Any project involves planning, scheduling and controlling a number of interrelated activities with the use of limited resources, namely, men, machines, materials, money and time. The projects may be extremely large and complex such as the construction of a power plant, a highway, a shopping complex, ships and aircraft, introduction of new products and research and development projects. It is required that managers must have a dynamic planning and scheduling system to produce the best possible results and also to react immediately to the changing conditions and make necessary changes in the plan and schedule. A convenient analytical and visual technique of PERT and CPM prove extremely valuable in assisting the managers in managing the projects.
Both the techniques use similar terminology and have the same purpose. PERT stands for Project Evaluation and Review Technique developed during 1950’s. The technique was developed and used in conjunction with the planning and designing of the Polaris missile project. CPM stands for Critical Path Method which was developed by DuPont Company and applied first to the construction projects in the chemical industry. Though both PERT and CPM techniques have similarity in terms of concepts, the basic difference is, PERT is used for analysis of project scheduling problems. CPM has single time estimate and PERT has three-time estimates for activities and uses probability theory to find the chance of reaching the scheduled time.
Project management generally consists of three phases.
1. Planning: Planning involves setting the objectives of the project. Identifying various activities to be performed and determining the requirement of resources such as men, materials, machines, etc. The cost and time for all the activities are estimated, and a network diagram is developed showing sequential interrelationships (predecessor and successor) between various activities during the planning stage.
2. Scheduling: Based on the time estimates, the start and finish times for each activity are worked out by applying forward and backwards pass techniques, the critical path is identified, along with the slack and float for the non-critical paths.
3. Controlling: Controlling refers to analysing and evaluating the actual progress against the plan. Reallocation of resources, crashing and review of projects with periodical reports are carried out.
Development of Project Network
Basic to PERT as well as CPM is the network diagram. The network diagram also referred to as the projected graph, shows the activities and events of the project and their logical relationships.
The network diagram is constructed in terms of activities and events. An activity is a definite task, job, or function to be performed in a project. For example, ‘prepare dinner’ is an activity. An activity is represented by an arrow. The head of the arrow marks the completion of the activity and the tail of the arrow marks its beginning. (The length and ‘compass’ direction of the arrow have no significance.) An event is a specific point in time indicating the beginning or end of one or more activities. It represents a milestone and does not consume time or resources.
Since activities are the basic building blocks of a network diagram, it is necessary to enumerate all the activities of the project. For this purpose, it is helpful to break the project into several steps. The number of steps, of course, would depend on the magnitude and complexity of the project. For industrial projects generally, a two-step procedure could suffice. In the first step, the major parts of the project are identified and in the second step, the activities of each major part are delineated. Activities should be so defined that they are distinct, reasonably homogeneous tasks for which time and resource requirement can be estimated.
Once the activities are enumerated it is necessary to define for each activity, the activities which precede it, the activities which follow it, and the activities which can take place concurrently. Given this information, the network diagram, showing the logical relationship between activities and events may be developed following either the forward method or the backwards method.
The forward method begins with the initial event, marking the beginning of the project, and proceeds forward till the end event is reached. The backwards method begins with the end event and works backwards till the beginning event is reached.