PM/U2 Topic 8 Project Scheduling/Network Techniques in Project Management: CPM and PERT Analysis
The project schedule is the tool that communicates what work needs to be performed, which resources of the organization will perform the work and the timeframes in which that work needs to be performed. The project schedule should reflect all of the work associated with delivering the project on time. Without a full and complete schedule, the project manager will be unable to communicate the complete effort, in terms of cost and resources, necessary to deliver the project.
Online project management software allows project managers to track project schedules, resources, budgets and project related assets in real time. The project schedule can be viewed and updated by team members associated with the project, keeping everyone well informed on the overall project status.
Network Techniques in Project Management: CPM and PERT Analysis
PERT and CPM are techniques of project management useful in the basic managerial functions of planning, scheduling and control. PERT stands for “Programme Evaluation & Review Technique” and CPM are the abbreviation for “Critical Path Method”. These days the projects undertaken by business houses are very large and take a number of years before commercial production can start.
The techniques of PERT and CPM help greatly in completing the various jobs on schedule. They minimize production delays, interruptions and conflicts. These techniques are very helpful in coordinating various jobs of the total project and thereby expedite and achieve completion of project on time.
PERT is a sophisticated tool used in planning, scheduling and controlling large projects consisting of a number of activities independent of one another and with uncertain completion times. It is commonly used in research and development projects.
The following steps are required for using CPM and PERT for planning and scheduling:
(i) Each project consists of several independent jobs or activities. All these jobs or activities must be separately listed. It is important to identify and distinguish the various activities required for the completion of the project and list them separately.
(ii) Once the list of various activities is ready the order of precedence for these jobs has to be determined. We must see which jobs have to be completed before others can be started. Obviously, certain jobs will have to be done first.
Many jobs may be done simultaneously and certain jobs will be dependent upon the successful completion of the earlier jobs. All these relationships between the various jobs have to be clearly laid down.
(iii) The next step is to draw a picture or a graph which portrays each of these jobs and shows the predecessor and successor relations among them. It shows which job comes first and which next. It also shows the time required for completion of various jobs. This is known as the project graph or the arrow diagram.
4 Basic Steps in Network (PERT/CPM) Techniques
The planning phase is started by splitting the total project into small projects. These smaller projects, in turn, are divided into activities and are analysed by the department or a section. The relationship of each activity with respect to other activities are defined and established and the corresponding responsibilities and the authority are also stated. Thus, the possibility of over- looking any task necessary for the completion of the project is reduced substantially.
The ultimate objective of the scheduling phase is to prepare a time chart showing the start and finish time for each activity as well as its relationship to other activities of the project. Moreover, the schedule must pinpoint the critical path activities which require special attention if the project is to be completed in time.
For non-critical activities, the schedule must show the amount of slack or float times which can be used advantageously when such activities are delayed or when limited resources are to be utilized effectively. In this phase, it is possible to resource requirements such as time, manpower, money, machines etc.
STEP-III: Allocation of Resources
Allocation of resources is performed to achieve the desired objective. A resource is a physical variable such as labour, finance, equipment and space which will impose a limitation on time for the project.
When resources are limited and conflicting demands are made for the same type of resource, a systematic method for allocation of resources become essential. Resource allocation usually incurs a compromise and the choice of this compromise depends on the judgement of managers.
The final phase in project management is controlling. Critical path method facilitates the application of the principle of management by exception to identify areas that are critical to the completion of the project.
CPM and PERT Analysis
Large, complex business projects require thousands of separate activities and can cost millions of dollars. With such high stakes, managing these projects poses a challenge to any large organization. Two quantitative analytical techniques known as Critical Path Method, or CPM, and Program Evaluation and Review Technique, or PERT, help managers plan, monitor and manage large projects.
- Features: PERT and CPM techniques both involve dividing a large project into a series of smaller tasks and activities. Although the two techniques differ in their original forms, Render and Stair cite six steps common to both methods. These steps are defining the project and its significant activities; developing a sequence of these activities; drawing a network diagram that connects the activities; assigning time or cost estimates; computing the longest time path through the network, known as the critical path; and using the network to monitor and manage the project.
- Significance: If project managers want to reduce total project time, they must reduce the length of some activity on the critical path identified through PERT or CPM, according to Render and Stair. Meanwhile, any delay of an activity on that path will delay project completion.
- Considerations: PERT is an excellent technique for monitoring project completion time but does not consider costs. A modification of this technique, PERT/Cost, allows project managers to control costs and project time, according to Render and Stair. CPM approaches project costs through two estimates: normal and crash. Normal time and cost are estimates of project time and cost under normal conditions. Project crashing is the time and cost required to complete a project on a deadline, sometimes through additional expenditures to reduce completion time.