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INSTRUCTORS RESOURCE MANUAL

CHAPTER ELEVEN
Critical Chain Project Scheduling

To Accompany
PROJECT MANAGEMENT:
Achieving Competitive Advantage
By
Jeffrey K. Pinto

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

CHAPTER 11
PROJECT PROFILE Canadas Oil Sands Recovery Projects
INTRODUCTION
11.1 THE THEORY OF CONSTRAINTS AND CRITICAL CHAIN PROJECT
SCHEDULING
Theory of Constraints
Common Cause and Special Cause Variation
11.2 CCPM AND THE CAUSES OF PROJECT DELAY
Method One: Overestimation of Individual Activity Durations
Method Two: Project Manager Safety Margin
Method Three: Anticipating Expected Cuts from Top Management
11.3 HOW PROJECT TEAMS WASTE THE EXTRA SAFETY THEY ACQUIRE
Method One: The Student Syndrome
Method Two: Failure to Pass Along Positive Variation
Method Three: Negative Consequences of Multitasking
Method Four: Delay Caused by Activity Path Merging
11.4 THE CRITICAL CHAIN SOLUTION TO PROJECT SCHEDULING
Developing the Critical Chain Activity Network
Critical Chain Solutions versus Critical Path Solutions
PROJECT PROFILE BAE Systems and Critical Chain Project Management
11.5 CRITICAL CHAIN SOLUTIONS TO RESOURCE CONFLICTS
11.6 CRITICAL CHAIN PROJECT PORTFOLIO MANAGEMENT
PROJECT MANAGEMENT RESEARCH IN BRIEF Advantages of Critical Chain
Scheduling
11.7 REACTIONS TO CCPM
Summary
Key Terms
Solved Problems
Discussion Questions
Problems

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Case Study 11.1: Judys Hunt for Authenticity

Case Study 11.2: Ramstein Products, Inc.
Internet Exercises
Bibliography

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TRANSPARENCIES

11.1 FIVE KEY STEPS IN THEORY OF CONSTRAINTS

1. Identify the
system constraint

5. Reevaluate
the system

4. Elevate the
system constraint

2. Exploit the
system constraint

3. Subordinate
everything else to
the system constraint

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11.2 DISTRIBUTION BASED ON COMMON CAUSE

VARIATION

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11.3 DISTRIBUTION BASED ON MISINTERPRETATION

OF VARIATION

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11.4 GAUSSIAN (LOG NORMAL) DISTRIBUTION

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11.5 STUDENT SYNDROME MODEL

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11.6 EFFECTS OF MULTITASKING ON ACTIVITY

DURATIONS

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11.7 THE EFFECT OF MERGING MULTIPLE ACTIVITY

PATHS

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11.8 REDUCTION ON PROJECT DURATION AFTER

AGGREGATION

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11.9 CCPM NETWORK EMPLOYING FEEDER BUFFERS

Noncritical
Activity X

Noncritical
Activity Y

Critical
Activity A

Critical
Activity B

Feeder
Buffer

Critical
Activity C

Critical
Activity D

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Project
Buffer

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11.10 EXAMPLE ORIGINAL PROJECT SCHEDULE USING EARLY START

A (10)

B (50)

E (30)
C (20)

Slack

D (10)

90 Days

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11.11 EXAMPLE (COND) REDUCED SCHEDULE USING LATE START

A (5)

B (25)

E (15)
C (10)

D (5)

45 Days

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11.12 EXAMPLE (COND) CRITICAL CHAIN SCHEDULE WITH BUFFERS ADDED

A (5)

B (25)

E (15)
C (10)

D (5)

Project Buffer (22.5)

Feeder
Buffer (7.5)

67.5 Days

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11.13 CRITICAL PATH NETWORK WITH RESOURCE CONFLICTS

Feeder
Buffer

Bob

Bob

Critical Path

Bob

Feeder
Buffer

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11.14 THE CRITICAL CHAIN SOLUTION

Feeder
Buffer

Bob

Feeder
Buffer

Bob

Feeder
Buffer

Project
Buffer

Bob

The Critical Chain is shown as a dotted line

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11.15 CRITICAL CHAIN PORTFOLIO MANAGEMENT THREE PROJECTS STACKED

TO USE A DRUM RESOURCE

Resource Supply

Priority: 1. Project A
2. Project B
3. Project C

Time

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11.16 APPLYING CCBS TO DRUM SCHEDULES

Resource Supply

CCB
B

Time
A & B start
immediately

Project C
start date

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DISCUSSION QUESTIONS
1. For questions 1 and 2, refer to the BAE Systems case at the beginning of the chapter.
What are the practical implications internally (in terms of team motivation) and
externally (for the customer) of making overly optimistic project delivery promises?
Setting high goals challenges the team to become more efficient, to work faster and set
high standards for member performance. As for the customer, optimistic delivery dates
makes BAE Systems initially more appealing to potential clients.

2. In considering how to make a big change in organizational operations (as in the case
of switching to CCPM), why is it necessary to go through such a comprehensive set of
steps; that is, why does a shift in project scheduling require so many other linked changes
to occur?
A number of problems confront us when we consider any significant organizational
change; particularly a change that can affect the culture and/or basic operations of an
organization. A systematic approach that applies a change methodology in a series of
programmatic steps offers the best probability of creating change that is lasting and leads
to significant improvement in operations.

3. Explain the difference between common cause variation and special cause
variation. Why are these concepts critical to understanding successful efforts to improve
the quality and reliability of an organizational system?
Common cause variation results from problems built into a system or process. This
means the problem will exist regardless of outside variables (i.e. workers, machinery,

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etc.) Special cause variation is the result of a variable external to the system. These
problems stem from a specific or unique condition (i.e. workers, machinery, etc.).
It is important to understand the difference between the two because they require
distinctly different methods of correction. Addressing the problem correctly can improve
quality and reliability of output. However, misinterpreting a common cause variation as a
special cause variation is a common and costly mistake. Managers begin to analyze and
adjust the system assuming that the variation stems from a condition unique to their
project when in reality it is an overarching organizational flaw. As a result, variation in
quality and reliability may actual increase when managers attempt to compensate for
what they mistakenly believe to be special cause variation.

4. What are the three reasons Goldratt argues are used to justify adding excessive amount
of safety to our project duration estimates? In your project experiences, are these
arguments justified?
One way project teams add safety to duration estimates is to overestimate the time to
complete individual activities. Team members may pad the activity time to ensure that
they will be able to meet the promised deadline. This padding is augmented by the next
justification project manager safety. Project managers use the previously padded team
estimates to make an overall project estimate. The PM may add additional time to the
already overestimated duration to be confident that the project will hit on schedule.
Lastly, project teams may add an additional percentage of time to the initial estimate in
anticipation of top management cuts. To keep from having the project cut to an
unattainable level by management, teams will increase estimates to protect themselves
from upper-level mandates.
The second portion of this question is intended primarily for students with project
management experience. They are asked to consider the charges that Goldratt levels at
activity duration estimation approaches and comment of the validity of his assumptions
regarding padding safety into estimates.

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5. What are the reasons we routinely waste the excessive safety we acquire for our
project activities? Are some of these reasons more prevalent in your own experiences
than others?
The first reason is procrastination. People tend to delay working on a project until the
deadline is in clear view. Team members may also have other demands on their time and
so, may choose to deal with closer deadline items first putting off work associated with
long-term project dates. The second reason is that positive variation (i.e. time saved
when work is completed ahead of schedule) is not passed downstream. When one
activity is completed before its deadline, the next activity may be delayed (until its
schedule start time) to allow team members to catch up on past due or backlogged
assignments. Additionally, workers may fear that if they finish a task early, they will be
expected to complete future work in a lesser amount of time. Problems with time
management and multitasking are the third reason for wasting safety. When team
members are pulled in multiple directions, they are unable to concentrate on one project
at a time. This reduces their efficiency and increases downtime as they switch between
projects. The last reason is lost slack time due to merge points. Activities that are
interdependent run the risk of losing slack time when one activity falls behind schedule.
In this scenario, delays in one activity are passed downstream creating delays in
dependent tasks.
As above, the second portion of this question is intended primarily for students with
project management experience. They are asked to consider the charges that Goldratt
levels at activity duration estimation approaches and comment of the validity of his
assumptions regarding wasting safety.

6. How does aggregation of project safety allow the project team to reduce overall safety
to a value that is less than the sum of individual task safeties? How does the insurance
industry employ this same phenomenon?

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Aggregation of safety is based on reducing the overall amount of slack by applying a

buffer at the project, not individual task, level. To do this, aggregation first calculates the
total amount of slack added to duration estimates. This is done by adding the durations
for all the activities and arriving at the project overall duration estimate. This number is
then cut in half. There are now two project duration estimates, the original and the
reduced estimate. The midpoint of these two numbers is the desirable duration estimate
(under the aggregation technique). As a result, the project safety is 50% less than the sum
of individual task safeties. The insurance industry uses the Central Limits Theorem to
arrive at a realistic estimate of potential risk.

7. Distinguish between project buffers and feeder buffers. What are each of these
buffer types used to do?
Project buffers are used to create slack in the critical chain, thereby lengthening the entire
duration estimate of the project. On the other hand, feeder buffers are used where noncritical and critical paths intersect. The feeder buffer is the amount of time between when
non-critical activities will be completed and when they need to join with activities in the
critical path. These buffers are used to eliminate delays in the critical path.

8. It has been said that a key difference between CCPM safety and ordinary PERT chart
activity slack is that activity slack is determined after the network has been created,
whereas critical chain path safety is determined in advance. Explain the distinction
between these ideas: How does the project team find slack in a PERT chart vs. how is
activity buffer used in critical chain project management?
In PERT, team members establish buffer time for each individual activity. PERT relies on
task dependencies meaning that slack in one task can be affected by events upstream that

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reduce or inflate safety. Because resource leveling is done prior to scheduling, CCPM
does not rely on task dependencies for establishing slack.
CCPM adds buffer at the project level using aggregation, which reduces the overall
amount of slack in the project.

9. What are the steps that CCPM employs to resolve conflicts on a project? How does
the concept of activity late starts aid this approach?
CCPM begins by establishing the availability of critical resources. The critical chain is
then created based on these availabilities so that delays on not created by lack of a
resource. Feeder buffers (instead of activity buffers in the critical chain) are used to
adjust for resource availability. However, conflicts may still arise that require a resource
to be available for two activities at one time. To resolve this, CCPM uses late starts. The
method applies start-as-late-as-possible times to preceding tasks to the later-starting
activity in the conflict. Working backwards from this activity, each predecessor is given a
late-start time until the activities in conflict no longer overlap.

10. What are the key steps necessary to employ CCPM as a method for controlling a
firms portfolio of projects?
First, all current portfolio projects are compiled. Next, the chief resource constraint must
be identified. Then, the constraint is exploited. After that, sequencing of portfolio
projects is determined around the constraint. Buffering between projects, called capacity
constraint and drum buffers, may be used to create safety between projects to ensure
proper flow and use of the constrained resource. The next step is to evaluate the
constraint and increase the drum capacity if possible. Lastly, the steps are repeated to
improve flow and resource levels.

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11. What is a Drum resource? Why is the concept important to understand in order to
better control resource requirements for project portfolios?
A drum resource is a system-wide resource constraint. The drum resource limits the
production capacity of the entire firm. Therefore, the concept must be understood
because it affects how all projects in the portfolio need to be scheduled. It also affects the
number of projects the firm can support at one time.

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CASE STUDIES
Case Study 11.1: Judys Hunt for Authenticity
This case illustrates a common problem with activity duration estimation and the desire
that each of us have to protect ourselves by providing padded estimates. Sid has been
caught offering an artificially high estimate for some work in his department and the
reasons for his decision to do so come out through his conversation with his supervisor,
Judy.
Questions:
1. Identify some of the symptoms in the case that point toward cultural problems in the
department.
The most obvious is the general sense of inauthenticity with regard to developing task
duration estimates for projects. Sid is afraid to give an estimate that is too low, since,
should he miss it, he knows he will get into trouble with his immediate supervisor, Randy.
Thus, no one is willing to provide authentic estimates to anyone else because of fear that
they will be held against them if the employee cannot complete the work on time.
2. What steps would you take to begin changing the culture in the department? In your
answer, consider what changes you would recommend making to the reward systems,
methods for estimating activity durations, and task assignments for project personnel.
This question requires students to first recognize that any cultural change is a long-term
undertaking and must consider multiple issues, all of which work together to create either
an atmosphere of trust or self-preservation. Personnel need to be rewarded for making
accurate and honest estimates and demonstrating genuine willingness to work toward
them in completing assignments. That way, even if they miss their deadlines, they can
demonstrate a good faith effort that should be rewarded. Likewise, as the chapter

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mentions, most activity duration estimates are padded with extra time to protect all team
members, including the project manager. Therefore, another change needed is to move
away from 95% likelihood estimates to 50/50 estimates, with no sanctions should the
deadline be missed. Essentially, the key to cultural change here has to be to recreate a
department with a risk-free attitude. As long as good faith efforts are made, probabilities
suggest we will miss deadlines as often as we make them, but at least when people lose
the fear of punishment, they will begin generating more accurate estimates.
A final point that can be mentioned regarding task assignments has to do with the
problems of multi-tasking, as Sid mentions when talking with Judy. The fact is that
unless we account for resource availability in our project task estimates, we are creating
schedules that cannot be met, due to conflicts with resources who are assigned to multiple
projects and are forced to juggle several simultaneous commitments.
3. Why do you suppose Randy took Sids 24 hour estimate and increased it to 32 hours
when he presented it to Judy?
This was an example of the supervisor adding his own margin of safety to an estimate in
order to protect himself. Thus, every step of the activity estimation chain involves selfprotection and inauthenticity.

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Case Study 11.2: Ramstein Products, Inc.

The Ramstein case is an example of the problems that often occur once we have padded
our activity estimates, through wasting project safety in a variety of ways. The case
mentions that Jack is eager to fix project overruns, which are becoming more prevalent,
but does not have the option of simply adding resources to his department. Any solutions
must come from dealing with existing issues and fixing them.
Questions:
1. Applying Goldratts idea of critical resources, what is the system constraint within the
Special Projects Division that is causing bottlenecks and delaying projects?
The primary system constraint is the seven system integration engineers who must
support a large portfolio of projects. All project activities should be scheduled around the
availability of this critical resource, but there is no indication that the organization is
clearly recognizing this critical resource constraint, much less that they are attempting to
reorder projects to most efficiently use the resources.
2. How is multitasking contributing to systemic delays in project development at
Ramstein?
The chapter discusses the impact that multitasking has on resources ability to effectively
manage time across multiple projects. As the chapter demonstrates, multitasking serves
to waste project safety by not permitting resources to apply themselves completely to one
task before moving on to another.
3. Using concepts from Critical Chain Portfolio management, how could buffer-drum
concepts be applied to this problem?

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When we recognize that the seven system integration engineers are the drum in this
example, we can set up a sample chart to schedule projects for access to the drum
resource. Instructors could ask students to create a simplified chart that identifies the
manner in which the drum resource constrains the system and the manner in which Jack
must schedule all projects in order not to overload the critical resource (using the capacity
constraint buffer process).

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PROBLEMS
1. Assume the following network diagram. Megan is responsible for activities A and C.
Use the Critical Chain methodology to resource level the network. What are two options
for redrawing the network? Which is the most efficient in terms of time to completion
for the project? Show your work.

Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

Solution:
One solution is to order Megans work so that she performs Activity A first and then
Activity C. The MSProject output is shown below and the expected duration for these
five activities is now 31 days.

Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

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An alternative is to reconfigure the order to that Megan first performs Activity C and then
completes Activity A (see alternative solution below). Because of precedence in the
activities, this solution will lead to a longer total duration for the five activities of 34
days; thus, the first solution is better as it saves 3 days.

Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

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2. Consider the following activities and their durations. The original project schedule,
using early activity starts, is shown below. Reconfigure the network using critical chain
project scheduling.
Activity

Duration

5 days

30 days

10 days

10 days

15 days

A (5)

B (30)

E (15)

C (10)

Slack

D (10)

50 Days

What is the critical path? How much slack is currently available in the non-critical path?
Reconfigure the network as a critical chain network. What is the new duration of the
project? How long are the project and feeder buffers?

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Solution:
In the current network configuration, the feeder path (Activities C and D) has 15 days of
slack. Total project length is 50 days. When we reconfigure the network as shown
below, the new project length is 37.5 days, the feeder buffer is 5 days and the project
buffer is 12.5 days (half of the total project time savings reapplied as project buffer).

A (2.5)

B (15)
E (7.5)

(5)

D (5)

PB (12.5)

FB (5)
37.5 Days

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3. Reconfigure the following network using the critical chain approach.

Remember to reconfigure the activities to late-start where appropriate. What is the
original critical path? What is the original project duration? How much feeder buffer
should be applied to the noncritical paths? What is the length of the project buffer?

A (12)

B (10)

D (8)

C (15)

E (10)

F (18)

H (15)

G (15)

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Solution:
The noncritical paths are Activities D and E, with 19 days of slack and Activities F and
G, with 4 days of slack. The original project duration is 52 days. Reconfiguring this
network as a critical chain approach would yield the following:

A (6)

B (5)

D (4)

F (9)

E (5)

G (7.5)

C (7.5)

FB (4.5)

H (7.5)

FB (2)

39 Days

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PB (13)

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4. Assume the following network with resource conflicts. How would you redraw the
network using a critical chain in order to eliminate the resource conflicts? Where should
feeder buffers be applied? Why?

Joe

Feeder
Buffer

Joe
CRITICAL PATH

Joe

Feeder
Buffer

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Solution:
Applying critical chain methodology in order to account for resource conflicts, we would create a different path through the network
to get most efficient use of the system constraint, in this case, Joe. The reconfigured network, showing a replacing of feeder buffers
and reordering of Joes activities, would be the following:

Feeder
Buffer

Joe

Feeder
Buffer

Joe

Feeder
Buffer

Joe

The Critical Chain is shown as a dotted line.

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Project
Buffer

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5. Consider the following project portfolio problem. You are required to manage
resources to accommodate the companys current project portfolio. One resource area,
comprising Carol, Kathy and Tom, are responsible for all program debugging, as new
projects are completed. There are currently four projects that have activities that need to
be completed. How would you schedule Carol, Kathy, and Toms time most efficiently?
Using Buffer-Drum scheduling, reconfigure the schedule below to allow for optimal use
of the resource time. Where would you place capacity constraint buffers? Why?

Resource Supply

Time

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Solution:

Resource Supply

X & Y start
immediately

CCB

Project Q
start date

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Time