Theory of Constraints

Two decades ago, Japanese car-makers developed several new manufacturing methods, including 'Just-in-Time'. Based on the theory that most in-process inventory spends most of its time in a buffer, waiting to be processed, Just-in-Time scheduling dramatically reduced inventory, which coincidentally reduced the amount of time it took product to move through a manufacturing plant.

In the 1980's, Dr. Eli Goldratt publicized the Theory of Constraints, which improved upon Just-in-Time methodologies, and in the 1990's, Goldratt adapted the Theory of Constraints to project management in his book "Critical Chain". Based on the idea that individual estimates of project time must be padded to allow for contingencies, Goldratt demonstrated that padded project time operates in the same manner as inventory buffers to delay projects.

It's Okay to be Late
The fundamental concept behind the Theory of Constraints is that elements of a project must be scheduled based on the average time they will take to accomplish, not the maximum time they might take to accomplish. A project buffer is placed at the end of the project, which allows for some activities to be late.

Of course, it's human nature to estimate time based on the worst case scenario, not average time to complete. As soon as people are penalized for estimating average time and then not meeting the estimate, they will revert to estimating the maximum time, and project schedules will again fill up with padded time estimates. Thus, in a project using Theory of Constraints, it is important that it is 'okay' to be late.

It may be hard to buy at first, but even though it's okay for individual elements to be late, Theory of Constraints project management makes it far easier to assure that the overall project is completed on time.

Last Planner

The Lean Construction Institute has developed an effective project management technique for construction called 'Last Planner System'. This is a deceptively simple system which involves having foremen (last planners) planning activities for the immediate future, using only two rules:

1. If it can't be done, then don't plan to do it.
2. If you plan to do it, then get it done.

These two simple rules, along with a similar set of rules for the period after the immediate future, have led to enormous productivity increases in construction. For more on this visit the Lean Construction Institute.

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