A Critique of the Critical Chain Approach to Project Management

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Course in Operations Management
ASSIGNMENT 1: “A CRITIQUE OF THE CRITICAL CHAIN APPROACH TO PROJECT MANAGEMENT” 3,000 words excluding reference list and summary

for Dr. Tom Mullen

Anthony C Mould October 2003

Reprinted with the kind permission of Anthony C Moulds. This essay should be viewed as an example of a well written, structured, referenced and argued assignment. It has been issued to MBA students on commencement of their studies, prior to submission of their first assignment.

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EXECUTIVE SUMMARY

This report reviews the Critical Chain approach to project management as proposed by Dr Eliyahu Goldratt (1997). The approach is based on the Theory of Constraints (TOC).

The report finds the following:

Conventional techniques (Critical Path Method, PERT) often fall short of delivering projects on time and within budget.

Traditional approaches have two main problems: o Three mechanisms exist which create excessive project ‘safety time’. o Three mechanism exist which waste the created ‘safety time’.

The Critical Chain approach has stated advantages over the conventional approaches: o o Safety time is eliminated and replaced with project buffers. The resource contention and multi-tasking problems are addressed through ‘focussing’ and the use of ‘feeding buffers’. o o Total duration does not change as the project proceeds. Total project duration is reduced.

The Approach has been criticised on the following basis: o o o Not a revolutionary approach. Lack of clarity with regard to managing multiple-projects. Constraint may be in management capacity and not within project plans. o Lack of empirical evidence of success.

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CONTENTS

page

1

INTRODUCTION

3

2

LITERATURE REVIEW: 2.1 LIMITATIONS OF CONVENTIONAL APPROACHES 2.2 ADVANTAGES OF THE CRITICAL CHAIN APPROACH

5 6 9

3

ANALYSIS: 3.1 THE CRITISCISMS AND CHALLENGES OF CRITICAL CHAIN PROJECT MANAGEMENT 14

4

CONCLUSION AND LEARNING REFLECTION

16

REFERENCES 17

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1

INTRODUCTION

According to Dr. Eliyahu M. Goldratt, author of the business novel, Critical Chain (1997), conventional project management techniques such as the Critical Path Method (CPM) and the Project Evaluation and Review Technique (PERT) are conceptually flawed.

Goldratt, a pioneer, if not the founder of the Theory of Constrains (TOC), applies the framework to project management in order to develop the innovative Critical Chain Project Management (CCPM) approach to scheduling. The technique is based on the premise that the conventional pre-occupation with what he calls the “cost-world” undermines attempts to meet schedules and budgets and should be replaced by a “throughput-world” mentality.

The purpose of this contribution is to provide a discussion and critique of the Critical Chain approach to project management. The paper proceeds as follows: section 1 literature review which establishes our current understanding of the critical chain approach; section 2 discusses the general problems with contemporary projects and explains the need for a new approach. Section 2 proceeds to analyse the limitations of conventional project management approaches. Section 3 discusses the advantages of the Critical Chain approach before section 3 also outlines some criticisms and challenges that the new technique has and will continue to face. Finally, section 4 concludes.

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Literature Review:

“When we execute a project, the first ninety percent of the project usually takes ninety percent of the available time, then the last ten percent of the project takes the other ninety percent of the available time”. (Umble and Umble 2000, p27) The preceding statement, tirelessly quoted in project management literature and attributed to a bemused company executive, illustrates that invariably, projects finish behind schedule, over budget and to a different specification than initially commissioned. A great deal of contemporary anecdotal...
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