CRITICAL CHAIN PROJECT

MANAGEMENT (CCPM)

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 CCPM

• When TOC philosophy applied to project scheduling and

control, it is called “critical chain project management”
• CCPM was introduced by E. Goldratt in 1997, and can be
found in his classic titled “Critical Chain”
• CCPM acknowledges the stochastic nature of activity durations
and takes into account the human behavior on project
scheduling and execution

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• The report shows that software projects have a 29% success rate
• 52% of the projects are challenged (late, over budget or lacking the essential features)
• 19% of the projects failed

THE CHAOS REPORT

Source: https://www.projectsmart.co.uk/it-project-management/the-curious-case-of-the-chaos-report-2009.php 3
 COMMON PROBLEMS WITH PROJECTS

• Time Overruns
• Budget Overruns
• Compromising the content or the scope

For projects, the constraint is the critical path determining the project duration

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WHY DO PROJECTS FACE
TIME OVERRUNS?

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 REASON

• Uncertainties form an integral part of all projects and are

being embedded into almost all the activities that constitute
the projects
• However, everybody factors these uncertainties while
quoting their respective estimates

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CRITICAL CHAIN: THE HUMAN SIDE

Estimation and Safety

Parkinson’s Law
Factor

Student Syndrome Multitasking

Early Finish leading to

Sandbagging estimates
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ESTIMATION AND SAFETY FACTOR
& BUFFER MANAGEMENT

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 BUFFER MANAGEMENT

• Under CCPM, we come across four different types

of buffers for smooth execution of projects
• Project Buffer
• Feeding Buffer
• Resource Buffer
• Milestone Buffer

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 EXAMPLE

• Consider the following “Systems Development Project”

Activity Activity Code Predecessor(s) Durations Resources

Design Subsystem A
Manufacture Subsystem A
Test Subsystem A
Design Subsystem B
Build Subsystem B
Assemble Subsystems A and B
P - 8 Design Team A
Q P 12 Technician
R Q 8 Test Team
S - 4 Design Team B
T S 20 Technician
Z R,T 4 Technician

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 EXAMPLE

Q
1 3

P R

Z
Start 4 End

S 2
T

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 EXAMPLE

P Q R
8 12 12

S T
4
4 20
Z

32 Days

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 PROJECT BUFFER

• To protect against project delays, a project buffer is added at the end of

the project, i.e., the end of the buffer is the date being committed by
the project manager to complete the project
• Most people while submitting their time estimates provide padded estimates to
make up for time uncertainties so as to avoid being penalized for finishing late
• CCPM advocates the reduction of time estimates by 50%, as a result,
the contingencies are removed
• Subsequently, a single project buffer is added at the end of the project

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 EXAMPLE

P Q R
8 4 12 6 12 6

S T
4 2
4 2 20 10
Z

32 Days

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 PROJECT BUFFER

• A project manager can also strive to reduce the

quantum of the project buffer using the following
two arguments:
• Aggregation Effect
• Parkinson’s Law

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 AGGREGATION EFFECT

• Consider a project with the longest path having activities X1, X2, X3, and X4
having the additional information
Activities Mean Duration S.D. of Duration
X1 4 2
X2 6 3
X3 5 3
X4 7 5

• Further, the durations across all activities follow Normal Distribution

• While quoting the initial estimates, the activity in-charge personnels have
padded up the estimates following a rule.
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 PARKINSON’S LAW

• It states that
“Work expands to fill the time available for its
completion”
• In CCPM, the need is to counteract the effects of
Parkinson’s Law by introducing constraints and buffers
strategically, i.e., setting of an aggressive yet achievable
project deadline

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 FEEDING BUFFER

• Managers need to use safety buffers, i.e., allow extra time

for tasks that impinge directly on critical path
• The feeding buffers protect against delays in the non-
critical activities
• The decision of inserting these buffers rest with the project
managers

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 CAUTION?

• While project buffers and feeding buffers show a resemblance

with slack, they are not slack
• CPM advices to schedule the activities as early as possible, and if
necessary, the activities can be delayed using the slack, whereas
CCPM recommends to start the non-critical activities as late as
possible amidst with the presence of buffers

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RESOURCE BUFFER & CRITICAL
CHAIN

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 CRITICAL CHAIN PROJECT
MANAGEMENT

• Consider the following project:

Activity Predecessor(s) Durations

A - 15
B - 5
C A 15
D B 20

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 CRITICAL CHAIN PROJECT
MANAGEMENT

• Task Dependencies vs. Resource Dependencies

A;15 C;15
Critical Path:

Duration is 30 days
B;5 D;20

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 CRITICAL CHAIN PROJECT
MANAGEMENT

• Consider the following project with some additional information:

Activity Predecessor(s) Durations Resources

A - 15 Design Team Lead (X)
B - 5 Design Team Lead (X)
C A 15 Technician (Y)
D B 20 Testing Team Lead (Z)

At a given point of, only one unit of any of these resources are available

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 CRITICAL CHAIN PROJECT
MANAGEMENT

• Task Dependencies vs. Resource Dependencies

A;X;15 C;Y;15

B;X;5 D;Z;20

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 CRITICAL CHAIN PROJECT
MANAGEMENT

A 15 A 15

B 5 B 5

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C 15 C

D 20 D 20

40 Days 35 Days

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 CCPM

• According to Goldratt Institute,

“The Critical Chain is defined as the longest chain [not path] of dependent tasks.
In this case, ‘dependent’ refers to resources and resource contention across
tasks/projects as well as the sequence and logical dependencies of the tasks
themselves.”

Source: http://www.goldratt.co.uk/resources/critical_chain/

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 RESOURCE BUFFER

• Whenever activities finish late their successors naturally start late, but whenever
they finish early don’t necessarily start early
• Resources such as people and equipment that has been scheduled to work at a particular
date often are not available earlier due to some prior commitments or ongoing tasks
• Hence, whenever “bad luck” or unforeseen delay occurs the project is delayed; whenever
“good luck” or tasks completing ahead of schedule occurs it makes no difference
• In CCPM the issues of “good luck” is addressed through use of resource buffers
• Unlike project and feeding buffers, resource buffers do not add time to the schedule rather
is a countdown signal or warning to alert resources that an activity on the critical chain
will possibly finish earlier than planned and to be prepared to start early

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RESOURCE ALLOCATION TO PROJECTS:
PRIORITY RULES OR DISPATCHING
RULES

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 PRIORITY RULES OR DISPATCHING
RULES

• As Soon as Possible: Activities that can be started sooner are given priority over those that can be
started later
• As Late as Possible: Activities that can be finished later are given lower priority than those that
must be finished earlier
• Most Resources: Activities requiring more resources are given priority over those requiring fewer
resources
• Shortest Task Time: Activities of shorter duration are given priority over those of longer duration
• Least Slack: Activities with less slack are given priority over those with more slack thereby
indicating that the critical activities have the highest priority
• First Come First Served: Activities that arrive earlier or require resource earlier are given priority
• Earliest Due Date: Where a resource is to be allocated to more than one project, the project with the
earliest due date is given priority 29
 EXAMPLE

Activity Predecessor(s) Durations in weeks Resources

A - 2 5
B - 1 5
C B 2 10
D B 1 10
E A 3 5
F C 5 5

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 HEURISTS

• Apply the corresponding rule

• In case of ties, break the ties based on the shortest processing time,
followed by whether the activities are critical.
• If any of the above doesn’t hold true, break ties arbitrarily.

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 AS SOON AS POSSIBLE

Resources

A E
C D
B F

Duration
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 AS LATE AS POSSIBLE

Resources

A E
C D
B F

Duration
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 SHORTEST TASK TIME

Resources

F
D C
B A E

Duration
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 MOST RESOURCES

Resources

A E
C D
B F

Duration
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 MILESTONE BUFFER

• Sometimes a project is also characterized by milestones driven by

deliverables
• Project managers, as such, need to keep buffers close to each milestone
just like the project buffers
• The project managers, as a consequence of inserting milestone buffers,
need to keep the project buffers smaller

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