Project Management Workshop

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Project Management Workshop
By Jonathan W. Powell, CGFM, PMP
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Agenda

• 'Cost world' perspective
• 'Throughput world' perspective
• Three mechanisms to add 'safety' to projects
• Three mechanisms that waste project 'safety'
• Critical chain analysis to ensure project success
  

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(No Transcript)
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The Problem

• High Tech Industry

Product Life Cycle
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The Problem (Cont.)

• Development time of 2 years
• New generation of modems every 6 months
• Not are we going to miss but when?
• Huge ramifications
• Miss completely
• Launch inferior product
• Launch good product late

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The Problem (Cont.)

• Genemodem decides to form a think tank
• Three managers (Finance, Engineering, Marketing)
• No budget restrictions
• Mission Find a way to drastically cut
  development time

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Solving the Problem
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Answer 1 Cost World Perspective

• Cost World Perspective Driving local
  efficiencies
• What this fails to account for is the linkage
  between dependent steps
• Using the analogy of a chain -

It Depends! Which One is the Weakest Link?
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Answer 2 Throughput World Perspective

• Throughput World Perspective Driving production
  output
• Managing by both the Cost World and Throughput
  World causes irreconcilable conflict

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Theory of Constraints Analysis

• Four Step Process
• 1. Identify the Systems Constraint
• Find the weakest link!
• Could be physical or it could be something like
  an erroneous policy
• 2. Strengthen the Weakest Link
• Adding more capacity
• Hire more people or buy more machines
• Squeeze the maximum from the capacity we already
  have

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Theory of Constraints Analysis (cont.)

• Four Step Process (cont.)
• 3. Subordinate Everything to the Systems
  Constraint
• If the bottleneck can only do 3 units/hour, dont
  demand 5 units/hour!
• If 3 units/hour is unacceptable then revisit Step
  2
• 4. Elevate the Systems Constraint
• Strengthening the weakest link to the point where
  it is no longer the weakest link
• Repeat the four steps based on the new weakest
  link

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Project Management Application

• Step 1 Identify the Constraint
• The constraint for a particular project is its
  critical path Delays to the critical path delay
  the project as a whole
• Step 2 Strengthen the Constraint
• The question We want to strengthen the
  constraint the critical path How do we do
  this?

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The Concept of Safety

• Safety The difference between the median of the
  probability distribution and the actual estimate
• Typical for people to provide estimates that give
  them over an 80 chance of success
• However, probabilities of 80 or more yield
  safeties of 200 or better
• Three (3) common ways safety is added to a project

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Three Common Ways to Add Safety

• Time estimates are based on pessimistic
  experience
• Larger number of management levels involved
  higher total estimation, because each level adds
  its own safety factor
• Estimators also protect their estimates from a
  global cut

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Three Common Ways to Waste Safety

• Students Syndrome first fight for safety time,
  then wait until the last minute anyway
• Multitasking

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Three Common Ways to Waste Safety (cont.)

• Reluctance to report an Early Finish

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Project Management Application (Cont.)

• Step 2 Strengthen the Constraint
• Example Project, Four Steps of Varying Length
  (all on the critical path)

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Project Management Application (Cont.)

• Step 3 Subordinate Everything to the Constraint
• Develop feeding buffers for tasks that feed into
  the critical path
• Provide resource buffers eliminate negative
  impact of multitasking

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Pulling Together the Pieces
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Project Management Application (Cont.)

• Step 4 Elevate the Systems Constraint
• During the natural progression of a project, the
  critical path may change one or more times
• A critical path change means that your constraint
  has changed
• Determine the new constraint and re-perform
  four-step analysis
• Also, organizations may be performing many
  projects
• The same resource may be needed to perform
  critical path tasks on different projects
• The dependencies between the critical path tasks
  of the various projects is called the Critical
  Chain

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Conclusion

• 'Cost world' perspective
• 'Throughput world' perspective
• Three mechanisms to add 'safety' to projects
  
• Three mechanisms that waste project 'safety'
  
• Critical chain analysis to ensure project
  success

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Credits and Contact Info

• www.eligoldratt.com
• Jonathan Powell, CGFM, PMP
• jwpowell_at_us.ibm.com
• 240-715-3926