The Critical Path Method (CPM) in Project Management

Revision as of 07:58, 13 September 2016

According to the Project Management Institute (PMI), project management is the application of knowledge, skills, tools and techniques to project activities in order to meet project requirements and objectives.^[1] The challenging task of managing projects can be supported by an operation reserach technique called the Critical Path Method (CPM). The CPM is a mathematically-network based algorithm in which can be used for planning, scheduling and monitoring project progress. ^[2]

The technique developed in late 1950s uses information from a work breakdowm structure (WBS) in a network representation to display interrelationships and dependencies between project activities that must be accomplished to complete a project. The technique is used for analyzing projects by determining the longest sequence of tasks through a project network, called the critical path. This determines the shortest possible time to complete the project as well as which tasks or activities should be of extra focus in the project. Furthermore, based on acquired information from the CPM, the next question could be if it is possible to shorten the project in order to finish within certain deadline. ^[2][3][4]

The article includes brief introduction and background of the CPM method in project management together with the methodology behind it. An example of the method is carried out step-by-step and a solution is presented. Following is a discussion on time-cost trade offs in project acceleration together with an example of project crashing. Lastly, the article ends on a brief summary on the benefits and limitation of the CPM method within the field of project management.

Overview

Introduction

Organizations across the world and within different sectors have been using project management as a way to improve project results. The increased awareness and acceptance indicates that the application of knowledge, skills, tools and techniques can have significant impact on project success.^[5][1]

Figure 1: The Project Management Iron Triangle ^[6]

According to the ISO 21500 a project is defined as a “unique set of processes consisting of coordinated and controlled activities with start and end dates, performed to achieve project objectives. Achievement of the project objectives requires the provision of deliverables conforming to specific requirements.” ^[7]

Each and every project is carried out under certain constraints. The most traditional ones, the three constraints of cost, time and scope represent together the iron triangle of project management, which can be seen in Figure 1. Each constraint forms the vertices with quality as the central theme and all together it indicates that projects must be delivered within agreed time and cost and furthermore to meet the agreed scope and customer quality requirements. The three constraints are closely linked and changes to one of them will likely affect the others, or impact the quality of the project. This emphasizes the importance of project management and that the area is challenging and not at all easy to deal with.^[6][8]

Project management is accomplished through the appropriate application of five processes: ^[1]

1. Initiating
2. Planning
3. Executing
4. Monitoring and Controlling
5. Closing

Each and every organization can be involved in a project of any size, duration and complexity level at any given time. It is notable that project planning, scheduling and monitoring is a major part involved in project management. Therefore the critical path method (CPM) can be of good support within the challenging process of managing projects and helps those involved to address questions such as:

• What is the (minimum) total time required to complete the whole project?
• What are the (earliest and latest) start and completion times for individual activities?
• Which activities are critical and must be completed on time in order to complete the whole project on time?
• How much delay is tolerated of non-critical activities without impacting the overall project schedule and project completion time?
• With cost information on each activity: What is the least expensive way to speed up a project to meet a targeted completion time?

All these questions are valid and important to have under control when managing projects.

Background

The critical path method (CPM) is a mathematically-network based project modeling technique developed in late 1950s in order to plan, schedule and control large, complex projects with many activities. CPM is one approach of network techniques that has been widely used and was developed by a DuPont engineer Morgan R. Walker and a Remington Rand computer expert, James E. Kelly, Jr. to manage plant maintenance and construction work. Furthermore, a critical path network technique developed simultaneously and independently from CPM, called PERT (Program evaluation and review technique). PERT was developed by the U.S. Navy for managing Fleet Ballistic Missile (Polaris) submarine project and is commonly used in conjunction with CPM and and the two optimization techniques are ofen referred to collectively. Today, there exists project management software packages in which are based on these two techniques, for example Microsoft Projects.^[4][9][10]

The CPM technique has been used for many different forms of projects including construction of a new building, bridge or a road, construction of IT-systems, building of ships and research and development of new products. All these projects consist of multiple activities or tasks that have to be completed in order to finish the whole project. Furthermore, some activities are independent and therefore cannot start before other activity has been completed and so on. The ones who manage projects have to deal with multiple challenges within planning, coordinating and monitoring these activities in order to complete the project of interest successfully within agreed time, cost and scope and according to customer quality requirements.^[4]

Application and use

Methodology

The following input requirements are needed in order to construct a network model of the project of interest: ^[2]

• A list of all activities or specific tasks required to comlete the project also known as the work breakdowm structure (WBS)
• The duration of each activity for completion
• The dependencies between the activities

With this information, the critical path method is able to determine the longest path of activities through the project network, defined as the critical path and the corresponding activities are defined as critical activities. Based on the fact that the entire project cannot finish until all the activities are completed, the longest path or the critical path gives also the minimum required time to complete the entire project.

The critical path is of great importance since all critical activities must be completed as scheduled in order to meet the scheduled project completion time, that is, if an activity on the critical path is delayed, the project is delayed by the same amount of time. This is due to the fact that the activities on the critical path have a zero slack. Slack (SL) is defined as the amount of time an activity can be delayed without delaying the whole project. Therefore, project managers need pay close attention to the critical path activities in order to ensure that they are not delayed and therefore put the entire project in risk of being late.

The sensitivity of a project network is aligned with the number of critical or noncritical paths. A network is considered sensitive when it has more than one critical path and/or non-critical activities with little slack and therefore, it is considered more likely that the original critical path(s) will change, once the project has started. On the other hand, a network is considered insensitive when it has one critical path and noncritical activities with very large slack, and therefore less likely that the critical path will change, once the project has started.

It is important to note that the methodology is normally not applied to real large scale and complex problems with many activities, since developing the project network and applying the technique can be extremely time consuming. Today, there exists project management software packages based on the methodology in which are used to calculate all completion times based on an input. The programs are further able create a visualization the whole project network in which is used to ease overview and understanding as well as supporting the monitoring of the project as a whole. But the methodology can easily be applied manually to smaller problems and that will be the case here.

Figure 2: Activity Notation in a Project Network ^[2]

• ID: Identification code of individual activity
• DUR: Duration time of individual activity based on the WBS
• Early Start (ES): The earliest starting time of an individual activity
• Early Finish (EF): The earliest finishing time of an individual activity
• Late Start (LS): The latest starting time of an individual activity
• Late Finish (LF): The latest finishing time of an individual activity
• SL (Slack): The tolerance of delay of an activity without affecting imposed completion date

The network computation process involves drawing the project network by placing the activities that need to be completed in the right logical sequence based on their interdependencies. The methodology involves the two procedures of forward pass used to compute earliest times, ES and EF, and backward pass used to compute latest times, LS and LF. ^[2][11]

Forward Pass

Forward Pass begins at the initial activity and traces each path through the network step-by-step, to the end of the last project activity/activities. An important rule of the forward pass prodeadure is is that all immediate predecessors must be completed before an activity can begin. That is, ES of an activity equals the largest EF of the immediate predecessors.

For the starting activity of the network, ES = 0 (or some other known value) and EF = ES + DUR is applied to all activies in the network. When finished, the longest path denotes the project completion time for the plan, that is, largest EF = Total Time.

Backward Pass

Backward Pass is initiated after the forward pass has been compleated and starts with the last project activity/activities without successors and the LF is set as equal to the maximum EF for those activities. Note that in cases where imposed project duration deadline exists, that deadline is used instead as LF. An important rule of the backward pass is that an activity can start the latest time, only if all immediate predecessors are completed. That is, LF for an activity equals the smallest LS of the immediate successor activities.

With that in mind, each path is traced backward towards the inital starting activity/activities applying LS = LF - DUR. When this has been applied to all the activities in the project network, the total slack of an activity can be determined by using SL = LS – ES or LF – EF.

The methodology and how to develop the project network will be explained step-by-step with an example.

CPM Example

In order to gain understanding of the critical path method, the following example is provided.

Developing the CPM Project Network

Table 1 provides information on 9 activities required to complete a project of intrest as well as their dependencies and duration times. Based on those information, the project’s needs can be translated into a network diagram in which the CPM can be utilized. The diagram graphically shows the project flow and precedence relationships among all project activities and gives the project manager a visual represensation of the entire project.

A network model of the project of intrest represented in Table 1 can be seen in Figure 3 where all project activities have been placed in the right logical sequence based on their interdependencies, using the project activity notation presented in Figure 2. This is the inital starting point of the critical path method.

Figure 3: Network Representsation of the Project Example presented in Table 1

The CPM Computation Process

Following the CPM methodology presented earlier, the first step is to perform the forward pass. Activity A has no predecessors and therefore we assume that the activity can start as soon as the project can start, at time 0. The earliest finish (EF) date for activty A can now be computed as 0+1=1. Activities B and C have activity A as their immediate predecessor with early start as 1 and early finish (EF) as 1+5=6 and 1+5=5. Activity D is a merge activity since it is preceded by both B and C. The early start (ES) of a merge activity depends on the largest early finish (EF) of all activities that merge to it, since the activity cannot start until both the predecessing activities have finished. Therefore, early start of activity D is max(6_EF-B,5_EF-C)=6. If we continue this forward pass, the early start and early finish for all activities can be computed as summerized in Figure 3. When the forward pass has been completed, it can be see that the early finish for activity I or the project in total is 29 weeks.

The later step in the CPM methodology is the backward pass. The first step is that the late finish (LF) of the finish node is set equal to its early finish EF = 29 weeks. The immediate successor of activities G, F and H is node finish node I.

Figure 3: Solution of the Project Example presented in Table 1 based on CPM - Critical Path: A - B - D - F - I

Consdideration of Time-Cost trade-offs

Question from "Introduction" in bullet point number five:

• With cost information on each activity and how much it costs to speed up that activity: what is the least expensive way to speed up a project to meet a targeted completion time?

Once the critical path and timeing of activities has been identified - the next question is if it is possible to shorten the project in order to finish within a certein deadline. If you put in information about the cost of each activity, and how much it costs to speed up each activity, CPM can be of help to find out:

• whether we should try to speed up the project, and if so,
• what is the least costly way to speed up the project.

Project Crashing Example

• Do an example of project crashing.
• Show how you have to look at the critical path closely

Benefits of CPM

Here I am going to write about the benefits of the method!

• Benefits in planning, sceaduling and monitoring

Limitations of CPM

Here I am going to write about the limitation to the method.

• Details known with certainty - make use of PERT, these detailes are not known with certenty so with combination of those two as mentioned in the Overview chapter

References

1. ↑ ^{1.0 1.1 1.2} Project Management Institute. (2008). A Guide to the Project Management Body of Knowledge. 4th Edition. p. 6. USA. ISBN 9781933890517
2. ↑ ^{2.0 2.1 2.2 2.3 2.4} Larson, E. W & Gray, C. F. (2014). Project Management - The Managerial Process. 6th edition, p. 161. USA: NY. ISBN 9781259010705
3. ↑ Newbold, R.C. (1998). Project Management in the Fast Lane – Applying the Theory of Constraint. USA: FL. ISBN 9781498738064
4. ↑ ^{4.0 4.1 4.2} Larsen, J. & Clausen, J., (2009). Course material in Networks and Integer Programming Supplementary at DTU - Notes to Networks and Integer Programming. Retrieved from campusnet.dtu.dk
5. ↑ Project Management Institute. (2010). The Value of Project Management. Available Online Version
6. ↑ ^{6.0 6.1} Wikipedia. The Project management Triangle. Retrieved 10.08.2016
7. ↑ International Organization for Standardization (2012) ISO 21500 – Guidance on Project Management.
8. ↑ Mind Tools. The Iron Triangle of Project Management. Retrieved 10.08.2016 from MindTools online page
9. ↑ Anderson, E. B., & Hales, R. S., (1986). Critical Path Method Applied to Project Planning: FEES. United States Department of Agriculture. USA. Available Online
10. ↑ Stelth, P. (2009). Project’s Analysis through CPM (Critical Path Method). Isles International University. Available Online
11. ↑ Chapter on Deterministic Decision Models. (n.d.). Course material in Network Optimization at DTU autumn 2015. Project Scheduling: PERT/CPM. Available online