New Goldratt-fashioned approach saves project time, money

Countering the notion that most projects arrive late and over budget, customers of project management solution vendor Realization Technologiessay they can deliver projects on time—and faster. Testimonials delivered at Realization's first user conference—convened in the fall by the six-year-old company—credit a methodology developed by scheduling guru Dr. Eliyahu Goldratt and extended by Realization.

Project management is a major concern for companies that make complex products or conduct large maintenance, repair, and overhaul (MRO) operations. Due to increased pressure to improve output, the push is on for these manufacturers to improve project management efficiency, often with fewer resources.

At Murray Hill, N.J.-based Lucent Technologies' network switch division, Project Manager Paul Mandigo says that over the last three years, projects are being delivered, on average, 15-percent faster, while product development personnel are taking on 45-percent more projects each year. According to Mandigo, those improvements are critical for the telecom equipment manufacturer, which has weathered severe layoffs and an industry downturn since 9/11.

The results are similar at Washington, N.C.-based Hamilton Beach/Proctor Silex, whose new business strategy calls for outsourcing manufacturing—but not product development—and aggressively increasing the number of new product introductions. Paul Blankenship, director of product engineering, says the new approaches boosted product development activity from 38 to 50 projects over the past year. "We were able to get four toasters developed for Wal-Mart in record time," he notes.

Realization's Project Flow approach was modeled on critical-chain theories developed by Dr. Goldratt in 1997. Realization extended those concepts to prioritize, balance, and optimize activity for multiple projects in its Concerto solution.

In many ways, critical chain is the project management equivalent of finite scheduling, which is based on similar Goldratt concepts from a decade earlier. In place of traditional practices where elaborate project schedules are generated ahead of time, critical-chain approaches factor in constraints, using the project due date as the baseline. Another major departure is separating safety factors traditionally incorporated into task schedules. "By taking variability out of tasks and placing them in buffers, you can make project plans far more efficient," says Sanjeev Gupta, president and cofounder of Realization.

With a customer list of more than 100 clients, the company is growing at a 50-percent to 60-percent annual rate, according to Gupta. Foreseeing plenty of potential for future growth because "there is a huge market for efficient projects," he concedes there is one important hurdle. "The major constraint is cultural resistance to systematic management of projects."