The Critical Path Method Explained

The Critical Path Method or Analysis has been a prominent figure in the project management world since its inception in the later 1950s. Known for its detailed visualizations and sequencing, the Critical Path Method has become one of the most commonly used project modelling and scheduling tools. Tapping into this technique is one way to take your project management activities to the next level.

So just what is the Critical Path Method? Read on to learn how it started, its benefits, key elements and how you can start using it.

What is the Critical Path Method?

The Critical Path Method (CPM) is a project modelling technique that helps project managers schedule their projects, identify flexibilities and estimate project duration. 

The CPM can create accurate yet flexible sequencing models by identifying:

  • A list of all required tasks for project completion
  • The dependencies between the tasks
  • The estimated duration of each activity or task

This information allows managers to calculate the critical path of a project, the longest sequence of tasks that must be completed for a project to be complete, and preemptively prepare for potential changes along the way to reduce the project’s overall timeline. With the help of algorithms and project management tools, a CPM tool can instantly calculate the least amount of time needed to complete each task without incurring ‘slack’, the amount of time a task can be delayed without impacting following tasks or overall project completion.

A brief history of CPM

Developed in the late 1950s by mathematicians Morgan R. Walker and James E. Kelley Jr., it emerged out of the desire to reduce the costs of plant downtimes caused by inefficient scheduling in the Dupont chemical company. Their research revealed that efficiencies could be achieved by properly sequencing the tight tasks rather than simply adding more hands to the problem. Though the company shelved the approach just a year after its deployment due to management changes, CPM has become a staple in project management ever since.

Benefits of Critical Path Method

Projects are becoming increasingly complex with multitudes of tasks and activities that need to be continuously monitored and managed. Any project manager knows that there are always changes in a project and different types of changes, depending on their importance and priority, can lead to catastrophic timeline delays and cost increases.

When properly implemented, CPM can help organizations:

  • Visualize different task dependencies and relationships
  • Prioritize the right tasks to secure project success
  • Improve their planning accuracy and activities
  • Enable more effective resource management
  • Identify and mitigate project bottlenecks
  • Facilitate clearer communication so expectations can be managed

Key elements of CPM

Before jumping to calculating a project’s critical path, there are some key concepts in CPM that need to be explained.

Start and finish times

There are four key indicators in CPM that are assigned to each task:

  1. Earliest start time (ES): identifies the earliest time a task can be started. Task dependencies must first be analyzed to find this indicator.
  2. Latest start time (LS): identifies the latest possible time a task can be started without disrupting the project timeline.
  3. Earliest finish time (EF): identifies the earliest time a task can be completed, typically calculated by duration, from the proposed earliest start time.
  4. Latest finish time (LF): identifies the latest time an activity can be completed before it causes project timeline disruptions.

Float

Also known as ‘slack’, float identifies the amount of time a task can be delayed without disrupting ensuing tasks or the project’s overall completion. It identifies how much lee-way is available in each task so the project is completed on time and within budget.

There are two types of float in CPM:

  • Free float: the amount of time a task can be delayed without impacting ensuing tasks.
  • Total float: the amount of time a task can be delayed without impacting the overall project completion timeline.

By calculating float, project managers are better prepared to react and respond to changes while understanding the complete impact of their actions and decisions on the overall project timeline.

How to calculate the critical path of a project

1. List project tasks and activities

With the help of a Work Breakdown Structure (WBS), list down all the related project tasks required to produce the outlined deliverables.

2. Identify task dependencies

Building upon your WBS, identify which tasks are dependent on one another and why type of dependency they have with each other. There are typically four types of dependency:

  • Finish to Start (FS): Activity A must be completed before activity B can begin
  • Finish to Finish (FF): Activity A must be completed before activity B can be completed
  • Start to Start (SS): Activity A must start before activity B can start
  • Start to Finish (SF): Activity A must start before activity B can be completed

3. Formulate a network critical path diagram

As you can see from above, task dependencies are often visualized in a chart form with certain dependencies placed vertically and others placed horizontally. Once all the task dependencies and general order has been identified, they can be visualized into a network diagram or critical path analysis chart like the one seen below.

4. Estimate task duration and timelines

Calculating the critical path is largely dependent on estimating the duration of each activity. These estimations can be made in several ways, including:

  • Experience and knowledge-based educated guesses
  • Estimations based on previous project data
  • Estimations based on industry standards

With these sources of information, project managers can identify the critical start and finish indicators of each task mentioned above; the earliest start (ES), latest start (LS), earliest finish (EF), and latest finish (LF), which in turn help calculate the critical path.

5. Apply the Critical Path Algorithm

While the critical path can be calculated manually, most people will apply the critical path algorithm through the forward pass and backward pass technique.

Forward Pass 

Used to determine the ES and EF of a task. The ES of an activity is equal to the EF of its prior task. Thus the EF of the last activity helps identify the estimated time required to complete the entire project. The common formula is:

EF= ES + t (t being the duration of the activity)

Backward Pass

Used to determine the LS and LF dates. The common formula used is:

LS = LF – t (t being the duration of the activity)

6. Calculate the free and total float

Depending on the project’s needs, you can calculate the free or total float of the project. Critical tasks should have zero float, meaning that their dates are set as they are the foundational tasks for the project. Non-critical tasks typically have a positive float number, meaning that their delay will not significantly impact the overall project completion date.

Here are the two common formulas.

Free float = ES (next task) – EF (present task)

Total float = LS – ES or LF – EF

7. Find the critical path

All the critical activities that have 0 float make up the critical path. All of these activities are the dependent tasks from which other tasks are completed except for the very first task in the critical path schedule. Projects with positive slack or float are thus placed parallel to the critical path.

8. Monitor and revise calculations during project execution

The critical path method is not set in stone at the beginning of the project. It needs to be continually monitored and revised based on actual data as the project progresses. With all the critical tasks visualized, project managers can better prepare and react to oncoming changes to guarantee a greater chance for project success.

Using the Critical Path Method

The Critical Path Method is not just about finding the critical path of a project but giving you the necessary tools to deal with ongoing (and inevitable) changes within your projects. Here are some ways that you can use the Critical Path Method to optimize your projects.

Use the Critical Path Method to optimize schedules

One of the key benefits of being able to see all your task dependencies and estimations is you can be better prepared to make accurate decisions that will make sure your project meets its deadlines. There are two common scheduling techniques used in conjunction with the critical path method to optimize your project schedules: fast tracking and crashing.

  • Fast tracking: is a technique that runs multiple tasks on the critical path at the same time to reduce the overall project timeline. However, this can only be used for tasks that do not have ‘hard’ dependencies and will often require additional resources to speed up progress. Without proper resource management, fast tracking can result in a reduction of project quality.
  • Crashing: typically used in emergencies, it is the act of allocating more resources to a specific task to speed up its completion. However, it is important to make sure that the changing resource allocation is still within the project’s scope and does not divert critical resources from tasks on the critical path.
  • Use the Critical Path Method to overcome resource shortages

While CPM is a powerful scheduling tool, it does not consider resource availability. In situations where there is a resource shortage, teams can implement resource levelling techniques to combat the issues.

Resource levelling techniques can help mitigate resource allocation issues and make sure projects can be completed on time and within budget with the current availability. It does so by adjusting and optimizing project start and end dates which inevitably lead to alterations on the critical path and float calculations.

Make sure to read more about resource levelling techniques and how you can use them alongside CPM.

Use the Critical Path Method to secure historic data for future projects

As mentioned above, historic data is one of the critical sources of information when making task duration estimates. Paired with proper project management software, your CPM data and actuals can be stored, compared and analyzed for future reference to help make your task estimations as accurate and realistic as possible.

Not only can this be used to improve estimations, but comparisons between plans and actuals can better identify common bottlenecks and inefficient internal processes which could be plaguing projects throughout the organization.

Critical Path Method Project Management Software

The Critical Path Method is a highly visual and data-based method that would benefit most from an intuitive software that is suited to its processes. While many project management software can help your scheduling and resource management activities, failing to have certain software features can act as a barrier to your team fully implementing and utilising CPM to its full capabilities. If you are looking to implement CPM, certain software features you should look out for in your next solution include:

1. Project Variance Tool

Project variance shows the amount of change a project has made from its original plan. Variance can impact different areas of a project, mainly impacting cost and schedule. With a handy variance tool, project managers can easily see how far projects have deviated from the original plans outlined in the CPM and take steps towards mitigating it, all in one single platform.

2. Detailed Gantt charts

Gantt charts are a powerful tool often used in conjunction with CPM. Having a detailed and adaptable Gantt chart allows for project managers to easily establish task dependencies and keep track of task progress across the entire length of the project. A particularly effective software will also have real-time data and cloud-based features to ensure managers can easily make changes on the move.

3. Integrated WBS and other project management tools 

The WBS is one of the foundational building blocks for the CPM. However, many project management software cannot fully integrate and share their WBS across different project management software and tools. 

For example, while project A’s WBS is available on your project management software, that data cannot be fully integrated and linked to the same project on your ERP software. Making sure that your WBS and CPM activities can translate across all your different tools and software is critical to maintaining full visibility and control over your project.

4. Real-time smart dashboards

No one wants to spend every minute looking at every change in their progress and making updates to their critical path calculations. With a real-time dashboard, managers can easily view the progress and potential delays occurring within their projects in a single glance and can display specific metrics that relate to project-specific KPIs such as costs, schedule, resources and more.

5. Securing historic records of your plans

One of the important ways project teams get better is by learning where they went wrong and what they can do better. Having a historic record of your plans and the ensuing changes along the way helps teams get a better understanding of their successes and potential shortfalls that can be considered in future project planning activities.

Starting using the Critical Path Method with pmo365

Looking to straight away jump into using the Critical Path method? Well lucky for you, pmo365 is perfectly equipped to help you get started! Not only does it come with project management features geared specifically for CPM, but it also offers a whole lot more so you can take your project management activities to the next level.

If you want to have a look at how we help you make the most out of CPM, have a look at our tool in action and book a free trial with our PPM experts today!

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