Critical chain project management

Critical chain project management (CCPM) is a method of planning and managing projects that emphasizes the resources (people, equipment, physical space) required to execute project tasks. It was developed by Eliyahu M. Goldratt. It differs from more traditional methods that derive from critical path and PERT algorithms, which emphasize task order and rigid scheduling. A critical chain project network strives to keep resources levelled, and requires that they be flexible in start times.

Critical chain project management is based on methods and algorithms derived from Theory of Constraints. The idea of CCPM was introduced in 1997 in Eliyahu M. Goldratt’s book, Critical Chain. Application of CCPM has been credited with achieving projects 10% to 50% faster and/or cheaper than the traditional methods (i.e., CPM, PERT, Gantt, etc.) developed from 1910 to 1950s.

According to studies of traditional project management methods by Standish Group and others as of 1998, only 44% of projects typically finish on time. Projects typically complete at 222% of the duration originally planned, 189% of the original budgeted cost, 70% of projects fall short of their planned scope (technical content delivered), and 30% are cancelled before completion. CCPM tries to improve performance relative to these traditional statistics.

With traditional project management methods, 30% of lost time and resources are typically consumed by wasteful techniques such as bad multitasking (in particular task switching), student syndrome, Parkinson’s law, in-box delays, and lack of prioritization.

In a project plan, the critical chain is the sequence of both precedence- and resource-dependent tasks that prevents a project from being completed in a shorter time, given finite resources. If resources are always available in unlimited quantities, then a project’s critical chain is identical to its critical path method.

Critical chain is an alternative to critical path analysis. Main features that distinguish critical chain from critical path are:

CCPM planning aggregates the large amounts of safety time added to tasks within a project into the buffers—to protect due-date performance and avoid wasting this safety time through bad multitasking, student syndrome, Parkinson’s Law, and poorly synchronized integration.

Critical chain project management uses buffer management instead of earned value management to assess the performance of a project. Some project managers feel that the earned value management technique is misleading, because it does not distinguish progress on the project constraint (i.e., on the critical chain) from progress on non-constraints (i.e., on other paths). Event chain methodology can determine a size of project, feeding, and resource buffers.

A project plan or work breakdown structure (WBS) is created in much the same fashion as with critical path. The plan is worked backward from a completion date with each task starting as late as possible.

A duration is assigned to each task. Some software implementations add a second duration: one a “best guess,” or 50% probability duration, and a second “safe” duration, which should have higher probability of completion (perhaps 90% or 95%, depending on the amount of risk that the organization can accept). Other software implementations go through the duration estimate of every task and remove a fixed percentage to be aggregated into the buffers.

Resources are assigned to each task, and the plan is resource leveled, using the aggressive durations. The longest sequence of resource-leveled tasks that lead from beginning to end of the project is then identified as the critical chain. The justification for using the 50% estimates is that half of the tasks will finish early and half will finish late, so that the variance over the course of the project should be zero.

Recognizing that tasks are more likely to take more time than less time due to Parkinson’s law, Student syndrome, or other reasons, CCPM uses “buffers” to monitor project schedule and financial performance. The “extra” duration of each task on the critical chain—the difference between the “safe” durations and the 50% durations—is gathered in a buffer at the end of the project. In the same way, buffers are gathered at the end of each sequence of tasks that feed into the critical chain. The date at the end of the project buffer is given to external stakeholders as the delivery date. Finally, a baseline is established, which enables financial monitoring of the project.

An alternate duration-estimation methodology uses probability-based quantification of duration using Monte Carlo simulation. In 1999, a researcher[who?] applied simulation to assess the impact of risks associated with each component of project work breakdown structure on project duration, cost and performance. Using Monte Carlo simulation, the project manager can apply different probabilities for various risk factors that affect a project component. The probability of occurrence can vary from 0% to 100% chance of occurrence. The impact of risk is entered into the simulation model along with the probability of occurrence. The number of iterations of Monte Carlo simulation depend on the tolerance level of error and provide a density graph illustrating the overall probability of risk impact on project outcome.

When the plan is complete and the project is ready to start, the project network is fixed and the buffers’ sizes are “locked” (i.e., their planned duration may not be altered during the project), because they are used to monitor project schedule and financial performance.

With no slack in the duration of individual tasks, resources are encouraged to focus on the task at hand to complete it and hand it off to the next person or group. The objective here is to eliminate bad multitasking. This is done by providing priority information to all resources. The literature draws an analogy with a relay race. Each element on the project is encouraged to move as quickly as they can: when they are running their “leg” of the project, they should be focused on completing the assigned task as quickly as possible, with minimization of distractions and multitasking. In some case studies, actual batons are reportedly hung by the desks of people when they are working on critical chain tasks so that others know not to interrupt. The goal, here, is to overcome the tendency to delay work or to do extra work when there seems to be time. The CCPM literature contrasts this with “traditional” project management that monitors task start and completion dates. CCPM encourages people to move as quickly as possible, regardless of dates.

Because task duration has been planned at the 50% probability duration, there is pressure on resources to complete critical chain tasks as quickly as possible, overcoming student’s syndrome and Parkinson’s Law.

According to proponents, monitoring is, in some ways, the greatest advantage of the Critical Chain method. Because individual tasks vary in duration from the 50% estimate, there is no point in trying to force every task to complete “on time;” estimates can never be perfect. Instead, we monitor the buffers created during the planning stage. A fever chart or similar graph can be created and posted to show the consumption of buffer as a function of project completion. If the rate of buffer consumption is low, the project is on target. If the rate of consumption is such that there is likely to be little or no buffer at the end of the project, then corrective actions or recovery plans must be developed to recover the loss. When the buffer consumption rate exceeds some critical value (roughly: the rate where all of the buffer may be expected to be consumed before the end of the project, resulting in late completion), then those alternative plans need to be implemented.

Critical sequence was originally identified in the 1960s.

Tzvi Raz, Robert Barnes and Dov Dvir, Project Management Journal, December 2003.

Project engineering

Project engineering includes all parts of the design of manufacturing or processing facilities, either new or modifications to and expansions of existing facilities. A “project” consists of a coordinated series of activities or tasks performed by engineers, designers, drafters and others from one or more engineering disciplines or departments. Project tasks consist of such things as performing calculations, writing specifications, preparing bids, reviewing equipment proposals and evaluating or selecting equipment and preparing various lists, such as equipment and materials lists, and creating drawings such as electrical, piping and instrumentation diagrams, physical layouts and other drawings used in design and construction. A small project may be under the direction of a project engineer. Large projects are typically under the direction of a project manager or management team. Some facilities have in house staff to handle small projects, while some major companies have a department that does internal project engineering. Large projects are typically contracted out to engineering companies. Staffing at engineering companies varies according to the work load and duration of employment may only last until an individual’s tasks are completed.

The role of the project engineer can often be described as that of a liaison between the project manager and the technical disciplines involved in a project. The distribution of “liaising” and performing tasks within the technical disciplines can vary wildly from project to project; this often depends on the type of product, its maturity, and the size of the company, to name a few. It is important for a project engineer to understand that balance. The project engineer should be knowledgeable enough to be able to speak intelligently within the various disciplines, and not purely be a liaison. The project engineer is also often the primary technical point of contact for the consumer.

A project engineer’s responsibilities include schedule preparation, pre-planning and resource forecasting for engineering and other technical activities relating to the project. They may also be in charge of performance management of vendors. They assure the accuracy of financial forecasts, which tie-in to project schedules. They ensure projects are completed according to project plans. Project engineers manage project team resources and training and develop extensive project management experience and expertise.

When use, an engineering company is generally contracted to conduct a study (capital cost estimate or technical assessment) or to design a project. Projects are designed to achieve some specific objective, ranging in scope from simple modifications to new factories or expansions costing hundreds of millions or even billions of dollars. The client usually provides the engineering company with a scoping document listing the details of the objective in terms of such things as production rate and product specifications and general to specific information about processes and equipment to be used and the expected deliverables, such as calculations, drawings, lists, specifications, schedules, etc. The client is typically involved in the entire design process and makes decisions throughout, including the technology, type of equipment to use, bid evaluation and supplier selection, the layout of equipment and operational considerations. Depending on the project the engineering company may perform material and energy balances to size equipment and to quantify inputs of materials and energy (steam, electric power, fuel). This information is used to write specifications for the equipment. The equipment specifications are sent out for bids. The client, the engineering company or both select the equipment. The equipment suppliers provide drawings of the equipment, which are used by the engineering company’s mechanical engineers, and drafters to make general arrangement drawings, which show how the pieces of equipment are located in relation to other equipment. Layout drawings show specific information about the equipment, electric motors powering the equipment and such things as auxiliary equipment (pumps, fans, air compressors), piping and buildings. The engineering company maintains an equipment list with major equipment, auxiliary equipment, motors, etc. Electrical engineers are involved with power supply to motors and equipment. Process engineers perform material and energy balances and design the piping and instrumentation diagrams to show how equipment is supplied with process fluids, water, air, gases, etc. and the type of control loops used. The instrumentation and controls engineers specify the instrumentation and controls and handle any computer controls and control rooms. Civil and structural engineers deal with site layout and engineering, building design and structural concerns like foundations, pads, structures, supports and bracing for equipment. Environmental engineers deal with any air emissions and treatment of liquid effluent.

The various fields and topics that projects engineers are involved with include:

Project engineers are often project managers with qualifications in engineering or construction management. Other titles include field engineer, construction engineer, or construction project engineer. In smaller projects, this person may also be responsible for contracts and will be called an assistant project manager. A similar role is undertaken by a client’s engineer or owner’s engineer, but by inference, these often act more in the interests of the commissioning company.

Project engineers do not necessarily do design work, but instead represent the contractor or client out in the field, help tradespeople interpret the job’s designs, ensure the job is constructed according to the project plans, and assist project controls, including budgeting, scheduling, and planning. In some cases a project engineer is responsible for assisting the assigned project manager with regard to design and a project and with the execution of one or more simultaneous projects in accordance with a valid, executed contract, per company policies and procedures and work instructions for customized and standardized plants.

Typical responsibilities may include: daily operations of field work activities and organization of subcontractors; coordination of the implementation of a project, ensuring it is being built correctly; project schedules and forecasts; interpretation of drawings for tradesmen; review of engineering deliverables; redlining drawings; regular project status reports; budget monitoring and trend tracking; bill of materials creation and maintenance; effective communications between engineering, technical, construction, and project controls groups; and assistance to the project manager.

Tasks in Project Management

In project management, a task is an activity that needs to be accomplished within a defined period of time or by a deadline to work towards work-related goals. It is a small essential piece of a job that serves as a means to differentiate various components of a project. A task can be broken down into assignments which should also have a defined start and end date or a deadline for completion. One or more assignments on a task puts the task under execution. Completion of all assignments on a specific task normally renders the task completed. Tasks can be linked together to create dependencies.

Tasks completion generally requires the coordination of others. Coordinated human interaction takes on the role of combining the integration of time, energy, effort, ability, and resources of multiple individuals to meet a common goal. Coordination can also be thought of as the critical mechanism that links or ties together the efforts on the singular level to that of the larger task being completed by multiple members. Coordination allows for the successful completion of the otherwise larger tasks that one might encounter.

In most projects, tasks may suffer one of two major drawbacks:

Project Plan Document

The Project Management Plan Document also known as Project Plan Document or simply Project Plan is a document that contains the strategy for managing the project and the processes related to all areas of the project (scope, cost, schedule, quality, etc.) which are known as Knowledge Areas according to PMI. There are lots of project management processes mentioned in PMBOK® Guide, but determining what processes need to be used based on the needs of the project which is called Tailoring is part of developing the project management plan

The project plan document may include the following sections:

A High level overview of the project

The roles and authority of team members. It represents the executive summary of the Project Management Plan

The scope statement from the Project charter should be used as a starting point with more details about what the project includes and what it does not include (In-Scope and Out-Of-Scope)

A list of the project Milestones (the stop points that helps evaluating the progress of the project). This list includes the milestone name, a description about the milestone, and the date expected.

WBS which consists of Work Packages and WBS Dictionary, which defines these work packages, as well as Schedule Baseline, which is the reference point for managing project progress, are included here.

This section contains all management plans of all project aspects

Identify key resources needed for the project and their times and durations of need.

This section includes the budgeted total of each phase of the project and comments about the cost.

Acceptable levels of quality.

Some space for the project sponsor to sign off the document

Process

A process is a set of recurrent or periodic activities that interact to produce a result.

Things called a process include:

Task Management

Task management is the process of managing a task through its life cycle. It involves planning, testing, tracking, and reporting. Task management can help either individual achieve goals, or groups of individuals collaborate and share knowledge for the accomplishment of collective goals. Tasks are also differentiated by complexity, from low to high.

Effective task management requires managing all aspects of a task, including its status, priority, time, human and financial resources assignments, recurrence, dependency, notifications and so on. These can be lumped together broadly into the basic activities of task management.

Managing multiple individuals or team tasks may be assisted by specialized software, for example workflow or project management software. In fact, many people[who?] believe that task management should serve as a foundation for project management activities.

Task management may form part of project management and process management and can serve as the foundation for efficient workflow in an organization. Project managers adhering to task-oriented management have a detailed and up-to-date project schedule, and are usually good at directing team members and moving the project forward.

The status of tasks can be described by the following states:

The following state machine diagram describes different states of a task over its life cycle. This diagram is referenced from IBM. A more up to date task’s state machine diagram applicable to the new continuous delivery method could be found here.

As a discipline, task management embraces several key activities. Various conceptual breakdowns exist, and these, at a high-level, always include creative, functional, project, performance and service activities.

Task management software tools abound in the marketplace. Some are free; others intended for enterprise-wide deployment purposes. Some are simple to-do lists, while others boast enterprise-wide task creation, visualization, and notification capabilities – among others. Task management is used by small to Fortune 100 size companies. It does support simple individual projects to corporate task management activities.

Project management software, calendaring software and workflow software also often provide task management software with advanced support for task management activities and corresponding software environment dimensions, reciprocating the myriad project and performance activities built into most good enterprise-level task management software products.

Software dimensions crisscrossing nearly all lines of task management products include task creation, task visualization, notifications, assign resources, compatibility, configurability, scalability, and reporting

Project Management 2.0

Project Management 2.0 (sometimes mistakenly called Social Project Management) is one branch of evolution of project management practices, which was enabled by the emergence of Web 2.0 technologies. Such applications include: blogs, wikis, collaborative software, etc. Because of Web 2.0 technologies, small distributed & virtual teams can work together much more efficiently by utilizing the new-generation, usually low or no-cost Web-based project management tools. These tools challenge the traditional view of the project manager, as Project Management 2.0 represents a dramatic increase in the ability for distributed teams’ collaboration.

While traditional project management structures focused on the paradigm of the project manager as controller, Project management 2.0 stresses the concept of distributed collaboration, and the project manager as a leader. Project management 2.0 advocates open communication. While traditional project management often was driven by formal reporting and hierarchical structures, project management 2.0 stresses the need for access to information for the whole team. This has led to one of the many criticisms of Project Management 2.0 – that it cannot scale to large projects. However, for distributed teams performing agile development, which are often emergent structures, the use of rich collaborative software may enable the development of collective intelligence

Common comparisons of traditional project management vs. project management 2.0 are listed in the table below.

Business Process Interoperability (BPI)

Business process interoperability (BPI) is a property referring to the ability of diverse business processes to work together, to so called “inter-operate”. It is a state that exists when a business process can meet a specific objective automatically utilizing essential human labor only. Typically, BPI is present when a process conforms to standards that enable it to achieve its objective regardless of ownership, location, make, version or design of the computer systems used.

The main attraction of BPI is that a business process can start and finish at any point worldwide regardless of the types of hardware and software required to automate it. Because of its capacity to offload human “mind” labor, BPI is considered by many as the final stage in the evolution of business computing. BPI’s twin criteria of specific objective and essential human labor are both subjective.

The objectives of BPI vary, but tend to fall into the following categories:

Business process interoperability is limited to enterprise software systems in which functions are designed to work together, such as a payroll module and a general ledger module that are part of the same program suite, and in controlled software environments that use EDI. Interoperability is also present between incompatible systems where middleware has been applied. In each of these cases, however, the processes seldom meet the test of BPI because they are constrained by information silos and the systems’ inability to freely communicate among each other.

The term “Business process interoperability” (BPI) was coined in the late 1990s, mostly in connection with the value chain in electronic commerce. BPI has been utilized in promotional materials by various companies, and appears as a subject of research at organizations concerned with computer science ontologies.

Despite the attention it has received, business process interoperability has not been applied outside of limited information system environments. A possible reason is that BPI requires universal conformance to standards so that a business process can start and finish at any point worldwide. The standards themselves are fairly straightforward—organizations use a finite set of shared processes to manage most of their operations. Bringing enterprises together to create and adopt the standards is another matter entirely. The world of management systems is, after all, characterized by information silos. Moving away from silos requires organizations to deal with cultural issues such as ownership and sharing of processes and data, competitive forces and security, not to mention the effect of automation on their work forces.

While the timetable or adoption of BPI cannot be predicted, it remains a subject of interest in organizations and think tanks alike.

To test for BPI, an organization analyzes a business process to determine if it can meet its specific objective utilizing essential human labor only.

The specific objective must be clearly defined from start to finish. Start and finish are highly subjective, however. In one organization, a process may start when a customer orders a product and finish when the product is delivered to the customer. In another organization, the same process may be preceded with product manufacture and distribution, and may be followed by management of after-sale warranty and repairs.

Essential human labor includes:

To qualify for BPI, every process task must be taken into account from start to finish, including the labor that falls between the cracks created by incompatible software applications, such as gathering data from one system and re-inputting it in another, and preparing reports that include data from disparate systems. The process must flow uninterrupted regardless of the underlying computerized systems used. If non-essential human labor exists at any point, the process fails the test of BPI.

To assure that business processes can meet their specific objectives automatically utilizing essential human labor only, BPI takes a “service-oriented architecture“ (SOA) approach, which focuses on the processes rather than on the technologies required to automate them. A widely used SOA is an effective way to address the problems caused by any disparate system that is the heart of each information silo.

SOA makes practical sense because organizations cannot be expected to replace or modify their current enterprise software to achieve BPI, regardless of the benefits involved. Many workers’ jobs are built around the applications they use, and most organizations have sizable investments in their current information infrastructures which are so complex that even the smallest modification can be very costly, time-consuming and disruptive. Even if software makers were to unite and conform their products to a single set of standards, the problem would not be solved. Besides software from well-known manufacturers, organizations use a great many legacy software systems, custom applications, manual procedures and paper forms. Without SOA, streamlining such a huge number of disparate internal processes so that they interoperate across the entire global enterprise spectrum is simply out of the question.

To create an SOA for widespread use, BPI relies on a centralized database repository containing shared data and procedures common to applications in every industry and geographical area. In essence, the repository serves as a top application layer, enabling organizations to export their data to its distributed database and obtain the programs they need by simply logging on via a portal. To assure security and commercial neutrality, the repository conforms to standards promulgated by the community of BPI stakeholders.

Organizations and interest groups that wish to achieve business process interoperability begin by establishing one or more BPI initiatives.

Management System

A management system is a set of policies, processes and procedures used by an organization to ensure that it can fulfill the tasks required to achieve its objectives. These objectives cover many aspects of the organization’s operations (including financial success, safe operation, product quality, client relationships, legislative and regulatory conformance and worker management). For instance, an environmental management system enables organizations to improve their environmental performance and an occupational health and safety management system (OHSMS) enables an organization to control its occupational health and safety risks, etc.

Many parts of the management system are common to a range of objectives, but others may be more specific.

A simplification of the main aspects of a management system is the 4-element “Plan, Do, Check, Act” approach. A complete management system covers every aspect of management and focuses on supporting the performance management to achieve the objectives. The management system should be subject to continuous improvement as the organization learns.

Elements may include:

Examples of management system standards include:

Management Process

Management process is a process of setting goals, planning and/or controlling the organizing and leading the execution of any type of activity, such as:

An organization’s senior management is responsible for carrying out its management process. However, this is not always the case for all management processes, for example, it is the responsibility of the project manager to carry out a project management process.

Planning, it determines the objectives, evaluate the different alternatives and choose the best

Organizing, define group’s functions, establish relationships and defining authority and responsibility

Staffing, recruitment or placement and selection or training takes place for the development of members in the firm

directing, is to give the Direction to the employees.