Goldratt's Critical Chain

Resource Allocation
Chapter 6
 Course Outline
Course Component Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7
Wk Begin 27-Jan 03-Feb 10-Feb 17-Feb 24-Feb 03-Mar 10-Mar

Online
Feb Bank
Lecture 1 No Lecture 1 PM Roles & Assessment 1 Managing & No Lecture 1
Holiday PERT
Mon 17.00 - 18.00 Project Scope 25% Budgeting

Lecture 2 Course
Project Project No Lecture 2 Goldratt &
Tues 17.00-18.00 Overview & Planning Scheduling
Selection Crashing Levelling
Introduction

Network PERT/CPM
Video Tutorials Introduction Project Project
Diagrams & Activity
Released to MS Project Selection Crashing
CPM Sequencing
 Class Update
• This weeks Tutorial on PERT & Levelling is now uploaded to
Brightspace

• Required Reading
–Chapter 6 Project Management in Practice
–Overview-of-Critical-Chain

• Online Assessment 2 24th March (25%)

–Chp III & IV Project Management in Practice, Mantel, S., Meredith, J., Shafer, S. & Sutton, M.
(2008/11). John Wiley & Sons.
–Labs, Reading & lecture notes Associated with the above chapters
 Recap

Up to now you have learned about:

• Definition and constraints of a project
• Project Selection Techniques:
• PM Roles & Responsibilities
• Project Organisational Structure & Project Plan
• Developing a Work/Cost break down structure (WBS)
• Network Diagraming (AOA and AON Networks)
• Critical Path Analysis (CPM)
• Budgeting
• Project Crashing
• PERT Analysis
 Overview
Todays Lecture
– Resource Management
– Goldratt’s Critical Chain
– Resource Levelling
 Resource loading
• In resource loading, each employee is assigned a task or a percentage of a project
(X percent of the whole).

• Then the employee is assigned other tasks until he or she reaches 100 percent
booked. This would then mean that the employees cannot take on any additional
work.

• With resource loading, a project manager can predict an employee's hours for the
year and see how tasks can be assigned. This also allows the project manager to
decide whether or not additional employees or contractors are needed to
complete the scheduled projects.

• The downside to resource loading is that employees cannot be 100 percent

booked. Other things may arise to take away their time, such as unexpected
problems that need to be fixed.

• An employee should always be under 100 percent booked. Resource loading

increases the chance that a project will not be completed on time because
employees are overloaded with projects.
 The Charismatic Manager

•Subordinates have hard time saying no to well liked

boss.
•Leads to overcommitted workers.
•Problem further compounded because more
experienced workers tend to be most over worked.
•One solution is to set specific limits on amount of
over-scheduling permitted.
GOLDRATT’S CRITICAL CHAIN
 Challenges with current project
• Unrealistic due dates
• Too many changes
• Resources and data not
available
• Unrealistic budget
• Multiple projects competing
for the same resources
 Multitasking
Figure 6-22 Two Small Projects
Figure 6-23 Alternative Gantt
Charts for Projects A and B
 Common Chain of Events
• Underestimate time needed to complete project
– assumption of known activity times and independent
paths
• Project team members inflate time estimates
• Work fills available time
– student syndrome
– early completions not reported
 Common Chain of Events continued
• Safety time misused
• Misused safety time results in missed
deadlines
• Hidden safety time complicates task of
prioritizing project activities
• Lack of clear priorities results in poor
multitasking
Common Chain of Events concluded
• Poor multitasking increases task durations
• Uneven demand on resources also results due
to poor multitasking
• More projects undertaken to ensure all
resources fully utilized
• More projects further increases poor
multitasking
 Reversing the Cycle
• Reduce number of projects assigned to each
individual
• Schedule start of new projects based on availability
of bottleneck resources
• Reduce amount of safety time added to individual
tasks and then add some fraction back as project
buffer
– “set activity durations so that there is a high probability
the task will not be finished on time” Goldratt (1997)
 The Critical Chain
• Longest chain of consecutively dependent
events
– considers both precedence relationships and
resource dependencies
• Project Buffer
• Feeding Buffer
 Figure 6-25 Project and Feeder
Buffers

• Note the project and Feeding buffers

 Managing the Critical Chain

• Consider the AOA network diagram shown. Critical Path 1,2 & 4
• Task 2 & 3 are sharing the same resource A
 Managing the Critical Chain
ID Task Task Name Duration 09 Mar '15 16 Mar '15 23 Mar '15 30 Mar '15 06 Apr '15
Mode M T WT F S S M TW T F S S M TW T F S S M TW T F S S M T W
1 Task 1 Start 0 days 12/03
2 Task 2 7 days A
3 Task 3 5 days A
4 Task 4 6 days B
5 Task 5 10 days C

• Gannt Chart demonstrates both task 2 & 3 starting at the same time
competing for resource A
 Resource Levelling
• For project managers, a key mission is to ensure that all
project team members are assigned the right tasks – and the
right amount of work – given their availability. That means if
someone is only available 8 hours a day, then the project
schedule should only reflect (at most) 8 hours of work on that
person each day.
• Good project managers know a resource can’t squeeze triple
the work into a given day just because that is what we see on
the screen, so it’s the project schedule that needs to adjust. It
needs to be “resource levelled.”
 Managing the Critical Chain
ID Resource Name Work Details 09 Mar '15 16 Mar '15 23 Mar '15 30 Mar '15
M T W T F S S M T W T F S S M T W T F S S M T W
Unassigned 0 hrs Work
Task 1 Start 0 hrs Work
1 A 96 hrs Work 16h 16h 16h 16h 16h 8h 8h
Task 2 56 hrs Work 8h 8h 8h 8h 8h 8h 8h
Task 3 40 hrs Work 8h 8h 8h 8h 8h
2 B 48 hrs Work 8h 8h 8h 8h 8h 8h
Task 4 48 hrs Work 8h 8h 8h 8h 8h 8h
3 C 80 hrs Work 8h 8h 8h 8h 8h 8h 8h 8h
Task 5 80 hrs Work 8h 8h 8h 8h 8h 8h 8h 8h

• Resource Usage chart from MS Project demonstrates the resource A

conflict
 Managing the Critical Chain
09 Mar '15 16 Mar '15 23 Mar '15 30 Mar '15
M T W T F S S M T W T F S S M T W T F S S M T W T
200%

180%

160%

140%

120%

100%

80%

60%

40%

20%

Peak Units: 200% 200% 200% 200% 200% 100% 100%

A
Overallocated: Allocated:

• Resource Graph from MS Project demonstrates the % resource conflict

 Resource Levelling
• Resource levelling is a technique used to smooth out the
resource assignments without over-allocating resources
and without a detrimental impact on the project
schedule.

– Balanced resources, reducing over allocations or

overtime
– Validates schedule
– Predicts based on information entered
– Determine dates or resources needed
– Valuable as a “Sanity Check”: predicts dates based on
durations, links, and resources assigned
 Resource Levelling using Microsoft Project
• Dynamic Scheduling Tool
• Predicts completion of the project and its
activities
– Based on identified tasks, durations,
dependencies, resources available
• MS project will suggest a solution to the
conflict as follows
– Highlight all tasks and selecting the auto
schedule function
– Under the resource Tab select level all
 Managing the Critical Chain

ID Task Task Name Duration 09 Mar '15 16 Mar '15 23 Mar '15 30 Mar '15 06 Apr '15
Mode MTWT F S S MTWT F S S MTWT F S S MTWT F S SMTWT F S
1 Task 1 Start 0 days 12/03
2 Task 2 7 days A
3 Task 3 5 days A
4 Task 4 6 days B
5 Task 5 10 days C

• Managing the resource A conflict has now extended project timeline and changed the critical path to
1,2,34
 Figure 6-24 Sample Network
Diagram
09 Mar '15 16 Mar '15 23 Mar '15 30 Mar '15 06 Apr '15
M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T
100%

80%

60%

40%

20%

Peak Units: 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

C
Overallocated: Allocated:
 Resource Leveling with Microsoft Project

• Resource leveling with Microsoft Project can be confusing and

intimidating, often unexpectedly shifting dates and extending
a schedule, sometimes by years.

• By understanding the principles and options Microsoft Project

provides to level resources and predict a schedule, resource
leveling is helpful toward realistic and accurate schedules,
efficient and reasonable resource allocations, and in some
cases even accelerating schedules.
 Video
• http://www.youtube.com/watch?v=7AJ73qxZtsI