Much has been written about our need to rebuild the energy infrastructure for the 21st century. But, not enough has been written about how infrastructure projects are fraught with delays and cost overruns at a time when economic uncertainty is high and capital is scarce. These problems afflict all three types of projects in the infrastructure ecosystem:

• Build: Building new infrastructure takes too long and costs too much, thus limiting the viability and number of projects.
• Maintain, Repair, and Overhaul: Long maintenance and repair cycles cause significant downtime of revenue-generating power plants, refineries, oil rigs, and other infrastructure.
• Manufacture: Manufacturing of modules and equipment for infrastructure projects is also inefficient, causing extensive delays and generating unhappy customers.
• It is against this backdrop that a new system for managing project execution is being adopted for all the three types of projects. Based on the Critical Chain method, Critical Chain, by E.M. Goldblat, this system has helped organizations achieve results that are nothing short of amazing, whether they are in the private sector or public, engaged in engineering or construction, or are large or small.

Problem
Executing infrastructure projects is all about synchronization. Various inputs (e.g., approvals, drawings, specifications, materials, etc.), resources (e.g., engineers, skilled labor, technicians, inspectors, etc.), equipment, decisions, and corrective actions have to be brought together in the right place and at the right time throughout the life of a project.

However, uncertainties get in the way. Tasks take longer than expected, vendors do not deliver on time, requirements change, technical glitches occur, and so on. To execute projects faster, managers must have an efficient response to inevitable uncertainties when they occur. A key element to this is maintaining synchronization among all the moving pieces, even in the face of uncertainties.

If at any time, any of the elements – inputs, resources, or management interventions – are late or missing, the project stalls. Unfortunately, this happens quite frequently, especially in large and complex projects.

As uncertainties unfold, individuals can no longer follow the original schedules and they start to work independently on what they presume are their priorities. By definition, such independently-set priorities are unsynchronized, causing a project to be mostly waiting for something or the other; for example:

• Waiting for resources because they have been assigned to other tasks;
• Waiting for specifications, approvals, materials etc., because the supporting resources that were supposed to supply or obtain these things were busy elsewhere;
• Waiting for issues to get resolved, because experts are firefighting other issues;
• Waiting for decisions, because managers have too much on their plates; and
• Waiting for all feeding legs of the project to come together at integration points.

Like an engine without a timing belt, everyone is working hard, but the overall project does not move forward. Lack of project synchronization also causes poor utilization of resources, which adds costs as resources are deployed for longer periods of time. Finally, poor synchronization results in firefighting, multitasking, and chaos.


Solution
The Critical Chain breakthrough lies in keeping tasks and resources synchronized within and across projects, even in the face of uncertainties. To synchronize project execution, Critical Chain uses three precepts, or rules:
Pipelining: Limiting the number of work-streams and projects in execution.

When too many work-streams are in execution compared to available capacity – that is, high work-in-progress (WIP) – it automatically causes resources to get spread too thin and priorities to become unsynchronized.

To illustrate, if electrical and mechanical engineering departments both have to support four workstreams at the same time, but can effectively support only two, electrical engineers might choose to work on streams one and two; while the mechanical department is working on streams three and four. As a result, streams one and two will be stuck waiting for mechanical engineers, while streams three and four will be stuck waiting for electrical engineers. Had only two workstreams been in execution at a time, both the departments would be working on the same priorities.

Therefore, the first rule for Execution success is to limit the number of workstreams in execution at a time. They should be staggered, based on the most limiting resources, because at any time only as many workstreams can be executed as you can get through those constraints. Any extra work will only destroy synchronization. Enforce this rule even if it means leaving some resources idle.

Buffering: Discard local schedules and measurements, and use aggregate buffers – unscheduled blocks of time – to protect against uncertainties.

The traditional project management approach is to turn task schedules and estimates into commitments. It assumes that if people are held accountable, they will finish individual tasks on time and on budget, and the entire project will consequently be on time and on budget. Unfortunately, this traditional approach only leads to longer projects, while causing execution to become more unsynchronized.

In planning, accountability for planning estimates causes people to include contingencies in their commitments – they have to plan for uncertainties as well as time spent waiting for one thing or another. That is how project plans are extended.

In execution, resources now not only are scattered across too many projects, but also have an incentive to work on easy tasks – tasks that will help them beat or meet their estimates – instead of working on tasks that are most critical to the project. Safe estimates also allow Parkinson’s Law to set in, meaning work extends to fill the time available.

Therefore, the second rule for execution success comes down to allowing individual tasks to exceed their planning estimates. To protect projects from task delays, buffers are inserted before integration points and at the end of the project. With lower WIP, pressure to meet estimates gone, and buffers implemented to take care of uncertainties, the contingencies embedded in task estimates are no longer needed and can be stripped out.

Not only does this second rule allow for shorter project plans because buffers are smaller than the sum of task-level contingencies, execution becomes easier as well. With shorter project plans there is significantly less pressure to start all workstreams as soon as possible, and extra time on the front end can be used to get ready for execution through better preparation.

Buffer Management: Use buffer consumption to measure execution, and to drive execution priorities and managerial interventions.

With low WIP and adequately buffered project plans, a single priority system can be firmly established in execution. The essence of the third rule is simple, but profound prioritizing tasks according to buffer consumption. The highest priority is given to project legs that are consuming buffers at the fastest rate. When every department follows these priorities, they are all synchronized automatically.

Buffer-based priorities are not only synchronized, but they also cause project status to be reliable. If resources work on the right tasks at the right time, it is assured that current project status is an accurate predictor of the future, despite uncertainties, most of which can be absorbed into the properly sized buffers. If recovery actions are initiated whenever buffers are being over consumed, many abnormal uncertainties can also be combated.


Implementation
Experience shows that there are two sets of challenges in realizing the benefits of a Project Execution Management system based on Critical Chain.

Challenge #1: Gaining managerial commitment for implementing the three Rules
To state the obvious, without a managers’ commitment, it is not possible to activate any new management rules.  While managers are an obvious set of stakeholders, depending on the situation, buy-in of an organization’s customers and key suppliers might also be needed. To be clear, commitment is not about managers agreeing with the idea of Critical Chain – it is about them thoroughly thinking through the details of the changes, overcoming the hurdles that will come up, and getting results.

Buy-in needed to gain the commitment: As many would attest, even after managers are trained by experts, and even after the method has been successfully piloted on one or two projects, organizations may not undertake a full implementation. Not surprisingly, lofty visions and abstract mission statements advocated by change-management gurus do not break the inertia either.

Achieving true buy-in only happens when managers realize that the management challenges they face daily, and the inordinate waste of time and capacity stem from the same root cause – poor synchronization of tasks and resources – then, and only then, do they realize why improving project performance is vital for the business.

Challenge #2: Translating concepts into practical procedures and instructions
Once managers have bought into the need for change and the validity of the Critical Chain rules, a host of technical questions arise: What is the right level of WIP? When to release new projects into execution? How to size buffers? How much detail to put into project plans? How to ensure that removing local due-dates and local efficiency measurements does not lead to loss of accountability?

The good news is that not only have hundreds of organizations successfully overcome these challenges to achieve impressive results, but also that many of them have shared their experiences publicly – visit videos.realization.com/results/default.aspx. In fact, based on those experiences, a step-by-step process for achieving buy-ins and implementing the method can be designed for any organization.

Conclusion
Execution problems have plagued projects for far too long. Critical Chain is a simple straightforward and field-proven method for managing project execution that can produce dramatic results quickly. Organizations of all types can take advantage of Project Execution Management systems, provided they are willing to take the right steps and challenge existing preconceptions about project management.
 

Realization Technologies
San Jose, CA
realization.com