Week10 slides
- 1. Mgt 610 Strategic Perspectives on Project Management (c) 2013, Thomas Lechler. All rights reserved.For academic use only. 1 Session 10 Effort Perspective: Critical Chain Simulation Dr. Thomas Lechler Babbio Center 636 Phone: (201) 216-8174 FAX: (201) 216-5385 email: tlechler@stevens.edu
- 2. Mgt 610 Strategic Perspectives on Project Management (c) 2013, Thomas Lechler. All rights reserved.For academic use only. 2 Session 10: Course Pointer Shareholder Value Output Value Stakeholder Value Effort Value Critical Chain
- 3. Mgt 610 Strategic Perspectives on Project Management (c) 2013, Thomas Lechler. All rights reserved.For academic use only. 3 Session 10: Evidence 1. How to solve resource conflicts in a multi project environment? 2. What is the leverage to raise the efficiency in a multi project environment?
- 4. Mgt 610 Strategic Perspectives on Project Management (c) 2013, Thomas Lechler. All rights reserved.For academic use only. 4 Topics and Objectives • Understanding the basic problems in multi- project environment. • Understanding the impact of CC implementation • Implementing the principles of TOC • Improving effort value
- 5. Mgt 610 Strategic Perspectives on Project Management (c) 2013, Thomas Lechler. All rights reserved.For academic use only. 5 Session 10: Agenda 1. Introduction 2. Multi-Project Problems 3. CC Impact 4. Applying Critical Chain
- 6. Mgt 610 Strategic Perspectives on Project Management (c) 2013, Thomas Lechler. All rights reserved.For academic use only. 6 1. Multi-Project Problems: Success Impact Samples: USA: 172 Projects (112 succ., 50 fail.) GER: 448 Projects (257 succ., 191 fail.) Correlation Coefficients Resource Conflicts Success Criteria GER USA Efficiency -.20 -.26 Effectiveness -.15 -.19 Customer Satisfaction -.21 -.21 Business Results -.20 -.19 MEANS 4.4 4.1 • Many projects suffer under resource conflicts • Resource conflicts have negative impact
- 7. Mgt 610 Strategic Perspectives on Project Management (c) 2013, Thomas Lechler. All rights reserved.For academic use only. 7 1. Multi-Project Problems: Known Problems It’s the system, stupid! “Pit a good person against a bad system and the system will win all the time.” Rummler and Brache, 2002 Deming’s 85/15 – 85% of faults are process related, and it is management’s responsibility to solve them – 15% of faults are the responsibility of – individual employee’s – Most time management is focusing on the “15” rather than the “85”, trying to find the guilty person rather than to improve the process Deming, W.E., “Out of the Crisis”, MIT, CIA, Massachussetts, 1986
- 8. Mgt 610 Strategic Perspectives on Project Management (c) 2013, Thomas Lechler. All rights reserved.For academic use only. 8 On-time performance N CPM N CC Greater Than 90% 9 7% 8 53% 80% To 90% 12 10% 3 20% 70% To 80% 18 15% 1 7% 60% To 70% 20 17% 0 0 50% To 60% 18 15% 1 7% 40% To 50% 15 12% 0 0 Less Than 40% 27 22% 0 0 No Response 2 2% 2 14% Results from: http://www.pdinstitute.com/surveys/surveyresults.htm Question: On-time performance for the projects of my organization is: CC promises higher due date performance! 2. CC Impact: Reported Improvements
- 9. Mgt 610 Strategic Perspectives on Project Management (c) 2013, Thomas Lechler. All rights reserved.For academic use only. 9 2. CC Impact: Simulation Results Goldratt, Viewer Notes, 1999, pp.70 Simulated Project Results 10% chance to complete 50% chance to complete 90% chance to complete Days until project completion Multi Taski ng CC Multi Taski ng CC Multi Taski ng CC Project 1 315 81 370 111 425 190 Project 2 315 160 375 200 430 235 Project 3 315 185 375 210 430 240
- 10. Mgt 610 Strategic Perspectives on Project Management (c) 2013, Thomas Lechler. All rights reserved.For academic use only. 10 CC-Project Before After Warfighter Systems Testing (US Air Force Operational Test & Evaluation Center) 18 projects in six months. On time delivery unknown. 26 projects in six months. 75% projects on time; 30% reduction in cycle time. Aircraft Repair and Overhaul (US Naval Aviation Depot, Cherry Point) Average turnaround time (TAT) for H-46 aircraft was 225 days. Throughput was 23 per year. Reduced TAT to 167 days, a 25% reduction while work scope was increasing. Delivered 23 aircraft in six months (throughput of 46 per year). 70% reduction in backlog Submarine Maintenance and Repair (US Naval Shipyard, Pearl Harbor) Job Completion Rate = 94%. On-time delivery less than 60%. Cost per job was $5,043. Job Completion Rate now 98% On-time delivery 95+%. Cost per job reduced 33% Overtime reduced by 49% $9M saving in first year. 2. CC Impact: Cross Case Analysis
- 11. Mgt 610 Strategic Perspectives on Project Management (c) 2013, Thomas Lechler. All rights reserved.For academic use only. 11 2. CC Impact: Cross Case Analysis Summary The Impact of CC across many cases: – Increased systems throughput ~ 20% – Reduced project schedule ~ 15% - 40% – Increased on-time delivery ~ 93% – Reduced backlog ~ 30% - 70% – Reduced overtime ~ 20% - 50% CC shows dramatic performance improvements but…
- 12. Mgt 610 Strategic Perspectives on Project Management (c) 2013, Thomas Lechler. All rights reserved.For academic use only. 12 3. Applying Critical Chain Applying the Five steps of TOC to CC-Multi-Project Management: 1. IDENTIFY the system’s constraint. 2. EXPLOIT the system’s constraint. 3. SUBORDINATE everything else to the above decision. 4. ELEVATE the constraint 5. DON’T let inertia become the constraint (If the constraint is broken, go to 1) In-Class Simulation Goldratt, Viewer Notebook, 1999, pp.75