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Aggregate Risk Critical Path Planning:. A Discussion of Leveraging Critical Chain Concepts for Critical Path. Robert Richards, Ph.D. Stottler Henke Associates, Inc. www.StottlerHenke.com Hilbert Robinson President, Afinitus Group, LLC. Orientation. Introduction Uncertainty & Risk - PowerPoint PPT Presentation
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Aggregate Risk Critical Path Planning:
A Discussion of Leveraging Critical Chain Concepts for Critical Path
Robert Richards, Ph.D.Stottler Henke Associates, Inc.
www.StottlerHenke.com
Hilbert RobinsonPresident, Afinitus Group, LLC
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
2
Orientation
• Introduction• Uncertainty & Risk• Needs for Aggregated Risk• Aggregated Risk: The Critical Chain
Solution• Aggregate Risk Critical Path Planning• Conclusions• Q/A & Authors
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
3
Critical Chain & Resources
• Critical Chain Project Management (CCPM):
Resources explicitly defined and tracked
• Imply that resources must be modeled to use Critical Chain concepts?
• Only a subset of concepts deal with resourcesI.e. many of CCPM’s benefits are independent of resources
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
4
Critical Chain & Resources (2)
• Many of CCPM’s benefits are independent of resources
• If resources available in large enough quantities, then Critical Chain = Critical Path
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5
Critical Chain & Critical Path
• Why Not Leverage Critical Chain Concepts for Critical Path
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6
Aggregation of Risk
• Major Principle of Critical Chain– Does not explicitly require resource
modeling
• Fights– Student Syndrome– Parkinson’s Law
• Let’s Look at in More Detail
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
7
Uncertainty & Risk
• All Projects deal with uncertainty and risk
• Provisions are always made to accommodate a reasonable amount of uncertainty
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
8
Non-Aggregate Risk
• Traditional Critical Path implementation uses what will be referred to as a non-aggregated risk
• Basic building block of the project model is the task or activity.
• Assumption: in order to have a high confidence that the project will finish on time … each activity (or at least most) need to finish on time
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
9
Activity Contingency
• Amount required by each activity to make it reliable is not trivial– More uncertain the environment and the
more significant the consequence of missing the commitment, the greater the amount of safety incorporated into the planning of each activity must be, in order to maintain a high degree of reliability.
• This is the non-aggregated risk technique; each activity is lengthened to provide protection against all its associated risk.
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
1052
10
Task Estimation Variation
50% confidence
90% confidence10%
confidence
Safety
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11
Estimating Task Durations
• The situation: You are asked to estimate how long it will take you to complete a critical task. You want to make sure that you can live up to the estimate you provide.“I know the
task will be late before it
comes to me” safety
“I know this is not the only task I
will work on” safety
“I know my manager will cut estimates
anyway” safety
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
12
Needs for Aggregated Risk
• Paradox? Even with apparent safety – projects still have a tendancy to be late– Student Syndrome– Parkinson’s Law
• Critical Chain – considers these in its mitigation strategy Aggregated Risk– Independent of Resources– Thus may be applicable to Critical Path
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
13
Student Syndrome (Procrastination)
• Initial Activity• Inactivity• Deadline Trigger• Burst of Activity
Level of Effort
Start Scheduled CompletionTime
Deadline Trigger
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14
Parkinson’s Law
• “Work expands so as to fill the time available for its completion”– I can make it better.– I don’t want to be wrong on my estimate.– Avoid the accusations of “Sandbagging”.– The reward for finishing early is more work.
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15
Aggregated Risk: The Critical Chain Solution
• Project Networks rebuilt:1) Removing hidden contingency from activity durations2) Replace with explicit contingency provisions– Strategically located at key points in the
network
• Results in: Project with shorter overall duration & higher degree of schedule protection.
Project Level vs. Task Level Protection
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
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Aggregation Principle
• Insurance is designed to work by spreading costs across a large number of people. Premiums are based on the average costs for the people in an insured group. This risk-spreading function helps make insurance reasonably affordable for most people.
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
17
Introduction to Critical Chain
• Developed by Eliyahu M. Goldratt– Introduced in 1997
• Derived from the Theory of Constraints• Differs from CPM in focus on resource
requirements• Focuses on protecting the project’s
critical chain• Gathers contingency time into pooled
buffers protecting the critical chain
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
18
1. Traditional Plan
2. Safety Excluded
3. Resource Leveled
4. Critical Chain Marked
From Task to Project Protection
Critical Chain Planning Process
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19
Buffer Placement
• Project Buffer– Between the last task of the aggressive
project schedule critical chain and the committed end date
• Feeding Buffers– Protect the critical chain from being
impacted by non-critical chain– Place at the end of non-critical chains before
they connect to the critical chain
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Buffered Project
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PB = Project Buffer FB = Feeding Buffer
Compared to 60 days traditional
Buffered Project (2)
• Aggregation Principle [where did some of the safety go?]:– Pooled protection provides more coverage– Location is just as important as amount– Sizing Rule of Thumb Buffer is half of
preceding chain Buffers does NOT = Management Reserve
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
22
Critical Chain: 2nd Look
• The shortest causal path through a schedule
• Takes resource requirements, contention into account
• Slippage in the critical chain causes slippage in the delivery date
1
2
3 4
56 7
8
PERT w ith critical path
1 2
3 4
56 7
8
Partial Order PERT w ith cp/cc
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
23
Critical Chain: Example
1
2
3 4
56 7
8
PERT
1 2
3 4
56 7
8
Partial Order Schedule
1 2
6
3 54
8
Schedule
R
R
7R
1 2
6
3 54
8
Schedule w ith Critical Chain
7
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24
Buffering the Critical Chain
1 2
6
3 54
8 7
Contingency time
1 2
6
3 54
8 7
Combined contingency time
1 2
6
3 54
8 7
Buffer placement schedule
1 2
6
3 54
8 7
CCPM schedule
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
25
Schedule Before Execution Starts
“AS OF DATE
Execution Mode: Buffer Management
1. T8 experienced a 5 day increase in scope or delay
2. Results in a 2.5 day impact to the project buffer
3. The rest was absorbed by the CC gap
35-32.5=2.5 7% Complete and 14% Buffer Consumed
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26
Project Buffer Consumption after Feeder Buffer Consumption
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Fever Chart
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CCPM Schedule Control
• Frequently status with estimates of Remaining Duration for working tasks:– Simple.– Forward looking.
• Calculate impact on project buffer tracing task chains forward: buffer penetration.
• Compare to pre-set thresholds for action:– Green no action– Yellow plan buffer recovery.– Red implement buffer recovery.
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29
Aggregate Risk Critical Path Planning
• The process to determine the Critical and Feeding Chains is identical regardless of whether resources are in scarce supply or not.
• Resource scarcity has the impact of altering which tasks comprise the Critical versus Feeding changes but has no other material impact.
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30
Aggregate Risk Critical Path Planning
• Update each activity duration to remove the entire hidden contingency, i.e., the activity duration is that duration where the probability of finishing on time is 50/50.
• Insert Feeder Buffers (FB) where non-critical-path activities merge into the critical path.
• Insert a Project Buffer (PB) after the final critical path activity.
• During execution prioritize activities using buffer penetration.
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
31
ARCPP: Implementation
1. Model as currently done2. Set all the activities to require one unit
of an arbitrary resource 3. Define the available number of arbitrary
resource units to the number of activities.
4. Export to a Critical Chain software package
5. Use the Critical Chain software as advertised
6. Result = Aggregate Risk Critical Path Planning.
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
32
Conclusions
• By removing major inhibitor to the application of the Critical Chain method (the effort required to explicitly model resources) – more projects may benefit from a key concept of CCPM – Aggregated Risk
• Aggregate Risk Critical Path Planning minimize the negatives:– Procrastination, and – Parkinson’s Law.
• By making Critical Chain benefits accessible a la carte, 1) more likely to be experimented with and 2) incorporated into practice
• Practitioners may find that a subset of concepts serves them better
PMI College of Scheduling“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
33
Robert Richards, Ph.D.Stottler Henke Associates, Inc.
951 Mariner’s Island Blvd, Suite 360San Mateo, CA 94404
(650) [email protected]
Hilbert RobinsonAfinitus Group, LLC
Q/A & Authors