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Project performance

Posted By Chris Reay, Thursday, 25 September 2014

My interest and activities in the field of constraints theory over the last 15 years inevitably leads me to evaluate how its body of knowledge has impacted on industry. It was developed by the late Eli Goldratt, who described his reasoning behind developing the Theory of Constraints (TOC) was to help to teach the world to think more effectively. Perhaps the most resonant feature of TOC is that it simplifies complex issues due to the logical manner in which the thinking processes are applied.

Project management has had few really significant breakthroughs over the last 50 years with the exception of the applications of the TOC to the processes. Reviewing the statistics published by organisations that carry out this type of research indicates that the overall project failure rate (as defined by collective metrics) had not changed since the early 80s and has remained at a level of some 70%.  Indications are emerging that over recent years this may be starting to improve.

Projects essentially fail on the two main measures; costing well over original budget and finishing well beyond due completion date. In fact it can be said that there is no such thing as a project that meets its original cost estimate even though it may finish on due date. The challenges that arise in projects which require resolving normally face the inevitable conflict: finish on time at no increase in cost or finish at original cost with no increase in time.

TOC realized that until measures to address this typical conflict were created, the situation would not change. The thinking processes reviewed the assumptions being made and extent of the focus. The most interesting to me is that the changes that TOC proposes are of a human behavior nature rather than high-tech algorithmic solutions. When this difference is observed by the new-comer to TOC, the response is often “why all the hype, it looks like common sense to me”. Eli, is his characteristic way, would respond that the observation is entirely correct; the problem is that common sense is not that common.

Projects are once off activities and have not had the benefits of the production industry that has adopted the constraints theory to implement and practice the focusing steps. Touch time in projects is long whereas in production it is generally short. But both processes utilise the same fundamental rule of applying the focus onto the constraint, subordinating to it and making use of buffer capacity to meet the throughput requirements.

The evidence is now robust that the most effective project improvement that has occurred over recent times has been from the application of TOC methodology.

What can we learn from all this in the hoped-for implementation of the 18 NDP projects? It is apparent that whatever project approach one uses there is one endemic mistake made on so many projects today. That is, starting to construct before the design is complete, which is to me a culture driven by the bean- counter mentality that, in its ignorance, believes the project will finish sooner and cost less.

A quick lesson from TOC would propose the following: start activities as late as possible, ensure resources are available which includes design work, avoid multi-tasking with limited resources , cut the normal (over) estimated times back by 50%, allocate half to the task and half to the project buffer, start the activity on time and thereby run your project with safety in hand instead of losing it before you start.

The biggest concern I have for the NDP is the evident lack of engineering and project management capacity at the Owner’s team level. Will government, provinces and municipalities take this issue seriously and ask private industry to help with resourcing this?

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