Pert - CPM

INTRODUCTION

 

Basically, CPM (Critical Path Method) and PERT (Programme Evaluation Review Technique) are project management techniques, which have been created out of the need of Western industrial and military establishments to plan, schedule and control complex projects.

Brief History of CPM/PERT

 

CPM/PERT or Network Analysis as the technique is sometimes called, developed along two parallel streams, one industrial and the other military.

CPM was the discovery of M.R.Walker of E.I.Du Pont de Nemours & Co. and J.E.Kelly of Remington Rand, circa 1957. The computation was designed for the UNIVAC-I computer. The first test was made in 1958, when CPM was applied to the construction of a new chemical plant. In March 1959, the method was applied to a maintenance shut-down at the Du Pont works in Louisville, Kentucky. Unproductive time was reduced from 125 to 93 hours.

PERT was devised in 1958 for the POLARIS missile program by the Program Evaluation Branch of the Special Projects office of the U.S.Navy, helped by the Lockheed Missile Systems division and the Consultant firm of Booz-Allen & Hamilton. The calculations were so arranged so that they could be carried out on the IBM Naval Ordinance Research Computer (NORC) at Dahlgren, Virginia.

 Planning, Scheduling and Control Advantages

Besides the direct project management benefits, PERT/CPM/PDM provide ancillary ones. The methods are an important communications bridge between the driving strategy and the tactics critical to realizing it, i.e. getting the project done on-time, on-budget. Meeting the PDM/PERT/CPM plan also has come to be used as a benchmark for evaluating individuals and teams.

The methods address the following main concerns:

- ETA (estimated time of arrival, i.e. completion) of the project

- Potential project bottlenecks

- Progress control - the meeting of milestones

- Risks of exceeding the budget

- Risks of missing the deadline

The Basic Network Concept of PERT and CPM

PERT and CPM have six steps in common:

1. Set the start and end dates for the project as a whole.

2. Break up the project into a series of individual tasks, i.e. activities.

3. Develop the sequence for these activities and their relationship to one another. For example, A must be finished before B, C, or D can start; B must be finished before D can start (but not before C), etc.

4. Estimate the time needed for each activity.

5. Estimate the cost for each activity.

6. Compute the longest path through the network, which is known as the critical path.  

The activities that make up the longest path control the project. Therefore focus should be upon them, with adequate resources (the best people, other top quality input) allocated to them. Implicit to PERT/CPM is continuous feedback and the ability to adjust to changes in activity times/budgets to optimize project completion.

A Note on Float

Float or slack gives you your leeway, your margin of error. The two main categories are Free Float and Total Float. The former is the time buffer, or extra available time, when all the preceding activities finish at the earliest possible times, AND all the succeedingactivities happen at the earliest possible times.

The latter, Total Float, is the available time when all the preceding activities finish at the earliest possible times AND all the succeeding activities happen at the latest possible times. Restated as a simple formula:  

Total Float = Latest Start - Earliest Start

When an activity has zero Total Float, Free Float will also be zero. Activities with zero Total Float are on the Critical Path

If the above is all intuitively obvious to you, then you are ready to progress to float variations: Independent, Early Free, Early Interfering, Late Free, and Late Interfering. Note that float can be negative. Float is treated at length in the literature. 

CPM & PERT Weaknesses & Strengths

Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM) help managers to plan the timing of projects involving sequential activities. PERT/CPM charts identify the time required to complete the activities in a project, and the order of the steps. Each activity is assigned an earliest and latest start time and end time. Activities with no slack time are said to lie along the critical path--the path that must stay on time for the project to remain on schedule.

Expected Completion Time

A strength of PERT/CPM charts is their ability to calculate exactly how long a project will take. PERT/CPM provides managers with a range of time in which the project should be completed, based on the total of all minimum and maximum time limits for all activities. This gives companies a number of advantages, such as the ability to tell customers exactly when their orders will be filled, or to know exactly when to order new supplies. The expected completion time of the project is based on ideal situations, however, and does not take into account the possibility of unforeseen events. The expected completion time of all subsequent activities and the project as a whole can become skewed when things go wrong, which can cause problems if the company has made plans that rely on the timely completion of the project. Another weakness of PERT/CPM is that the technique relies on past data and experience to formulate completion time predictions. New companies may not have any past experience to lean on, putting them at a disadvantage.

Efficiency

Businesses can share PERT/CPM charts among all key employees, letting employees at each station know exactly when they will be required to begin work processes, where the required inputs will come from, where the outputs must go, and when their task must be completed. This can help dispersed employees to operate efficiently by having a common understanding of the expected work flow. When things go wrong, however, the very thing that encouraged efficiency might suddenly cause confusion. When a project is held up due to an unforeseen circumstance, workers at all subsequent stations must delay their own progress while explaining to subsequent stations' employees why outputs are not flowing.

Critical Path

The critical path identified in a PERT/CPM chart shows managers which activities are the most time-critical. This allows managers to focus process improvements on the tasks that are most vital to the timely completion of the project. More slack time can be created by reducing the processing time at critical points in the project, or the project schedule can be tightened up for a quicker turnaround. Managers may place too much emphasis on activities along the critical path, however. A weakness of CPM is that it focuses primarily on the time aspect of activities, neglecting other concerns, such as quality and cost control. Focusing too much attention on the critical path can cause managers not to notice possible production improvements in other activities.