Management Principles and Application for Construction

Question1: a) How are construction projects planned? This should refer to the following:project organisation and coordination (layout and accommodation, method statements, plans of work, safety plans)Project Monitoring; e.g. Gantt charts, critical path arrow diagrams, precedence diagrams, line of balance; manual and computer-based techniques. b) How is Procurement scheduling and control carried out for materials and plant? You should try to cover as many different types. c) How is quality controlled? What methods are used? d) What other factors need to be taken in to consideration when planning construction projects. Answer1: a) Project planning in construction management involves planning of what to done? Where to be done? Whom to do? When to do? And How to do? Complete project planning facilitates the actual project progress. Generally speaking planning of a project works out to keep tasks arranged. Project planning is essential to organize the tasks for increasing the effectiveness of the project execution. Planning of the project is essential to identify the critical path of the project execution. Essentially planning of the construction project will work out to identify the slack period in the projects and will facilitate effective execution of the project work. Planning is inevitably necessary to minimize the total project work. Once the project feasibility is assessed by the organization management, the detailed construction project planning will commence. Several key personnel along with the project management experts involve in the project planning phase of the project. Typical issues planned during the construction project planning phase includes the total time for the project completion, the resources needed for the project like human resources, material resources , capital resources etc. During the design planning of the project the actual layout of the project will be confirmed and will be subsequently approved by all the related stakeholders as a part of the project plan. Gantt charts, CPM, Precedence diagrams will be used to structure the project plan in terms of the different activities and all the tasks will be streamlined to identify the project duration and the optimum sequence of the project tasks. Key personnel from different domain expertise along with the top management do usually involve in the planning committee of the organization. Other supporting plans like devising the safety measures, like safety control methods, implementation of the safety standards enforcing all do constitute project planning in any construction project. Line of balance (LOB) techniques are employed for expediting the implemented project plan in the construction. Typical objectives include comparison of the actual progress with respect to the project plan. Assessment of the severity on the future plans by means of deviations from the established plan. Identification of the project deviations and the corrective actions assessment and implementation are all the part of the future project forecasting process. Project planning is essential for any type of the project viz., small, medium, large etc. Conventionally manual project planning is common. The present day improvement in the technologies made the project planning more effective by means of availability of the number of the project planning and management tools available(Walker,2002)(Hendrickson,1982)(Clough,2000). b) Project scheduling is essentially a project management tool, which works to provide a detailed list of the project activities with the expected start and the finish date. Also included in the project scheduling are the activities such as the resources and the time duration planning. Project scheduling will provide input to the project manager for the estimation of the cost and other resources requirement planning. Also the project scheduling template will facilitate a project manager to expedite the project progress. Break down of the actual total work precedes the actual project scheduling. Supply chain management involve the modelling of the supply chain analytics to find a representative situation of the material supply or the material flow into the construction management. Any deviation of the supply chain analytics will have direct implications to the scheduled program and its analytics. Hence a project schedule will facilitate the project management to monitor the schedule and take corrective actions whenever necessary. Project scheduling is a representation of the sequence of the project activities and the time duration of the activities with the start and end dates. Project scheduling will facilitate procurement of the material in right time as per the project requirements. As it is essential to make the project complete in right time, any deviation in the external factors should be accounted for in facilitating the changes as well to plan the new project progress and to estimate the analytics of the same. Just in time is a process of procuring the things in right time. There are several techniques of Scheduling in Just in time. Just in Time scheduling of the activities involve costing the earliness and tardiness with respect to a fixed due date. A constraint programming approach will result in a JIT PERT solution. The JIT constraint based scheduling is one of the many techniques gained popularity in the project scheduling process. Recycling and the safe disposal of the demolished materials will be scheduled before the actual project commences itself. Prior to the actual scheduling of the waste and the recycling scheduling process, the actual possible waste estimation is mandatory in the project plan. Estimation of the project waste in each phase of the project, evaluating the waste handling like whether it is needed to be handled by recycling or whether it will be required to dispose-off safely is the part of the planning that forms input to the scheduling. A proper and timely planning of waste disposal management will facilitate an efficient project planning and schedule and also will contribute to the minimization of the overall resource costing to the project. Waste management in the construction process usually starts with the estimation of the waste in each phase of the construction process. Identification of the type of the waste management (whether recycling or disposal) forms the key constitute of the waste scheduling process. Resource scheduling and the utilization of the direct and the contracted labor in an organization consists of the identification of the requirements for the project and the tuning the scheduling process with the availability of the resources. For example if a project is outsourced by a project owner, the scheduling of the project will be done by the contractor. If the contractor operates by outsourcing to the subcontractors the subcontractor will do the project scheduling. Basically the scheduling here mean the effective planning of the resource allocation considering the direct labor available and also considering the hired direct labor. At times, scheduling will also consider the multiple project progression and scheduling will consider the resource requirements of all the projects as well as the resources available in hand. Costing and budgeting of the project will be done usually based on the historical factual information and a thorough interpolation of the information to the present project will yield cost and budget control constraints to the running project. An integrated approach of project management will facilitate the project budget and the cost controlling aspects of the project management. This will be done through the scheduling of the money resources to the project. Budgeting and the costing of the project elements to the micro break down elements will facilitate high coherence with the constraints laid down. An integrated costing will facilitate the project to adhere to the limits imposed on (OBrien, 1993) (Mullholland, 1993) (Austeng et al, 2006). c) Quality of the construction project will usually be decided in the planning phase of the project. Quality assurance and the quality control wings are the two units of the quality management stream of the construction management. Quality assurance team of the construction project team Will determine whether the proper control methods are used in the design as well as in the construction phase of the project. If the work is subcontracted, then the Quality management team will examine and decide whether the quality standards are upto the requirements in the construction project. Designing the standards like ISO quality standards to the construction project and enforcing the quality standards in the construction by means of means of quality inspection is one of the most popular technique employed in the construction project. Total quality control is one such quality control method which ensures zero defective material usage in the construction project. Statistical methods of quality control are more popular in the construction industry. Sampling by attributes and the sampling by variables are the most popular statistical techniques of quality control. PDCA technique is another popular technique used for quality control in the construction management industry. (PDCA mean plan, Do, check and Act) All these four process will be integrated to keep up the quality control in the construction industry (Montgomery, 2007) (Kanji, 1996). d) Construction planning embraces a number of domains which are all required for the implementation of an efficient work plan. There are number of issues that will be covered during the process. Workforce recruitment consist of arranging work force as per the requirement of the project plan in right quantity, at right time as well with necessary skills. Usually this will be done as per the project requirements. Work force planning is also done as per the project execution plan, if the project is to be executed in house then the direct work force will be arranged as per the requirements of the project plan. If the project is outsourced then the work force will be planned as per the requirement by the contractor to whom the work is delegated. Usually the planning will be done taking into consideration of the work skill level requirement, Man power preparation will be done as per the project requirements, right training will be provided to people well before the actual task commencement so as to let the task accomplished in right time and with right quality. Within the planning phase it will also be done to estimate the skill levels requirement and the work plan will be devised accordingly. Usually the project planning and execution requires compliances as per the existing legislature requirements from time to time. The design to be implemented need to be approved as per the compliance requirements. Design approval as well as the project progression need to be done as per the legislatural compliance requirements. Information verification and control will be done at different phases of the project in accordance with various progression requirements of the project. The accuracy and precision of the information collected and the controlled will be done at various stages of the project. Typical methods include cross verification from a variety of sources (Baloi et al, 2003) (Sanvido et al, 1992) (Chua et al, 1999) (Love, 2002). Question2: Evaluate the procurement methods used in the construction and built environment sector. Explain the use of contracts to manage construction projects. Evaluate the impact of procurement techniques on the organisation and operation of construction firms and construction projects. Answer2: There are several procurement methods employed in the construction and built environment sector. Typical procedures involve traditional or general contracting the work, where in the typical variants of the process involve bills of firm quantities and specification, schedules of rates, cost reimbursement as well as labor for finishing the project. Other procurement methods involve Design- build process, where in the client employs single point of contact. However the client commits to the cost of the total project in terms of the design and the construction. Generally in this method, the contracting organization is responsible for the design and construction. Few varieties of the design and build type of procurement methods are available in the literature, some of them being develop and construct where the client has the design prepared to concert or scheme design stage and the contractor will takes on finishing off the design. Package deal is a process where in the contractor provide s an off the shelf building, where the building type is often modular and the sizing of the same can be adjusted at any time as per the requirements of the project. Management contracting is the process in which the permanent works are constructed under a series of construction contracts which are placed by the management contractor after approval by the client. Other methods include the procedures where the contractors are contracted directly to the client and the construction manager manages the process for the client on a simple consultancy basis. Usually this technique is employed by senior and experienced clients. (Love, 2002)(Bing 2005)(Love, 1998) Contracts are used in the construction project either if the owner do not have expertise in carrying out the construction project are the resources may not available for the construction alternatively there may be situation where two or more projects are proceeding simultaneously. Contracts forms a legal and well defined bind over between all the participating stakeholders for work completion. This forms a reference in the situations of deviation from the accepted terms of the construction as well will also forms a well-defined and legal obligation for all the parties to execute the project. One of the biggest issues for the bank is understanding how the process of procurement and contracting operate within the construction industry. With this in mind, compile a second report that covers the following: Procurement techniques do have decisive influence on the performance of the project. Procurement technique will obviously influence the type and the form of Governance. For example a traditional governance form of the procurement technique will result in number of complications, at the same time procurement by competition, procurement by co-optetion as well as procurement by co-operation are some of the different forms that do have direct influence on the form of the governance on the project performance. Typical performance parameters that will be affect the project performance are economic performance, time performance, quality of the output, environmental performance as well as work and innovation(baiden,2006)(Ward,1991)(Eriksson, 2008). Question3: a) Evaluate the different types of Procurement methods. b) Explain the different types of contracts to manage construction projects. c) Evaluate the impact of procurement techniques on your organisation and operation of construction firms and construction projects. Look at the different way teams operate i.e. multi-disciplinary teams, integrated teams, partnering. How performance is monitored e.g. benchmarking, key performance indicators (KPIs) and does an organisation deal with environmental management issues and legislation. Answer3: a) Traditional method of tendering Traditional method tendering involves making a traditional lump sum contract which requires the production of a complete set of documents before tenders are invited are invited. Hence it takes lot of ground work to be done before the actual invitation of the tenders in the case of the traditional method of tendering. The method assumes that the design will be appointed by consultants and it will be assumed that the contractor will not be having any obligations to execute the design this may not be true in all the cases and hence it is normally required to express the terms related to that in the contract. Usually the employer decides which specialist firms the contractor need to use and the contractor may require certain safeguards related to performance. It is highly one sided since the payments and valuations are done usually by the employers consultants. The method do have certain accountability due to a competition based selection. All the tendering contractors bid on the same b asis and hence there exists competitive equity in the process. Design lead and the client is able to have a direct influence which can facilitate a high level of functionality and improve the quality in the overall design. There will be price certainty at the award of the contract. It is quite easy to manage the variations in the design. This is quite well established method of the procurement process. The disadvantages of the process include the consumption of large amount of time to produce all the full contract information. Usually it takes more time in the traditional procurement than any other process. Another disadvantage of the process is no design or planning of the project by the contractor as they are not appointed during the design stage. Method of partnering in the procurement process Partnering type of the procurement process includes a substantial amount of accountability on the contractor as well. Usually the design is a part of obligation of the contractor and it includes express reference to the responsibility for some or all of the design. Some of the key advantages of the project being transparency in all the issues progressing in the project. Price certainty is one of the several issues that commences during the process, overlap of the design and the construction activities can reduce project time, due to the partnering of the contractor in the actual construction process there will be certain amount of the improvement in the constructability. However the negative aspects of the project include difficulties in preparing an adequate and sufficiently comprehensive brief, since the contractor is also partner in the progress, there usually lies lot of expenses when the client changes the project scope anytime in the project progression, Usually the design liab ility in the project is limited to the standard contracts that are available in such partnership type of procurement processes Public private partnership Procurement PPP type of the procurement process do facilitate the public sector to harness the expertise and the efficiencies that the private sector can bring to the delivery of the certain facilities and services traditionally procured and delivered by the public sector. This will also be structured in a way that the public sector body seeking to make a capital investment does not incur any borrowing. PPP borrowing any if required will be incurred by the private sector vehicle. Typical benefits of the PPP type of procurement involve speedy, efficient and cost effective delivery of the projects, value for money for the taxpayer through optimal risk transfer and risk management, efficiencies from integrated design and construction, creation of added values through the synergies, alleviation of the capacity constraints and bottlenecks in the delivery of the project, innovation and diversity in the provision of public services, effect utilization of the public assets for the benefits of the end us ers of all public services. However typical PPP type of procurement processes are more complicated, because of the reasons existing like need to anticipate possible contingencies in a long term contractual relationship. There is possibility of high legal expenses in negotiating a PPP procurement contract. Private finance initiative Private finance initiative is a type of the PPP financing. The process consist of funding public infrastructure projects with the private capital. It is also been used to simply to place a great amount of debt off balance sheet and proved to be successful. Generally a special purpose vehicle (SPV), the private firm works on to provide capital for the PPP finance requirements. Not only the required capital, the SPV also works on to provide maintenance as well as capital replacement expenses during the life cycle of the contract. They usually range for duration more than 25-30 years. The consortium will usually paid over the course of the process on a no service no fee performance basis. The public authority will design an output specification which is a document setting out what the consortium is expected to achieve. Usually the process is complicated, the public sector is entitled to terminate the contract, compensate the consortium where appropriate and take ownership of the projec t. The termination procedures of the contract are very complex as most projects are not able to secure private financing without assurance of project repayment in the case of the termination (Brennen, 2000). b) There are number of contracts in use in managing the construction projects, lumpsum contract is a type of the contract where the owner has essentially assigned all the risk to the contractor. The legal obligations of the project include higher markup in the cases of unforeseen contingencies in the project. Also the there can be other commitments like underestimated cost, which will reduce the contractors profit by that amount. Overestimated contracts may result in losing the bid in the lumpsum projects. Unit price contract is a case where the risk of the inaccurate estimation of uncertain quantities for some key tasks has been removed from the contractor. The bid has flexibility in opting for flexible methodology of the biding, contractor can rise the bid value in the case of the underestimated bids and can even lower the unit prices in the case of underestimated bids. If the contractor has high expertise in the chosen field it is much likely that he will remain profitable in the contract execution. Cost plus fixed percentage contract is the case where the owner assumes all the risks of the cost overruns. He will receive the actual direct job cost plus a fixed percentage and have little incentive to reduce the job cost. This contract even permits overtime payments to the workers and are very common and will further increase the job cost. It is very rarely employed by the owner. Cost plus fixed fee contract: this is a case where the contractor will receive the payment for the actual job as well as a fixed fee for the same. Generally the job does not constitute any special incentive to complete it quickly and hence there wont be much of the compellation to complete the project in time, except the risk of profit erosion for the project by means of delayed completion (Odeh et al, 2002)(Hendrickson et al, 1989)(Chan et al, 2004). c) The procurement techniques do have a large impact on the organization performance characteristics. Typical performance characteristics include time duration of the project completion, the cost of completion of the project, quality of the project etc. Working with a range of the possible ways is common in the construction projects. Each type of the methodology do have its own advantages and disadvantaged. For example a multi-disciplinary team will facilitate the collection of the expertise from large pool of expertise and will facilitate the project completion in the most effective manner. Integrated teams do work on to facilitate the efficient planning and completion of the project, Partnership is a typical model where the advantages of integration is chosen for the better performance as well as the issues like debt transfer to the private partner can be employed as in the case of PPP type of the procurement technique. However they are much complicated as involves more complicated processes in the anticipation of all the outcomes as well as benchmarking the performance in variety of the situations. Also it will lead to the further complications in the cases of large project durations. Typical key performance indicators in the case of construction project are the time of the completion, cost of the project, utilization of the resources, minimizing the waste disposal, legal and other compliances, etc. It is possible for an organization to deal with environmental management issues and legislation by means of selecting a particular project procurement process. 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