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Murugappan Chettiar 1

Critical Chain Workshop

Murugappan Chettiar, PMPwww.linkedin.com/pub/murugappan-chettiar/5a/205/b62/

mchettiar@deloitte.com

Project Management InstituteNorthern Utah Chapter20 May 2013

Acknowledgements, References, Disclaimero Acknowledgementso Dr. Michael Poli, Worldwide Project Management, NJ

o Referenceso Critical Chain, Goldratt, The North River Presso Project Management, Meredith & Mantel, Wileyo PMBOK, PMIo Practice Standard for WBS, PMI

o Disclaimero The views expressed in this presentation are the personal views of

Murugappan Chettiar and do not necessarily reflect the views of Deloitte Touche Tohmatsu Limited, its member firms or any of their related entities. The views expressed reflect the current views of Murugappan Chettiar as of the date hereof and Murugappan Chettiar does not undertake to advise you of any changes in the views expressed herein.

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Agendao Context & Objectiveo Uncertainty - Gaming to Confidenceo Efficiency Trapo 11th Hour Rusho Buffer Managemento Resource Contentiono Critical Chaino Summaryo Q&A

Context & Objectiveo Contextn Senior management changes the scope without

consultation, without warning and without changing the budget or schedule!

n Corporate mentality on SNAFU(s).n Too many synchronization meetings.

o Objectiven How to make uncertainty tangible.n How to calculate confidence of achieving target dates.n Shift from Critical Path to Critical Chain thinking.

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Critical Path vs. Critical Chaino Traditionalo Critical Patho Schedule onlyo Local Efficiencieso Safety added to each

step

o Paradigm Shifto Critical Chaino Schedule + Resourceo Project Efficiencyo Safety added to

project as a whole

Critical Chain - Applies to o If you deal with -

Time, People, Materials – Critical Chain applies

http://en.wikipedia.org/wiki/File:Three_software_development_patterns_mashed_together.svg

http://upload.wikimedia.org/wikipedia/commons/f/ff/Generic_diagram_of_an_agile_methodology_for_software_development.png

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Uncertainty – Gamingo Projects are often

characterized by uncertainty.

o Concept of Safety: Production line vs. Project.

o Typical budget cycleo Need = $75o Ask = $100o 1st level = $120o 2nd level = $125o Accounting = $110o Executive = $100

o Estimates are based on pessimistic experience. o Each level of management adds its own safety.o Estimators protect estimations from global cut.

Uncertainty – Gaming Exampleo Custom Bicycle project.o PDD - Custom Bicycle - Basic.mppo PDD - PERT - Basic.xlsxo What is your normal safety net (percentage)?o Normal Estimate vs. Safety Estimate.o Probability Difference % vs. Estimate

Difference %.

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Uncertainty – PERT Approach

Uncertainty – Confidence Calculation

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Normal Distribution

Uncertainty – Stop Gamingo Estimates are a self fulfilling prophecy.o Consider opportunity cost vs. too much safety.o Try not to protect the performance of each

step. o Steps completed on time don’t matter, as long

as Project is delivered on time.o Reduce Safety %!

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Efficiency Trap

The compensation-productivity gap: a visual essay - Susan Fleck, John Glaser, and Shawn Sprague. Monthly Labor Review • January 2011

Efficiency Trapo Leaderso Increase Revenue (i.e.

Gain Market share)o Macro Environmentn Economic, Political

and Governmental, Socio-cultural, Natural, Demographic, Technological & International Environments

o External Focus

Revenue- Cost

---------------Profit/Loss

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Efficiency Trap

o Managerso Reduce Cost (i.e.

Increase Efficiency)n Processn Proceduresn Templates

o Organizational Environment

o Internal Focus

Internal

Process

Macro

o Feedback loopo Speed of reactingo Critical Path – Pure

Projecto Set Expiration Dates!

Critical Patho Longest chain of dependent steps.o PDD - Custom Bicycle - Basic.mppo PDD - PERT - Basic.xlsxo Critical Path as the bottleneck.o Protect the Critical Path.o Example:

A

10

B

10

C

10

D

10

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Critical Path – 11th Hour Rusho Student Syndrome.o First fight for safety time. o When you get it, why hurry. o Start early (not necessarily as soon)!

Critical Path – Multi Taskingo Multi-tasking Concept.o Priority setting by shouting.o Why multi-tasking is the killer of lead time.o Minimize Multi-Tasking!

A B C

10 10 10

A

5

B

5

C

5

A

5

B

5

C

5

A@20

B@25

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Critical Path – Dependencieso Dependencies.o A delay in one step

is passed on fully to next step.

o An advance made in one step is usually wasted.

o Reduce Dependencies!

A

B

C

D

Next Task(choke point)

-5

-5

-5

+15

Buffer Management – Project Buffero Concept of Buffer.o PDD - Custom Bicycle - Buffer.mppo PDD - PERT - Buffer.xlsxo Project Level Buffer vs. Task Level Safety.o Put safety where it matters!

A

10

B

10

C

10

D

10

A

5

B

5

C

5

D

5

Project Buffer

20

A

7.5

B

7.5

C

7.5

D

7.5 10

Project Buffer

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Buffer Management – Feeding Bufferso Most problems do not occur on the Critical Path.o Total Float vs. Free Float.o Feeding Buffer.o Protect the Critical Path!

A

7.5

B

7.5

C

7.5

D

7.5 10

Project Buffer

C1 FBC2

D1 FBD2

Buffer Management – Resource Buffero Resource Buffer.o Communication Tool.o E.g. T-10, T-5, T-2 about Critical Path tasks.o Friendly Reminders!

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Resource Contentiono Critical Resource as a bottleneck.o PDD - Custom Bicycle - Buffer.mppo PDD - PERT - Buffer.xlsxo Resource contention.o Not just Resource Leveling.

Project Buffer

X

X

X

FBX

X

FB

FB

FB

Critical Chaino Longest chain due to network and resource.o PDD - Custom Bicycle - Chain.mppo PDD - PERT - Chain.xlsxo Removes time/resource contention.o Later end date (most likely).

Project Buffer

X

X

X

FBX

X

FB

FB

FB

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Try Critical Chain with a Piloto Stop estimation games.o Set expiration dates on current tools.o Identify a small project with a cohesive team.o Reduce task level safety.o Introduce Project Buffer as a WBS element.o Introduce Feeding Buffers as a WBS element.o Formalize Resource Buffer notifications.o Start early and reduce risk exposure.o Measure the % complete on Critical Path.o Measure the % consumed from Project Buffer.o Leadership buy in is critical.

Critical Path vs. Critical Chaino Traditionalo Critical Patho Schedule onlyo Local Efficiencieso Safety added to each

step

o Paradigm Shifto Critical Chaino Schedule + Resourceo Project Efficiencyo Safety added to

project as a whole

Its not moving numbers but a cultural shift to project management.

Critical Chain allows us to execute projects more realistically!

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Q&A

Thank you!

Appendix – Public Domain Linkso http://www.goldratt.co.uk/Successes/pm.html

n Antarctic Support Association n BAE Systems n Balfour Beatty n Better On-Line Systems n Habitat for Humanity n Harris Semiconductors n Israeli Aircraft Industries n Lord Corp n Lucent Technologies n Synergis Technologies