Theory of Constraints and Project Management: Challenging the Dominant Paradigm

McElroy Translation

Theory of Constraints and Project Management:

Challenging the Dominant Paradigm

Bob Donaldson, VP Strategy, McElroy Translation Company

Setting the Stage: Technology Pressures

CMS/TMS Integration– Automates Localization Project Initiation– Impact on Capacity Planning?

Translation Memory & Advanced Leverage Tools– Improves Translation Reuse– Impact on Translator Involvement?

Collaborative Working Models & Environments– Enables More Parallelism– Impact on Quality Control?

Machine Translation Integration– Improves Translator Productivity– Impact on Business Model?

Typical Project Problems

Challenges & Symptoms Survey Results (1998)*

Late

Only 44% of all projects finish on schedule or before.  The rest tend to be very late.  On average, projects are 222% longer than planned.

Over budget By 189%

Fall short of planned technical content

70% of projects

Canceled before finished 30% of projects

Day-to-day chaos & frustrations

Epidemic

No reliable way to measure project status

Until it's too late

Source: National survey conducted by The Standish Group

Project or Standard Services or Life Cycle?

Localization Project– Historical Usage– Describes Initial Localization of Legacy Material– Implies Unique Set of Goals, Tasks, Challenges

Localization Life Cycle– Standard Component of Product/Content Development– Better Describes Buyer Viewpoint– Implies Regularity & Repetition

Localization Services– Standard Tools, Processes & Deliverables– Better Describes Vendor Viewpoint– Implies Global Perspective on Multi-Project Management

Service Delivery Challenges

Service delivery depends upon people who …– Do not always work at the same rate– Do not always communicate effectively– Constitute a capacity constraint

Customer satisfaction depends upon …– Service Quality standard processes– Service Responsiveness flexible processes– Management intervention to adjust priorities

Suboptimal processes & metrics often create – Interdepartmental friction– An environment of chaos

Dilbert’s Perspective on Coordination

Service Delivery Dilemma

GOAL: Become a Good Service Company

Maintain ConsistentQuality

Meet TimelinessExpectations

Work to StandardProcesses

Work Flexibly

Source: TOC Resultants: www.toc-resultants.com

PMBOK – The Current Standard

Initiating– Sponsorship, Project Goals, etc.

Planning– Schedule, Budget, Resource Allocation, etc.

Executing– Monitoring, Problem Resolution, QA, etc.

Controlling– Performance/Risk Reporting, Forecasting, etc.

Closing– Delivery, Lessons Learned, etc.

Why Projects Fail

The Dilbert Principle:

“Anything I don’t understand must be easy.”

Do we really understand the difference between project management & project monitoring?

Typical Project Plan

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Critical Path

Local ‘Safety Time’ Embedded Throughout

Note the illusion of certainty!

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Typical Plan w/Resource Leveling

Critical Path

Local ‘Safety Time’ Embedded Throughout

Resource Contention

Illusion of certainty remains

Multi-Project [Standard Services] Issues

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Early Late

Expected Performance

Actual Performance?

Early Late ……

Parkinson’s Law

1 C. Northcote Parkinson; The Economist, Nov. 1955

Work expands to fill the time available for its completion1

The root problem is “Safety” time!

Implications for Project Execution

Resources scheduled to maximize utilization Late completion is penalized (obviously)

– So local safety time expands Early completion is also penalized

– “Excess” capacity invites more work– Utilization is often part of performance reviews– Credibility of estimates may be in question

On-time delivery is placed at risk– Current ‘on time’ status not indicative of risk– Time ‘saved’ by early completion is typically wasted– Time ‘lost’ by late completion cascades to subsequent

tasks (and projects!)

Dilbert’s Perspective on Project Status

Theory of Constraints – Focus on Throughput

Identify

Exploit

Subordinate

Elevate

Evaluate

Strategic (Corporate) Loop

Tactical (Project) Loop

Tactical Constraints – Single Project

Goal is to deliver project benefit as quickly as possible

Effective project management involves – Identifying the critical chain of tasks that are

constraining the project’s completion– Exploiting potential capacity constraints

through effective scheduling– Subordinating non-critical tasks & Controlling

uncertainty through buffer management Focus on throughput not utilization

Theory of Constraints in PMBOK Context

Initiating

Planning– Critical Chain Schedule (vs. Critical Path)

Executing– Maximize Throughput (vs. Utilization)

Controlling– Buffer Management (vs. Task Completion)

Closing

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Back to our Familiar Project Plan

Critical Path

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Critical Chain Plan w/Buffers

Critical Chain

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Critical Chain Plan w/Buffers

Gating Buffer

Constraint Buffers

Feeding BufferProject BufferCritical Chain

100%100% 100%100%

Typical Resource Utilization PlanAdjusted by removing “safety” time …

The Roadrunner … Sprint Capacity

Roadrunners have two speeds …

Stopped (but ready for action)

and Fast !

Roadrunner Advantages

Working to capacity per schedule generates throughput

Not working ahead protects throughput by– Preserving “sprint capacity”– Avoiding unnecessary work– Reducing work in progress

It’s all about throughput!

Strategic Constraints

Goal is to maximize organizational throughput

“Hard” Constraints– Resource Capacity– Infrastructure Capacity

“Soft” Constraints– Existing Policies– Existing Performance Metrics

A Few Words on Metrics

Typical metrics are cost-centric– Resource utilization levels– Task duration & on-time completion– Project cost & on-time delivery

We need throughput-centric metrics– $’s of throughput per unit of time– $-days of buffer consumption– $-days of work in progress

Performance Metrics w/Buffers

Source: http://www.dbrmfg.co.nz

Throughput Dollar DaysLate

Throughput Dollar DaysLate

Near-the-endMiddleBeginning End

Track

Feeding Buffer End Time

0 Buffer

CheckingTime

Constraint Buffer End Time

0 Buffer

CheckingTime

Tracking Zone

Resolving the Dilemma

GOAL: Become a Good Service Company

Maintain ConsistentQuality

Meet TimelinessExpectations

ConstraintManagement

Buffer Management

Throughput OrientedMetrics

Summary

Identify the Constraint – Select the best leverage point

Exploit the Constraint– Maximize throughput with system schedule– Protect throughput with project buffers

Subordinate everything else to the Constraint– Beware of legacy performance metrics– Provide for “Roadrunner” responses

Elevate the Constraint– Address capacity or productivity limits

Repeat!

Further Reading

A Guide to Implementing the Theory of Constraints (TOC). Dr. K. J. Youngman. www.dbrmfg.co.nz

Any book by Eliyahu Goldratt …

TOC Resultants – www.toc-resultants.com

Contact Details

Bob DonaldsonVP StrategyMcElroy Translation Company910 West AvenueAustin, TX 78701

+1 (512) 472-6753bobd@mcelroytranslation.comwww.mcelroytranslation.com