Book Notes - Critical Chain

Critical Chain by Eliyahu Goldratt [1997]

Summary:

Key steps to improving project management:

1. Cut safety out of individual process steps

2. Redistribute safety into a project buffer

3. Identify the critical chain (longest list of dependant events)

4. Add feed buffers to the non-critical paths to protect the critical chain

5. Monitor the progress closely and focus on the steps that will impact the project buffer

6. Look for resource contentions, if there are any resource bottlenecks; schedule and buffer them like you would a manufacturing bottleneck.

Other key notes:

The cheapest option is not always the best, pay for focus and reduced risk.

Create unrefusable offers for your suppliers or customers (See Its Not Luck).

Notes:
Page 11: "teaching by open discussion" How is it possible to do this in all situations? Can you predict adequately where the discussion will go? How do you prompt people in the right directions without giving the answers? How do you keep classes to time?
Page 24: The Golden Triangle - Cost, Time, Quality OR Budget, Time, Features.
Page 25: U2 project as an example of something that beat the golden triangle.
Page 37: Common causes for delays;

· Unrealistic timescales to start with

· Forced to chose the cheapest vendors

· Key stages started too late

Page 41: Managing projects is all about managing uncertainties in terms of timescales, costs and specifications, risk management and planning.
Page 44: How long does it take to get from A to B - tailed distribution, shortest possible time to do anything is zero, longest possible time is virtually infinite.
Page 45: What is a persons objective in a project? To be considered a reliable person. Therefore they will never budget the median, it means they have a 50% chance of being seen as unreliable. On the other hand if they finish early they can always pad the work to fill the time to the estimate and still be seen as reliable.
Page 90: You can cut costs in any department and impact the whole (make the chain weight less) but you can only improve the throughput in the weakest link (make the chain stronger). Cost cutting projects can be focused anywhere, capacity increasing projects should only be focused in the constraint. However cost cutting projects should only be undertaken once the throughput is met.
Page 92: look for policy constraints in the business.
Page 97: There are no compromises in the accurate sciences. If one person measures something at 20g and another person uses a different method and gets 30g, they don't decide it must be 25g. One or both of the methods must be wrong, they cannot both be right.
Page 98: Conflicts are the result of faulty assumptions, if there is a conflict there is always an assumption that can be challenged.
Page 124: Student Syndrome; we fight for extra safety time only to the waste it.

Page 126: The evils of multitasking; the lead time is extended for each step even assuming that there is no negative impact due to having to get up to speed with the individual parts again.

Page 172: Three steps to getting a project back on track:

1. Persuade people to cut lead times

2. Remove Milestones for individual tasks

3. Frequent reporting of lead times and issues

Page 218: If there are resource conflicts (constraints) the Critical Path becomes the resource therefore you must buffer the process steps after the resource constraint.

Page 235: Identify the resource constraint for the whole programme and schedule that resource like you would schedule a production constraint, base the other projects (start and finish) around the constraint and insert a “bottleneck buffer” to protect the resource.

Page 242: Dollar-Day investment strategy instead of payback period or NPV, don’t fully understand, try listening to Beyond the Goal and coming back.

Quotes:
Page 8: "Smart people learn from their own mistakes, wise people learn from the mistakes of others."
Page 38: "The lower the level of the person the more the finger points internally rather than externally."
Page 40: "Uncertainty is what typifies projects. It is the nature of the beast."
Page 62: "Companies are so immersed in the mentality of saving money that they forget that the whole intention of a project is not to save money but to make money."

Page 121: “A delay in one step is passed in full to the next step. An advance made in one step is usually wasted.”

Page 188: “The probability of a piece of bread falling butter side down is directly proportional to the price of the carpet.”