How to Calculate a Real Growth Business Case based on CCPM - For a Breakthrough Change
Theory of Constraints EBITDA Throughput Accounting
How to Calculate a Real Growth Business Case Based on CCPM - For a Breakthrough Change
July 6, 2025
I hear so many change agents and managers complain about a lack of support from top management for the change ahead!
And in most cases, the top managers are simply right!
Why should they support a change if there is no business case? Why should they support those who want the change if they cannot explain why?
We have already completed over 42 Critical Chain (CCPM) changes - most of them very successfully.
And we have learned a lot about "how to calculate a business case" that really convinces top managers. This applies not just to CCPM but also to any other breakthrough change!
This guideline is based on over 25 years of management experience.
Executive Summary of CCPM
Critical Chain Project Management (CCPM) is a proven method for dramatically improving (agile/classic) project performance. Used by leading companies like Mazda, Bosch, Festo, Telefónica, and Endress+Hauser, CCPM is especially effective in product development and complex project portfolios. It is often implemented alongside lean and agile methods.
At its core, CCPM focuses on maximizing throughput and reducing lead time by:
- Identifying and exploiting the system’s main constraint (bottleneck)
- Eliminating multitasking, establishing full-kit readiness, and adjusting capacity at the constraint - which increases the throughput of the overall system and massively shortens time-to-market
- Introducing real-time prioritization using buffer management for fast operational problem-solving and long-term identification of processes
Typical short-term results include:
- 20–50% more output within weeks
- 25% shorter project durations
- No additional resources required
Long-term gains can be even more impressive:
- 100–300% output growth
- 50–75% reduction in lead times
- Increased innovation and resource flexibility
- A self-organizing agile organization
But to achieve this, you have to:
- Freeze (pause) 25% to 90% of the current activities so that the flow kicks in.
- Have a rough plan for the remaining initiatives that is updated daily - so everyone knows which project is the most critical.
- Everyone has to work together to get the most critical project done - with no silos, no local optimization, and completely different accounting.
So you see - you must have quite a strong business case - otherwise, top management will never buy it!
How to Calculate the Business Case for CCPM
You can evaluate the business impact of CCPM across two time horizons:
1. Short-Term Business Case (within 12 months)
1.1. Avoid Delay Costs
Reducing lead times directly eliminates unnecessary costs:
- Annual budget overruns - gone
- Post-launch quality issues due to rushed delivery - massively reduced
- Penalties for late delivery - gone
→ Add all avoidable annual delay-related costs to the Year 1 business case.
1.2. Increase Throughput and Sales
CCPM improves output at the constraint, allowing you to sell more without increasing operating expenses (OE).
To calculate:
- Estimate potential sales growth (% per year)
- Multiply it by current annual sales
- Subtract total variable costs (e.g., materials and licenses - not labor) from these new sales
- Calculate the resulting EBITDA uplift
For example, if you have €10 million in sales, you could sell 20% more (and can now deliver it), and the total variable costs are 50%, then you get a €1 million EBITDA uplift!
→ Add ~50% of this to the Year 1 business case
1.3. Accelerate Cost-Reduction and Improvement Projects
Typically, you can’t sell all the capacity gained due to CCPM - so you use the rest to complete more internal initiatives, such as:
- Cost-cutting programs
- Process optimizations
→ Estimate the projected earnings from these projects if they are delivered faster, and add the full amount to the Year 1 business case.
2. Long-Term Business Case (12+ months and beyond)
CCPM enables sustained improvements by using the freed capacity wisely (strategically).
2.1. Premium "Rapid-Response" Offerings
Faster delivery can justify higher prices or win new business.
To calculate:
- Estimate the extra volume sold due to faster delivery
- Add any price premium for speed
- Subtract total variable costs
- Calculate the resulting EBITDA increase
→ Add this to the long-term business case
2.2. Expansion into Emerging Markets
Newly available capacity can serve high-growth or high-price markets.
→ Estimate additional sales and calculate them as in Section 1.2.
2.3. AI Integration and Digitalization
Freed capacity can be used to integrate AI into workflows, especially at the constraint:
- E.g., faster request-for-proposal turnaround
- E.g., reduced documentation effort
- E.g., reduced manual effort
→ For effort saved by non-constraint teams, simply add these savings to the long-term business case
→ At the constraint, you have to calculate the additional throughput resulting from the reduced effort
New Throughput = 1 / (1 - Effort Reduction (%))
So, a 50% effort reduction at the constraint leads to a doubling of throughput.
→ Estimate additional sales and calculate them as in Section 1.2, 2.1, or 2.2.
2.4. Reduced Employee Turnover ("Brain Drain")
CCPM leads to better working conditions:
- Less burnout
- More engagement and innovation
- Less effort and fewer delays due to onboarding and training new people
To calculate:
- Estimate the cost of turnover (recruitment + productivity loss)
- Estimate the lost capacity at the constraint
→ Add the avoided lost throughput to the long-term business case (calculated as in Section 1.2).
2.5. Innovation Capacity
More time and capacity allow for experimentation and innovation:
- A higher-value product portfolio - increases pricing power
- New markets with higher margins
→ Calculate the expected sales uplift and price premium. Use the method from Section 2.1.
Summary: Business Case Structure
Overview of the elements of a bold growth business case
Final Note
CCPM delivers fast results and creates long-term strategic value. By effectively tracking effort savings, throughput gains, and market opportunities, companies can build a compelling business case that supports both operational excellence and scalable growth.
In medium-sized companies, such a business case can be in the range of €150,000 EBITDA/week - in huge companies, it can amount to €300,000 EBITDA/day.
The first step is a FlowScreening to roughly estimate the potential short-term gain in throughput and reduction in lead time - and calculate the one-year short-term business case.
The second step is to evaluate the long-term effects and calculate the long-term business case.
Along with the one-year short-term business case, this should be enough to make the decision to adopt CCPM (or any other bold breakthrough change) easy.
The short-term business case is intended to ignite the desire, and the long-term business case is the add-on that makes the change sustainable.
So, take the first step - use our free "Constraint Analytics Center" - everything you need to find the constraint, determine a valid potential throughput increase, and calculate a growth business case: