Now that we have defined the problem and substantiated the claim that the current theory is in need of improvement, the next step requires cre- ating a new theory (of the project system): critical chain project manage- ment (CCPM). Expectations for the theory are that it will, subject to critical evaluation, consistently achieve project success. It should explain both past success and failure and provide testable predictions of future performance. Preliminary experience with the new theory shows benefits that exceed the minimal performance requirements for the new theory but that the theory can explain. Those benefits (compared to the present critical path theory) are the following.
◗ Improved project success:
◗ Projects completed on time all the time;
◗ Projects delivered full scope;
◗ Project cost under budget;
◗ Improved market position and business growth.
◗ Reduced project duration:
◗ Projects completed in half the time (or less) of previous similar projects;
◗ Individual project plans reduced by at least 25%;
◗ Multiple project durations reduced by larger amounts;
◗ Project changes reduced;
◗ Early returns for commercial projects;
◗ Reduced payback periods for investment projects.
◗ Increased project team satisfaction:
◗ Reduced confusion from multitasking;
◗ Ability to focus on one task at a time;
◗ Reduced changes;
◗ Reduced rework;
◗ Reduced pressure from multiple project managers;
◗ Win-lose task completion (date-driven task pressure) eliminated;
◗ Buffer reporting used by individuals to decide task priority;
◗ Reduced insertion of new priority tasks.
◗ Simplified project measurement:
◗ Quick and easy plan status;
◗ Real-time project status; no need to wait for financial reports;
◗ Immediate focus by buffer, chain, and task provided by status;
◗ Decisions defined by buffer report;
◗ Focus of buffer reporting on management priority decisions (reflected in the buffers by staggering project start).
◗ Simplified project management:
◗ Clear focus for project manager (critical chain, reduced early start);
◗ Simplified project plans reduce paperwork;
◗ Simplified project status reporting;
◗ Whether to plan or act decided by measurement;
◗ Resource priorities decided by measurement.
◗ Increased project throughput with same resource:
◗ Reduced resource demand conflicts;
◗ More projects completed faster for the same level of resources;
◗ Less need to hire new critical resources;
◗ Less delay due to resources;
◗ Improved project cash flow;
◗ Improved ROI.
Evidence of other users often gives people confidence to try new ideas. The present CPM project paradigm has been in force for over 40 years, making change hard for many people to accept. More and more companies, small and large, are demonstrating success with CCPM.
Several examples illustrate that success. (As will be discussed later, these success examples do not “prove” the new theory; they only provide confidence that it is not fatally flawed.)
◗ Honeywell Defense Avionic Systems (DAS) is experimenting with critical chain. A recent internal article noted the following for a project they named RNLAF. “The RNLAF team was asked by the customer to deliver something we originally scheduled to take 13 months to deliver—and the team did it in six months…The team is experi- menting with a new way of scheduling the program using critical chain concepts. Boeing has read the book, and is supporting the concept.” [13]
◗ Lucent Technologies. Lucent Technologies has adopted CCPM as their primary tool for project management. (The author provides Lucent training and implementation assistance.) “In 1996, Lucent Technologies Advanced Technology Systems, now part of General Dynamics, was told by a sister organization that the yearlong project being considered was an impossibility…The project was used as a pilot effort, to evaluate TOC project management. The project was completed in June, 1997, with buffer to spare.” [14]
◗ Harris. Harris recently decided to use CCPM to build a new eight- inch semiconductor wafer plant. The largest previous wafer was 6 inches in diameter. Total investment for a plant that size is in the
range of $250 million, and revenue for such a plant is in the range of
$2 million per day! (Raw material cost is very small.) The industry standard to build a 6-inch plant was 30 months up to the time the equipment was qualified, that is, no production quantities. The industry standard to get the plant up and running to 90% of capac- ity is about 46 months. The plant was recently completed and up to 90% production in 13 months. Harris presented their results at a recent conference hosted by the Avraham Y. Goldratt Institute. See their Internet page [15].
◗ Israeli aircraft industry. The Israeli aircraft industry employs about 15,000 people. A major function is to maintain jumbo jets used in passenger service. A particular type of maintenance, type D mainte- nance, normally takes 46 days in the industry. The penalty for nonperformance to schedule is steep—$60,000 per day—because the airlines need the planes back into scheduled service. The company had been paying up to $25 million per year in penalties.
A letter from the manager to Dr. Goldratt noted that “we succeeded to drop our average turn around time per aircraft visit from three months to two weeks and to increase our backlog from two months to one year” [16].
◗ BOS. According to Izzy Gal, president of Better Online Solutions (BOS), “A project was originally planned to be released to the market in August 1997 (there is no reason to believe that it would have been on time—but who knows?). The TOC scheduling cut four months from this timetable—so it was planned to be ready on May 1, 1997. It was finished in [the] beginning of April, 1997, almost a month before the corrected time. Almost five months before the original time.” [17]