From Theory of Constraints to Critical Chain

When Goldratt carried his ideas to project management, he identified the project constraint as the critical path. By this association, what Goldratt means is that the project is constrained to a certain duration, and that constrained duration cannot be made shorter. The consequence of the critical path is that constrained throughput (valuable deliverables to the project sponsor) cannot be increased, and indeed throughput is endangered if the critical path cannot be properly managed.

Goldratt made several recommendations in his book Critical Chain, but the most prominent are:

■ The tasks on the critical path do indeed require statistical distributions to estimate the range of pessimism to optimism. But, unlike PERT [9] or CPM, [10] Goldratt insists that the median value, the 50% confidence level, be used. Using the median value, the so-called 50-50 point, means that there is equal likelihood that the task will underrun as overrun.

■ All task activity in the project schedule network that is not on the critical path should be made subordinate to the demands of the critical path.

■ There should be "buffers" built into any path that joins the critical path. A buffer is a task of nonzero duration but has no performance requirement. In effect, buffer is another word for reserve. However, Goldratt recommends that these buffers be deliberately planned into the project.

■ By using the median figure for each task on the critical path, Goldratt recognizes that the median figure is generally more optimistic than the CPM most likely estimate and is often more optimistic than the expected value. Goldratt recommends that the project manager "gather up" the excess pessimism and put it all into a "project buffer" at the end of the network schedule to protect the critical path.

We have already discussed Goldratt's point about a project buffer in our earlier discussion about how to represent the project schedule risk as calculated on the network with the project sponsor's business value dates as set in the program milestones. We did not call it a buffer in that discussion, but for all intents and purposes, that is what it is. Figure 7-15 illustrates the placement of buffers in critical chain planning.

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Figure 7-15: Critical Chain Buffers.

The critical chain ideas are somewhat controversial in the project management community, though there is no lack of derivative texts, papers, projects with lessons learned, and practitioners that are critical chain promoters. The controversy arises out of the following points:

■ Can project teams really be trained to estimate with the median value? If so, then the critical chain by Goldratt's description can be established.

■ Can team leaders set up schedule buffers by taking away schedule "pad" from cost account managers, or does the concept of buffers simply lead to "pad" on top of "pad"? To the extent that all cost account managers and team leaders will manage to the same set of principles, the critical chain can be established.

[7]Goldratt, Eliyahu M., Critical Chain, North River Press, Great Barrington, MA, 1997.

[8]Goldratt, Eliyahu M. and Cox, Jeff, The Goal, North River Press, Great Barrington, MA, 1985.

[9]PERT uses the BETA distribution and requires that the expected value be used.

[10]CPM traditionally uses a single-point estimate and, more often than not, the single estimate used is the "most likely" outcome and not the expected value.

Team LiB

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