Wednesday, April 14, 2021

Supply chain bollocks!



If you're working projects in the construction industry then you know what I'm talking about: supply chain constraints and missed or stretched schedules everywhere.
 
It may be time to dust off two ideas that are actually timeless:
  1. "The theory of constraints"
  2. "The Critical Chain"
Now as it happens, both of these ideas come from the same industrial theorist: Eliyahu Goldratt; and he wrote books -- well received and widely read -- about each one (*).

Theory of Constraints
Goldratt had two big ideas in his theory
  1. There's no point piling up "inventory" ahead of a constraint, only to have that "inventory" languish and possibly expire before it's sell-by date.
    This means don't work feverishly in one part of the project, only to have another part of the project constrain the utility of that work.
    Resources will be unnecessarily committed to tasks that could be done at another time.
    It's better to put those resources to work -- perhaps even on another project -- where their outcomes can be readily used. Matrix management anyone?

  2. If the constraint is really impacting outcomes in a material way to project objectives, then subordinate everything else to the task of mitigating the constraint.
    In a few words: don't accept the fact of the constraint; do something!
The Critical Chain
Most project managers have heard of this one. Even PMI talks about it. The ideas are these:
  1. Figure out the chain of events and tasks that comprise the path to the most important project outcomes. Often, such is the 'critical path' as defined by PDM methods, but not always. Unfortunately, "critical" and "important" do not have a common definition. Let's focus on "important" as the critical chain , and leave "critical" to PDM.

  2. Create 'buffers' -- or schedule slack -- between any activity that joins the important critical chain path. The buffer is there such that those less important activities do not impact the performance of the critical chain, even if they run over and thereby consume their buffers.

  3. And, create a buffer at the end of the critical chain such that any variance along the way is absorbed by the buffer. In schedule speak this is known as "under promise and over perform"

  4. Finally, and somewhat controversially in the age of Agile, centralize the oversight of the 'buffer budget' so that the budget is applied to the most important project objectives as determined by the high command in the project office.
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(*) "The Goal" is the business novel that explains the theory of constraints
"Critical Chain" is also a business novel


Buy them at any online book retailer!

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