Project financial management

Critical path project management

Leverage critical path project management to keep your team on schedule. With CPM, you’ll effectively schedule crucial tasks for successful delivery.

Critical path project management: The roadmap to success

In any project, some components and functions are must-haves, and others are nice-to-haves. Nice-to-haves are features that improve functionality and user experience but are noncritical to the project’s success.

With must-haves, there’s no choice. The project’s charter or scope statement obliges the team to deliver these items. Otherwise, the group fails to meet the established goals. The project manager is responsible for determining the difference between the two.

However, an experienced PM knows better than to rely on gut feelings. Critical path project management is the best tool for distinguishing between the must-haves and the nice-to-haves. 

What is a critical path in project management?

Critical path analysis is a to evaluate, plan, and schedule large, complex initiatives. It’s a democratic process that brings team members together to create a work breakdown structure (WBS) listing all the activities that will deliver the desired outcome. The team then sequences WBS tasks and estimates each item’s duration, organizing the info in a network diagram that functions like a flowchart.

Within the work breakdown structure, you’ll find the critical path – the sequence of dependent tasks that takes the longest to complete.

Critical path methodology (CPM) also categorizes tasks as critical or noncritical. The team must complete critical tasks to deliver the project on schedule. These are the must-haves. Noncritical tasks are less likely to cause a delay, so there’s some flexibility in path scheduling and inclusion.

Knowing how to calculate critical paths helps project managers identify potential bottlenecks in the development process and ensure adequate resource deployment. It also enables effective prioritization and risk mitigation, ensuring timely project delivery.

Why is the critical path important?

The critical path method lets a project manager achieve two things:

  1. Identify essential tasks that critically affect the project schedule’s length

  2. Effectively schedule time to deliver the project’s goals and outcomes according to established milestones, deadlines, and budget

Project managers also gain insight into the project plan when they correctly identify critical pathways. This allows them to:

  • Uncover task dependencies, resource constraints, and potential risks or roadblocks

  • Generate accurate time durations for project tasks

  • Prioritize tasks to optimize scheduling and resource allocation

  • Ensure team members complete critical tasks by their drop-dead date

  • Identify where to reallocate resources to avoid falling behind

  • Leverage schedule compression techniques, such as crashing or fast-tracking, when time runs short

Benefits of critical path project management

The critical path method helps project managers deliver the project within spec, but the benefits don’t end there. The process also delivers the following benefits:

1. Improved communication and problem-solving

Every team member must provide input to plot the critical task. The process draws on the cross-functional group’s diverse expertise, promoting understanding and alignment. Diverse perspectives help counteract bias, making problem-solving more effective and improving processes for everyone.

2. Prioritization

A network diagram makes visualizing the critical path easier. The team can readily identify critical tasks, breathing room in the , and issues with time or costs. Most importantly, it helps the team focus on crucial tasks to achieve the project’s goals.    

3. Accurate scheduling

Program evaluation review technique (PERT) is another tool that creates a schematic representation of project tasks and timelines. When used alongside the critical path method, PERT charts improve project scheduling accuracy and uncover potential pitfalls. With these tools, the team can mitigate risks and build slack into the project schedule to avoid costly delays.

4. Visualization 

Once the critical path process is complete, leaders can easily map the project timeline onto a Gantt chart. This chart communicates the project schedule to team members and stakeholders in an intuitive visual format.

How to calculate the critical path method step-by-step

With a systematic approach, establishing a project’s critical path is straightforward. Here are seven simple steps:

1. List project activities

Gather the project team and other stakeholders to discuss requirements and deliverables. Create a list of project tasks in the work breakdown structure to ensure the team doesn’t forget anything. 

2. Identify dependencies

Review the WBS and team member feedback to determine which tasks depend on the completion of others before they can begin.

3. Generate the network diagram

Visualize critical pathways using arrows to illustrate the task order. Activities without dependencies can run concurrently. These are known as parallel tasks. They are helpful for project scheduling because the manager can adjust their start and end dates if a bottleneck occurs.  

4. Establish timelines

There are four primary methods for estimating task duration:

  1. Best guess based on previous experience

  2. Estimate based on historical project data

  3. Estimate based on industry benchmarks

  4. Estimate based on extrapolated data

Regardless of your method, can become inaccurate due to delayed dependent tasks, timeline calculation errors, or unexpectedly efficient workers. The best way to address these unknown factors is to use three estimates for each activity and calculate the average. These estimates should include the following:

  1. The best case, shortest scenario

  2. A typical scenario

  3. The worst-case, longest duration

The calculation should look like this:

Activity duration = (A + B + C) ÷ 3

You can calculate a weighted average if previous experience shows one possibility is more likely than the others. For example, if you’re confident scenario B is most likely, the formula would look like this:

Activity duration = ( A + 2B + C) ÷ 4

Once the team completes the calculations, list the durations next to the corresponding tasks in the network diagram.

5. Calculate forward and backward passes for each activity

It’s time to apply the critical path algorithm. The formula has two parts. The first is the forward pass, which determines each activity’s earliest start (ES) and earliest finish (EF) time. The ES of any activity equals the EF time of the previous one. Here, T represents the duration of the activity.

Calculate a task’s EF like so:

Earliest Finish = ES + T

The forward pass allows the project manager to organize resourcing to remove downtime from the schedule.

The next component is the backward pass. This calculation determines the latest finish (LF) of the critical path’s final activity. Use the CPM formula to determine each task’s latest start (LS).

Latest start = LF – T

Defining the backward pass helps the team manage project risks by identifying the launch milestone – the date when an activity must begin to avoid delaying the entire project.

Include each item’s forward and backward pass calculations on the network diagram.

6. Chart the critical pathway

Review the CPM chart to determine the pathway with the longest duration from start to finish, traversing every critical task on the WBS. This sequence represents the critical path and the minimum time needed to deliver the project’s outcomes.

7. Calculate floats

A float is the amount of time the team can delay a task’s start time without negatively impacting the project’s schedule. This calculation can help with resource planning, allowing the project manager to divert assets from floating tasks to critical activities that are at risk of missing deadlines.

Note that tasks on the critical path have zero float because delaying their completion impacts the project timeline directly.

Some project management software includes features to calculate floats for you. Here’s how to do it manually:

  1. Identify the second-longest activity sequence in the network diagram.

  2. Subtract the duration of this sequence from the time needed to complete the critical path. This is the total amount of float.

  3. If the two sequences share an activity, the float for that task is zero as it’s on the critical path.

8. Review and revise

Mapping the critical path isn’t a file-it-and-forget-it activity. You must monitor progress throughout the execution phase to uncover and address risks before they impact the CPM schedule. 

Critical path method example

For leaders launching an e-commerce website, the work breakdown structure could look like this:

In this case, the critical path would map out like so:

Critical path project management with Tempo

Plotting a project’s critical path can be labor intensive. You have a lot of information to gather and process – not to mention all the calculations. Let Tempo project management software do the heavy lifting for you.  

is an all-in-one project management application that supports project and capacity planning, helping your team complete critical path scheduling and resource allocation. If the group encounters roadblocks or bottlenecks, the Portfolio Manager leverages artificial intelligence to find the best resource-leveling methodologies, such as crashing or fast tracking, to compensate.

For task duration estimates, review historical data stored in to improve accuracy and establish start times and deadlines. Timesheets can also monitor time spent on activities for current projects, helping to identify team members that need assistance before delays affect the project timeline.

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                    Translate the information into a flowchart diagram to help team members visualize a project’s critical path. Start with the opening task, then list all subsequent jobs in order of completion with arrows to identify dependencies – activities that can’t begin before the previous work is complete. Highlight the longest chain of tasks to identify the critical path.

                    You can use an to uncover a project’s critical path. Download the prototype, then input and organize each task and its duration. This will help you identify dependencies and visualize potential delays.

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