Project management & critical chain

On Project Management &
The Critical Chain
Ziya G. Boyacigiller
This presentation was created and given by Ziya
Boyacigiller who was leading Angel Investor and a loved
mentor to many young entrepreneurs in Turkey. We have
shared it on the web for everyone’s benefit. It is free to
use but please cite Ziya Boyacigiller as the source when
you use any part of this presentation. For more about
Ziya Boyacigiller’s contributions to the start-up Ecosystem
of Turkey, please go to www.ziyaboyacigiller.com

Copyright © Ziya G. Boyacigiller 2003,2004
On Project Management &
The Critical Chain
Ziya G. Boyacigiller

What can us from
Succeeding
in Product Development?
1. Definition: Not working with key
customer(s) on the α-version (prototype)
2. Planning: Not signing up to an Objective
Specification (concurrent engineering).
3. Management: Not using Project
Management with intensity end-to-end.
4. Quality: Not adopting and applying Dr.
Deming’s (or Dr. Juran’s, etc.) principles.

CCRITICAL-RITICAL-CCHAINHAIN
SCHEDULING & MANAGEMENT
TECHNIQUES
Eliyahu Goldratt, North River Press

Q: Where do profits come from?
CUSTOMER PAYS COMPANY
COMPANY SHIPS PRODUCT TO CUSTOMER
COMPANY BUILDS PRODUCT
COMPANY SAMPLES, DESIGNS-IN, BOOKS PRODUCT
COMPANY INTRODUCES PRODUCT
COMPANY DEVELOPS PRODUCTS
COMPANY USES PROFITS TO START NEW PROJECTS

If we can’t make a product
shipment, we lose the profit for
that shipment.
Whereas if we can’t introduce a product
on time we lose much bigger:
“A six month delay in product introduction
(TTM) reduces lifetime profits by 50%.”
“McKinsey & Co.”
sales
t im e

Incomplete, Misfocused
Design
results in cost, time overruns
– loss of profits and position

Affect of TTM on
Return on Development Time
ASP - 2-3x use monopoly pricing / maintain
higher pricing longer
margin - 1-2x get a head-start in experience-
curve, use higher-volume
volume - 2-3x get to see more quotes / get to
win more designs
lifetime - 1-2x get a head start / get into better
quality projects
DEMM - 1-3x use same or more resources
RODT - 4-12x get a better payback

fast cycle-time => TTM => higher
profits
0
20
40
60
80
100
1201
3
5
7
9
years
revenue
fast (1 yr cycle) slow (2 yr cycle)

TTM Focus is vital to
Competitiveness

ALL SCHEDULES START NEAT
AT THE BEGINNING...
E X P E C T E D F I N IS H D A T E
" M I L E S T O N E "
A
B
C
D

Pareto of Typical Delays
0
2
4
6
8
10
12
14
16
18
20FrequencyofOccurance
(wks)
CONFLICT
ESTIMATION
RESOURCE/PO
TECHNICAL
TECHNICAL
COORDINATION
DEFINITION
TECHNICAL
TECHNICAL
REQUIREMENT
VENDOR
ACTSOFGOD
VACATION
DONWTIME
PERSONNEL
MANAGEMENT
HUMANERRS
TECHNICAL
DOCUMENTATION
QA/SHIP

UNCERTAINITY IS WHY WE NEED
PROJECT MANAGEMENT
T I M E T O C O M P L E T I O N
PROBABILITYOFON-TIMECOMPLETION
MEDIAN
1 X > 1 X

Murphy’s Law:
“Whatever can go wrong,
willwill.”

ParkinsonParkinson’’s Laws Law
“Work expands to fill (and evenand even
exceedexceed ) the time available.”

Pareto of Historic Delays
0
5
10
15
20
25
30
35
40
45%of1800WW
MURPHY
PARKINSONS
MULTI-TASKING
SUBORDINATION
OTHER

Q : What does “Manage Well”
reallyreally mean?
Faster project development times
Meet schedule dates
Meet milestone date
Maximize engineering productivity
Minimize costs
Minimize rework
Do not keep resources idle
. . .

SACRIFICE LOCAL OBJECTIVES,
FOCUS ON THE GLOBAL
OBJECTIVE
C
1 5
D
9 0
B
3 0 E
3 0
L A T E S T A R T
( S A V E C O S T / R E W O R K )
C
1 5
D
9 0
A
9 0
B
3 0 E
3 0
E A R L Y S T A R T
( P R O T E C T C R I T I C A L - P A T H )

SUBORDINATE ALL OTHER
OBJECTIVES TO PROTECT
THE CRITICAL-CHAIN
M A N A G E W E L L
C O N T R O L
C O S T S
P R O T E C T
T H R O U G H P U T
E A R L Y S T A R T
L A T E S T A R T
G O O D L O C A L P E R F O R M A N C E
G O O D G L O B A L P E R F O R M A N C E

S C H E D U L E S A R E
M I S S E D
M E E T S C H E D U L E S
P R O D U C T I V I T Y
T O O L O W
I M P R O V E
P R O D U C T I V I T Y
S C H E D U L E L E S S S L A C K
T I M E F O R U N C E R T A I N I T I E S
S C H E D U L E M O R E S L A C K
T I M E F O R U N C E R T A I N I T I E S
.... need to decide what is
more important to make us
win...

“SAFETY” BUILT INTO ESTIMATES,
EXTENDS TASK SCHEDULES BY 2X
T I M E T O C O M P L E T I O N
" A G G R E S I V E E S T I M A T E "
W I T H M I N I M U M S A F E T Y
5 0 % C O N F I D E N C E
" S A F E E S T I M A T E "
8 0 - 9 0 % C O N F I D E N C E
S A F E T Y
PROBABILITYOFON-TIMECOMPLETION
MEDIAN
1 X > 1 X

BELIEF: The only way to meet the
schedule is through protecting
each step... Pad every step with
safety.
T IM E
SAFETYA
SAFETYB
SAFETYC
SAFETYD

SAFETY IS INSERTED INTO
PROJECTS IN 3 WAYS
 TIME ESTIMATES BASED ON PESSIMISTIC
EXPERIENCES
 EVERY LEVEL MANAGER ADDS ONE
ADDITIONAL SAFETY
 ESTIMATOR SANDBAGS AGAINST “CUTS”
Q : If estimates have so
much safety why do projects
finish late?

Only 50% of projects meet Original
Schedule Date (OSD)
Over 90% of products introduce the
last week of the quarter
Q : If estimates have so
much safety why do
projects finish late?

PARKINSON’S LAW KICKS
IN...
EXPECTED
FINISH
DELAYED
START
"URGENT"
STUFF
 Student Syndrome
 Multi-Tasking
 Accumulating Delays
 Interruptions
 Distractions

PARKINSON + MURPHY =
DELAY
E X P E C T E D F I N IS H
M I L E S T O N E D A T E
A
B
C
D

Q : How come we allow multi-
tasking?
A
1 0
B
1 0
C
1 0
N O M U L T I - T A S K I N G
A
5
B
5
C
5
A
5
B
5
C
5
2 0 + d
M U L T I - T A S K I N G
2 0 + d
2 0 + d
PLUS if A is delayed by “d”, domino-effect
kicks in and delays all projects by “d”.

AVOID MULTI-TASKING
Use free-time (waiting time) to help
other projects
Select resources with low loading-
factor
Use resource buffers to eliminate
domino-effect
Coordinate resources through
advanced reminders

DELAYS ACCUMULATE,
GAINS DON’T...
E X P E C T E D F I N IS H
M I L E S T O N E D A T E
A C T U A L F IN IS H
D A T E
A
B
C
D

PROTECT THE CRITICAL-PATH
WITH A PROJECT BUFFER...
T IM E
SLACKA
SLACKB
SLACKC
SLACKD
P R O J E C T B U F F E R

ATTACK THE HIGHEST
UNCERTAINTY TASKS
FIRST...
T IM E
SLACKA
SLACKB
SLACKC
SLACKD
P R O J E C T B U F F E R
C
A
B
D

Buffer Simplifies Priorities,
Provides Focus and Early
Warnings
For Managers
O K
W A T C H /
P L A N
A C T
S A F E T Y B U F F E R

FEEDING-BUFFERS PROTECT
THE CRITICAL-CHAIN, AND
PREVENT CRITICAL-PATH FROM
CHANGING DURING PROJECT
F E E D IN G - B R A N C H E S
&
F E E D IN G - B U F F E R S

MANAGING THE SCHEDULE :MANAGING THE SCHEDULE :
Eliminate Milestones
Force On-time/early Starts
Manage To Meet The Aggresive
Durations
Manage Murphy’s Delays
RESULT:RESULT:
Gain The Times When Tasks Are
Finished Early & Minimize
Parkinson’s Delays

Critical-Chain Technique
Saves Resources and Cuts
TTM
 Half the tasks will be finished on time or
early (gains accumulate).
 This will offset the other half done late.
 Statistically, a project will need less than
1/2 of the safety (project buffer)
Therefore, on the average
projects will pull in by over 25%

Less-is-More!
Make TTMMake TTM firstfirst priority.priority.
MISSINGTTM,
PRODUCTIVITY
ISLOW
MEETTTM,
PRODUCTIVITY
ISHIGHER
PRODUCTIVITY
TOOLOW
MISSTTM,
PRODUCTIVITY
ISSTILLLOW
START MOREPROJECTS
(ONEENGINEERPERPROJECT)
START LESSPROJECTS
(MULTIPLEENGINEERSPER
PROJECT)
versus

We need a paradigm shift for TTM...We need a paradigm shift for TTM...
 TTM means focused product plansfocused product plans (less-is-
more)
 TTM means simplicitysimplicity (straight-line to target)
 TTM means focus on futurefocus on future (duck-hunting)
 TTM means commitment to wincommitment to win (doing vs
winning)
 TTM means taking riskstaking risks (risk failure now -
win later)

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
PRE-MFH
MFH
PD
IOS
DES
LAY
FAB
TEST
INTRO
MANAGEMENT INFLUENCE MANAGEMENT ATTENTION
Management Influence is
Lowest Towards the End of a
Project
Front-End Roles Back-End Roles

MANAGEMENT ROLESMANAGEMENT ROLES
FRONT-END
 Define business strategies
 Define product direction
 Define process direction
 Manage aggregate project &
resource portfolios (build -
match)
 Own and operate product
development process
 Launch projects & teams
 Obtain firm commitmentsObtain firm commitments
BACK-END
 Review commitmentsReview commitments
 Review projects & plans
 Provide resources
 Assure support from functional
organizations
 Manage changes & conflicts
 Fix systematic problems
 Teach, train, indoctrinate
 Improve product development
process

Make Commitment to WinCommitment to Win Highest
Priority
 CEOCEO buys into project - commits to
support resource requirements fully & on-
time
 Senior ManagersSenior Managers buy into project - commit
to provide service and support fully & on-provide service and support fully & on-
timetime
 Project TeamProject Team signs-up to win - commit to
meet TTM and other goals - with no
excuses

Manage Project ConflictManage Project Conflict
 Commit to meet TTM for all projects when planning OSPCommit to meet TTM for all projects when planning OSP
 Eliminate uncertainty - achieve first pass success
 Anticipate potential problems, and schedule into successor
project a “reasonable” time to resolve them
 Have additional resources available to add to predecessor
project if problem is beyond reasonable / free up engineer
altogether (takes consulting role) if possible
 Double-up engineers on successor project to have at least
one available all the time (trade the other engineer if
problem is beyond reasonable)
 Add resources to successor project to make up the lost
time

Manage Estimation ErrorsManage Estimation Errors
 Break project into tasks and determine “without-
problems” & “with-problems” time estimates
 Allow “sufficient” slack time in addition to the cumulative
without-problems time
 CommitCommit to meet this schedule
 Publish project bonus amounts when schedule is signed
 Review schedule performance weekly, and actively
coach / manage
 Eliminate rework by using systems approach to design,
and doing cell/block level objective (before design) and
design (after design) reviews
 Dictate cell / block reuse
 Compile task time actuals to use in future estimates

TTM needs back-end support for good results
LIFETIME
PROFIT
FROM
PRODUCT
CUSTOMER REQUIREMENTS
(POTENTIAL = 100%)
PRODUCT
DEFINITION
IOS
DESIGN
TEST
TTM
REACH
QUOTE
LEADTIME/PRICE
DELIVERY
RESULT
10% ???

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