Jacob Austin (00:00:17) - Hi everyone. Jacob Austin here, owner of Quest Zone. And welcome to episode 42 of The Subcontractors Blueprint, the show where subcontractors will learn how to ensure profitability, improve cash flow and grow their business. Today's episode- number 42 is going to be about critical path analysis, that fun subject! I recently got asked about programming and what a critical path analysis is. So I thought it's only right if I do a short episode to give you a bit of information about it. So I'm going to give you a few gifts on what it is, what it actually means to you, and how you can set it up in a quite cost effective way using a basic program like Excel. And before I dive into all of that, if you are new to the show, please do consider subscribing for more information and user friendly advice on all things subcontracting. So critical path analysis. What's it all about? Well, it's a means for analyzing a program. It's a project management technique to identify the shortest possible route from the start of a project through to the end of that same project.
Jacob Austin (00:01:25) - It can help you identify the most important areas for you to focus upon, and allow you to effectively allocate your resources to the most productive tasks, or prevent you from wasting resources trying to finish certain tasks which aren't critical. So it helps you to identify the efficient way for you to complete your project. And it also helps you understand which items are the risk items that if they get delayed, they're going to mean you finish later. By using a critical path analysis, you hopefully are better able to control your project so that you can finish it successfully and on time. So why is it important, and what does it mean to the current job that you're working on? Well, under the two main kinds of contract that we see in the UK, the JCT and the NEC, both of these kinds of contract ask for a program that identifies the critical path and the sequence of tasks involved. So that means whether you've produced one or not, you are working to somebody's program. There are different program requirements between the JCT and NEC contracts, and a lot of that comes down to the different terminology and a few different things that you've got to identify and how clear they are identified on the program.
Jacob Austin (00:02:40) - But regardless of what contract you're working on, the principles of critical path analysis are broadly the same. And these are important to you because when it comes to proving delay, which is something that we've discussed in a few recent episodes, critical path analysis is one of the tools that you can use to demonstrate that you've lost time. So having a basic understanding of it and being able to generate a basic linear program is something that is going to serve you well in negotiating final accounts, negotiating extensions of time, and any of the things that flow from those such as you loss an expense or your entitlement to prelims within your variations and compensation events. Sorry, I'm mixing up all my contract terminology there as I'm trying to cover most of the bases. So how is it done? So you first have to start by understanding what the objective of the project is. And as you're a subcontractor and you're feeding in your portion of the project, you have to know what the critical end of your piece of work is. There might be more than one, so it might be that you have more than one finish point, and that one path doesn't really intersect with another.
Jacob Austin (00:03:54) - Say, if you're working in more than one building, you might be working in more than one place at the same time. But one set of activities don't have any bearing on whether you complete the other set of activities. A bit like one person watching the telly in one house doesn't have any bearing over the person next door, but when it comes to programming them out, they are likely going to appear on the same program, and your objectives for the job might be to finish as efficiently as possible all of your main scope items, and along the way make some decent money on it. So by doing your critical path analysis, this is going to enable you to plan and resource your work. You can monitor against it to work out whether you're spending more or less on labor than what you have forecasted for, or what you've priced for, and you could even use that information to inform your next job. So starting with the goal and the objectives, we then start identifying the tasks that it is going to take you to complete in order to meet your objective.
Jacob Austin (00:04:55) - And the thing with this is you can go right down to the millimeter, or you can take a broader brush approach, and neither of them is wrong, but one of them is going to take you a hell of a lot more time to do than the other. And this is where it needs to come down to you. As to how much detail do you want to see? How much detail does it? Take you to make sense of what you've got to finish, and how much are you going to get out of putting any more detail into it. So if you want to understand the nuts and bolts build up as to how you finish something on a typical site, you might be taking something like your risk and method statement and programming out each activity to ascertain how long each little section is going to take. And doing an analysis like that might really help you when it comes to resourcing your project, as to how much time you need to allow under each different work heading to get the job finished, but in reality, is that going to help you program and resells the job? Only you're going to know that's getting down to your kind of time and motion study level of detail.
Jacob Austin (00:06:01) - And I would suggest the more detail you go into, it's a diminishing return that you're going to get out of it. So how you strike that balance is up to you. But I would suggest that you need to be somewhere in the region of working out what somebody can do in a day so that you're breaking down your activities into those that are going to take multiple days of work, or that you can only get done on a single visit. So what do I mean by that? If you have to go into a building and do something minor, and then you break and you leave the site or go to a different part of it, then you want to identify each one of those kind of activities, regardless of whether it can be done in an hour, two hours or a whole day. You want to note those activities down so that you can show you need to do them, and then you show when you expect to start your next activity. Another way of deciding what to split down would be by considering that you put a program together for each sort of gang, or each partnership that you're going to put to work.
Jacob Austin (00:07:05) - So if your lads have to work in twos and threes, or if they are clustered together with a number of other people and a couple of pieces of plant, then it makes sense to resource and plan your work broken down into parts that each of these different gangs can do. Now, once you've got these listed out, the next thing to do with that information is to start deciding how to link them together with their dependencies. So let's look at something that we can all discuss and hopefully all know how to do. Although if you ask my wife, whilst I would have claimed I could do this ten years ago, it's only fairly recently that I can consistently achieve making a cup of tea to acceptable standards. So making a cup of tea, we obviously have to start with checking and filling the kettle. So that's got to be a critical activity. It leads on to boiling the kettle. So the relationship between filling the kettle and then boiling the kettle is what we call a finish to start. As one finishes the next one must start.
Jacob Austin (00:08:08) - Or more likely or more likely, you can't start boiling the kettle until the kettle is full. Now the kettle is boiling. That has got a duration. So we've then got some other activities which may be less critical, but they may become critical. So we've got to get out the cup, get out the teabag, put the teabag in the cup. Now those items ought to happen in that order. But getting out the cup and getting out the teabag could happen concurrently. They could happen before you start boiling the kettle. But the point for them to be critical will be that we want to have the teabag in the cup by the time that the kettle is boiled. So what we're going to have now is having the teabag in the cup is going to have a finish to finish relationship with boiling the kettle. And what that means is by the time the kettle is boiled, we also want to have our teabag sat in a cup, because pouring the water in onto the teabag, of course, is dependent on us having boiled the kettle and got the cup out and put the teabag in the cup.
Jacob Austin (00:09:16) - So there is again a finish to start relationship between these activities. But we've now got two dependencies. So before we can pour in the water, we need the kettle to be boiled and we need that teabag in the cup. I'm saying teabag two many times now, because boiling the kettle was the longest activity out of getting out the cup and getting out the teabag and assembling them in accordance with the specification. And for clarity, because I'm not a psychopath, putting in the milk comes at the end, not before you pour the water on the teabag. Now we've got to let the thing brew. And this is a curious one because it doesn't require any action. So this might be a little bit like programming for the concrete curing time on a slab. It's still something that you need to observe, but it doesn't involve any action. So what we could call this is a lag item. So let's say that we want to let our teabag stew for seven minutes. What we can do then is show removing the teabag.
Jacob Austin (00:10:15) - As being dependent on pouring the water, but it's not able to start until seven minutes after you've poured that water. And that's what we would call a lagged finish to start. So we've got the finish time. We've got to observe a given duration before we can then start the next activity. Now in the middle there, what we're also going to do is give it a stir and give it a very good stir. But we're not going to do that. Just after we've poured the water in, we're going to let the teabag sit for a minute. Then we're going to stir for a minute. And this is going to be linked to you starting to pour the water into the cup. But we're observing a lag of one minute before we start stirring. So this is called a lagged start to start a relationship. The point that we've started stirring is related to when we start pouring the water, but we can do it from any time, from when we start pouring that water through to when we take the teabag out of the cup.
Jacob Austin (00:11:12) - So this item, we want to do it somewhere in the middle. So that is the lag that we're going to give to it. After we've removed the teabag, we've got two items which are putting in the sugar and putting in the milk. These are both dependent on removing the teabag, because we wouldn't want to lose any sugar into the teabag. And the same with the milk. So they are again finished to start linked. Once we've put the milk in we can drink the tea, so drinking the tea is finished to start again. As soon as the milk has gone in it's ready to drink. But dunking the biscuit. Now that is a start to start item. And what that means is that we can start doing that as soon as we start drinking the tea, but not before. Depending on your preference, you might not want to start dunking the biscuit until you've had a few sips. And then what you're doing is you're introducing lag. So it becomes a lagged start to start. And you also might be particularly fussy and decide that before you've drunk all of the tea, you have to have finished your biscuits.
Jacob Austin (00:12:15) - And not only that, because you don't like too many crumbs sat at the bottom of your cup, you like to stop dunking your biscuits one minute before you finish drinking the tea. Now that creates a rather unusual relationship then, because you have a lagged start and then you have a negative lagged finish, so that however long you spend dunking your biscuit in your tea, you can't start it for the first minute, but you must finish it more than a minute before you've drunk your whole cup. So that gives you a description in hopefully some meaningful terms of each of the type of relationships, the dependencies that you can get within a typical program. Now, if you want to observe those items in Excel, like I mentioned at the start of today's episode, then what you do is you can list out across the top your activity name, your start, your duration. You'll finish another column for float and then one final column for dependencies. You want to list out all of the links that you need to make.
Jacob Austin (00:13:17) - So in our case, boiling the kettle is linked to filling the kettle. Putting the teabag in the cup is dependent on getting out the teabag and getting out the cup. Pouring the water is dependent on the water being hot, i.e. kettle being boiled, and you also having that teabag in the cup. So list out all of those dependencies and then what you start doing is introducing a formula to link the items as they finish to the items that must follow on from them, and where you've got two items that feed in to the same start time. What you can do is use a handy formula called Max, which picks the biggest of any given variables. And what that means is it will automatically choose the largest input. So you can link, say, the pouring of the water to the maximum of both the boiling the kettle activity and the putting the teabag in the cup activity. Now, because the boiling the kettle takes so much longer than getting those two things out, what we create then, and we'll work out in a second is a period of float.
Jacob Austin (00:14:23) - So if you work through all of the dependencies using that maximum formula, then what you do to work out your float is you start working backwards from the end, back to the beginning. So to describe the float, let's take the drinking of the tea I've put down on my program that that's going to take about six minutes. Maybe I've been a bit optimistic because the tea is probably still boiling hot, and I didn't introduce a time for it to cool down. Nevertheless, Asbestos Shops is going to get it down in within that six minutes. We've got dunking a biscuit, which only takes a minute now, as long as you've dunked your biscuit during that six minutes, you haven't prolonged the finish time. And because the activity of dunking the biscuit is so much shorter than the duration of drinking the tea, it can float anywhere between starting drinking the tea. I'm finishing it. Meaning the time that it's got to end. Taken away from the duration. Taken away from its start. Time gives its float. So if the whole activity.
Jacob Austin (00:15:25) - Making the cup of tea to having drunk it took 24 minutes, and the duration of drinking that tea was six minutes. As long as I started dunking my biscuit before 23 minutes was up, I could successfully dunk my biscuit without delaying the finish date and working out the float. I've got a finish time of 24 minutes. I've got a start time of 18 minutes for dunking my biscuit, and I've got a duration of one minute, meaning that I've got five clear minutes where I can move the dunking of the biscuit anywhere around without delaying that cup of tea, being drunk. So your float is the difference between the finish time and the start time, less the duration. So let's carry on working backwards. The drinking the tea was a critical item. The next item is putting in the milk and putting in the sugar. Those are done sequentially, so there's zero float on them as well. Preceding that was removing the teabag, which was directly after letting it brew, which was a programmed lag period between that and pouring in the water.
Jacob Austin (00:16:27) - Within that lag period, we stirred the teabag. Now again, that stirring could happen at any time in between the finishing of the brewing and the pouring in, and I gave that a one minute duration, whereas the brewing had a seven minute duration. So the six minutes of float in and around the stirring, keeping on, working backwards, the two items before pouring the water were putting the teabag in the cup and boiling the kettle. I gave boiling the kettle five minutes and I get the three activities getting out the cup, the teabag and putting the teabag in the cup a minute each. I also gave filling the kettle for two minutes, which was a precursor to boiling the kettle. So the two start points are filling the kettle and getting out. The cup can start at the same time, and if you use it to the other end, those two little clusters finish at the same time when the water is poured. So in between the filling the kettle through to the kettle being boiled was seven minutes.
Jacob Austin (00:17:23) - And as long as you get out the cup, get out the teabag and put the teabag in the cup. Before the seven minutes is up, you've got a float of four minutes that can sit anywhere between those three activities. So to complete the analysis, we then work out which items have got no float and the items with no float become our critical path, because any delay to those items and the overall process gets delayed. So what you get is you go from filling the kettle to boiling the kettle, and in the background you're getting out your cup teabag and putting them together. When the kettle is boiled, you're boring the water and you're letting that brew whilst it's brewing. You're going to give it a quick stir, you're removing your teabag, you're putting in the sugar milk, and then you're drinking it. And whilst you're drinking it, you might help yourself to a biscuit as a treat. So there you've identified your critical path and items of float. So as I say, if you want to get Excel out and link all of the start to start, finish to start and finish to finish items together, then you can have a little play around with the various durations and see what happens when you extend one, or you insert perhaps a delaying event in there of oh no, I've run out of milk and I have to go to the shop to get some more, and playing around with it will just help you to learn and understand that bit of logic.
Jacob Austin (00:18:49) - And there you have it. You can achieve a critical path analysis. So the tricky bits around this are establishing your logic for your dependencies and establishing the correct periods of lag, if there are any, in between different activities. The rest of it you should be able to work out fairly straightforwardly. You can usually tell what items have to start and finish in time for others to start, and then it's just a matter of linking through, adding your durations, and working out your float. Now, there's no reason why you can't tidy this up a little bit with some borders, and put some bar chart alongside it to help you to negotiate extensions of time and compensation events. Now the more complexities become, with more items and more interconnected dependencies, the more difficult the logic becomes. But the principle doesn't go away. There's no real limit as to how complicated a project you can plan using Excel, but for practicality sake, there are more efficient programs out there and ones that will display the relevant and links in the way that the industry is used to seeing them.
Jacob Austin (00:19:53) - But the great thing is, now that you've listened to this episode, you know the logic that sits behind the program. And particularly if you fill out the exercise on an Excel sheet, you'll have an understanding of how it works so that you can interpret your program from your project manager with confidence. So there you have it critical path analysis. Hopefully that worked example. Helps you to understand the basics in a way that wasn't as boring as my lecturer delivered it to me. I hope you get some use from that. My mission here is to help the million SME contractors working out there in our industry. If you've taken some value away from today's episode, I'd love it if you'd share that value and pass on the show to somebody else who would benefit from hearing it. And of course, subscribe yourself if you haven't already. Thanks for tuning in. If you like what you've heard and you want to learn more, please do find us at QS.Zone at the letters Q and S dot zone - Z-O-N-E where you can subscribe to our training and support system for like minded subcontractors.
Jacob Austin (00:20:57) - In there you'll find templates, how to videos, interviews, and more. It's less than the price of a daily cup of coffee and you can cancel any time. We're also on all your favourite socials at @QS.zone. Find me. Tell me what you thought about programming, making your own cup of tea. Thanks again for tuning in. I've been Jacob Austin and you've been awesome.
