Archive for the ‘Critical Chain’ Category

Earned Value and Critical Chain

Sunday, May 23rd, 2010

Two questions were recently asked on the LinkedIn “Earned Value Management” forum: “Q1. What are the WEAKNESSES and LIMITATIONS of EVM? Q2. Can EVM schedule forecasting methods provide us RELIABLE EARLY WARNING SIGNAL?” Wayne Abba, a noted Earned Value expert, wrote in response:

“EVM is not a scheduling technique and therefore has no inherent ‘schedule forecasting methods’ – it measures the volume of work that has been performed relative to planned volume, with no regard to critical path or even when the work was scheduled to be performed. Nevertheless it provides one of the best possible early warning signals – a straightforward indication that work is not being performed. The larger and earlier the unfavorable schedule warning, the redder the flag… bear in mind that EVM was invented to deal not with schedule, but with cost variance. So-called ’schedule variance’ (a better term would be accomplishment variance) is a useful bonus but limited by the mathematics. At completion, no matter how late, the variance is zero by definition. The true value of schedule variance thus is early in performance.

“Those advocating using EV to forecast schedule have built a pseudo-science on EV data that are derived from the schedule (and thus must correlate with it) but most assuredly is not the schedule. ANY schedule analysis using EVM must be compared with the ‘real’ schedule. Expect the GAO to delve into this further as the Cost Estimating and Assessment Guide evolves.”

One implication of what Wayne has written is that there need be no conflict between Earned Value Management and schedule techniques like Critical Chain. While we have known this for years, the increasing popularity of “schedule margin” (a buffer-like concept) in government contracting circles has raised the urgency for answering questions about how to make the combination work. With the help of Charlene and Chuck Budd, EV experts in their own right, I recently wrote a paper on the use of schedule margin (or buffers!) with Earned Value. See our new Resource Center to download a copy.

Change: Here to Stay

Sunday, April 18th, 2010

Change is in the air. In much the same way that constraint-related concepts have become standard in manufacturing, critical chain-related concepts continue to gain popularity in the project world. Even if “Critical Chain” doesn’t become standard practice, its important elements will.

For example, consider project buffers: protection time added after project endpoints to protect project deliveries against uncertainty. This concept is known in non-Critical Chain circles as schedule margin or schedule reserve. A few years ago this was not a popular concept, but that has changed. For example, we typically regard government “best practices” as lagging indicators, but NASA (see, for example, p.44) talks a great deal about schedule margin, and the U.S. Government Accountability Office (p. 223) calls schedule reserve a “best practice.” More and more, buffering is being recognized as essential to good management.

Where are these kinds of changes leading? First, I think people will have to pay more attention to the individual concepts like buffers, resource leveling, or task gating than to the overall categories they’re put into, such as Critical Chain or Earned Value Management (EVM). Whether (for example) buffers become part of EVM, or analysis of work completed becomes part of Critical Chain, the concepts that make sense will eventually rise to the top with or without the labels. This is good news.

Second, groups of concepts that together can be applied in the real world to get practical results – methodologies – will continue to be put together into new buckets and given both old and new names. That’s inevitable: we label things, and we like to use popular labels. But it will also serve to create more confusion. Practitioners must understand what practices people refer to when they use a particular label; whether the label is CPM, Critical Chain, EVM, or Monte Carlo. A holistic view of how the methodology fits together to get results will be more and more essential.

Third, project management will continue to improve. Why do I say “continue,” when organizations like the Standish Group “continue” to tell us how poor project results are? Because, on the whole, our ability to manage projects is clearly improving. Project complexity is increasing dramatically year after year: drug development and approval, chip design, and software are far more complex than they were 20 years ago. Meanwhile, new products must hit the market more and more quickly. While project successes across industries may not be at a level we’d like or know to be possible, in a world of increasing complexity and speed, holding steady implies that improvements are going on.

Last, companies and their methodologies will have to become more and more adaptable. That’s because new ideas are going to be tried and integrated, the best will eventually float to the top, and competition will require their adoption. The best new ideas will be more and more essential, both for companies that need to complete their projects more reliably and quickly, and for vendors like ProChain that need to provide that competitive advantage. Your organization should have in place a process for ongoing project management evaluation and improvement.

Welcome to the ProChain Blog!!

Tuesday, February 23rd, 2010

Welcome to the ProChain Solutions blog site! We will post articles that are of interest regarding project management, critical chain, and related topics. We have started with some selected entries from existing blogs of Rob Newbold and Andreas Scherer.

Please post comments or send them to us so that we can make this a great tool for the entire ProChain community.

Rob Newbold, CEO, ProChain Solutions, Inc.
Andreas Scherer, General Manager, ProChain Solutions, Inc.

Harmony

Thursday, November 19th, 2009

I just read the book WA: Transformation Management by Harmony by Yuji Kishira. It’s about critical chain, but from a Japanese perspective. It has some pretty wacky stuff, but that’s ok: I found it very interesting and entertaining.

For me, the most important idea it contains is in the title: relating the concept of Wa (harmony) to implementations of critical chain (CC) and more broadly — and only by inference – to theory of constraints (TOC). If you think in terms of a vision and a message needed to promote (sell!) an implementation internally, it’s hard to find a simple concept that everyone can grab onto and say, “yes, that helps me, I want it.” An implementation of anything does best long-term if there is value created that everyone can relate to. A major effect of a properly done implementation is a reduction in conflicts and chaos: increased harmony. Therefore “harmony” can be such a value and can form a core part of a vision.

It seems to be effective in Japan. I’m here at the TOC International Certification Organization conference in Japan (I presented on the topic of making CC stick). I talked with Yuji and heard the Japanese Director-General of the Ministry of Land, Infrastructure and Transport speak. The concept of Harmony is a big part of the culture here, and it’s the main emphasis when Japanese people talk about success stories.

Will it play in Peoria? Maybe, if we measure it and talk about it. It’s worth thinking about.

A second interesting point in the book is equating safety time with responsibility. For example: I feel responsible for finishing my task in the time I committed to, so I add safety time. Moving the safety time to the buffers spreads responsibility to the entire project team. You’re not alone, you don’t have to shoulder the on-time burden yourself, you have a team to help. Harmony again.

Want a flavor? Try this:

A Safety Bug Story Episode 1
Episode 2
Episode 3

Pssssht. Happy, happy ending.