Critical Pathway Analysis (CPA): Definition, Purpose, and Example

What Is Critical Path Analysis?

Critical path analysis (CPA) is a project management technique that requires mapping out every key task that is necessary to complete a project. It includes identifying the amount of time necessary to finish each activity and the dependencies of each activity on any others.

Also known as the critical path method, CPA is used to set a realistic deadline for a project and to track its progress along the way.

Key Takeaways

  • Critical path analysis is a project planning method that focuses on identifying tasks that are dependant on other tasks for their timely completion.
  • Understanding the dependencies between tasks is key to setting a realistic deadline for a complex project.
  • Critical path analysis is used in most industries that undertake highly complex projects.

What Is the Purpose of Critical Path Analysis?

In the late 1950s, James Kelley of Remington Rand and Morgan Walker of DuPont developed a project management technique called the critical path method (CPM). Earlier versions of their technique were being practiced before then and are said to have contributed to the completion of the Manhattan Project, the secret American defense program to build an atomic bomb in order to end World War II.

Since then, CPA has become a key component in planning and managing projects rationally.

Critical path analysis identifies the sequence of crucial and interdependent steps that comprise a work plan from start to finish. It also identifies non-critical tasks. These may also be important, but if they hit an unexpected snag they will not hold up any other tasks and thus jeopardize the execution of the entire project.

The concept of a critical path recognizes that completion of some tasks in a project is dependent on the completion of other tasks. Some activities cannot start until others are finished. Inevitably, that presents the risk of bottlenecks.

CPA is used widely in industries devoted to extremely complex projects, from aerospace and defense to construction and product development.

How to Use CPA

CPA detects and defines all of the critical and noncritical tasks involved in a work plan and identifies both the minimum and the maximum amount of time associated with each. It also notes those dependencies among activities, and that tells them the amount of float or slack time that can be associated with each in order to arrive at a reasonable overall deadline date.

The project plan must be tracked through the course of a project to make sure every task is on track and no adjustments need to be made. The timeline in a CPA is often expressed as a Gantt chart, a type of bar chart that is designed to illustrate the key dependencies in a complex project.

CPA is used widely in industries devoted to extremely complex projects, from aerospace and defense to construction and product development. Today, project scheduling software is used to automatically calculate dates for CPA, aiding in time efficiency, tracking performance, and creating a unified workflow.

How Do You Analyze a Critical Path?

The core of analyzing a critical path is identifying both critical and noncritical tasks and how to schedule these tasks most effectively. The goal is to reach the project deadline with the lowest cost possible. Analyzing a critical path involves identifying which tasks are dependent or independent from each other.

To create an optimal critical path, one can analyze if the time to complete tasks can be reduced. For example, say a contractor is building a home. To reduce the number of days it takes to build the frame, the contractor may choose to have more carpenters assigned to the job. As a result, the overall project may be completed a day earlier.

It's worth noting that the contractor may have key questions to ask when analyzing the critical path. Would the costs of this decision outweigh the savings of completing the project a day earlier? Is there enough equipment to make this possible? Looking closely at these interconnected variables is important for determining the critical path.

What Is an Example of Critical Path Analysis?

Consider the following example of critical path analysis used in the aerospace industry. Say airline Company A has low profitability. Management has identified that excess capacity is one reason behind its lower profitability levels. To increase the utilization of aircraft, it may choose to increase daily utilization from 10 to 11 hours a day. Here, the company finds that an extra hour will result in $100,000 in profit per aircraft annually. The company could in turn schedule a greater number of flights for aircraft that would have otherwise stood idle.

What Are the Benefits of Critical Path Analysis?

Critical path analysis (CPA) has a number of advantages, in particular for large and complex tasks. Using CPA can improve the efficiency and clarity of a project, provide accurate timescales, and provide estimates to stakeholders.