Critical Chain Project Management

Critical Chain Project ManagementCase Study Application and Lessons Learned

Prepared for PMI Montgomery ChapterFebruary Chapter dinner

February 6, 2013

Mike Hannan, VP, Public Sector ServicesHilbert Robinson, Senior Program Manager

Objectives

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1. Use Actual Case Studies to address typical questions about the applicability of CCPM to real life project/program management challenges

2. Stimulate thinking about how you might apply this yourselves

Agenda

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1. Brief Review of “The Three New Rules” of CCPM2. Case Study # 1 : Redesign of Commercial Jetliner3. Case Study # 2 : Nuclear Submarine Maintenance4. Q & A

New Rules

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1

New Rule Advantage

Buffer Projects, Not Tasks

Faster project and a more reliable

project commitment.

Old RuleProblem

Plan each task as a highly reliable commitment.

Task variability preventsreliable project commitments.

2Assign staff to multiple

tasks, and start all projectsas early as possible.

Focusing staff on 1 taskat a time results in low resource utilization, andholds up other projects.

Stagger ProjectsMaximize project completion rate

and resource utilization.

3 Each PM lobbies the PMOfor critical resources.

Priorities across projectsshift, resulting in persistent conflicts over resources.

Protect ProjectBuffers ThatNeed It Most

Clarity, commonly agreedpriorities, stronger

cooperation among PMs

Change the rules, change the game, change results, close the gap

Case Study Format

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Background, Performance Gap Implementation Challenges Approach / Application of the New Rules Results Lessons Learned

6

Case Study # 1 – New Product Development

The Application of CCPM to the Re-design of Commercial Jet Liner

Background / Performance Gap

Program budget is lowest ever – dictated by promises to investors Program schedule is shortest ever – dictated by promises to the market Program delivery date is set and not negotiable Executive in charge of only part of the program Only half the staff located at main site, 25% are overseas Must implement EVM and other “Best Practices”

Program Launch

Conceptual Design Fabrication Assembly Test DeliveryPreliminary

DesignDetail

Design

• Mechanical Engineering Only• Several hundred scientists, designers, analysts and technicians involved• Budget in the high 9 figures• Sub-contractors not involved

Additional Challenges and Special Considerations

How to draw boundaries around the resource poolsWhat do we define as a projectWhat work statement to include or ignoreHow much of the value stream to includeShould we do a pilotHow to integrate with other best practices / avoid

turf warsShould we also consider:

– Budget buffers– Scope / performance buffers

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Approach / application of the rules

Independent cross functional product teams by airplane sections Program management specialist does both EVM and CCPM Build CCPM team plan first then convert to EVM baseline Standardize the design and drawing release process Each drawing is a project, hundreds of projects per team Use common template library for ease of planning and integration of

reporting across multiple teams Build comprehensive load to capacity model for each team Initially, no staggering – dates already set Instead, analyze staffing requirements and adjust staffing plans Renegotiate supplier commitments where necessary

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Team

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% Critical Chain Complete

% B

uffe

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Example Multi-Project DashboardDifferent shaped dots for different types of deliverables

Approaching the end of the program

Approach / Application of Rules

Status by estimating

duration remaining,

not % complete

NO multi-tasking

Finish when you’re

done, not when it’s due

Plan using 50% probabilities for task durations, not 80%

Team members share

responsibility for project

deliverables

All team members work to the same priorities

Start only when ALL the prerequisites are complete

Poster Used to Communicate Desired Behavior

Critical Chain Execution Run

Rules

Seek out, identify and resolve issues quickly

Results

0.8

0.9

1.0

1.1

1.2

1.3

2001MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2002JAN FEB

Contractor2 1 CPAF RDTEElement: LR777.01 Name: AFITCPI and SPI

Index of Dollars

CPI 1.0051.0031.0071.0091.0300.9820.9600.9620.9640.9600.9651.001SPI 0.9931.0181.0141.0050.9980.8990.9040.9230.9490.9440.9400.972

Performance to PUSH system—late and over budget

Cost Performance Index (CPI) Schedule Performance Index (SPI)

Earned Value Reports-Before

Question: Please predict how the chart looks from this point to the end of the program.

Business as usual

Crisis

0.8

0.9

1.0

1.1

1.2

1.3

2001MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2002JAN FEB

Contractor2 1 CPAF RDTEElement: LR777.01 Name: AFITCPI and SPI

Index of Dollars

CPI 1.0051.0031.0071.0091.0300.9820.9600.9620.9640.9600.9651.001SPI 0.9931.0181.0141.0050.9980.8990.9040.9230.9490.9440.9400.972

Radically and rapidly increased system performance

Earned Value Reports-After

Cost Performance Index (CPI) Schedule Performance Index (SPI)

Results

Did you guess correctly? Be honest

Business as usual

Crisis New mode of

operations

Results

Engineering thought that

this was a VERY aggressive schedule

Working to flow events and NOT to due dates

3 weeks ahead

4 weeks ahead

8 weeks ahead

12 weeks ahead

Second Airplane Program

Two weeks of xmas break

Even shorter schedule yet finished 3 months early!!

Lessons Learned

Trust the data or, fix the data then, trust the data

No compelling need or reason to get better, no compelling results

Buffer Watching is not the same as Buffer Management

EVM and CCPM works together just fine, if you want them to

CCPM Scales up just fine

Benefits grow with increased alignment over a larger span of control

Quality improves with improved focus

Some people will have a hard time making the switch

100% compliance is not a pre-requisite

It is not just about scheduling. Focus on behaviors

It is not about the software

Trust the data or, fix the data then, …15

Case Study # 2

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Navy – Pearl HarborThe Application of CCPM to the Repair of Nuclear Submarines

Find picture of fast attack submarine

Case Study Format

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Background / Performance Gap Implementation challenges Approach / Application of the rules (deviations) Results Lessons Learned

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Pearl Harbor Naval Shipyards employ about 4,000 peopleMaintain and modernize submarinesProjects start and end at a pre-determined timeMuch of the work is identified after project startsTasks completed using 81 specific trade skills

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Expect high attrition – must refresh workforce - maintain critical skills

972 6681027

2182

3799

5248 5065

2066

493

735

383

144

88

100

63

279

0

1000

2000

3000

4000

5000

6000

18 - 25 26 - 30 31 - 35 36 - 40 41 - 45 46 - 50 51 - 55 56 - 60 61 - 65 66+

Total ES w/o Apprentices Apprentices Total ES

33%over 50

1707

10511306

2326

3887

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2002 DataTotal Workforce 23,530Attrition 1,129


Workforce Age Profile

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Uncertainty• Neither the scope nor the work content is clear upfront, but we

need to make firm commitments before the projects begin

Not enough capacity• Our people (and equipment) resources are already overloaded,

but we keep accepting more projects

Aggressive schedules• It already takes heroic efforts to meet due-dates, yet we are being

asked to deliver more scope in lesser time

Complexity• Fixing Hundreds of components, in dozens of integrated systems • Severe space constraints – space is a limited resource• Highly dependent on specialized skills in short supply

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Constraining Business Rules/Practices• Managing the money got in the way of managing the work

• Bad measures driving people to behave badly– Poor planning (confusion between work breakdown and workflow logic)

– Multi-tasking – staying busy but not making progress

– Parkinson's Law – Keep jobs open until all money has been spent

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Customers disillusioned with late projects

Multiple scheduling tools and work lists

Job timelines inconsistent

Multiple priority lists across the organization

Difficulty in correctly prioritizing jobs

Increasing management complexity with contractors

No appropriate tool for balancing resources

No means for evaluating impact of new work

No means to validate necessity of overtime

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Add to this picture:

1. Six months post 9/11

2. There is an X-fold increase in the need for secret missions

Proud tradition and impressive accomplishments, but…There still existed a substantial gap.

Measure Before After

Percent of on-time delivery < 60%

Amount of overtime charges Too high

Work not completed at end of project > 6%

Staffing requirements Too high

Implementation Challenges

How to deal with the nuclear culture – all changes increase safety risk How to plan when 30% of the work has not yet been identified How to integrate work being done by shipboard personnel How to integrate work being done by contractors How to integrate work being done in the many production shops How to handle a single CCPM project in a multi-project environment How to deal with fixed start AND finish dates How do deal with high volume of non-project work Getting permission to ignore / modify business rules / practices

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Approach / Application of the Rules

Used templates and place holders to complete planning quickly Joint planning sessions with contractors and crew Modeled physical space as resources Separate “misc work” file reduced schedule clutter Free standing Local Area Network to address IT/security concerns Use schedule to determined and renegotiate due dates Not able to officially implement pipelining / (pseudo stagger) Full load to capacity picture for the first time

– Identified pockets of hidden resources– Identified urgent cross training needs – shifted manpower around

All over time decisions made based on buffer recovery expectations

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Approach / Application of the Rules

Task # Task Name

1 Initiate Work Request2 Screen work to FMB3 Review work for acceptance4 Perform ship check5 Identify work scope6 Identify material requirements7 Write work package and provide to Zone Manager8 Review work package content for completeness9 Submit work package to work control10 Write work authorization form (WAF) and submit to ship11 Hang Tags, open WAF and notify Zone Manager WAF is open12 Remove Miscelleaneous interference as necessary13 Remove major inteference where required14 Perform authorized work15 Review completed work16 Grant testing authority to ship17 Clear tags and revise WAF18 Verify that all work related to the affected system is complete19 Establish required system conditions in preparation for testing20 Test system to verify integrity and performance requirments21 Document test results22 Re-install all interference23 Close WAF24 Sign AWR (Ship and QA)25 Review TGI and submit to Work Package Control26 Close All TGIs27 Sign Pre-requisit List28 Sign Certification Letter29 Issue Certification Letter

This step does the work

Summarized to seven schedulable steps and replicate for each component

Typical process to repair a single component

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Focused Use of Overtime

29.8%

27.7%

17.4%

13.0%

14.6%

12.5%

14.9%

10.1%

$2,489,450

$2,015,968

$2,220,402

$1,981,335

$2,187,398

$1,398,487

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2000 2001 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03

% O

vert

ime

-$250,000

$250,000

$750,000

$1,250,000

$1,750,000

$2,250,000

$2,750,000

Ove

rtim

e C

ost p

er Q

uart

er

May 2003

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On Time Completion

(5)(4)(3)(2)(1)

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Avail Start Date

Day

s Ea

rly (-

) Lat

e (+

)

This chart displays the "On Time Completion" metric for the last 35 availabilities. It also superimposes a 10 Availability moving average line. The small tick marks at the axis indicate on time completion. Numbers above the line indicate late, numbers below the line indicate early.

May 2003

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Improved Schedule Adherence

0.00

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1.00

1.20

2000 2001 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03

Quarter

% O

n Ti

me

This chart displays the "On Time Completion" metric. The ratio is the total number "On Time" versus the total completed. (This is

the equivalent of the Schedule Indicator in the DMOIs.)The Goal

May 2003

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Performance Gap significantly reduced!!!

Proud tradition and impressive accomplishments, but…There still existed a substantial gap.

Measure Before After

Percent of on-time delivery < 60% >95%

Amount of overtime charges Too high Cut in half

Work not completed at end of project > 6% <2%

Staffing requirements Too high Cut by 25%

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Critical Success Factors

1. Project schedules buffered, with aggressive task estimates2. Modeling is not too granular, and does not require too

much data 3. Pipeline is level-loaded at the constraints only, with

adequate protective capacity for all resources4. Task priorities are followed and tasks are regularly updated5. Buffer recovery is planned and managed6. Resource requirements are proactively managed7. Write new planning and execution process guides8. Use CCPM to focus other initiatives9. Revise performance metrics and accounting process10. Conduct CCPM expert training for stabilization

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Transformation Challenges

1. System (holistic) versus functional (silo) perspective2. Multiple initiatives / change overload3. Frequent changes in military and civilian leadership4. Difficult to change large project midstream5. Full benefits not visible for single projects in the multi-project,

multi-shipyard environment

A Few Key Takeaways

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CCPM is simple in concept—it turns common sense into common practice.

Introducing CCPM will help any project right away, regardless of how sophisticated and disciplined your project-management practices are (or aren’t).

Some “high-discipline” PM organizations take longer to realize CCPM benefits, because they have a harder time letting go of the “Old Rules.”

Many “low-discipline” PM organizations have an easier time adopting CCPM, because the “Old Rules” are not as deeply embedded.

Questions???

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Documented Benefits of Critical Chain

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Sample Results

18 months vs. 60 months,

IT department first then drug development – CEO: “100% due date performance”

Warner Robbins – Iraq War – Expanded C-5 air lift capacity by 8 million ton-miles

Iraq War – One extra submarine in steaming days

Satellite Division – Turned around the business

Engine Division – partially funded Northwest acquisition

Software delivered 5 months early, 33% cost reduction

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Sometimes Speed and Reliability Are Mission Critical.

Documents

Critical Chain Project Management