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TOC & Project Management
The Traditional Approach to Safety Buffers:
Traditionally safety buffers are applied to individual tasks. By adding a time safety buffer, what we are intuitively doing is estimating the time required that will allow us a high probability of completing that task on time. In terms of statistics, given the dominant characteristic of uncertainty that is inherent to project tasks, the probability distribution function of most tasks is very much skewed in the direction of the higher probability numbers. In "layman" terms what that means is that at times estimation with an 80% - 90% probability of success is 3 to 4 times higher than the average time estimation.
    

An experienced project manager will want to add safety buffers to the individual tasks, especially where his / her integrity is at stake. Invariably, the need to add safety buffers leads to a conflict between the project manager and top management who have typically committed the organization to a time schedule that is short on its safety buffers. Remember that in most cases where there is a competitive environment, in order for an organization to be awarded a project, it has had to commit to a "tight" time schedule that has had to ignore the demands for safety buffers (otherwise the organization / project team would not be awarded the project.)


The above inherent "conflict" is paradoxically the paradigm that Eli Goldratt uses in developing his innovation solution. TOC claims that even where task managers and project managers succeed in planning in significant safety buffers, for the vast majority of cases these safety buffers do not provide us with the protection we anticipated. In fact TOC claims that the very use of task safety buffers exacerbates the problem. A point in case is the "Student Syndrome". By requesting more time to complete a task we invariably put off doing the task until the very last moment. By delaying commencement we have compromised the chances of us finishing on time. Should "Murphy" hit us (as he invariably does) we find ourselves exposed with no protection and the task ends up running over schedule.

Identifying the Project Constraint:
TOC`s solution to a project environment is based on the TOC 5 building blocks earlier elaborated on. The first step is to "Identify the Constraint". If you were to ask any experienced project manager where the constraint in your project is, then probably he / she would answer that the constraint is constantly moving. For example he / she could say "a month ago it was when we were up to ears with problems of integration of the laboratory proto type; today we are bogged down in testing; and next month I foresee the obstacles awaiting us as we launch into the beta site stage". What in fact the project manager is describing is sequential segments of the critical path. We can now conclude that the constraint of any single project is its critical path.

In most cases, project managers identify the critical path by use of the PERT or CPM logic. According to PERT / CPM, the critical path is the longest sequential path of tasks based on a logical dependency and early start. By logical dependency we mean for example that activity "C" cannot commence until activity "B" has been completed. Goldratt reminds us however, that the "true" critical path needs to consider not only the logical dependency but also the logistical dependency between tasks. By logistical dependency what we mean is if any two tasks or more require at the same time the same constrained resource, be it manpower, tooling, workplace, etc. By taking into account the logistical dependency, in addition to the logical dependency, we have in fact uncovered the true critical path that Goldratt coins the "Critical Chain".

Exploiting the Constraint:
Exploiting the constraint is the second step within the TOC logic. Primarily what that means is that we don`t want to waste the constraint, rather we want to do all we can to squeeze the maximum out of it. In the context of a single project this means that we need to "squeeze" the maximum out of the safety buffers that have been inherently build into the tasks on the critical path. TOC solution is simple but extremely powerful and innovative. Instead of adding on the safety buffers to the individual tasks, which itself causes problems, TOC takes the individual safety buffers and reallocates them to the end of the project into an aggregated safety buffer, called a Project Buffer. The project`s "critical chain" includes the Project Buffer. The "thumb rule" is to leave 50% of the original time estimation. From the amount that is deducted from the original time estimate, approximately 50% is aggregated into the Project Buffer. Mathematically the result is an overall project schedule whose true critical path, that includes the Project Buffer, is approximately 75% of the length of the original project schedule. Statistically, through a change of project team behaviour, we are able to increase the probability that we will in fact realistically succeed in completing our project in time, without compromising product specifications or budget. . The next extract from your text details the logic of how to "exploit the constraint" and he implementation mechanism.


The key to changing project team behaviour is in performance measurement. Project task teams are no longer measured according to the success of the individual tasks but rather according to the success of the entire project. This change in measurement encourages task members to both complete their task ASAP as well as to begin ASAP in the event that the preceding task finishes before its estimated time. Furthermore, providing the task team has done its very best yet "Murphy" has hit hard, it is legitimate for a task team to run over its schedule. We need to remember that this is the reason why we have a Project Buffer.


Management needs to have a clear understanding of the importance of incorporating the Project Buffer into the project schedule. The entire logic of "exploiting constraint" requires the inclusion of the Project Buffer in the schedule. Where management does not understand this and decides to dispense with the Project Buffer, the result is a "death sentence" to both the project schedule and subsequent attempts to implement the TOC strategy.

Subordinating non constraints to the constraint:
In the context of the single project what this means is that all tasks and resources are subordinate in "serving" as well as "not disrupting" the "Critical Chain". To this end TOC introduces the concept of the Feeding Buffer and Resource Buffer.


The Feeding Buffer:
Under traditional project management, it often occurs that a non critical path’s turn into critical path as a result of the original non critical path`s tasks running over schedule to the extent that they over run the non critical path`s "slack time".

TOC`s overall strategy is to do all that is logically possible so as not to endanger the project`s true critical path i.e. the "critical path". To this end TOC introduces the concept of the Feeding Buffer. The Feeding Buffer uses the same logic as the Project Buffer except that it is applied for non critical paths. Refer back to pages 158 and 159 from the early text readings that elaborated on the Feeding Buffer.


The Resource Buffer:
Whenever a new resource is planned for a task on the "critical chain", we need to evaluate the effect to the overall schedule should this resource not be available. A definite strategy that minimises the risk of non availability of such a resource is for us to plan for it to arrive earlier than when we actually need it. This strategy is known as the Resource Buffer. The advantage is twofold. Firstly it decreases the probability that a resource that we need won`t arrive in time. Should "Murphy" strike we have allowed enough time to "recuperate". Secondly it allows us to exploit an opportunity where a proceeding task completes its assignments earlier than expected, hence we are now able to commence earlier since we have the resources available to commence the present task.


Naturally there is a price to pay by planning to have resources made available earlier than required. This price needs to be weighed up against the risk of not having a critical resource available on time and the implication of that for the overall project. Generally speaking, the use of a Resource Buffer becomes more critical towards the latter stages of a project in which we have already consumed a large portion of our Project Buffer.

Vendors and Subcontractors:
Many projects are also dependent on vendors and subcontractors. Typically negotiations will be centred on price. TOC on the other hand emphasises "lead time" as being as important, if not more important, than price. If as a result of long lead times the project completion is delayed, the savings achieved through price negotiations can be dwarfed by the lost benefits from not completing the project. The lead times stated by vendors and subcontractors have their own safety buffers built in. TOC offers a logic that will allow suppliers to be more amenable to shorter lead times. By providing enough warning to the suppliers together with the necessary "kit" if appropriate (be it documentation, a partially completed product to be worked on by the contractor, etc …), the supplier can more easily commit himself to shorter lead times.

Paradoxically though, too much warning will boomerang back resulting in inflated lead times. A requested starting date that is too far out in the future will in turn push the supply to provide a lead time that is heavily padded with a large safety buffer. The further out in time the contractor is required to predict in terms of his availability, the more uncertain the supplier is in being able to commit to a tight schedule. Refer to the following extract from your textbook in order to illuminate further how TOC effectively integrates Vendors and Subcontractors.

A Dynamic Multi Project Environment:
Up till now we have been discussing the application of TOC on a single project. In reality we recognize that most projects are managed within a dynamic multi project environment in which project tasks are constantly competing for shared resources. The logic used by TOC for a single project certainly assists in protecting the project from evils of Murphy, but in itself it is not enough to allow the project to weather the storm of a dynamic multi project environment in which there is constant resource contention.

TOC evokes the same logic that it has developed for synchronizing resources in a dynamic job shop[1] scenario. The key to success is to limit the number of projects in execution based on the most limited resources. Logically an organization can only complete within a certain time frame as many projects as it can within the constraints of its most limited resources, i.e. the system constraints. Releasing more projects than can be processed by the system constraints will only spread critical shared resources thin and inevitably will fall into the trap of bad multi tasking. Enforce this rule even if it means leaving some resources "unproductive" part of the time. Remember that what is important is to be effective and not necessarily efficient. One way of enforcing this rule is to adopt a process of ‘pipelining’. Pipelining releases work in a metered fashion, similar to traffic lights releasing cars into the freeway. By concentrating resources on fewer projects, projects are completed faster; capacity opens up; and the organization`s throughput of projects actually goes up.
A side benefit of Pipelining is that the extra time (before projects can be released into execution) can be used for preparation or “full-kitting.” At last, the organization has ample time to properly prepare drawings and specifications, get approvals, order materials, and test plans.

Paradoxically, by limiting the number of projects in the pipeline at any one time we in effect increase our productivity and complete more projects in a shorter time, within specs and within cost. The following text extract elaborates on the technique of TOC to effectively manage a dynamic project environment.

The F-22 is claimed by multiple sources to be the world’s most effective air superiority fighter. The US Air Force states that the F-22 cannot be matched by any known or projected fighter aircraft.[1] Air Chief Marshal Angus Houston, Chief of the Australian Defence Force, said in 2004 that the "F-22 will be the most outstanding fighter plane ever built."]

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