Critical Chain Project Management (CCPM) Overview

Critical Chain Project Management CCPM is a project management technique that focuses on managing project constraints. It was developed by Eliyahu Goldratt in 1997 and later popularized by the book  Critical Chain.

Critical Chain Project Management is based on the Theory of Constraints (TOC), which states that the pace of any system is determined by its slowest component. In a production system, for example, the bottleneck resource determines the output of the entire system. CCPM attempts to address this problem by identifying and managing project constraints.

The main difference between CCPM and other project management methods is the way it identifies and manages project constraints. In CCPM, the critical path is determined by identifying the critical chain.

If you’re looking to improve your project management methodology, critical chain project management may be the right approach for you.

My critical chain project management video on YouTube has over 71,000 views.  Why?  Because everybody does projects and has to manage them.  Even if you are a manufacturer or distributor, you do projects.

And we’re all desperate for help. Different surveys estimate that somewhere between 90% to 94% of projects finish late.

So most of us struggle to get them done. Click on the video and see if you agree.  It’s only 9 minutes long and you get an overview of the Theory of Constraints Critical Chain Project Management (CCPM).

And to make matters worse, the requirements or specs of the project change often while the project is in process.  Which means that not only are we challenged to finish projects in on-time, it’s difficult to finish in spec and in budget.

The challenge is in executing what I describe in the video.  It’s not physically hard to do, but it’s counter intuitive and if you don’t have the experience you can get easily stalled.

But, no worries — I’m going to get you started in the right direction, right now.  Here’s how you can start tomorrow!

How do you use critical chain in project management?

Multitasking is probably the biggest issue. In June 2011 before Dr Goldratt passed he was telling us about a client that had implemented CCPM to the letter, and they had improved, but they said that they felt like they were still doing a lot of multi-tasking.

Upon further review there was still quite a lot of multi-tasking going on at the department level.  Historically when we reduce the number of concurrent projects and stagger the starts, we had believed that we had reduced the multi-tasking enough.  In this case and as it turns out, in many cases there can still be too much multi-tasking.

So the negative effects of multi-tasking are even bigger and more devastating than we thought. A slight reduction wasn’t enough.  Which really isn’t that surprising when you consider all the studies that have been done.  Here’s just a few:

And if that wasn’t enough, it can also effect our future ….

So let’s start by reducing the amount of multi-tasking you’re doing.

First find out how many projects (or tasks) each person has on their plate.  Also find out if they deal with other interruptions during the day.  For example in many engineering departments the engineers may each have 10 or so projects they’ve been assigned but they also have to deal with plant production problems as they come up.

1.  How many projects or tasks do they typically have?

2.  What kinds of things tend to disrupt them?

Now if the things that disrupt them can be off loaded, then that’s a no brainer.  But that is not always possible.

We can’t always control or reduce the disruptions, but we can limit the number of tasks/projects each engineer has.

A good rule of thumb is 3.

Each engineer is only allowed 3 tasks or projects (depending on the environment) and they must finish one BEFORE they are assigned another. No exceptions (unless the project is cancelled).

Three is plenty for them to work on, especially considering there will likely continue to be plant emergencies and disruptions.

Start applying this new rule and really stick to it, I’ll bet you see a big improvement fast!

I’m sure that instruction raised a lot of “yes, buts” and questions.  Good — you’re thinking!  Here’s another video on how to select which projects to work on:

It’s natural to have questions and I’m sure you will have lots more — that’s only part of implementing CCPM. The good news is that Dr Goldratt did a 5 part series on how to implement Critical Chain Project Management.  And, he used a “strategy and tactics tree” to explain it.

The strategy and tactics tree was developed years ago and then forgotten until early to mid 2000s when I was with Goldratt Consulting.  It’s one of the thinking processes that very few people know about.

S&T trees can be difficult to write.  But reading one and using one to communicate your strategy and tactics is pure poetry. Imagine if everyone in your organization was perfectly clear on what they were supposed to do and why, and how it connected to the overall goals of your company ….

And modifying one from a template is very achievable for most.

Transcript of 9 Minute Critical Chain Project Management Methodology Summary Video:

Let’s start by understanding how task durations are typically determined. It’s different of course, for each organization, but often the task duration is determined by asking the task resource, how long will it take you to do this task. For some organizations, the task durations are based on history, but initially somebody had to answer the question or make the first guests of how long will it take to do this task. If you were asked this question, would you give the answer That was a 50% chance you could finish in the project in the promised time or something greater? Now, most of us want to give a high probability answer because we like to meet our commitments, which means we give the about 100% probability of completing the task in the time given. So if we draw a normal distribution and of course this isn’t exactly normal, but let’s for convenience sake, say it’s a normal distribution. That means that we’re getting the a hundred percent far to the right of the normal distribution chance of getting it done in that time. With a hundred percent probability of completing each task, we should finish projects on time. Right Well, not necessarily due to a couple of things. First of all, you’ve probably heard of student syndrome. Remember when you had that test, but it wasn’t for two weeks, we didn’t necessarily start studying for it right away. We don’t always start a task right away either. And each resource is typically working on several projects concurrently. So while we might have 10 projects going on, a particular resource could be involved in many or all of those projects.

So I’ve added resource a and read where you can see resource a at least is involved in three of the projects that we can see. So let’s talk about multitasking. Let’s say that resource say starts working on project one, but then it’s a call from the project to manager and ask them to please start because the customer has just called now doesn’t this sound familiar What happens many times is resources end up having to bounce from task to task, really being allowed to focus on just one. So between students and are not starting right away and this bad multitasking, it is quite possible for, for a 100% probability task to still be late.

But doesn’t it all average out. You would certainly think that while some tasks are late, others must finish early and we should have a shot at finishing the project on time. That sounds logical. And you would certainly think that would be possible, but unfortunately that’s not how it works. If you were one of the task resources who finished early, you typically don’t pass it on because either the next step in the project may not be ready for it. Or you may be expected to finish in that amount of time next time. So you’re reluctant to hand it off early. And by the way, there’s always some improvements that you can do. So Parkinson’s law, since you have a little more time, you tend to spend the time. So the net net of this is that only lateness gets passed on and early completion simply does not. That’s why products are perfect by perfect. I mean, 100% late. Most companies you do projects are either less than a hundred percent on time, or they go through extraordinary measures to meet their commitments. You might even see some of the people wearing capes signs of extraordinary measures include overtime, worn out staff, poor morale. You certainly it’s easy to recognize.

So if that’s the problem, what’s the solution. Now we’ll introduce critical chain, project management. And again, this will be a very brief introduction, but to give you a sense of what it is and how it works First, we’ll put the buffer where we need it. Instead of buffering each task, let’s put the buffer where it’s needed. If each task has a hundred percent probability that we’ll complete in that time, we can cut each task in half and use the buffers. What essentially we’re doing by putting the a hundred percent probability in a task we’re buffering each task. So what we’re going to do is cut each task and then use the buffers at the end of the project.

So here cutting each task of our original project and half. So what was 10 days becomes five. What was seven becomes three and a half where we used to finish at the end of the project, if we were lucky and most likely it was well beyond that. If we were perfect and late, like most environments, we’re now going to be able to finish in much less time by cutting the prod the task in half. So what we do is we take the time that we saved by cutting each task in half and half of that time that we cut. Now, it becomes a project buffer. So if we can finish within the project buffer duration, you can see we’re already finishing projects faster. The rule of thumb is that the project buffer is one half of what you cut from all the individual tasks. Second consider resource contention in determining the critical chain. The critical chain is the critical path, which is the longest chain of dependent events. With the addition of resource contention. We also put feeding buffers at connection points. So here we’ve identified the critical path and critical chain, which in this example happened to be the same. The longest chain of dependent events is this top, box here. And it also happens to be the critical chain. We put a buffer for the project buffer as we did in the last step. And now we’re adding a feeding buffer because the set of tasks below that connects into the critical chain, we want to make sure that it doesn’t cause a delay on the critical chain itself.

Next, we also take into account resource contention across all projects, which means that we start at the start of projects so that our constraint resources are not working on any more than one task at a time. So if resource say is our constraint resource, we start, our project starts according. So back to our list of projects, we can see that project one starts and offset by five days because that’s the time it takes resource a to do project one, we’re starting project two and then eight and a half days after that, we can start project 10 here, which takes an additional five. So we’re staggering. According to this resource, a which in our example happened to be the constraint resource. We also want to change our measures. We have to let everyone know that we understand there was only a 50% chance that we’ll finish their task on time. It is okay if they go over and that’s what the buffers are there for. And it’s now easy to track projects. We can track task completion relative to project buffer penetration. We can then easily determine which project is most at risk for being late and respond accordingly.

And finally, we can now focus our continuous improvement. If we take the project buffer in divided into three equals around zones, a green, a yellow or red, we can track reasons for penetration into the red zone. We paraded those reasons then to guide our continuous improvement and to really focus those efforts. So that’s a very quick, very brief overview of critical chain project management. And of course, a very simple example, no doubt, much simpler compared to your environment and what you have to deal with. So you may want some more information. Here’s some recommended reading. Critical chain is Dr. Goldratt’s business novel. It’s written similar to The Goal. It’s a very easy read, very entertaining. the challenge is that it’s hard to understand how to apply those concepts to your business. So I also recommend a companion ebook called projects in less time. And those two things together I think will be a very good next step. You can get those from me for a reduced price of $25, which includes shipping. If you just send an email. And of course, if you’d like.

Critical Chain Project Management PDF

Critical Chain Results

The results obtained by a sampling of 60* projects:

*Published by Jerry Kendall and Kathy Austin in their book Advanced Multi-Project Management

CCPM has been shown to improve project completion rates by up to 40%, and is used by a variety of organizations, including NASA, Boeing, and General Electric.

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