How to Reduce Project Lead Times Through Improved Scheduling

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1 Hw t Reduce Prject Lead Times Thrugh Imprved Scheduling PROBABILISTIC SCHEDULING & BUFFER MANAGEMENT Cnventinal Prject Scheduling ften results in plans that cannt be executed and t many surprises. In many cases, the plan is a bidding exercise that has little effect n prject behavir and thus, is a pr indicatr f what actually ccurs during a prject. This paper explres the reasns why and ffers a slutin t prject planning. Mark Weppel Pinnacle Strategies 5/21/2009

2 WHAT ARE PROBABILISTIC SCHEDULING AND BUFFER MANAGEMENT? Prbabilistic scheduling uses knwledge f the variatin in prject tasks and the prject envirnment (prject risks) t make quantitative predictin f a range f prject utcmes. Instead f prviding a fixed date t answer a questin such as When is first il? prbabilistic scheduling prvides a range f answers f the type, There is a 50% chance f achieving first il by date x r sner, and a 90% chance f achieving it by date y r sner. Mre general applicatin f prbabilistic planning als cnsiders the range f prject csts and returns. This evaluatin fcused n the range f utcmes fr key prject dates, such as first il. Quantifying the range and prbability f utcmes can aid prject planning and decisin making. Prbabilistic scheduling prvides a methd t quantify the risk management prcess. Quantifying the impact f ptential risks imprves decisin making affecting the cntrl f thse risks, and ptentially n the verall financial viability f the prject. It specifically aids the upfrnt recgnitin f critical issues and practive management f thse issues. Buffer management is a methd t cntrl wrk mre effectively. When applied acrss multiple prjects, it aids prject and resurce level decisin making t accelerate the cmpletin f all f the prjects sharing resurce pls. Buffer management achieves better resurce utilizatin thrugh enabling resurces t fcus n prject tasks in pririty rder, cmpleting them all sner as cmpared t switching back and frth between multiple tasks n multiple prjects. It imprves prject team fcus by rapidly identifying the prject tasks requiring actin t ensure prject cmpletin n r befre a cmmitted prject cmpletin date. Buffer management enables cmmitting t high prbability fixed dates while using the variatin infrmatin prvided by prbabilistic scheduling. Buffer management uses the prbabilistic analysis t place time buffers at the end f chains f prject tasks leading t a desired prject utcme date (e.g. first il). It then uses prject task status infrmatin and decisin rules t cntrl the prject. When used with multiple prjects, buffer management prvides the prject resurces with infrmatin as t which task they shuld fcus n next. It als prvides the prject team with infrmatin n which tasks need fcused attentin, and when they must take actin t ensure prject delivery t the cmmitted milestne. APPROACH The verall apprach begins with a prbabilistic scheduling/buffer management strategy and, agreed t between the prject team and Pinnacle Strategies caches. We then develp the rles statement and the basic prcess adpted fr the pilt. Prbabilistic Prject Management: Schedule Prject 1 Create/validate baseline netwrk NO: Change baseline assumptins r strategy 2 Estimate cmmn-cause variatin 4 Identify (validate) risks Buffer 3 Perfrm prbabilistic analysis f baseline netwrk Actinable? OK? 5 Plan risk preventin and mitigatin 6 Perfrm prbabilistic analysis with (selected residual) risk 7 Buffered baseline (P50) executin OK? 8 Baseline risk register N: Change baseline assumptins r strategy N Figure 1: Prbabilistic planning deplys knwledge f variatin in prject tasks t ptimize the plan. Figure 1 addresses tw causes f variatin (Deming, p. 310), cmmn causes and special causes. Cmmn cause variatin is the variatin inherent in the system, while special cause variatin has sme definite cause; e.g. an identified prject risk. Cmmn cause variatin is why perfrming the same task n five different prjects will shw variatin in the time t cmplete the task. Yu seek t manage Special Cause variatin by yur risk management prcess. Deming (p. 309) ntes that the reasn fr the distinctin is that, the type f actin required t reduce special causes f variatin is ttally different frm the actin required t reduce variatin and faults frm the system itself. This prject intrduces buffer management as the tl t mre 2009 Mark Weppel strategies.cm Page 2

3 effectively manage cmmn cause variatin, and t identify when actin is required t cntrl special cause variatin beynd thse items identified in the risk management prcess. Step 7 f figure 1 identifies a buffered prject. Fr this pilt, a single prject time buffer was added at the end f the critical path leading t first il. The buffer size (duratin) is the difference between the 90% prbable and 50% prbable date predicted fr first il. Inserting this buffer int the deterministic enables using the deterministic t cntrl the prject, using a buffer management prcess. Prbabilistic Prject Management: Execute Prject 7.7 Priritize tasks fr resurce N 7.2 Status P50 with estimate f remaining duratin 7.1 Execute t P Update risk register with: - Risk triggers - New risks - Clsed risks - Actin cmpletin 7.4 Update P Prepare buffer reprt 7.6 Actin threshld? YES: Add t risk register Figure 2: Buffer management executin ensures that the prject team fcuses n the right tasks t cmplete the prject n r ahead f. Figure 2 illustrates hw the prbabilistic analysis and buffer management is used during prject executin. The prject team updates prgress n the n a frequent basis t achieve the benefits in terms f task pririty and actin signals fr the prject team. We recmmend weekly (at a minimum) updates. The executin prcess uses a buffer status chart (called a fever chart) during executin t determine when t take actin n the prject (e.g. accelerate selected tasks). It des nt require rerunning the prbabilistic analysis each week. Updates t the prject lgic (e.g. new tasks), r changes t the risk register (e.g. new risks, r risks n lnger applicable) may initiate a need t re run the prbabilistic analysis Mark Weppel strategies.cm Page 3

4 Figure 3: The buffer management fever chart defines when t take actin t recver time n the prject. Figure 3 illustrates a buffer management fever chart. The vertical axis indicates the percentage f buffer cnsumed, based n inputting the weekly status int the prgram (MS Prject r Primavera). The hrizntal axis illustrates the prject prgress, in terms f the percentage f the critical path baseline time accmplished. The three regins represent actin criteria: Green, n actin. Yellw, plan buffer recvery. Red, execute buffer recvery. Nte that a prject that cmpletes within 100% f buffer cnsumed successfully meets the cmmitted date fr the milestne cntrlled by the buffer; e.g. fist il. LESSONS LEARNED IN IMPLEMENTATION 1. Creatin f the prbabilistic prvides an effective quality check f the deterministic. This alternative way f viewing and analyzing the led t many imprvements in the deterministic task definitin and lgic. 2. The prbabilistic analysis prcess identified unexpected impacts f cnstraints and lags in the deterministic. Standard scheduling best practices shuld seek t minimize these cnstraints and ensure that they are visible. The baseline shuld seek t eliminate cnstraints. 3. The primary buffer used t manage the prject is a prject time buffer placed at the end f the critical path; in this case in frnt f the First Oil milestne. Buffers shuld be placed in frnt f reprtable milestnes requiring a higher prbability than 50%. These milestne buffers shuld be external t the critical path f the prject. Mdeling f weather and lp current impacts can be lumped tgether, and included in the risk quantificatin analysis. They shuld nt be included in the critical path. This way, they will nt push ut the baseline task dates. 4. Risk definitin in the risk register must be imprved t be understandable by all prject participants, with due cnsideratin that persnnel assignments ften change during the life f a prject. It must include a specific frmat fr stating risks, input clumns fr the prbabilistic infrmatin, and a clumn t supply the basis fr the quantitative risk estimates. We fund a number f instances where n ne currently wrking n the prject understd what the risk statement in the register meant. 5. Traceability frm the risk register t mdeling in the prbabilistic is necessary t relate the variatin in the utput date t the manageable risk cause. 6. Prject wrk package leaders (WPLs) wrking n multiple prjects using a plethra f tracking mechanisms (s and actin lists) will have a hard time fcusing n what needs t be dne in what rder. Each functinal rganizatin has their wn wrk scheduling system fr bth prject tasks and actin items. These systems d nt tie directly t the prject systems. Thus, extensive manual effrt wuld be required t synchrnize these tls acrss all prjects. 7. Sme WPLs determine the end f tasks by the availability f persnnel t a review meeting; i.e. they wrk t a meeting with a reviewer, and the date f that reviewer s availability determines the cmpletin date fr the task. This apprach wastes prject time (delays prject cmpletin), as they cannt cmplete sner than thse dates. This apprach will significantly reduce the ptential gains f prbabilistic scheduling/buffer management. 8. Prjects d nt effectively use a single Wrk Breakdwn Structure (WBS) t integrate prject wrk. The des nt relate t a WBS. This cmplicates understanding hw t link risks t and actins t activities, as activity numbers change with mdificatins. In additin, it cmplicates the integratin f the functinal systems fr and actin tracking relative t the prject system. PROBABILISTIC SCHEDULING AND BUFFER MANAGEMENT BENEFITS The prbabilistic scheduling prcess has the fllwing benefits: SHORTER PROJECT LEAD TIMES There are fewer surprises. Having dne a prper jb f evaluating prject risk and task duratins, yu're prepared t deal with the "murphys" that always ccur during prject executin. Since yu've already prepared, yu can respnd much quicker, withut wasting time Mark Weppel strategies.cm Page 4

5 Secnd, a gd prject plan mves these ptential risk events ff the critical path (if pssible!). By mving risk events ff the path that determines prject delivery, eliminating disruptin t yur deliveries. That desn't happen withut planning. Third, the tasks themselves are stripped f the safety that mst prject plans have, with all task safety aggregated at the end f the critical chain. Saftey aggregatin allws yu t manage the safety as a prject level item, rather than letting it be dispersed t every resurce in yur prject. That means that yu need less, and the verall prject duratin is shrter with greater certainty f cmpletin n time. SCHEDULING PROCESS IMPROVEMENT Imprve the credibility f the prject plan Give a greater understanding f the wrk t be accmplished thrugh: Cnsistent task estimates acrss grups Reliable task relatinship linkages Greater assurance f risk and team fcus Imprved cntrl during executin thrugh: Earlier identificatin f prblem areas Mre practive prject management Yu can expect additinal benefits frm prbabilistic scheduling and buffer management: Increased availability f engineering resurces t effectively deliver n mre prjects Imprved visibility f prject risks and their impact n s Greater flexibility t respnd t risks, thus Imprving n time cmpletin f prjects. These will be caused by better planning and deplyment f the resurces t prject tasks, reducing waste and inefficiency in task perfrmance. If we can help the resurces fcus n ne prject task at a time, and pass n their result t the next task in the prject, we can reduce delays and rewrk. BENEFITS FROM BEHAVIOR CHANGE The primary benefits (mre prjects and better reliability) t the system will cme frm enabling resurces t fcus n ne task at a time, cmplete it, and hand it n t the next task in sequence. The shrtening f actual task duratin by fcusing n ne task at a time is evident, but the imprvement in efficiency and reductin f stress and chas resulting frm this imprved fcus may nt be s evident. Human perfrmance research indicates gains upwards f 40% are achievable thrugh eliminating task switching n intellectually challenging tasks. Yu can realize significantly mre benefit by implementing prbabilistic scheduling and buffer management acrss multiple prjects. Many WPLs and resurces supprting this prject are als assigned t ther prjects nt deplying prbabilistic scheduling/buffer management. Since they d nt receive cmparable pririty infrmatin frm the varius surces cmpeting fr their attentin, applying buffer management n a single prject des nt help in make the pririty call n Which task t wrk n next? The natural result f this is t devte shared time t multiple prjects tasks, thus delaying the wrk n all f the tasks, and pssibly delaying the prjects. NEXT STEPS Fr mre infrmatin n Prbabilistic Scheduling: 1. Visit strategies.cm t brwse a variety f articles and resurces, including critical chain prject management 2. Subscribe t Mark Weppel s blg, at strategies.cm/blg and jin the discussin Cntact the authr directly at strategies.cm 2009 Mark Weppel strategies.cm Page 5

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