Basic concepts of network analysis

A network is a system of interrelated events through which an item or items move in order to achieve a given objective.

It is a network analysis which is a rational systematic way of planning operation. By identifying critical activities resources can be transferred to ensure completion at the earliest moment. The lines which consume resources representing activities are shown by lines.

On the other hand circles known as nodes or events symbolize the start of one activity and the finish of another. Where a line in the node is followed by a line out again, it means that the first task has to be completed before the second line is started.

If two lines enter the node then both tasks have to be completed before the second line is started. Where two lines leave the node it means neither task can be started until the first is completed. The dotted line is known as dummy---an imaginary activity consuming neither time nor resources but introduced if there are two starting or finishing points.

Network analysis can be used in a variety of business situations. It is particularly useful in complex activities when it can help minimize:

Loss of time, by ensuring that the transition from one process to another takes place smoothly as possible

Cash flow problems, by ensuring that materials are bought when they are needed and are not bought too soon

(iii) Material wastage, by cutting down on the risk of spoilage and pilfering,

Capital equipment required by ensuring maximum utilization of the capital stock.

A major advantage of Network analysis is the fact that it produces a picture of the system which is relatively easy to interpret. Network analysis has a number of techniques associated with it.

The most commonly referred to are Critical Path Analysis (CPA) and Project Evaluation and Review Technique (PERT). Using CPA certain times are calculated----an activity will be given a definite date on which it will have to be completed.

PERT uses activity times calculated on probability. At first sight the PERT approach appears to be more realistic. If network analysis is being used in planning then it is concerned with future events and there are inevitably unknown variables.

Critical Path Analysis

It is a method of structuring the parts of a project. Between the start of a project and its finish, there are a number of separate tasks which have to be done before others. For example, in a construction of a house, the foundations are laid before its walls are built and the walls are built and the walls are built before the roof is put in place. Each separate task requires a length of time for it to be accomplished. Some tasks may be carried out simultaneously, such as the fitting of window frames as the roof is being tiled. There is therefore, a mix of separate pieces of work some of which must be done in sequence. Each piece requires a certain time.

Setting out the pattern of work showing time required and their sequence will reveal a setoff tasks which must be done in sequence: at which points, time is required to await the completion of tasks and which tasks are such that they do not require the completion of others. There then emerges a critical path showing the sequence of tasks which minimize the time to completion for the whole project. Any reduction in the time required to bring the project on stream must be looked for along this critical path, as any of the tasks is not critical and cannot affect the completion of the whole project. In any project there will be some activities that can overrun the time calculated for them without delaying the start of the next activity.

This is known as the free float. The total float is the difference between the earliest start time of an activity and latest time of start time.

The writer is former DG, EPB. He can be contacted at [email protected]