•   6 min read

How the Critical Path Method (CPM)
Works for a Product Business

Devel­op­ing soft­ware, pro­vid­ing ser­vices to end con­sumers, or oper­at­ing in the B2B sec­tor – busi­ness­es in any indus­try reach a stage of growth where the num­ber of tasks exceeds what can be real­is­ti­cal­ly man­aged. This is a sign of busi­ness progress. To tack­le this chal­lenge, we will exam­ine CPM, the Crit­i­cal Path Method, from clas­si­cal method­olo­gies. It is an algo­rithm of actions and stages designed to solve orga­ni­za­tion­al issues for direc­tors man­ag­ing many tasks.

For exam­ple, Michael is the man­ag­er of a cater­ing ser­vice in the cap­i­tal. He loves his job and knows all the ins and outs. How­ev­er, he has­n’t tak­en a vaca­tion in two years. Recent­ly, his firm won a ten­der for 500,000 meals for the Olympic team ath­letes. He needs to over­see the tim­ing of meal deliv­er­ies, coor­di­nate pro­tein shake sup­plies, and sched­ule wait­staff shifts. On top of that, there are oth­er tasks: arrang­ing office clean­ing, con­duct­ing inter­views, order­ing dis­pos­able food con­tain­ers. Due to such a work­load, impor­tant orders from pri­vate clients have been missed sev­er­al times.

Does this sound famil­iar? What should Michael and oth­er man­agers with sim­i­lar sto­ries do?

They can start sim­ple – by apply­ing the Crit­i­cal Path Method.

What is CPM?

Bril­liant solu­tions are cre­at­ed to address spe­cif­ic prob­lems. In 1957, when the Amer­i­can com­pa­ny DuPont faced issues with the recon­struc­tion and launch of chem­i­cal plants, the term CPM” did not exist. The com­pa­ny’s man­agers had a sim­ple task: to tran­si­tion to a new pro­duc­tion stan­dard as pain­less­ly as possible.

They solved it with the avail­able human, finan­cial, and time resources, thus lay­ing the foun­da­tion for the Crit­i­cal Path Method (CPM).

Note: CPM and CRM are dif­fer­ent con­cepts. Crit­i­cal Path Method (CPM) is a mech­a­nism for build­ing the short­est (most effi­cient) path to achieve a result, while CRM (Cus­tomer Rela­tion­ship Man­age­ment) is a soft­ware appli­ca­tion for automat­ing cus­tomer relations.
Over time, CPM evolved from a set of dry the­o­ret­i­cal prin­ci­ples into a full-fledged prac­ti­cal method. It is worth apply­ing for man­agers and direc­tors to con­trol dead­lines, ana­lyze, and man­age projects.

What is the Crit­i­cal Path Method in Project Time Management?

The Crit­i­cal Path Method in project time man­age­ment (CPM) is a step-by-step process man­age­ment sys­tem for indi­vid­ual projects and entire busi­ness­es. By defin­ing all actions on the crit­i­cal path, future costs can be ade­quate­ly esti­mat­ed, and project time­lines can be forecasted.

Why does­n’t man­ag­er Michael go on vaca­tion? Because as the cater­ing ser­vice grows, the num­ber of tac­ti­cal and strate­gic tasks has increased pro­por­tion­al­ly. A sin­gle per­son can man­age with a dai­ly plan­ner, and two can man­age with a board and sticky notes. Michael needs to over­see the inter­con­nec­tion between hun­dreds of tasks dai­ly for a dozen employ­ees. Michael imple­ments the Crit­i­cal Path Method in the company.

For exam­ple, region­al man­ag­er Dwight needs to win a cater­ing ten­der for an inter­na­tion­al IT con­fer­ence in 2017. Since time is one of the most valu­able resources, he breaks down the remain­ing time before the ten­der dead­line (21 days) into five seg­ments, each allo­cat­ed to a spe­cif­ic task. The big­ger the task, the more time is allot­ted to it.

Dwight breaks down the project prepa­ra­tion into five tasks:
  1. Detailed study of ten­der con­di­tions – 2 days
  2. Iden­ti­fy resources need­ed to meet the con­di­tions – 1 day
  3. Com­pare cater­ing resources with ten­der require­ments – 3 days
  4. Com­plete the ten­der check­list items – 13 days
  5. Sub­mit the ten­der appli­ca­tion – 2 days
Each task is fur­ther bro­ken down into small­er tasks, each assigned a pri­or­i­ty. Less impor­tant tasks may not be com­plet­ed at all, which is acceptable.

Dwight cal­cu­lates the nec­es­sary time, informs Michael, and allo­cates tasks among col­leagues to short­en the time­lines. As a result, the cater­ing ser­vice wins the ten­der, and Dwight receives a sub­stan­tial salary bonus. No more last-minute sub­mis­sions or overnight shifts!

What is the Crit­i­cal Path in Project Man­age­ment Analysis?

If the Crit­i­cal Path Method is a man­age­ment and plan­ning sys­tem, the crit­i­cal path is the longest chain of tasks in this sys­tem. All tasks on this path are crit­i­cal­ly impor­tant and can­not be post­poned, delayed, or for­got­ten with­out jeop­ar­diz­ing the project.

Let’s see how this works in real­i­ty and can be rep­re­sent­ed in a Gantt chart in Work­sec­tion.

Michael ordered a land­ing page for the cater­ing ser­vice with beau­ti­ful sales copy, ani­ma­tions, videos, and a pho­to gallery to boost sales. The task is com­plex and needs to be done yes­ter­day.”

For­tu­nate­ly, his acquain­tance, pro­gram­mer Ryan, knows about the crit­i­cal ren­der­ing path – the set of min­i­mal­ly nec­es­sary actions, resources, and cal­cu­la­tions need­ed to start ren­der­ing the page.

In the tech­ni­cal task, the fol­low­ing blocks are spec­i­fied for the ide­al land­ing page:

  • Head­er (logo, title, sub­ti­tle) – essen­tial for clarity
  • Call-to-Action block – crit­i­cal for sales
  • Carousel – show­cas­ing new dishes
  • Text blocks – for sea­son­al offers and descriptions
  • Gallery – can be added later
  • Timer – for future dis­counts or offers
  • Tar­iffs – impor­tant for pricing
  • Map – to be added after mov­ing to a new office
  • Foot­er – show­cas­ing part­ner­ships and trust

Based on this, Ryan builds a pri­or­i­ty scheme from most to least important:

  1. Head­er
  2. Carousel
  3. Tar­iffs
  4. CTA block
  5. Foot­er
  6. Text blocks
  7. Gallery
  8. Map
  9. Timer
With this pri­or­i­ty scheme, the land­ing page will be devel­oped on time, Michael will launch tar­get­ed ads, the cater­ing ser­vice will get new orders, and Ryan will receive his deserved salary. Every­one is happy!

Cal­cu­lat­ing the Crit­i­cal Path in Project Management

In 1997, when Steve Jobs was invit­ed back to Apple, the com­pa­ny was strug­gling. The leg­endary com­pa­ny was bounc­ing from one oppor­tu­ni­ty to anoth­er, announc­ing, releas­ing, and simul­ta­ne­ous­ly freez­ing dozens of new prod­ucts. Each depart­ment man­aged prod­uct time­lines inde­pen­dent­ly. It’s no won­der dead­lines for prod­uct mod­i­fi­ca­tions were con­stant­ly missed.

Steve was a genius but not omnipo­tent. He brought in key peo­ple, but one per­son can­not be every­where at once.

It was time to cal­cu­late the crit­i­cal path. Jobs might have used a cus­tom method for graph­i­cal­ly dis­play­ing the crit­i­cal path. Let’s present it in such a way:

Task Name

Task Code

Days

Entry

Exit

Dis­solve the board

A

14


B

Intro­duce new board members

B

12

A

C

Remove Gil Ame­lio as CEO

C

2

B

D

Elect Steve Jobs as CEO

D

1

C

E

Write a new slo­gan for Apple

E

15

D

F

Order a new ad cam­paign from TBWA\Chiat\Day

F

5

E

G

Diag­nose prof­itabil­i­ty of exist­ing projects

G

18

D

H, I, J

Ter­mi­nate unprof­itable projects: New­ton, Cyber­dog, Opendoc

H

13

G

K

Refuse to renew soft­ware licenses

I

6

G

K

Ana­lyze the PC market

J

19

G

K

Define future prod­uct concepts

K

4

H, I, J

L

Work on nam­ing new devices

L

4

K

M, N

Form team for Pow­er Mac­in­tosh G3 and Power­book G3

M

3

L

O

Form team for iMac and iBook

N

3

L

O

Cre­ate a pre­sen­ta­tion concept

O

9

M, N

P

Choose venue and tech­ni­cal equipment

P

8

O

Q

Write press releas­es for lead­ing media

Q

2

P



Then a scheme resem­bling a mind map was cre­at­ed and sent to key employees.

Jobs ensured the project time­line for Res­ur­rec­tion of Apple.” The best proof was the iMac G3’s suc­cess and the open­ing of the first Apple Stores.

The cal­cu­lat­ed crit­i­cal path can be con­ve­nient­ly rep­re­sent­ed as a diagram.


To build such a dia­gram, fol­low this checklist:
  1. Iden­ti­fy tasks.
  2. Sequence tasks using a table.
  3. Visu­al­ize using a dia­gram sim­i­lar to the one above.
  4. Esti­mate time for each task.
  5. Update the dia­gram as needed.

Note: The longest chain of tasks is the crit­i­cal path!

Advan­tages and Dis­ad­van­tages of CPM

Using CPM with­out thought won’t help achieve goals. Like many meth­ods, it’s a pow­er­ful tool for com­pa­ny goals.

Advan­tages:

1 Iden­ti­fies key tasks and their impact.
2 Opti­mizes time management.
3 Enables quick response to changes.
4 Com­pares planned vs. actu­al results.
5 Shows clear dependencies.
6 Focus­es on crit­i­cal tasks and outcomes.

Dis­ad­van­tages:

1 Increas­es prod­uct cre­ation time due to time reserves.
2 Tasks often take all allot­ted time (Parkinson’s Law).
3 Fin­ish­ing one task ear­ly doesn’t always fin­ish the project early.
4 Dif­fi­cult to use for cre­ative tasks with many variables.
5 Hard to apply in high-risk projects.

Prin­ci­ples of CPM

  1. Visu­al­i­ty: Effec­tive with dia­grams, graphs, info­graph­ics, and schemes. Tools like Work­sec­tion sim­pli­fy this.
  2. Tem­po­ral: Time defines task and project dead­lines and dependencies.
  3. Pre­dictabil­i­ty: Helps fore­cast nec­es­sary time.
  4. Pri­or­i­ty: Deter­mines task importance.

Steps to Man­age Project Timelines

  • Spec­i­fy tasks.
  • Deter­mine dependencies.
  • Visu­al­ize.
  • Fore­cast com­ple­tion times.
  • Iden­ti­fy crit­i­cal paths.
  • Update the scheme regularly.

CPM as an Alternative

CPM has evolved into a com­pre­hen­sive plan­ning and man­age­ment sys­tem. By break­ing down tasks, it enables accu­rate time fore­cast­ing. Thou­sands of com­pa­nies use CPM because time is an irre­place­able val­ue, and man­ag­ing it leads to success.

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