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3 Key Resource Allocation Methods In Project Management
In theory, resource management sounds straightforward: A project is broken down into tasks, the necessary resources are applied to each task, and the project is completed. In practice, however, things never go exactly according to plan. Resource availability is often split between multiple projects, workers have sick days, and tasks take longer than estimated—these are just a few pitfalls that can put stress on a project’s completion.

Your resource allocation process has to be adaptable to avoid project failure, but there’s more than one method you can use to minimize and manage setbacks. Below, I’ll outline the four major resource allocation methods and their key benefits. Plus, I’ll go over some ways that proper planning can help prevent issues from arising.

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3 Critical Resource Allocation Methods

Without further ado, here are 3 resource allocation methods in project management that you can use to properly utilize resources, as well as adjust resource scheduling and allocation as needed.

1. The Critical Path Method

The critical path method (CPM) is a preemptive strategy for keeping a project within time constraints. The CPM starts with the basis that some tasks in a project are dependent on other tasks, and the longest line of dependent tasks in a project is the critical path. The critical path identifies the highest-priority tasks in the project because the first task must be started in time to get all the way down the line. Using this chain, the CPM calculates the earliest and latest possible start and finish times. Tasks outside the critical path are said to have slack; they can be delayed without lengthening the total project time. By designating a clear priority order for tasks before the project starts, the CPM aids efficient resource planning. It also allows for close monitoring and easy adjustments during the project to make sure that the timeline stays on track. Despite its time-management optimization, one criticism is that this format is not meant for multitasking. While the critical path is in progress, all other tasks sit waiting until it’s done. Although this means fewer resources are in use at any given time, it also means they need to be available for longer.

2. The Critical Chain Method

The critical chain method (CCM) is a newer technique that grew out of the CPM with a few key distinctions. Though the CPM creates a project schedule based on task dependency, the CCM alters the schedule to consider resource limitations. Therefore, it can be used independently or in conjunction with the CPM. The CCM also doesn’t put the same emphasis on finding an optimal solution like the CPM. With the CCM, getting it done is good enough. In exchange for perfection, however, the CCM addresses the CPM’s multitasking criticism and offers more leeway for setbacks. To account for resource availability, the CCM assumes buffer time as part of the total project duration. These buffers protect the project’s timely completion in multiple ways:
  1. The project buffer is all the time remaining between the project completion and its due date and can be used to absorb any delays.
  2. Feeding buffers are extra time at the end of noncritical chains that can give slack to the critical chain.
  3. The resource buffer is placed at the start of the critical chain, allowing time for all necessary resources to be gathered before the critical chain begins.
  4. A capacity buffer puts extra resources on hold to avoid delays in the case of sudden issues. However, since this increases the budget, it’s the least used.
While this method was created to streamline resource use, its other greatest benefit is easy monitoring because of the buffers. If that extra time is being used up by tasks, then project managers need to plan how to recover and prevent the due date from being pushed.

3. Resource Leveling and Resource Smoothing

Despite methods like the critical path and critical chain that optimize efficiency and provide extra time to deal with setbacks, sometimes the project plan does need to be changed. Depending on what you change, you’ll be using either resource leveling or resource smoothing. With resource leveling, the project schedule, including the start and end dates, is modified according to the resource availability. This method reduces resource demand and protects workers from overcommitment that can lead to burnout. It also gives you the time to allocate resources more efficiently instead of rushing to get things done. However, it can lead to higher costs. Plus, only certain kinds of projects offer flexible end dates. Many times, you will begin these projects knowing that the end date will only be decided once you evaluate your available resources.

On the other hand, resource smoothing attempts to reduce demand while staying within the given time constraints. Resource scheduling and allocation are modified as needed, and in some cases additional resources are brought in. You need to be prepared to allocate smartly, though, because there’s little wiggle room for delays.

Related Read: Project Management Resource Leveling: A Resource-Optimized Scheduling Approach

Steps for Effective Resource Allocation

I’ve covered these resource allocation methods separately, but in practice you will likely use a combination of these and other approaches that work for your company. Truly unexpected situations can affect your project, but the most common issues can be prevented with proper planning and communication. Make sure you’re well prepared for the start of your project and don’t encounter surprises by following these steps:

1. Make a Project Resource Management Plan

A project resource management plan lays out the full strategy for resource allocation, scheduling, and use during a project. This includes rented equipment and facilities, purchased materials, and most importantly, team members. I recommend sharing the resource plan with everyone involved. Communication within your company can help prevent issues like resource competition, especially when it comes to overallocated or overcommitting workers. Resource plans can be customized to your priorities and allow you to keep track of everything you need throughout the duration of the project. Plus, they improve accountability and personal satisfaction within your team.

2. Use Resource Management Software

Like management plans, resource management software helps project managers keep track of everything they need—which is especially important if you’re overseeing more than one project! In fact, it can be used in tandem with your management plan. There are a lot of different resource management software programs out there with a lot of different features, including ones focused on forecasting, scheduling, and tracking. Take a look at our list of the best resource management software. I’ve included something for every budget and proficiency level.

3. Take Advantage Of Visuals

A work breakdown structure outlines and defines the outcomes of a project and each step in that process. Displaying tasks in an easy-to-follow chart can help clarify responsibility among your team and show them how every part comes together. And if you’ve already mastered that, you can go a step further with a Gantt chart. While a work breakdown structure just demonstrates project flow, a Gantt chart actually tracks tasks with specified start and end times. Learn more about resource planning visualizations here.

4. Be Wary Of Shortcuts

There are other resource allocation methods, such as fast-tracking and crashing. Though there are times when these are necessary, they come with high costs. Fast-tracking work can increase the risk and lower the quality of the finished product, plus it can’t be done with overlapping tasks.

Crashing focuses all efforts on the critical tasks and uses alternative resources to get them done. This adds to the budget and may mean other projects are delayed. If you don’t mind the tradeoff, though, it will decrease the completion time.

Get the Tools You Need

There’s a lot that goes into resource allocation, and it may seem overwhelming, but there are also a lot of tools at your disposal for preventing and fixing any problems. Do you have a preferred planning method or software? Is it one I didn’t mention here? Be sure to let me know, and check out our full archive of tools for digital project managers. Related Read: 10 Best Resource Allocation Software In 2022
By Ben Aston

I’m Ben Aston, a digital project manager and founder of I've been in the industry for more than 15 years working in the UK at London’s top digital agencies including Dare, Wunderman, Lowe and DDB. I’ve delivered everything from film to CMS', games to advertising and eCRM to eCommerce sites. I’ve been fortunate enough to work across a wide range of great clients; automotive brands including Land Rover, Volkswagen and Honda; Utility brands including BT, British Gas and Exxon, FMCG brands such as Unilever, and consumer electronics brands including Sony.

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