My book review is on Eli Goldratt’s book, Critical Chain: A Business Novel. Goldratt’s story centers on a college professor, Rick Silver, who teaches project management to EMBA students. He’s nearing tenure and financially strapped at a time when the college president decides to abolish tenure until she gets the school back on a growth trajectory.
The author is an Israeli physicist who developed the Theory of Constraints (TOC) and other related project tools. The premise behind TOC is that we need to identify the bottleneck in any process and manage the process by making sure that no other work keeps the bottleneck process from moving as quickly as it can.
In this book, a group of students work with the firebrand professor to explore ways of improving the process of project management. One result of their work is a better understanding of how and where buffers need to be inserted in the project schedule for maximum benefit.
Frustrated in their real worlds by the impact of delays on the critical path when resources have limited capacity, the class collaboratively creates the critical chain method of managing projects. The critical chain is the shortest path through a project when adjusted for resources that have limited availability.
The book is fun to read and offers a few takeaways that I found helpful:
- We need to question our assumptions.
- Using TOC, there is typically only one constraint at a time. And that is where we put our focus.
- Using traditional scheduling approaches, a delay on any activity typically passes through as a delay to the project. Finishing activities early doesn’t typically result in earlier completion of the project.
- Using the critical path method, the team determines that it needs to put a “feeding buffer” in place at every entry point on the critical chain. Then, it needs a “project buffer” at the end. A resource buffer is used to address delays from unavailable resources.
- The students found that on non-critical activities, eliminating due dates improved performance. They also improved performance by frequently asking for expected completion dates.
- In our efforts to manage projects frugally, we need to remember the cost of delays. Project managers and sponsors should calculate the actual cost of a month-long delay on each project. Sometimes it makes sense to spend extra money to accelerate progress.
- Towards the end of the story, Prof. Silver was asked about ways to evaluate project investments. The conversation centered around the weaknesses of the payback period and net present value but did not offer a solution to the problem of balancing time, money and investments, which are all measured differently. (Money – in dollar; Time – through days; Investments – in dollar/days)
As you can probably guess, Silver makes quite a name for himself by impressing the companies that have placed students in his class, and by doing so, is finally granted tenure.
Thanks for reading.