Critical chain project management
I'd like to introduce you toCritical ChainProjectManagement (CCPM). And if you think this is simply an alternative to critical path and earned-value, you might beinterestedto learn that it is much more than that... Let me illustrate with an example of a cross-country drive.
Say I need to catchtheDover-Calais ferry at 22:00 later today. Google tells me the journey is 273 miles, and will take me 4h48.
Icouldbreak this down to a simple sequential project:
- Drive home to M6 = 18 minutes
- J18 - M6 Toll = 40 minutes
- M6 Toll = 20 minutes
- ...
Adding up to 4h48 minutes.
In practice I would take Google's 4h48, I would add a couple of stops, say 40 minutes, and I would add a buffer forthewhole journey (M25 at about 18.00...mmmmm.. let’s add 2 hours. I know that about 250 miles is on motorways, at a legal limit of 70mph, so Googlehasn'tincluded much for bad traffic and accidents). So my project planned duration is 7h28m. I’ll round it up and leave by 14:30.
But what would we do if this was a project?
Each of the sequential taskswouldbe done by adifferentmanager - or in my field of capex projects, a different company. Most project managers manage progress with task deadlines and milestones, and insist ongetting reliable commitments for each task. In my road journey analogy, this means a highly reliable time for each leg of the journey.
But that is not what I haveincludedin the first plan. Each stage of the journey is based on areasonable average, and I have added contingency time to cover the whole project. How many of us do this in our day jobs? Most project managers don't want an average task time in their plan, they want acommitmentthat an individual is held accountablefor.
So if I plan again, but this time using highly reliable times for each leg, I might get:
- Drive home to M6 = 30 minutes
- J18 - M6 Toll = 70 minutes
- M6 Toll = 27 minutes
- ...
... Adding up to 7h30m.
Then I might add some time for stops (40m)and a smaller project-level contingency (40m), meaning I mightplan my journey to last 8h50, and I need to leave home at 13:10. In total I have 50 per cent more safety (3h22 v 2h02), with most of it built into task commitments.
Now you might think that this longer duration is OK. What harm does a bit of extrasafetydo?
Well for one thing, on my kind ofproject (capex and construction), it has added significantly tothecost. Allthetasksuppliershavegiven me a highly-reliable commitment, and I have tied them up with a fixed-price contract with damages for lateness. Meaning if one supplierdoesn'tneed thesafetythey built in, they profit. They are notgoingto pass the unused time or money back to the project - and theyshouldn'tbe expected to, that is simplypartand parcel of fixed-price contracting. Holding people to task-level commitments is obviously silly in my driving story. Imagine if on stage 1 it only took me 16 minutes, and I then park up for 14 minutes so that I hit my30 minute “commitment”- remember some project managers seem to hateearlyfinishes as much as late ones!
The other thing is that when I have a lot of safety, I am much more relaxed about time. I might take a detour to find a nice high street coffee shop rather than the same-old same-old motorway service station. I might call in on a tourist spot near my route. I might drive at 60 mph andemitless CO2. We can all relate to the "student syndrome", where wehaveplentyof time to do an assignment…but still end up burning the midnight oil and often end up late. The same can happen on projects where wehavetoo much safety. On a project though, rather than slowing down and taking in the scenery, most of us take on other work. "Sure I can fit that in, I have plenty of time to complete my project task". Then we find ourselves inefficiently switchingfrom one task totheother. We are overloaded, and everything takes longer!
So what are the project management learnings from this cross-country drive?
- There is no point in trying topredictwith certainty how individualtasks(the stages of my journey) will turn out.
- Taskestimatesare only useful in setting a reliable project completion date and budget. They are not firm commitments.
- Shared, project-wide contingency buffers are much more effective than including contingency in each task.
- Task milestones, based on highly-reliable commitments, add to the project time and cost, without adding value. They don’t make the project any more reliable.
- Task managers should complete as quickly as possible – known as “Focus & Finish”.
- Project managers should removetheobstacles to rapid task completion, and “project flow”.
- You need to choose the right performance measures on your project. Measurethe wrong thing (like task managershittingtheir commitments) and you will get a project taking longer and costing more than it needs to, and you wont notice early signs of real problems.
In short we need just a good-enough plan, and great, agile and real-time execution.
And yes, there is a formal methodology that incorporates these learnings. It is not yet verycommon butcompaniesthat have used it have made significant improvements in their projects - making them more reliable, whilst costingmuchless and taking less time. Mazda said it reduced their project duration by about 50 per cent, allowing their R&D team to complete over 35 per cent more projects than they used to. And a division of Siemens in the USA used this method to halve the time to design new wind turbines - from two years to one year.
The method is Critical ChainProjectManagement (CCPM).And if you think this is simply an alternative to critical path and earned-value, you might beinterestedto learn that it is much more than that. Typical results fromcompaniesusing CCPM include:
- 35% faster than before
- 25% increase in project throughput
- 90%+ due date performance
Ian recently presented a webinar for APM on CCPM, and what else is needed to beableto use it onconstructionand capital projects, wherecontractscan often get in the way.
You can see the webinar recording, and the Q&A here.
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Good read. Not sure I’ve head of CCPM until now. Interesting example with the cross country drive from the midlands to Dover. I’ll look into your website http://www.breakthroughprojectmanagement.com/ when I get back to England. Find it difficult to open website, where I’m at the moment. Thank you.