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Critical Chain and Earned Value

In another thread in the Grouch Potato area, Martin Wartenberg asked . . .when I've tried to use [Critical Chain] in either construction or Aerospace where Earned Value is employed, I've hit a complete stop and resistance. Has anyone had any experience in trying to use buffer management in a earned value environment?

I thought it would be appropriate to move the conversation to Project Central.

Around April of 2000, a team of government and government contractors (chaired by representatives from the Air Force and Boeing) convened on this very topic. The initial outcome or their review was that there is no real inherent conflict between CC and EV. Thier initial findings can be found at the Critical Chain Project Management & EVMS Working Group website. Other firms associated with the study included Raytheon, Northrupp-Grumman, Proxicom, and Lockheed-Martin. Not all of these may have actually implemented CC, but they are apparently intrigued.

Success in merging the two approaches has typically been accomplished by treating EV reporting as simply a necessary condition of the contract, and use the data gathering of EV to satisfy that need. However, operational decisions and assessments of the health of their projects - the actual management of the project - are driven by buffer management.

Some open-minded folks in the EV-centric community of government work initially recognized the possibilities of using buffer management to apply a rigor to one of the fuzzier parts of EV practice - the reliance on relatively subjective "thresholds" for indication of the need to take corrective action. But as time has gone on, the trend (where both have been assessed) seems to have been to replace EV's supposed predictive tools (and other traditional methods of tracking their projects) with buffer management. This is supported by situations where the two systems occasionally show conflicting indications regarding project health that usually proved out that reality was in far closer alignment with the buffer management indicator.

Another government contractor, BAE Systems, a maker of training simulators for aricraft and other military systems, has publicly talked about their success with Critical Chain-based multi-project management and other applications of TOC thinking. Part of their presentation at July's TOC World conference talked about reducing project carrying costs by $400,000, avoiding unecessary expenditures, and providing a new level of confidence in the ability th bring their projects in on or ahead of schedule.

They did not let EV requirements stop them from using CC to achieve these accomplishments.

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