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Emblems of Success of Critical Chain Project Management: A Review

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 Proceedings of 2nd International Conference on Emerging Trends in Mechanical Engineering, February 24th - 25th, 2017
G H Patel College of Engineering & Technology, V V Nagar - 388120, Gujarat, India
ISBN: 978-93-84659-77-6

IE02
Emblems of Success of Critical Chain Project Management: A
Review
Prof. Jaydeepsinh. M. Ravalji1*, Prof. Vivek A. Deshpande2
1
Mechanical Engg. Department, Faculty of Technology, DDU,Nadiad-387001, Gujarat, India
2
G. H. Patel College of Engineering & Technology, V.V.Nagar-388120, Gujarat, India
*
Corresponding author (e-mail: jmravalji.mh@ddu.ac.in)

Abstract
This paper reviews literature of Critical Chain Project Management (CCPM) -
application of Theory of Constraint (TOC) techniques to Project Management. In
beginning of paper, how CCPM addresses the drawbacks of Traditional Project
Management (TPM) is explained with example. In later section, two key features
of CCPM: Project control through buffer management and avoiding multitasking of
resources in multi project environment are discussed. This paper concludes the
key points behind success of CCPM and advice when to use CCPM for better
result in project environment.
Keywords: CCPM, Buffer Management, Freeze Project.

1. Introduction

Theory of Constraint (TOC) is an operation management technique developed by an Israeli

physicist Dr. Eliyahu Goldratt. TOC identifies the constraint of organization that prevents the
organization to achieve more of its goal and by managing them it gives extraordinary
performance improvements such as reduced inventories, realizing extra production capacity
without investment etc. [4]. This technique is applied successfully to production, marketing and
distribution functions. Dr. Goldratt has also applied TOC technique to Project Management
and he defined it as Critical Chain Project Management (CCPM). Critical chain (CC) word
indicates the constraint of the project. In single project environment, it is the series of task
having logical as well as resource dependency [5] and in multi project environment, it is the
bottleneck resource (capacity constraint) that increases work in progress (WIP) in front of it [9].
CCPM can develop a robust project schedule by which project can be completed in 25 to 50
percent shorter time compare to Traditional Project Management techniques.
CCPM has proven its innovative concept by imparting success to many organizations.
From the Concerto case studies, it is found that ABB, Delta, Boeing, Honeywell DAS and
Hewlett Packard have implemented CCPM successfully in their companies [16].
There are many pieces behind the success story of CCPM but there are two, which have
the larger contribution to it: (1) Project control through Buffer Management and (2) Avoiding
multitasking of resources in multi project environment. The main motivation for the research
review reported in this paper is to discuss these two key elements of CCPM.

2. Traditional Project Management techniques V/S CCPM

Traditional project management (TPM) is a philosophy to run project organization with

goal of maximizing resource utilization. New projects are continuously released to keep
resources busy [21]. As a result, resource conflict occurs and bad multi-tasking increases. This
cause increase in WIP and eventually increase in project duration. CPM and PERT techniques
advocate such type of thinking. CCPM addresses all the drawbacks of CPM/PERT. A
comparison of TPM and CCPM is given below:

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 Proceedings of 2nd International Conference on Emerging Trends in Mechanical Engineering, February 24th - 25th, 2017
G H Patel College of Engineering & Technology, V V Nagar - 388120, Gujarat, India
ISBN: 978-93-84659-77-6

Table 1 Comparison of TPM and CCPM

The time estimates made with 90% probability of completion result in bad human
TPM behaviour such as delay or postponement of the work, also known as student
syndrome [11].
1
It converts the time estimate having 90% probability of completion into aggressive
CCPM estimate having 50% probability of completion. Thus, it reduces the chances of
procrastination of work resulted due to student syndrome [5].
TPM Further cushion of time is provided over the estimated time to meet uncertainties.
By turning high probability estimate into aggressive estimate, safety is removed
2
CCPM locally from each activity and cushion of time is provided at end of project
completion to face uncertainty known as project buffer [14].
Network diagram is prepared based on logical dependency among tasks. Resource
TPM
dependency is not taken care [3].
3 Network diagram is prepared by considering both logical and resource dependency
CCPM between tasks. Thus, delay due to unavailability of resource can be avoided at
planning stage [5].
The activities are scheduled on ‘Start Date’ which encouraged Parkinson’s
TPM Behaviour where early finish are not reported and next activity start on its start date
[2]
.
4
The activities are scheduled on ‘As soon as possible’ the predecessor activity
CCPM completes. This can help to avoid polishing of early finish resulted due to
Parkinson’s law [5].
TPM It overlooks the resource conflict that encourages the multi tasking of resources.
5 The activities those require the same resource are scheduled in series in network.
CCPM The resource is assigned to only one activity at a time until it finishes completely.
Thus, resource is prevented from the multi- tasking [8].

2.1 CCPM Scheduling Examples

In above table, the various features of CCPM are discussed. They will be better
understood by preparing a Critical Chain (CC) Scheduling of a sample project of procurement
of supplies from potential vendors [10]. Figure 2.1.1 and 2.1.2 shows CPM scheduling and CC
scheduling respectively. The intention of preparing schedule by both methods is to show some
key differences in both methods. The project has 12 activities and 2 different departments:
End user and Material Management perform them. Predecessor-successor relation among
activities can be understood from CPM scheduling. In both figures, numbers are marked to
discuss points on CC and CPM scheduling.

Figure 2.1.1 CPM Scheduling of Example Project

Point 1: the safety from the task duration is reduced in CC scheduling compare to CPM
scheduling. Point 2: the activities are scheduled as late as possible to accommodate change
in scope. CPM schedules the activities as soon as possible so that float can be used to level
the resource [8]. Point 3: Eliminate resource145contention by re-sequencing the tasks. CPM
 Proceedings of 2nd International Conference on Emerging Trends in Mechanical Engineering, February 24th - 25th, 2017
G H Patel College of Engineering & Technology, V V Nagar - 388120, Gujarat, India
ISBN: 978-93-84659-77-6

overlooks it. Point 4: The critical chain contains 11 activities due to consideration of resource
contention whereas critical path contains 10 activities. CPM overlooks resource contention.
Point 5: The project buffer of 54 days is placed at end of critical chain to meet any uncertainty
during execution of project [11].

Figure 2.1.2 Critical Chain Scheduling of Example Project

3. Emblems of success of CCPM

The emblems of success of CCPM those together make a difference and offer a
number of advantages over the traditional project scheduling methods are:
1. Identification of critical chain as project constraint.
2. Aggressive time estimate to avoid assignable cause variations (Bad Human Behavior).
3. Aggregation of project risk in a buffer.
4. Protecting the critical chain by providing feeding buffer to non-critical chain feeding to
critical chain.
5. Use of resource buffer to warn upcoming work [8].
6. Project control through project buffer and feeding buffer tracking.
7. Avoiding multitasking of resources within and across the projects.
Out of these, the following two has played significant role in success of CCPM:
1. Project control through project buffer tracking i.e. buffer management
2. Avoiding multitasking of resources in multi project environment.

3.1 Project Control through Buffer Tracking

The use of buffer in CCPM is to provide a project control tool so that project manager
knows when to take action an when to avoid doing so unnecessarily [3]. In CCPM, buffer
consumption is tracked to control project deviation from plan. It is also called as buffer
management. Buffer is a safety time that is used to meet variation and uncertainty during
project execution. There are two types of buffers used in CCPM to protect the project. The first
is project buffer: placed at end of critical chain, second is feeding buffer: placed at end of non-
critical chain feeding to critical chain to avoid delay on critical chain.
At the end of particular period, percentage completion of critical chain is calculated and for
the same period, buffer consumption is recorded. This information is plotted on graph called
‘Fever Chart’ to anticipate possible variations in future activities [3]. Reporting period can be a
month, a week or sometimes a day also. Figure 3.1.1 shows a typical fever chart presenting
the percentage buffer consumption versus percentage of critical chain completed. The chart
is divided in three equal zones that differentiated by Green, Yellow and Red colors. The Green
zone represents one-third of the buffer consumption by the end of critical chain whereas yellow
zone represents two-third. The Red zone signals unusual buffer consumption, which is more
than two-third with respect to the completion of critical chain [3]. There are three different
measures, to be calculated to track buffer consumption on fever chart. (1) Percentage of critical chain
completed (2) Buffer Burn Rate and (3) Project Buffer Consumption Rate [21].
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 Proceedings of 2nd International Conference on Emerging Trends in Mechanical Engineering, February 24th - 25th, 2017
G H Patel College of Engineering & Technology, V V Nagar - 388120, Gujarat, India
ISBN: 978-93-84659-77-6

3.1.1 Percentage of Critical Chain (CC) complete

The answer of this calculation provides actual project progress. If CC completed is
50%, it does mean project progress is 50%. Further, to know that progress is good or bad,
buffer burn rate must be calculated [21].

% CC Completed = No. of days on CC

work completed / Total no. of days on CC

Buffer Burn Rate = % of project buffer

consumed / % of CC completed

PBCR = Increase in % buffer consumption

in a reporting period / Increase in % CC
completed for same reporting period
Figure 3.1.1 Typical Fever Chart

3.1.2 Buffer burn rate (BBR)

Project buffer (PB) consumption must be inline with completion of critical chain. Hence,
the desirable value of BBR is 1.0 or less. If it is more than 1.0, the progress graph on fever
chart enters in yellow or red zone. It is the indication of corrective actions must be taken for
protection of project due date. If calculated BBR is in the green zone of the fever chart then
there is no need of action [7, 21].

3.1.3 Project buffer consumption rate (PBCR)

It is the rate at which, consumption of buffer occurs with respect to completion of critical
chain for a same reporting period. The desirable value of PBCR is 1.0 or less than one.
For example, consider a project with critical chain of 6 weeks and 3 weeks of project buffer.
Thus, total project duration is 9 weeks. Reporting period =1 week (6 days working).

Table 2 Hypothetical Example to understand use of PBCR

At end of 3rd week: Now at end of 4th week, work of 2 days on CC completed
% CC completed = 33% and 4 days consumed of PB. Hence,
% PB consumed = 33% PBCR = 22%(4 days/18 days of total project buffer) /
PBCR = 33% / 33%=1.0 5.5% (2 days/36 days of Project duration) = 4.0

PBCR value more than 1.0 warns the project manager to take necessary action for critical
chain activity causing higher PBCR.
These three measures provide a clear picture of a project or a number of projects at end
of each reporting period and indicate where management attention and resources should be
directed. The measures help to quickly identify whether a problem exists and where it is on
the critical chain.

3.2 Avoiding Multi tasking of Resources in Multi-Project Environment

Many organization works in project environment. E.g., Ship Building, Space research
centres, software developers etc. where multiple projects are running in parallel. Many projects
are started in parallel with a belief that if project is initiated early some more time will be there
to deal with uncertainties in that project. Second, to keep all resources busy, new projects are
continuously released without any priority policy. This result in many problems out of them the
first is an invisible but dangerous problem called ‘Organizational Multi tasking’ [1, 19].
CCPM works in multi project environment with same common features that it applies to
single project but apart from that, it has some more rules to manage multi projects. The book
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 Proceedings of 2nd International Conference on Emerging Trends in Mechanical Engineering, February 24th - 25th, 2017
G H Patel College of Engineering & Technology, V V Nagar - 388120, Gujarat, India
ISBN: 978-93-84659-77-6

critical chain does not give detail information on how to manage multi projects using TOC
concept [12].
There are mainly three rules supplementing the guidelines given by Goldratt [13, 22].
Rule 1: Reduce the numbers of projects running concurrently. For that, the word is ‘Freeze
Project’. The clear advantages of doing this are: (1) As number of projects reduce resources
will have less burden, less demand across the projects and resource allocation can be done
effectively by saying no to Organizational Multi tasking. (2) Now there is less WIP in flow,
waiting time at bottleneck resource will reduce and touch time of activity will reduce.
Goldratt thumb rule says that 50% of projects running in parallel should be freeze.
However, proper mechanism can be made such as ‘bottleneck resource’ which gives the
direction to run minimum number of projects concurrently or a policy like not more than four
projects should be in flow [20].
Rule 2: Don’t start a project without adequate preparation such as approved design
specifications, procured raw materials and other necessary facilities to execute the project. So
those projects should be freeze having issues for smooth execution till they resolve [18, 19].
Rule 3: Set a rule for task priorities among reduced number of projects running. To reduce
multi tasking, task level priorities should be developed within and across projects. For this,
buffer burn rate can be used as a measure to decide the tasks on chain with highest buffer
consumption as high priority tasks. Resources should work first on tasks with high buffer burn
rate and critical for meeting project due date [20].

3.2.1 Some Examples of Success of CCPM in Multi Project Environment

A descent example of this practice can be seen in case study of MRO projects of C-5
Galaxy Aircrafts at Warner Robins Air Logistics Centre, USA. Best and Srinivasan (2006)
explained how by holding the aircrafts in hanger while its parts are getting repaired or
procured, they could surprisingly reduce total duration from 240 days to 171 days and the
number of aircrafts serviced at a time reduced from 12 to 7 [23].
By applying TOC concepts, Delta Airlines has returned from bankruptcy to back into
the business of Maintenance, Repair and Overhaul (MRO) and increase external customer
orders by 33% [15]. Realization Inc. gives two examples of implementation of CCPM to multi
project environment. One is Alcatel-Lucent Company, which makes equipment in telecom
industry. It could improve its 90% of projects within budget and 10 to 25% shorter duration.
Second is Hamilton Beach Company, which makes kitchen appliances. It could improve
throughput from 34 to 52 products in a year by reducing its Product Development Cycle [6].
The list is exhaustive. The main reason behind the success of CCPM is to shift the
performance measure from efficiency to reduction in multitasking and reduction in WIP (No.
of projects running concurrently). When these two goals are achieved, projects can be
performed more easily.

4 Conclusion

From the study of theory and successful case studies, it is apparent that Critical Chain
Project Management (CCPM) is really a revolutionary way of managing the project
successfully in today’s dynamic project environment. CCPM recognizes the problem of
existing Project Management methods and provides a systematic approach to manage the
project from organization (system) perspective. CCPM scheduling clearly identifies the
influence of activity duration variability, precedence relationship and resource requirement and
resource availabilities on the project duration. CCPM also identifies and removes bad human
behavior i.e. student syndrome and multi-tasking. However, the decision to go with CCPM
should be driven by speed. When early finish or shorter project duration can realize money or
other benefits, CCPM is the right choice. For example, establishing new plant facility as a
project, if completed before due date, it will start to make money early [17]. CCPM has no effect
where early finish of project has no any benefits.
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 Proceedings of 2nd International Conference on Emerging Trends in Mechanical Engineering, February 24th - 25th, 2017
G H Patel College of Engineering & Technology, V V Nagar - 388120, Gujarat, India
ISBN: 978-93-84659-77-6

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