule fail?

10 10.5

10 10.0

10 two-day tasks

project

start

project buffer

1 111111111

1 twenty-

day task

10 10.5

10 two-day

tasks project buffer

1 111111111

1 twenty-day task

1

last task

last task

project

start

A

B

1

2|04|0 3|0 1|0 0|0



CC Buffer Management: Goldratt’s Measures

• Judging the status of the project

– Percent of the critical chain complete

• “60% on critical chain completed”

– Ratio of the critical chain completed

to the consumption of the completion buffer

• “60% of CC complete, 30% of buffer consumed”

– Rate of consumption of the buffer

• “We did 21 days of work this month, and only

consumed 6 days of the buffer”

• What do each of these tell you?



CC Buffer Management: Buffers Status directly?

• How much do we have?

• How much do we need?

• What if your project [re-]started now?

• What buffer would you calculate you need?

2|03|0 1|0 0|0

95 5 5

-1 day

bufferdeposits/

withdrawls


6 5 85

3 105 +2 days

510 -5 days

finished!

2

1

3

2|03|0 1|0 0|0

8.6

7.1

5.0

5 5 5

55

5

3 tasks

2 tasks

1 task




CC Buffer Management: Minimum Buffer Size

5 15.810

tasks

2|04|06|07|0 5|0 3|0 1|0 0|0

5 5 5 5 5 5 5 5 5

59 tasks 5 5 5 5 5 5 5 5 15.0

14.1

13.2

12.2

11.2

10.0

8.6

7.1

5.0

8 tasks 5 5 5 5 5 5 5

7 tasks 5 5 5 5 5 5

6 tasks 5 5 5 5 5

5 5 5 5 5

5 5 5 5

5 5 5

55

5

5 tasks

4 tasks

3 tasks

2 tasks

1 task

5

5

5

The buffer you

need for where

you are now, to

the end, is your

minimum buffer

required



CC Buffer Management: The Voice of the Buffer

13

17

12

16

7 tasks

left

3 tasks

left 30 days

30 days

32 days

6 tasks

left

4 tasks

left

35 days 6

15

18

18

actual

MBR

2

1

3

4

If we have more than we need, we are more likely to make the deadline than when we started the project…

If we have less than we need, we know how many days we would like to regain…



CC Buffer Management: Buffer Reporting

2|02|5 1|0 |0

95 5 5

-1 day

minimum buffer required

?2000 ZULTNER & COMPANY

6 5 85

3 105

+2 days

510

-5 days

finished!

2

1

3

1|5 |53|0

8.6

7.1

5.0

actual buffer

+1 buffer-days

+5 buffer-days

+5 buffer-days

BUFFER STATUS

So…

– How many

buffer-days

are you “plus”

what is your

need?

Or “minus”?

– How can we

manufacture

that amount

of good luck?



CC Buffer Management: Monitoring Buffers

FB

C

2 no delay

8

10 15

10

delay!

early!FB2

Feeding Buffers protect the critical chain

– Monitor the consumption of all feeding buffers:

is there sufficient protection left?

– Which task is causing the consumption?

– Project completion buffers have priority



CC Buffer Management: Monitoring Resources

Relay Runner resources

– Are activities starting as

soon as possible—

not when the schedule

says?

• Are the resource

buffers too big? Too

small?

– What does the resource

need to start? To

prepare?

• Can we reduce this?

3

10

A

B

Resource

Buffer

7

start!

10

current task next task

3

10

2

1

three days to go

two days to go

one day to go

good luck strikes—early finish

the plan



CC Buffer Management: Traditional artifacts

• Traditional schedule-based methods may need

revising. What about:

– Milestones?

– stage gates?

– phase-end reviews?

– Earned Value?



CC Buffer Management: Milestones

13.9

4|08|0 6|0 2|0 0|0

462

1 milestone

A

B

C

44444444444

8.0472

3 milestones

44444444444

5.7484

6 milestones

44444444444

8.0 8.0

5.75.75.75.75.7


1|00

buffer

buffer

buffer

Milestones delay projects!



Summary: Project Status

With Critical Chain and buffer management project

status reporting is:

• More accurate

– We know better when we will deliver, despite Murphy,

and how the project stands

• Simpler

– Less time is spent reporting, so more time can be

spent constructively on problems

• Enables shorter projects with no trade-offs

– Schedule-based approaches force local safety



Summary: Revisions

• Float milestones, do not tie to dates

– Do not judge project progress by intermediate dates

– Use buffer management to judge progress

• Educate customers at Customer Reviews

– Leverage your superiority in project management

– Seek better customers

• Earned Value Analysis

– Can they accept EVA-like reporting? It is possible to

report in an EVA-like way…



• Plan for variation (and the real world)

– Project tasks will vary from any plan, so

• do not give task-dates-with-certainty,

• give task-windows

– Do not track progress against the calendar

(scheduled dates)

• look at what remains to be done

• look at the status of the buffer(s)

– Will we still make our deadline?

Summary: Project Status



Project Risk Management: Quantifying Risks

• Most risks are judged in terms of impact on the project

schedule

– “Big” risk, big impact

• Not all risks are task related

– Only task-related risks included in task estimates

– How to accommodate the rest? Simply?



Project Risk Management: Traditional Risk PM

Methods of identifying risks

• Objective Sources:

– Recorded experience from the past projects and the

current project as it proceeds:

– Lessons learned files

– Program documentation evaluations

– Current performance data

• Subjective sources: Experiences based upon

– knowledgeable experts:

– Interviews and other data from subject matter experts

– Expert Judgment, Brainstorming



Project Risk Management: Traditional Monitoring

Kerzner, 2001, pp.937

• Methods for monitoring risks:

– Earned value method

– Program metrics

– Schedule performance monitoring

– Technical performance measurement

• The monitoring process systematically tracks

and evaluates the effectiveness of risk handling

actions against established metrics.



Project Risk Management: Traditional Risk PM

• Why are existing risk management methods not used in

your organization?

– Ignorance? (Why?)

– No time (They ADD more time to a project that is

already TOO LONG!)

• But with Critical Chain, we have time

– To do risk management, and any other “we know we

should do that, but we do not have time” methods…



Traditional Risk Management: Traditional PM

• Why are existing risk management methods not used in

your organization?

– Ignorance? (Why?)

– No time (They ADD more time to a project that is

already TOO LONG!)

• But with Critical Chain, we have time

– To do risk management, and any other “we know we

should do that, but we do not have time” methods…



Project Risk Management: Causes of Risks

• Identify non-task related risks (project risks)

– Can they be prevented? Where?

• Add effort

– Can they be detected early? Where?

• Add checks (inspections)

– Can they be minimized by a rapid response?

• What response? How much effort?

• Add into project completion buffer

• Filling the gap between the 1/3 rule of thumb and the

calculated minimum buffer required



CC Risk Management: Extending the Buffer

565

1|02|03|0 2|5 1|5 |5 0|0

duration

8.66

50% 90%

variation

extra-

task riskintra-task risk

2 3

prevention actions protection time

project buffer

Risk Management

• After risk identification the project could be protected by

extending the buffer size.



CC Risk Management: Avoiding Multitasking

• De-implementing multitasking is hard work

– Not everyone will buy in right away

– All our reporting systems support it

– We have gotten accustomed to doing it

• And some of us like the excitement…

– It is a habit (“we do it without thinking”)

• Hard work and constant vigilance is needed

week11 slides

Business

project managementc

project practice

project contextsamples

project management practice

strategic perspectives

david keeney

academic use

manager of project managers