THE CRITICAL CHAIN

The Critical Chain

A think-tank at Genemodem trying to reduce
lead time of modem production from 2 years
to 6 months
Rick Silver, a business professor trying to
achieve tenure
Teaches Project Management to an EMBA
class

Current problems at Genemodem
Budget Overruns
Time Overruns
Greater dependence on vendors


Uncertainty as nature of beasts
Project leader complaints
Revolves around Uncertainty of:
Unrealistic schedule
Vendors are chosen according to cost and not reliability
Availability of plant equipment, hence late recruitment
Uncertainties in projects Mismanagement
For every step of the project there is a Time-estimate

CONCEPTS IN THE BOOK
Bell Curve
Popular name for
Normal
Distribution
(Gaussian
Distribution) curve
The higher the
uncertainty the longer
tail of distribution
PERT
Statistical tool used in project management
Used to analyze and represent tasks involved in
completing a project.
Identifies
Time needed to complete a task
Minimum time to complete a project
Critical Path
Determines the maximum time for the completion
of a project
Any delay on CP will delay the completion of
project
Gantt Chart
Project scheduling chart
Involves decisions of the planner when to start
each path
Some choose late start where others chose early
start

Theory of Constraints
New management philosophy
Introduction of research methods
Broad spectrum of robust applications

Theory of Constraints
1. Identify the system constraints
The constraints are physical e.g. bottlenecks
The bottleneck can be overcome by adding more
resources or by squeezing the maximum from the same
2. Exploit system constraints
3. Subordinate everything else to the above
decisions
4. Elevate the systems constraints
5. Inertia: Re-evaluate process to determine new
bottleneck
Managers must control cost and protect
throughput
Must ensure that right products should reach right
people
Focus should be on local improvements in
order to attain better results for the
organizations
Linking chains
The organization comprises of a network of
linked chains and their linkages are very
important in order to complete the whole
process of producing something
If one link fails to perform the whole process is
disrupted
The most weakest link is more important.


Focus
Pareto principle
80% benefits from solving 20% problems
Pareto is only applicable where the variables
are independent e.g. cost
It is not applicable where variables are
dependent like in throughput
The goal of Critical Chain is to help projects finish on
time, within budget, and without cutting scope.
Main points:
Cultural change in how to manage projects and
evaluate team members
Avoid multi-tasking while on the Critical Chain
Protect against uncertainty by aggregating all safety
time at the end of the project
Concentrate on the constraint of the project: the
Longest chain of dependent tasks or resources
Student Syndrome
Estimation including Hidden Safety







Student Syndrome


Buffers
Project buffers
Buffer before the completion date
Feeding buffer
Cushion between two tasks
Resource buffer
Buffers of resource to complete a task
The Critical Chain
Rick receives tenure
The lead time is reduced to 6 months
THANK YOU.