Network analysis :CPM/PERT Network analysis Dr Nihar Ranjan Ray Senior Research Officer, FRHS Ahmadabad, Iindia


Project :Project “A project is a series of activities directed to accomplishment of a desired objective.” Plan your work first…..then work your plan


Slide 3:Network analysis Introduction Network analysis is the general name given to certain specific techniques which can be used for the planning, management and control of projects. One definition of a project: “A project is a temporary Endeavour undertaken to create a "unique" product or service”


Why CPM….?....PERT…….? :Why CPM….?....PERT…….? Why India succeeded in the Chandraayan mission and why the Sun Temple of Puri failed to stand long though it is newer than the Lord Jagannath Temple…??


Slide 5:CPM and PERT as alternative to each other as Network Analysis tool in Management Planning


History :History Developed in 1950’s CPM by DuPont for chemical plants PERT by U.S. Navy for Polaris missile PERT was developed by the US Navy for the planning and control of the Polaris missile program and the emphasis was on completing the program in the shortest possible time. In addition PERT had the ability to cope with uncertain activity completion times (e.g. for a particular activity the most likely completion time is 4 weeks but it could be anywhere between 3 weeks and 8 weeks). CPM was developed by Du Pont and the emphasis was on the trade-off between the cost of the project and its overall completion time (e.g. for certain activities it may be possible to decrease their completion times by spending more money - how does this affect the overall completion time of the project?)


Definition…………………………… :Definition…………………………… The Critical Path Method (CPM) or Critical Path Analysis, is a mathematically based algorithm for scheduling a set of project activities. It is an important tool for effective project management Critical Path Method (CPM), is a procedure for using network analysis to identify those tasks which are on the critical path: ie where any delay in the completion of these tasks will lengthen the project timescale, unless action is taken. A PERT chart is a project management tool used to schedule, organize, and coordinate tasks within a project. A methodology developed by the U.S. Navy in the 1950s to manage the Polaris submarine missile program. A similar methodology, the Critical Path Method (CPM) was developed for project management in the private sector at about the same time.


Project Cycle Management :Project Cycle Management Henery Gnatt


Events of a project.. :Events of a project.. Discovery: Finding the Projects Portfolio planning Picking the Best Projects The Stop, Start, Continue Approach Innovate or Improve Identify the opportunities. Compare the opportunities Rank them and decide which to undertake. Spotting Bad Projects


CPM - Critical Path Method :CPM - Critical Path Method Definition: In CPM activities are shown as a network of precedence relationships using activity-on-node network construction Single estimate of activity time Deterministic activity times USED IN : Production management - for the jobs of repetitive in nature where the activity time estimates can be predicted with considerable certainty due to the existence of past experience.


PERT - Project Evaluation & Review Techniques :PERT - Project Evaluation & Review Techniques Definition: In PERT activities are shown as a network of precedence relationships using activity-on-arrow network construction Multiple time estimates Probabilistic activity times USED IN : Project management - for non-repetitive jobs (research and development work), where the time and cost estimates tend to be quite uncertain. This technique uses probabilistic time estimates.


Slide 12:Originated by H.L.Gantt in 1918 Gantt chart Advantages - Gantt charts are quite commonly used. They provide an easy graphical representation of when activities (might) take place. Limitations Do not clearly indicate details regarding the progress of activities Do not give a clear indication of interrelation ship between the separate activities


CPM/PERT :CPM/PERT These deficiencies can be eliminated to a large extent by showing the interdependence of various activities by means of connecting arrows called network technique. Overtime CPM and PERT became one technique ADVANTAGES: Precedence relationships large projects more efficient


Definition of Network terms :A Network is a graphic plan of all tasks that must be completed to reach the end objective of a project, showing their inter-dependencies and inter-relationships and the manner in which the project has to be executed. NETWORK ACTIVITIES EVENTS Definition of Network terms


An Event :An Event Also called as milestone and represented as node in the Network Analysis Chart. Recognizable at a particular instant of time. Consumes neither time nor resources. A point in time and not a passage of time. Events on a project network are either a commencement point or a completion point of a task to be performed. An event is generally represented on a network by means of a circle.


An Activity :An Activity Performance of work between any two events. Time-consuming and a resource-consuming element in a Network plan because performance of any activity (job) requires time and resources. A time-lag or a waiting-time can also be an activity. An activity is represented on a network by means of an arrow. There is another component of a network which is called a ‘Zero-time activity’. It is also known as a ‘Dummy Activity’ or a ‘Dummy’. It is represented on a network by means of a broken arrow.


While drawing Network Plan :While drawing Network Plan Besides observing the above ground rules, three basic questions should be posed and answered while drawing each and every arrow in a network plan. They are: What activities should be completed before the activity being drawn? What activities should follow immediately after the activity being drawn? What activities can be performed concurrently?


The Project Network :The Project Network Use of nodes and arrows Arrows ? An arrow leads from tail to head directionally Indicate ACTIVITY, a time consuming effort that is required to perform a part of the work. Nodes ? A node is represented by a circle - Indicate EVENT, a point in time where one or more activities start and/or finish.


Activity on Node & Activity on Arrow :Activity on Node & Activity on Arrow Activity on Node - A completion of an activity is represented by a node Activity on Arrow - An arrow represents a task, while a node is the completion of a task - Arrows represent order of events


Activity Slack :Activity Slack Each event has two important times associated with it : Earliest time , Te , which is a calendar time when a event can occur when all the predecessor events completed at the earliest possible times Latest time , TL , which is the latest time the event can occur with out delaying the subsequent events and completion of project. Difference between the latest time and the earliest time of an event is the slack time for that event Positive slack : Slack is the amount of time an event can be delayed without delaying the project completion


Critical Path :Critical Path Is that the sequence of activities and events where there is no “slack” i.e.. Zero slack Longest path through a network minimum project completion time


Ground Rules for developing a Network :Certain ground rules are to be observed for developing a Network plan for any project. They are: An event cannot occur until all the activities leading to it are completed; An activity cannot start until its preceding event has occurred; An event once having occurred cannot occur again, i.e. there is no network looping back to a previously accomplished event; Time flows from left to right; (v) Arrows, therefore, flow from left to right, i.e. there is no backward direction to the arrows; Every activity should be completed to reach the end event of the Network; Length of arrows has no significance with reference to the time durations of the activities, at the initial Planning stage. Ground Rules for developing a Network


Benefits of CPM/PERT :Benefits of CPM/PERT Useful at many stages of project management Mathematically simple Give critical path and slack time Provide project documentation Useful in monitoring costs


Potential Other Benefits :Provides a logical thinking in preparing the project schedule and gives a working logical model Identifies the jobs critical to the completion of the project Provides a means for minimizing resource allocation Helps in coordination of various efforts and improves communication at all levels Determines the status of the project at any given time Works as a diagnostic instrument in detecting problem areas for improvement Helps in predicting schedule slippage and cost overrun; and gives management a tool for supervision and control. Potential Other Benefits


Questions Answered by CPM & PERT :Questions Answered by CPM & PERT Completion date? On Schedule? Within Budget? Critical Activities? How can the project be finished early at the least cost?


example :example Illustration of network analysis of a minor redesign of a product and its associated packaging. The key question is: How long will it take to complete this project ?


Slide 27:For clarity, this list is kept to a minimum by specifying only immediate relationships, that is relationships involving activities that "occur near to each other in time".


Slide 28:"What activities must be finished before this activity can start" could we complete this project in 30 weeks? could we complete this project in 2 weeks? One answer could be, if we first do activity 1, then activity 2, then activity 3, ...., then activity 10, then activity 11 and the project would then take the sum of the activity completion times, 30 weeks. “What is the minimum possible time in which we can complete this project ? “ Before starting any of the above activity, the questions asked would be


Slide 29:We shall see below how the network analysis diagram/picture we construct helps us to answer this question.


Slide 30:CRITICAL PATH TAKES 24 WEEKS FOR THE COMPLETION OF THE PROJECT


Slide 31:Packages are available to determine the shortest path and other relevant information.


Slide 32:Data entry window


Slide 33:Output of the package


Limitations to CPM/PERT :Limitations to CPM/PERT Clearly defined, independent and stable activities Specified precedence relationships Over emphasis on critical paths Based on future prediction only


Slide 35:Thank you…. For any query kindly contact at dr.nihar.ray@gmail.com