Project management & critical chain

On Project Management &The Critical Chain

Ziya G. Boyacigiller

This presentation was created and given by Ziya Boyacigiller who was leading Angel Investor and a loved mentor to many young entrepreneurs in Turkey. We have shared it on the web for everyone’s benefit. It is free to use but please cite Ziya Boyacigiller as the source when you use any part of this presentation. For more about Ziya Boyacigiller’s contributions to the start-up Ecosystem of Turkey, please go to www.ziyaboyacigiller.com

Copyright © Ziya G. Boyacigiller 2003,2004

On Project Management &The Critical Chain

Ziya G. Boyacigiller


What can us from Succeeding

in Product Development?

1. Definition: Not working with key customer(s) on the α-version (prototype)

2. Planning: Not signing up to an Objective Specification (concurrent engineering).

3. Management: Not using Project Management with intensity end-to-end.

4. Quality: Not adopting and applying Dr. Deming’s (or Dr. Juran’s, etc.) principles.


CCRITICAL-RITICAL-CCHAINHAINSCHEDULING & MANAGEMENT

TECHNIQUES

Eliyahu Goldratt, North River Press


Q: Where do profits come from?

CUSTOMER PAYS COMPANY

COMPANY SHIPS PRODUCT TO CUSTOMER

COMPANY BUILDS PRODUCT

COMPANY SAMPLES, DESIGNS-IN, BOOKS PRODUCT

COMPANY INTRODUCES PRODUCT

COMPANY DEVELOPS PRODUCTS

COMPANY USES PROFITS TO START NEW PROJECTS


If we can’t make a product shipment, we lose the profit for that shipment.

Whereas if we can’t introduce a product on time we lose much bigger:

“A six month delay in product introduction (TTM) reduces lifetime profits by 50%.”

“McKinsey & Co.”

sale

s

t im e


Incomplete, Misfocused Designresults in cost, time overruns –

loss of profits and position


Affect of TTM on Return on Development Time

ASP - 2-3x use monopoly pricing / maintain higher pricing longer

margin - 1-2x get a head-start in experience-curve, use higher-volume

volume - 2-3x get to see more quotes / get to win more designs

lifetime - 1-2x get a head start / get into better quality projects

DEMM - 1-3x use same or more resources

RODT - 4-12x get a better payback


fast cycle-time => TTM => higher profits

020406080

100120

years

reve

nu

e

fast (1 yr cycle) slow (2 yr cycle)


TTM Focus is vital to Competitiveness


ALL SCHEDULES START NEAT AT THE BEGINNING...

EXPECTED FINISH DATE"M I L E S T O N E"

AB

CD


Pareto of Typical Delays

0

2

4

6

8

10

12

14

16

18

20F

req

uen

cy o

f O

ccu

ran

ce

(wks

)

CO

NF

LIC

T

ES

TIM

AT

ION

RE

SO

UR

CE

/PO

TE

CH

NIC

AL

TE

CH

NIC

AL

CO

OR

DIN

AT

ION

DE

FIN

ITIO

N

TE

CH

NIC

AL

TE

CH

NIC

AL

RE

QU

IRE

ME

NT

VE

ND

OR

AC

TS

OF

GO

D

VA

CA

TIO

N

DO

NW

TIM

E

PE

RS

ON

NE

L

MA

NA

GE

ME

NT

HU

MA

N E

RR

S

TE

CH

NIC

AL

DO

CU

ME

NT

AT

ION

QA

/SH

IP


UNCERTAINITY IS WHY WE NEED PROJECT MANAGEMENT

TIME TO COMPLETION

PR

OB

AB

ILIT

Y O

F O

N-T

IME

CO

MP

LE

TIO

N

ME

DIA

N

1 X >1 X


Murphy’s Law:“Whatever can go wrong,

willwill.”


ParkinsonParkinson’’s Laws Law

“Work expands to fill (and evenand even exceed exceed ) the time available.”


Pareto of Historic Delays

0

5

10

15

20

25

30

35

40

45%

of

1800

WW

MU

RP

HY

PA

RK

INS

ON

S

MU

LTI-

TAS

KIN

G

SU

BO

RD

INA

TIO

N

OT

HE

R


Q : What does “Manage Well” reallyreally mean?

Faster project development times Meet schedule datesMeet milestone dateMaximize engineering productivityMinimize costsMinimize reworkDo not keep resources idle . . .


SACRIFICE LOCAL OBJECTIVES, FOCUS ON THE GLOBAL OBJECTIVE

C15

D90

B30 E

30

LATE START(SAVE COST / REW ORK)

C15

D90

A90

B30 E

30

EARLY START(PROTECT CRITICAL-PATH)


SUBORDINATE ALL OTHER OBJECTIVES TO PROTECT THE

CRITICAL-CHAIN

MANAGE W ELL

CONTROLCOSTS

PROTECTTHROUGHPUT

EARLY START

LATE START

GOOD LOCAL PERFORMANCE

GOOD GLOBAL PERFORMANCE


SCHEDULES AREMISSED

MEET SCHEDULES

PRODUCTIVITYTOO LOW

IMPROVEPRODUCTIVITY

SCHEDULE LESS SLACK TIME FOR UNCERTAINITIES

SCHEDULE MORE SLACK TIME FOR UNCERTAINITIES

.... need to decide what is more important to make us win...


“SAFETY” BUILT INTO ESTIMATES, EXTENDS TASK SCHEDULES BY 2X

TIME TO COMPLETION

"AGGRESIVE ESTIMATE"W ITH MINIMUM SAFETY

50% CONFIDENCE

"SAFE ESTIMATE"80-90% CONFIDENCE

SAFETY

PR

OB

AB

ILIT

Y O

F O

N-T

IME

CO

MP

LE

TIO

N

ME

DIA

N

1 X >1 X


BELIEF: The only way to meet the schedule is through protecting each step... Pad every step with safety.

TIME

SA

FE

TY

A

SA

FE

TY

B

SA

FE

TY

C

SA

FE

TY

D


SAFETY IS INSERTED INTO PROJECTS IN 3 WAYS

TIME ESTIMATES BASED ON PESSIMISTIC EXPERIENCES

EVERY LEVEL MANAGER ADDS ONE ADDITIONAL SAFETY

ESTIMATOR SANDBAGS AGAINST “CUTS”

Q : If estimates have so much safety why do projects finish

late?


Only 50% of projects meet Original Schedule Date (OSD)

Over 90% of products introduce the last week of the quarter

Q : If estimates have so much safety why do projects

finish late?


PARKINSON’S LAW KICKS IN...

EX

PE

CTE

D F

INIS

H

DELAYEDSTART

"URGENT"STUFF

Student Syndrome Multi-Tasking Accumulating Delays Interruptions Distractions


PARKINSON + MURPHY = DELAY

EXPECTED FINISHM I L E S T O N E DATE

AB

CD


Q : How come we allow multi-tasking?

A10

B10

C10

NO MULTI-TASKING

A5

B5

C5

A5

B5

C5

20+d

MULTI-TASKING

20+d

20+d

PLUS if A is delayed by “d”, domino-effect kicks in and delays all projects by “d”.


AVOID MULTI-TASKING

Use free-time (waiting time) to help other projects

Select resources with low loading-factor

Use resource buffers to eliminate domino-effect

Coordinate resources through advanced reminders


DELAYS ACCUMULATE,GAINS DON’T...

EXPECTED FINISHM I L E S T O N E DATE

ACTUAL FINISHDATE

AB

CD


PROTECT THE CRITICAL-PATH WITH A PROJECT BUFFER...

TIME

SL

AC

K A

SL

AC

K B

SL

AC

K C

SL

AC

K D

PROJECT BUFFER


ATTACK THE HIGHEST UNCERTAINTY TASKS FIRST...

TIME

SL

AC

K A

SL

AC

K B

SL

AC

K C

SL

AC

K D

PROJECT BUFFER

C

A

B

D


Buffer Simplifies Priorities, Provides Focus and Early Warnings

For Managers

OK W ATCH /PLAN ACT

SAFETY BUFFER


FEEDING-BUFFERS PROTECT THE CRITICAL-CHAIN, AND PREVENT

CRITICAL-PATH FROM CHANGING DURING PROJECT

FEEDING-BRANCHES&

FEEDING-BUFFERS


MANAGING THE SCHEDULE :MANAGING THE SCHEDULE :

Eliminate MilestonesForce On-time/early Starts Manage To Meet The Aggresive

DurationsManage Murphy’s DelaysRESULT:RESULT:

Gain The Times When Tasks Are Finished Early & Minimize Parkinson’s

Delays


Critical-Chain Technique Saves Resources and Cuts TTM

Half the tasks will be finished on time or early (gains accumulate).

This will offset the other half done late. Statistically, a project will need less than

1/2 of the safety (project buffer)

Therefore, on the average projects will pull in by over 25%


Less-is-More! Make TTM Make TTM firstfirst priority. priority.

MISSING TTM,PRODUCTIVITY

IS LOW

MEET TTM,PRODUCTIVITY

IS HIGHER

PRODUCTIVITYTOO LOW

MISS TTM,PRODUCTIVITYIS STILL LOW

START MORE PROJECTS(ONE ENGINEER PER PROJECT)

START LESS PROJECTS(MULTIPLE ENGINEERS PER

PROJECT)

versus


We need a paradigm shift for TTM...We need a paradigm shift for TTM...

TTM means focused product plansfocused product plans (less-is-more)

TTM means simplicity simplicity (straight-line to target)

TTM means focus on futurefocus on future (duck-hunting)

TTM means commitment to win commitment to win (doing vs winning)

TTM means taking risks taking risks (risk failure now - win later)


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

PR

E-M

FH

MF

H

PD

IOS

DE

S

LA

Y

FA

B

TE

ST

INT

RO

MANAGEMENT INFLUENCE MANAGEMENT ATTENTION

Management Influence is Lowest Towards the End of a Project

Front-End Roles Back-End Roles


MANAGEMENT ROLESMANAGEMENT ROLES

FRONT-END Define business strategies Define product direction Define process direction Manage aggregate project &

resource portfolios (build - match)

Own and operate product development process

Launch projects & teams Obtain firm commitmentsObtain firm commitments

BACK-END Review commitmentsReview commitments Review projects & plans Provide resources Assure support from functional

organizations Manage changes & conflicts Fix systematic problems Teach, train, indoctrinate Improve product development

process


Make Commitment to Win Commitment to Win Highest Priority

CEOCEO buys into project - commits to support resource requirements fully & on-time

Senior Managers Senior Managers buy into project - commit to provide service and support fully & on-provide service and support fully & on-timetime

Project Team Project Team signs-up to win - commit to meet TTM and other goals - with no excuses


Manage Project ConflictManage Project Conflict Commit to meet TTM for all projects when planning OSPCommit to meet TTM for all projects when planning OSP Eliminate uncertainty - achieve first pass success Anticipate potential problems, and schedule into successor

project a “reasonable” time to resolve them Have additional resources available to add to predecessor

project if problem is beyond reasonable / free up engineer altogether (takes consulting role) if possible

Double-up engineers on successor project to have at least one available all the time (trade the other engineer if problem is beyond reasonable)

Add resources to successor project to make up the lost time


Manage Estimation ErrorsManage Estimation Errors

Break project into tasks and determine “without-problems” & “with-problems” time estimates

Allow “sufficient” slack time in addition to the cumulative without-problems time

CommitCommit to meet this schedule Publish project bonus amounts when schedule is signed Review schedule performance weekly, and actively

coach / manage Eliminate rework by using systems approach to design,

and doing cell/block level objective (before design) and design (after design) reviews

Dictate cell / block reuse Compile task time actuals to use in future estimates


TTM needs back-end support for good results

LIFETIMEPROFITFROM

PRODUCT

CUSTOMER REQUIREMENTS(POTENTIAL = 100%)

PRODUCTDEFINITION

IOS

DESIGNTEST

TTMREACH

QUOTELEADTIME/PRICE

DELIVERYRESULT10% ???

Date post:	16-Aug-2015
Category:	Small Business & Entrepreneurship
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Project management & critical chain

Small Business & Entrepreneurship