Project management using the theory of constraints. Theory of Constraints (TOC) for Project Management. Results of applying the Theory of Constraints - examples of implementations

My certification work “Theory of Constraints for managing IT projects using the Critical Chain method” was based on the key problems in managing any IT project that each manager working in a project environment faces.

Over the past fifty years, many options have been proposed to improve project management methods, and the best techniques have been combined into the PMBOK project management body of knowledge. Completing a project on time and within budget is the dream of any project manager. In order to achieve success in the implementation of the project, project managers set aside more and more time for the project, increase the detail of operations in the project, calculate the risks even more carefully, however, despite all efforts, the vast majority of projects still cannot be completed on time, within the limits budget and initial specifications. Moreover, the problem of timing, budget and content is not related to a specific type of project or country of implementation.

A successful project is one that is completed when three boundary conditions are met: project content, time and cost. These conditions for the implementation of a successful project are interdependent: the longer the project lasts, the more funds are spent on it, the longer the project lasts, the higher the likelihood of changes in the initial content of the work, the more changes in the content, the more costs, resources and duration of the work increase.

In the process of work, I analyzed the main problems in project management and by studying these problems and analyzing the causes, I managed, in my opinion, to find the sources of these problems. Among the reasons that prevent us from completing the project on time within the original budget, without cutting the contents of the project, I include the following phenomena:
uncertainty;
project variability;
multitasking;
lack of resources;
"student syndrome";
inertia of thinking of employees and company management;
people’s aversion to change – “we’re used to working this way”;
Murphy's laws;
Parkinson's law.

During the certification work, I consistently and deeply studied the currently existing project management methods:
1. classic PMBOK method;
2. principles based on quality management theory:
TQM;
Lean;
six sigma;
3. “critical chain” method for project management (CCPM - Critical Chain Project Management), based on Goldratt’s theory of constraints (TOC - Theory of constraints);
4. light or flexible management methods in an Agile IT project.

The next step was to analyze the strengths and weaknesses of all methods. The disadvantages of the classic PMBOK method include an incorrect understanding of variability, planned start and end dates for operations, and “student syndrome.” When using quality management theories and lean manufacturing methods in conjunction with systems constraint theory, it is necessary to avoid sub-optimization of processes.

As a result of the analysis, I proposed a solution that combines the best practices of PMBOK, superimposes on them Goldratt's theory of constraints and lean manufacturing methods.
Goldratt's Theory of Constraints is a common sense interpretation of a system. The basis of his theory is that every system has a goal and in every system there is a limitation that prevents the system from achieving that goal.

The Critical Chain Method is based on TOC, so in order to effectively use the Critical Chain Method for project management, you must understand the five guiding steps of Goldratt's Theory of Constraints and learn to use the logical reasoning method and TOC tools. The five guiding steps in TOC are a process of continuous improvement that allows you to get rid of the limitation of the system and achieve the goal:
1. Find the system limitation.
2. Find a way to reduce the impact of the constraint.
3. Subordinate the operation of the entire system to the needs of the limitation.
4. Remove the restriction.
5. Do not allow inertia to lead to the emergence of new restrictions (go to step 1).

Through the process of logical reasoning, TOC answers three questions:
1. What should I change?
2. What should I change to?
3. How to make changes?

To implement this process of logical reasoning, Goldratt developed TOC tools: current reality tree (CTR); storm cloud conflict resolution diagram; future reality tree (FRT); branch of negative developments of events (NV); transition tree (TD); transformation plan (CP).

In addition, Goldratt found that in most cases the system limitation is of an organizational nature, which is based on incorrect initial settings in the accounting system. Goldratt proposed a new method - management accounting according to TOS. It is based on three concepts: cash flow performance (Throughput, T); attachments (Inventory, I); operating expenses.

The emergence of this management accounting methodology is due to the initial assumptions of Goldratt that every company has a goal and this goal is to make money now and in the future, or in other words, to increase productivity in terms of cash flow.

The critical chain method is based on the classical PMBOK approach, superimposing on it the theory of systems constraints as applied to project management.
The main steps in the process of creating a project schedule using the critical chain method include:
1. reduce the estimated duration of each operation in the project by 50%;
2. we align resources and find the project limitation - the “critical chain”;
3. to protect the “critical chain” we add a project buffer;
4. to protect several stages of the project that are not included in the critical chain, at the points of merger with the critical chain, we add buffers for merging paths;
5. in order to minimize changes made to the project, we shift all stages that are not included in the critical chain to a later date;
6. manage the project based on information from reports on the project buffer;
7. We constantly monitor the merger buffers and the cost buffer and, as part of buffer management, if necessary, make decisions about the time to make changes to the process (buffer replenishment).
After studying the theoretical part of the CCPM method in my certification work, I chose a small real project in the company where I work. This project was implemented using the “critical chain” method for project management.

As a result of completing the work, from a practical point of view, I was able to independently test the functionality of the theory of system limitations for managing an IT project. The CCPM method helped resolve the problems that stood in my way of managing IT projects; the project was completed 39% ahead of the originally planned deadline.

Having studied the theoretical part of the “critical chain” method and tested it in practice, I believe that the CCPM method is not a set of disparate instructions, but acts as a scientific approach to the theory of system limitations. This approach systematizes world experience in the field of project management, probability theory and psychology. It is for this reason that the use of the “critical chain” method leads to a significant increase in the likelihood that the project task will be completed on time and to a high quality level. In addition, the use of this technique provides effective control over budget expenditure on an IT project.

The critical chain method is characterized by absolute logic. After analyzing and evaluating this method, many project teams come to the conclusion that it not only helps to effectively manage the project, but also to plan well the stages of the project task. Managers receive information about the real trend of the project from the first days of its implementation. As a result, managers can quickly prepare and implement measures aimed at solving emerging problems. In this case, the risk that the problem will be started is almost completely eliminated.

At the end of my work, I provide impressive examples of the effective use of the critical chain method in large projects of well-known companies: Honeywell Defense Avionics Systems, Lucent Technologies, Israeli Aviation Industry, US Navy, Delta Airlines Delta TechOps, CSIR South Africa.

As can be seen from the examples, this project management methodology is quite widely and successfully used in foreign companies, and I am very sad that in our country the vast majority of project managers have not even heard of CCPM, let alone implemented this methodology.

The method of logical reasoning according to TOC, superimposed on the best practices of PMBOK at the moment, in my opinion, is the most effective tool for achieving the goal - completing a project on time, with a given budget and within the original specifications and can be used in almost any area where the methodology is applied project management.

Thus, the conclusion is obvious: the critical chain method is an effective tool for managing any IT project.

At its core, the theory of constraints is a common sense interpretation of a system. TOC says that in any system there is a limitation that does not allow you to get a greater result. This can be proven by subjecting the statement to critical discussion. If there were no restrictions, the result would either increase indefinitely, or there would simply be no result. Thus, the constraint keeps the result within certain limits. Rice. Figure 2.7 shows that limiting the flow along any of the arrows will affect the overall result obtained at the output of the system. This arrow will be a limitation of the system. In physical systems, a constraint is a bottleneck or bottleneck that restricts movement in the system.

Figure 2.7.

The purpose of using TOS is to improve business systems. In What is This Thing Called Theory of Constraints, Goldratt writes: “Before attempting to improve any element, it is necessary to define the overall purpose of the system, as well as the measurement system that will allow evaluate the impact of each subsystem and each individual decision on this goal.”

In New Economics, Deming notes: “We have learned that optimization is the process of adjusting the operation of all components of a system to achieve a common goal.”

Rice. 2.8.TOC in action - using the example of a conventional chain: the weakest link limits the strength of the chain

Most often, a conventional circuit is used as an illustrative example when explaining TOC (Fig. 2.8). The chain's job is to remain strong under tension. Everyone understands that the strength of a chain is determined by the strength of the weakest link. And it is clear that strengthening any other links will not affect the strength of the chain as a whole.

The next position of TOS is not so obvious. The theory moves on to consider production chains. It is argued that the performance of any circuit at any given time is determined by only one constraint. This is probably easier to understand using the example of projects: so, in any project plan there is only one longest chain of work (if there are no other chains absolutely equal in length to it). Once you start a project, this one chain will be a real limitation. Any other sequence of work can become a constraint (the longest chain) - under the influence of changes that occur during the implementation of the project. However, at any time, only one chain determines the duration of the entire project.

By applying the scientific method to the fundamentals of TOC, many derived principles can be derived. In Goldratt's Theory of Constraints: Systems Approach to Continuous Improvement, Detmer lists the following:

  • 1. When introducing change and resolving conflicts, it is better to rely on systems thinking rather than analytical thinking.
  • 2. The effectiveness of optimal system solutions decreases over time as environmental conditions change. A continuous improvement process is required to monitor the relevance and effectiveness of the solution.
  • 3. When the system as a whole is operating at maximum efficiency, only one of its elements is operating at its maximum capacity. Just because all parts of a system are operating at their maximum capacity does not mean that the entire system is operating efficiently. The optimal state of the system does not consist of the optimal states of its individual elements.
  • 4. Systems are like chains. Every system has a weakest link (constraint), which ultimately reduces the effectiveness of the entire system.
  • 5. Strengthening any non-limiting element does not make the chain stronger.
  • 6. To carry out thoughtful, intelligent changes, it is necessary to understand the current state of the system, its goals and the nature of the existing problems.
  • 7. Most adverse events in a system are caused by a few key problems.
  • 8. Key problems are almost always hidden. They manifest themselves in a number of undesirable phenomena connected by cause-and-effect relationships.
  • 9. Elimination of individual adverse events gives a false sense of security, while the true cause remains unidentified. Solutions of this kind are short-lived. Solving a key problem simultaneously eliminates all undesirable phenomena associated with it.
  • 10. Core problems are usually exacerbated by underlying hidden conflict. To solve the problem, you need to identify the main initial settings of the conflict and get rid of at least one of them.
  • 11. System limitations can be both physical and organizational. Physical limitations are relatively easy to identify and eliminate. Organizational constraints are usually more difficult to detect and remove, but their removal usually entails more significant and important changes than removing the physical constraints of the system.
  • 12. Inertia is the worst enemy of the process of continuous improvement. Former decisions gradually acquire weight and significance and become overgrown with a mass of auxiliary details, which impedes further transformations.
  • 13. Ideas are not solutions.

The theory of constraints itself is constantly being improved. When Goldratt first formulated the method of logical reasoning in TOC, determining the scope of transformations came down to establishing key problem as can be seen from the above list of TOC principles. Fixing the core problem will cause adverse events to give way to desired results. Sometimes the core problem is also called the root cause. Later Goldratt began to talk about the definition key conflict not the core issue. This is a significant step forward in the development of the theory. The point is that most of the undesirable phenomena in the system occur due to unresolved or insufficiently resolved conflict or dilemma. If you replace the phrase “key problem” with “key conflict” in the above list of TOC principles (except for point 10), you will get a modern sounding theory. Point 10 is an earlier formulation of a previous version of the logical reasoning process.

The concept of a key conflict underlying many of the system's undesirable phenomena is likely related to the idea that people would change the system to get rid of adverse events if they knew how and were able to carry out the changes. If the undesirable phenomenon does not disappear, it means that something is preventing the creators or managers of the system from changing it. The idea of ​​a key conflict helps to understand what exactly is stopping them.

To establish a logical connection between undesirable phenomena and the key conflict, TOS offers a tool such as the current reality tree (CTR).

For reasons that will be explained later, I recommend that when creating and analyzing a DTR, it should be viewed from the widest possible angle. Presenting the organization as a system and regularly reviewing the operation of the main components of the system will reduce the discrepancies between the real situation and ideas about it. If there is an organizational development process, the management team of the enterprise can use the identified inconsistencies to optimize the system.

Sergey Goncharenko
Leading management systems specialist, project management consultant at ARB-Consulting

When creating a plan for any project, all tasks ultimately have a specific calendar start and end date. And it would be just great for the project if all tasks began and ended strictly in accordance with these dates. Or at least those that lie on the Critical Path of the project. Therefore, when project management, at least the project manager, puts in tremendous effort to ensure that every task is completed on the scheduled date.

But the vast majority of projects still fall behind schedule. It is almost impossible to find out at the planning stage the duration of all tasks with 100% accuracy, even in cases where such a task has already been done before. This can be prevented already at the execution stage unseen circumstances:

  • Change of performer, for example due to illness or dismissal of the previously appointed
  • Problems for suppliers if the task is related to external resources
  • Problems with financing
  • and simply Murphy's law - if something bad can happen, then it will definitely happen

Any project has risks associated with uncertainty. This means that each task will have a probability of completion on the planned date of less than 100%. So why do we expect that an entire project, consisting of many sequential and parallel tasks that do not have a 100% chance of finishing on schedule, should be completed on the scheduled date?

To this we must also add that the probability of completion of two sequentially executed tasks, which have a probability of completion at the scheduled time of 90%, is already 81%. In other words, if we do not use the positive deviations of those tasks that finish earlier than the date planned on the calendar, then the probability of finishing the entire project on time tends to zero.

But this is one of the problems scheduling. Tasks that were completed ahead of schedule cannot pass the baton to those following them. The resources required for this task are not ready; they are busy in other tasks and on other projects. The time of these resources was pre-allocated in accordance with the schedules of all projects in which they are involved. Therefore, there is often simply no one to move on to the task that they were able to complete earlier.

Moreover, if you try to recall from your practice cases when tasks were completed earlier than on the planned date, you will not remember many such cases. The vast majority of tasks were completed late, or at best, on time. Why is this happening? What would happen if someone, when planning, told us that he needed 20 days for this job, but did it in 10 days? Most likely, in the next project we would immediately plan 10 days for a similar task.

Therefore, realizing that this will happen, people continue to perform the task, trying to double-check the result or improve it. And since there is no limit to perfection, you can improve it ad infinitum, or until the desired date. Although, of course, more often than not people switch to performing other tasks, but do not inform the project manager about this, so that next time the time for this task will not be reduced, and there will be a reserve for unforeseen circumstances. Thus, positive deviations in the duration of tasks performed rarely help the project to be completed on time.

What to do in this case? One of the best project methods that solves this problem is: Theory of Constraints. Critical Chain Method takes into account the psychology of the performer and promotes the use of positive deviations in the duration of tasks for the successful completion of the entire project. To begin with, you will have to change your worldview and abandon the exact calendar dates for the completion of each task, and concentrate on the end date of the entire project.

During the implementation of the project, you should focus on the current estimate of the performers about the remaining duration of the task, and not on some date by which, as you predicted at the planning stage, the task must be completed. Critical Chain Method will allow you to respond in a timely manner to problems in tasks from the very beginning of the project, but it is focused on the main date - the end date of the entire project.

The reputation of the project manager and the entire company depends on how often the entire project is completed on time. Clients will not be satisfied that most tasks are completed at exactly the scheduled time if the entire project is late. Investments in most projects begin to return only after its completion. By applying the Critical Chain method, you will significantly increase number of projects completed on time.

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Whether you work in services, industry, IT, design or marketing, project management is an essential part of your business. Any company is constantly undergoing changes. And in order to cope with the problems that arise and solve them on time, you need to manage changes as a project.

Every project has a goal, a beginning and an end. Only the completion of the project leads to the opportunity to earn new money. Therefore, the most important question becomes: can we meet the deadline and the allocated budget? The traditional approach to project management looks like this: a project is broken down into individual tasks, which are assigned calendar start and end dates. A well-written plan is assumed to be easy to implement. But how can all unforeseen circumstances be taken into account in this case? Is it possible to effectively initiate, plan and control projects based on intuition alone? How to reduce risks in this case? At the same time, it is known that even well-planned projects during their execution run out of budget and calendar dates.

Managing a project means being able to deal with uncertainty. Projects are never similar to each other and they always contain some probability of events occurring. But the modern market requires projects to be completed on time and in full. Therefore, when implementing most projects, only experience and common sense are not enough; a suitable project management methodology is also required.

The critical chain method, based on the principles of the Theory of Constraints, allows you to effectively manage uncertainty in projects. Using the project buffer tool helps you get timely information about those tasks that are currently leading to delays and jeopardizing the budget. At this seminar you will receive a tool that will allow you to set priorities, identify current project tasks, and accurately allocate resources.

The target audience: executives managing a multitasking environment, project managers, marketers, designers, IT specialists.

Target: master the critical chain method and Scrum for project management.

In this seminar you:

  • get acquainted with the TOC and Agile approach;
  • learn all about the critical chain method and Scrum for project management;
  • learn to plan the project critical chain and scrum sprint;
  • understand how to manage a project using the project buffer;
  • Get ready-made solutions for managing uncertainty in a project.

Seminar program

1st day. Project environment and management behavior in project management

  1. Undesirable phenomena in projects: missed deadlines, repeated postponements of completion dates, budget exceedings, rush jobs and overtime, cuts in functionality and specifications, constant lack of resources, competition for them.
    • Problems that interfere with project management.
    • Features of project management for seminar participants.
    • Main characteristics of the project management environment: uncertainty, multitasking, local performance indicators.
  2. Typical behavior for a project management environment: drawing up detailed project schedules, monitoring the accuracy of fulfillment of obligations on task deadlines, early launch of projects, “bad” multitasking.
  3. Introduction to TOS. Principles and premises.
  4. Root conflict of the project environment.
  5. Main misconceptions in project management:
    • a game that demonstrates the impact of multitasking;
    • discussion of student syndrome and the Parkinson's effect.
  6. Competitive advantage in the project environment (time reliability, quality assurance and budget adherence).
  7. The critical chain concept (CCPM) and its difference from the critical path concept.
  8. Agile philosophy. Scrum concept for project management.

2-3rd day. Project management using the critical chain method

  1. Management setting and implementation of new performance indicators that allow you to see the dynamics of income from projects.
  2. Reduce multitasking:
    • freezing some ongoing projects;
    • accelerating the implementation of remaining projects;
    • unfreezing projects as previous ones are completed, “virtual drum”;
    • launch of new projects.
  3. Tool Kit (complete preparation of the project for launch):
    • preparing projects in accordance with priorities;
    • determining the scope of work for project preparation;
    • eliminating the risk of losing clients due to late launch of projects.
  4. Planning:
    • building good PERT plans;
    • definition of the critical chain taking into account resource limitations, project buffer concept, feeding buffer concept;
    • echeloning of the project portfolio.
  5. Project execution management:
    • daily reporting on task completion, communication issues;
    • ensuring that tasks are completed and prepared in accordance with established priorities;
    • timely adoption of corrective measures by top management;
    • regulation of execution speed at the point of project integration.
  6. Elimination of project delays caused by clients.
  7. Placing orders with subcontractors:
    • control of work performance;
    • using effective incentives for on-time performance on the part of the contractor.
  8. Selling the reliability of completing projects on time.
  9. Workload control: regardless of sales growth, the company always meets deadlines.
  10. Continuous Improvement Process:
    • report on the reasons for delays;
    • analysis of the causes of delays;
    • initiating projects to improve performance.
  11. Power Expansion:
    • identification of resources responsible for delays in projects;
    • ensuring timely availability of the necessary labor resources.
  12. Realization of the competitive advantage “early delivery”:
    • formation of a “bonus market”;
    • development of a bonus offer;
    • sale of "early delivery";
    • quick completion of the project.
  13. Project management software for TOC and Scrum.
  14. Organization of work in a project using the Scrum method:
    • planning and prioritization of work;
    • roles of product owner and scrum master;
    • holding scrum meetings;
    • conducting a retrospective.
  15. Combined use of CCPM and Scrum techniques.
  16. Examples of the application of the critical chain method and Scrum at enterprises in various industries.