By CommenceCRM

How Critical Chain Project Management Helps Improve Performance

Shot of a young businesswoman having a brainstorming session in a modern office

Is the business losing too much time and resources on important projects? It might be time to implement a project management strategy for more efficient and cost-effective project completion. Critical chain project management is a helpful strategy employed by big companies like Mazda and Texas Instruments.

So how does critical chain project management improve project performance? Critical chain project management is an efficient planning method that focuses on the resources needed to finish a project successfully. It helps project managers create realistic schedules that improve productivity.

What is Critical Chain Project Management For?

Critical chain project management is a technique that results in an efficient project execution without overworking the team or overspending the resources. It was introduced in 1997 in the book, Critical Chain written by Eliyahu M. Goldratt.

Poor management planning results in companies losing around 12% of the money invested in the project. Critical chain project management prevents this amount of loss and more by taking the state of resources into account and predicting possible problems. This allows the team to find the most efficient way of executing certain tasks in the project.

Theory of Constraints

The Theory of Constraints (TOCs) is a management concept where the critical chain project management is based from. It states that a manageable system is limited in achieving more of the goals set because of some constraints.

The theory assumes there is always at least one constraint and that it should be identified through a focusing process. Once the constraint has been found, the rest of the system must be restructured around it. The Theory of Constraints believes that the process or an organization becomes vulnerable to failure because of its weakest link.

The critical chain project management is an evolved version of this concept. The system identifies all the possible constraints that might affect each of the vital tasks in the chain.

How Does CCPM Work?

Before starting a project through critical chain project management, it’s important to identify the critical chain first. This chain is defined as the longest path in the diagram that considers the interdependence of activities and the resource constraints.

When planning the project, it’s important to learn about any possible resource constraints early into the plan. The next step is to develop a workflow that’s good enough for everyone involved. Don’t forget to incorporate different buffers into the project plan to monitor the project’s feasibility.

For example, assume that the project is about building construction. The team follows the schedule created with the critical path method, but they eventually encounter resource problems – the cement at the site was not enough, the equipment for the building was assigned to another project, and one member of the team had to resign because of an accident.

These challenges caused the project to be extremely delayed. To resolve the issue, the project manager creates a new schedule while considering the possible shortages of resources to make the project more attainable. The strategy evolved from traditional management into a critical chain.

Sizing a Single Project Buffer in CCPM

There are three kinds of buffers that are usually considered in project management strategies: the project buffer, feeding buffer, and resource buffer. The project buffer is the pooled buffer found after the last task and before the project completion. It’s the contingency that most critical chain activities have. Feeding buffers are found on the non-critical chain. Lastly, resource buffers are found alongside the critical chain to ensure that they’re available when the project calls for it.

But when it comes to critical chain project management, project managers only use a single project buffer at the end. This is their main tool to manage the risks of the project in a CCPM. All the buffers from each task are pooled after the last task and then reduced by half.

However, slashing the buffer in half is only a simplified version of sizing the buffer to highlight its difference from traditional management models. In reality, sizing the buffer is an important step that’s done in many ways. One way to do it is through dynamic buffer sizing, in which the buffer changes as the project progresses.

Critical Path vs. Critical Chain: Which Method is Better?

Both critical chain and critical path are project management methods that show the timeline of a project. The critical path is about finding the early start and finish dates, as well as the late start and finish dates. The main problem with the critical path is that it assumes that all resources are unlimited for each project.

Critical chain is an improved version of the critical path because it modifies the schedule to consider the limited resources. It adds duration buffers to optimize the time spent on planned activity durations. The use of critical chain project management helps the team improve their performance while working with limited resources.

While the critical path method is popular in project scheduling, most of the estimates used in this model are ideal. The critical chain method is a lot more realistic because it considers the resource constraints and finds the best way to work around them.

How to Create a Successful CCPM

Project managers are responsible for the success or failure of a project, which is why they should create a good project schedule and follow it. Critical chain project management is one of the best project management models that help companies maximize their resources. Here are some tips to help you create a successful CCPM plan:

1. Determine the critical chain

The first step to developing an effective CCPM plan is to find the critical chain in the project. Identify the important tasks and other assignments that take too long to complete. Most project managers breakdown the whole project into small manageable tasks first. This helps them identify which jobs need specific amounts of resources.

2. Identify possible resource constraints

Its focus on resources is what sets critical chain project management apart from other traditional management methods. Consider the constraints, buffers, or floats that the team might experience when assigning specific tasks to people.

For example, it takes an employee around 10 days to finish a task, but they’re scheduled to take a 7-day vacation during the project. This is a type of resource constraint that many projects encounter. To maintain the project’s progress, it’s better to assign another employee to cover for their co-worker’s absence. Finding these kinds of constraints early on helps avoid floats, downtimes, and delays.

3. Limit the focus and multitasking

Keeping the team focused on their own assigned tasks boosts their productivity. It also promotes innovative and collaborative behavior among co-workers, which are essential for efficiently completing the tasks on time.

Multitasking is known to kill an employee’s productivity and lower their output quality. It’s better to assign experienced people for each task and let them focus so that the tasks are executed quickly. The teams should only have enough on their plate to stay focused but not too little that they tend to slack off.

4. Create time estimates

Effective critical chain project management allows teams to finish the project earlier than their schedule. It cuts down the estimated finish time by half. While it sounds unrealistic for some, there’s a chance to achieve this kind of finish time by avoiding wasted time and encouraging the team to work efficiently.

Some employees tend to slack off and just start working on their tasks at the last minute. Cutting the time for each task in half creates a sense of urgency that pushes the team to stay focused. This allows them to finish their tasks way earlier than the project’s deadline.

5. Implement the right buffers

After cutting the allotted time for the product by half, the other half should be reserved for buffers or floats. These buffers serve as the “shock absorber” in case the project takes longer than the estimated deadline.

6. Make the project model more detailed

Critical chain project management is a great method for managing large-scale and complicated projects. Develop a detailed plan that the entire team follows to ensure that the project is completed just in time. A detailed project also allows the employees and the project leader to track their progress. The project schedule must include task descriptions, time estimates, time buffers, assigned resources, and deadlines.

Plan a Successful Project with Commence CRM

Projects that make use of critical chain project management are a lot more successful than other projects that utilize traditional management methods. Start planning your next project with Commence’s Next-Generation CRM that’s integrated with different project management tools. 

Our software is developed for small to medium-sized businesses who need CRM solutions to help boost their sales or improve their company’s performance. Find the best CRM software with all the features you need with Commence CRM. Visit our website now to get started on the test drive with our program.