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Oded Cohen Oded has nearly 35 years of experience in developing, teaching and implementing TOC methodology, solutions and implementation processes working directly with Dr. Goldratt all over the world. Among the countries to which Oded brings his expertise are the USA, Canada, Japan, India, China, the UK, Poland, Russia, Ukraine, Colombia, Chile, Peru, Turkey and many others.
Oded has authored multiple TOC articles and contributed to several TOC books.
Oded in the is the author of Ever Improve – A Guide to Managing Production the TOC Way, published in June 2010. Oded co-authored the book Deming & Goldratt: The Theory of Constraints and the System of Profound Knowledge – The Decalogue.
Together with Jelena Fedurko Oded has co-authored the book TOC Fundamentals, recently published in Russian.
• This session is for contractors that provide the State or the Government deliverables that have the nature of projects.
• Typical projects are in construction, infrastructure, IT, new product development, etc.
• As such contractors are expected to meet three conditions – the projects that they are committed to fulfill should be: On Time Within Budget According to the agreed specifications (promises)
• The Reality of projects is dominated by uncertainty. As such it is extremely difficult and seems unrealistic to expect to meet the three conditions of Time, Budget and Specifications.
• Nevertheless, it is likely that more and more State bodies may demand from the contractors to meet these conditions.
TOC provides a managerial approach to better manage uncertainty that dominates projects.
TOC recognizes that key constraint of projects is the Critical Chain – the shortest chain of dependent activities while the dependency is not only logical but also through the resource availability.
Critical Chain is used for better planning and better controlling the execution of projects plans.
• In Project Planning – CCPM promotes good and realistic project plans with built-in protection – Project Buffers and Feeding Buffers.
• In Project Execution – CCPM promotes Buffer Management, Priority setting, Early Warning and Recovery Actions.
• TOC Provides focus by setting the measurement for project management – to be a reliable provider.
• Outstanding performance – reliability and competitive lead times can bring the provider more sales.
What is unique about CCPM – Critical Chain Project Management?
• There are too many uncertainties stemming from the nature of the project (first time, new technology etc.), the lack of control (customers’ instructions, bureaucracy, other contractors
etc.) and Murphy – what can go wrong – will!
• Typical situations that can block the progress of State Projects: There are too many cost overruns against budget – materials, resources etc. Existing projects are disrupted by ‘extra work’ Many tasks (activities) take longer than planned Progress payments are not received when expected Revisions for late changes to scope hold us up Too much rework Too much overtime (especially before milestones and towards the end of the
project) Too many resources are not available when needed (they have many
simultaneous tasks) Priorities constantly shift Top management under pressure to add more resources Often scope or specifications are cut from a project
Why is it so difficult to deliver on time
TOC claims that a Core Problem is responsible for the existence of the majority of these problems.
Any solution must address the Core Problem.Oded Cohen – TOC For Contractors
CCPM – Critical Chain Project Management: The TIME constraint of the project is
presented through the Critical Chain – the longest chain of dependent activities. Managing the project through the CC is geared to finish the project in a safe and quick way.
CCPM – Critical Chain Project Management: The TIME constraint of the project is
presented through the Critical Chain – the longest chain of dependent activities. Managing the project through the CC is geared to finish the project in a safe and quick way.
CCPM – Injection 1 Achievement of the delivery commitments is
established as a Prime Measurement for managing project environment
UDEDE
NBR
Inj
Measuring On Time Delivery
1. Reliability - The number of projects that were delivered on-time (or early) versus the total number of projects within time “buckets” (e.g. month, quarter, year). [Percentage]
2. For internal use: The amount of money that has been delivered on time or early versus the total value of the projects within time buckets [Percentage].
3. Also for internal use : The financial impact of the late delivery – T$D – Throughput Dollar Days. [the amount of money delayed multiplied by the number of days late]
CCPM – Injection 2Project Planning Diagrams are in place
with tasks resourced and estimated for duration – while estimates of durations are challenging but achievable
Build a diagram of task dependencies and check its quality in accordance with the following criteria: Completeness – No more than 400 tasks All dependencies are identified The deliverables ("output") of each task clearly known
All tasks are connected "Finish-Start” Feasibility Required resource(s) – main resources, no fractional and no specific names Duration of tasks – no forced dates
CCPM-Injection 2 establishes a mechanism and procedures to develop a quality diagram of the project plan, with duration of the tasks to be set “Challenging, but achievable“.
Why? Because of the behaviour of managers – in planning phase managers ask for estimationsin execution – they treat estimations as justified commitments
Task duration - Behavioral reasons for 80% probability distribution
Estimation times – Current reality in projects
UDEDE
NBR
Inj
CCPM – Injection 2Project Planning Diagrams are in place
with tasks resourced and estimated for duration – while estimates of durations are challenging but achievable
Making the project plan realistic means that we identify and address resource contention situation. This is happening when the plan calls for the same resource to perform more than one task at the same time.
Two mechanisms are used to handle the situations:1. By re-assigning resources that are likely to be available
when needed by the plan2. By sequencing the tasks by creating dependence
between tasks due to availability of resources – this is the Critical Chain
CCPM – Injection 3 Critical Chain determined through resolving
Sorting out Resource Contention:The Critical Chain is the chain of dependent events - one that takes into consideration all dependencies (including resource dependency).
W16
B10 M16C20
G10
M16Finish
68 days
Critical Chain
W16
B10 M16
C20
G10
M16Finish
Letter andColour = Resource
Critical Path Promise = 56 days
M16 - Resource contention!
CCPM – Injection 3 Critical Chain determined through resolving
The Critical Chain is the chain of task and resource dependencies that prevents the project from being planned in a shorter interval, given finite resources.
The Critical Chain provides the major focus and back bone for the planning. It plays even more important role in controlling the execution of the plan.
Hence – the name of the solution - CCPM
CCPM – Injection 3 Critical Chain determined through resolving
Reality in projects – Reality in projects – Working to task due datesWorking to task due dates
RESULT - The delay of 5 days is passed on - the project is RESULT - The delay of 5 days is passed on - the project is said to have “moved to the rightsaid to have “moved to the right””
What happens if it takes less than 10 days - What happens if it takes less than 10 days -
PlanPlan 1010 1010 1616
ActualActual <10 (6)<10 (6) 1010 1616
What happens if it takes more than 10 days -What happens if it takes more than 10 days -
1010PlanPlan 1010 1616
> 10 (15)> 10 (15)ActualActual 1010 1616
Because of working to task due datesBecause of working to task due datesthe positive variation is not passed on (usually)the positive variation is not passed on (usually)
CCPM – Injection 4 Buffers are inserted in strategic pointsUDE
Tasks are performed according to the status of their corresponding buffers through using Buffer Management. Resources inform daily how much time it will take them to complete
In order to ensure resources for the tasks in CC – look ahead!
The length of the project is determined by the CC.
Any delay on CC can bring the whole project to be late.
When a resource is not available for a task on CC and the task has to wait for the resource – it causes delays on CC.
In order to prevent such situations – project manager must ensure that all resources assigned for CC were available when they are needed. This can be achieved through early check and early warning.
This is like a “wake-up call” for a resource on CC.
UDEDE
NBR
Inj
CCPM-Injection 6 Resource Availability is monitored in
The penetration to the buffer presents a risk to the expected completion of the project.
When the trend of Buffer Consumption is too high or when the remaining level of buffer is below Low(=RED!), managers are expected to come with ideas of how to restore the buffer to higher level.
These ideas are discussed and actions agreed.
CCPM-Injection 7 BM for corrective actions
(expediting) is in place Restoring the level of the Buffers
CCPM-Injection 8 Buffer penetration reasons are reviewed periodically for POOGI
Buffer Management Statistics The commitment to POOGI is performed through collecting
statistics of major reasons for delays while the buffers are depleted. The reasons are collected and used for statistical analysis.
A periodically meeting to review the statistics of the reasons for buffer penetration is held.
The meeting is used to decide on the necessary actions to eliminate causes for buffer penetration. Improvement initiatives are agreed and the progress of implementing these initiatives is monitored by the Buffer Management Committee assigned.
CCPM-Injection 9 Resources are monitored as potential CR
– Critical Resources
Please note that in reality there is a pressure to dedicate resources to projects. This stems from the demand for resources to be available when needed (as per the evolution of the original plan). Nevertheless – resources can be used in more than one leg of the project and hence can become critical.
Even though the Critical Chain mechanism ensures that there is no resource conflicts and contentions in the plan – the unfolding reality can cause resource contention and highly utilized resources can cause delays and penetration to the buffer.