PPM for Theory of Constraint Advocates

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In this section, we offer a little bonus. In Chapter 8.1 on the application of theory of constraints (TOC) to project portfolio management, Larry Leach includes an overview of TOC and critical chain project management (CCPM) as he advocates these practices as an alternative to conventional project management approaches.

In the project management community, there is a significant and growing cadre of advocates of theory of constraints and critical chain project management, which are philosophies and methodologies developed by Eliyahu M. Goldratt. The followers of TOC and CCPM have approached near cult status, often summarily rejecting conventional project management practices while forwarding their praise of TOC and CCPM.

Although we must question abandoning traditional practices outright, we can find some very wise and useable advice in this alternative approach. A primary focus of TOC is to recognize and exploit bottlenecks (constraints). Certainly this makes a lot of sense for PPM. This focus is critical to the activity of project prioritization and selection. The project selection process must fully consider constraints to the project throughput, whether people, manufacturing capacity, or other limitations.

Furthermore, TOC practitioners stress the value of keeping resources applied to single projects and getting the projects done as soon as possible (as opposed to a multiproject application). Recent feedback from early implemented of PPM has indicated that doing fewer projects at a time will often result in getting more projects done in the long run.

We are indebted to Larry Leach for preparing this chapter. For the benefit of those who are not up to speed on TOC, he starts with an overview of TOC and CCPM, including his arguments as to the advantages of these techniques over conventional approaches. He then demonstrates how TOC thinking is applied to PPM.

What is indeed interesting is that despite the claim of difference from conventional thinking, the principles of TOC application to PPM essentially support the same key tenets that appear elsewhere in this book. Perhaps there is a slightly different slant and an emphasis on terms that have been favored by the TOC community. Nevertheless, we see the same list of key principles:

• Expected project value should be modified by estimated risk.

• Range of risk is a measurable factor that should be matched against the risk culture.

• Project selection should consider active as well as pending projects.

• When considering active projects, the valuation data should be updated.

• Termination (or delay) of active projects should be considered an option.

The message is to recognize that PPM is equally applicable to advocates of TOC/CCPM as to the traditional project management community.

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