Introduction to Crtical Path Analysis

Critical Path Analysis

The OR techniques used for planning, scheduling and controlling the large and complex projects are often referred   to as Critical Path Analysis or Network Analysis. A network is a graphical diagram consisting of a certain configuration of arrows and nodes for showing the logical sequence of various tasks( or activities) to be performed to achieve project objectives. Network analysis is the quite useful for designing, planning, coordinating, controlling and decision- making so that the project could be economically completed in the minimum possible time with the limited available resources two most popular form of this technique now used in many scheduling situations are the Critical Path Method (CPM) and Program Evaluation and Review Technique. (PERT)

1. CPM: It differentiates between planning and scheduling. Planning refers to the determination of activities that must be accomplished and the order in which such activities should be performed to achieve the objectives of the project. Scheduling refers to the introduction of the time into the plan there by creating a time table for the various activities to be performed. CPM uses two time and two costs estimates for each activity (one time- cost estimate for the normal situation and the estimate for the crash situation). CPM operates on the assumption that time taken by each activity in the project is already known precisely.
2. PERT: In PERT we usually assume that the time to perform each activity is uncertain and as such three time estimates (the optimistic, the pessimistic, and the most likely) are used. Indeed in actual implementation, the distinctions between PERT and CPM have become blurred as firms have integrated the best features of both systems into their own efforts to manage projects effectively.

Though the two techniques were developed independently, they are only superficially different.   The two methods have many features in common and are now combined into a technique called Critical Path Analysis (CPA) or Network Analysis.

There are three basic different between a PERT network and CPM network:

• PERT is event oriented while CPM is activity oriented (i.e. PERT prepares network from events while CPM builds if from activities)
• PERT provides for an allowance for uncertainty while CPM does not (i.e. PERT makes three time estimates for each activity while CPM makes one time estimate)
• Activity time in CPM technique are related to costs while it is not so in PERT since it is event oriented

Basic Steps in Critical Path Analysis

Project scheduling by Crtical Path Analysis  consist of four main steps:

1. Planning: The planning phase is started by splitting the total project into small projects. These smaller projects, in turn, are divided into activities and are analyzed by the department or a section. The relationship of each activity with respect to another activity are defined and established, and the corresponding responsibilities and the authority are   also stated. Thus, the possibility of overlooking any task necessary for the completion of the project is reduced substantially.
2. Scheduling: The ultimate objective of scheduling phase is to prepare a time chat showing the start and finish times for each activity as well as its relationship to other activities of the project. More over, the schedule must pinpoint the critical path(in view of time) activities which require special attention if the project is to be completed in time. For non- critical activities the schedule must show the amount of slack of float times (defined later) which can be used advantageously when such activities are delayed or when limited resources are to be utilized effectively. In this phase, it is possible to resource requirements such as time, man power , money machine etc
3. Allocation of resources: Allocation of resources is performed to achieve the desired objective. A resource is a physical variable such as labor, finance, equipment, and space which will impose a limitation on time for the project. When resources are limited and conflicting, demand are made for the same type of resources a systematic method for the allocation of resources become essential. resource allocation usually incurs a compromise, and the choice of this compromise depends on the judgment of managers.
4. Controlling:  The final phase in the project management is controlling. Critical path methods facilitate the application of the principle of management by project. By having progress reports from time to time and updating the network continuously, a better financial as well as technical control over the project is exercised. Arrow diagrams and time charts are used for making. Periodic progress reports. If necessary, new course of action is determined for the remaining portion of project.

Significance of Critical Path Analysis

Critical path analysis offers several advantages.

• Forces through pre-planning.   Each and every activity compromising the project is identified and recorded.   Nothing is left to memory or chance which prevents crises in scheduling.
• Increases coordination of tasks as technological relationship between the activities suggests which activities can run simultaneously and which should succeed others.
• Helps computations of different project duration’s for different level of resources and thereby select a plan that minimizes total project cost.
• Indicates optimal start and finish times of each activity of the project.
• Defines areas of responsibility of different departmental heads for timely execution of the project.
• Facilitates progress reporting and limits unnecessary discussion at the progress meetings.
• Identifies troubles spot often in advance and apply remedial measures.
• Enables the plan to be revised in accordance with changes/changing circumstances.
• Helps to exercise “control by exception” and prevents cost overruns.

A Project comprises a series of activities and the identification of the individual activities requires knowledge and experience of the men responsible for the planning of the project.   Even the preliminaries-mere listing of the activities-make the operating personnel:

• Think of details about the project well in advance.
• Observe critically the way in which the various activities interact or compete for scarce resources.
• Improve upon the original plans even before network is formally drawn and analyzed.

A project, therefore, must be torn into a set of identifiable activities.   There are no set rules but general guidelines are as under:

• An activity should represent the smallest unit of the operation or set of operations over which management desires control.
• An activity should represent an operation or set of operations, which can be performed using a particular kind of equipment or a special skill.   For example in construction project, plumbing is considered as one activity while wiring can be considered as another activity since the first activity requires plumbers and the second activity needs electricians.