# Critical Path Analysis

#### Full Definition of Critical Path Analysis

Critical Path Analysis is an analysis technique used to identify the critical (essential) and non-critical (non-essential) activities associated with a business process or work plan and the amount of float (slack) associated with each activity.

The result of the analysis defines the critical path, a sequential set of related and essential steps that comprise a value stream or work plan, usually with zero slack. It is the longest path, in terms of duration, that passes through all the critical steps of a value stream or work plan, and determines the fastest time to completion. The results of critical path analysis are depicted graphically in a Critical Path Diagram.

Critical Path Analysis Answers the most important question – What is the minimum amount of time needed to complete all activities?

## Applications

• To identify the critical and non-critical activities associated with a business process or work plan.
• To identify non-critical steps that can be eliminated, at minimum cost, to improve the value stream or work plan.
• To identify the amount of time an activity may be delayed without affecting subsequent, dependent activities or the ending time or date.
• To identify the total float of each of the project activities.
• Allows you to determine the duration of the project

## Procedures

• Identify all steps in the business process or work plan.
• Document the steps in the sequence in which they occur.
• Identify the relationships between steps, and document the dependencies between them.
• Determine the latest allowable start and end time or date when each step can occur without delaying the next step and, subsequently, the whole value stream or work plan.
• Calculate a float value for each task. Critical tasks usually have zero float. Non-critical tasks will have a numeric value associated with them, representing slack time.
• Calculate the float for each step by subtracting the Early Start time or date from the Late Start time or date and assign a float value to each task and sub-task.
• Using the information collected above, identify the critical and non-critical tasks and sub-tasks by determining the duration of the value stream or work plan.
• Chart/document the critical path.

## Instructions

The essence of critical path analysis is to examine all options for reducing the duration of time required to complete the critical steps in a business process or work plan. Tasks, their duration, and their dependency relationships determine the critical path. When applied in business reengineering, critical path analysis addresses issues of quality, efficiency, and cost reduction by standardizing work efforts and eliminating unnecessary steps to reduce the time required to satisfy the value stream customer. In project planning, critical path analysis is applied to determine all options (duration, cost, resource requirements) for reducing the work plan or project duration and for determining the amount of time an activity may be delayed without affecting subsequent, dependent activities or the project end date. When used in conjunction with Cycle Time Analysis and Dependency Analysis, Critical Path Analysis is an effective tool to measure the quality of the business process or work plan by analyzing the steps in the path, measuring inefficiencies, and determining what steps can be eliminated to improve a business process redesign or reduce the amount of time required in the work plan.

Critical path analysis begins with the identification of all activities (tasks and sub-tasks) which are part of the business process or work plan. Document the tasks and sub-tasks in sequential order; documentation can be prepared using various diagramming techniques such as block diagrams, workflow diagrams, etc. (see Work Flow Diagramming), in a simple list, or using an automated project management tool for creating work plans.

Once all tasks and sub-tasks have been identified, identify the relationships between the tasks and sub-tasks, using Dependency Analysis. Determine which tasks and sub-tasks are dependent upon one another and establish a predecessor or successor relationship. Document these relationships on the diagram, list, or work plan.

Chart the critical path by identifying all critical steps (those with the least float). The path through all steps or events that have zero float represents the critical path. The non-critical steps (those with associated float) are candidates for elimination from the value stream or work plan.

Resource constraints will affect the true critical path calculation as the longest chain of activities that will determine the shortest period of time may be affected by such constraints. The critical path analysis may be followed by resource planning, using resource manipulation techniques such as Resource Allocation, Loading, and Leveling to improve project schedules and end dates. A Project Critical Path altered by constraints would determine the resource critical path or critical chain.

Keep in mind, a project critical path may change over time. Another sequence may overtake current critical path at any point in time. It is important to monitor for these possibilities. These overtake candidate sequences can be called “near critical path.”

1. Maximise efficiency in the use of time, Improve efficiency and generate cost saving in the use of resources, Beneficial for monitoring cash flow.
2. CPM encourages a logical discipline in the planning, scheduling, and control of projects.
3. CPM encourages more long-range and detailed planning of projects.
4. All project personnel get a complete overview of the total project.
5. CPM provides a standard method of documenting and communicating project plans, schedules, and time and cost performances.
6. CPM identifies the most critical elements in the plan, focusing management’s attention to the 10 to 20% of the project that is most constraining on the scheduling.
7. CPM provides an easy method for evaluating the effects of technical and procedural changes that occur on the overall project schedule.
8. CPM enables the most economical planning of all operations to meet desirable project completion dates.

Usefulness may be limited in complex and large-scale operations, Necessity of having clear and reliable information, Skilled management, and team philosophy are essential.

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#### Definition Sources

Definitions for Critical Path Analysis are sourced/syndicated and enhanced from:

• A Dictionary of Economics (Oxford Quick Reference)
• Oxford Dictionary Of Accounting
• Oxford Dictionary Of Business & Management

This glossary post was last updated: 26th November, 2021 | 0 Views.