A Critique of the Critical Chain Approach to Project Management

3782 Words Jul 19th, 2011 16 Pages
Course in Operations Management
ASSIGNMENT 1: “A CRITIQUE OF THE CRITICAL CHAIN APPROACH TO PROJECT MANAGEMENT”
3,000 words excluding reference list and summary

for Dr. Tom Mullen

Anthony C Mould October 2003

Reprinted with the kind permission of Anthony C Moulds. This essay should be viewed as an example of a well written, structured, referenced and argued assignment. It has been issued to MBA students on commencement of their studies, prior to submission of their first assignment.

1

EXECUTIVE SUMMARY

This report reviews the Critical Chain approach to project management as proposed by Dr Eliyahu Goldratt (1997). The approach is based on the Theory of Constraints (TOC).

The report finds the following:
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Goldratt holds that the main reason for project overrun is the creation and misuse of safety time which is applied to each activity in a project to protect against ‘Murphy’s Law’: “whatever can go wrong will” (Patrick 1999, p1). The three time estimates used in PERT and the weighted mean used in CPM, provides an incentive for individuals to overestimate times in order to increase the probability of the completion date being met (Rand, 2000). There are three main mechanisms which inflate project time estimates: the “worst case scenario” mentality, the addition of safety time by project managers and the addition of safety time by estimators to protect against management schedule cuts (Umble and Umble 2000, p2).

The “worst case scenario” mechanism relates to the fact that people make considerable provision for contingencies when estimating project duration. In general, there is little incentive for finishing an activity ahead of schedule yet often hefty penalties for finishing behind schedule. Rational individuals therefore pessimistically skew their estimations.

Furthermore, time estimations are often inflated, as managers at each level of the organisation add their own safety time on top of those of the initial estimators in an attempt to ensure personal deadlines are achieved. The greater number of management levels the greater the accumulated safety time.

The third mechanism whereby project time estimations may be inflated

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