9-1 ELC 347 project management Day 22

Agenda Integrative Project –Part 5 Feedback Posted –Part 6 (page 378) Due Dec 9 –Completed project plan and presentation due December 1 PM –Any of the first five sections can be resubmitted for rescoring prior to finals week. The recorded score will the average of the original score and the score on the resubmitted section. Please notify me via which sections you will be resubmitting. Assignment 7 corrected –13 A’s, 1 B and one that I cannot read (Project 2010 files) Assignment 8 (Last One) Posted –Due Dec 12:35 PM Exam 2 Graded –2 A’s, 4 B’s, 9 C’s –Threw out two faulty questions Course Evaluations Discussion on Critical Chain Project Scheduling 6-2

Schedule for rest of semester Today –Chap 11 Dec 2 –Chap 12 –More on MS Project Dec 6 –Group Work –Assignment 8 due Dec 9 –Chap 13 & 14 –IP Part 6 due Dec 1 PM –Quiz 3 Chaps –IP Project’s due 6-3© 2007 Prentice-Hall, Inc

11-4 Critical Chain Project Scheduling Chapter 11 © 2007 Pearson Education

11-5

11-6 Theory of Constraints & Critical Chain Project Scheduling A constraint limits system output. The Goal – Goldratt TOC Methodology 1.Identify the constraint 2.Exploit the constraint 3.Subordinate the system 4.Elevate the constraint 5.Repeat the process

11-7 Variation Common Cause Inherent in the system Special Cause Due to a special circumstance Managers should Understand the difference between the two Not adjust the process if variation is common cause Not include special cause variation in risk simulation Not aggregate discrete project risks

Dropping a marble Top leftTop right Bottom left Center 11-8

11-9 Dr J Edwards Deming

11-10 CCPM and the Causes of Project Delay How safety is added to project activities 1.Individual activities overestimated 2.Project manager safety margin 3.Anticipating expected cuts from management time 25% 50% 80% 90% Gaussian Distribution

11-11 Wasting Extra Safety Margin 1.The Student Syndrome a.Immediate deadlines b.Padded estimates c.High demand 2.Failure to pass along positive variation a.Other tasks b.Overestimation penalty c.Perfectionism 3.Multitasking 4.Path Merging

11-12

11-13 Critical Chain Solutions  Central Limit Theorem  V ∑ = n * V, SD 2 = n * V, SD = n 1/2 * V 1/2  Standard deviation of the sum is less than the sum of the standard deviations!  Aggregating risk leads to reduced risk

9-14

 Activity durations estimated at 50% level  Buffer reapplied at project level –Goldratt rule of thumb (50%) –Newbold formula (2σ)  Feeder buffers for non-critical paths 11-15

11-16

11-17

CCPM Original50% Probability ActivityDuration A105 B62 C147 D21 E83 F126 Total New estimate = 24 + (52-24)/2 = 38

11-19 CCPM Changes  Due dates & milestones eliminated  Realistic estimates – 50% level not 90%  “No blame” culture  Subcontractor deliveries & work scheduled ES  Non critical activities scheduled LS  Factor the effects of resource contention  Critical chain usually not the critical path  Solve resource conflicts with minimal disruption

11-20

11-21

11-22 Critical Chain Solutions Bob Feeder Buffer Project Buffer Bob Buffers protect constraints and prevent delays

11-23 Joe.mpp

11-24 Critical Chain Project Portfolios Drum – system-wide constraint that sets the beat for the firm’s throughput Drum – person, department, policy, resource Capacity constraint buffer – safety margin between projects Drum buffer – extra safety before the constraint

11-25 Applying CCPM to Project Portfolios 1.Identify the drum 2.Exploit the drum a.Prepare a schedule for each project b.Determine priority for the drum c.Create the drum schedule 3.Subordinate the project schedules (next slide) 4.Elevate the capacity of the drum 5.Go back to step 2

11-26 Subordinating Project Schedules Schedule projects based on drum Designate critical chain Insert capacity constraint buffers Resolve any conflicts Insert drum buffers so the constraint is not starved

11-27

11-28 CCPM Critiques  No milestones used  Not significantly different from PERT  Unproven at the portfolio level  Anecdotal support only  Incomplete solution  Overestimation of activity duration padding  Cultural changes unattainable