Critical Chain_Project Management

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Critical Chain

CRITICAL CHAIN METHOD

Project Masters helps you to looks at an entire system as a whole, not the individual parts so you do not to lose sight of the big picture.

We help you:

Improve systems

Recognize dependency variation and finite capacity that exists in the systems

Understand that seemingly complex cause and effect occurs via these dependencies, both in time and in space, and this is termed dynamic complexity

Increase productivity and output at a constant investment of money, manpower, and machinery. Knowing that variable costs (raw materials) will increase in proportion to output, but operating costs should stay the same

We use the Critical Chain Method which is defined as the longest chain of dependent events where the dependency is either activity or resource driven. It assumes that the longest chain is the one that is most likely to impact negatively the overall duration of your project; it is consequently the leverage point for reducing your project’s duration.

Here are the steps we use to help you come up with a Critical Chain project schedule:

Identify the Critical Chain – the longest chain of dependent Schedule Activities where the dependency is either activity or resource related. There are two possible paths for each activity: first, what is the next logically dependent activity? – you can’t pour footers until they have first been framed up. And secondly, what is the next activity that uses the same resource as the one where the dependency is therefore a resource dependency? – the procurement person for any project can only order one thing at a time.

Examine – the duration of each possible path and pick out the longest path based on resource or activity dependency.

Buffers – are then added which act as shock absorbers.

Tips to control your project plan throughout execution:

Take all forms of padding out of activity estimates – move to dedicated time estimates.

Resource level the project – don’t schedule the project assuming that resource conflicts will resolve themselves. Take care of this up front.

Don’t measure people on the completion of their activities on time or on the accuracy of their estimates. Reward team members based on finishing the project on time or early.

Let people work on Critical Chain activities in a dedicated manner. If someone is schedule to work on one of these activities, let him/her work on it exclusively until it is complete or substantially complete to the point where it can be turned over to the next scheduled resource.

Change your resource management approach so that resources on the Critical Chain have more flexibility to accept work earlier than expected.

Implement a project buffer to project the project’s Critical Chain. This is usually put at the end of the project and is calculated as a percentage of the length of the Critical Chain – usually 30 to 50 percent. It’s a buffer that protects the collection of Schedule Activities on the Critical Chain from any common cause variations.

Implement feeding buffers on any path feeding into the Critical Chain to protect it from variances on the feeding paths.

We perform Buffer Management using the Critical Chain Method

Buffer management is the key to project success. We will show you how to examine your Buffer reports (daily or weekly) to determine what actions are to be taken on your project. Buffer reports for your short projects, less than one month, will be examined more often.

Every Schedule Activity is connected to some sort of buffer. If an activity takes longer than estimated, it eats away at the buffer. Buffer penetration reports indicate when a project is in danger and which current activity is causing the problem.

A comparison of the percent of the buffers that are used up to the percent of the Critical Chain that is completed. The results are an indicator of project health. For example, if 50 percent of the Critical Chain is completed and only 20 percent of the buffer is consumed, the project is in excellent shape.

Only after a feeding buffer is completely consumed is the project buffer affected.

Any Schedule Activity on the Critical Chain that is completed early adds that amount of time to the project buffer. Any Schedule Activity on a feeding path that finishes early adds that amount of time to the feeding buffer assuming of course that the down-stream resource is flexible enough to take advantage of an early finish from a previous activity.

Buffer management should be rigid. The first priority is the current Schedule Activity that is penetrating the project buffer, and the next priority is the activity that is currently penetrating a feeding buffer.

In cases where there are critical milestones, where bonuses or penalties depend on meeting them, there is another priority called the “milestone” buffer. It behaves much like the project buffer. This buffer protects a subset of the project and is almost like a mini-project within the bigger project.

Managing the Execution of a Critical Chain Project

You need to look at all Schedule Activities a given resource pool is working on and set priorities based on the activity that is most penetrating the project buffer.

The information used to generate Critical Chain reports comes from the reporting, by resource, of three key pieces of information:

When the Schedule Activity is started

How many days are left to complete the activity

When the activity is completed

Many managers keep track of this information on a daily basis with formal management reports issued weekly. You should look at buffer reports to identify whether you’re dealing with a common cause or special cause variation. If an individual Schedule Activity is taking longer than expected, this is a common cause variation. However, if a series of activities is taking longer than expected, this is a special cause variation.

In Critical Chain, the assumption is that a single Schedule Activity has a 50 percent probability of being completed on time. These are very subjective however, and if three or four activities in a row are significantly (more than 5%) exceeding their estimates, other factors such as risk and variability in those types of activities must also be considered.

Where Critical Chain and earned value reporting is used, the reporting should be done only once, but should feed both databases.

Project Masters can help you implement the Critical Chain method on your project.