What Is Critical Path Method in Project Management

Read it in 8 Mins

Last updated on
12th Jul, 2022
Published
12th Oct, 2021
Views
5,702
What Is Critical Path Method in Project Management

Project Management has always been a key skill that is critical to the success of all types of organizations. Typically, a project would involve a range of activities that need to be completed either in sequence or in parallel, in order to achieve the project goal. This is often quite an uphill task. To complete a project successfully within the estimated time and budget, it is vital to understand the activities that are involved in it and how they relate to each other.  

A delay in one activity could have a domino effect, triggering repercussions on a subsequent or related activity. Identifying how each activity is related to another, and what kind of impact they may have on each other will play a key role in the success or failure of a project.

Critical Path Method

Critical Path Method is a tool used in project management for optimizing resource allocation. It helps create an algorithm of activities that can be monitored to get an idea of how the project is turning out. The many activities that interlink and diverge from each other have different dependencies.  

The Critical Path Method involves calculating the most important activities in the project and working out the optimal schedule for successful completion of tasks, on time within budget, and to the quality expected. 

This involves collating the following: 

  • An exhaustive list of project tasks, from start to finish 
  • The dependencies between tasks 
  • An estimate of the time needed to complete each task 

Once this is done, the Critical Path is determined by figuring out which is the longest stretch of co-dependent activities, lining them up and measuring them end-to-end. 

Get to know more about characteristics of project management.

Critical Path 

As we have mentioned above, the Critical Path is the longest sequence of activities from the start to the end of a project. This is significant because it represents the shortest amount of time the project can be completed in.  

Any activity at any stage that is part of the critical path cannot be delayed. If it gets delayed, the project timelines change. 

So, once you know which is the most critical set of activities, activities that fall outside this set can be delayed, within limits, without pushing the end delivery date.

Key terms in Critical Path Method 

It’s important to understand and get up-to-speed with the terms that are used by project managers who are working on this method. Here’s a ready reckoner: 

  1. Schedule refers to the entire roster of activities that are a part of the project along with the time it takes to finish each activity. 
  2. Duration is the estimated time it takes to complete a particular activity. 
  3. Activity-On-Node (AON) is a visual representation of the schedule showing how activities are linked to each other. 
  4. Critical path is the longest chain of activities in the project. 
  5. Critical Activity is any activity on the critical path. The activity is considered critical because a delay in that activity will cause a delay in project completion. 
  6. Early Start (ES) is the earliest date a particular activity can be started on. 
  7. Early Finish (EF) is the earliest date an activity can be completed on. 
  8. Lag is the estimated time to wait before an activity can start.  
  9. Late Start (LS) is the latest date the activity needs to be started by, without delaying the project completion.  
  10. Late Finish (LF) is the date an activity needs to be finished by, without delaying the project.  
  11. Predecessor is an activity that precedes the current activity. 
  12. Successor is the activity that comes right after the completion of the current activity. 
  13. Free Float (FF) is the maximum number of days an activity can be delayed, without delaying a succeeding activity. 
  14. Total Float (TF) is the maximum number of days an activity can be delayed, without causing a delay in the project completion date. 

How Does Critical Path Method (CPM) Work in a Project?

Typically, projects have quite a lot of activities—and more complex and challenging projects in large companies can run into hundreds, or even thousands, of activities. In such complex projects it is necessary to identify the key activities that could derail the entire project and impact the project completion by delaying the succeeding activities.  

The Critical Path Method works by identifying these critical activities and managing them by ensuring there are no delays. It also denotes the number of days by which an activity can be delayed, without affecting the succeeding activity (Free Float) or the Project completion date (Total Float). 

In today’s era of rapid developments in technology, it becomes even more important to identify these activities and continually measure progress, by making sure that projects are running on time and keeping a close watch on the activities that need the most attention. Project Management solutions that are in use today come with more advanced features that enable this.  

If you are looking to implement CPM in one of your own projects, you will have to: 

  • List out the activities involved 
  • Estimate the duration of each activity 
  • Arrange them in a sequence where interdependency is clearly defined 
  • Find the longest chain of activities in terms of duration. This will be your critical path 
  • Prioritize and plan the activities on the critical path 
  • Calculate the delay that can be accommodated in activities that are not on the critical path 
  • By ensuring that the critical activities are not delayed and other activities are not getting delayed beyond the permissible level, you can ensure that you project gets completed on time. 

Importance of Critical Path Method

Critical Path Method is a tried and tested way of managing projects. It has been in use for over 60 years, and has been proven to help project managers to smoothen workflows, ironing out any obstacles to progress. helps project managers to: 

  • Prioritize activities 
  • Identify activities that can run simultaneously 
  • Optimize resource allocation 
  • Track progress in real time 
  • Comply with deadlines 
  • Simplify dependencies 
  • Get a wide, bird’s-eye perspective on all project activities 

Calculating Variables Within the Critical Path

Critical path activities are the ones without a Free Float or Total Float. Once the duration of each activity is established and the interrelationship and sequence between the activities are established, the next step is to calculate the float for each activity.  

The earliest start date and earliest finish date are calculated for each activity. Comparing these with preceding and succeeding activities gives the float for each activity.  

There will be one chain of activities where the float is zero for every activity. This means that any delay in any of these activities will result in a delay in the chain which will impact on the completion date for the program. 

Critical Path Method Calculation

Tools and Software to Calculate Critical Path

There are a few tools or methods that are popularly used to find the Critical Path in a project.  

  • Activity On Node (AON):

Is a method that represents activities in a diagram to show interdependencies between them. Once durations, early start date, and early finish date are assigned, the critical path can be mapped by using the earliest start date for each activity. This technique is called Forward Pass 

Using the Latest Start date and Latest Finish Date and starting from project completion, you can calculate the critical path through a similar technique called Backward pass. 

  • GANTT:

Charts are used for simpler projects where activities are represented in a bar chart format instead of a network chart. This is an alternate method of finding the critical path in a project. 

Gantt Chart

  • PERT or Program Evaluation and Review Technique:

Works based on a similar principle to other methods. It dismisses the notion that there is a fixed amount of time for an activity to be completed. Instead, it estimates a best-case scenario, worst case scenario, and an ordinary scenario to estimate the amount of time each activity takes. It calculates variance and standard deviation to see which activities are likely to risk delaying the project by exceeding the time they are estimated to take.  

PERT is a more dynamic method that is more suitable to make flexible project plans as it accounts for the fact that time taken for activities cannot be estimated or predicted accurately.

Parts of a PERT Chart

Software for calculating Critical Path

The calculations can seem complex and if done manually it may end up being a time-consuming exercise. Thankfully, project management software come with options to calculate the critical path. 

MS Project, Wrike, Capterra, Mavenlink, Buildertrend, and WorkflowMax, among others, have features that help the user to identify and monitor the critical path in their projects and keep an eye on activities that are nearing the maximum delay, threatening to derail the project deliveries. 

Closing Thoughts 

Even though the Critical Path Method was created in a different era, it is still relevant in today’s world, where projects have grown to be more complex and time sensitive. Software has added teeth to proven techniques like the Critical Path Method to make them more efficient and to give project managers more insight and faster updates. Organizations today operate in the midst of volatility, and projects have out of necessity become more flexible and dynamic. Using tools like the Critical Path or its improved variations supported by evolving software is a necessary element to project success. 

Tags

Profile

KnowledgeHut

Author
KnowledgeHut is an outcome-focused global ed-tech company. We help organizations and professionals unlock excellence through skills development. We offer training solutions under the people and process, data science, full-stack development, cybersecurity, future technologies and digital transformation verticals.