Project

When I first heard about the Theory of Constraints in 1997 I was curious about it. I read "THE GOAL" and thought, well it seems reasonable, but hardly surprising. Then I read "CRITICAL CHAIN" and then started thinking is that all there is?

To be honest about it, from a project scheduling point of view there is not much more to it than a resource loaded critical path method (CPM) schedule with a certain amount of strategically placed contingency tasks. I was underwhelmed. To top it off, the concepts are wrapped in a second-rate novel. Um... OK. I just didn't see why anyone would care particularly much about a repackaging of existing concepts. Then I learned that Mr. Goldratt had his own institute. An institute with $10,000 Jonah programs. It got me thinking of L. Ron Hubbard.

But misgivings aside, it was clear that I was headed for a collision course with TOC. I'll cover that in some upcoming postings.

It seems that one thing that is required when implementing TOC is consultants. Now, since you can read Goldratt's books and you can see how Alex Rogo thinks this stuff up all by himself, implements it and saves his company, you might start thinking it is possible to do it yourself. But according to the consultants you would be wrong.

One can't fault consultants. They have bills to pay just like everyone else. I know that many of them provide important services (Just try implementing Project Server on your own...), but I tend to be suspicious of them when they say start listing everything that you will need to do and it all requires their participation. I'm still not sure why something supposedly as simple as TOC requires a huge effort. I've already mentioned that it is very little different from a resource loaded critical path schedule. Any competent Project manager should be able to understand it.

Another thing that TOC people will constantly repeat is that you need executive sponsorship or your implementation will fail. Um... generally if you are going to change the way you manage your company - even if you are going to use the I Ching - you will need upper management to be involved in some way. And of course there are courses available for upper management. What I find a bit objectionable about this is that it is like saying that for the diet consultant to guarantee the results you must already weigh less than xx pounds. Management buy-in is half the battle. One almost thinks that the reason that the consultants want upper management involved is that the consultants know who have 6 figure spending limits.

But, please don't get me wrong. Most of the TOC consultants I've met have been personable and seemed to genuinely want to help. I'm not against them, I just find that some of their practices seem to have a strong element of self-preservation surrounding them and I wonder how much that drives the canonization of TOC rather than the other way around.

The next article will get into some of the mechanics of TOC and examine the typical claims made for TOC. With some real examples we can move away from my opinionated comments and towards something worthy of reasoned discussion.

One thing that TOC DOES get right is the need for contingencies. Contingencies have been a part of project planning for a long time. If I read Latin I'm sure that we could find some description of them in the graffiti on the walls of Pompeii or scratched on the stones of the pyramids. At the most basic they are simply a little bit of extra time allocated for all of the unplanned or unpredictable events that may affect the project.

Proponents of TOC claim that their approach is unique because it aggregates all the contingency from each level of the project (claiming that each individual adds some and their manager adds some and then the manager of the manager adds some more) and places it in a single "buffer" at the end of the project. Somewhere that it can be watched over easily and since it is on a high shelf, individuals won't be taking some "just in case". I'm still not sure how this is any different from the usual.

One area in which TOC has a shortcoming with contingency is in how it is calculated. The implementations of TOC that I'm familiar with take the critical path and put a buffer at the end of it (based on the underlying variability of the tasks within that path). So far so good. Then they examine the schedule paths which feed into the critical path and place a buffer on them.

The problem with this is that the tasks on these feeding chains are double buffered, sometimes to the extent that the resulting schedule no longer makes logical sense.

Let me explain by example. Consider a schedule with 8 activities. The critical chain is A,B,C,D,End
There are three activities X,Y,Z which are parallel to A,B,C but are just a day shorter in total duration. The TOC software puts a buffer after End equal to some percentage of the task variation of the sum of A,B,C,D,End. Then it inserts a buffer between X,Y,Z and D. The result is that X is now scheduled to begin before A. This makes no sense to people on the project and they begin to doubt the validity of this approach.

Instead of inserting buffers by rule (a rule we have just shown to be odd if not invalid) I think it is better to put contingency where it belongs and to derive the PROBABLE critical path using techniques like Monte Carlo simulation. This way you are dealing with a better set of probabilities (it requires no more inputs than TOC) and in the case of multiple near critical paths it can point out which paths require close attention and which are closer to being a "sure thing". For more on Monte Carlo schedule simulation you can check out a macro I wrote which does monte carlo simulation in Microsoft Project.

For those reading my entries on TOC and wondering what it is I am talking about, here is one of the more useful references on the Theory of Constraints. I think it does a great job of laying out the principles, thoughts and history behind it. The author does at times get carried away with jargon and uses phrases like "verbalizing intuition" for example. But if you like hot talk like:

The reductionist/local optima approach is well represented; firstly by the family of material requirements planning (mrp), manufacturing resource planning (MRP II) and enterprise-wide planning (EPR). Secondly, it is represented by “reversions” from more systemic but nevertheless transitional approaches. The reversions are World Class Manufacturing and Lean Production.

The transitional class is composed of the Ford Production System and the Toyota Production System. Both methodologies are mass production systems and while both are paced or synchronized to the slowest step in the line, safety is distributed evenly throughout the system. The advancement of the Toyota system over the Ford system is that although safety is spread throughout both, the Toyota system seeks to substantially reduce it by increased quality throughout the process.

Sorry to continue disparaging TOC consultants, but boil all this down and all you have left is a pitch for the Goldratt Institute's "Viable Vision" multi-level marketing. Perhaps I'm letting the sales tactics blind me to the true utility of the processes they are selling. Is there anything wrong with buying project management processes from the fuller brush man?

If you are interested in the business behind Theory of Constraints, David Anderson has an interesting post on the TOC ICO. Worth reading to see what is going on.

I'm listening to a podcast (from www.thepmpodcast.com) about Critical Chain Project management and hear from Allen Elder the familiar contention that when implementing Critical Chain in an organization "Pilots don't work". The reason given is that people are judged on a different system. I've heard this from almost every critical chain consultant that I know of, but I don't believe it. The contention is that people being "graded" on a different scale can't exist in the same organization.

Of course this is false. People with different job titles and on different projects co-exist within almost any large organization. One of the big problems is trying to compare the productivity or efficiency of these different groups, so it seems to me that this contention is just another tool in a consultant's toolbox to get a bigger contract.

I wonder how many organizations HAVEN"T gone for TOC precisely because of this insistence on "all or nothing". I'm on board with many of the concepts of TOC, but this one always seemed to be a bit sketchy.