ELC 347 project management

1. ELC 347 project management Day 21

2. Agenda • Integrative Project • Part 4 corrected, feedback sent, both teams need revision and clarification • Part 5 Due Nov 24 (page 342) • Any of the first five sections can be resubmitted for rescoring prior to finals week. The recorded score will the average of the original score and the score on the resubmitted section. • Assignment 7 Posted • Due Nov. 24 • Today will discuss Critical Chain Project Scheduling

3. Schedule for rest of semester • Nov 17 • Chap 11 • Nov 20 • Group work • Nov 24 • Quiz 3 • Through Chap 11 • IP part 5 Due • Assignment 7 due • Dec 1 • Project ‘s 5 & 6 • Dec 4 • Group Work • Assignment 8 due • Dec 8 • Chap 12 • IP Part 6 due • Dec 11 • Chap 13 & 14 • Dec 18 @ 10 AM • Quiz 4 • Through chap 14 • IP Project’s due © 2007 Prentice-Hall, Inc

4. Critical Chain Project Scheduling Chapter 11 © 2007 Pearson Education

6. BAE Systems http://www.baesystems.com/

7. Theory of Constraints & Critical Chain Project Scheduling A constraint limits system output. The Goal – Goldratt TOC Methodology • Identify the constraint • Exploit the constraint • Subordinate the system • Elevate the constraint • Repeat the process

8. Dropping a marble

9. Dr J Edwards Deming

10. Variation Common Cause Inherent in the system Special Cause Due to a special circumstance • Managers should • Understand the difference between the two • Not adjust the process if variation is common cause • Not include special cause variation in risk simulation • Not aggregate discrete project risks

12. 25% 50% 80% 90% time CCPM and the Causes of Project Delay How safety is added to project activities • Individual activities overestimated • Project manager safety margin • Anticipating expected cuts from management Gaussian Distribution

13. Wasting Extra Safety Margin • The Student Syndrome • Immediate deadlines • Padded estimates • High demand • Failure to pass along positive variation • Other tasks • Overestimation penalty • Perfectionism • Multitasking • Path Merging

15. Critical Chain Solutions • Central Limit Theorem • V∑ = n * V , SD2 = V, • Standard deviation of the sum is less than the sum of the standard deviations! • Aggregating risk leads to reduced risk

16. Activity durations estimated at 50% level • Buffer reapplied at project level • Goldratt rule of thumb (50%) • Newbold formula (2σ) • Feeder buffers for non-critical paths

19. CCPM New estimate = 23 + (52-24)/2 = 37

20. CCPM Changes • Due dates & milestones eliminated • Realistic estimates – 50% level not 90% • “No blame” culture • Subcontractor deliveries & work scheduled ES • Non critical activities scheduled LS • Factor the effects of resource contention • Critical chain usually not the critical path • Solve resource conflicts with minimal disruption

23. Bob Bob Bob Feeder Buffer Feeder Buffer Feeder Buffer ProjectBuffer Critical Chain Solutions Buffers protect constraints and prevent delays

25. Critical Chain Project Portfolios Drum – system-wide constraint that sets the beat for the firm’s throughput • Drum – person, department, policy, resource • Capacity constraint buffer – safety margin between projects • Drum buffer – extra safety before the constraint

26. Applying CCPM to Project Portfolios • Identify the drum • Exploit the drum • Prepare a schedule for each project • Determine priority for the drum • Create the drum schedule • Subordinate the project schedules (next slide) • Elevate the capacity of the drum • Go back to step 2

27. Subordinating Project Schedules • Schedule projects based on drum • Designate critical chain • Insert capacity constraint buffers • Resolve any conflicts • Insert drum buffers so the constraint is not starved

29. CCPM Critiques • No milestones used • Not significantly different from PERT • Unproven at the portfolio level • Anecdotal support only • Incomplete solution • Overestimation of activity duration padding • Cultural changes unattainable