73 Oorsigartikels • Review articles Henry Deacon & Elma van der Lingen The use of the critical path and critical chain methods in the South African construction industry Peer reviewed and revised Abstract The purpose of this article is to report on an investigation of the use of critical path and critical chain methods in the South African construction industry. Through a questionnaire survey, data was collected to establish which construction sectors apply these methods, the percentage of construction professionals using these methods, the reasons why these methods are applied, and the factors that influence the use of these methods. Based on the findings, the critical path and critical chain methods are mostly used in the South African construction industry by the building sector, in comparison to the civil and industrial sectors. The critical path method is used more than the critical chain method, with over 70% of the responding companies applying the critical path method and only 22% applying the critical chain method. The latter method is considered to be a relatively new project management tool and requires a culture change in the company. Users of the critical path method believe that the method mainly improves their project understanding, planning, scheduling and control, with all these improvements ultimately leading to better on-time completion of projects and cost saving. Keywords: Critical path method, critical chain method, construction, project management, CCPM Abstrak Die doel van die artikel is om die Suid-Afrikaanse konstruksiebedryf se gebruik van die kritiesepadmetode en die kritiesekettingmetode te ondersoek. Data is deur middel van ’n vraelys ingewin om te bepaal watter konstruksiesektore die metodes gebruik, asook die persentasie-gebruik deur professionele persone in die konstruksiebedryf, die onderliggende redes vir die toepassing van die metodes en die faktore wat die gebruik hiervan beïnvloed. Die navorsing het bevind dat die kritiesepadmetode en die kritiesekettingmetode in die Suid-Afrikaanse konstruksiebedryf meer in die bousektor gebruik word Mr Henry A. Deacon: M.Eng. student, Graduate School of Technology Management, Department of Engineering and Technology Management, University of Pretoria, Pretoria, South Africa. Phone: 012-4205939, Fax: 012-3625307, email: Prof. Elma Van der Lingen, Graduate School of Technology Management, Department of Engineering and Technology Management, University of Pretoria, Pretoria, South Africa. Phone: 012-4205939, Fax: 012-3625307, email: Acta Structilia 2015: 22(1) 74 as in die siviele en industriële sektore. Die kritiesepadmetode word deur meer maatskappye en op meer projekte gebruik as wat die kritiesekettingmetode deur die konstruksiebedryf gebruik word, met meer as 70% van die responderende maatskappye wat van die kritiesepadmetode gebruik maak teenoor 22% wat die kritiesekettingmetode gebruik. Die laasgenoemde metode word as ’n jong metode beskou en implementering vereis kultuurveranderinge in die maatskappy. Gebruikers van die kritiesepadmetode glo dat die metode help met die verbetering van projekbegrip, beplanning, skedulering en beheer, met al die verbeteringe wat lei tot beter optydafsluiting van projekte en kostebesparing. Sleutelwoorde: Kritie sepad metode, kritieseket ting metode, kon struk sie, proje kbe- stuur 1. Introduction The critical path method (CPM) has been in use for approximately 55 years (Dilmaghani, 2008: 10) and has become the construction industry’s main standard for project scheduling. The critical chain method (CCM) has been in use for only 17 years (Goldratt, 1997). Since its introduction in the late 1950s, the CPM has proven to be a useful tool for planning and controlling construction projects (Dilmaghani, 2008: 10). The CPM allows project managers to identify critical activities by evaluating the times when activities can start and finish, determining activity float, and assessing the effect of adjustments in duration and logical relations on the overall project duration. Over the past three decades, the use of the CPM has drastically increased in the construction industry, due to its benefits and the noteworthy advancements that have been made in both computer hardware and scheduling software. The CPM is a valuable asset for construction projects, because it enables contractors to determine resource requirements, vendors to finalise material deliveries, and subcontractors to establish when work can be performed. Goldratt’s book Critical chain (1997) introduced the CCM, often referred to as critical chain project management (CCPM), as a new technique for scheduling, monitoring and controlling. Any organisation that implements this relatively new methodology hopes to make the most of the opportunity to reduce the project completion time significantly. The theoretical basis of the CCM, the theory of constraints (TOC), claims that the weakest link in the system determines construction efficiency (Goldratt & Cox, 1984). Therefore, the core factor influencing the efficiency of construction is the capability of the weakest link. According to Goldratt (1997), the critical chain is the longest path formed from resource balances on the basis of a detailed consideration of the logical and resource constraints that exist between project activities. Deacon & van der Lingen • The use of the critical path ... 75 No comprehensive, structured investigations have been conducted to establish what circumstances influence the utilisation of the CPM and CCM in South Africa’s construction industry. Furthermore, no publications differentiate the factors associated with the implementation success of the CPM and CCM in this sector in South Africa. Therefore, South African construction professionals’ experience and use of the CPM and CCM are unknown. The primary focus of this article is to determine the application of the CPM and CCM in the South African construction industry with the following subobjectives: • To determine which of the construction sectors (building, civil and/or industrial) apply the CPM and CCM. • To obtain the percentage of professionals who use these methods. • To define the prevailing reasons why these methods are applied. • To clarify the factors that influence the use of the CPM and CCM. 2. Background 2.1 Development of the critical path method Henry Laurence Gantt introduced the Gantt chart (bar chart) in 1916 (Weaver, 2012: 7). Since then, bar charts have been used extensively for planning and monitoring construction projects. Menesi (2010: 10) states that, although this is a simple format that efficiently communicates the required information, such bar charts have restrictions, as the logical relationships between activities are not considered. This complicates the updating of the schedule as the project progresses. In the late 1950s, E.I. Du Pont de Nemours Company, as well as the Univac Applications Research Centre of Remington Rand collaborated to develop the CPM, which is based on the bar chart (Dilmaghani, 2008: 10). The CPM is an algorithm for scheduling a large number of activities in complex project plans, where the “critical path” is the sequence of dependant tasks, where if there is a delay, will cause the end date to move out (Stelth & Le Roy, 2009: 23). For example, a project manager can determine the critical path of activities by evaluating the start and finish times of activities, determining the activity float/delay and assessing the effect of duration modifications. 2.2 Development of the critical chain method In their book entitled The goal: A process of ongoing improvement, Goldratt & Cox (1984) introduced the TOC as an operations management method with the purpose of continuously improving Acta Structilia 2015: 22(1) 76 profit, return on investment, and cash flow. The TOC considers that the total system output is determined by a bottleneck or single constraint, with the best possible system performance being accomplished by managing the constraint. The T O C emphasises that constraints and non-constraints require different management and behavioural rules to manage flow by allowing for uncertainty, for example, rework and unscheduled stoppages. The TOC proposes a five-step sequence: identifying the constraint, exploiting the constraint, subordinating the constraint, elevating it, and repeating the process (Pretorius, 2014). Goldratt extended the TOC to the project environment by introducing the concepts of the CCM in his book Critical chain, which offers a better understanding of how the TOC concepts can be applied to single- and multi-project environments. In TOC, the constraint determines system (organisational) performance. Similarly, in projects, TOC states that the critical path determines project performance. Thus the constraint in a project is the critical path (Goldratt, 1997). The purpose of the critical chain is to enable projects to finish promptly, within budget, and without curtailing the project scope. Cook (1998: 21) summarised the following key features of the critical chain: • It is a cultural change in project management. • Multi-tasking is avoided. • It accumulates all safety buffers at the end of the project instead of building them into activity estimates, and protects the critical chain against insecurity. • It focuses on the project constraint (the longest chain of dependent resources or activities). Different terminologies for the CCM are also used in the literature, for example, CCPM (Dilmaghani, 2008: 2), critical chain scheduling (CCS) (Yang, 2007: 25), and critical chain scheduling/buffer management (CCS/BM) (Herroelen, Leus & Demeulemeester, 2002: 48). 2.3 Comparison and differences between the CPM and CCM The Project Management Institute (2013: 176-178) defines the critical path, the CPM, the critical chain, and the CCM as follows: • The critical path is the longest link of successive activities that determines the project completion date on a schedule, Deacon & van der Lingen • The use of the critical path ... 77 where the entire schedule will be delayed by delays in the critical path. • The CPM is the method used for planning, monitoring and controlling the project schedule based on the determined critical path. • The critical chain is the longest link of successive activities taking resource constraints into consideration, where the completion date of the project is only finalised after a project buffer has been added to the end of the critical chain. • The CCM is the project schedule planning, monitoring and controlling method that uses the critical chain, first, for scheduling, by determining the critical chain and buffers and, secondly, for monitoring and controlling the project schedule in terms of the buffers. The safety buffers (SB) of the CPM schedule are included in each activity (see Figure 1), whereas CCPM refers to a single project buffer (PB) at the end with the CCM. Feeding buffer (FB) is located wherever a non-critical path feeds into a critical path. The CPM is further only used on a single-project basis, while the CCM can be used as a multi-project scheduling solution, in addition to its applicability for single-project use (Lechler, Ronen & Stohr, 2005: 53). T1 SB T2 T3 T6 T4 T5 SB SB SB SB SB (a) T1 T4 T5 T2 T3 T6 PB FB (b) Figure 1: The (a) CPM with implicit safety buffers and the (b) CCM with explicit project buffers with T = task; SB = safety buffer; PB = project buffer; FB = feeding buffer. Table 1 provides a comparison of the main characteristics of the CPM and CCM as adapted from Stelth & Le Roy (2009: 32-33). Acta Structilia 2015: 22(1) 78 Table 1: Comparison of the CPM and the CCM Characteristic Critical path method Critical chain method Project finishing date A realistic date is believed to be met. It has a high level of probability and is assured throughout with buffers. Project schedule CPM establishes the project start and end. The path can be adjusted during the project. CCM determines the end of t h e project, but the start is o f t e n determined by a non- critical activity. The chain does not adjust. Project variation Variation is implicit and expected to balance out throughout the project. Variation is explicitly planned and handled during the project with buffers. Schedule management Each activity must be kept on schedule according to the calendar i n o r d e r to keep the project on schedule. Buffers are managed to absorb variation efficiently i n o r d e r to keep the project on schedule. Schedule tracking Activity starts and finishes are thoroughly tracked. Schedule slippage is important and must be monitored closely. Buffer status is thoroughly tracked. When any task starts or finishes with respect to the calendar is insignificant. Task completion People are assessed in terms of whether or not their tasks are late with regard to their committed calendar date for activity completion. Half of all tasks are anticipated to take longer than scheduled and the buffers absorb such variation. Project reviews Fixed reviews are scheduled to assess the project progress to date. Floating reviews are set off by phase completion and buffer status is reviewed for the probability of project completion. Non-critical activities slack The total slack that non-critical paths have is irrelevant and not monitored. Non-critical activities should have adequate feeding buffers to protect the critical chain. Resource management Resources should be multi- tasked to make progress on every project. Multi-tasking of resources is avoided at all costs. 2.4 Use of the CPM and CCM by construction industries Several surveys have confirmed that the use of the CPM in the construction industry has been growing over the years. Kelleher (2004: 36) analysed the data from three surveys conducted in 1974, 1990 and 2003, respectively. These surveys investigated how the top 400 contractors in the USA, as identified by Engineering News Record (ENR), used the CPM. The study revealed that the CPM was used on Deacon & van der Lingen • The use of the critical path ... 79 75% of contracts and was regarded as a valid management tool by 98% of the respondents in 2003. Given the mixture of both small and large contractors, Hawkins (2007) conducted a survey in 2007 that proved that small and medium-sized construction firms also utilise the CPM for project management and that it is not only the ENR’s large top 400 firms that do so. A study by Georgy, Marzook & Ibrahim (2013) revealed that the main reasons why construction professionals in Egypt and Saudi Arabia use the CPM are that no highly sophisticated skills are required; it assists in dispute resolution; it is valued as a management tool; cost and time are saved, and it is mostly a contract requirement. Georgy et al. (2013: 8) state that, of the construction professionals in Egypt and Saudi Arabia, 10% and 44% of the respondents, respectively, were of the opinion that the CCM does not add any genuine value to project planning. However, the CCM is appreciated as a fresh and innovative methodology. 2.5 Criticism of the critical path method The study by Kelleher (2004: 38) indicated that the CPM’s disadvantages are excessive implementation work, logic abuse, too much reliance on specialists, and lack of awareness of field personnel requirements. Contractors may find the CPM beneficial for progress status analysis and updating activity data, but not as useful in supporting other essential aspects, such as corrective actions and identifying execution problems. Kuhn (in Hegazy & Menesi, 2010: 1078), states that, while the owners and managers of contracting companies recognise the value of using CPM, contractors cannot use it effectively, because the critical path does not reflect reality. This is supported by Menesi (2010: 2) who states that the CPM algorithm is based on two idealistic assumptions during the project planning stage, namely that resources are limitless and that the project deadline is unrestricted. 2.6 Criticism of the critical chain method Trietsch (2005: 33) claimed that most of Goldratt and Cox’s concepts preceded the publication of their book The goal: A process of ongoing improvement. For example, he referred to a book by Pervozvansky as the original idea of the constraint. However, he conceded that Goldratt made a notable contribution to project management. Steyn (2001: 368-369) states that the application of Acta Structilia 2015: 22(1) 80 the TOC to project management was not customary prior to the introduction of the CCM, and he quotes sources that argued that the critical chain philosophy derived a great deal from old- fashioned methods. In a case study, Lechler et al. (in Repp, 2012: 45) pointed out that a reason for failures of the CCM was that the critical chain was becoming extremely difficult to manage, as there were too many buffers. Herroelen et al. (2002: 59) state that it is possible for different software packages to determine completely diverse critical chains and non-minimal baseline schedules, with the critical chain then having to be selected randomly. The literature reveals that a higher percentage of construction professionals are now using the CPM than in the past. It is hard to identify any single reason why use of the CPM has grown; it is rather a combination of factors. Overall, users of the CPM are of the opinion that they are successfully reaping the benefits of the method. The literature further uncovers that the CCM, although it may be successfully implemented in certain industries, is still unfamiliar in the construction industry. Though many construction professionals have doubts about achieving positive results with the implementation of the CCM, many still expect partial success. 3. Research methodology 3.1 Research questions and hypotheses This research study is descriptive and conclusive, as it is aligned with the identified research questions and hypotheses. Table 2 indicates the research questions and hypotheses that were formulated for this research study. Table 2: Research questions and hypotheses Number Questions Hypotheses 1 What types of construction companies (building, civil or industrial) use the CPM in South Africa? H1: The CPM is used by all types of construction companies in South Africa. 2 What types of construction companies (building, civil or industrial) use the CCM in South Africa? H2: The CCM is used by all types of construction companies in South Africa. 3 What is the percentage of construction professionals’ use of CPM in South Africa? H3: The CPM is implemented by approximately 90% of construction professionals in South Africa. Deacon & van der Lingen • The use of the critical path ... 81 Number Questions Hypotheses 4 What percentage of construction professionals in South Africa use the CCM? H4: The CCM is used by approximately 15% of construction professionals in South Africa. 5 Why do construction professionals in South Africa use the CPM and the CCM? H5: Construction professionals in South Africa use the CPM and the CCM mainly for project scheduling, tracking, and control. 6 What factors influence the use of the CPM in the South African construction industry? H6: The use of the CPM is mainly influenced by contract requirements. 7 What factors influence the use of the CCM in the South African construction industry? H7: The use of the CCM is mainly influenced by improving systems throughput. 3.2 Research philosophy and approach The philosophy that is associated with the research problem is the positivism paradigm, which is followed throughout the research process. The key concepts of the positivism philosophy are the following: i The researcher is detached from, independent of, and not influenced by the research subject. ii The research emphasises a highly structured methodology for replication intentions. iii The research produces quantifiable observation that can be examined statistically. A deductive approach is more appropriate for a positivism paradigm, which classifies this research study as deductive or theory testing in nature. Zikmund (2002: 46-47) states that deductive reasoning involves the process of reasoning from one or several general statements in order to achieve a logical conclusion. The key concepts of the deductive approach are as follows: • The approach forms a hypothesis or theory and devises the research to investigate the hypothesis. • It is more oriented to positivism. • It is scientific research. • It strives to clarify fundamental relations between variables. • It is more probable to gather quantitative data. • The approach is very structured. Acta Structilia 2015: 22(1) 82 3.3 Methodology The data collection tool was a questionnaire that was set up in an electronic web-based program (Survey Monkey). A questionnaire was deemed to be the most appropriate method of data collection for this research. Albaum, Wiley, Roster & Smith (2011: 687) state that it is fast becoming the favoured method of distribution for self-administered surveys. The questionnaire for this research is self-administered and respondents were contacted by email. The questionnaire design is based on closed-type questions. Zikmund (2002: 333) maintains that closed-type questions are easier to answer, as they require little skill and less time from respondents. The questionnaire consisted of three sections: • The first section clarified the study and asked for basic information, such as the respondent’s name, company name, and current management level. The purpose of these questions was to determine the company and the respondent’s management position in the company. • The second section tested the various respondents’ application of the CPM. These questions were all pre-coded. An open- ended option was included in case the respondent’s response did not fall into one of the pre-coded options provided. The purpose of these questions was to determine the application of the CPM in the South African construction industry. • The third section tested the various respondents’ application of the CCM. These responses were also pre-coded; with the choice of an open-ended response, should the response not fall into one of the pre-coded options provided. The purpose of these questions was to determine the application of the CCM in the South African construction industry. Because descriptive research seeks to answer certain questions, Welman, Kruger & Mitchell (2005: 23) propose it to clarify the characteristics of a population or phenomenon. This research study is descriptive and conclusive, as it will be aligned with the identified research questions and hypotheses. Construction professionals’ application of the CPM and the CCM is clearly defined and well researched by Kelleher (2004), Hawkins (2007), Repp (2012) and Honiball (2012), which substantiates the quantitative nature of this research. A survey is believed to be appropriate for the collection of data and to accomplish the research objectives. The benefits of surveys are the reason for the selection of this strategy. Zikmund (2002: 195) highlights Deacon & van der Lingen • The use of the critical path ... 83 that surveys can provide accurate, economic and fast means of attaining information for objectives. Saunders, Lewis & Thornhill (2009: 94) state that the survey approach affords the researcher more control over the research process. Wyse (2012) highlights the following shortcomings of on line ques tionnaires: • Respondents may not always provide honest answers, as they could be concerned that they present themselves in a negative manner. • Closed-type questions might give the survey a lower validity rate, as question non-responses could result in data errors. Bias could also be created if the number of respondents who choose to answer a certain question differs from those who choose not to answer. • Self-administered surveys run the risk of having errors. 3.4 Population and sample The contact information of members of the South African Council for Project and Construction Management Professionals (SACPCMP), Master Builders South Africa (MBSA), and the National Home Builders Regulation Council (NHBRC) was obtained from each organisation’s website. These organisations represent employers and contractors who operate in the construction industry and are leading national representative bodies in this sector. E-mails requesting the company’s participation in the study were sent directly to company staff members. The e-mails provided a link to the survey. Response to the survey was voluntary. From the 321 companies, 63 respondents agreed to participate in the survey. However, 22 respondents were disqualified, due to incomplete responses. Therefore, 41 responses (13%) were used to evaluate the study’s results. It is, however, not possible to conclude that the survey results represent the entire range of contractors. The low responses provided a limitation to the generalisation of the results to the entire industry. However, the results represent the section of companies/ industries that chose to participate. Acta Structilia 2015: 22(1) 84 4. Results and discussion 4.1 Profile data on company and respondents Figure 2 categorises the responding companies by size according to annual construction revenue. The majority (41%) of the respondents are from a large company with an annual construction revenue exceeding R50 million. The least number (27%) of respondents are categorised as medium-sized firms (annual revenue between R15 million and R50 million), and 32% represented the small company category with an annual construction revenue of less than R15 million. >R50m 41% R50m) 22% 22% CPM CCM 69% 44% 64% 33% 82% Pe rc en ta g e re sp on d en ts Company size Figure 4: Overall usage of the CPM and the CCM according to company size (some companies make use of both CPM and CCM, resulting in >100%). Figure 5 further indicates that for the companies making use of CPM and/or CCM, the smaller companies were mainly involved in building and civil construction, whereas the larger companies had a presence in all construction sectors. The industrial sector was dominated by the medium-sized industries. Deacon & van der Lingen • The use of the critical path ... 87 35% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Building Civil Industrial Other >R50m R15m to R50m [Accessed 10 February 2014]. Yang, J.B. 2007. How the critical chain scheduling method is working for construction. Cost Engineering Journal, 49(4), pp. 25-32. Zikmund, W.G. 2002. Business research methods. 7th edition. Nashville, TN: Southwestern Publishing.