Critical path method (CPM) is defined as a resource-utilization algorithm for scheduling a set of project activities. A critical path analysis is a diagrammatical representation of what needs to be done and when.
Critical path method is based on mathematical calculations and it is used for scheduling project activities. This method was first introduced in 1950s as a joint venture between Remington Rand Corporation and DuPont Corporation.
Although it originated in the late 1950s, critical path is still incredibly important to project managers today. It provides a visual representation of project activities, clearly presents the time required to complete tasks, and tracks activities so you don’t fall behind. The critical path method also reduces uncertainty because you must calculate the shortest and longest time of completion of each activity. This forces you to consider unexpected factors that may impact your tasks and reduces the likelihood that an unexpected surprise will occur during your project.
The critical path is just a fancy way of saying ‘How long does each task take before you can finish the project?’ The essential technique for using CPM is to construct a model of the project that includes the following:
- A list of all tasks required to complete the project
- The dependencies between the tasks
- The estimate of time (duration) that each activity will take to complete.
Let’s have a look at how critical path method is used in practice.
Step 1: Activity specification
You can use the Work Breakdown Structure (WBS) to identify the activities involved in the project. This is the main input for the critical path method.
A work breakdown structure breaks down project tasks into manageable sections. The first step is to identify the main deliverables of a project. Then you can start breaking down the high-level activities into smaller chunks of work.
In activity specification, only the higher-level activities are selected for critical path method. When detailed activities are used, the critical path method may become too complex to manage and maintain.
Step 2: Activity sequence establishment
In this step, the correct activity sequence is established. Listing the immediate predecessors of each activity will help you identify the correct order. To correctly identify the order of the activities, you need to ask three questions for each task of your list.
Which tasks should take place before this task happens?
Which tasks should be completed at the same time as this task?
Which tasks should happen immediately after this task?
Step 3: Network diagram
Once the activity sequence is correctly identified, the network diagram can be drawn. The network diagram is a visual representation of the order of your activities based on dependencies.
This critical path diagram used to be drawn by-hand, but there are now software programs that can create this diagram for you.
Step 4: Estimates for each activity
This could be a direct input from the WBS based estimation sheet. If you are managing a smaller project, you will most likely estimate time in days. If you are working with a complex project, you may have to measure time in weeks. The 3-point estimation method is quite popular, which is designed to put more weight on the most realistic timeframe. You can also opt for the COCOMO (Constructive Cost Model) based estimation methods for tasks estimation which is basically a procedural software cost estimation model.
Step 5: Identification of the critical path
An easy way is to identify critical activities with the Forward Pass/Backward Pass technique. For this, you need to identify the earliest start and finish times, and the latest start and finish times for each activity.
First, determine four parameters of each activity of the network.
Earliest start time (ES) — The earliest time an activity can start once the previous dependent activities are over.
Earliest finish time (EF) — ES + activity duration.
Latest finish time (LF) — The latest time an activity can finish without delaying the project.
Latest start time (LS) — LF — activity duration.
The float time for an activity is the time between the earliest (ES) and the latest (LS) start time or between the earliest (EF) and latest (LF) finish times. The float time, in simple terms is a buffer in which an activity can be delayed without delaying the project finish date.
Another way to identify the critical path is to look at and examine your network diagram and simply identify the longest path throughout the network — the sequence of activities on the path having longest duration in days, not the path with the most boxes or nodes.
In the figure above: If we follow the longest path (in days), from node A to node C to node D, total days it takes is, 5+2+2=9 days.
If you have multiple critical paths, you will run into network sensitivity. A project schedule is considered sensitive if the critical path is likely to change once the project begins. The more critical paths in a project, the higher the probability of a change in schedule. In case you need to accelerate the project, reduce the time required for critical path activities.
Step 6: Critical path diagram to show project progresses
Critical path diagram is a live artefact. Therefore, this diagram should be updated with actual values once the task is completed.
By updating the network diagram as new information emerges, you may recalculate a different critical path. You will also have a more realistic view of the project completion due date and will be able to tell if you are on track or falling behind. This gives more realistic deadline and everyone can know whether they are on track regarding the deliverables.
The critical path method is an absolutely great and game changing tool if done right, and is crucial for any project planning phase. It offers a visual representation of the project activities and helps you to identify the most important tasks and the time it would take to complete them-thus reducing the project timeline and giving you deeper insight into your tasks and overall project. The Critical path diagram should also be updated regularly and gives you a quick and detailed overview of your project goals and enables comparing of planned and actual progress.