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Paul DeLong

Customer Success Manager

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Critical Chain Project Management

Paul DeLong- 09/25/18 04:42 PM

Recently we’ve had a number of questions regarding the management of critical resources across multiple projects. Here are some tips for ensuring your projects move forward in the most efficient way possible.

What is critical chain project management?

First let's start with the definition of Critical Chain Project Management (CCPM). CCPM is a method of planning and managing projects that focuses on the resources (people, equipment, physical space) required to execute project tasks. This method was developed in 1997 by Eliyahu M. Goldratt.

The basic idea is that a system’s throughput is determined by one bottleneck, called the constraint. Critical Chain Project Management seeks to identify the constraint and then optimize the system based on that constraint in order to maximize the system's throughput.

For example, in the image below we see three machines A, B and C in a serial process.

critical chain

The maximum number of parts that this serial process can produce is determined by the machine with the lowest capacity. In this example, Machine B is the constraint and therefore this production line’s maximum throughput is 20 parts/hour.

To maximize a system’s throughput with critical chain project management, Goldratt recommends five steps:

  1. Identify the constraint
  2. Exploit or make full use of the constraint
  3. Subordinate all other system elements to the constraint
  4. Elevate the constraint
  5. Repeat 

It’s a continuous process of tweaking to optimize the system. Each of these points is explored further in this post. 

In product development projects the constraint is the person working on the critical path task, i.e. the critical resource. In this case we are talking about the situation where the resource is critical on two or more projects at the same time.

Managing critical resources across projects in critical chain project management

When working on multiple projects, conflicts can arise between resources on the critical path. In the best-case scenario, your project management tool will alert you to resource conflicts that are ahead so you can plan accordingly.
Planning accordingly means you are aware of the constraint in advance and are able to identify another route for the work to be completed. For example, handing off the work to another person to complete.
In the worst-case scenario, you are alerted by a team member the day that the conflict materializes, e.g., the day that the critical person should be getting started on the task but is pulled in two different directions, on two different projects.

 

What not to do when a critical resource conflict arises

When a critical resource conflict arises, do not have the person multi-task. This is a recipe to delay both projects (or multiple projects). 

In the case of two projects where you decide to have the person multi-task, working on both, Project A will be delayed as a function of how much time the person is spending on Project B. So, if the critical person multi-tasks across two projects, both projects will be delayed.

In every case it is better for the business to decide which project is more important for the critical resource to work on and ensure the critical resource focuses on one project at a time as opposed to delaying both.

So, how do you decide which project takes priority for the critical resource?

The first and simplest approach is where there is a distinct strategic reason why one project takes precedence over another. In this case, the higher priority project gets the benefit of the resource.

When two projects have the same strategic importance, we recommend looking into which project is going to cost the most to delay by calculating each project’s cost of delay.

You can see how to calculate the cost of delay here (need to add link). Simply put, the cost of delaying a project is the cost of delay times the number of days the project will be delayed while the critical person is working on the other project.

The magic in critical chain resource management 

In summary, the magic wand, is knowing when resource constraints are going to happen before they happen so you can manage them proactively.

But if you are in a bind with a critical resource assigned to two projects at once -- choosing one project over the other vs. delaying both is our recommended approach; preferably delaying the one that has the lowest business impact.

Take closer look

Playbook identifies resource constraints across all of your projects so you can proactively manage your projects across the organization. Want to know the number one cause of project delays? It's not what you think.

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