Q 270. Distinguish Critical Path Method from Critical Chain Method. How does Critical Chain method relate with Theory of Constraints or with Lean Management practices?

 

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Benchmark Six Sigma Expert View by Venugopal R

Critical Path Method:

 

Critical Path Method (CPM) has been in existence from 1950’s. It was developed by Morgan Walker and James Kelley. The trigger for development of CPM was attributed to PERT (Program Evaluation Review Technique), that was developed around the same time by Booz Allen Hamilton. CPM is a project modelling method that applies to any kind of project - Construction, Aerospace, Defence, Software, Product development, Research, Healthcare and so on. The steps involved in CPM are outlined broadly as below:

1. Breakdown and list the activities involved for the project
2. Sketch the activities sequentially, depicting the serial and parallel paths
3. Identify and indicate the expected time duration for each activity
4. Indicate dependencies between the activities
5. Calculate the time for each path and identify the path that is expected to take the longest duration, which is the ‘Critical Path’

Any delay on the critical path will directly impact the project timelines and hence it is very important in Project Management to ensure Critical Path is not delayed.

 

Assumptions while using CPM:

 

1.     Multi-tasking is not done using the resources

2.     The time duration estimates are considered realistic and honest

 

Critical Chain Method:

 

In the late 1990’s, Eliyaru Godratt, who is the author for the famous book “The Theory of Constraints (TOC)” came up with another business fiction by name “Critical Chain”. The Critical Chain Project Management is based on the methods and algorithms derived from TOC.

 

He brought out the fact that practically there would be constraints in the form of resource limitations that could adversely impact the Critical Path Method. There would possibly be a ‘buffer’ on the time duration provided by the respective stakeholders.

 

Two other syndromes that are likely to occur for the CPM are:

 

1. Student Syndrome – Whenever the available time is more, there is a tendency to commence the work only towards the later part of the duration.
2. Parkinson Syndrome – Whenever the task is completed before time, tendency to keep ‘polishing the work’ to fill in the remaining time duration, though such activity is only a wasted ‘over processing’.

In Critical Chain Method, the activity time duration is cut by 50% and the reduced time is kept as buffer. The buffers may be classified as Project Buffers, Feeding Buffers and Resource Buffers. The project progress is monitored by monitoring the extent of consumption of the buffers rather than the individual performance adherence to schedules.

 

Theory of Constraints:

1. A quick overview of the principle of Theory of Constraints is as follows:
2. Identify the system’s constraint
3. Exploit the system’s constraint
4. Subordinate & Synchronize to constraint
5. Elevate the performance of constraint
6. Repeat the process

 

Critical Chain Method – Benefits:

 

By applying the Critical Chain Management, the following benefits are obtained:

1. Resource conflicts removed – Constraints due to resource variability, interdependence and contingencies are removed from the required resources. Resource de-contention is done for the project based on the capacity of available resources
2. Critical Chain is identified – Critical chain is the longest series of interdependent activities through a network that are connected by task or resource dependencies. Critical chain is the project constraint for meeting the delivery commitments
3. Feeding Buffers – Variability on the non critical feeding chains can become constraints for the critical chain. The feeding buffers help to address those constraints
4. Start only as early as necessary – By this, the delaying of Critical Chain tasks are controlled and in turn it addresses the resource constraints that occur due to company-wide imbalanced loading of resources
5. Address variability in Critical Chain – Project buffer protects the critical chain completion date due to variability within the critical chain itself.

Critical path and Critical chain method:

 

Both Critical Path and Critical chain methods are types of schedule network diagramming techniques used in developing the project schedule.

Critical path is the longest path of schedule network and the duration of critical path is the project duration. Floats are calculated, based on difference between critical and non critical pathway. Free float can be defined as the amount of time an activity can be delayed, without any delay in the successor activity. Total float can be defined as amount of delay in the activity that can be done, without affecting the overall project duration.  Floats in  all critical path activities are zero.

Critical chain is modification of critical pathway with resource optimization. Based on resource availability schedule is prepared. Here buffers are used instead of float. Buffers account for contingency. Buffer is not zero in critical chain pathway. There is no early and late start or early and late finish. There can be only one start and one finish.

The Project Buffer is the total buffer at the end of the project. Any  delayed activity can consume this buffer.

The Feeding Buffer is  the buffer added to non critical chain , so that these non critical chain, if delayed, can use this buffer.

The Resource Buffer is a resource  kept as buffer along critical chain, so that continuity of the work is ensured.

 

Differences Between Critical Path and Critical Chain Method

Resources

The critical path method does not assume any resource constraint and assumes that it is freely available. The critical chain method, on the contrary assumes resource constraint and builds a realistic schedule based on availability.  Critical chain based method schedule may be of longer duration, but is more realistic.

Float/Buffer

In the critical path method, float can not be utilized before  the early start of succeeding activity. While in case of critical chain, if preceding activity gets finished early, succeeding activity can be started earlier and time saved will be added to project  buffer. 

Misuse of Float

In the critical path method,  team members often do not start an activity, until they utilize the float  of the activity completely, till late start. Where as in critical chain, each activity has a realistic schedule and time gained is placed at the end of project as project buffer.

Project progress: Floats can  not be used to assess project progress, where as buffers can be used to analyze project progress.

 

 

 

Critical path method:

   

Critical Chain method:

 

 

 

Correlation of Critical chain with lean and theory of constraints:

Lean management aims at value creation over entire processes of organization, where as critical chain and theory of constraints are  centered on managing time duration and uncertainties of the project. The uncertainties of durations and project completion can  be contributed to inadequate management processes, which can be sorted by lean management practices. 

Lean practice  implementation  has  greater effect on correcting processes unevenness, eliminating wastes and have more impact on whole organization, whereas critical chain and theory of constraint methods  are efficacious in task completion on time and project  monitoring, by optimizing the resource constraint.

 

Images Sources:

Critical Path:

www.blog.pmsprout.com

Critical Chain:

www.blog.pmsprout.com

Critical path method

• CPM is used for scheduling a set of project activities and it identifies the critical activities of a program or project. As a conclusion it results in finding shortest time to complete a project
• It emphasis more on task orders and scheduling
• CPM principle is simple sequencing approach it is not feasible in case of resource constrained scheduling
• CPM calculates only duration taken for each activity and it arises problem in case of activities that have been delayed. It will affect the entire cycle of project completion
• CPM helps to identify bottlenecks in the project. Since it is calculating Early start (ES), Early Finish (EF), Late start (LS) and Late finish (LF) through forward and backward passes from project schedule network diagram

 

Critical chain method

• CCM is used for scheduling and managing a set of project activities only when limited or restricted resources are available. Here project manager will schedule most of the high risk or critical activities at the earlier stage itself. It has buffers to handle unexpected problems in middle
• It emphasis more on resource management involved in the project
• CCM principle is network based analysis and it is well suited for resource constrained scheduling
• CCM has prior knowledge about resource sharing activities and it has wide range of choice on activities that will be delayed to eliminate resource conflict. So it improves performance by avoiding activities which are all sharing resources will not be scheduled simultaneously
• CCM is fully relies on priority and resource dependent task mapped. This helps in project management team to identify each location potential based on their production

CCM Relation with theory of constraints

The critical chain method derived from “Theory of constraints” was originally developed by Eliyahu Goldratt. TOC focus on improving throughputs of overall system by identifying and fixing bottlenecks in the system.

CCM deals with resource availability or uncertainties in the project. The traditional triple constraints of time, scope and cost still exist in CCM with add on project constraint. Critical tasks are separated from the tasks which have low priority and the next step is deploying resources to complete those critical tasks at first.

Uncertainty Management

1. Average task duration estimation

Reduces duration of activity estimation by 50% which gains excessive safety time. This is implemented strategically as buffers in project.

2. Resource constraint

Resource contentions is removed by leveling the project plan. It also determines resource dependencies.

3. Including Buffers in project Plan

Resource buffer- Protect critical chain by ensuring resource availability and when the critical resource availability is needed.

Feeding buffer- protect critical chain from accumulation of negative variations by inserting safety margins in the non-critical chain paths of network schedule which again feeds back into the critical chain path.

Project buffer- summation of all internal buffers included in the project.

4. Prevention of Multitasking

Tasks does not contain any predecessor so it prevents from multitasking which helps to increase the speed of a resource while completing a task.

5. Buffer management

Use buffer management to control the plan. This help manager to get regular information from buffer. Insist manager to take necessary recovery action at exact time.

 

Distinguish Critical Path Method from Critical Chain Method: -

 

Critical Path Method	Critical Chain Method
Definition: - CPM is an algorithm for scheduling a set of project activities and commonly used in conjunction with the program evaluation and review technique. CPM has developed in the late 1950 by Morgan R Walker. CPM helps to identify critical and non-critical tasks from project’s start to end and helps in short-term prevention. The longest path is known as the critical path, and the duration of the critical path is the duration of the project.	Definition: - CCM is based on methods and algorithms derived from Theory of Constraint. It was introduced in 1997 and it has been credited with achieving projects 10%-50% faster and cheaper than traditional methods.
Advantages: - 1. Offers a Visual representation of the project activities 2. Provides time to complete the tasks and overall project. 3. Helps in tracking critical activities	Advantages: - 1. Removes bottleneck to resolve constraints (Theory of Constraints) 2. Lean: Eliminate wastes & Six Sigma: Reduce Variation 3. Helps in Planning and control process
Terms Used & Difference: - Float 1. Calculated Difference between the critical and non-critical path 2. Float is Zero. 3. Can't be used as tool to check Project status. 4. Activities - early start or late start, early finish or late finish possible. 5. Types - Free & Total floats	Terms Used & Difference: - Buffer 1. Based on contingencies 2. Buffer is not Zero 3. Can be used to analyze Project status 4. Activities - only a start and an end 5. Types - Project, Feeding & Resource Buffer
Method: - CPM is all about Managing activities 1. Resources will be provided whenever they are needed. 2. It’s not useful to gain time by completing an activity as next task can't be stared before its early start time. So you can't utilize the time by completing previous activity early. 3. Member will not start activity till its late start, and utilize the float if an activity has a float.	Method: - CCM is all about Managing buffers 1. Consider Resources availability is limited and builds a realistic schedule based available resources. Provides more realistic and better schedule 2. Whenever an activity is completed, you can start the next activity and the time remains will be added as buffer. 3. Buffer is placed at the end of project and each task has its real time.

 

 

 

How does Critical Chain method relate with Theory of Constraints or with Lean Management practices?

 

CCM is an outgrowth of the Theory of Constraints to scheduling and managing manufacturing.  

1.       Theory of Constraints focuses on identifying and fixing bottlenecks to improve throughput and CCM focuses on bottlenecks. Example, Manufacturing Company was facing delay with new product approval. It was found that bottleneck was expert testing engineer to analyze more test results. And Expert testing engineer hiring cost is more than the revenue expected to launch the products to market sooner.

2.       CCM is the realizing component to the theoretical TOC which typically has applied through five steps.

3.       CCM and TOC both are concentrating more into the micro elements for a specific process.

4.       CCM and TOC is more focused on the management of time, duration and uncertainty of Projects.

5.       CCM and TOC can have distinguishing and remarkable outcomes for tasks completion and monitoring.

6.       CCM focused on bottleneck similar like Lean management practices where Lean management talks about the improvement lean by eliminating the bottlenecks.

 

Thanks to resource:-

 

https://blog.pmsprout.com/critical-path-method-versus-critical-chain-method/

https://www.invensislearning.com/resources/pmp/critical-path-critical-chain-method

http://apppm.man.dtu.dk/index.php/Critical_Chain_Theory

https://www.ijser.org/researchpaper/A-Comparison-Between-Lean-Implementation-and-Critical-Chain-Management.pdf

Theory of Constraint -  This is a methodology to identify the bottleneck/constraints  that prevents us from achieving the goal and improving the same till the time the impact of the bottleneck is minimized. The concept of TOC was initiated by Eliyahu Goldratt. This includes a five step process 

1. Identify the constraint  

2.Exploit the constraint

3.Subordinate all other decisions

4.Elevate performance of the constraint

5.Avoid inertia

 

In each of these steps we can use different lean tools...

 

Constraints : Anything that prevents the progress towards the goal which is called the bottleneck.these could be on account of policies,physical constraints (shortage of people,inventory,machinery etc)..Real constraints would have inventory piled up.

 

Critical path - identifying a task in the end to end process and pick up the one that has the longest duration. It focuses on early start and early finish dates based on which the longest path will be determined

 

Critical chain is based on the tasks. it is completed after determining the critical path by entering resource availability and the outcome or plan produces a resource constrained critical path. This focusses on utilizing the buffer resources and have focussed tasks completed on time so that the time saved through early completion of projects is utililized in enhancements 

 

Few aspects that distinguish critical path from critical chain are 

1. Multitasking is done in critical path method since they are duration based and in order to meet set timelines there is a need to multitask however in critical chain there are focussed tasks and there is no multitasking instead we add resources to ensure the workload is focussed and manageable

2.Critical path would factor in buffer for individual activities where as critical chain would factor buffers for the whole project to ensure we have right resources to complete each task

3.Activities are often completed ahead of time in Critical chain however projects are often delayed or on time with lot of stress and rush in critical path method

4.Estimated durations in the plan for critical chain would not include the buffer where as buffer would be included as part of the project plan

 

Critical Chain method relate with Theory of Constraints or with Lean Management practices

Critical Chain method focuses on removing the bottlenecks in the process similar to TOC and elimination of waste which is the basic objective of Lean.

Both Lean and Critical chain method control carefully the addition of new work based on the ability for each of the resource to take it up.

 

 

 

 

 

                                  

Raj Saxena, Shashikant Adlakha and Selva Mariappan Subramanian are the joint winners for this question.

Also review the answer provided by Mr Venugopal R, Benchmark Six Sigma's in-house expert.