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Critical Chain Project Management

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Charchit Kumawat

on 24 March 2014

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Transcript of Critical Chain Project Management

What is Critical Chain?


Critical Chain Project Management (CCPM) is a methodology for planning, executing and managing projects in single and multi-project environments.

Critical Chain Project Management was developed by Dr Eli Goldratt and was first introduced to the market in his Theory of Constraints book “Critical Chain” in 1997.
Some Keywords
Critical Path -a critical path is the sequence of project network activities which add up to the longest overall duration. This determines the shortest time possible to complete the project. Any delay of an activity on the critical path directly impacts the planned project completion date.
Critical Chain Project Management
Project Management At Dazzling Speed
Critical Chain Project Management
Necessity
It was developed in response to many projects being dogged by poor performance manifested in longer than expected durations, frequently missed deadlines, increased costs in excess of budget, and substantially less deliverables than originally promised.
Student syndrome
-By
Charchit Kumawat
Mohnish Thakur
Soniya Parkhee
Pawak Vayeda
Critical Chain –“the longest time route of tasks through a project network considering both technological precedence and resource contention in completing the project. Where no resource contention exists, the critical chain would be the same as the critical path.”
A Case Study at TATA Steel
CCPM Implementation
Problems in Promotion of CCPM
Project Environment at TATA Steel
Need to apply CCPM
Maintenance-In terms of statistics:

They have about 10% down time / year
About 8% to 9% of which is Planned
Industry Benchmark ??
1% increase in availability –38 Mil USD in Sales

Sustenance
Huge demand
Need to augment capacities to meet demand
Capture desired market segments
All this would lead to higher down time
Issues In applying CCPM
Issues in applying CCPM
Execution –Taking advantage of early finish
Short duration projects : Less than 10 days
In most cases all resources are available
Since the belief in themselves is not there: the resource may not be present when needed.
Planning to make sure resource is available is essential
When the project starts, facilitator should point out the early finishes that were not capitalized on
Long duration projects
Resources are not planned as per aggressive schedules
The conflict is –If resources are brought in early and in case activity is delayed –it will increase cost
Approach At TATA Steel
When problems really got solved, people adopted the concept.
Analysis
Why was the approach effective?

1. Teams which saw value, adopted the concept.
2. There was no pressure to adopt the process like a religion.
Assumptions:
If a new concept helps people achieve their goalsthey will adopt it.
Belief:
Implementing the new concept cannot be a goal in itself. It is only a means to the goal.
3. Early project completion was celebrated.
4. The concept became popular by word of mouth.
Project teams were encouraged to share their experiences.
People were encouraged to discuss the pros and cons of the process.
Effects
CCPM Case on Primary Crusher Replacement in Noamundi Iron Ore Mines
Poor reliability of the crusher was hampering the output of the plant (output reduced by 30%)
Crusher shutdown of one day meant loss of 10000 metric tonnes of dispatch of iron ore from Noamundi to Jamshedpur
Raw material stock including transit was 25 days. this meant that any shutdown beyond 25 days would result in production loss
Supplier indicated 55 days completion period- Industry benchmark- 30 days for crusher installation only

Any steel plant is a V-shaped plant with higher capacity upstream.
shutting down any process upstream would result in heavy losses.
Shutting down blast furnace causes throughput losses of more than 2 Million dollars per day

Strategy- Option evaluation and project planning
Strategy
Above mentioned is the time saved
Execution
Pictorial Representation
Pictorial representation
Pictorial Representation
Pictorial Representation
Pictorial Representation
Pictorial representation
Full transcript