1. Critical Path Analysis
A critical Path!

2. Critical Path Analysis (final section of 3
Critical Path Analysis (final section of 3.3 Decision Making Techniques)
Essential Items you need to know
Wide range of uses for planning/projects/launches
Scheduling to conserve TIME, minimise COST and maintain QUALITY
NOT required to build critical path from scratch but finish semi-complete diagram
Identification of where is the critical path
Understanding Critical Path terms (and calculating results for) items such as “Total Float”, Earliest Start Times and Latest Finish Times
Understand the strengths and weaknesses of the approach

3. Critical Path Analysis = use of “Network Diagrams”
What industries are likely to use these diagrams? (And why?)
Project based construction, engineering, product development, software design, aerospace and defence industry, event planners (2012 London Olympics)

4. Intro: Making a cup of tea (no sugar) – how quick can we plan to do this - from standing in the kitchen to have a hot tea ready to drink?
Lets list what we need to do, how long it takes and in what order:
Sketch a critical path diagram to represent the project of making a cup of tea

5. Chocolates anyone?
When Cadbury’s decided to introduce Flake Bites, to compete with Maltesers and KitKat, Management wanted to know how long it would take to reach full scale production.
Machinery ordering and delivery will take 9 weeks,
Installation takes 5 weeks,
Staff recruitment takes 4 weeks,
Training 2 weeks,
Suppliers need 4 weeks’ lead time, and
Trial production requires 2 weeks

6. Preparing a network diagram
Activity Preceded by Duration A B C D E F
Machinery ordering and delivery will take 9 weeks, installation takes 5 weeks, staff recruitment takes 4 weeks, training 2 weeks, suppliers need 4 weeks’ lead time, and trial production requires 2 weeks

7. Try sketching the network diagram in pencil

8. Step 1: Network for Flake Bites9
Node
A node represents:
The start of an activity
The end of an activity
Both the start and end of an activity. All networks start and end with a node
The number represents which step it is. Number 1 means the first step
Activity
An activity represents a task that is undertaken, eg staff recruitment 1
Label the activities, putting in time taken. Do in pencil first

9. Earliest Start Time 1 1 A 9 B D 5 4 F C E 2 EST - Earliest start time
EST - Earliest start time
EST is the earliest time an activity can start. We write this in the top right box in the node:
The EST for the first activity is now ie 0
We start from the left and fill in, remembering we cannot start an activity until all the preceding activities have finished, which means the EST is the longest route to a node.
Calculating EST allows a firm to organise when it needs resources, and gives the earliest completion date for the whole project.
So for example, the earliest we can start on D (installation) is 9 weeks. This means the earliest time Cadbury’s needs its engineers on site to install the machines is 9 weeks after the project starts

10. Latest Finish Time 1 1 A 9 B D 5 4 F C E 2 14 16 1614 16 16
LFT – Latest Finish Time
LFT shows the time by which an activity must be completed.
We write this in the bottom right box in the node; it refers to the preceding activity
We start from the right and work backwards. The final node will have a LFT of the time a project takes, which will be the EST, in this case 16 weeks. Working back gives 14 weeks as the latest all the preceding activities (B,D and E) have to be finished by.
Calculating the LFT provides the deadlines that must be met for the project to be completed on time. It also helps to identify the activities which have slack, or ‘float time’, and identifies the critical path

11. Critical path 1 A 9 B D 5 4 F C E 2 14 16 9 12 14 16
Critical Path is marked
The critical path comprises those activities that take longest to complete, and so which determine the length of the whole project.
In this case it is A, D and F, and is indicated by
A, D and F are the critical activities which must not be delayed by even 1 day – because if they are, the whole project is delayed.
Identifying the critical path allows managers to apply management by exception, which means management time is spent supervising the critical activities.
If a manager sees an activity might be delayed, the manager can consider moving resources (labour or machinery) from a non-critical task

12. Float time 1 A 9 B D 5 4 F C E 2 14 16 12 Float Time14 16 12
Float Time
The float time shows by how much time an activity may overrun (be delayed) before is has an effect on either the next activity (“Free Float”), or on the project as a whole (“Total Float”)
FF = EST start of next task – EST start of this task – duration
Activity C (training) FF = = 8 weeks float
Management can delay / extend training an additional 8 weeks if required
TF = LFT of the activity - duration of the activity - the EST of the activity
Activity D (installation) TF = = 0 weeks float
NO Slippage Allowed as D is on the Critical Path

13. Terminology
EST – Earliest start time – the earliest day number a project can begin
Critical path – the longest collection of steps such that any delay extends the project
Free Float – days a task can be delayed without affecting the next step
Latest Finish Time – last possible day number a project can finish, so next step is not delayed
Total Float – Total time a task can be delayed without affecting the project

14. Disadvantages of using CPA
GIGO
Unforeseen Challenges during project
Beware the un-doable project
Feasibility / Flexibility of resource use

15. Working Capital Control
Benefits of CPA
Efficiency
Decision Making
Working Capital Control
Time Management
Eff: tasks done together, saves time, resources, highlights probable delays, avoid penalty clauses/earn bonuses. DM: sci and Obj method – should lead to more realistic assessments, fore warns vs difficult areas; Time CPA minimises time OR swaps extra time for lower cost Working Capital – when will mats and equipment be needed – crucial for resource management V IMPORTANT FOR JIT Management

16. What CPA should be linked to
Just-in-time (JIT). JIT is when a business orders supplies just in time for them to be used, and requires the careful planning given by CPA
Working capital management, keeping stocks low
Human Resource Management (HRM) planning: how many staff are needed, with what skills, for how long

17. Preparing a network diagram (answers)
Activity Preceded by Duration
A Machinery weeks
B Staff Recruit weeks
C Suppliers lead time 4 weeks
D Installation A 5 weeks
E Training B 2 weeks
F Trial Production All 2 weeks
Machinery ordering and delivery will take 9 weeks, installation takes 5 weeks, staff recruitment takes 4 weeks, training 2 weeks, suppliers need 4 weeks’ lead time, and trial production requires 2 weeks