Step 1: Laying the Foundation
Reducing Work in Progress
The foundation of efficient multi-project management lies in recognizing and addressing constraints. Constraints can be real, such as limited resources, or virtual, representing critical project phases. Identifying these constraints is the first step in setting the stage for streamlined multi-project management.
In practice, there is typically one constraint that stands out – if you focus on not overloading this, all the other constraints will disappear. In project environments, this one constraint is, in most cases, the previously mentioned virtual constraint – a critical project phase. This approach is based on the “Theory of Constraints” by E. Goldratt and used successfully all over the world by market leaders.
A critical concept in this step is adjusting the virtual drum’s capacity to ensure optimal resource availability for all projects. The virtual drum is a metaphor for the one constraint – the master pacemaker for the whole project organization. By making the constraint synonymous with the virtual drum, you are ensuring that all projects are aligned with it.
The concept of the “drum buffer rope” shown here actually comes from production and cannot be applied 1:1 to projects. However, it illustrates the clocking bottleneck nicely.
The primary goal of this step is to reduce work in progress. Due to the well-known “Little’s Law”, excessive work in progress leads to prolonged project lead times, and as a result, frequent disruptions and a cluttered and chaotic workflow. Little states that the project duration (lead time) is directly proportional to the work in progress divided by the output.
One of the remarkable outcomes of reducing work in progress is a substantial effect on lead time – a reduction of 50% of work in progress immediately results in ~50% decrease of project duration. This is valid, especially if you suffer from an overloaded constraint.
In practice the effects are even bigger. The work-in-progress reduction also leads to multitasking reduction, an issue that plagues many organizations. You can significantly enhance productivity by addressing multitasking. Reducing multitasking not only leads to a more focused and efficient workforce, but also helps minimize errors, thereby improving the overall quality of project delivery. Less multitasking, fewer mistakes, and better synchronization – this all leads to a reduction of the effort in the constraint and, due to Goldratt’s Law, leads directly to an increase in output – which, in turn, leads to another reduction of project lead time.