Is Due Date performance a good measurement tool in a multi-project environment?

Is Due Date performance a good measurement tool in a multi-project environment?

In a multi-project environment, your resources have to work on several projects simultaneously. This makes this kind of environment much more complex compared to a single-project setting with dedicated resources. The resource dependencies between projects dramatically increase the uncertainty factor. If Due Date performance is one of the KPIs in your organization, schedulers tend to increase their capacity and time reserve to overcome this uncertainty factor. This often leads to the increase of project costs and project lead times. Another damaging effect is Parkinson's law,?according to which "work expands so as to fill the time available for its completion."

This means that all the scheduled capacity and time reserve will be consumed regardless of whether it’s really needed or not.

In my view, Due Date performance as a KPI makes you slower and less efficient. I had an interesting experience with a client. The R&D department of a cable company was suffering because of long lead times and too high costs. We did an experiment for one year with the aim to decrease the project lead time. We reduced the capacity and time reserve in the projects by 50% and removed the Due Date performance as a KPI. Besides, we also reduced the number of projects (WIP) to the level necessary to avoid capacity constraints that block the flow of projects. We got the following results.

  • The average lead time of the projects went down from 12-18 months to 3-4 months.
  • The number of finished projects per year increased from 24 to 76.
  • In case a project had a delay, no resources were taken away from other projects to save its due date. So, sometimes a project needed 6 months instead of the 4 months planned. The R&D employees were enthusiastic and confident that they could decrease the capacity and time reserves dramatically. And what’s also important, no harm was done when a project was delivered with a delay.

Then a new COO came in. He told everybody: “Due Date Performance is the most important KPI”. The effect was devastating. Everybody started to protect themselves. Capacity and time reserve was back in the project schedules. Lead time went up and the number of finished projects per year dropped down. The R&D manager was fired because of the ‘poor’ results.

Therefore, this story proves that the Due Date performance is a not good measurement tool in a multi-project environment!

Menno Graaf

Managing Change, focus on establishing FLOW, from chaos towards predictability, process maturity

2 年

Hmmm, in E2O environments, it is still an important thing to know what your DDP capability is. Instead of blaming the KPI, let's see how we can create, as much as possible, single project conditions in multi project environments, and just get them projects done, using Epic Flow or other priority based project SW

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Georgijs Buklovskis

Business Consultant, Author, TOC Expert

2 年

And example hove management bias kills common sence

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Willem de Wit

Founder and Principal at Mobilé 4 flow & innovation

2 年

a revealing example, how KPIs can make or break your company′s performance!

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