Unleashing the Power of the Critical Path for SMB Contractors

Construction projects can be absolute chaos, especially if your company is growing and you are taking on larger projects and building your team’s experience. The interconnected nature of activities and deliverables on a project can quickly become overwhelming if the activities are not managed effectively.

As your company grows and you start finding yourself on projects where a disciplined understanding of the project schedule is required for success, it’s time to use a powerful tool to bring order to the madness: the Critical Path Method (CPM). No more flying by the seat of your hard hat – CPM is your roadmap to smoother sailing, shorter timelines, and happier clients.

Key Takeaways

• The critical path is the longest sequence of dependent activities on a construction project. Delays in individual tasks on the critical path will delay the overall project completion date.
• Identifying and managing the critical path provides many benefits including sharper scheduling, resource optimization, enhanced communication, and improved cash flow.
• Creating a critical path involves listing all tasks, identifying dependencies between tasks, estimating task durations, mapping the tasks chronologically, and using software to calculate the critical path.

What is the Critical Path?

Imagine your project as a tangled web of tasks. Some tasks can wait patiently, while others, like laying the foundation before building walls, must be done in a specific order. The critical path is that crucial sequence of tasks — the tightrope walk across the project timeline — where delays in one domino can bring the whole sequence crashing down. In other words, the Critical Path is the longest sequence of dependent activities on a construction project, where a delay in any of the component activities will result in a delay to the overall completion date of the project.

On every construction project I worked on, whether it was a $200,000 job or a $700 million job, the Critical Path was treated with respect and governed many of the daily decisions around how the work was planned and executed. “We can’t push that activity, because it will affect Critical Path,” is a phrase I have heard and said countless times. If you aren’t currently identifying, monitoring, and managing items that are on or related to the Critical Path, this article will help guide you through how to integrate the Critical Path into your project planning.

👉🏻 Check out our full guide on building a construction schedule.

How Can It Help Your SMB Business?

Think of CPM (also called Critical Path Analysis) as your secret weapon against project pandemonium. It helps to add clarity to the most important aspects of your project and allows you visibility into conditions and events that threaten to delay the most critical pieces of work. A CPM also allows all stakeholders across the project team to understand the importance of certain activities and work in unison to ensure there are no delays to the critical tasks. These are but a few of the many benefits using a CPM brings to your project management team:

• Sharper Scheduling – Identify potential bottlenecks and delays before they become reality. Plan your resources better, avoid costly backtracking, and watch those deadlines be met more consistently. More efficient scheduling on one project can, ultimately, allow you to free up resources and manage them more effectively, allowing you to take on more projects simultaneously.
• Resource Optimization – Allocate manpower and materials precisely, ensuring the right people and tools are at the right place at the right time. Letting craft labor and equipment sit around is very expensive. Stop losing money to wasted hours by utilizing the CPM on your project.
• Enhanced Communication – Share the clear-cut critical path with your team, fostering understanding and collaboration. Everyone knows their role in the overall orchestra that is the project and they know when they are supposed to play their respective instruments, leading to smoother workflows and happier builders.
• Improved Cash Flow – Shorter timelines mean faster completion and quicker billing. You’ll spend less time on site, so you spend less out of the gate on general conditions. You are able to start other projects faster and can bill faster, leading to quicker realization of revenue and improved cash flow. CPM helps you keep the money flowing, fueling your business growth and keeping the bank manager smiling.

Building Your First Critical Path: A Step-by-Step Guide

Identifying what the Critical Path is and understanding the benefits of using it on your project are all well and good, but let’s put theory into practice. Let’s imagine a scenario where you are building a little coffee shop and we’ll go through the process of defining and managing items on the Critical Path:

1. List Your Project Tasks – Break down your project into bite-sized tasks, using a work breakdown structure (WBS), from pouring the foundation to installing the espresso machine. Think of it as your construction grocery list. Once you have your tasks broken down into smaller, more digestible chunks, they become easier to conceptualize, plan for, and manage.

2. Identify Task Dependencies – Figure out which tasks must be completed before others can begin. The foundation has to be laid before you start wiring the coffee grinder, right? To understand and effectively manage the Critical Path, as well as the risk to your project it represents, you need to understand how all of the activities are related to each other on a project. Certain activities might not be on the Critical Path, but a Critical Path activity might depend on that activity to avoid the schedule pushing. That’s why it’s important to understand the related activities to Critical Path items as well.

3. Estimate Durations – Assign a realistic amount of time it will take to complete each task, considering your team’s skills and available resources. This can either be determined by looking at historical production rates of similar activities (if your team plans on self-performing the activity) or these durations can be obtained from subcontractors who have the activity in their scope of work. Don’t forget those coffee breaks!

4. Map the Journey – Arrange your tasks in chronological order, taking dependencies into account. This is your project timeline, laid bare. Understanding the dependencies and durations, as outlined in the previous steps, are crucial at this point, because if the logic is flawed, the downstream effects on the project duration just get bigger and bigger.

5. Calculate the Critical Path – Analyze the timeline to identify the longest sequence of dependent tasks. That’s your critical path, the tightrope walk of your project. The test to know if you have determined the correct Critical Path will be that a delay on any of the activities you have outlined on your Critical Path will result in a delay in project milestones or the overall finish date of the project by the same duration as that activity was delayed.

6. Monitor and Adapt – Keep a close eye on your critical path. If delays arise, adjust your timeline and resources accordingly. While the Critical Path is usually looked at through the lens of the project’s overall schedule, managing Critical Path activities effectively as they are in the course of construction can be done with a 3-week look-ahead schedule. The 3-week look-ahead, used in conjunction with the project’s overall schedule, creates a powerful combination for managing the project’s Critical Path. Remember, the CPM schedule is a living document, not a rigid statue.

Tools for Managing the Critical Path

While the Critical Path of activities on a project can be determined by hand, it’s easiest to calculate the Critical Path on scheduling software, like Oracle Primavera P6, Microsoft Project, or Smartsheet. Surprisingly, the cpm scheduling capability is a gap in some fully-fledged project managemet tools. But, fortunately, there are tools out there that you'll want to use as you begin to get into projects where you are starting to build out formal schedules and looking to define the Critical Path. I would recommend either Microsoft Project or Smartsheet. Smartsheet is completely web-based, which adds another element of flexibility in allowing remote workers, estimators, or scheduling consultants to work in collaboration. 

The main advantage to using CPM software is that you can change the CPM schedule as you progress through the project, based on updates and actual durations, and the Critical Path is dynamically changed for you as the changes are input. Depending on the changes you make, it can alter the Critical Path of activities on a project, so having software save you the time of having to do this manually is an absolute game changer.

Final Thoughts

The benefits of identifying and understanding the Critical Path on your projects cannot be overstated. It unifies all of the stakeholders in understanding which activities are the most important on the project and it allows everyone to know which pieces of their work need to get prioritized in order to accomplish the project in the timeframe that was originally promised. The key takeaways to using CPM on your projects are as follows:

• Know your project inside and out. Become the master of every piece of scope included and do your best to determine accurate durations, based on your historicals and sub input, as well as dependencies.
• Invest in scheduling software like Smartsheet or Microsoft Project to build your schedule and determine your CPM. These tools cost a little bit, but will save you so much on the backend in terms of wasted time and frustration.
• Once you know what the Critical Path is on your project, watch it and every activity that can affect it like a hawk and make sure that you have a robust plan in place for how you want the work to go, but also how you can pivot if conditions change.

Embracing the Critical Path Method might feel like learning a new language, but trust me, it’s a language worth mastering. With a little practice and the right tools, you’ll be navigating construction deadlines with grace and ease, leaving chaos in the dust and watching your projects become more predictable, with less risk and uncertainty, and ultimately more profitable. So, ditch the juggling act, use the steps outlined in this article, and get ready to build your way to success, one critical step at a time!

Further Reading: Foundations of Construction Project Management