Learning about Lean

It’s the critical chain, not the critical path that needs project management attention.

Is your day job more like a nightmare than a dream job? Are you constantly battling the pressures of little time, blindsided schedules and relentless stress to accomplish more in less time?

First, you are not alone. Not in the construction industry and not in the world. Anyone involved with any project faces these challenges.

Second, it doesn’t have to be this way. Really. That’s how Ed Hill, president of Hill Business Solutions and Ed Ligon, president of Bottom Line Alliance LLC, caught the attention of attendees in the Contractor Tools and Supplies/Construction Purchasing Lean University – Construction seminar in October.

Hill and Ligon are independent consultants who work closely with the South Carolina Manufacturing Extension Partnership (SCMEP). The SCMEP helps companies identify waste in their systems and helps them eliminate it. They shared ideas with contractors that challenge the “that’s the way we’ve always done it” mentality.

“We all want to be ahead of schedule and under budget,” says Ligon, “but too often we settle for the ordinary and get overdue and over budget. Those who excel at project management get to take it to the bank. Project management shouldn’t be train wreck management. If you want different results, you need to address project management in a significantly different way. It means changing flow behavior and leadership style of the job.”

Concentrate on the critical chain, not critical path
Identifying the critical path of a project is the most common method of project planning, says Ligon.

“However, the critical path doesn’t account for resource availability. It assumes that resources, such as labor and material, are ready when that next step in the project is ready. Instead, resources, such as labor, are often working on another part of the project, so critical path work is at a standstill until labor can get to them. Or, on jobsites with limited space, access to the crane or set-down areas aren’t available even though the path is ready for the components. These are constraints that, no matter how fast any other part of the job goes, sets the pace for the job. We call these the drum resource,” says Hill.

The working definition of the critical chain: The longest chain of dependent events taking into account both task and resource dependencies.

“Can we drive away uncertainties that plague jobsites? Probably not, but we can make a big dent in them using critical chain thinking and adding discipline in managing our tasks and resources,” says Hill.

“There is at least one constraint that is the weakest link in any project,” says Hill. “If you know the constraint, you can plan for it. But if you don’t fully understand the constraint or it appears to jump around the jobsite, then it is difficult to know where to direct improvement initiatives,” he says.

That’s where synchronous flow comes in. “If you can synchronize the activities in the critical chain to complete a project, you can then more effectively direct the activities of the project team,” says Hill.

The rub begins when every worker, subcontractor, general contractor and engineers, architects and even owners build in safety factors. That built-in safety factor can sabotage even the best-laid schedule.

“The safety time that all parties build into the system must be pulled out, but much of it is added back into the critical chain as buffer,” explains Hill. Typically, he recommends adding in a 30 percent time buffer to each segment of the project that feeds the critical chain, plus a time buffer at the end of the project. These buffers come from the exaggerated safety time pulled from the tasks, so the overall project duration is reduced.

“Then, track the consumption of buffer time against the percent of task completed to know where you stand on the project. This allows you to actively control execution by managing it before the buffer is consumed,” he says.

Conventional wisdom: The critical path. This is the sum of time allocated for critical project components. Critics point out that the critical path does not account for constrained resources that are needed to complete the critical path.

Critical chain thinking identifies the path of resources needed to complete the project. It is almost always longer than the critical path.

Analyzing the constraints on the critical chain can identify efficiencies that can be realized to reduce time.

How safety time gets lost
“Safety time that everyone builds into the system almost always gets wasted,” says Hill. It usually gets consumed in three ways:

The student syndrome. Waiting until the last minute to start because the resource knows he/she has plenty of time because of the safety he/she has included. (“My paper is not due until December so I don’t need to start it in August.”)

Bad multi-tasking. A resource normally has several tasks concurrently underway and many contractors attempt to work on them simultaneously. This actually increases the lead time for a specific task and the total time it takes to complete all tasks. It requires many “mental setups” (stopping one task before completion in order to work on another of currently higher priority), says Ligon. “This start/ stop/start again approach requires a time-consuming rethinking of the task status for each iteration.”

Dependencies between steps. Delays accumulate faster over time than advances. “Delays are frequent because of Murphy’s Law, the effects of the first two mechanisms and the interaction of variation with dependency,” says Hill.

Hill and Ligon report that many scheduling programs available today are not effective because they only consider task dependencies in their system. However, there are several programs that also consider resource availability in addition to tasks. “Concerto from Realization Technologies and Scitor consider tasks and resources; and ProChain is another that bolts on to MS Project,” Hill says.

A good critical chain clearly identifies the tasks and a reasonable duration for those tasks. This makes the tasks manageable, says Hill. “Only about five percent of the projects are run this way. Less than one percent of projects consider the resources available and make sure that the resources aren’t overloaded. A work plan that masters critical chain thinking effectively allows for uncertainty and variability. Most critical path methods can’t capture the benefit of completing any task early.”

Ways to gain
Hill and Ligon report that the best ways to prevent time and resource waste are rather counter-intuitive and create the most consternation among those trying to be more lean in their activities. Here’s what they recommend:

Avoid Just-in-Time starts. It makes more sense to start a project at the last possible moment, but that works only if you have established a reasonable amount of time for the tasks and the protective buffers. However, once the project is started, each resource should complete their tasks as soon as possible – this is the “get it – work it – move it” practice. This gives us the opportunity to collapse the critical chain and finish the project early (and collect on performance bonuses). “The time estimates can have no slop in them. They must be accurate, and the resource must be able to concentrate on that task until it’s complete,” says Hill.

The time to start a project is determined by subtracting the critical chain time plus the protective buffer time from the task due date. “This pull approach is rarely used in project management,” he says.

Avoid Just-On-Time finishes. “There is little or no reward to complete tasks ahead of schedule and there is a general belief that giving back that buffer time means the next time the buffer time will be less. A better way to look at it: When a task gets done ahead of schedule, you can use that time to improve the product or schedule. We always suffer the losses but we rarely take advantage of the gains,” says Hill.

Manage the buffers. “A project manager is really a buffer manager. If you make buffers 50 percent of the total real task time, it becomes one third of the total length of the chain. Feeding buffers protects the critical chain from incoming delays. Individual task durations become more aggressive. This protects the project due date and gives the opportunity to finish early.”

Make multi-tasking a sin. While our work culture honors the multi-tasking principle, when it comes to any given task, it can actually more than double the task time. “Multi-tasking is a major cause of project management failure. If workers must multi-task, the variability falls on their backs and they become much less efficient. Instead, control the release of work into the system and throughput will improve. But do not precisely schedule project tasks and resources at planning time because it can’t account for anything that will go wrong. Instead, manage release of work at execution. Multi-tasking on a project that’s already behind will only make the problem worse,” says Hill.

Measure Throughput Dollar Days
While many financial systems look at cost management as a way to manage the health of a project, Hill and Ligon recommend looking at Throughput Dollar Days (TDD).

“You can’t save yourself to prosperity in project management,” says Ligon. “If you monitor a project using TDD, the metric combines the cost of lateness with the throughput value of the task. It helps measure what should be done vs. what wasn’t and is figured as the project value multiplied by buffer days consumed. If a late task doesn’t consume buffer days, it does not affect TDD,” he says.

You can use the percent buffer consumed to set task priorities. “You only need to watch for trends of percent completed vs. percent buffer consumed,” Ligon says.

While many tasks on the project have some effect on feeding the critical chain, the overall project buffer provides the basic direction as to what should be completed first. The software that Hill mentioned can help you prioritize the work to least impact the critical chain. “This is first in, first out planning, not multi-tasking, which creates inefficiencies,” says Hill.

Rules of building buffers
Hill recommends enforcing three important rules when building the buffers into a critical chain:

Management is not allowed to cut buffer time to meet its needs. “This doesn’t mean that it can’t be considered in the next project. Instead, use the gained buffer time to speed or improve the project,” Hill says.

Buffers are not slack time. “If everyone is truthful about the real time it takes to finish a critical task, then the buffer time offers the project some flexibility to manage unforeseen problems. This is how we protect the project due date against uncertainty.”

Expect the buffers to be used. “If the planning is completed correctly, there is a high probability the buffer will be used. Murphy’s Law will assure it will be used,” Hill says.

Editor’s note: Want to learn more about critical chain management? Contact SCMEP at info@scmep.org, Ed Hill at ehill@hillbusinesssolutions.com or Ed Ligon at edligon@bottomlinealliance.com.

Published in the January/February 2007 issue of Contractor Tools and Supplies magazine.

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