Reinforce FIFO work rules.

Emphasize fast turnover of work (analogous to relay race transfers) when a task is completed.

Enforce the policy of not stopping work once started until it is finished, unless workers receive orders from management (change of priorities) or project status reports indicate that they should work elsewhere.

Include team performance on projects assigned to individual resources in their overall evaluation.

Project Manager Responsibilities

As front-line managers, PMs should be both capable and creative. PMs will: Be available to help any resource that needs help.

Carefully track all active tasks and immediately record all buffer quantity changes.

Provide appropriate notice to resources required for upcoming work on a Critical Chain or required to start the first task on a non-critical path.

Resist the impulse to interfere with the work on a task while buffer consumption is in the "expected" (first third, or green) or "normal" (second third, or yellow) portions of a buffer.

Formulate an action plan to reverse an unfavorable trend in buffer consumption prior to entering the last third of a project's buffer.

Implement planned actions immediately when the remaining buffer is one-third of its expected size according to remaining CC tasks.

Respect the project priority sequence established by the organization and assist other PMs when possible.

Enforce the discipline required to protect the project staff from unnecessary multitasking interruptions.

Importance of Trust

Trust is earned slowly and lost quickly. You cannot expect workers who distrust management to welcome any change. A change to CC concepts may be especially difficult if many project workers have considerable experience with traditional project management. With traditional project management systems, tasks appear to require all the time they have been allotted. Estimated task times are a self-confirming prophesy. When people have been scrambling to meet many deadlines, multitasking like crazy, and you tell them they are now working under a new system that requires even shorter durations, they quite naturally will be concerned, if not alarmed. A full explanation of the anticipated implementation plan, including environmental and other policy changes, is required.

The next topic presents an organizational system to implement change in a way that addresses employee concerns.

Implementing a Critical Chain Project Management System

There is always resistance to change-sometimes for very good reasons. TOC proponents have developed six "layers of resistance" to change (for example, see Kendall, 2005, Chapter 11; Goldratt, Chapter 20, this volume), a familiar topic in behavioral psychology and many other circles. Based on the TOC six layers of resistance, previous behavioral research, and the Budd Innovation Empowerment Model (Budd and Budd, 2010), Fig. 3-12 shows a 10-step process for incorporating concerns and suggestions from many individuals in the organization.33 FIGURE 3-12 Critical Chain implementation empowerment model. (Adapted from Budd & Budd, 2010, 260.) Step 1 in Fig. 3-12 establishes the motivation for change (Why change?). A critical mass of individuals must recognize the pain resulting from continued use of the current system-in this case, traditional project management. Step 2 is the TOC first layer of resistance.34 The remaining steps proceed in numerical sequence. All of the steps must be addressed and none skipped. Some have to be visited more than once if some members have been left behind at another step or now question a previous step.

The dotted line from Step 8, "Evaluate results of CCPM to assess value to the organization," to Step 5, "Ensure that all significant unintended consequences of CCPM have been surfaced and addressed," indicates that Steps 5, 6, 7, and 8 may have to be repeated multiple times as implementation proceeds and negative unintended consequences are experienced and overcome.

Once all 10 steps have been taken, a CCPM system is in place and, if no steps have been passed too quickly, the system is working and benefitting the organization as planned. However, as the environment changes, new practices may develop that require changes in the installed system. Therefore, a dotted line also extends from Step 10, "CCPM is established as best practice and standard operating procedure," back to Step 1, signifying the need for a significantly revised project management system. Of course, new improvements in CCPM are being developed every day (see the next three chapters in this book), and your system should be revised from time to time, which may require only a portion of the 10 steps.

Summary

This chapter presents a basic approach to CCPM concepts. Because task times have skewed distributions and cannot be predicted accurately, CC is designed to avoid the dysfunctional behaviors of ineffective multitasking, the student syndrome, sandbagging, and the impact of Parkinson's Law typical in traditional project management.

To shift concentration from local optima to global optima, safety time is removed from individual tasks and used to protect the entire project. Resource contention is addressed early in the CC planning process and time buffers are used to address task time uncertainty. Communication tools called resource buffers add to the project communication process and scheduling buffers control the initiation of new projects into the multi-project mix. Full kitting is completed prior to the release of a project. The chapter describes the six regular steps and one optional step in scheduling a single CC project. The three primary sources of safety for on-time project completion are the project buffer, multiple feeding buffers, and multiple resource buffers.

In multi-project environments, it is essential to have a prioritizing process for projects. None of the projects will complete on time if there are so many projects that resource scheduling is difficult and multitasking is rampant. A "Wafer Experiment" located at www.mhprofessional. com/TOCHandbook is an excellent way to experience the effects of bad multitasking. A SR is similar to the constraint resource in DBR implementations in manufacturing. A scheduling buffer, based on the SR's availability, will minimize resource conflicts and prevent choking the organization with too many projects.

Buffer Management gives the PM important information on the project status. When actual task durations are longer than planned in the project schedule, the overages are subtracted from the buffer. Normal variations in task durations are expected to consume some or all of the buffer time during the operation of the project. An extreme rate of buffer consumption can inform the PM when extraordinary action is required. As the project is completing, the size of the buffers can be reduced as there will be less and less task protection time required.

The use of time buffers in the project schedule has been covered extensively and the use of budget buffers in planning the project might be helpful. Typically, project budgets are derived from the costs of materials, labor, and overhead. As components of the project schedule are moved to time buffers, the associated costs could be moved to budget buffers. Careful attention must be paid to contract wording so that unintended consequences do not occur because of early (or late) project completion.

Internal reporting in CCPM is accomplished primarily with buffer reports. For external reporting, either CC metrics or a formal or informal EVS may be used.

Implementing CCPM will require changes in the typical behavior of project team members and in organizational policies and procedures. Certainly, management support is crucial and a pilot program might be advisable. The chapter describes the responsibilities for top management, resource managers, and PMs and reinforces the need for intraorganizational trust. Because there will always be some resistance to any change, a CC implementation empowerment model graphically illustrates the steps in overcoming resistance and dealing with unintended consequences.

References

Atallah, M. J. 1999. Algorithms and Theory of Computation Handbook. Boca Raton, FL: CRC Press.

Budd, C. I. and Budd, C. S. 2010. A Practical Guide to Earned Value Project Management. 2nd ed. Vienna, VA: Management Concepts.

Defense Contract Management Agency. 2009. Earned Value Management Systems Criteria. In Defense Contract Management Agency [database online]. Available online at http://guidebook.dcma.mil/79/criteria.htm.

Deming, W. E. 1986. Out of the Crisis. Cambridge, MA: MIT Center for Advanced Engineering Study.

Deming, W. E. 1993. The New Economics for Industry, Government, Education. Cambridge, MA: MIT Press.

Goldratt, E. M. 1990. The Haystack Syndrome: Sifting Information Out of the Data Ocean. Crotonon-Hudson, NY: North River Press.

Goldratt, E. M. 1997. Critical Chain. Great Barrington, MA: North River Press.

Goldratt, E. M. and Cox, J. 1984. The Goal: A Process of Ongoing Improvement. Great Barrington, MA: North River Press.

Kendall, G. I. 2005. Viable Vision: Transforming Total Sales into Net Profits. Ft. Lauderdale, FL: J. Ross Publishing.

Leach, L. P. 2005. Critical Chain Project Management. 2nd ed. Norwood, MA: Artech House.

NASA. 2009. NASA Schedule Management Handbook Draft. (Revision 16a, April 3). Online: National Aeronautics and Space Administration.

Newbold, R. C. 2008. The Billion Dollar Solution: Secrets of Prochain Project Management. Lake Ridge, VA: ProChain Press.

Parkinson, C. N. 1957. Parkinson's Law. Boston: Houghton Mifflin.

Rubinstein, J. S., Meyer, D. E., and Evans, J. E. 2001. "Executive control of cognitive processes in task switching." Journal of Experimental Psychology: Human Perception and Performance 7(4)(August):763797.

Sarbanes, P. S. and Oxley, M. G. 2002 . Sarbanes-Oxley Act of 2002, H.R. 3763. Washington, DC.

Shellenbarger, S. 2003. "Multitasking makes you stupid: Studies show pitfalls of doing too much at once." Wall Street Journal, February 27, sec D.

Sullivan, T. T., Reid, R. A. and Cartier, B. 2007. TOCICO Dictionary. http://www.tocico.org/? page=dictionary United States Government Accountability Office. 2009. GAO Cost Estimating and Assessment Guide: Best Practices for Developing and Managing Capital Program Costs. Washington, DC: GAO-09-3SP.

About the Authors

Charlene Spoede Budd is a Professor Emeritus from Baylor University, having taught management accounting and project management classes for a number of years. She received her undergraduate degree (accounting major, Summa Cum Laude), and MBA degree from Baylor University (1972 and 1973, respectively), and her PhD from The University of Texas at Austin (1982), where she specialized in the fields of accounting, economics, and finance. She holds the following active professional designations: CPA, CMA, CFM, PMP. In addition, she is certified in all areas of the Theory of Constraints by the Theory of Constraints International Certification Organization (TOCICO).

Her research has been published primarily in practitioner journals and she has been awarded three Certificates of Merit for articles published in Strategic Finance. She also has singly or coauthored publications in Industrial Marketing Management (special issue on projects), Human Systems Management Journal, Today's CPA, The Counselor, and other journals, and many conference proceedings. Charlene has coauthored two accounting textbooks and she and current coauthor, Charles Budd, have published A Practical Guide to Earned Value Project Management, 2nd Edition (Management Concepts, 2010) and Internal Control and Improvement Initiatives (BNA, 2007).

She is active in several professional organizations, including the American Accounting Association, Financial Executives Institute, and the Project Management Institute. In addition, she has been a member of the AICPA's Content Committee and was chair of the Business Environment and Content Subcommittee of the AICPA for the past several years. Currently, she is chair of the Finance and Metrics Committee of the TOCICO.

Most of her time now is devoted to research, but she also is a member of the Board of Directors of a public company.

Dr. Janice Cerveny is on the faculty of the College of Business, Department of Management Programs. She has worked primarily in the blood banking and health care industries but now consults and trains many diverse organizations in the Theory of Constraints. She is an Avraham Y. Goldratt Institute "Jonah," "Jonahs Jonah," and is certified in the functional-specific applications of TOC for Production (Drum-Buffer-Rope, DBR), Distribution/Supply Chain Management (Continuous Replenishment, CR), Project Management (Critical Chain, CCPM), and interpersonal management skills applications (Management Skills Workshop, MSW).

She has had a number of for profit and not-for-profit clients in the South Florida area including NCCI (National Council on Compensation Insurers), Siemens Telecom Networks, Sensormatic Electronics Corporation, Office Depot, the North Broward Hospital District, and Philips Electronics. She has most recently completed a contract with the Veterans Administration in Washington, DC, for clinical practice managers resulting in her editing a book for Ambulatory Care Clinic Managers. Her most recent article (with Dr. Stuart Galup) "Critical Chain Project Management: Holistic Solution Aligning Quantitative and Qualitative Project Management Methods" appeared in Production and Inventory Management [43(3&4):5564, 2002)].

She is a member of the American Production and Inventory Control Society (APICS), the Decision Sciences Institute (DSI), the American Society for Quality (ASQ), and the Theory of Constraints International Certification Organization (TOCICO). She is recognized by the latter as internationally certified to facilitate implementations of TOC applications and is chairman of the TOCICO Project Management Certification Committee.

She received her undergraduate degree from the University of Texas at Austin. Her PhD is from the State University of New York at Buffalo's School of Management.

CHAPTER 4.

Getting Durable Results with Critical Chain-A Field Report

Realization Technologies, Inc.

Background

"Overdue and over budget" is what most often comes to mind whenever one mentions "projects." An equally depressing image is one of long hours, firefighting, and chaos. It is against this backdrop that Critical Chain was introduced by Dr. Eliyahu Goldratt in 1997.

Since 1997, Critical Chain has been deployed in a wide range of organizations. Many of them have achieved results that are nothing short of amazing-whether they are in the private sector or public; engaged in blue sky R&D or industrial projects; large or small; or based in western or eastern countries. Some of them have won top honors including the 2006 Franz Edelman Award,1 and the 2009 TOC North American Achievement Award.2

Purpose and Organization