Process Of Ongoing Improvement Deming Goldratt And The Pareto Principle

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The critical chain system outlined above and described in the referenced texts is intended to bring drastically shorter project cycle times and predictability to project management, at least in the scheduling attribute. Where should the PMO go from there? Goldratt brings to project management the concept of Buffer Management. He suggests that individual task times are naturally variable. Protection built in to individual tasks breeds Student Syndrome and Parkinson' s Law. Instead, he advocates protecting the entire project from variation, where statistics will work in our favor.

Buffers are used to insulate a project from common cause variation. They are also used to insulate the critical chain from variability in the non-critical tasks. However, the more common cause variation that exists in projects, the bigger the buffers must be as insulators.

Goldratt suggests using the Pareto Principle (the 80/20 rule) to help determine where the next improvement effort should be. In other words, 80% of the penetration of the buffers is probably caused by 20% of the different originating causes. The approach is simple and it works. Have each project manager document in a simple spreadsheet the reasons for tasks taking longer than expected. Accumulate those reasons across projects. Take the top one or two reasons and have the PMO do an improvement process on those. If it works, buffers can be shorter across all projects.

For example, assume that the reason for 80% of the problem of tasks taking longer than expected is related to rework. The PMO investigates and finds that most rework occurs because the specifications were not correctly defined to begin with. The PMO further researches and concludes that training and methodology will eliminate most of the problem. While some rework and redefinition will probably be part of projects to eternity, it is of little consequence if you can eliminate most of the problem.

*See Harold Kerzner, Ph.D., Project Management: A Systems Approach to Planning, Scheduling and Controlling, 8th ed., John Wiley & Sons, New York, 2003, chapter on Critical Chain.

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Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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