A project involves a large number of interrelated activities (or tasks) that must be completed on or before a specified time limit, in a specified sequence (or order) with specified quality and minimum cost of using resources such as personnel, money, materials, facilities and/or space. Examples of projects include the construction of a bridge, highway, power plant, repair, and maintenance of an oil refinery or an airplane, etc. Since a project involves a large number of interrelated activities, therefore it is necessary to prepare a plan for scheduling and controlling these activities (or tasks). This approach will help in identifying bottlenecks and even discovering alternate work-plan for the project.
Network Analysis, Network Planning, or Network Planning and Scheduling Techniques are used for planning, scheduling, and controlling large and complex projects. These techniques are based on the representation of the project as a network of activities. A network is a graphical presentation of arrows and nodes for showing the logical sequence of various activities to be performed to achieve project objectives. These two well-known techniques are PERT and CPM.
Difference between PERT and CPM
Both PERT and CPM share in common the determination of a critical path and are based on the network representation of activities and their scheduling that determines the most critical activities to be controlled so as to meet the completion date of a project. However, the following are some of their major differences.
- In PERT analysis, a weighted average of the expected completion time of each activity is calculated given three-time estimates of its completion. These time estimates are derived from the probability distribution of completion times of the activity.
- In PERT analysis emphasis is given to the completion of a task rather than the activities required to be performed to complete a task. Thus, PERT is also called an event-oriented technique.
- PERT is used for one-time projects that involve activities of non-repetitive nature (i.e. activities that may never have been performed before), where completion times are uncertain.
- PERT helps in identifying critical areas in a project so that necessary adjustments can be made to meet the scheduled completion date of the project.
- In CPM, the completion time of each activity is known with certainty.
- CPM analysis explicitly estimates the cost of the project in addition to the completion time. Thus, this technique is suitable for establishing a trade-off for optimum balancing between schedule time and cost of the project.
- CPM is used for completing projects that involve activities of a repetitive nature.
Significance of using PERT and CPM:
- A network diagram helps to translate a complex project into a set of simple and logical arranged activities and therefore helps in the clarity of thoughts and actions.
- Detailed analysis of a network helps the project in charge to peep into the future because difficulties and problems that can be reasonably expected to crop up during the course of execution can be foreseen well ahead of its actual execution.
- Isolates activities that control the project completion and therefore allows expeditious completion of the project.
- Helps in the division of responsibilities and therefore, enhances effective coordination among different departments/agencies involved.
- Helps in the timely allocation of resources to various activities in order to achieve optimal utilization of resources.