Critical Chain in Project Management: A Quick Guide

Project managers love a good plan. It takes what might be an overwhelming project and structures it in such a way it can now be methodically executed. Everything is within control. It might sound boring, but stakeholders are not buying a ticket for an amusement park thrill-ride, they just want the job done right.

With that mandate, project management includes methodologies designed to forge order from chaos. There are overarching methods and those that focus on specific aspects of a project, such as scheduling and monitoring. Every phase of a project is important, but perhaps the most critical to a successful end is the planning and managing of resources.

Resources are more than just the equipment you use or the site on which execution of the project takes place. Resources include your team. People, places and things – that’s a lot of balls to juggle. Think of it as a critical chain. In fact, there’s a methodology to control project resources. This is Critical Chain Project Management (CCPM).

What Is the Critical Chain Method?

At it’s core, the critical chain method plans and manages project resources. Executing tasks that make up a project require resources, including people, equipment materials, locations and more.

While critical chain might sound similar to other project methodologies, such as critical path and the Project Evaluation and Review Technique (PERT) algorithm, it is different. Task order and a rigid schedule are the hallmarks of traditional structure.

Critical chain project management, as developed by Israeli business management guru Eliyahu M. Goldratt, works to keep project resources level. This involves more flexibility with the start time of project tasks.

Theory of constraints is the foundation of CCPM. A small number of constraints help management systems achieve more goals. Think of it like the adage that a chain is only as strong as its weakest link.

How Does Critical Chain Project Management Work?

Goldratt, who literally wrote the book on Critical Chain, was on a mission to make projects finish quicker and cheaper than by traditional methods. When he wrote the book, in 1997, a study by the Standish Group found that only 44 percent of projects were able to close as scheduled, and even then they finished over budget and fell short of planned scope. Many (30 percent) never made it to completion.

The presence of resource-dependent tasks often slows projects. The critical chain includes these tasks, in sequence. Therefore, the critical chain is no different that the critical path, assuming resources are available and unlimited.

Ineffective methods – including the following – lead to schedule uncertainty:

• Padding task duration
• Starting work as early as possible
• Multi-tasking

Critical chain identifies resource dependencies and is happy with “good enough” as time is spent trying to find the best path forward.

Critical chain project management also identifies and adds project, feeding and resource buffers. Extra time added to keep a project on track is a buffer. Then it monitors project progress through the metric of a consumption rate of the buffers, instead of through the measurement of task performance against the schedule.

Therefore, CCPM uses buffer management rather than earned value management to track project performance. It focuses on the project constraint, as follows:

Critical Chain Throughout the Project Phases

Critical chain can help over the course of the project. In planning, start with a work breakdown structure (WBS), only working backwards from the completion date. Start each task as late as possible, and add duration for each task.

Tasks then acquire resources. At this point the plan can level resources, to make sure none of the tasks are taking longer than the longest sequence of resource-leveled tasks from the beginning to the end of the project. This sequence is the critical chain.

Most tasks are likely going to take longer than their estimated duration. Buffers are used to monitor the project schedule for this reason. The buffer is the difference between the best guess duration of the task, and the safe guess, which offers more leeway. Stakeholders are given a delivery date which is the end of the buffer.

Buffers are locked and cannot be altered during the remainder of the project, after the planning phase. This is true for both the scheduling and financial performance of the project. Because there is no slack in the duration of each task, resources are focused solely on the task being worked upon, until it can be completed, and then next task started. This process avoids multitasking that can suck up much project time. Think of it as a relay race, each person with the baton is tasked to move as swiftly as they can to hand it off to the next one.

As for monitoring, this is where the rubber hits the road with critical chain project management. Because each task varies in duration from best to safe guess, each task doesn’t necessarily have to finish on time. Estimates aren’t perfect. Buffers created when planning will be more accurate if the rate of consumption of buffers is low. This means the project is on target. However, if there’s no buffer at the end of the task, that’s a red flag.