Topic

Critical Path Method

 TABLE OF CONTENT
S. No Description Page
No
1. Preface I
2. Dedication II
3. Acknowledgment III
4. Executive Summary IV
5. History of Critical Path Method 1
6. Critical Path Method 3
7. Application of Critical Path Method 6
8. Elements of Critical Path Method 8
9. Conclusion 20
10. Recommendation 21
11. References 22
 PREFACE

Every student of MBA in AIOU has an essential requirement to do the research base

assignment in any of the well reputed organization. The purpose of this program is to

acquaint the students with practical applications of theoretical concepts taught to them during

conduct of their MBA program.

The research base assignment in MidJac Pvt Ltd Pakistan, it was a nice opportunity to

have a close comparison of theoretical concept in practical field, involving the use of primary

and secondary data. This assignment may depict deficiencies on my part but still it is an

output of a student’ efforts, for which I beg pardon. The output of my analysis is summarized

in a shape in the report the contents of the report shows the detail of sequence of these. The

report is concluded with problem and suggestions.

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 DEDICATION

This small research paper is also lovingly dedicated to my respective parents who

have been my constant source of inspiration. They have given me the drive and discipline to

tackle any task with enthusiasm and determination. Without their love and support this

project would not have been made possible.

I also dedicate it to my beloved teachers and friends who gave me suggestions not

only in this project but also in every field of life.

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 ACKNOWLEDGMENT

All praises for Allah Almighty, the most Merciful, who gave me courage to complete

this report on MidJac Pakistan. All esteems are for his Prophet Muhammad (S.A.W.W) whose

teachings have served as beacon light for the humanity in the hours of despair and darkness

and provide us regular guidance in every sphere of life and guides me in the lacerate and

congenial circumstances, without his help one cannot reach at his destination. I am very

thankful to my Parents, teachers, friends and to all those who cooperated and gave their

precious opinions / information regarding the completion of this report.

I also would like to thank all the staff members of MidJac Pvt Ltd, Rawalpindi,

Pakistan, without the help of whom; the successful completion of the report was not possible.

I am also thankful to all my teachers, friends and to all those who cooperated and gave their

precious opinions/ information regarding the completion of this report.

____________________________
(Muhammad Baqir Zar)

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IV
 CRITICAL PATH METHOD

Executive Summary

Because of this rapid change in time and era we have to cope with it. I got an

opportunity of getting practical knowledge about the Critical Path Method (CPM) in

Pakistan. So, to quench the thirst of practical exposure and for getting the basic

knowledge about Management I joined MidJac, Pakistan. During my case study I gather

all necessary information and interviewed the employee in different section of the

company regarding my topic.

Efforts have been made to compile this report in such a way that activates its

salient features not only for students but also for the layman. I started my practical case

study on CPM from introduction of my topic. I read previous studies to get familiar with

my topic and then went through its important sub topics. I went through some research

articles and read books from different authors. During my practical study, I visited the

company office several times to analyze the on-ground practical situation. So, I can

review and compare it with the theoretical study. I concluded my study with the SWOT

analysis and then the conclusion and recommendations which I suggest for CPM.

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 CRITICAL PATH METHOD (CPM)

CRITICAL PATH METHOD (CPM)

History of Critical Path Method

The Critical Path Method, known under its acronym CPM, is a way of optimizing the

sequence of scheduled activities, or tasks, in a project. This is a management tool

designed to ensure a project’s completion on time. Since its conception in the 1950s,

CPM has been adapted to the Theory of Constraints and Critical Chain concepts

devised by Israeli physicist Eliyahu Goldratt, but project management itself dates back

to ancient times.

Ancient Egypt: The origins of project management tools like the Critical Path Method

can be traced back to ancient civilizations. Over 5,000 years ago, the Great Pyramid of

Giza, which stands close to Egypt’s capital city Cairo, was built using over two million

blocks of stone. Each of the blocks weighed around two tons. Archaeologists infer from

ancient Egyptian records of the period that thousands of skilled workers were organized

into four construction teams, one for each face of the pyramid. The 20-year construction

project required sophisticated planning and organization in order to find the correct

stones, and then to cut, transport, and set them in place, according to Lew Ireland,

president of the American Society for the Advancement of Project Management.

Gantt Chart: The use of project management as a modern tool dates from the 1900s

with the creation of the Gantt chart. American mechanical engineers Henry Gantt and

Frederick Taylor designed a graphic method for planning and controlling a work

schedule and recording its progress. The Gantt chart is a type of bar chart where

varying lengths of horizontal bars represent each activity's time span, and the vertical

axis lists the separate activities making up the project. It was used in the 1931 Hoover

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Dam construction project. Gantt charts are still in use today because they are easily

understood by the whole project workforce. The shortcomings of a Gantt chart are that it

does not show the interrelationships between the activities within a work sequence, or

the constraints they may impose on one another.

Dupont: Starting in 1956, a joint venture between the Dupont chemical company and

computer firm Remington Rand Univac devised the Critical Path Method to tackle the

interrelationships of separate activities within a project schedule. The critical path is a

sequence of individual activities of a project that must be finished on schedule so that

the whole project is completed on time. Activities along the path cannot begin until a

predecessor activity is complete. CPM provides a graphical representation of the project

and predicts its completion time. The original calculations were made on the UNIVAC-1

computer. This method was first tested in 1958 on a project to construct a new chemical

plant, and again in 1959 during the maintenance shut down of another plant at

Louisville, Kentucky.

U.S. Navy: In 1958, the U.S. Navy’s Special Projects Office, together with aerospace

company Lockheed Missile Systems and consultancy firm Booz Allen & Hamilton,

developed Program Evaluation Review Technique, called PERT, for the Polaris missile

program. Like CPM, it was designed to tackle the interrelationship between the different

activities in a project. The research developed simultaneously with, but independently

of, Dupont and Remington's CPM analysis. PERT's aim was to control over 3,000

contractors employed on the missile program. The calculations were carried out on an

IBM computer. PERT was essentially a project road map identifying major activities and

their interrelationships. Unlike Dupont’s CPM, it only showed time constraints and did

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not deal with the cost and quality issues faced by commercial organizations. The driver

for PERT was political, not commercial. It was a tool to ensure the completion the

Polaris program during the Cold War when the U.S. government was concerned about

the Soviet Union’s growing number of nuclear weapons.

Theory of Constraints: The Theory of Constraints was developed in the 1980s as an

improvement to CPM. One of CPM’s limitations was that it did not consider non-critical

activities that could introduce risk to a project, such as labor issues over pay, for

example. Neither did it assume that a critical path may change during a project’s

duration. In his Theory of Constraints, Israeli physicist Eliyahu Goldratt wrote that a

system can never be better than its weakest part, so the improvement of a project and

its schedule depends on the identification of this constraint and its mitigation.

Critical Chain: In 1997, Goldratt introduced the concept of the Critical Chain in a book

with that title. Previously, CPM calculations were based on a strict sequence in a

project’s activities, and a rigid project schedule. The Critical Chain method emphasizes

the resources required for a project, in particular costs, and the flexibility required in

these resources to keep a project on schedule -- despite management's usual

reluctance to increase a project’s budget. Goldratt also incorporated uncertainty

"buffers" into project scheduling to allow for unpredicted problems arising.

CPM
Critical path is the maximum time taken to complete a set of processes when parallel

operations occur. Generally, the path that takes the maximum time to complete the

given set of operations determines the rate at which a process comes out. This path is

called the critical path. In deterministic data, the critical path can be calculated by simply

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calculating the sum of the times taken by individual processes within the workstation. In

stochastic data, the critical path is calculated the same way by adding the individual

processing times. But, due to variability more than one path could tend to dominate the

system. According to Winston (1994) various rules need to be considered when coining

analysis using critical path method. The various rules used for critical path analysis are.

Rule 1. Activities for parallel processing must start at a node.

Rule 2. The activities must end at the completing node.

Rule 3. The number of nodes need to be numbered such that the

completion node has a larger number than the starting node.

Rule 4. An activity should not be represented with more than one node.

Rule 5. If two nodes need to be connected with more than one arc then

a dummy arc is used to trigger the activity.

Moder and Phillips categorize the leading features of CPM under five main headings

1. Planning: Control Path methods first require the establishment of project

objectives and specifications and then provide a realistic and disciplined basis for

determining how to meet these objectives, with due consideration given to

pertinent time and resource constraints. It not only reduces the risk of

overlooking tasks which are necessary to complete a project but it also provides

a realistic way of conducting more long-range planning of projects, including their

co-ordination at all levels of management. unless this is done, it may be

reasonable to question how much may be taken for granted or overlooked, which

may come to haunt management later.

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2. Communication: Critical path methods can provide a career and concise way of

documenting and communicating project p1ans, schedules and time and cost

performance.

3. Psychological: the critical path method, if properly developed and applied, can

create and promote a team feeling. It can be useful in establishing interim

schedule objectives that are most meaningful to operating personnel and in the

delineation of the various responsibilities. It can, however, lose value if used as a

weapon against any of its participants. Its greatest potential lies in projects with

several prime contractors, each jealous of his own rights and unwilling to

subordinate his schedule to any of the others.

4. Control: By identifying the most critical elements in the plan, the critical path

method facilitates the application of the principle of management by exception, It

focuses attention on the 10-20% of project activities that are most constraining

on the schedule; it enables the manager to define schedules; and it shows the

effects of technical and procedural changes on the overall schedule" CPM

enables the manager to monitor the progress of the project at any given stage.

This in turn can provide the opportunity for "trading off" time and cost and

applying these trade-offs to critical areas.

5. Training: Critical path methods can be useful in training new management and in

indoctrinating other personnel that may be connected_ with a project from time to time"

It is agreed. That experienced and supportive personnel can improve on their

functioning by the use of this technique. CPM may be defined as a technique which will

assist to visualize the entire construction project clearly so that immediate decisions

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can be made which will be in the best interests of the Board" This technique breaks d-

own all the steps in the design and construction of a building and arranges them into a

specific logical order which takes into consideration the interrelationships and co-

ordination of all parties" The monitoring and analysis of the progress reports which list

all the activities, provide a basis for determining delays so that decisions can be made

accordingly in the planning stages of a new building, an addition or a modernization

project, every step can be scheduled from the inception of the project to the completion

of the building" All such scheduling and then the analysis of progress can be carried out

by the use of CPM techniques.

Application of CPM

Explicit in both techniques and fundamental to them are three managerial functions:

1. Planning: The listing of tasks or jobs that must be performed and determining

requirements of materials, equipment and manpower. In this phase estimates of

costs and durations for the various jobs are also made.
2. Scheduling: The laying out of actual jobs in the time order in which they have to

be performed and calculating manpower and material resources required. as well

as expected completion time of each of these jobs.

3. Controlling: This managerial function which begins with reviewing the

differences between schedule and actual performance and analyzing and

correcting these differences as the project progresses. The analysis and

correction of these differences forms the basic aspect of control.

Research and development programs range from pure research to design and

production engineering. While PERT is most useful in the middle of this spectrum,

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variations of it are being used in the production end. PERT is not particularly suited to

pure research, and perhaps should be avoided as it may stifle ingenuity and

imagination, both of which are the keystones of success in pure research. CPM is

basically concerned with obtaining the trade-off between cost and completion date for

projects. It emphasizes the relationship between applying more men or other resources

to shorten the duration of given jobs in a project and the increased. cost of these

additional resources with CPM the amount of time needed to complete various facets of

a project is assumed to be known with some certainty; moreover, the relation between

the amount of resources employed and the time needed to complete the project is also

assumed known, Thus while CPM is not concerned with uncertain job times PERT deals

with time cost trade-offs " Because of these differences PERT is used more in research

and development projects while CPM is used in projects such as construction, where

there has been some experience in handling similar endeavour. Despite the fact that

maintenance and shutdown procedures (true area in which CPM was initially

developed) continue to be productive areas for application of CPM, construction type

projects continue to be able to evaluate alternate project plans and resource

assumptions on paper rather than in mortar and bricks.

Although widely diverse kinds of projects lend themselves to analysis by CPM, the

construction industry has several well-defined characteristics that make it especially

suited to such analysis with CPM being the logical choice" Three such characteristics

are:

1. Construction projects consist of well-defined jobs to activities, which when

completed, mark the end of the Project.

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2. The jobs may be started or stopped independently of each other, within a given

sequence. The jobs are ordered, that is, they must be performed in technological

sequence.

In addition to the numerous application possibilities, is should be emphasized that once

a technique is chosen, it should be very useful for monitoring and control.

Elements of CPM
The CPM has four key elements.

 Critical Path Analysis

 Float Determination

 Early Start & Early Finish Calculation

 Late Start & Late Finish Calculation

Critical Path Analysis

The critical path is the sequence of activities with the longest duration. A delay in any of

these activities will result in a delay for the whole project. Below are some critical path

examples to help you understand the key elements...

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The duration of each activity is listed above each node in the diagram. For each path,

add the duration of each node to determine its total duration. The critical path is the one

with the longest duration.

There are three paths through this project.

Use Critical Path Analysis to find Your Critical Path

Float Determination

Once you've identified the critical path for the project, you can determine the float for

each activity. Float is the amount of time an activity can slip before it causes your

project to be delayed. Float is sometimes referred to as slack.

Figuring out the float using the Critical Path Method is fairly easy. You will start with the

activities on the critical path. Each of those activities has a float of zero. If any of those

activities slips, the project will be delayed.

Then you take the next longest path. Subtract its duration from the duration of the

critical path. That's the float for each of the activities on that path.

You will continue doing the same for each subsequent longest path until each activities

float has been determined. If an activity is on two paths, it's float will be based on the

longer path that it belongs to.

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Determining Float

Using the critical path diagram from the previous section, Activities 2, 3, and 4 are on

the critical path so they have a float of zero.

The next longest path is Activities 1, 3, and 4. Since Activities 3 and 4 are also on the

critical path, their float will remain as zero. For any remaining activities, in this case

Activity 1, the float will be the duration of the critical path minus the duration of this path.

14 - 12 = 2. So, Activity 1 has a float of 2. The next longest path is Activities 2 and 5.

Activity 2 is on the critical path so it will have a float of zero. Activity 5 has a float of 14 -

9, which is 5. So as long as Activity 5 doesn't slip more than 5 days, it won't cause a

delay to the project.

Early Start & Early Finish Calculation

The Critical Path Method includes a technique called the Forward Pass which is used

to determine the earliest date an activity can start and the earliest date it can finish.

These dates are valid as long as all prior activities in that path started on their earliest

start date and didn't slip.

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Starting with the critical path, the Early Start (ES) of the first activity is one. The Early

Finish (EF) of an activity is its ES plus its duration minus one. Using our earlier

example, Activity 2 is the first activity on the critical path: ES = 1, EF = 1 + 5 -1 = 5.

Critical Path Schedules

You then move to the next activity in the path, in this case Activity 3. Its ES is the

previous activity's EF + 1. Activity 3 ES = 5 + 1 = 6. Its EF is calculated the same as

before: EF = 6 + 7 - 1 = 12.

If an activity has more than one predecessor, to calculate its ES you will use the activity

with the latest EF.

Late Start & Late Finish Calculation

The Backward Pass is a Critical Path Method technique you can use to determine the

latest date an activity can start and the latest date it can finish before it delays the

project.

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You'll start once again with the critical path, but this time you'l begin from the last activity

in the path. The Late Finish (LF) for the last activity in every path is the same as the last

activity's EF in the critical path. The Late Start (LS) is the LF - duration + 1.

In our example, Activity 4 is the last activity on the critical path. Its LF is the same as its

EF, which is 14. To calculate the LS, subtract its duration from its LF and add one. LS =

14 - 2 + 1 = 13.

You then move on to the next activity in the path. Its LF is determined by subtracting

one from the previous activity's LS. In our example, the next Activity in the critical path is

Activity 3. Its LF is equal to Activity 4 LS - 1. Activity 3 LF = 13 -1 = 12. It's LS is

calculated the same as before by subtracting its duration from the LF and adding one.

Activity 3 LS = 12 - 7 + 1 = 6.

You will continue in this manner moving along each path filling in LF and LS for activities
that don't have it already filled in.

SWOT Analysis
Strength

1. A standard system of planning for design and construction

2. A more effective tool for periodic rescheduling and evaluating

3. CPM could give the contractor a better control over his job, and if he uses it

effectively, would enable him to submit lower bids

4. It can offer a reliable basis for extension of time and negotiations or assessment

of liquidated damages, should the need arise

5. If change in personnel became necessary, it could be easily accomplished as all

records are available at any point.

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6. If overtime had to be ordered, it would only be applied to critical jobs, which could

be easily determined with the use of CPM.

7. CPM would enhance the identification of immediate or future trouble spots

8. Quick rescheduling of a project to meet unpredictable conditions or emergencies

can be provided

9. Realistic and easily interpretable scheduling can enhance ordering of furniture

and supplies to arrive at proper time.

10. A better analysis of change orders and appraisals can be made.

11. CPM can be used to provide the Board with the correct information and fix

responsibilities of the various parties involved.

12. The Board can be in a better position to arrange financing more efficiently by

being able to determine times of payments to contractors

13. If changes are required, rediagramming can indicate the impact of such changes

on cost and timing, and adjustments can be made accordingly

Weakness

1. A poorly organized. network can be worse than any conventional or traditional

schedule, and can thus compound problems rather than alleviate them
2. Personnel who have no knowledge and understanding of the system can be

helplessly lost and create problems that might otherwise be avoided or not

develop at all
3. The method of analyzing, diagramming and adjusting a CPM network can easily

become too complex and too cumbersome" Details must be considered-

carefully, but an imaginative flexibility of the system must be allowed to Prevail.

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4. Use of CPM may tend to reduce time considerations to objective fact" Adequate

allowance for flexibility must be maintained for many subjective considerations of

a building program that are difficult to pin-point or accurately time. These same

subjective considerations will be imperative to the project development

5. An attitude of "policing a project" must not be allowed to develop. The advantage

of CPM is to assist and coordinate. It may be used to isolate problems, but an

over aII attitude of co-operation and participation must be nurtured carefully if the

technique is to be effective.

Opportunity

1. Managers can identify areas where attention needs to be focused

2. CPM can play important role in patient care in Pakistan.
3. Costs and resources forecasts if needed
4. Better communication among the people can save the bigger loss
5. New teams and ideas can be concluded due to group discussions

Threat

1. Single critical error can lead to magnitude loss

2. CPM cannot be the one man show. Here in our culture one man is taking

decision is a big threat for CPM effectiveness

3. While developing CPM, imagination can lead to a erroneous diagram.

Conclusion
I would further conclude that wherever CPM is used wisely by a project manager who

understands its strengths and weakness, it can be an effective amplifier of his

managerial skills and it can produce the following results:

1. A disciplined approach to planning

2. A better definition of the scope of the work

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3. A separation of planning and scheduling

4. An identification of the critical activities
5. A graphic plan of work which can be constructively reviewed
6. Better communication between and amongst people
7. More accurate forecast of time requirements, and.
8. Cost and resource forecasts, if needed

Recommendations

Recognizing the fact that CPM is not widely known and little used, a number of

recommendations are worthy of consideration:

1. That administrators become better informed as to the possibilities of CPM and

how to use it
2. That orientation courses in management techniques like CPM be made more

readily available
3. That CPM become a requirement in building construction which would ultimately

result in more competitive bidding and help keep costs from rising so

dramatically.
4. That CPM not be confined to construction management but applied to other

areas of educational planning e.g. implementation of new programs, designing

new approaches to instruction, experimenting with evaluative procedures and

change-over of educational systems.

References

 Steve Gïngera. The critical path method and school building construction: A

case study. May 1974.

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 Swati Razdan, Mayur Pirgal, Abhishek Hanchate, Mrs. N. R. Rajhans, Vicky

Sardar. Application of Critical Path Method for Project Scheduling – A Case

Study. https://www.researchgate.net/publication/315045237
 Achanga P, Shebah E, Roy R. “Critical success factors for lean

implementations within SMEs”, Journal of Manufacturing Technology

Management. 2006;17(4) 460-471.

 Buckley JJ. Fuzzy PERT: Applications of fuzzy set methodologies in industrial

engineering. Elsevier, Amsterdam. 1989): 103-114.

 http://www.scribd.com
 http://www.wikipedia.org

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