We are fans of the Theory of Constraints (ToC). It is a wonderful tool for accelerating processes and reducing throughput times.
However, in some situations such as knowledge work, it hits some barriers.
Where the ToC Shines
ToC is excellent for production processes. And it works well in multi-project environments where all projects follow a similar process flow. In such cases, it makes perfect sense to identify the one bottleneck and increase throughput by expanding it.
Complexity in Multi-Project Environments: The Challenge for ToC
In multi-project situations with a highly diverse project landscape, it is somewhat more complicated. In our opinion, it is not practical to look for the one bottleneck here in these situations.
Here, we are dealing with internal development projects, digital transformation initiatives, process improvement efforts, client projects, implementation of ESG reporting obligations, AI Act compliance, cybersecurity, and the like.
These are all projects with a high proportion of knowledge work:
- They do not follow uniform or similar processes.
- They often require people from different departments with varying skill sets, working together in different combinations.
The Fallacy of the “One” Bottleneck
We have heard statements like: “In this case, management is the one bottleneck.”
If you take this point and focus on management, the logical conclusions would then be, for example:
- Limit the number of projects to what management can handle.
- Take measures to take the pressure off management – such as using one-page reports with no room for detailed discussions.
- Or perhaps hire another managing director to expand the bottleneck?
But what about the other bottlenecks, such as the overload in our IT, which is struggling with the many ESG, cybersecurity, and digitalization projects?
What about the overload in engineering, where teams not only handle client projects but also have to contribute concepts to the technical design phase of a new ERP system?
What about the overload in procurement, which is responsible for strategic make-or-buy projects together with engineering and IT, besides daily business tasks?
The list goes on and on.
In such a multi-project environment, there is no single bottleneck; we are dealing with dynamically changing and shifting bottlenecks.
An Alternative Approach: Launching Projects at the Right Time
In such a situation, we think it is better to establish this one simple rule instead:
A project should not be started as early as possible, but only when a team can be assembled that has the necessary skills and the time to take care of the project now.
(This does not mean that all resources should be “hoarded” for the entire project duration, but it should be ensured that the team can work on the project at least until the next decision gate.)
In this way, we avoid overloading employees and create a very important prerequisite for completing projects as quickly as possible. Combine this with avoiding micromanagement and empowering teams, and you will achieve amazing results.
The Digital Twin: A Solution for Dynamic Bottlenecks
This is exactly where a digital twin of a project portfolio organization can help you: A digital model of the total available capacity and all ongoing and potentially upcoming projects. Ideally supported by artificial intelligence, visualization, analysis and automatic reports for everyone.
The digital twin of the project portfolio allows companies to:
- Identify bottlenecks at an early stage: The digital twin shows which teams or individuals are at risk of being overloaded in the coming weeks or months.
- Take proactive measures: Reallocate resources, adjust priorities or postpone projects before bottlenecks lead to delays.
- Plan and manage more efficiently: By simulating different scenarios, it becomes clear how changes in the project landscape affect the overall organization.
- Avoid overload: The digital twin helps to ensure that projects are only started when there is sufficient capacity to execute them effectively.
Flexible Control for Increased Project Performance
The digital twin replaces rigid, static planning approaches with flexible, dynamic management. It enables us to efficiently manage shifting bottlenecks and prevent overload. This increases the performance of our projects almost automatically.
