Today, we will discuss the Critical Chain Method (CCM), which is an updated version of the Critical Path Method.
The Critical Path Method has helped project managers develop and manage schedules in the past.
This method makes the life of a project manager easy. They can plan activities with less effort and communicate easily with team members.
However, the Critical Path Method permitted some drawbacks in developing schedules. These schedules were not realistic, and projects experienced delays, which caused them to exceed their cost baselines.
Many times, these delays will lead to project termination, hurting companies financially.
Critical Chain Method
Before we discuss the Critical Chain Method, let’s review the flaws with the Critical Path Method. The critical path method has a few inherent drawbacks:
- Unlimited Resources
- Float Misuse
- Activity Completion Gain/Loss
- Student Syndrome
The Critical Path Method is optimistic, assuming that the project always has resources whenever needed.
However, this is not always possible. Many times, this assumption leads to delays and additional costs. No organization can provide unlimited resources for any project, and in fact, resource constraints are common.
Misuse of Float
Misuse of Float or slack was routine in the Critical Path Method.
According to Parkinson’s Law, “work expands to fill the time available for its completion.” Team members often misuse the slack, causing delays in the schedule.
If any activity has a float, the team member is incentivized to use all of it to complete the task, considering the float as a part of the activity duration estimate.
Activity Completion Gain/Loss
If you complete an activity early, the time gain is useless because the next must wait until its early start date. This may happen because the resources allocated to the next activity may not be available at the moment.
However, the opposite is not true. If any activity is delayed, it will affect the next, and the next activity will be delayed, and thus the project is too. Delays accumulate in the critical path method, but gain does not.
Student Syndrome infects the critical path when team members do not start the task until the last moment.
Therefore, the activity has no float, and any delay in the activity will affect the project schedule.
Clearly, a critical path-based schedule contains many potential pitfalls for project managers.
Project managers needed a pragmatic approach to developing a realistic schedule to help them complete projects on time with minimal obstruction.
Hence, the Critical Chain Method (CCM) came into existence. Mr. Eliyahu M. Goldratt developed this method in 1997 as an improvement over the Critical Path Method.
Many experts also call CCM critical chain project management.
What is the Critical Chain Method (CCM)?
Before discussing CCM, let’s understand the critical chain.
The critical chain is “the longest path in the network diagram considering activity interdependence and resource constraints.”
(Path “Start->C->D->E->F->End” is the critical chain.)
Now we come to the Critical Chain Method.
The Critical Chain Method is an updated form of the Critical Path Method. Here, you consider resource availability while developing the project schedule.
In the Critical Chain Method, you use a buffer instead of float. These buffers eliminate the concept of float or slack.
You can consider the critical path as a particular case of the critical chain when the project has unlimited resources.
Critical chain management has three buffers:
- Project Buffer
- Feeding Buffer
- Resource Buffer
This buffer is placed between the last task and the project completion date as a non-activity buffer, and it acts as a contingency for the critical chain activities. Any delay on the critical chain will eat this buffer, and the project completion date will not change.
If any activity finishes early, the gain will be added to this buffer.
Usually, the duration is 50% of the contingency that you have removed from each task. This helps to move uncertainty from the tasks to the project buffer, improve efficiency, and reduce the schedule duration.
Please note that although the critical chain starts at the beginning, it ends before the start of the project buffer, and it does not end at the close of the project. This duration will include any time duration borrowed from the project buffer or exclude the duration added to the buffer.
This buffer is added to the non-critical chain so that any delay does not affect the critical chain. Feeding buffers are inserted between the last task on non-critical and critical chains.
Feeding buffers and the project buffer are calculated the same way. The duration of these buffers is based on some fraction of the safety removed from the tasks on non-critical chains.
Resource buffers are kept alongside the critical chain to ensure that they are available when required. These buffers can be human resources or equipment.
Please note that since the critical chain considers resource constraints, its duration will be longer than the critical path. However, you can compensate for this by removing contingencies from the activities.
The resources used in the critical chain are known as critical resources.
Differences Between Buffer and Float
Many aspirants confuse buffer and float, but they are quite different.
- Float or slack is a critical path phenomenon, while buffer belongs to the critical chain.
- A float is a difference between the duration of the critical and the non-critical paths, and a buffer is based on contingencies.
- A float is zero on a critical path, while a buffer is not zero on a critical chain or any other chain.
- A float is the same for all activities on a non-critical path. Any activity can consume it partially or fully, and others can utilize the balance. There is no further analysis.
- Any activity can also borrow a buffer if the activity is delayed. The project manager analyzes the remaining buffer to find the status of the project.
- Buffers can be divided into three categories: project, feeding, and resource. A float is either total float or free float.
How to Create the Critical Chain Network Diagram
To create a critical chain network diagram, first, create a critical path network diagram.
Then you must follow these three additional steps to develop a critical chain network diagram:
- Remove all contingencies from activities. Replace your estimate with an optimistic estimate if you have used a PERT (Program Evaluation and Review Technique) estimate to build the schedule.
- 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 are equal to the critical chain. Add the project buffer to the end of the critical chain, but before the project end date.
You can see that the Critical Chain Method is a modified form of the Critical Path Method.
Example of Critical Chain Method
Suppose you get a project to construct a building. You develop a schedule based on the Critical Path Method and start the work.
However, during the execution of this project, you find out that:
- There is a shortage of cement, or
- Equipment from your project is assigned to some other projects, or
- Management has pulled one team member for some urgent work.
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 identified the resources for your activities.
So, where was the problem? What went wrong?
The problem was with resource allocation. Although the critical path identified the resources, it did not account for the limited availability of resources. The project schedule was developed with the assumption that all resources would be available whenever they were needed. Unfortunately, this could not happen, and the schedule was delayed.
Therefore, to resolve these issues, you apply resource constraints to your critical path, and it is now a critical chain network diagram, and it is more realistic.
Now you can complete your project with more confidence.
Let us revisit some key features of critical chain management before this blog post ends:
- It is a deterministic model.
- It avoids mismanagement of slack or float.
- It optimizes the utilization of resources.
- Projects based on the critical chain method are completed 10% to 30% faster than those based on the critical path method.
- It is a more practical approach.
- It improves productivity.
The Critical Chain Method is a more practical approach to developing the project schedule. In it, the availability of resources is taken into consideration while drawing the network diagram. Here you use buffers instead of float. The Critical Chain Method is one of the most important recent developments in project management. This method addresses many shortcomings of the Critical Path Method, provides a realistic schedule, encourages team members to perform efficiently, and improves productivity.
Are you involved with schedule development? Please share your experiences with the Critical Chain Method.