Increasing value of projects by leveraging limited capacity through the application of the Theory of Constraints

This paper introduces the concepts of the Theory of Constraints as developed by Dr. E. M. Goldratt and others. When applied to a portfolio of projects, the value that an organisation realises from successful delivery can be maximised. A new value metric is introduced that effectively accounts for the flow of money in different time periods. An approach to portfolio management that strives for maximising organisation performance, given limited organisational capacity, is also introduced. Critical Chain project scheduling and synchronising projects around the schedule of a heavily loaded (drum) resource are used as the methodology of finite capacity management that enables leveraging value with scarce resources. A new set of buffers is introduced to enable the integration of portfolio management and Critical Chain scheduling.