Case Study: Using CPM or PERT in time planning & control

For over three decades, I worked for a development bank. My main job was to evaluate proposals for setting up of industrial projects initially as an Officer and later as Head of the Division. I have many interesting stories to share in project planning and implementation. One such story is the success of Pakistan Mineral Water Corporation (PMWC) in water-bottling. The company no more exists. It has since been swallowed up by multinational brands of bottled-water like AVA, Aquafina & Culligan.

In early 1986, three companies, including PMWC, applied for water- bottling plants. The market justified only one. I called sponsors of the companies and told them that I would recommend the case of one which could demonstrate its ability to go into production before October 1987. “What is that for!!!” all spoke at the same time. “Well, as a bottlers you should know upcoming Cricket Cup at Karachi” I told them and added, “Anyone who catches the event would have an instant success.” Only one, J. Rashid of PMWC, turned up with a rudimentary sketch of CPM which convinced me of his ability to beat the deadline.

Simply put, CPM stands for Critical Path Method used in planning and controlling time. It helps estimate time for project completion, pin-points activities critical for achieving the target. Above all, it gives a graphic view of the activities of a project which is easy to understand in one go.

As per information provided by J. Rashid, the project required basic facilities like land, building and machinery which have been shown in Table #1 along with estimated time. As would be observed that after acquiring land, the company can go for three activities: (i) placing order for machinery, (ii) construction of building, (iii) placing order for plastic bottles for water filling.

When buildings are complete, machines can installed and the same time, racks can be erected for storing plastic bottles. Thus the company can go for trials runs as necessary pre-requisites are in order.

Format of a network or CPM varies. Basic structure is given in the text books or Software (MS Project 2007) which can be suitably modified. Personally, I like a detailed format for presentation.

Here each box or node has nine cells as shown in its legend. ES means Early Start while EF mean Early Finish.

In sketch # 1, some information has already been inserted about a particular activity such as ID, Description & Duration. The activities are also placed keeping their relationships in view.

Let us start with ES & EF. This is simple except where we confront a Merge Event. We would insert Zero ( or expected date ) in the first cell of activity #1. Since duration for this activity is 1 month, the EF would be 0 + 1 = 1. Same would be carried for activities #2, #3 & #4 and EF worked out accordingly.

The ES of activity #5 would be 9, same as EF of its predecessor #3. It is natural; you cannot start erecting racks (#5) unless buildings (#3) are complete.

When you go next to activity #6, you would see two activities (#2 & #3) are merging. Obviously, you cannot start installation of machines (#6) unless the machinery has arrived as per order (#2) and buildings (#3) are complete. Here we would take maximum of EF of the both as both must be complete before #6 can be started. In the same way, we can complete rest of the diagram. We find that the project would take 19 months to be completed as shown in Sketch # 2 below:

As the name implies, we move backward to the origin. In this example, the project completion time is 19 months. So its Early Finish (EF) or Late Finish (LF) must be the same. In other words, call it early or late, it must be finished by 19th month.

We start from last activity #8 and insert 19 in its LF cell. This activity has duration of 4 monthss. Calculating backward, we find that its LS should be 15th months (19 - 4 =15 ). In other, if #8 was started as late as on 15th months and it takes 4 months, it could still meet the deadline of 19 months.

We go back further and trace tails of any arrows touching #8. We find two, one linking with #7 (Store Raw Materials) and other with #6 (install machinery). We would put 15 in the LF Cells of #6 & #7. We can now calculate their LS by deducting from 15 their respective durations. For example, the LS of #6 should now be 9 (15-6=9).

We can continue likewise till we hit a "Burst Event" like #3 & #1. For explanation, #1 would be better as three activities are leading back to this activity. (There are three tails touching #1.) In such a situation, we shall take minimum of the LS of the three which is one month and it would be LF of #1. Why? The longest activity after #1 is #3. In order to enable #3 to start on time, it is essential that the preceding activity is completed well in time.

The complete working is shown in Sketch # 3 below:

PERT stands for “Project Evaluation and Review Technique”. It is almost the same as CPM except for the following differences:

• CPM is for repeated projects while PERT is for first-timers.
• CPM is used both for time and cost whereas in PERT only time is taken care of.
• Because CPM is for repeated projects, there is a track-record or database of previous projects. It enables the manager to be realistic in their estimates. For PERT, being for first time projects, one has to ask the knowledgeable persons to give time-estimates for each activity as to (i)Minimum time as in most favorable conditions, (ii) Maximum time as in most unfavorable conditions and (iii) Normal time. Thereafter a weighted average is calculated as shown in Sketch #4.

Once time has been estimated, the rest is the same as in CPM.

In the upcoming articles, I would cover probabilities of project completion in different situations, relationship amongst activities, slacks and resource management.