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Project Management in the Fast Lane:
Applying the Theory of Constraints

by Robert C. Newbold, 1998, St. Lucie Press, hardcover, 284 pages
(available from Project Management Institute's on-line bookstore at http://www.pmi.org, about US$40)

The theory of constraints (TOC) has gained widespread recognition in manufacturing.  Simply put, greater throughput can be achieved by working on the bottleneck constraints.  "A basic principle of TOC is that the unpleasant problems or 'undesirable effects' we experience in a field such as project management are usually the result of relatively few core problems."  Robert Newbold is a disciple of Goldratt, having worked at the Avraham Goldratt Institute from 1988 to 1996.   Newbold started his own company in 1996 to develop ProChain™ software for improved project management.

In Critical Chain (reviewed in Tip 26), Eli Goldratt applies his philosophy to project management. The bottlenecks are activities or tasks along the critical path, resources that prevent timely start of activities, and the project equivalent of work-in-progress is activities started prematurely.  Manufacturing "throughput" represents project completion time.  People usually have a culture of wanting to stay busy.  This leads to prematurely starting tasks, which leads to inefficiencies, especially multitasking.  Working on multiple tasks concurrently may seem like a good way to keep busy.  However, it is less efficient and the most important task may be finished last.

"Most people spend years fighting the same fires with the same hoses and axes.  Accusing them of arson will not cheer them on." (p. 48)

Critical chain scheduling identifies the sequence of tasks that determine overall project completion time, recognizing both precedence relationships among tasks and resource constraints.

• Buffers are removed from individual activities; otherwise they will be wasted.
• The main project buffer is placed at the project end to protect the customer.   The book suggests that this buffer be about half the sum of the customary critical path activity buffers.
• Paths of activities feeding into the critical path should have (feeding) buffers so as lower risk of delaying critical path activities.
• High risk activities should be scheduled early so that problems can be detected early.

Project risk management is a primary concern of project managers.  Projects are commonly late and over-budget, and/or the asset falls short of the needed performance.   The traditional responses to project risk are:

• risk analysis
• more detailed specifications
• more planning
• less planning (!)

These fall short.  Newbold details his methodology to apply the critical chain approach.  There are some good ideas here, some of which are in conflict to decision analysis.  The decision analysis approach would be to use Monte Carlo simulation on the project model.  Here is my comparison of the two approaches:

* This is an important improvement.
Reduce work-in-process so as to reduce multi-tasking.

Critical chain scheduling needs to be understood by all project managers.  For moderate- to low-risk projects, perhaps you will prefer critical chain scheduling to Monte Carlo simulation and optimization.

I recommend this as complementary reading after Critical Chain.  Almost all executives and professionals are involved in project management and can benefit from ideas contained in this book.

—John Schuyler, August 1998.  Revised Jan. 2006

Copyright © 1998, 2006 by John R. Schuyler. All rights reserved. Permission to copy with reproduction of this notice.