Recently we’ve had a number of questions regarding the management of critical resources across multiple projects where there may be resource conflicts that are working on critical chain tasks. Here are some tips for ensuring your projects move forward in the most efficient way possible.
First let's start with the definition of Critical chain project management so we are all on the same page. Critical chain is a method of planning and managing projects that focuses on the resources (people, equipment, physical space) required to execute project tasks. This method was developed in 1997 by Eliyahu M. Goldratt.
The basic idea is that a system’s throughput is determined by the weakest performer, called the constraint. Critical chain project management seeks to identify the constraint and then optimize the system based on that constraint.
For example, in the image below we see three machines A, B and C in a serial process.
The maximum number of parts that this serial process can produce is determined by the machine with the lowest capacity. In this example, Machine B is the constraint and therefore the production line’s maximum throughput is 20 parts/hour.
To maximize a system’s throughput using Critical Chain Project management, Goldratt defined the five focusing steps as follows:
It’s a continuous process of tweaking to optimize the system. You can explore each of these points further in this post.
In the case we are talking about, the constraint is a person that is a critical resource on the critical chain of two ore more projects who is overloaded with work.
When working on multiple projects, conflicts can arise between resources on the critical path. In the best case scenario, your project management tool will alert you to resource conflicts that are up and coming so you can plan accordingly. (Playbook does this.)
Planning accordingly means you are alerted about the constraint in advance and are able to identify another route for the work to be completed. For example, handing off the work to another capable person to complete.
In the worst case scenario, you are alerted by a team member the day that the conflict materializes, e.g., the day that the critical person should be getting started on the task but is pulled in two different directions, on two different projects.
There are a number of ways to resolve the issue when a critical resource conflict occurs. But let's start with what not to do.
Don't have the person multi-task across projects.
This is a recipe for delay on both projects (or multiple projects) as both projects will end up being delayed.
In the case of two projects where you decide to have the person work on both, Project A will be delayed as a function of how much time the person is spending on project B. So if the critical person multi-tasks across two projects, both projects will be delayed.
In every case it is better that the business decides which project is more important for the critical resource to work on as opposed to delaying both.
The first and simplest approach is where there is a strategic reason why one project takes precedence over another. In this case, the more strategic project gets the benefit of the resource.
When two projects have the same strategic importance, we recommend looking into which project is going to cost the most to delay by calculating the cost of delay.
You can see how to calculate the cost of delay here. Simply put, the cost of delaying a project is the cost of one day of delay times the number of days the project will be delayed while the critical person is working on the other project.
In summary, the magic wand is knowing when queues and resource constraints are going to happen before they happen so you can manage them proactively.
But if you are in a bind with a critical resource assigned to two projects at once -- choosing one project over the other vs. delaying both is our recommended approach; preferably delaying the one that has the lowest financial impact.
Want to share the benefits of critical chain project management with your team? Download the PowerPoint presentation.