We have studied the critical path method (in my previous blog post), which was used to develop the project schedule. This technique helped project managers manage their projects in the past.
However, in today’s fast moving era, a project manager has to build an aggressive and realistic schedule because time is important, resources are costly, and the organization may be managing many projects at the same time, requiring cross utilizing of resources.
In such scenarios in the past, project managers were having difficulties with managing schedules because of some inherent drawbacks of the critical path method.
These projects were having poor responses, such as not being able to complete on time, over budgeted, and in some cases terminated.
Issues with the Critical Path Method
The following are a few issues faced by project managers while dealing with the schedule based on the critical path method.
The first issue with the critical path model is that it is an optimistic model which assumes that all resources will be available at all times and can be utilized whenever they are needed. However, practically this was not always possible. Many times this assumption led to delay in projects and more spending.
Misuse of Float or Slack
Another issue with critical path method is misuse of float or slack.
According to Parkinson’s Law which states that “work expands so as to fill the time available for its completion,” team members misuse the slack, causing the project to be delayed.
Activity Completion Gain/Loss
In the critical path method, even if an activity is completed before its planned completion date, the time gain cannot be utilized by the next activity, because the next activity has to wait until its early start date. Usually this happens because the resource allocated to the next activity may not be available at the moment.
However, the opposite is not true. If any previous activity is delayed, this delay will be passed to the next activity and this may cause delay in the project. In the critical path method, delays accumulate but gain does not.
The critical path method is also infected with Student Syndrome, where team members do not start the task until the last moment.
So you see there were many problems with the schedule based on the critical path method.
There was a need to develop a more pragmatic approach to build the project schedule, help project managers to run projects efficiently, and hence consequently the critical chain method (CCM) came into existence. The critical chain method (CCM) is also known as critical chain project management and was developed by Eliyahu M. Goldratt in 1997.
What are the Critical Chain, and the Critical Chain Method (CCM)?
The critical chain can be defined as “the longest path in the network diagram considering activity interdependence and resource constraints.”
(Path “Start->C->D->E->F->End” is the critical chain.)
The critical path can be assumed as a particular case of the critical chain when the project has access to unlimited resources that will never run out.
In other words, you can say that the critical chain method is a modified form of the critical path method. Here, availability of resources is considered while creating the project schedule.
In critical chain project management, instead of float, buffers are used. These buffers are designed in such a way that they completely eliminate the concept of float or slack.
Three types of buffers are used in critical chain management. These buffers are as follows:
This buffer is placed between the last task and the project completion date as a non-activity buffer, and this buffer acts as a contingency for the critical chain activities. Any delay on the critical chain will eat this buffer, but the project completion date will remain unchanged. Also, if there is any gain from the early finish of any activity, this gain will be added to this buffer as well.
Usually the duration of this buffer is 50% of the contingency that you have removed from each task estimate. This helps you move uncertainty from each task to the project buffer.
Please note that, although the critical chain starts from the beginning, it ends before the start of the project buffer. It does not end at the end of the project. This duration will include any time duration borrowed from the project buffer or exclude the duration added to the buffer.
These buffers are added to the non-critical chain so that any delay on the non-critical chain does not affect the critical chain. They are inserted between the last task on a non-critical chain and the critical chain.
Feeding buffers are also calculated the same way as the project buffer. The duration of these buffers is based on some fraction of the safety removed from the tasks on non-critical chains.
These buffers are kept alongside the critical chain to make sure that they are available when they are required. This buffer can be a human resource or any equipment.
Please note that, since the critical chain considers the resource constraints as well, it may be longer than the critical path schedule. However, this might be compensated by removing the contingencies from the activities. Resources used in critical chain are known as critical resources.
Difference Between Buffer and Float (or Slack)
People often get confused between buffer and float. They find these two terms similar, however they are not.
The following are a few differences between the float and buffer:
- Float or slack is a critical path phenomenon, and buffer belongs to critical chain.
- Float is the difference between the duration of the critical path and non-critical path. On a critical path, float is zero.
- Buffer is based on contingencies. For example, the project buffer is about 50% of the safety time that you have removed from the activity estimate duration. As per the definition of buffer, it is not zero on a critical chain or any other chain.
- Float is the same for all activities on a non-critical path, any activity can consume it partially or fully, and balance can be utilized by other activities. There is no further analysis.
- Buffer can also be borrowed by any activity if the activity is delayed. The project manager analyzes the remaining buffer to find the status of the project.
- Buffer can be divided into three categories: project buffer, feeding buffer and resource buffer. Float can be either total float or free float.
I hope now the differences between buffer and float are clear to you.
How to Create the Critical Chain Network Diagram
Three steps are required to create a critical chain from the critical path. These steps are as follows:
- Remove all contingencies from activities, regardless of whether you have added the calculated contingencies or any percentage of it. If you’ve used the PERT (Program Evaluation and Review Technique) estimate to build the schedule, replace your estimate with optimistic estimate.
- Align the activities with late finish dates and remove resource constraints. Give priority to critical chain activities while assigning resources.
- Add feeding buffers to non-critical chains so that their durations become equal to the critical chain. Add project buffer to end of the critical chain, but before the project end date. The project buffer should be approximately half the contingency you removed from the activities. This helps improve the efficiency, and reduces the schedule duration.
From the above procedure, you can clearly see that the critical chain method is a modified form of the critical path method.
Now, let’s see a real world example.
Suppose you get a project to construct a building. You build the schedule based on the critical path method, and start working on it.
However, during the execution of this project, you happen to know that:
- There is a shortage of cement, or
- Some of the equipment needed by you is assigned to some other projects, or
- One of your key team members is pulled out for some other important tasks by management.
What will happen now?
Of course this will cause a delay in your project.
So, where was the problem?
Did the critical path not identify the resources required by your project?
No, the critical path had identified the resources for your activities.
So, where was the problem?
What did it go wrong?
The problem was with the resource allocation. Although the critical path had identified the resources, it did not account for the limited availability of resources into the schedule. The project schedule was developed optimistically, assuming that all resources would be available whenever they were needed. Unfortunately this could not happen in this case, putting the project in trouble.
Therefore, to solve these issues, you made some modifications to the critical path, considering limited resource availability. Now this critical path has been converted to the critical chain, and it is more realistic.
And now you can complete your project with more confidence.
Before this blog post ends, let’s revisit some key features of critical chain management:
- It is a deterministic model
- It avoids mismanagement of slack or float
- It optimizes the utilization of resources
- The project based on the critical chain method completes 10% to 30% faster than that based on the critical path method
- It is a more practical approach
- It encourages team members to perform efficiently, and
- It improves the productivity
There is no doubt that the critical chain method is one of the most important developments in project management made recently. This method answers many shortcomings of the critical path method, provides a realistic schedule, encourages team members to perform efficiently, and improves productivity.
Critical chain method is an upgraded version of the critical path method, which is a more practical approach to developing the project schedule. In critical chain method, the availability of resources is taken into consideration while drawing the network diagram. In this method, you use buffers instead of float, which reduce the mismanagement of float, which is seen in the critical path method.
There is no doubt that the critical chain method is one of the most important developments in project management recently. This method answers many shortcomings of the critical path method, provides a realistic schedule, encourages team members to perform efficiently, and improves productivity.
Here this blog post on critical chain management finishes. I hope you have enjoyed reading it. If you liked this blog post, I would highly appreciate you share it via Twitter, Facebook, Google+, and leave a comment to let me know your thoughts.