Critical Path Method: How to Use CPM for Project Management

Updated Aug 3, 2022.
critical-path-method

Before you embark on a project, you need to build a solid project management roadmap that can help you visualize what is needed to attain your project goal. 

There are so many project management techniques that you can use to visualize your project from the projection initiation phase to the project closure phase. They include scrum, process-based, PERT (Program Evaluation Review Technique), waterfall, critical chain, and critical path project management to mention a few. 

The critical path method (CPM) is one of the most-used project management techniques today. You can leverage the technique to effectively manage your projects and ensure the project deliverable is met at the close of the project. 

Read on to understand what the critical path method (CPM) is all about and how it can be used in project management.

Let’s get started.

What is the Critical Path Method (CPM)?

The critical path method (CPM) is a step-by-step technique that works like an algorithm to schedule and prioritize a series of project activities. This technique identifies activities on the critical path and introduces an approach that enables the project team to section a project into minor tasks and arrange them in a chart.

When the tasks are designed in the form of charts, the proposed or estimated time frame will be calculated for each task. This representation makes it easy for you to identify the hierarchy of tasks in terms of importance and time sensitiveness. 

The technique used for handling projects under the CPM involves the following:

  • A complete list of all the tasks needed to execute a project.
  • The relationship between the tasks
  • The estimate of the time required to complete each task.

These tips mentioned above can help you identify the critical path in project management. They can help you discover how many tasks the project is divided into, how dependent one task is on the other, and how much time it will take to complete a task.

If you can identify the longest stretch of dependent tasks, you can find out the tasks you can suspend without any further delay of the project. The scope of a project depends on how many tasks it is divided into and the nature of each task. This method can also help you identify a total estimate of a project's budget.

Why Use the Critical Path Method

The critical path methodology is a resource-filled technique that provides insight on how to assess projects, schedule important tasks, and allocate resources to the right place. However, that is not the only reason why the critical path method is one of the best.

1. Facilitates the Efficient Use of Resources

In a project management life cycle, a key feature of the planning phase is the creation of a resource plan. Here, you are gathering every necessary resource to use for the execution of a project. 

Project management life cycle
Source: Lucidchart

If you gather enough resources but use them wrongly, they might not be sufficient in the long run. As a result, you need a method that utilizes resources well.

The critical path method is designed in such a way that project managers can arrange tasks in order of importance and urgency. When you can prioritize your tasks, it is easier to allocate resources to the right place and use them in the right manner.

2. Prevents Unnecessary Delays in Project Execution

Delays or bottlenecks can result in the loss of valuable time in a project management life cycle. Every project has a duration for completion and bottlenecks lengthen the time frame. You need to be careful with your approach because any time wasted cannot be regained.

Drafting project tasks using network/chart diagrams will give you insights into project dependencies. This gives you an idea of the tasks you can simultaneously work on without delaying the progress of the projects. 

Also, you can use the critical path method to schedule your activities as planned during the project planning stage.

3. Enables Future Project Planning

The critical path methodology can be used to set expectations from the current project's progress. Using the critical path approach of breaking down projects and allocating an estimated time frame, you can perfectly predict how much time it will take to execute future projects, especially if the project scope is similar.

Also, the data gotten from the current project can be used to eliminate guesses when planning for subsequent ones. If your approach manages your financial and business-related risks well, you know how to adapt the technique for your future projects.

How to Find the Critical Path

1. Make a List of Project Activities

You should make a list of all the project activities required to produce results in a work breakdown structure (WBS). For an effective and clear breakdown, it would be best to use the tree structure or bullet points. This list of activities represents the foundation for the critical path method.

Outlining your activities gives you a better idea of everything that needs to be done for effective project execution. When you have the list already, you can start identifying the relationships between each task.

2. Identify Tasks Dependencies

The work breakdown structure, whichever way you represent it, determines the dependency and independence of each task. You can identify the tasks that depend on one another and the ones that can be executed simultaneously with other activities.

The collection of dependent tasks is also known as an activity sequence and it is used to determine the critical path in project management.

3. Build a Network Diagram

The next step is to convert the structured list into a network diagram. This diagram will be similar to a flowchart which will display chronicles of activities. Fill in each activity in a box and use straight, neat arrows to connect the tasks that are dependent on each other.

Network Diagram Method
Source: Wrike

For your network diagram to be very comprehensive and logical, you can add other specific and measurable components that make the schedule as wholesome as possible. When the schedule looks figured out, you are free to move to the next step.

4. Calculate Activity Duration

For you to find the critical path, you need to look for the longest sequence of important tasks. Finding the longest sequence of tasks also requires you to estimate the duration for each task. 

To estimate the activity duration, you either make calculated guesses based on experience or make estimates based on previous project data.

Apart from making guesses based on knowledge or data, you can use the forward and backward pass technique.

Forward Pass 

This method of calculating a task duration refers to the use of early start (ES) and early finish (EF) dates starting from a specific date. The early start is the highest early finish value from previous tasks while the early finish date is the early start date + duration of the task.

Early Finish = Early Start + Duration.

For the early start (ES) of the first activity, you start calculations from 0 and continue that way throughout the schedule. Using the forward technique allows early and easy distribution of resources to the project.

Backward Pass 

The backward technique is the use of late start (LS) and late finish (LF) dates to calculate the duration of multiple tasks. The late finish (LF) date is the lowest late start value from upcoming tasks while the late start (LS) date is the late finish – duration.

Late Start = Late Finish – Duration.

The forward and backward pass techniques can be used to calculate float, which is the flexibility range of every activity in a project schedule.

Forward and Backwards Pass Calculations
Source: Mudassiriqbal

5. Determine the Critical Path

You can either calculate the critical path manually or by using the algorithm style alternatively. The critical path algorithm saves your time and effort. If you insist on using the manual method, here are the steps:

  • Step 1: Write down the start and end times for each activity. The first activity should start counting from zero while the end time should be the duration of that particular activity. Also, the start time for the next activity should be the end time of the previous activity and the end time will be the start time plus the duration of that activity.
  • Step 2: Take note of the end time of the last task on the activity sequence to determine the entire duration of the series of activities.
  • Step 3: The sequence of tasks with the longest duration is the critical path (note that a project can have more than one activity sequence depending on tasks dependencies).

Once the critical path is identified, then you can center your project schedule around it.

6. Calculate the Flexibility of Tasks

The flexibility of tasks and activities in a project schedule is known as the float or slack. How much a task can be delayed without it affecting the budgeted duration or other activities in the sequence is determined by the flexibility rate. Calculating the float says a lot about a flexible project regardless of the project scope. 

One advantage of float in project tasks is the freedom to use it to cover up project risks or constraints. Most critical tasks do not usually have floats, that is they have fixed and rigid start and end dates. Any task with a positive float does not belong to the critical path, that is any little delay does not affect the overall project.

Float can be calculated manually or with the algorithm. The calculations can be used to determine the free float and total float.

Free Float

This type of float talks about the amount of time you can delay an activity without affecting the next activity in the sequence. There are specific conditions for you to have a free float between tasks.

Free Float = Early Start (next task) – Early Finish (current task)

Total Float

Total float is the amount of time that an activity can be delayed from the start date without impacting the fixed finished date or violating the budgeted time for the project schedule. 

Total Float = Late Start – Early Start or Late Finish – Early Finish

Benefits of Understanding Float

  • Helps You Monitor Your Projects Efficiently. Float makes sure you are on track. The more the float, the greater your chances of completing the project before the due date.
  • Gives You a Sense of Priority for Your Tasks. When you identify tasks with free float, it hints at the activities you can suspend without affecting the sequence and the ones you need to prioritize. The tasks with free float can be postponed while the ones without float need to be attended to at the due time.

How to Use the Critical Path Method

1. Shrink Your Schedule

There are times when you need to compress schedules. This can be a result of a change in deadlines. Although it is not ideal if it happens, there are two major compression methods you can use to meet up: fast-tracking and crashing.

Fast-tracking

Carefully study the network diagram and determine the tasks that can be performed simultaneously without negatively impacting any other activity in the sequence. Running parallel activities can speed up the work rate and reduce the time you have to spend on the overall project.

Crashing

This technique requires you to allocate more resources to speed up the work rate. With sufficient resources, you can swiftly attend to all important and urgent tasks before the ones in the non-critical path. 

However, before you obtain more resources, ensure your request is still within the project scope. Also, inform the stakeholders before taking that step. They should agree with you before you make moves to obtain resources for speeding up project execution. 

If you have the critical path figured out on time, it would help you develop the right strategy to execute your project as fast as possible.

2. Store Enough Data for Future Purposes

Project schedules are always subject to change and scope creep situations because the project team often deals with calculated guesses and not certain values. While working on the project, you can always compare the theoretical critical path to the actual critical path. 

Whatever data you gather from the comparison can be stored for future use. When the team gathers together for another project, they can save themselves the stress of making educated guesses. 

All they need to do is check for the data of the previous projects which are of the same scope as the one they want to execute.

2. Correct Resource Issues

The critical path methodology does not account for resource availability. So when there is a shortage of resources due to excessive team members or lack of equipment, you can implement certain resource-balancing techniques to correct the issue.

These resource-balancing techniques are used to correct resource over-allocation or under-allocation and to ensure that the available resources are sufficient to execute the project at hand. They work by adjusting certain start and finish dates on the critical path or utilizing float from activities on the non-critical path.

3. Assess Your Final Project

Assess your final project due to the unexpected constraints that impact some changes during project execution. The way these constraints affect the project is the same way they impact the critical path. So if your final project is quite different from what you have on the original project schedule, you can do some assessment.

Fluctuations are common when using the critical path methodology because you often make educated guesses on decisions. Checking mistakes that resulted in the deliverables will ensure that you do not have to make the same mistakes in future projects.

Critical Path Method vs PERT

The critical path method and the Project Evaluation and Review Techniques (PERT) were methodologies that were established in the mid-1990s. 

What is PERT? PERT is a technique used to calculate uncertainties in project management by estimating the average of pessimistic and optimistic occurrences. This project management technique uses three values to calculate the estimated time for the duration of an activity. They are Optimistic (O), Pessimistic (P), and Most likely Estimate (M)

The calculation for PERT Estimate is (O + 4M + P) / 6

PERT Chart Method
Source: Blog.hubstaff

Both methodologies are used to find the level of certainty during activity duration although there are some differences. The major difference is that while CPM is used when tasks' duration is already estimated, PERT is used to estimate the time required to complete the activities.

Other differences between the two project management techniques include:

  • Estimation Value: PERT uses three values for estimation while CPM uses one value.
  • Time Control vs Cost Optimization: PERT focuses on time control while CRM focuses on cost optimization.
  • Model: PERT uses a probability model while CPM focuses on a deterministic model.
  • Type of Tasks Handled: PERT handles uncertain tasks while CPM handles slightly predictable tasks.
  • Crashing: PERT does not enable crashing (shortening the duration of specific tasks while incurring the least possible costs) while CPM enables crashing.
  • Technique Focus: PERT is an event-oriented technique while CPM is an activity-oriented technique.
  • Year of Development: PERT was developed in 1959 while CPM was developed in 1957.

Their similarities are that they both analyze the list of activities, the duration for each activity, and task dependencies. For optimum effectiveness, you can combine both techniques. Also, you can use the PERT method to acquire realistic estimates before combining the CPM and float/slack.

Critical Path Method vs Gantt Chart

Gantt charts are horizontal representations that spell out project activities. These representations can be monitored against a set timeline. Both the network diagrams in CPM and the Gantt charts exhibit the dependencies between activities. 

Some differences between the tools are:

  • Visualization: CPM portrays the critical and non-critical paths to calculate project duration while Gantt charts visualize how the project activities are progressing towards the final stop.
  • Display of Network Diagram: CPM displays the network diagram as boxes that are linked to each other to show dependency while Gantt charts display them as horizontal bar charts.
  • Resources: CPM network diagrams do not show resources needed while Gantt charts show the resources required for each activity.
  • Timescale: Activities are plotted without a timescale for CPM while Gantt charts plot activities on a timescale.

Asides from their differences, you can pair both methods by tracking the critical paths to ensure your project is running as planned. 

To use the Gantt charts, you can either customize your chart from scratch or use a template. You can get hundreds of pre-designed Gantt charts when you use the best Gantt chart software in project management such as Monday.com, ClickUp, Wrike, Teamwork, Scoro, and Smartsheet. 

The Gantt chart templates have your sections, tasks, and sub-tasks boxes already designed. All you need to do is to enter the right information in the appropriate space, then you have your project schedule figured out. After inputting your information, you are one click away from discovering the critical path.

Key Critical Path Terms for the PMP Exam

Regarding the critical path methodology, there are some terms you need to be familiar with right from the project planning phase through to the project closure phase. These terms are also important for anyone that wants to take the PMP exam.

  • Critical Path Method is a step-by-step method to determine the critical and non-critical paths in a project schedule. Discovering these paths will help you in the hierarchy of activities in order of priority. Also, you can avoid issues like over-allocation of resources and task duration problems.
  • Criticality Index refers to the probability that an activity or task was on the critical path during project analysis.
  • Early Start Dates are the earliest dates that you can commence an activity once the previous dependent ones are completed.
  • Late Start Dates are the latest finish dates minus the duration you used to complete an activity.
  • Early Finish Dates are the earliest start dates for a task or activity plus the duration of that activity.
  • Late Finish Dates are the latest time a task or activity can be accomplished without delaying the delivery dates of the entire project. 
  • Free Float refers to how many times you can delay a task or activity without affecting the start time of the immediate task or activity.
  • Total Float refers to how many times you can delay an activity without causing a postponement to the project’s deadline.
  • Forward Pass is a technique of moving forward through the network diagram in a bid to determine the duration of the project or find the project’s critical path.
  • Backward Pass is a technique of moving backward through the network diagram to the end result to calculate late start.
  • Network Diagram is a schematic representation of the activities of a project both in the critical and non-critical path. They are filled in linked boxes showing the connection between dependent tasks and activity sequence. The connection also shows the order of the project often from left to right.
  • Network Analysis is the breaking down of the sophisticated activities in a project into short and easily-executable components. This analysis also shows the interdependencies and relationship between activities.
  • Critical Path DRAG (Devaux's Removed Activity Gauge) is a key metric used to determine the number of times an activity on the critical path adds to the duration of the project.

Martin Luenendonk

Editor at FounderJar

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.