Since Goldratt first published the Critical Chain book in 1997 (Goldratt 1997a), proposing the Critical Chain Project Management method (CCPM), the CCPM has received a lot of attention in the project management literature and has recently emerged as one of the most popular methods of project management in a multi-project environment. In the past 15 years, many project management practitioners and researchers have written books (Newbord 1998, 2008, Leach 2004 and Yuji 2010) and conducted research to enhance and spread CCPM knowledge (Steyn 2000, 2002, Rand 2000, Herrolen and Leus 2001, 2002, Elmaghraby, Herroelen and Leus 2003, Cohen, Mandelbaum and Shtub 2004, Ashtiani 2007, Jacob and Mendenhall 2008, Long and Ohsato 2007, 2008, Liu 2008, Rezaie 2009 and Cui 2010), developed software systems (Realization 2011, Prochain 2011) to support CCPM implementation, and created implementation strategy and tactics to guide practitioners in how to implement CCPM (Goldratt 2009).
CCPM method achieves highly reliable on-time delivery (OTD) and short project lead-time (PLT) in a multi-project environment mainly because it focuses on changing the way to manage multi-projects, efficiently using the safety time embedded in tasks through two changes: logistical change (planning aggressive task times with 50 % buffers, staggering the release of projects, and determining priorities with buffer management) and changing bad human behaviors (no bad multi-tasking, no exhibition of student syndrome, and no practicing of Parkinson‘s Law). Although related literature has reported hundreds of successful cases achieving highly reliable OTD with short PLT in a multi-project environment (Realization 2011, Goldratt Marketing Group 2011), the introduction of CCPM to project management society still encounters two obstacles. The first is from project management practitioners, who have been less than confident that OTD and PLT, in a multi-project environment, can be significantly improved by simply changing the way to manage multi-projects. The second is from academia: some scholars have criticized the approach as offering nothing new.
Concerning the first obstacle, our interviews with local managers revealed that few agreed that the mode of managing multi-projects is the root cause of poor OTD and long PLT.
The interviews were conducted in three-hour public workshops1 attended by more than three hundred people. The majority of the participants were project managers, resources managers, and engineers. The polling question was: why is it difficult to achieve high OTD in
1 During the year of 2009, four workshops (January, 17th, March 14th, May 9th and June 13th) were conducted on the campus of National Chiao-Tung University, Hsinchu, Taiwan. The workshop title is: “Project the TOC way.”
multi-project management? We asked them to not just write the reasons they believe in, but also what they think others believe in. Ninety percent of their responses can be summarized as excessive task time variability (or uncertainty). Such as resources and the time available for projects are often inadequate, and tough situation becomes dire when exacerbated by severe competition in the market place. Clients and management are often slow to make decisions, delivery from suppliers is sometimes delayed, and information is not always shared in a timely manner. Moreover, project scope/specifications change and often creep. Even when problems arise, support is not necessarily forthcoming (from management or from other project stakeholders) without delay. In spite of these difficulties, project members work very hard, with a strong sense of responsibility and urgency, and are even willing to work around clock to comply with all kinds of expectations from stakeholders. Looking carefully into these uncertainty problems, it has become obvious that they do not originate within the project, but rather exist outside the project. Therefore, project members often believe that they can do little to overcome these problems even with CCPM.
In light of the above results, it is not surprising that reducing uncertainty thus has become the focus of improvement efforts, with programs such as PDM and Six Sigma becoming the norm. Unfortunately, the second polling question (if they have adopted PDM and Six Sigma programs, was OTD improved significantly?) in three-hour public workshops1 found that for eighty percents of participants, OTD remained a major issue. Only twenty percents of the participants indicated that their OTD improved, and only through long-term effort.
Theoretically, it is not difficult to achieve highly reliable OTD in multi-project management. First, an accepted Project Evaluation and Review Technique (PERT) or Critical Path Management (CPM) network and its estimated project lead time (PLT) should be determined for each project. Since uncertainty exists, this estimated PLT should have a sufficient safety time to handle uncertainty; if not, it will be difficult to meet the deadline (Goldratt 1997b). The greater the uncertainty, the bigger the safety embedded in the task‘s time estimates. Second, the starting and ending times of each project should be scheduled according to the required completion date and resource limitations. If the required completion date can be achieved, then the project is confirmed. If the required completion date cannot be met due to capacity loading, the project will be given a new completion date. If the new completion date is accepted, planning is complete. If not, negotiation is initiated or the project
is simply lost. When planning is complete, project execution begins. In most multi-project environments, to better utilize human resources, most employees are not dedicated to a single project, but must multi-task. They are organized in resource groups according to their skills, and each group performs certain types of tasks for several projects. The responsibility of these teams is to turn task time estimates into commitments. In addition to resources managers, project managers are also in charge of the project. Their responsibility is to make sure that the project is completed according to the original commitments. In the multi-project environment, projects are usually managed in a matrix structure. The progress of each project is reported periodically, and task priorities are shuffled according to urgency. Recovery plans for projects falling behind schedule are discussed and executed as necessary.
As stated above, the mode of planning and controlling multiple projects to achieve high OTD is obvious. If excessive uncertainty is the main challenge in OTD, as claimed by the managers interviewed in this study, and improvement programs for reducing uncertainty are also initiated, OTD should be significantly improved. However, the reality is that it is not improved (or improved slowly) (Standish Group 2007).
So what is the true root cause to poor OTD in multi-project management? Although Goldratt claims these problems (originating outside the projects) do not appear to be the root cause of poor OTD and long PLT in multi-project management; rather, the mode of managing multi-projects does. Specifically, four major causes related to the mode of project planning and execution will significantly affect OTD and project lead time, which are: (1) Unrealistic planning (over-promise), meaning that most key resources work across projects in a multi-project management, but poor planning fails to consider resource contentions across projects. This makes the plan unrealistic and leads to missed commitments and long project lead times; (2) A lack of clear working priorities, meaning that engineers will work on the wrong priority project in a multi-project management due to a lack of clear priorities.
Working on the wrong priorities causes an interruption in the critical chain, which in turn causes a cascading effect in other tasks and ultimately leads to missed commitments and long project lead times; (3) Bad-multi-tasking, meaning that project managers in multi-project environments will release a project as soon as possible because they fear that projects will not finish on time. Releasing projects too early causes too many projects to be executed simultaneously (resources competition), which means that many resources will suffer from bad-multi-tasking. Extensive bad-multi-tasking drastically increases the lead time of both tasks and projects, which further leads to missed commitments and long project lead times.
Bad-multi-tasking also cause, in the down-stream departments, overloads follows by under loads, which creates a tendency to release more work into the system so that people will always have something to work on, which increases bad-multi-tasking, a vicious cycle. (4) Masking and misusing the safety time. People who do the tasks used to add safety time by inflating the time estimate for individual tasks. However, inflating the time estimates, in turn, leads to Parkinson‘s Law (not reporting on early finishes and work expands to fill the available capacity) and student syndrome. These effects cause the safety to be misused and masked. Misusing (or wasting) the safety time leads to missing the commitments.
Consequently, OTD improvement programs should first focus on improving the mode of project planning and execution instead of reducing task time variability.
We realized unless it is experienced by managers themselves, we could not convince them that these problems (originating outside the projects or uncertainty) do not appear to be the root cause of poor OTD and long PLT in multi-project management; rather, the mode of managing multi-projects does. Their lack of confidence would linger. Continually seeking and trying new management methods or can do little mentality, eventually becomes the norm.
Because of the difficulty in overcoming this obstacle through the collection and analysis of data obtained from directly in the field, we invited experienced project managers, resources managers, and engineers to participate in an experiment with a series of multi-project management games. Game 1 was designed to reveal how teams manage the multi-project game with no problems outside of the project. Results were collected to identify the root cause of poor OTD, and served as a baseline to make comparisons with the other games.
Games 2 and 3 were designed to gather data to support the notion that ―mode of managing multi-projects‖ was the root cause and to validate that changing the mode of managing multi-projects (CCPM) could significantly improve OTD and PLT. Such measures include reasonable and reliable project plans (more efficient use of safety time embedded in each task), reductions in bad multi-tasking, prioritizing or working on the right priority (with a buffer management system), changing work behaviors (such as those related to student syndrome or Parkinson‘s Law). This is the first objective of the thesis.
Concerning the critics from academia, two major criticisms include the shortcomings and lack of novel ideas in CCPM. Concerning the first critic, one of the most significant shortcomings in CCPM claimed by them is the lack of mathematical analysis, specifically, in buffer sizing determination (Ashtiani 2007, Liu 2008, Long and Ohsato 2008 and Rezaie 2009), critical chain identification (Long and Ohsato 2007, Cui 2010 and Zhen Yu Zhao 2010),
and priority control (Cohen, Mandelbaum and Shtub 2004). The results of newly developed methods tested for validity show that the proposed methods yield schedules that are more reliable in duration estimation and priority control than the schedules produced by the original CCPM method. By answering this critic, Goldratt (1997, 2008) and Steyn (2000, 2002 ) emphasize that due to uncertainty and unavailability of accurate data on task duration, optimizing buffer size, critical chain schedule, and priority control is a myth. They proposed that buffer management is the key to managing uncertainty. However, from an academic research viewpoint, these research efforts enhance the theory of the CCPM method.
Concerning the second critic, Duncan (1999) and Trietsch (2005) have argued that although CCPM presents some good ideas as new insights, these ideas are not new. They have claimed that the project management literature has thoroughly documented changing bad human behaviors, such as reducing bad multi-tasking. They also doubts whether it has much to offer when applying the PMBOK (2004) concepts properly. Steyn (2000, 2002), referring to Drucker (1985), mentioned that a large new method is not new knowledge. Innovation is a new perception. It is putting together things that have been around for a long time in a way that no one has thought of putting together before. His study concluded that CCPM puts together concepts that have not been combined in the same way before, and is therefore considered an innovation. Steyn‘s study presents that CCPM achieves highly reliable OTD (On Time delivery) and short PLT (Project Lead Time) in a multi-project environment mainly because it makes good use of safety time imbedded in tasks by implementing two changes:
logistical change (plan aggressive task times with 50% buffers, stagger the release of projects, determine priorities with buffer management) and bad human behavior change (no bad-multi-tasking, no student syndrome and no Parkinson‘s Law).
Yuji (2010) in his book claims by applying logistical changing aligned with performance measurement change and buffer management creates a situation in which good behaviors become more desirable. For example, giving people ―aggressive but possible‖ task duration and not judging the ability of people to meet their time estimates reduces the student syndrome and Parkinson‘s Law. People who are given ―aggressive but possible‖ task duration cannot accept additional tasks at the local level and senior management cannot easily add additional tasks to them because they do not have their own safety time. Multi-tasking reduces in both situations. Logistical change staggers each project as late as possible with a synchronization buffer and schedules the non-critical chain as late as possible with a feeding buffer. Both reduce multi-tasking behavior. Switching a resource between tasks only when a
project buffer erodes to the extent that it poses a risk of delaying a project further avoids multi-tasking, as well as setting priorities only according to the degree the task consumes its project (or feeding) buffer. Buffer management of CCPM determines the priority of a task by examining its affect on project completion. Bendoly and Swink (2007) also supported that lack of timely information affects the behaviors of project managers in ways that do not directly focus on work objectives, but that affect performance.
Steyn also indicated that the assumptions regarding bad human behaviors are not critical to CCPM validity, unlike logistical change. However, Steyn did not adequately support that assumption. Leach (1999) also indicated that although applying the CCPM increases OTD and reduces PLT successfully, it is still difficult to determine to what extent the CCPM or the mere emphasis on logistical change contributes to success.
Although Goldratt (1997b, 2003) with his simulation results pointed out that mere emphasis on logistical change CCPM outperforms with no logistical change in terms of OTD and short PLT (Table 1.1).
Table 1.1 Compare the simulator results Days until project completion
Chance to complete
10% 50% 90%
CCPM
Project 1
80 95 115Project 2
140 160 180Project 3
170 190 210With no logistical change
Project 1
95 111 131Project 2
151 171 201Project 3
178 198 222By carefully examining Goldratt‘s simulation model, which was designed according to the scheduling rule in which the first task of each project path starts only at the planned start time (Figure 1.1), even if it can be started early (as late as possible). This rule favors CCPM because the starting time of the first task of each project path planned by CCPM will be started earlier than those planned with no logistical change.
( FB: Feeding Buffer)
(a)
(b) Figure 1.1 (a) CCPM Single Project Plan, (b) Single Project Plan with no logistical change
Does the mere emphasis on logistical change contribute to the success of project reduction and OTD improvement? To answer this question, a multi-project management simulation experiment was designed to conduct a comparative study of the critical chain and PERT planning method, without bad human behaviors. Because the planning (project time estimation) and execution methods affect the success of PLT reduction and OTD, we first compared the CCPM method with the PERT method to evaluate the planning results of the two methods regarding the same project networks and uncertainties. Second, we simulated both plans to evaluate OTD performance under different scheduling rules. This is the second objective of the thesis.