Critical Path Method (CPM) in Project Management

What Is the Critical Path In Project Management?

In project management, the critical path is the longest sequence of tasks that must be completed to execute a project. The tasks on the critical path are called critical activities because if they’re delayed, the whole project completion will be delayed. To find the critical path, project managers use the critical path method (CPM).

What Is the Critical Path Method (CPM)?

The critical path method (CPM) is a project management technique that’s used by project managers to create an accurate project schedule. The CPM method, also known as critical path analysis (CPA), consists in using the CPM formula and a network diagram to visually represent the task sequences of a project. Once these task sequences or paths are defined, their duration is calculated to identify the critical path.

Finding the critical path is very helpful for project managers because it allows them to:

• Accurately estimate the total project duration.
• Estimate the time that’s necessary to complete each project task.
• Identify critical activities which must be completed on time and require close supervision.
• Find out which project tasks can be delayed without affecting the project schedule by calculating slack for each task.
• Identify task dependencies, resource constraints and project risks.
• Prioritize tasks and create realistic project schedules.

Once done by hand, the critical path can now be calculated automatically with project scheduling software equipped with Gantt charts, which makes the CPM method much easier. ProjectManager is project management software that helps you quickly implement the critical path method. Build a project schedule on our award-winning Gantt chart, then simply filter for the critical path. When it’s time to execute, your team can collaborate with a task list, kanban board or calendar. And you can track everything with dashboards and reports to ensure you stay on track. Get started today absolutely free.

ProjectManager can calculate the critical path for you on our award-winning Gantt charts—learn more.

The critical path method was developed in the late 1950s by Morgan R. Walker and James E. Kelley. The origins of the critical path method are closely related to the Program Evaluation and Review Technique (PERT), a similar method that is commonly used in conjunction with CPM in project management.

CPM vs. PERT

The critical path method (CPM) and program evaluation and review technique (PERT) are both project scheduling techniques. But they aren’t interchangeable. We’ve been talking about CPM, but before we compare it to PERT let’s define the term.

PERT is used to get accurate time estimates for complicated projects. It uses an algorithm to calculate the estimated duration for unpredictable activities. It focuses on events and milestones on a PERT chart with nodes in the wireframe when developing projects.

However, while these are two different techniques, PERT and CPM can be used together for project planning and scheduling. The difference between them lies in that PERT is about time planning and time management, while CPM is about time and budgeting. PERT delivers a project quickly and CPM gets the project done on budget and on time.

Now that we know what’s the critical path of a project, we can learn about the critical path method (CPM), an important project management technique that’s based on this concept.

Related: Free Project Plan Template

When Should You Use Critical Path Analysis?

Critical path analysis is another way of referring to the critical path method. As noted, it’s used by industries with complex projects, such as aerospace, defense, construction and product development.

Therefore, critical path analysis is a crucial first step in developing a project schedule. It’s done early in the life cycle of a project, usually in the planning phase, but it’s not unheard of to have CPM as part of a project proposal before the project has been approved.

By understanding which are the critical tasks in a project you can focus on getting those done if time, resources and costs are an issue. Knowing this in advance of executing a project will help you deliver that project successfully.

Free Critical Path Template for Excel

Need help getting started with a critical path analysis for your project? Download this free critical path template for Excel. All the formulas are embedded, the network diagram is made—all you have to do is input your values.

What Is the Importance of CPM in Project Management?

Projects are made up of tasks that have to adhere to a schedule in order to meet a timeline. It sounds simple, but without mapping the work, your project scope can quickly get out of hand and you’ll find your project off track.

Using the critical path method is important when managing a project because it identifies all the tasks needed to complete the project. It then determines the tasks that must be done on time, those that can be delayed if needed and how much float or slack you have.

When done properly, critical path analysis can help you:

• Identify task dependencies, resource constraints and project risks
• Accurately estimate the duration of each task
• Prioritize tasks based on their float or slack time, which helps with project scheduling and resource allocation
• Identify critical tasks that have no slack and ensure those are completed on time
• Monitor your project progress and measure schedule variance
• Use schedule compression techniques like crash duration or fast tracking

Critical Path Diagram

As you can see in this critical path diagram, project activities are represented by letters and the critical path is highlighted in green. Tasks F, G and H are non-critical activities with float or slack. We can also identify task dependencies between the critical path activities, and also between activities (A, F and G) or (A, H and E), which are parallel tasks.

Critical Path Method (CPM) Formula

Before we learn how to use the CPM formula, we need to understand some key CPM concepts.

• Earliest start time (ES): This is simply the earliest time that a task can be started in your project. You cannot determine this without first knowing if there are any task dependencies
• Latest start time (LS): This is the very last minute in which you can start a task before it threatens to delay your project timeline
• Earliest finish time (EF): The earliest an activity can be completed, based on its duration and its earliest start time
• Latest finish time (LF): The latest an activity can be completed, based on its duration and its latest start time
• Float: Also known as slack, float is a term that describes how long you can delay a task before it impacts its task sequence and the project schedule. The tasks on the critical path have zero float because they can’t be delayed

The critical path method formula has two parts; a forward pass and a backward pass.

Forward Pass in CPM

Use the CPM diagram and the estimated duration of each activity to determine their earliest start (ES) and earliest finish (EF). The ES of an activity is equal to the EF of its predecessor, and its EF is determined by the CPM formula EF = ES + t (t is the activity duration). The EF of the last activity identifies the expected time required to complete the entire project.

Backward Pass in CPM

Begins by assigning the last activity’s earliest finish as its latest finish. Then the CPM formula to find the LS is LS = LF – t (t is the activity duration). For the previous activities, the LF is the smallest of the start times for the activity that immediately follows.

Related: 12 Free Project Scheduling Templates for Excel

Critical Path Method Example

Let’s take a look at a critical path example to better understand how the critical path method is used in project management. Although it’s high-level, it can help you visualize the meaning of a CPM schedule.

We’ll use this critical path diagram to explain the elements that make up the critical path analysis process. To keep things simple, we’ve already done the calculations for this example using the CPM formula.

The above critical path method example shows the critical path for getting a website online. All the tasks that are scheduled to build and launch the website are shown in the rectangular nodes.

Some of the tasks are being done at the same time as others. For example, the work on defining a target market is being done as the design is being done and the content for the site is being drafted.

However, not all these tasks are equally important. Some aren’t critical to getting the site live by the deadline. That’s where the critical path comes in. It has identified by the colored arrows all the tasks that must be done in order to complete the project plan on time.

Critical Path Method Steps

Now that you know the key concepts of the critical path method, here’s how to calculate the critical path in 8 steps.

1. Collect Project Activities

Use a work breakdown structure to collect all the project activities that lead to the final deliverable.

2. Identify Task Dependencies

Determine which tasks are dependent on other tasks before they can begin. Use your judgment and your team members’ feedback. Failing to define task dependencies correctly makes the critical path method useless.

3. Create a Critical Path Diagram

A CPM diagram or network diagram, depicts the order of activities.

4. Estimate the Timeline

To use the critical path method, you’ll need to estimate the duration of each task. Use data from past projects and other sources of information such as subject matter experts.

5. Use the Critical Path Formula

The critical path uses an algorithm, also referred to as the CPM formula. That algorithm has two parts, the forward pass and the backward pass. The forward pass is determined by using the earliest start for each activity (ES) and the earliest finish (EF). The ES of an activity equals the EF of the one before it. The EF is calculated by EF = ES + t (the duration of an activity).

The backward pass assigns the last activity’s EF as its latest finish. Then use the CPM formula to find the LS, which is LF – t. For the activities before that, LF is the smallest of the start times for the next activity.

6. Identify the Critical Path

The activities with 0 float make up the critical path. All of these critical path activities are dependent tasks except for the first task in your CPM schedule. All project tasks with positive slack are parallel tasks to the critical path activities.

7. Revise During Execution

Continue to update the critical path diagram as you go through the project execution phase.

These critical path analysis steps determine what tasks are critical and which can float, meaning they can be delayed without negatively impacting the project schedule. Now you have the information you need to plan the project execution plan and critical path schedule more accurately and have more of a guarantee you’ll meet your project deadline.

You also need to consider other changes or constraints that might change the project schedule. The more you can account for these unexpected events or risks, the more accurate your critical path schedule will be. If time is added to the project because of these constraints, that’s called a critical path drag, which is how much longer a project will take because of the task and constraint.

Benefits of Using CPM in Project Management

There are many reasons to use the critical path method. It’s a great project management tool to help you deliver your project on time and within budget, but we’ve already discussed that at length. Here are some other benefits of using CPM.

Critical Path Analysis Improves Team Communication

It fosters better communication within the project team. Everyone is involved in providing input and that brings the expertise of various project team members together for the better good of the project as a whole. This includes subcontractors, architects, electricians, construction managers, etc.

CPM Helps Prioritize Tasks

Naturally, having determined the critical path is going to help you prioritize your work. You know the tasks that must be done and that gives you wiggle room if there are issues with time or cost. You might not get every activity done, but you’ll get the ones finished that are critical to the project.

CPM & PERT Help Create Accurate Schedules

The critical path method will help you make a more accurate project schedule, especially when you use it in conjunction with PERT charts. You can estimate better and discover areas of risk and prepare to respond to them to avoid costly delays.

CPM & Gantt Charts Help Map Out Project Plans

Another benefit is the visual nature of CPM, especially when mapped on the timeline of a Gantt chart. Having a visual element to communicate the project schedule is always a plus. Not everyone absorbs information in the same way. Visual tools help teams better understand what’s expected of them and when it’s expected.

CPM Training Video

Do you still have questions about the critical path method? In this video, Jennifer Bridges PMP, explains how to find the critical path using a CPM diagram.

CPM & Project Management Software

As stated, the critical path method (CPM) was first invented in the late 1950s. During those times, project scheduling software didn’t exist, and project managers had to calculate the critical path manually.

Fortunately, today there are many project management software alternatives that can help with the critical path process. Most of them use Gantt charts to represent CPM diagrams and calculate the critical path, but their feature sets vary greatly. One of the most commonly used project management software to identify the critical path is Microsoft Project. However, it has major drawbacks that make ProjectManager a better choice.

Here are some of the main features that you’ll need as a project manager to properly use the critical path method for your scheduling process.

How to Find the Critical Path With ProjectManager

Figuring out the critical path by hand takes time, and it must be done throughout the project, which is why using project management software streamlines the process. ProjectManager is award-winning software that automates the critical path method process for you.

Our online Gantt chart filters for critical path, links dependent tasks and is integrated into a full project management software. Sign up for a free 30-day trial of our software and follow along to build a dynamic Gantt chart and automatically calculate your critical path in a few easy steps.

1. Start a Project With a Gantt Chart

Managing a project on Gantt charts allows you to both plan and schedule in one place. Add your tasks and their durations, and they’ll automatically appear on a project timeline, allowing you to see your whole project at once.

In the software, upload your tasks manually or upload a pre-existing spreadsheet. Add task descriptions, deadlines, priority, tabs and assign them to one or more team members. We also provide templates to help you get started.

2. Add Task Dependencies

In the software, connect your dependent tasks on the Gantt chart by dragging one onto the other. You’ll see a dotted line indicating that the tasks are linked, and you can then define the type of dependency it is.

3. Set the Project Baseline

Setting the baseline is possible when you’ve finished making your project schedule, complete with deadlines and costs. The baseline captures your data and uses it to compare against your actual progress.

On the Gantt chart, create your baseline for the project by adding the start date to the task and when it’s due to be completed. These planned start and end dates will be compared to your actual project data and show you whether you’re on target.

4. See the Critical Path

Easily find the critical path of your project by using our critical path filter. This helps you know what must be done to complete the project and shows if you’re experiencing any slippage.

5. See Your Overview With a Dashboard

Now that you’ve got your project planned out, viewing it from a dashboard is the best way to get a high-level view of your progress.

From the dashboard view, track if your project is proceeding as planned. Our dashboard monitors several project metrics, such as variance, tasks and more, automatically calculating your data to display it in easy-to-read charts and graphs.

6. Report on Progress

Reporting is crucial to pull data from your project and get and share insights into how it’s doing. Reports come in many varieties, which together provide a snapshot of the whole project’s performance.

Easily generate reports on the critical path, task progress, project status, costs and more in the software. We do the calculations for you, and you can filter the results to show just what you want to see. Our reporting feature is done automatically with one click.

ProjectManager is an online tool that gets real-time data to determine how accurate your planned schedule is to the actual one, so you can adjust immediately if necessary. See how it can help your project by taking this free 30-day trial.

Start My Free Trial