Critical Chain

IOM580Hiroshi Ochiumi

1

High Probability of

Budget OverrunsTime OverrunsCompromising the Content

2

Reason for Project Delays

Official– Weather– Government– Vendors– ..always someone else’s

fault

Unofficial– Unrealistic Schedule– Forced to choose cheap

(and unreliable) vendor– Vendor progress report

unreliable– Wasteful meeting– Too many emergencies

3

Reason for Project Delays

Uncertainty

4

Three Project Scenarios

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Three Project Scenarios

Scenario 1 Scenario 2 Scenario 3Average 50.4 51.9 53.4Std Dev 7.1 6.3 5.3Max 69.4 72.7 69.3Min 30.1 36.1 39.3Median 50.0 51.8 53.1

6

Which is more significant?

Budget OverrunOverdue

P62: “They try to cut the budget by a few percent and cause the payback period to double.”

7

Cost World vs. Throughput World

“The only way to achieve good cost performance is through good local performance everywhere.”“There is no way to achieve good throughput performance through good local performance everywhere.”

8

Tons/hour story

The way you measure = The way you manage

9

Safety is Wasted.

If a task is finished earlier,– They may not report.– Resource is not yet available for next job.

A delay in one step is passed in full to the next step.An advance made in one step is usually wasted.The Student Syndrome

10

Multi Tasking

11

Multi Tasking

12

Option to Trade Lead Time with Money

Impact of DelaySubcontractors make money on changes3month delay can bankrupt real estate developerCapable subcontractor can include in the contract– guaranteed lead time– penalty

13

Critical Chain

Dependencies between steps can be a result of a path or a result of a common resource.

14

How to Approach

Don’t waste the time allotted for the CP.Project BufferFeeding BufferProgress is measured only on CP.Eliminate the Student Syndrome– Trim Safety– Now people are not sure if they can finish on time– It also eliminates multi tasking

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