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This Focused Performance Weblog started life as a "business management blog" containing links and commentary related primarily to organizational effectiveness with a "Theory of Constraints" perspective, but is in the process of evolving towards primary content on interactive and mobile marketing. Think of it as about Focusing marketing messages for enhanced Performance. If you are on an archive page, current postings are found here.

Thursday, January 22, 2004

Estimates and Buffers in Critical Chain (Part 1 - Why Buffers?) -- Over in APICS' Constraint Management SIG (CMSIG) discussion group (sadly, no web archive available), there's been an interesting discussion on estimates and the determination of buffer size for use in Critical Chain Schedules. On the surface, this can be seen as yet another discussion of the minutiae of a process that is meant to free us from worrying about minutiae. On the other, it can also be seen as an honorable exercise in understanding our preferred and proffered processes in an effort to improve their utility. I see it as an important discussion among TOC/Critical Chain practitioners who help to implement the approach in the real world, especially due to some recent comments from Eli Goldratt on the subject and the potential impact of those comments. But more about that later.

Buffers are the means of explicitly stating the uncertainty involved in a project in terms of impact on schedule or budget. The most common use of the terminology in project management is in the Project Buffer and Feeding Buffers found in critical chain schedules. Feeding Buffers are about protecting the critical chain/path from interference or delay from "non-critical" tasks -- to help "keep the critical critical." and to protect the project promise from the delays associated with integration of activities. The Project Buffer is meant to describe the anticipated range within which a project is expected to be complete, given the understanding of the project at the time of planning (or re-planning). The outer limit of the project buffer is often interpreted as a reasonable "not-to-exceed" promise. The greater the uncertainty associated with the work laid out in the network of project dependencies, the larger proportion of schedule duration we would expect the buffer to occupy.

Depending upon how estimates are derived -- in most cases through a bottom-up, 2-point range estimating process -- they provide the primary basis for sizing buffers. In the discussion I refer to above, Larry Leach, author of Critical Chain Project Management and PMI's frequent Critical Chain trainer, points out that by allocating some of one's estimate to a common buffer,...
A portion estimating the mean goes into the network, and the rest goes into the buffer. Since much of the buffer adds [in a statistical manner], the total buffer will be significantly less than the amount removed from the tasks...simple math. The more you move [from the tasks] to the buffer, the larger the buffer, and the shorter the overall plan.
In this way, buffers are not unlike an insurance pool that, in the aggregate, requires cumulatively less contribution from the individual components to protect against risks that would impact the schedule as a whole. The amount of "safety" needed to promise a project at the same level of confidence is less if the pool did not exist; less than if the safety was spread among the tasks. Larry continues...
If people get hung up on the duration used in the plan part [the network of tasks], they aren't getting it. No matter what number you use there, the probability of that exact duration is exactly the same as any discrete duration number: exactly zero. [...] The only stupid manager is the one who would present any estimate without a buffer. Because, if they promise to make it without a buffer, then I know they are sandbagging, and their estimate is much higher than it needs to be.
One of the major benefits of making promises based on such buffered schedules is that even if details of later aspects of the project are not perfectly clear at the time of planning and promising, "good enough" assessments of that lack of clarity can often be made, and explicitly laid out in the project's plan and schedule. Another benefit is the ability to use the buffers as the basis for assessing the health of project promises without the artificial priorities and undesirable effects that come from relying on task due dates for such purposes.

There are three commonly used approaches to sizing buffers in critical chain schedules. They will be the topic of the next part of this series.

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