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Introduction to Critical Chain Project Management

 

As Agile gains popularity in the IT world in the 21st century, what role is left for Critical Chain Project Management (CCPM)? What is Critical Chain and how is it different from other project management tools?

There are two primary approaches to managing change in a chaotic environment–plan up front (Waterfall) and plan as you go (Agile). Waterfall approach recommends a thorough analysis of requirements, assumptions and risks up front and iterating through this process as the project gets executed. Agile approach, on the other hand, recommends doing light planning up front and filling in the details during the execution phase. Critical Chain typically falls under the Waterfall model, but has certain differences that make it a unique methodology.

CCPM is part of the overall methodology developed by Dr. Eliahu Goldratt called the Theory of Constraints (TOC). TOC has a strong global following. TOC was first introduced in the mid 80's when Goldratt published his first book, The Goal. This book introduced the fundamental principles of TOC into the manufacturing environment, including Constraint, Drum Buffer Rope and Throughput. Over the years, Goldratt published more books on the subject of optimizing organizational performance that were well adopted in many companies in various industries. Eventually, the Critical Chain Project Management was introduced to the public when it was first discussed in Goldratt's book called Critical Chain. In essence, the same TOC principles, first applied to manufacturing optimization, were applied to Project Management. Below are some of the mechanisms and tools that make TOC stand out from other methodologies:

1.  Undesirable Effects – UDEs help identify the core issue (Core UDE) that is causing the need for change and help relate various challenges that people experience with the core problem being solved. UDEs help align stakeholders from the beginning of the project and are collected at the start of the planning process

2.  The Goal – The goal is the single primary objective of the project, which, when reached, will address the Core UDE. Typically, the ultimate Goal is to maximize Throughput.

3.  Throughput – Throughput is the pace at which an organization generates cash. This is usually the criteria used when prioritizing projects within a portfolio in a TOC company. Goldratt introduced a new accounting method called Throughput Accounting which focuses all financial decisions on the speed of cash generation and uses different metrics than GAAP.

4.  Conflict Cloud – A logical technique, used to derive a win-win solution to a problem or a conflict. This technique lays out opposing positions, corresponding underlying needs, along with the assumptions that "protect" these positions. A common goal is required for this technique to work. The result is a list of "Injections" that solve the initial conflicting positions through addressing the assumptions.

5.  Future Reality Tree (FrT) – FrT is a logical diagram that answers one main question–are the "Injections" that have been identified sufficient to achieve the goal? As with other "trees", FrT makes use of assumptions to validate the logic.

6.  Pre-requisite Tree (PrT) – In order to achieve the goal, a number of Intermediate Objectives must be completed. During planning, these Intermediate Objectives are laid out in a logical structure, showing what objective needs to be done before another one can be started. If a Product Backlog was logically structured, it would look much like a PrT.

7.  Transition Tree (TrT) – TrT is similar to PrT, except it logically lays out interdependent tasks within each Intermediate Objective. It helps answer "why" we want to do a certain task and lists the underlying assumptions.

8.  Task Network – Once the tasks have been logically identified through the use of TrT, a complete logical sequence of all the tasks, that make up the project and serve as input into building the schedule, can be prepared.

9.  The Critical Chain (CC) – CC is the longest chain of interdependent tasks, taking into account resource allocation. It shows the length of the project. Any delay to CC delays the project. CC is the "constraint" of the project that needs to be protected at all times.

10.  Project Buffer – CCPM does not "allow" multi-tasking, promoting a focused execution of each task in order to achieve results faster. Because of this approach, tasks are estimated without buffers, instead adding a single project buffer that protects the Critical Chain.

11.  Feeding Buffers – Since non-critical tasks may be delayed and can affect the Critical Chain, these tasks have Feeding Buffers, meant to protect the Critical Chain from slippage.

 

CCPM is built around the constraint and allows for a more focused management of resources. The logical tools used in TOC facilitate the implementation and adoption of change, which is often the main reason why projects fail. Although planning may at times be extensive and time consuming, the stakeholder buy in and support that is achieved as the result, goes a long way in ensuring that the project is successful.

In order for CCPM to be effectively implemented at an organization, certain cultural changes need to happen. CCPM is a speed model, striving to get results as quickly as possible, with minimum required resource investments. Organizations looking to adopt TOC or just CCPM need to expect to:

  • Make decisions based on hard logic
  • Manage around the constraint
  • Focus on cash profits
  • Eliminate multitasking, focusing on getting things "done"

Critical Chain's primary benefit is that it allows managing finite capacity. Similar to resource leveling, used with Critical Path, Critical Chain ensures that people are not over-utilized, allowing for development of more realistic schedule and budget baselines. CCPM can be a powerful tool on its own or can be a strong addition to other methods used in organizations. As an example, TOC and Six Sigma, when used together, have shown powerful results, combining the benefits of constraint management with statistical process control. Similarly, Critical Chain, when used with Statistical Process Control charts (SPC), help improve project buffer sizing, as well as project monitoring and control through variation management. With over two decades of global success CCPM continues to make a difference in companies all over the world across the full spectrum of industries and business cultures.

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