Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Day 21
Slide 2
Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Ch 1 -2 Agenda Questions? IP Part 4 Graded, feedback provided
Lack of correlation between project schedules and budget
statements. Any of the first five sections can be resubmitted for
rescoring prior to December 13. The recorded score will the average
of the original score and the score on the resubmitted section.
Please notify me via email which sections you will be resubmitting.
IP Part 5 Due Today Developing a Project Schedule Early submission
falls (dreadfully) short of requirements IP part 6 Due Dec 9
Assignment 7 Corrected All As Assignment 8 posted Due Dec 5
Critical Chain Project Scheduling
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Finals Rescheduling IP Project presentation on Dec 12 Part 1-5
resubmits due Exam 3 done asynchronously via Blackboard on Dec 16
Final IP Project Due Dec 18 3
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall 11-4 Chapter 11 2007 Pearson Education
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11-5
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Chapter 11 Learning Objectives After completing this chapter,
students will be able to: Understand the differences between common
cause and special cause variation in organizations. Recognize the
three ways in which project teams inflate the amount of safety for
all project tasks. Understand the four ways in which additional
project task safety can be wasted. 11-06
Slide 7
Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Chapter 11 Learning Objectives After completing this chapter,
students will be able to: Distinguish between critical path and
critical chain project scheduling techniques. Understand how
critical chain methodology resolves project resource conflicts.
Apply critical chain project management to project priorities.
11-07
Slide 8
Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Theory of Constraints & Critical Chain Project Scheduling
A constraint limits any systems output. The Goal Goldratt TOC
Methodology 1. Identify the constraint 2. Exploit the constraint 3.
Subordinate the system 4. Elevate the constraint 5. Repeat the
process 11-08
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FIGURE 11.2 Five Key Steps in Theory of Constraint Methodology
11-09 Copyright 2012 Pearson Education, Inc. Publishing as Prentice
Hall
Slide 10
Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Theory of Constraints as a System Problem Systems have sources
(infinite supply) and sinks (infinite waste) Systems processes have
inputs and outputs System processes have throughputs which defines
the rate at which input is converted to outputs When system
processes of different throughputs are chained together by matching
outputs to inputs we often have to add temporary storage buffers
The throughput of a system is a function of individual system
processess throughputs 10
Slide 11
Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall A system example of TOC 11
http://www.tocca.com.au/Services/demoprojectM.htm
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall 11-12 Variation Common Cause Inherent in the system Special
Cause Due to a special circumstance Managers should Understand the
difference between the two Not adjust the process if variation is
common cause Not include special cause variation in risk simulation
Not aggregate discrete project risks
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Dropping a marble Top leftTop right Bottom left Center
11-13
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall 11-14 Dr J Edwards Deming
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall 11-15 CCPM and the Causes of Project Delay How safety is added
to project activities 1. Individual activities overestimated 2.
Project manager safety margin 3. Anticipating expected cuts from
management time 25% 50% 80% 90% Gaussian Distribution
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Wasting Extra Safety Margin 1. The Student Syndrome a.
Immediate deadlines b. Padded estimates c. High demand 2. Failure
to pass along positive variation a. Other tasks b. Overestimation
penalty c. Perfectionism 3. Multitasking 4. Path Merging
11-016
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall FIGURE 11.6 Student Syndrome Model 11-17 Copyright 2012
Pearson Education, Inc. Publishing as Prentice Hall
Slide 18
Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Effects of Multitasking on Activity Durations 11-18 FIGURE
11.7 Copyright 2012 Pearson Education, Inc. Publishing as Prentice
Hall 10 20 30 20 25 30
Slide 19
Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall FIGURE 11.8 Effect of Merging Multiple Activity Paths 11-19
Copyright 2012 Pearson Education, Inc. Publishing as Prentice
Hall
Slide 20
Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall 11-20 Critical Chain Solutions Central Limit Theorem If a
number of probability distribution are summed, the variance of the
sum equals the sum of the variance of the individual distributions
V = n * V, SD 2 = n * V, SD = n 1/2 * V 1/2 Standard deviation of
the sum is less than the sum of the standard deviations!
Aggregating risk leads to reduced risk
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Critical Chain Solutions Central Limit Theorem Activity
durations estimated at 50% level Buffer reapplied at project level
Goldratt rule of thumb (50%) Newbold formula based on desired ( , 2
, 3 ) Feeder buffers for non-critical paths
http://www.prochain.com/pm/articles/SchedulingForSucc
ess_WhitePaper.pdf
http://www.prochain.com/pm/articles/SchedulingForSucc
ess_WhitePaper.pdf 11-21
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11-22 At 90% probability estimate At 50% probability estimate
At ~70 % probability estimate with 50% buffer Time Saved
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11-23
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall CCPM Original50% Probability ActivityDuration A105 B62 C147
D21 E83 F126 Total5224 11-24 New estimate = 24 + (52-24)/2 = 38
(50% project buffer)
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall CCPM Changes Due dates & milestones eliminated Realistic
estimates 50% level not 90% No blame culture Subcontractor
deliveries & work scheduled ES Non critical activities
scheduled LS Factor the effects of resource contention Critical
chain usually not the critical path Solve resource conflicts with
minimal disruption 11-25
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11-26
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11-27
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Critical Chain Solutions Bob Feeder Buffer Project Buffer Bob
Buffers protect constraints and prevent delays 11-28
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11-29 Joe.mpp
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Critical Chain Project Portfolios Drum system-wide constraint
that sets the beat for the firms throughput company policy one
person a department/work unit a resource Capacity constraint buffer
safety margin between projects Drum buffer extra safety before the
constraint 11-30
Slide 31
Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Applying CCPM to Project Portfolios 1. Identify the drum 2.
Exploit the drum a. Prepare a schedule for each project b.
Determine priority for the drum c. Create the drum schedule 3.
Subordinate the project schedules (next slide) 4. Elevate the
capacity of the drum 5. Go back to step 2 11-31
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11-32
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Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Subordinating Project Schedules Schedule projects based on
drum Designate critical chain Insert capacity constraint buffers
Resolve any conflicts Insert drum buffers so the constraint is not
starved 11-33
Slide 34
Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall CCPM Critiques No milestones used Not significantly different
from PERT Unproven at the portfolio level Anecdotal support only
Incomplete solution Overestimation of activity duration padding
Cultural changes unattainable 11-34
Slide 35
Copyright 2013 Pearson Education, Inc. Publishing as Prentice
Hall Summary Understand the differences between common cause and
special cause variation in organizations. Recognize the three ways
in which project teams inflate the amount of safety for all project
tasks. Understand the four ways in which additional project task
safety can be wasted. Distinguish between critical path and
critical chain project scheduling techniques. Understand how
critical chain methodology resolves project resource conflicts.
Apply critical chain project management to project priorities.
11-35