Applying Theory of Constraints to Multiple Project Environment, Essay Example

Table of Contents

Relevance of Theory of Constraints to multiple project environment 1

1.0 Introduction. 3

2.0 The TOC.. 4

3.0 Problems. 5

4.0 Strategic recommendations. 7

5.0 Conclusion. 8

6.0 References. 9

List of figures

Figure 1: Multitasking (Source: Jacob & McClelland Jr., 2001) 6

Figure 2: TOC oriented project planning (Source: Rand, 2000) 7

1.0 Introduction

Given the halo of uncertainty surrounding the execution of projects, project management becomes one of the most challenging tasks to deal with. To manage projects effectively, project managers should make sure that each and every task in the concerned project is managed. The scenario of project management becomes much more complicated when managing multiple projects to be managed with availability of limited resources. However, the application of theory of constraints to project management simplifies tasks for project managers. Simplification of tasks in project management is possible given the facilitation of theory of constraints by which the managers can focus only on those that are important or critically identified. Furthermore, project buffers can be used for those sub-chain activities on the critical chain. This paper will evaluate the importance of applying the theory of constraints to multiple project management.

The roles of the following functionaries are vital to success of project management:

• Firstly, the project managers are endowed with the responsibility of maintaining the visibility of project timelines to reinstate the organizational commitment to customer satisfaction.
• Secondly, functional managers who manage resources and their allocation and are responsible for their distribution for various activities in the projects.
• Thirdly, the project resources that control the performance of projects and determine the outcomes of projects.
• Fourthly, the senior managers who leverage the project management team by judiciously resolving conflicts especially in within projects that share common resources. Managing capacity bottlenecks is also the concern of these managers.

2.0 The TOC

According to the theory of constraints (TOC), the core objective of any business is to generate revenue which is precisely the central principle behind the TOC (Rand, 2000). Using the above said principle objective, i.e. to generate revenue, the TOC aims to maintain organizational performance via three measures; firstly to create throughput, secondly to reduce operational expenses and lastly by reducing inventory. There is necessity for identifying where the constraints are located and where the constrained process-capacity bottleneck-is occurring and thus has to be reduced to least possible extent. Furthermore, if the bottleneck still persists, then all the other activities and tasks should be aligned towards subordinating the identified constraint. The management should realize that only the identified bottleneck is likely to grab the attention of the customer, therefore, the entire focus should be on that bottleneck. Further, Lenfle and Loch (2010) noted that there should be a synchronization of other activities to concentrate on the bottleneck so that the processes involving the bottleneck will not be piled up blocking all other processes. Alternatively, buffers or inputs can be made so that there would enough time to surpass the location of the constraint. Lastly, any action that is likely to cause elimination of the bottleneck should be undertaken the result of which is the improvement of the organizational performance overall.

According to Martinsuo and Lehtonen (2007), the theory of constraints assumes that there can never be an ideal situation within an organization where there is no constraint given the reason that in the absence of a constraint, the performance is likely to become infinite. The fact that organizational performance measured in terms of revenue generation is limited itself indicates to the existence of constraints which may wary from few to abundant number. Progress is also possible through exploitation of the constraints.

3.0 Problems

Although project managers monitor the timeline and progress of each project in the anticipated quality output, the problem is with resource allocation. Often there is improper allocation of resources mainly when more than one projects share common resources. Moreover, project managers do not have direct license to allocate resources because functional managers are assigned with the allocation resources even though they possess varying priorities (Killen & Kjaer, 2012). Resources are prioritized based on the efficiency measure of individual departments rather than considering the overall departmental efficiency.

Furthermore, the project resources that report to those functional managers are often measured on their own output, which again may not be consistent with the goals of the organization. This tends to sub-optimize departments, at the expense of the overall organization. There is also misconception amongst the managers who tend to think that achieving progress overall in most of the projects/tasks is better than focusing just on one. Hence, as Meskendahl, (2010) observes there is a division of attention with regards to multiple projects under the pretext of multitasking ability. The following figure demonstrates multitasking:

Figure 1: Multitasking (Source: Jacob & McClelland Jr., 2001)

As shown in the above figure, as the overall attention is generated and shared amongst the projects and this is labelled as multitasking. Due to division of attention of the resources between various projects, the whole cycle duration becomes dramatically increased and the tasks are left with lesser attention at the individual level. Thus, there will be progress only when each of the tasks is given enough focus to complete each in full manner and moving on further in the fulfilment chain. As can be seen from the above figure (figure-1), the total cumulative time expended for all projects by a resource is increased which stagnates the progress of the project. Incomplete status of different tasks results in lack of concentration at the individual level and consumes more time than needed because the focus is overall rather than segmenting it on individual tasks. Additional time is needed because the resource has to begin where it left with regards to an incomplete task.

In order to save time, managers begin tasks much before than the decided commencement which would be useful, however, at later stages they tend to set aside the progress presuming that the projects would stay on time. With such an attitude, managers are likely to set aside the incomplete tasks and switch to newer tasks instead. By setting aside incomplete tasks, the actual cycle time for an incomplete activity is magnified and at the same time the inventory burden is also increased. Due to increase in inventory levels, the role of the project manager becomes challenging and complicated. Therefore, tracking the progress of tasks has become a difficult job for senior management and hence the need for better leverage on task performance. As it is extremely counter-productive to execute tasks through divided attention of resources or to begin the work earlier than needed, the theory of constraints very much applies to project management in the sense that it relaxes the challenging task of project managers.

4.0 Strategic recommendations

The implementation of theory of constraints simplifies project management to large extent. For aligning project management in line with the theory of constraints, Rand (2000) suggested that there should solid planning process along with excellent communications systems. Safety buffers should be utilized and the project scheduling process should be aligned to suit the effective critical chain identified by application of TOC. There should be efficient work synchronization and tasks should be processed only when there are adequate resources available, moreover, the constraints identified should be prioritized while allotting resources. Multitasking is to be avoided. Efficient control systems that facilitate visibility of task/project progress should be employed to support timely decision making process. There must be changes in the organizational culture in that the behaviour should be oriented towards effective resource tasks and the human resources must be willing to work as per the schedule designed. The reporting mechanism should also improve in terms of accuracy. In brief, both the social and technical parameters within an organization should be transformed to suit the application of TOC. The following figure demonstrates a TOC oriented project management implementation.

Figure 2: TOC oriented project planning (Source: Rand, 2000)

5.0 Conclusion

For an organization to align itself towards the TOC environment for managing projects, it is important first of all to understand the process of change as there is a necessity for transformation from traditional project management scenario. The commercially available TOC implementation based software tools are there only to supplement a project manager’s role. From the setting of foundations of TOC environment to its full implementation, it can take anywhere between one to two years for preparation on the part of organizations, therefore, it is better to establish the foundations rather strong. The alignment towards the TOC environment requires project managers to imbibe new behaviours and an in-depth understanding of their individual roles. Clearly, the application of theory of constraints promises improved performance for project management which in turn contributes to overall organizational performance.

6.0 References

Jacob, D. B., & McClelland Jr., W. T. (2001). Theory of Constraints; Project Management. The Goldratt Institute.

Killen, C. P., & Kjaer, C. (2012). Understanding project interdependencies: The role of visual representation, culture and process. International journal of project management , 554-565.

Lenfle, S., & Loch, C. (2010). How project management came to emphasize control over flexibility and novelty. California management review , 32-55.

Martinsuo, M., & Lehtonen, P. (2007). Role of single-project management in achieving portfolio management efficiency. International journal of project management , 56-65.

Meskendahl, S. (2010). The influence of business strategy on project portfolio management and its success-A conceptual framework. International journal of project management , 807-817.

Rand, G. K. (2000). Critical chain: the theory of constraints applied to project management. International journal of project management , 173-177.