Theory of Constraints Handbook - James Cox Iii [577]
No forecasts are needed for RS, which is a radical departure from conventional wisdom. Thus, RS is an alternative to hire-to-plan, which begins hiring independent of whatever deals are in the sales pipeline. Likewise, RS is an alternative to hire-to-deal, which doesn’t even start the hiring process until a new engagement is imminent.
Hence, RG and RS are based on the same principles, but they operate in different contexts. Furthermore, within services enterprises, RS supports both projects and processes, which are two different ways to deliver services. They are discussed next.
Critical Chain for Services
Critical Chain for Goods (CCG) is the traditional TOC application for project management. It’s a radical alternative to Critical Path Method (CPM) and Project Evaluation and Review Technique (PERT), the dominant project management methods.
Briefly, CCG changes how projects are estimated, planned, performed, and tracked. Those changes lead to better on-time completion as well as shorter projects, which defies the conventional wisdom that says there is an immutable trade-off between those outcomes.
CCG employs task estimates at the 50 percent confidence level rather than at the 80 percent level because task-level contingency does not really protect on-time task completion, let alone on-time project completion. CCG instead starts with non-buffered task estimates, then consolidates contingency into a project time buffer, which protects the project as a whole.
CCG eliminates resource contention because overloaded resources cannot complete tasks on time. CCG instead adds resources or shifts selected tasks earlier in the schedule, which is called resource leveling. The longest path through the project plan after resource leveling is known as the critical chain. Even for projects with equivalent deliverables and scope, the critical chain and critical path are always different because the task durations are different. However, the set of tasks comprising the critical chain and critical path can be different, as well.
CCG applies different work rules because projects are best performed like a relay race. That is, each task starts as soon as its predecessors are done, even if that means an early start. Early task starts thus compensate for late finishes elsewhere in the project, which is not something that conventional project management does. Indeed, conventional projects are often late precisely because late task completions are cumulative.
CCG tracks projects differently because only a subset of tasks actually determines whether the project as a whole will be completed on time. CCG measures progress by how much of the project buffer has been depleted by late task completions. If buffer depletion is in proportion to the amount of the project completed (or less), the project as a whole is on track for on-time completion. This contrasts with conventional project management, which credits every task completion, regardless of whether those tasks actually determine whether the project will be late.
CCG was invented for engineering projects in a manufacturing context, but it works just fine on individual services projects, too. However, the traditional approach to Critical Chain Multiple Projects (CCMP) does not work as well in PSTS enterprises.
CCMP assumes that resources are essentially fixed and that multiple projects must be staggered based on their use of the constrained resource. For instance, if the constrained resource is an aircraft maintenance hangar that holds just one plane at a time, multiple aircraft maintenance projects are constrained by availability of the hangar. The resulting multi-project schedule forms a stair-step pattern based on when each project has an aircraft in the hangar. The same scheduling logic holds, however, if the constrained resource is a person or persons with a particular skill in short supply.
Thus, traditional multi-project critical chain presumes there is an internal constraint. As a result, clients must be willing to accept services as available. However, services