Critical Path Method. Resource Loop Challenge.

The Critical Path Method (CPM) has pitfalls rarely explained in project management books. Knowing them and applying the method correctly or even using an alternative approach essential for successful delivery.

The ultimate base for CPM calculation is an accurate estimation of activity durations. However, such an estimation may not be possible due to the Resource Loop problem:

• A: To calculate the critical path, the duration of each activity must be accurately estimated
• B : To estimate durations accurately the availability of resources has to be known
• C: To understand the resource availability the critical path has to be calculated

or 

• A (Critical Path) driven by B (Activity durations)
• B (Activity durations) driven by C (Resource availability)  
• C (Resource availability) driven by A (Critical Path) 

An approach that addresses the resource loop problem is the Volume-based Resource Critical Path Method (RCPM).

Instead of estimating activity in the duration units, Volume of Work (VoW) is used as a primary measure.
VoW could be mesured in physical (m, m2, items) or virtual (effort hours, points) units. 
  
VoW drives resource demand. Resource demand and supply drive Resource Critical Path. Resource Critical Path drives activity durations. 

So, Activity durations depend on:

• Volume of Work (Volume units),
• Assignment of required skillset (demand)
• Productivity (units per hour) of available resources (supply)

Heuristic scheduling methods could be applied to calculate activity durations and order of activities considering resource availability.

• The Volume of Work can be measured in meters in cubic meters, tons, story points, work hours, percentages, pages, or other units. Unites is an informative data point only. The calculation method is the same regardless of the applied volume.
• Project materials constraints (consumable resources) may also impact activity durations. If relevant, material supply and demand must also be added to relevant activities and included in the calculation.
• As an exception, a project may have activities that are not dependent on resource availability. The duration of these activities can be estimated directly in hours.

The Critical Path Method requires accurate estimations. However, when resources are limited, accurate estimation is difficult as the estimators need to consider parallel activities. It creates the  Resource Loop problem. 

Volume-based Resource Critical Path is an alternative approach that addresses the Resource Loop problem.