In the world of project management, things go wrong! This is an inherent characteristic of schedules. This is why good project managers will list and track risks associated with activities and the project. Still, it is difficult to find all the risks that may be hidden within the project schedule. This is why some project managers adopt the practice of adding a time buffer to their schedule.
Yes, in much the same way a management reserve or contingency reserve is included in a budget as a line item, project managers can include a time buffer as a line item in their schedule. So time buffers are a generally accepted way to account for unknown unknowns in the schedule. If you do not practice line item time buffer usage you most likely are unwittingly hiding time buffers within your schedule anyway.
This article discusses schedule time buffers and the practice of making schedule time buffers visible. It is important to note that this is just one tool in the project manager’s arsenal.
The jury is out as to whether a time buffer can be hidden or should be visible. Definitely for time and material projects it does not make sense to hide your buffer as you are guaranteed payment for your entire time spent of the project. But for fixed price contracts, where you commit to a fixed project cost and a hard delivery date, a hidden buffer may be appropriate. Generally, in a fixed price contract you do not show your profit margin, and this is acceptable standard practice. In the same way it should be acceptable not to display your schedule time margin for the project finish date.
If a visible time buffer is not used, as described above, you most likely are hiding time buffers in your schedule. For instance you may be exaggerating the time and cost estimates of individual activities. This is known as padding the activities. Padding is adding time and/or cost to an activity to provide a conservative estimate of the activity time and/or cost goals. So padding activities is one of the main forms of hidden buffer within a schedule.
Another is going pessimistic. When duration three point (optimistic, most likely, pessimistic) estimates are provided, you use the most pessimistic values to produce a conservative schedule. Again, this is a form of hidden time buffer. Others, include, ignoring learning curves or introducing ramp-up or mobilization factors.
Although, it may be legitimate to hide buffer on a fixed price contract, it is recommended that you always make your buffers visible. It is generally accepted practice that project managers can own time buffers to help adjust for unforeseen events.
Again, management reserve for budgets is a widely accepted practice. It is not much extrapolation from here to include time budget contingencies. Visible time buffers also promote transparency and openness on a project between the project manager and other stakeholders. Your use of visible buffers also encourages your project team members to be open and truthful about their own time buffers.
Your goal should be to optimize your schedule to achieve cost and time objectives in a timely and efficient manner. Then you may concentrate a safety margin at the end of the project chain and use only when risk materializes.
The project buffer is one element of the critical chain method that considers the effects of resource allocation, resource leveling, and activity duration uncertainty. The resource leveled project is known as the resource constrained critical path. Add time buffers and you now are employing a critical chain method to your schedule. An example critical chain is displayed in Figure 1.
In this figure note the last activity named Buffer. The original duration of this buffer will decrease as other activities on the critical path are delayed or take more time than planned.
Projects that do not utilize visible buffers most likely have hidden buffers in the form of padding, pessimism, constant production rates, and ramp-up factors. Although hidden time buffers are generally accepted for fixed price contracts, even then it is recommended that you optimize your schedule and include a safely margin visible time buffer at the end of your project. This transparency will result in better relations among stakeholders and other team members.
The critical chain is the resourced constrained schedule with the addition of a time buffer. During project execution, the buffer is gradually consumed by activities that take more time than originally predicted by the critical chain method.