Journal Article Presentation: Steyn, H. (2002). Project management applications of the theory of constraints beyond critical chain scheduling. Key Message of the Presentation: 1. Application of Theory Of Constraints to scheduling of a single project to reduce project duration and simplify project control (Critical Chain) 2. The importance on product life cycle as opposed to the project life cycle in decision making 3. Basic principles to application of TOC in concurrent projects: to manage shared resources, cost management and risk management Takeaways: 1. Understanding and appreciation of the Theory of Constraints and its practical applications in the field of project management 2. Discussion on the TOC application in other project management areas

1. ©GregorStrutz/AxelVölcker
1
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 0
“Innovation is new perception”, Drucker

2. ©GregorStrutz/AxelVölcker
Article Project management applications of the theory of
constraints beyond critical chain scheduling.
International Journal of Project Management, 20(1),
75-80, 2002
Author Steyn, H
Presented by
Anubhav Dhiman & Onurhan Irkin
MPMD International Project
Management
Journal Article Presentation
2nd November 2016

3. ©GregorStrutz/AxelVölcker
Executive
Summary
Title of Presentation:
Journal Article Presentation on Steyn, H. (2002). Project management applications of the theory of
constraints beyond critical chain scheduling.
Key Message of the Presentation:
‣ Application of Theory Of Constrains to scheduling of a single project to reduce project duration
and simplify project control (Critical Chain)
‣ The importance on product life cycle as opposed to the project life cycle in decision making
‣ Basic principles to application of TOC in concurrent projects: to manage shared resources, cost
management and risk management
Takeaways:
‣ Understanding and appreciation of the Theory of Constraints and its practical applications in the
field of project management
‣ Discussion on the TOC application in other project management areas
3
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 1
Executive Summary

4. ©GregorStrutz/AxelVölcker
√
4
Ref: Shuba Kathikeyan, Apex Global
Curriculum Vitae of Prof. Hermanus de Villiers Steyn
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 2

5. ©GregorStrutz/AxelVölcker
Executive
Summary
5
Contents
1 Critical Chain - Project Buffer & Feeding Buffer 2
2 Multi-project environment - Maximising the number of concurrent projects 5
3 Managing resources in multi-project environments 7
4 Application of TOC to Project Cost Management & Risk Management 9
5 Conclusion - Ideas & Applications 10
Time (mins)
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 3

6. ©GregorStrutz/AxelVölcker
6
The concept of Critical Chain
Taking resource limitations into account along with precedence
Ref: Steyn H. An investigation into the fundamentals of critical chain project management. International Journal of Project Management 19 (2000), 365
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 4

7. ©GregorStrutz/AxelVölcker
7
The concept of Project Buffer
Aggregation leads to a reduction in risk
σΣ = n ×σ
Ref: Steyn H. An investigation into the fundamentals of critical chain project management. International Journal of Project Management 19 (2000), 365
Imp: commitments regarding the completion date are only made at project level.
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 5

8. ©GregorStrutz/AxelVölcker
8
The Concept of Feeding Buffer “JIT-with-buffers”
Flexibility in tackling unforeseen changes and improving cashflow
Ref: Steyn H. An investigation into the fundamentals of critical chain project management. International Journal of Project Management 19 (2000), 365
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 6

9. Ref: Steyn H. An investigation into the fundamentals of critical chain project management. International Journal of Project Management 19 (2000), 365
©AppleInc
9
Why the emphasis on scheduling?
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 7

10. ©JamesBareham,TheVerge
10
The Project and The Product lifecycle
September 16, 2016 - …
June 29, 2007 - July 15, 2008
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 8

11. ©GregorStrutz/AxelVölcker
Executive
Summary
11
Contents
1 Critical Chain - Project Buffer & Feeding Buffer 2
2 Multi-project environment - Maximising the number of concurrent projects 5
3 Managing resources in multi-project environments 7
4 Application of TOC to Project Cost Management & Risk Management 9
5 Conclusion - Ideas & Applications 10
Time (mins)
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 9

12. ©GregorStrutz/AxelVölcker
12
“The optimum number of new product
development projects assigned concurrently to a
single engineer is two”, Clark & Wheelwright
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 10

13. ©AlexiFalson,PerformanceDrive
13
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 11

14. ©GregorStrutz/AxelVölcker
Executive
Summary
14
Contents
1 Critical Chain - Project Buffer & Feeding Buffer 2
2 Multi-project environment - Maximising the number of concurrent projects 5
3 Managing resources in multi-project environments 7
4 Application of TOC to Project Cost Management & Risk Management 9
5 Conclusion - Ideas & Applications 10
Time (mins)
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 12

15. 15
An iterative approach to allocate scarce resources in
multiple concurrent projects
1. Identify CCR
2. Schedule sequence of work*
3. Insert CCR buffer before each task**
4. Invest in additional resource
5. Iterate and identify current constraint
CCR
CCR
CCR
CCR
Buffer
CCR
Buffer
CCR
Buffer
Project
Buffer
Project
Buffer
Project 1
Project 2
Ref: Steyn, H. (2002). Project management applications of the theory of constraints beyond critical chain scheduling
* Non-constraints are
subordinated to CCR
** Risk of a resource delaying
the CCR is addressed
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 13

16. ©GregorStrutz/AxelVölcker
Executive
Summary
16
Contents
1 Critical Chain - Project Buffer & Feeding Buffer 2
2 Multi-project environment - Maximising the number of concurrent projects 5
3 Managing resources in multi-project environments 7
4 Application of TOC to Project Cost Management & Risk Management 9
5 Conclusion - Ideas & Applications 10
Time (mins)
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 14

17. 17
More applications of TOC principle to project management
1. Cost Management
Ref: Steyn, H. (2002). Project management applications of the theory of constraints beyond critical chain scheduling
$161
$110 1.1
1.21
1.61*
Snowballing of costs
Planned cost vs Budgeted cost
Possible Issues
"No blame" culture
n ×σ
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 15
n ×σvs
*1.15

18. 18
More applications of TOC principle to project management
1. Cost Management
Ref: Steyn, H. (2002). Project management applications of the theory of constraints beyond critical chain scheduling
$161
$110 1.1
1.14
1.22*
Snowballing of costs
Planned cost vs Budgeted cost
Possible Issues
"No blame" culture
n ×σ
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 16
n ×σvs
$122
*1+ 5 × 0.1

19. ©GregorStrutz/AxelVölcker
Executive
Summary
19
Contents
1 Critical Chain - Project Buffer & Feeding Buffer 2
2 Multi-project environment - Maximising the number of concurrent projects 5
3 Managing resources in multi-project environments 7
4 Application of TOC to Project Cost Management & Risk Management 9
5 Conclusion - Ideas & Applications 10
Time (mins)
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 17

20. ©PMBOK5
20
Ideas and Applications for the future
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 18
Project Selection
Procurement
Decision Making
Quantitative assessment of the
maximum number of projects an
organisation can do with the
current resources…

21. ©GregorStrutz/AxelVölcker
21
“TOC approach puts together concepts that have
not been put together in the same way before and
is therefore considered an innovation”, Steyn
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 19

22. ©GregorStrutz/AxelVölcker
22
Thank you for your attention!
MPMD1.1 | Dhiman & Irkin | 2nd Nov 2016 | 20