Critical Chain Project Management

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This article refers to the process Critical Chain. To see the article on the novel style book see: Critical Chain (novel)

Developed by Eliyahu M. Goldratt, Critical Chain Project Management (CCPM) is based on methods and algorithms derived from his theory of constraints. The idea of CCPM was introduced in 1997 in his book, Critical Chain. Application of CCPM has been credited with achieving projects 10% to 50% faster and/or cheaper than the traditional methods (ie. CPM, PERT, Gantt, etc.) developed from 1910 to 1950's.

From numerous studies by Standish Group and othersref for traditional project management methods, only 44% of projects typically finish on time, projects usually complete at 222% of the duration originally planned, 189% of the original budgeted cost, 70% of projects fall short of their planned scope (technical content delivered), and 30% are cancelled before completion.

These traditional statistics are mostly avoided through CCPM. Typically, CCPM users report 95% on-time and on-budget completion when CCPM is applied correctly.

With traditional project management methods, 30% of the lost time and resources are typically consumed by wasteful techniques such as multi-tasking, Student syndrome, In-box delays, and lack of prioritization.

In project management, the critical chain is the sequence of both precedence- and resource-dependent terminal elements that prevents a project from being completed in a shorter time, given finite resources. If resources are always available in unlimited quantities, then a project's critical chain is identical to its critical path.

Critical chain is used as an alternative to critical path analysis. The main features that distinguish the critical chain from the critical path are:

  1. The use of (often implicit) resource dependencies. Implicit means that they are not included in the project network but have to be identified by looking at the resource requirements.
  2. Lack of search for an optimum solution. This means that a "good enough" solution is enough because:
    1. As far as is known, there is no analytical method of finding an absolute optimum (i.e. having the overall shortest critical chain).
    2. The inherent uncertainty in estimates is much greater than the difference between the optimum and near-optimum ("good enough" solutions).
  3. The identification and insertion of buffers:
    • project buffer
    • feeding buffers
    • resource buffers.

CCPM aggregates the large amounts of safety time added to many subprojects in project buffers to protect due-date performance, and to avoid wasting this safety time through bad multitasking, student syndrome, Parkinson's Law and poorly synchronised integration.

Critical chain project management uses buffer management instead of earned value management to assess the performance of a project. Some project managers feel that the earned value management technique is misleading, because it does not distinguish progress on the project constraint (i.e. on the critical chain) from progress on non-constraints (i.e. on other paths).

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