1. IB Business and Management 5.8 Project Management (Critical Path Analysis)

2. Task – Planning a task You are going to do some simple project planning For making breakfast…….

3. Information It takes me 3 minutes to make the toast in the toaster It takes 1 minute to break and whisk the eggs and then I need to put them in the microwave for a further 3 minutes. The grill takes 2 minutes to heat and bacon takes 4 minutes to cook under the grill. The breakfast takes me 1 minute to serve and a further 10 minutes to eat. Once I have eaten my breakfast I need to wash up which takes a further 2 minutes and then put the plates away which takes 2 minutes.

4. Questions What is the quickest time to make and eat breakfast? Can you draw a diagram to explain the process to someone? Which tasks would cause the process to take longer if you didn’t start it on time?

5. Answer….. 1 Put the grill on 2 Put the bread in the toaster 3 Whisking the eggs takes 1 minute 4 Put the eggs in the microwave – need to be in for 3 minutes 4 Once the grill is ready I put the bacon in – total time so far is two minutes 5 The toast is ready after 3 minutes and the eggs are ready after a total of 4 minutes 6 The bacon finishes after 6 minutes – 6 minutes so far 7 The breakfast takes 1 minute to serve – 7 minutes so far 10 – It takes 10 minutes to eat – 17 minutes so far 11 – Washing up and putting away takes 4 minutes – 21 minutes

6. What is Critical Path Analysis? Critical Path Analysis (CPA) is a project management tool that: Identifies all the individual activities that make up a larger project. Determines how long each task will take Identifies which tasks require other tasks to be completed first Identifies which tasks can take place concurrently Identifies the earliest start time and latest finish time of each task Identifying the critical tasks that will cause delays to the whole project if not completed on time

7. Important parts of the CPA Diagram

8. Key Rules of Critical Path Analysis Nodes are numbered to identify each one and show the Earliest Start Time (EST) of the activities that immediately follow the node, and the Latest Finish Time (LFT) of the immediately preceding activities The CPA must begin and end on one ‘node’ Each activity is labelled with its name eg ‘print brochure’, or it may be given a label, such as ‘D’ The activities on the critical path are usually marked with a ‘//’

9. A B C D E F G H 2 days 8 days 4 days 6 days 9 days 5 days 6 days 2 days 1 2 3 4 5 6 0 211 17 813 17 112 0 1510 A network diagram is made up of lines and nodes, showing The sequence in which tasks must be completed Firstly, the activities are labeled…… this is usually done using letters in order to keep the diagram neater The time taken for each activity is added along the line Now, using the information given, we add the EARLIEST START TIME (EST) on the diagram working from left to right The nodes are now numbered Now working from right to left the LATEST FINISH TIME (LFT) Is added to each node The CRITICAL PATH is the path through the nodes where the EST and the LFT are the same. It is the longest path through these nodes These are labeled on the diagram using double lines The critical activities are A, E and G…… management should Concentrate supervision on these activities

10. Example…. Baking a loaf of Bread ActivityPreceded byElapsed time (minutes) A weigh ingredients-1 B mix ingredientsA3 C dough rising timeB60 D prepare tins-1 E pre-heat oven-10 F knock back dough and place in tinsC&D2 G 2nd dough rising timeF15 H cooking timeE & G40

11. Task Can you draw a critical path diagram for making breakfast?

12. What does the Diagram Show? If there is any delay on any of the activities on the Critical Path then the whole project will be delayed The total time along this critical path is also the minimum time in which the whole project can be completed. Some branches on the CPA may have FLOAT, which means that there is some spare time available for these activities.

13. A B C D E F G H 2 days 8 days 4 days 6 days 9 days 5 days 6 days 2 days 1 2 3 4 5 6 0 211 17 813 17 112 0 1510 Calculating the Total Float(the amount of time an activity can be delayed without delaying the whole project) To calculate the total float for an activity you must use the formula: Float = Latest Finish Time - Earliest Start Time - Activity Time E.g. For Activity F 15 – 8 – 5 = 2 days Work out the total float times for the other activities

14. A B C D E F G H 2 days 8 days 4 days 6 days 9 days 5 days 6 days 2 days 1 2 3 4 5 6 0 211 17 813 17 112 0 1510 Calculating the Free Float (the amount of time an activity can be delayed without delaying the next activity) To calculate the free float for an activity you must use the formula: Float = Earliest start time of next activity - Earliest Start Time of this activity - Activity Time E.g. For Activity F 13 – 8 – 5 = 0 days Work out the free float times for the other activities

15. DUMMY ACTIVITIES

16. Task Create and complete a network diagram to represent the following project: Activities A (4 days) and B (5 days) can start simultaneously Activity C (4 days) can begin once activities A and B are complete Activity D (3 days) can begin once activity B is complete Activity E (1 day) ends the project and can begin once activities C and D are complete

17. It is not possible… ….unless a DUMMY ACTIVITY is used

18. Dummy activities A dummy activity is one that is created purely to illustrate dependency They are not labelled and take up no time They are represented by a dotted arrow So our previous diagram would be completed as follows:

19. What can a business do if a project is delayed? Firstly, the CPA is helpful because it shows the likely impact on the whole project if no action were taken. Secondly, if there is float elsewhere, it might be possible to switch staff from another activity to help catch up on the delayed activity. As a rule, most projects can be brought back on track by using extra labour – either by hiring additional people or overtime. Note, there will be usually be an extra cost. Alternative suppliers can usually be found – but again, it might cost more to get urgent help.

20. Critical Path Advantages Gives a visual representation of the problem which can be easier to understand than a list of times, dates and activities. Can reduce lead times by identifying simultaneous activities. This could give the firm a competitive advantage By identifying the critical path and float activities, resources can be allocated more efficiently. Helps to reduce time lost between tasks allowing the project to run more smoothly. Encourages forward planning and the consideration of all tasks that make up a project. Contingency plans can be formulated based on different scenarios. Concentrates resources (labour and capital) on the most important areas (those lying on the critical path), instead of on the least important (those that have float time). Enables careful planning of cash flow. Supplies can be ordered and paid for when they are needed instead of well ahead of time when they are not. Encourages monitoring of the project. Actual timings can be compared to expected timings.

21. Limitations of Critical Path Simply drawing a network does not ensure smooth running of a project. Some projects are too large and complex. Computer programs may offer better planning tools. Network diagrams are only useful if the data used to produce them is accurate. Errors could lead to the identification of a false critical path. Does not ensure that managers keep control of the project. Some activities may over-run.