What is Critical Chain Method in Project Scheduling?


Creating realistic and accurate schedules is the first step towards project success. In Project Scheduling, PERT and Critical Path Method (CPM) are widely known methods. Using CPM, early Start and Finish dates and Late Start and Finish dates are calculated by forward & backward analysis of the project network diagram paths. But this method, does not take resource limitation into consideration. After identifying the path, resources are picked up & leveled. In general, activity owners add safety margin (buffers) to each of the activities in order to cope up with uncertainties. But this cause time waste when activities can be completed well before the estimated finish date.

Critical Chain Method, developed by Dr. Eliyahu M. Goldratt (1997), is a schedule network analysis technique that takes account of task dependencies, limited resource availability & buffers. First step in this method is identifying set of activities that results in longest path to project completion which are called critical chains. As it includes resources into consideration, it may be longer than CPM schedule. Resources used in those critical chain activities are critical resources. Set of activities that are in non-critical chain but converging to critical chain are feeders. Next step is shortening the project schedule by reducing the activity duration estimates with effective buffer management. CCM focuses on eliminating project schedule delays due to uncertainties, overestimation of task duration and wasted internal buffers.

In CPM, even a resource completes an activity before the planned finish date, the time gain is not propagated to next activity as he needs to wait till early start date of next activity. But delays are propagated which may even change the existing critical path. In the below example, I showed activity dependency & resource dependency across activities in a small project.

Any delay in Activity 1 (upper part of fig), will delay the entire project. Also if you see, the critical path is Activity 1 – Activity 3, though activity 2 is completed long before, Activity 3 has to wait till activity 1 is completed.

Critical_Chain_1

In the resource-leveled project(lower part of fig), same resource R1 used in two different activities A3 & A2. Though A1 is completed in 2 time units, but A2 has to wait till R1 finishes up A3 which 7 time units. Though A3-A4-Activity 3 is the critical path, but any delay in A3 or A2 will surely delay the entire project & due to Resource dependency another longest path comes into picture A3 – A2 – Activity 3 (15 time units). Hence, optimization of duration is required to concentrate not only on the activity dependencies but also on resource dependency.

Another important factor one need to deal in project scheduling is – safety margins(buffers) to beat the uncertainty. Due to addition of buffers at different activity level, it is very difficult to calculate exact time of project execution & this safety margin will go waste due to Student Syndrome or Parkinson’s Law.

In CCM, as calculation is based on set of activities in the critical chain, hence estimated finish dates for each activity is not of much use. Also, time gain or delay in an activity is fully passed throughout the chain activities. The internal buffers added to tasks are made explicit and summed up. The summed up value is called project buffer. As per CCPM, project buffer is part of project, hence project duration remain unchanged even after stripping off all the activity safety margins. And keeping them improves protection against uncertainties.

Also, 50% probability time estimates are used in calculating the activity durations in CCM instead of traditional 95% probability. Difference between original schedule estimates and new schedule estimates gives the project buffer. In general project scenario, there is 100% chance that activity-wise safety margin get exhausted by poor buffer management. In CCM, pooled project buffer is used as safeguard the entire project & even it is utilized up to 50% allows project completion well within the schedule.

Critical_Chain_2

CCM introduces 3 different buffers. 1. Resource buffer, 2. Feeding buffer, 3. Project buffer. Out of these, I discussed about project buffer previously. Let me give gist of other two buffers next.

Resource buffer

Resource buffer is inserted just before critical chain activity where ever a critical resource required. This is used to give a signal to the critical resource that a critical chain activity to which they are assigned is due to start shortly. According to CCPM, this wake-up call will cause the critical resource to wrap up any non-critical work and be ready to start work on the critical chain task as soon as its predecessors are completed. The resource buffer does not actually consume any resource, and it adds neither time nor cost to the project.[2]

Feeding buffer

Same like project buffer, pooling of activity safety margins in a non-critical chain & applying them at the end of those chain.Because this buffer is placed where the path feeds back into the critical chain path, it is called a feeding buffer. See the placement of feeding buffer in the fig.

References:

1.OVERVIEW OF CRITICAL CHAIN PROJECT MANAGEMENT by Francois Retief, Critical Chain Symposium 2002. http://www.hetproject.com/Francois_Retief_paper_Overview_of_Critical_Chain.pdf

2. A CRITICAL LOOK AT CRITICAL CHAIN PROJECT MANAGEMENT By Barnes, Robert, Publication: Project Management Journal, Date: Monday, December 1 2003 http://www.allbusiness.com/management/951030-1.html

3. 1. Critical Chain Project Scheduling By Kailash Awati & Arati Apte. http://www.orafusion.com/pm_cc.htm
4. Critical Chain Project Management Improves Project Performance by Larry P. Leach, Advanced Projects Institute, 1997. http://www.advanced-projects.com/CCPM/PMJOURN_R8.PDF

Schedule Network Analysis


Though projects use certain charting techniques like Bar, Milestone, Gantt to represent project schedules, they lack visualization of inter dependencies between different activities.

By constructing schedule networks, we can get inter dependencies between activities and can develop master schedule plan that provides up-to date schedule information about the project. Schedule network analysis is a technique that generates the project schedule.

In short, Schedule Network Analysis is the technique of identifying early and late start dates, as well as early and late finish dates, for the uncompleted portions of project schedule activities. [1]

It employs a schedule model and various analytical techniques, such as critical path method, critical chain method, what-if analysis, and resource leveling to calculate various project schedule information.

Schedule network provides:

* dependencies between activities,

* project completion date,

* analysis of the early and late start and finish dates,

* analysis of what-if scenarios,

* analysis of cost trade-off by crashing the schedule,

* analysis of applying leads and lags,

* analysis of slippage in project schedule

* analysis of scheduled start and finish dates for the uncompleted portions of project schedule activities

* graphical representation of the whole project from start to finish (master schedule plan)

We need to make following considerations before applying any of the analytical techniques

* adjustment should be made on any loops or open ends in schedule network for accurate calculation

* some network paths may have points of path convergence or path divergence that can be identified and used in schedule compression analysis or other analyzes

References:
[1]. PMBOK® Guide – 3rd edition

What-if Scenario Analysis


Let me start with a typical real-life example:

Your wife is asking you to take her out.

You are planning to go to the latest movie in a nearby movie theater.

First thing that come in your mind would be – “What do I do if all tickets are sold out before we reach the theater?”

Oh, no! It is going to be a big fight in the night then.

Now, jump into preparing mitigation plan.

In case tickets are not available, shall I take her to a park or mall? will that make her happy?

Like the one mentioned above, every day, for every activity which we perform, we have this proactive question – “What if the situation represented by scenario ‘X’ happens?” This What-If Scenario Analysis(shortly WISA) becomes our part of life and we ask this question till the end of life. Businesses use what-if scenarios to determine the effect different costs or investments have on profit and other financial indicators.

In businesses and projects, unanticipated adversities makes the business or project unstable and proactive handling of these uncertainties is required. With what-if scenario analysis, Project Manager & Project management team

* can evaluate the feasibility of completing the project under unfavorable conditions,

* prepare contingency and response plans to avoid or overcome the worst scenario,

* mitigate the impact of uncertain or unexpected situations

WISA (sometimes referred as deterministic simulation) used mainly in project analysis and schedule development. A schedule network analysis is performed using the schedule model to compute the different scenarios like delayed delivery of a major deliverable, impact of external factors such as a strike or change in the shipping procedures & processes, extending duration of certain specific activity under certain circumstances.

With different sets of activity assumptions, dozens of project schedule can be prepared through simulation.The most common simulation technique is Monte Carlo Analysis, in which a distribution of possible activity durations is defined for each schedule activity and used to calculate a distribution of possible outcomes for the total project. Early start/early finish, late start/late finish dates can be simulated.

To simulate what-if scenario analysis, number of tools are available in Excel. Following are the few links to them

1. Markham, I. S. and S.W. Palocsay (2006), “Scenario Analysis in Spreadsheets with Excel’s Scenario Tool,” INFORMS Transactions on Education, Vol. 6, No 2, http://ite.pubs.informs.org/Vol6No2/MarkhamPalocsay/

2. Using scenario manager to evaluate what-if questions- http://office.microsoft.com/en-us/excel/HA011117761033.aspx

3. Add Muscle to “What-If” Analyses BY JAMES A. WEISEL – http://www.aicpa.org/pubs/jofa/sep2004/weisel.htm