1. Aggregate Risk Critical Path Planning:
A Discussion of Leveraging Critical Chain Concepts for Critical Path
Robert Richards, Ph.D.
Stottler Henke Associates, Inc.
Hilbert Robinson
President, Afinitus Group, LLC

2. PMI College of Scheduling
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 resources I.e. many of CCPM’s benefits are independent of resources
This presents a challenge to some who may otherwise be interested in taking advantage of these concepts.
Notes after 2nd bullet:
In many scheduling applications, it is common practice to ignore resource load and capacity as factors in determining the schedule.
The goals therefore is to find a way to take advantage of Critical Chain concepts without the explicit modeling of resources, as is typically required in the traditional application of those concepts.
This is possible once it is understood that:
3rd bullet
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
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

5. Critical Chain & Critical Path
Why Not Leverage Critical Chain Concepts for Critical Path
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

6. PMI College of Scheduling
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. PMI College of Scheduling
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. PMI College of Scheduling
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. PMI College of Scheduling
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.

10. Task Estimation Variation
50% confidence
Safety
10%
confidence
90% confidence 2 5
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc. 10

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 Completion
Time
Deadline Trigger
When does the unexpected tend to occur – before or after activity start?
What about the safety we embedded to account for the unexpected?
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

14. PMI College of Scheduling
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.
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

15. Aggregated Risk: The Critical Chain Solution
Project Networks rebuilt: 1) Removing hidden contingency from activity durations 2) 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.

16. 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. Critical Chain Planning Process
From Task to Project Protection
1. Traditional Plan
2. Safety Excluded
The process starts with the creation of a project network that reflects the logical dependencies between activities in a project. Resource requirements are then added (represented in the exhibit by different colors) and the tasks estimated according to the new rule of scheduling activities with no contingency embedded. The entire network is then scheduled to level the work load of each resource to fit within their stipulated capacity. The list of tasks comprising the “Resource Constrained Critical Path” otherwise referred to as the Critical Chain, is then identified and all remaining tasks assigned to one or more feeding paths. See the yellow outlined sequence of tasks. At this point the network is a very aggressive representation of the schedule as it has no provisions for uncertainty. The model at this point is therefore considered to be too high risk to be used as the basis for committing to a schedule or budget.
3. Resource Leveled
4. Critical Chain Marked
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

19. PMI College of Scheduling
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
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

20. PMI College of Scheduling
Buffered Project
The final step of creating the single project Critical Chain schedule is to calculate and insert appropriately sized and located contingency buffers designed to render the schedule practically immune to the normal levels of uncertainty one is likely to encounter during execution of the typical project plan. FB stands for Feeder Buffer.
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

21. PMI College of Scheduling
Buffered Project (2)
Compared to 60 days traditional
PB = Project Buffer FB = Feeding Buffer
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
Application of Aggregation Principle means that the amount of protection required in a schedule decreases as the number of tasks being protected increases.
A series of tasks protected at one location requires less protection than if each task was to be individually protected.
Locating all the protection in a project at the end of the project provides maximum protection for all the tasks in that project.
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
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

23. Critical Chain: Example
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

24. Buffering the Critical Chain
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

25. Execution Mode: Buffer Management
Schedule Before Execution Starts
“AS OF DATE
Run Rule: No scheduled starts, work to global priorities only
T8 experienced a 5 day increase in scope or delay
Results in a 2.5 day impact to the project buffer
The rest was absorbed by the CC gap
=2.5 7% Complete and 14% Buffer Consumed
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

26. Project Buffer Consumption after Feeder Buffer Consumption
Once the feeder buffer is consumed, any more overage immediately impacts the project buffer.
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

27. PMI College of Scheduling
Fever Chart
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

28. PMI College of Scheduling
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.
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

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.
Only one (albeit important) part of the solution required the explicit modeling of resources, the determination of the critical chain and hence the feeder chains. Note that this determination of the critical chain and hence the feeder chains would proceed in the same way even if there were always enough resources so that a resource conflict never arose. That is, if the Critical Chain (i.e., the resource-constrained critical path) was the same as the Critical Path
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.

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
Model as currently done
Set all the activities to require one unit of an arbitrary resource
Define the available number of arbitrary resource units to the number of activities.
Export to a Critical Chain software package
Use the Critical Chain software as advertised
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. PMI College of Scheduling
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. Q/A & Authors Robert Richards, Ph.D. Stottler Henke Associates, Inc.
951 Mariner’s Island Blvd, Suite 360
San Mateo, CA 94404
(650)
Hilbert Robinson
Afinitus Group, LLC
PMI College of Scheduling
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.