AZAD İRİZEMİNE TAŞCİ MERVE ESRA AKKANSEVTAP SEVGİLİŞERİFE ÖZGÖÇ

CRITICAL CHAIN

ELIYAHU GOLDRATt

THE PURPOSE OF THE BOOK

To change Goldratt educational systems to better

accommodate the quickly changing world of business.

The book starts by pointing out the problems with how

time estimates are normally done on projects.

To provide a primer on the Theory of Constraints and an

example of its implementation in a steel mill.

To proceed to show how the Theory of Constraints can be

applied to schedule generation, resources constraints

and multiple projects.

KEY IDEAS

An information technology saying: "A project will run

out of time but will never run out of excuses.“

Top management blames externalities, while project

participants more-honestly place direct blame on

internal politics and management.

The estimate is judged at an 80% confidence point.

That is, the estimator believes there is an 80%

chance that an activity will be completed within this

time.

As a summary of bookThe main story in the book is about an associate professor named Rick Silver who is struggling to make it in the academic world. young business professor. He and his Executive MBA class learn together, using the Socratic method, as they discover and apply radical new project management concepts. The principal side characters are a young task force charged with dramatically reducing a modem manufacturer’s time-to-market cycle. He is a very good teacher, but he wants tenure and is in need of publications. His area is project management and he wants the articles to make a difference in this field. The fact is that the theories applied to project management are not effective and projects are running late at high expenses.

Think Tank:A group or an institution organized for intensive research and solving of problems, especially in the areas of technology, social or political strategy

Budget Overruns: The amount by which

the actual cost of a project exceeds its budget. While this does not necessarily guarantee that the project will fail, it does make it more difficult to succeed. This is also called cost overrun or budget overrun.

Time Overruns: Time overruns occur

when projects or tasks within a project is not completed by the time the project plan specifies. This can occur when materials to complete a project are back ordered and work cannot be completed until the materials arrive.

Bell Curved:"Bell Curve" is the popular name for Normal Distribution (also called Gaussian distribution). It is often called the bell curve because the graph of its probability density resembles a bell. It can be used to measure anything.

PERT is a statistical tool, used in project management, that is designed to analyze and represent the tasks involved in completing a given Project, especially the time needed to complete each task, and to identify the minimum time needed to complete the total Project.

PERT and Gantt techniques

Critical Path is defined as

the longest chain of dependent steps (longest in time) and it determines the time it will take to finish the Project.Any delay on the critical path will delay the completion of the Project.

Gantt Charts

unlike PERT Diagrams, involve decisions,the decision of the planner when to start each path.Somebody of them chose the late start for picking the vendors while the other one has chosen the early start.

THEORY OF CONSTRAINTs( TOC )

At first,it was related

to production scheduling. Then it became a banner to attack “product cost” methods,then marketing. Lately ,it seems TOC is more connected with methods to remove friction between people.

THEORY OF CONSTRAINTS( TOC )

TOC is a blend of three different breakthroughs : First one,as we all suspected,is that TOC is actually a new management philosophy like ,TQM,JIT,Re-enginnering,the learning organization.. Second one;is the research methods it introduces. Third one, the one TOC is known for the most,its broad spectrum of robust applications.

Identify the system’s constraints as physical,like a bottleneck,type of resource that does not have enough capacity to meet the demand.In that case, strengthening the weakest link will mean to help the bottleneck to do more.There are two different ways to strenghten a bottleneck. One is simply add more capacity,by hiring more people or buying more machines

Triggering the student syndrome in the resource assigned to the task - they have more than enough time to do the task, therefore they start the task late using up all the safety.

is suited to finding a solution to conflict

between two parties or two points of view. The method requires the participants to

find 'win-win' solutions because it

emphasizes that both parties are

trying to reach the same ultimate goal.

The Evaporating Cloud

W-W When you win

and the other person wins, instead of one winning and the other losing, then everybody is happy and the relationship gets stronger as a bonus.

BUFFERS

The identification and insertion of buffers:

project buffer feeding buffers resource buffers

PROJECT BUFFER

It is inserted at the end of the project network between the last task and the completion date.

PROJECT BUFFER

• Any delays on the longest chain of dependant tasks will consume some of the buffer but will leave the completion date unchanged and so protect the project.

• The project buffer is typically recommended to be half the size of the safety time taken out, resulting in a project that is planned to be 75% of a “traditional” project network.

FEEDİNG BUFFERS

• The safety time on the end of

the critical chain is called the

project buffer.

FEEDİNG BUFFERS

• Delays on paths of tasks feeding into the

longest chain can impact the project by

delaying a subsequent task on the Critical

Chain.

• To protect against this, feeding buffers are

inserted between the last task on a feeding

path and the Critical Chain. The feeding

buffer is typically recommended to be half

the size of the safety time taken out of the

feeding path.

RESOURCE BUFFERS

Resource buffers can be set alongside of the Critical Chain to ensure that the appropriate people and skills are available to work on the Critical Chain tasks as soon as needed.

The safety time should be large enough to insure the resource has at least a 50% chance of finishing the specific tasks on time.This safety time is called a resource buffer.

VENDOR MANAGEMENT

The abstractions of project management are instantiated by having portions of the project supplied by other firms. That is, the simple metrics of "minimize cost," and "deliver by this date" may be implicit for internal teams, but they have to be explicit for vendors, and there is less opportunity for fine tuning, and more motivation for protection.

VENDOR MANAGEMENT

The importance of schedule, and ways to improve it, can be explored by negotiating tradeoffs between it and cost. • What cost incentives for early

delivery will they respond to?

• What cost penalties for late delivery will they accept? More importantly, what penalties should we be seeking to imposeto capture our own opportunity costs and the expenses of a schedule slip?

• Small delays can create big impacts on profitability, improvements in delivery schedule will often be worth a premium. But focus this effort where it matters - in the critical path, and the critical chain dependencies within it.