Critical Chain Project Management by Chad_Cataman


									                      Critical Chain Project Management
                                        A Best Practice Guide

    This Best Practice Guide is based on a research project, funded by the Department of Trade and Industry,
    that piloted the implementation of Critical Chain within the UK construction industry. These projects were
    undertaken within a medium sized construction company, Denne Construction.

    Critical Chain project management has been used successfully in other industries. This is the first time
    that a research project of this nature has been carried out in the UK construction industry.

                                                                                               The Book Critical
    A brief overview of Critical Chain                                                         Chain
                                                                                               applied the
    Critical Chain is a relatively new form of project management.                             Theory of
    It differs significantly from traditional project management in the                        Constraints to
    way that it deals with uncertainty.                                                        project
    Estimated durations in traditional project management typically
    include a safety buffer to take into account uncertainty within                            Eliyahu Goldratt
    each task. These individual safety buffers are often wasted. A                             1997
    critical chain project plan reallocates these safety buffers and
    strategically places them in a project buffer where it can best
    protect the entire project from delays.                               Results of pilot studies
    This project buffer sits at the end of the Critical Chain of the              A contract manager on two
    project. The critical chain is defined as the longest chain of        of the projects is now so convinced
    dependant tasks. It is similar to the Critical Path in traditional    of the merits of the approach that he
    project management. However, once the critical chain is               would like to see Critical Chain used
    selected it remains the primary focus throughout the course of        on all projects.
    the project.
                                                                                  So impressed is one national
    The critical chain approach also uses a system called Buffer          housing association that they are
    Management to monitor and control projects. This records the          now using Critical Chain on the pre-
    extent to which the main project buffer is being consumed by          construction stage as well as on the
    delays within the project. A traffic light system provides a quick    construction phase of their next
    way of assessing the project’s status and provides a                  project.
    mechanism for making decisions on whether or not to instigate
    recovery actions.                                                     So what of the benefits:
    The methodology behind Critical Chain is derived from a body                  The pilot project that has
    of knowledge known as the Theory of Constraints. The Theory           completed did so within the original
    of Constraints is itself a broad methodology for understanding        contract programme. This was
    and improving business systems. Critical Chain is the                 despite a two month delay on
    application of the Theory of Constraints to the project               starting the job.
How individual task safety buffers get wasted:                                   In addition, the 20 houses
                                                                          were able to be handed over virtually
         Dependency between tasks means that delays are passed           defects free allowing residents to
          on while early completions are often wasted.                    move in on the same day.
         Student s yndrome means that commencement of tasks
are       left to the last minute.
                                                                          Other applications of critical chain
         Parkinson’s Law says that work expands to fill the time         are now being explored. These
          available.                                                      include using Critical Chain in i) the
         Multi-tasking refers to the practice of working on more than    pre-construction phase of a project
          one task at a time. This means that one of the tasks will       and ii) as a methodology for
be        completed later than would be the case if the tasks were        managing a construction company’s
          worked on sequentially.                                         complete portfolio of projects.
Initial exposure

The initial idea of exploring the use of Critical Chain project management arose from an interest in
Lean Construction within Denne Construction. A two day workshop for senior management and
contracts managers was provided by Goldratt UK. The workshop explored the principles of the
Theory of Constraints and Critical Chain and how they can be applied to business improvement and
construction project management respectively.

W hat became very apparent from an initial attempt to implement critical chain was that expert support
was required. Although many of the concepts are intuitively easy to grasp, the initial adoption of them
on site needs careful handling. Also the use of Buffer Management to monitor projects and plan
recovery actions requires a working knowledge of simple but specialist project management software.

Setting up the a Critical Chain implementation

Critical Chain workshop

W ith the support of the DTI ‘Partners in Innovation’ funding,
Denne set about identifying 3 projects on which to pilot
Critical Chain. This process involved selecting contract
managers who had attended the earlier workshop and
were willing to trial the Critical Chain approach.

At this stage there was still a high degree of scepticism
amongst the group as to whether or not this approach
could produce results.

Prior to running a specific Critical Chain implementation          Participants at the implementation
workshop it was decided to review key project                                   workshop
manpgement issues with one of the contract managers.
This meant that it was possible to explore in the workshop
how Critical Chain could be used to tackle these issues.          The exercise included reassigning
The contract manager was also asked to develop a simple           the individual task safety buffers into
project plan for use as a workshop exercise.                      a project buffer. This project buffer
                                                                  could now be seen to be under the
A key stage of the workshop came in the second day with           control of the project team. This
the exercise of applying Critical Chain scheduling to a           step provided the key element that
traditional programme for the 4 bed house.                        convinced the contracts managers of
                                                                  the potential for the Critical Chain
There was an acceptance by the contract managers that             approach.
the original task durations in the programme did contain
significant safety buffer.                                        This was a breakthrough moment in
                                                                  terms of both understanding and
                                                                  acceptance. The main sceptic
                                                                  amongst the contracts managers
                                                                  was finally won over and two
                                                                  contracts managers who had been
                                                                  acting as champions from the outset
                                                                  were seen to be vindicated for their

                                                                                 Workshop exercise -
                                                                                 Critical Chain
                                                                                 programme applied to a
                                                                                 4 bed house project

Critical Chain scheduling

Critical Chain scheduling first involves reviewing the reliability of the programme. This is in terms of the
inclusion of all the relevant tasks and completeness of the network of dependencies between the tasks.

Next is the identification of the Critical Chain which determines the duration of the entire project. This is
followed by a review of the individual task durations. For each task it is a process of identifying what
would constitute the correct work content and separate out the element that is normally included as a
safety buffer. This process of reducing task durations was familiar to the contracts managers and is
similar to the process of setting a target programme.

However, unlike a target programme, the safety elements of the durations are reassigned within the
programme to where they can have most effectively used. This involves aggregating them into a single
project buffer which serves to protect the project as a whole.

As a project also includes a number of chains of activities that feed into the Critical Chain, it is
necessary to consider how these feeding chains should be protected against delays. This is where
feeding buffers are introduced. Their role is to protect the Critical Chain.

Finally, the availability of resources needs to be considered. In some cases it makes sense to increase
key resources to ensure its availability. Otherwise the approach is to ensure their availability by using a
system of ‘wake-up’ calls to make sure the resource is aware of its forthcoming commitment.

Working with the site team

Now that the contract managers had bought into the
Critical Chain concept it was time to engage with the
site teams. This process took the form of workshop
session involving an introduction to Critical Chain
principles. This was followed by the application of
Critical Chain scheduling to each of the three pilot
projects. At this stage all the pilot projects were
                                                                      Review Critical Chain programme
awaiting firm commencement dates to start on site.
                                                                             with the site team
One of the pilot projects suffered a major delay in
starting on site and the decision was taken to                             Steps in developing a
substitute this for another project. In the event all three               Critical Chain schedule
projects were delayed in starting.
                                                                1.      Confirm necessity and sufficiency
The projects that were finally chosen included a                conditions for all tasks are satisfied
development of 20 houses, a sheltered housing
scheme consisting of 18 units and a 23 unit block flats.        2.    Review the network of
                                                                dependencies for completeness
One of the issues that arose was how to deal with the
site managers’ existing methods of monitoring                   3.      Identify the Critical Chain of the
progress. The idea was not to burden site managers              project
with a lot of new responsibilities and duplication of
work.                                                           4.      Identify the work content of each
Supply chain and Buffer Management                              task and remove safety buffer from each
W hat became apparent was that existing methods of              task
monitoring progress were absolutely fine for day to day
                                                                 5.       Insert a project buffer at the end of
sitetimalnCgemeandThe Cly icalaChain nagemeint
Cri c a a hain nt. supp rit ch in ma method s
involved with the bigger picture. This means that it can         the Critical Chain
be e eenitysof trontractntrantoremndtsuppriatrhetr thanform against task requirements is central to the
Th s abil a a c ade co m acag s aen tool l e s o per a
                                                                          Ins t fe ng u f r           h
sitecess agemeojtetctol.As was seen on these projects, the buff6.r manageerent ediocebs fpeos iatetd e very
suc man of a pr n o .                                             e           m    pr    s r vd a
                                                                 integration points on the Critical Chain
powerful tool to monitor trade contractor and supplier performance. The information from the buffer
reports can also be used to identify root causes for delays as part of a continuous improvement process.
                                                                 7.       Insert resource buffers
The other key area for supply chain management relates to the use of the Critical Chain planning
method to manage the procurement of key items. These would be items that are subject to high
variability and where any delay would have a significant impact on project performance.
Implementation using Buffer Management

Once the Critical Chain schedule has been established it is
now time to use Buffer Management to manage the

As part of a weekly project review the site managers
update the programme. This involve looking four weeks               Fever chart recording % of project buffer
ahead and calculating the amount of days remaining for the         consumed against % of project completed
completion of each task. Percentages of task completion
are not used as this provides no useful information for
making forecasts on completion dates.
                                                                     A buffer and a task report highlight
The Critical Chain software then calculates the amount of
                                                                     which tasks are consuming the project
the project buffer that has been consumed or added to. A
                                                                     buffer. This allows the site team to
fever chart plots the percentage of buffer consumed
                                                                     identify which actions are most likely to
against the percentage of the project completed.
                                                                     have the greatest impact on
                                                                     progressing the project. These reports
A traffic light system then indicates whether or not the
                                                                     were used successfully to discuss with
degree of buffer consumption is sustainable. W here the
                                                                     a number of trade contractors the need
fever chart time series enters the red zone this indicates
                                                                     for them to accelerate areas of their
that the buffer is being consumed at too great a rate and
that recovery action is required.

Working with trade contractors

Trade contracts are used to being asked to work to tighter deadlines. Usually this is in a response to
major project delays and the result is that site working becomes chaotic.

The critical chain approach starts on the basis that durations will be shorter but that there is a project
buffer to absorb individual task overruns. Trade contractors are asked to do their best and handover to
the next trade as soon as possible. It is expected that given the lower task durations, at least 50% of
tasks will be late finishing.

In practice, on one of the pilot projects, after an initial overrun on piling, the shorter durations have been
achieved, much to the surprise of the site manager.

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