1. Project Management module
Resourcing, levelling and Critical Chain theory
Bill Wright, Ashcroft International Business School
International Business & Strategy
Project Management

2. Project resourcing and related techniques
Once a project plan has been drafted (but not finalised), resources can be estimated and attached to the plan
This is a valuable exercise – evaluating at an early stage the potential impact of any resource constraints on a proposed schedule…
… and facilitate resource-based budgeting to develop a detailed “bottom up” budget for the entire project
Complimentary techniques include resource levelling
And a consideration of Goldratt’s Critical Chain theory *
Project Management

3. Resource categorization
Generally four resource categories on every project:
People (Human Resources)
Construction materials
Equipment
Cash (to meet subcontract commitments)
Is the cost of each resource time-based or fixed?
How easy to determine accurately?
Has every resource requirement been identified and quantified? *
Project Management

4. Resource based budgeting – the process
A task-based project plan is assumed to have been drafted (if not finalised):
Identify all significant resources required for the project
Go through the project task by task and allocate the resources required for each task
Estimate the quantities required for each resource on each task (consider whether fixed or time-related – this matters!)
Determine the cost of each resource (fixed or time-related?)
Calculate total resource costs by task
Aggregate for overall project budget *
Project Management

5. Simple single task example
System Training
10 days duration
IT services:
Total cost
EUR 500
2 Trainers
Required
@ EUR 1,800/day
each
Room hire in local
Hotel: EUR 300/day
Training materials
Required: total cost
EUR 1,200
Total budget cost for this task?
Project Management

6. Resource levelling or ‘smoothing’
Consider the following project example
Note that Task 2 (16w) is twice as long as Tasks 3 and 4 (8 weeks)
Where is the critical path?
Project Management

7. Resource levelling or ‘smoothing’
What is this profile indicating? Any evidence of potential staffing problems?
Project Management

8. Resource levelling within permissible float
Site Facilities now rescheduled to follow Pumping Services – no effect on overall project duration?
Project Management

9. Resource levelling within permissible float
Resource profile for Site Engineers now much smoother - and easier to manage
Project Management

10. Critical Chain Theory (Eli Goldratt)
Seeks to identify key resource constraints and plan accordingly
Considers size and rationale of ‘buffers’ on project activities
Explores ‘student syndrome’ …
… Parkinson’s law effect
Start – and finish – each activity as soon as possible
Tackles all the above concepts to seek out an optimal solution *
Project Management

11. Critical Chain Theory Each resource letter represents a single person
Project Management

12. Critical Chain Theory
Now the critical C resource constraint is modelled on the plan, and the overall projected duration is severely impacted – 68 days
Project Management

13. Critical Chain Theory
This CC model assumes each activity could be done in half the time if all the buffer is removed – and aggregated to the end of the project
Project Management

14. Critical Chain Theory
But a 34 day buffer is considered extreme and therefore
reduced by half to find the “optimal” solution?
Project Management