The Critical Chain - Book Report/Review Example

The Critical Chain Contents Contents 2 Synopsis 2 Measures of Project Success 3 Measures of Performance 3 The Five Focusing Steps 4 The Logical Thinking Process 5 Causes of Project Delays 6 An Example of a project delay 7 Constraints in Project management 8 The difference between chain management and critical path method 8 Lessons 9 References 10 Synopsis Eli Goldratt picked his theme of this book from his earlier version to proceed with presentation of concepts in the Theory of Constraints (TOC). However, with his new book, ‘Critical Chain,’ Goldratt centers on project management. The Theory of Constraints is a technique of developing existing improvements in the processes of operations in addition to the existing overall philosophy of management within business organizations. The world faced the Theory of Constraints for the first time through the book called The GOAL by the same author. In this best-selling book, Goldratt focused on the principles applicable in the manufacturing industry. Goldratt expounds on the principles set out in the GOAL in his latest publication, CRITICAL CHAIN. First, the author carries out a description of constructs of The Theory of Management. The book delves into particular phenomena applied in project management largely and compares the same to the real process of management. Measures of Project Success Goldratt puts together interrelated ideas that appear distinct through related processes in his Theory of Constraints. The processes and concepts include five focusing steps, performance measures, logistics, as well as logical thinking routes. Measures of Performance The scholar presents three important measurements of performance necessary for assessment during project implementation. They are operating expense, inventory, and throughput. According to Goldratt, it is significant to consider these three aspects as opposed to the traditional local evaluations that entail utilization and efficiency (Goldratt, 1997). To him, the three are global measures of operations. Enhancing throughput appears as the most important aspects presented by Goldratt. He defines throughput as the speed with which the system creates money through sales processes as opposed to generating money via production. In this case, he advises against considering goods as assets until the business company sells them. In earnest, he contradicts common accounting principles applied in the exercise of documenting inventory as an asset without considering whether it is sold or not. In the process, this develops a new accounting framework as an option to the existing models. The new framework replaces the common accounting measures and procedures. The sum of money put in goods intended for selling by a business company defines an inventory. On the other hand, it can apply to the material considered for conversion by the business organization into items that the same firm can sell. This leaves out the ideas of overhead as well as value-added. Similarly, operating expense takes into account money from the business used in transforming the inventory into throughput. Here, the business aims at decreasing operating expense and inventory while at the same time increasing throughput. This takes place in a way that enhances cash flow that is a global measure, increasing returns on investment, and profit. The business attains it target goal by decreasing operating expense and inventory as well as increasing throughput simultaneously. Scholars define this exercise as taking money in the present circumstance with a surety of the same in future. Professionals refer to anything that obstructs the business from achieving this target as a constraint. Constraints come in various forms including material, capacity, the demand referred to as the market, logistics, management policy, as well as behavior among many more. The Five Focusing Steps Goldratt developed the five focusing steps as a gadget to help businesses within the system to tackle constraints. Application of these steps aims at keeping on track improvement efforts towards achieving desired system-level improvements (Goldratt, 1997). Identification of constraints within the system is the first step, making decisions on ways to apply in exploiting constraints in the business is the second step while the third step entails providing adequate support to decisions outlined in the second step. Elevating the constraints follows the third while the fifth step constitutes going back to the first step if a constraint breaks in the fourth step. However, members ought to remain cautious to avoid using inertia to develop new constraints in the process. The whole practice aims at enhancing the output in the system. This is as opposed to a distinct component or unit. It is important for the system to identify the largest constraint of all existing ones. The five steps identified above by Goldratt entail an interactive process. This means that strengthening a constraint results in the development of the next weak link. Members ought to handle the constraints interactively. Ultimately, leaders realize that they are applying an ongoing system of improvement within the business organization. The Logical Thinking Process The logical thinking process introduced by Goldratt is in stages. This works in conjunction with his five focusing steps. A process of thinking is a crucial element that aids the process of isolating components that require change, resulting change products, and the ways of executing change. The thinking process constitutes gadgets used in problem identification, creation, and execution of processes. The effect-cause-effect diagramming and it constitutes are part of the tools for identifying problems. The components include the current reality tree, negative branch conditions, the prerequisite tree, the future reality tree, the evaporating cloud, the transition tree, and the effect-cause-effect audit exercise among many others. Using these tools helps the business organization to verbalize and evaluate the cause and effect within the organization. The concepts of identification, exploitation, subordination, elevation, as well as repeat apply in critical path management. The difference in this case is that the constraint changes to the critical path. On the other hand, processes are activities referred to by other experts as tasks. Goldratt introduces an additional aspect that considers the people. He refers to them as resources. They have the biggest responsibility of carrying out the activities. Abstracting a PER chart conceals the truth that one employee is an asset for multiple tasks (Goldratt, 1997). However, real constraints of projects entail the critical chain that puts into consideration the constrained individual referred to as the resource. This is tantamount to depending o information in the PER chart network more than any other thing. In effect, it gives room for enhanced determination of the real critical path. One of the best ways to improve critical success is through elimination of safety in the estimates of personal activities besides developing a combination of critical path safety occurring at the tail end of the critical path. Significantly, this action deals with delays that hamper completion of projects within stipulated time limits. Causes of Project Delays In his view, Goldratt puts forward three essential sources of delays in project implementation. First, the deadline effect that he refers to as the student syndrome. This explains ways through which people delay the commencement of a project until they have to. People create their buffer and apply them at the beginning of the project. The process is common on projects that people are not willing to carry out and does not affect those that people have serious interest as well as those that involve and animate them. Secondly, the issue of multitasking elongates all lead-times. Undertaking a project on part-time basis, the duration takes twice the time it would take to complete the same project if the involvement was on full-time basis. Overhead switching by a person from one project to another sets time for resources. The final source of the delay constitutes accumulation effect of delays that decrease the rate of progress. The process of delaying an issue in the critical chain results in the automatic delay of the project. However, early completion of a project in the critical path sets the stage for the commencement of the project on time. Early completion of projects means that they take place within the median estimates. This only applies without the effect of padded estimates. In entirety, project completion will occur at the earliest time as set. If completion is late, the organization should remove the overage from the initial critical chain using the term ‘used’. It also gives room for the organization to account for the unneeded safety, which in turn reduces the buffer within the critical path gradually. Generally, the size of the safety relates in a direct manner to the number of activities. This explains the complexity of the relationship between the critical path safety and the number of tasks (Goldratt, 1997). Busyness is another factor that prevents people from completing tasks on time. The only way people can become industrious is by getting involved in the critical path. It also requires the initiative of incorporating each other member of the project team into the critical path. This ensures that there are no delays in the process of project completion. Goldratt dismisses the traditional idea of staying busy. There are occasions when people stay busy on irrelevant things. In such situations, it will amount to wasted effort. In other circumstances, people decide to extend the project and complete within the specified time as opposed to early completion. They put measures to avoid mixing progress with activity. An Example of a project delay Certain activities that people do regularly may delay on other occasions. A case in point is getting ready for work in the morning. A person may have a good concept on the time estimates he takes on average for him to leave for work. It may be approximately one hour for the whole process. This entails waking from the bed, to preparations among them taking a shower, dressing, and having breakfast until the time he leaves the door for work. On a different occasion, the person may be very fast and takes thirty-five minutes on the lower side. However, no limits exist where there is lower and higher perspective. This means that on another day he may oversleep or slip in the bathroom and cause a delay of even one and half hours. Constraints in Project management The rise of these topics challenged the conventional status of project management. Each topic came with fresh concepts regarding management of projects most them appearing aggressive. The Theory of Constraints enhances concepts of operations in project management including among others ways of improving implementation processes, enhancing the entire institutional productivity, reducing reactionary measures to problems, and replacing them with cautionary alternatives arising from forecasts. Goldratt advances the idea of thinking in relation to implementation of a project as well as the environment process that facilitates project completion. The GOAL by the same author offers a foundation of concepts in addition to the theme-line witnessed in the Critical Chain. The difference between chain management and critical path method ‘Aha’ comes into action during this comparison. Characters employed by Goldratt in Critical Chain learn through discussion reasons for delays in projects as well as why they always exceed original budget estimates. Furthermore, they take time to consider why the same projects do not get to completion in the same effective way described at the start. The debate by characters centers on critical path versus non-critical path responsibilities, late start vis-à-vis early commencement, safety cushions in every duty, sources of conflicts during project implementation, erroneous measurement criteria referred to by other scholars as poor accounting techniques, and ways of negotiating with suppliers as well as subcontractors. In most cases, poor measurement methodologies lead to the development of false sense of proper implementation processes. Members of the project team get false satisfaction that the project heads in the most appropriate completion path. Lessons This is one of the best books available for people handling project management as well as those within project management teams. Goldratt identifies issues through relevant procedures and arranges his concepts in a chronological manner. Furthermore, I have the luck of having read the first novel by the author titled, The GOAL. This first book forms a good foundation for then Critical Path. The author interlinks issues from the first book and the second making his presentations superfluous. I recommend the book and the content within because I find very interesting and informative. References Goldratt, E. (1997). Critical Chain. Great Barrington, MA: The North River Press. Read More