Lean Project Management - Term Paper Example

Lean Project Management (LPM) Lean Project Management Overall Introduction A successful delivery of a project comprises a leadingsystem with people, product and process. The efficiency of the project is dependent on the effectiveness in defining the environment and related projects. This paper comprises of three sections. The first section discusses principle three; chartering process and the problems that are avoidable when a good charter is used. The second part discusses the project buffer while the third part gives a detailed explanation of capacity constrain buffer. Project Charter Introduction A project charter describes the project and its approach giving the list of all the stakeholders. This is forms a critical component on the initiation of project management and the planning phases. The charter is normally referred throughout the project lifecycle. Starting a project requires definition of what the project is required to accomplish. A project starts with an idea them the vision that must be associated with the vision of the business. Project charter acts as the starting point where it established the foundation of the project. This must include the business needs and the deliverables to be executed. All the stipulations must be tied up to roles and responsibilities of the project development team. Human and material resources must be well defined (Goldratt, 1997). Often, an organization must put more efforts in estimation of the cost of the project in the chartering stage. The risks affecting the projects are also considered and their effects to the duration and cost of the project evaluated. The benefits and cost estimates must be supported using consistent approaches which provide realistic estimates for both costs and benefits. The establishment of the vision of a project in accordance with the project charter facilitates the success of the project. The project charter must corresponds to the business case put across to demonstrate that the project is viable and will assist in achieving the financial, employee and customer goals. The project chartering phase allows for establishment of an effective process that identifies and resolves various issues and actions that arise during the project development process. The chartering process forms the first step in execution of Lean project (Leach & Lawrence, 2005). The examples of three kinds of problems that can be solved through using a good project charter include delayed decision making, lack of authority and approval, and scrutiny, delay and bureaucracy. Decision Making Delays Getting the sponsors and management to sign is normally difficult. Only one person is required in championing the project and passing it around. A good charter must be in a position to offer a written documentation that efficiently approves the launch and the requests of the efforts in project planning. Furthermore, the documentation of the project charter allows for collaboration of the major stakeholders and improves the deliverables. This must fairly represent the views of major parties involved and affected by the requests of the project. Though the charter is not a legal document, it must have a reasonable representation of anticipated benefits and the estimated efforts in fulfilling the requests. Therefore, the delays in making decision during the development of a project can be solved through use of a template for the organization and the content. The template may contain the description of the tailored organization based on complexity, request and size of the project. The lessons ad best practices learned from previous projects may be used in enhancing the project development template (MacAdam, 2009). Getting Approval The first thing in project developed is to get an approved project charter. Failure of getting a charter means that the project development process must be discontinued or the developer must develop a charter. Thereafter, the developer must ensure that all stakeholders agree with the terms and conditions. When the stakeholders fail to agree with the charter, then the success of the project becomes derailed. Charter acts as an authorization to the project leader. Apart from other several things contained in the project charter, one thing that is considered of paramount importance is the authorization to plan for the project. A project can arise in a unique way. For instance, when responding to the customer specifications, a good definition of the project scope is necessary to control the changes. The way out for good adage is regular reading of the contract. The project manager may be faced with difficulties in assigning the resources. This may create dissatisfaction and apathy among the project team (Goldratt, 1997). Based on the organization’s process of initiating a project, the project charter should be passed by the appropriate parties before the project planning process is launched. All project charters should be maintained in the project office’s project archives Scrutiny, Delays and Bureaucracy A project may be faced by considerable number of deviations and changes that increase the risks of not delivering and achieving the goals of the project. This may finally become a financial problem to the organization. A good project charter must concisely and clearly communicate each of the major elements of request benefits-goals and associated risks and issues. Based on the information during the time of creating the charter, such elements must be described clearly in details and quantified where possible. Use of project assumptions in most cases enables quantification of the benefits, timing and the costs. The project charters may contain unclear elements that cause contention and changes during the planning and execution of the project. Conclusion In conclusion, a good project enhances achievement of all the set goals while honoring preconceived constraints. This reduces the challenges of decision making delays, getting the project approvals and delays on bureaucracy and delays. Lean Project Buffers Introduction Buffers are commonly used in managing variations as well as putting appropriate controls in place. The four main buffers used include feeding buffers, cost buffer, capacity constraint buffer and project buffer. Buffers help in distinguishing critical chain methods from critical path methods and help in effective management of common-cause variations (Ballard & Iris, 2012). Project Buffer This is a time buffer normally at the end of project critical chain. All chains of the project tasks should merge before project buffer. Lean Project Management (LPM) contains only one buffer. According to Eli Goldratt, the inventor of critical chain theory, the sizing duration for the tasks within a project through taking of normal task estimates and reducing them by half, then adding the project time buffer is equivalent to the total time of the tasks in the critical chain. Therefore, project buffer is about a third of total project time, which is normally less when there are gaps within the critical chain (Goldratt, 1997). PERT model in 1950s became the first one to account explicitly the variation of the tasks. The PERT model uses both pessimistic and optimistic estimates of the duration of the tasks and costs in estimating the standard deviation and mean for every task. The method assumes that standard deviation forms the major difference between pessimistic and optimistic estimates. A method applicable to square root of sum of squares (SSQ) for the differences is used in estimating the standard deviation for the sum. This is recommended to be used with normal distribution tables in estimating the total duration for the costs and probability, as well as in sizing the most appropriate buffer. The buffer sizing can also be achieved using the statistical basis with two estimates for task duration; low risk and most likely estimates. The LPM does not involve specific assumption on number of standard deviations for two numbers. Rather, it assumes that same number of the standard deviations is required for the ranges in task estimates. The only difference between the estimates is uncertainty, ui in the task estimate. The SSQ method is expressed as: Variation Buffer = √Σn ui2 (n is equivalent to number of tasks in the critical chain). The bias in critical chain can be easily accounted by SSQ method to size the buffers and minimum buffer size of the project comprising of 25 percent of critical chain. Continues method supports the proposed Goldratt method developed originally that account for half of the total duration of tasks within the chain (Goldratt, 1997). The buffer sizing in LPM recommends for the statistical logic normally used. Two statistical facts for sizing include: Variance of schedule path is equivalent to the sum of variances for all elements Central Limit Theorem states that collection of samples tends towards normal distribution irrespective of shape of the distribution for the individual samples. Therefore, LPM must use the cost duration and mean estimates as baseline for the estimation of tasks. This is because mean is the estimate that is only unbiased for determining the sum along the project path. These techniques have their bias corrections relative to the mean of the task estimates on the path, or total sum of elemental costs for the project. The sum is substantially lower than that of pessimistic estimates within the basic critical path. Usually, real projects consist of hundreds and thousands of activities. Largest project may contain thousands while schedule and cost buffers may be estimated through use of variance pooling method. Use of PERT, SSQ and LPM buffer sizing method gives a similar general behavior of the decreasing value for the total variation and the increasing size of the project. The SSQ, Monte-Carlo and PERT methods of buffer sizing reduce relative buffer size as the tasks increase in number. This shows that large projects have high likelihood of coming into time and budget and model trend aims at improving the success of the project. Nevertheless, real project data indicates that the success rate of a project decreases as the project increases in size. This indicates a negative correlation for the success of the project as the size and opposite effect are predicted using the SSQ, PERT and Monte-Carlo method. Most projects over 10 million dollars can be considered unsuccessful. However, the predicted trends by the three models may not be a real reflection of reality. This discrepancy can be considered as a bias for project performance since the three models assume task variation is free from each of the task. This may not always hold true since tasks can overrun the estimates. The effects of the bias add linearly as the square root of the total of the squares. Therefore, buffers can be sized using below formula (Ballard & Iris, 2012). Project Schedule Buffer = Variation Buffer + Bias Buffer Variation buffer uses the SSQ method as illustrated above to estimate the bias for the projects that lack historical data. Conclusion Normally, a project buffer will come at the end of a project network between the completion date and the last task. It is clear that any delays on longest chain of the dependent tasks consume the buffer but leaves completion date unchanged. For most project environments, project buffers are effective in project LPM but most sophisticated project organizations may find it hard to adopt the method as they can perceive it as being too simple. Capacity Constrain Buffer Introduction This is a kind of buffer that ensures that resource with the greatest demand to supply ratio in all projects has sufficient capacity to accomplish all the work in time allocated. Due to low demand to supply ration, the capacity is normally excess than the loaded resource. Excess capacity is required in the system that has variation so as to limit the waiting time to avail the resources when required. The capacity constraint buffer is used in determining the data the projects start within a multi-project system. The queuing theory helps in predicting performance of the waiting lines for different situations. This starts from store check outs to the waiting calls in telephone exchanges. This helps in understanding the tasks within a project that wait for the resources. The simple queuing theory enhances the prediction of the non-intuitive results that contributes to overrunning of schedules in many projects. Many people tend to assume that when the average rate of process is equivalent to average time of arrival of the tasks, waiting line is eliminated (Goldratt, 1997). Fig 1: Utilization of the server as the queue approaches Utilization of one implies that the average arrival rate is equivalent to average processing rate. The line awaiting service lies far from zero and grow to infinity as the wait time increases indefinitely. In the actual systems, the time taken for the line to grow is normally short. From the figure, a small utilization extends the line to an excess capacity. Therefore, the average waiting time must be four times higher than duration of the tasks. As a result, the capacity constraint buffer requires about a quarter of the system project flow accompanied by very little work in progress (Goldratt, 1997). The sizing of capacity constraint buffer involves trade-off between the project throughput and the duration of the project. The reduction in the capacity of the buffer from 50 percent to approximately 17 percent increases the duration of the project by at most 22 percent. Such kind of behavior follows the queuing curve. The reductions of the capacity constraint buffer results in significant impacts in variation of the duration of the project. For a single project, the capacity constraint buffer can be implemented to allow for availability of the resources that are highly demanded at availability that is less than the actual one (MacAdam, 2009). For instance, the availability of 10 workers may be entered in the resource table as nine. The implicit capacity may be used for the capacity constraint buffer through planning of the consecutive actual deployment of the resources. The resources can be scheduled in such a way so as to create the effect of the capacity constraint buffer. According to the theory of constraints developed by Goldratt in 1984, every system must compose a constraint failure to which the output would go to zero or increase indefinitely. Therefore, the basic principle was for every system to have a constraint and the system results were only achievable through improving the results of the constraint. The constraint acts as the bottleneck by limiting the flow throughout the system (Goldratt, 1997). Therefore, a constraint server works well when the system constraint is identified as it forms part of the system and limits its objective. The bottleneck constraint must also be identified in production environment. Then, the constraint must be exploited by ensuring its maximum use. If the constraint is a machine, then it should be put in constant use by ensuring continuous operation. Everything else must be subordinated to the constraint. After identification and exploitation of the constraint, planning decisions must be in such a way to enable the constraint work well without any challenges. Thereafter, the system constraint must be elevated to enhance the achievement of the objective of the system. This requires a larger investment in resources and effort. In case the constraint raptures, the project developer should start from the initial step since the system constraint may change with increase in capacity (Ballard & Iris, 2012). Conclusion Regardless of whether the organization is undertaking one or multiple projects, there must be consideration for capacity constraint buffer to avoid overloading critical resources on one project leading to delays inn queuing. Overall Conclusion A lean project development process requires constant vigilance in order to maintain as well as improve its operations. The chartering process must therefore ensure appropriate charters that eliminate the obstacles that tend to appear when pursuing a lean environment. To avoid fortuitous events, perfection must be sought carefully and this makes the project development cycle efficient. A project chartering phase enhances the establishment of effective process that defines and resolves project related issues. Therefore, a good charter must be in position to eliminate delays involved in making decisions and enhances the acquisition of the project approvals. On the other hand, buffers have been identified to manage variations in projects by putting into place appropriate controls. The project and capacity constraint buffers reviewed in the current paper distinguishes critical chain methods from critical paths methods and help in managing the common-cause variations in projects. References Ballard, G., & Iris, T. (2012). Lean Management Methods for Complex Projects. Engineering Project Organization Journal 2(1-2), 85-96. Goldratt, E. M. (1997). Critical Chain. Great Barrington, MA: North River. Leach, L., & Lawrence, P. L. (2005). Lean Project Management: Eight Principles for Success. Boise, ID: Advanced Projects. MacAdam, T. (2009). Lean Project Management Slashing Waste to Reduce Project Costs and Timelines. Newtown Square, PA: Project Management Institute. Read More