Chapter 1 Cc603_rafik

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Chapter 1 – The Concept of Project Management

CC603- PROJECT MANAGEMENTBy: Mohd Rushdy YaacobRafikullah bin Deraman Lecturer Politeknik Sultan Haji Ahmad Shah

Unique Building Around The

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Problem That We Face in

Construction Industry

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Literature ReviewUAE researchers perspective;•Drawing s preparation and approval•Inadequate and poor planning•Lack of quick decision making from owner•Lack of manpower•Lack of proper supervision and management•Lack of labour productivity•Lack of labour skills•Lack of availability of equipment and material•Difficulties in taking approvals from goverment authorities and committees•Contractor’s financing problems•Changes in materials

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DEFINITION OF MANAGEMENT

• “the process of reaching organizational goals by working with and through people and other organizational resources”

Certo, 1985

• “the process of planning and decision-making, organizing, leading and controlling an organization”

Griffin, 1987

• “the process of acquiring and combining human, financial, informational and physical resources to attain the organization’s primary goal of producing a product or service desired by some segment of society”

Pringle, Jennings and Longnecker, 1988

• “the process with and through other people to achieve organizational objective effectively using limited resources in fluctuate or different situation”

Robert Kreitner, 2009

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MANAGEMENT CONCEPT

An effort to use the limited resources to achieve organizational

goals effectively

Chapter 1 - Management Concept8

BASIC COMPONENT OF MANAGEMENT


Figure 1.1 Basic Component of Management

Different Situation

Work

with & through

other people

Limited Resources

Impressive and Efficient

Diff

eren

t Situ

atio

nD

ifferent SituationOrganizationalGoals

Levels of Management

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It consists of board of directors, chief executive or managing director. The top management is the ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating functions.

The departmental managers constitute middle level. They are responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions.

Lower level is also known as supervisory / operative level of management. It consists of supervisors, foreman, section officers, superintendent etc. Those executives whose work has to be largely with personal oversight and direction of operative employees

IMPORTANCE OF MANAGEMENTa) Acquisition and utilization of resources Management performs efficient acquisition effective

development and utilization and proper coordination of resources

b) Environmental adaptation Management adopts organization to changing

environmental forces.c) Goal achievement Management achieves goals by balancing the

requirement of jobs and people.

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d) Problem solving Management solves organization problems. It identifies

and evaluates various alternatives and choose appropriate course of action.

e) Performance control Management measures and evaluates the actual

performance.f) Social responsibility Management anticipate and act before hand to social

expectation

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BASIC MANAGEMENT ACTIVITIES


Figure 1.2 Basic Management Activities

PLANNING

IMPLEMENTATION

CONTROLLING

• Compare between progress and planning• Reporting• Settle problems

• Distribute resources• Supervise implementation• Coordinate activities• Motivate workers

• Define objectives • Define resources needed

in the project• Develop strategy

DEFINITION OF PROJECT

• Unique set of coordinated activities, with definite starting and finishing points, undertaken by an individual or organization to meet specific objectives within defined time, cost and performance parameters using limited resources

Punmia P.C dan Khandelwal K.K, 1989

• A novel undertaking or systematic process to create a new product or service the delivery of which signals completion. Projects are typically constrained by limited resources.

• A unique venture with a beginning and an end, undertaken by people to meet established goals within defined constraints of time, resources and quality.

• Systematic process for achieving a distinct objective. The ‘system' consists of a period of planning followed by a period of 'doing', and this system is repeated at every level of detail. These two 'periods' are the genesis of the project life cycle.

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DEFINITION OF PROJECT


Project Characteristics

Defined goals

Limitedperiod of Time

Unique

Constraints

Limited resources

Figure 1.3 Project Characteristics

Not repetitive

TYPE OF CONSTRUCTION PROJECT


Figure 1.4 Type of Construction Project

- Single-familyhomes

- Multiunit town houses

- Apartments- Condominiums- etc

Construction Project

Residential

construction

Heavy

construction

Building

construction

Industrial

construction

- Retail stores- Schools- Universities- Hospital- Mosques- Office towers- etc

- Heavy-manufacturing Plants

- Nuclear powerplants

- Mine developments

- Dams, tunnels- Flood control- Irrigation- Bridges- Airport- Highways- Harbors, etc

PROJECT CONSTRAINTS


Figure 1.5 Project Constraints

Resources

Quality

CostTi

me

LawSafety

Performance and Technology

EnvironmentalIssues

Good Relationship with Clients

DEFINITION OF PROJECT MANAGEMENT

• Planning, controlling and coordinating a project from beginning stage to completing the owner’s need which ensure that the project finish on time, on budget and also on quality.

The Chartered Institute of Building, UK

• The process which project manager plan and control all the activities in a project, use and distribute all of resources (money, time, information, material, and equipment) to achieve goals, standards, and objectives that predetermined in the beginning of project stage (based on time, cost, resources and quality).


DEFINITION OF PROJECT MANAGEMENT

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19Figure 1.6 Project Management

Project’s goals

Result

- On time- On budget- On quality- Good relationship- Environmental friendly- Good safety- Good performance/technology

Project management

DUTIES OF PROJECT MANAGER

• Make a report to project coordinator• Check the quality of work and safety on construction site• Arrange all the facilities at the construction site before work commences• Comunicate with clients and consultans• Implement quality control procedures• Attend all meetings with clients and consultants• Prepare and present the main program to the client• Conducting meetings of sub contractors and suppliers• Monitor the work performed by sub contractors• Overall planning, coordinating the activities of the construction site, site

management and expenditure• Monitor the progress of work and cash flow• Leading the team of engineers, quantity surveyors, land surveyors, quality

coordinator at the site and supervise the construction project. 20

CONCEPT OF PROJECT MANAGER BETWEEN:

a. TRADITIONAL SYSTEM

• The designer does not have direct link with the specialist and all communication is via the main contractor who in many cases will not accept design liability.

• This results in a grey area of responsibility and liability as information is passed from one to the other.

• In general, the designer or the architect is the leader of the project and represents the client to implement the design process.

• The architect becomes more of a ‘surrogate client’ and takes on the responsibility to make sure the project is delivered on time and on budget.

• The traditional method of procurement, the client appoints independent consultants, on a fee basis, who fully design the project and prepare tender documents upon which competitive bids, often on lump sum basis, are obtained from contractors.

• The successful tendered enters into direct contract with the client and carries out the work under the supervision of the original design consultants.

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In the traditional procurement, the professionals are empowered to use best practice defined by their own professional bodies and education.

The basic workforces in general play an inactive role towards the design and planning process.

The basic workforces here work consistently if there are no interruptions in the production process.

Such an environment generally encourages an adversarial attitude among the design teams.

In terms of cost benefits, reduction of up to 30% can be achieved. While a reduction of 40% in delivery, time can be achieved but there is a little change in the quality of the product.

Traditional procurement system characteristics :Long construction periodConsecutive organisationClear contracting relations

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Procurement Strategy

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CostCost

CheapestCheapest

EconomicalEconomical

ReasonableReasonable

QualityQuality

BestBest

AdequateAdequate

TimeTime

FastestFastest

Time Due to its linear or sequential approach, the traditional procurement system has been identified as the slowest project delivery approach. However, this approach is more preferable because it provides clear accountability and better design and construction control by the client. Since the pre-contract stage of this system is longer, more time is available for the client and the project team to scrutinize and review the design before construction. Cost This system provides more price certainty to the client at the very early stage of the project. It also gives the client firmer and more competitive price because the design plus the complete working drawings have been fully developed and detailed out prior to tendering.It eliminates any design or construction ambiguity or uncertainty which often causes the contractors to unnecessarily inflate the price.

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• In the case where bill of quantities is used, the bidding tend to be more fair as such the project cost is also lower.

• The system also better cost control as such cost increase due to variations is minimized, but works were often disrupted when there are too many variations (due to unforeseeable problems) and it tend to cause the cost to inflate. (Masterman, 1996).

Quality • The traditional procurement system also provides a high degree of quality

certainty and functional standards. • It is also a system that provides an opportunity for the building owner to

combine the best design, management and construction expertise between consultants and contractor.

• It also provide more time for client and consultants to review and fully develop the design and specification thus allowing better documentation preparation.

• However, this system does not provide opportunities for contractor to contribute his construction technology and management expertise because they only come into the scene after the design has been fully developed and approved.

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The Linear or Sequential Process of the Traditional Procurement System

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b. DESIGN AND BUILD AND TURNKEY SYSTEMSTimeDesign and build and turnkey project procurement system are called “fast-tracking” or “build-it-fast” project delivery system where the design and construction are integrated. The design free pre-tender process allow for earlier construction date. It also allows the process of detail design and construction to run almost in parallel and concurrently to each other, thus reducing the overall project development period considerably. As a single entity responsible for both the design and construction, the contractor is able to control not only the construction time but also the time reserved for the design of the project, thus reducing the overall contract duration. In this type of procurement system, the contractor has always been selected based on its vast experience, knowledge and competency in construction, as such by giving it the design responsibility, the contractor very often able to reduce construction time. This is done by him rationalizing the design and construction process and site activities.

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CostAlthough the cost is fixed at the tender stage and is subject to design changes, it is often higher than the traditional contracting system. Apart from the fact that very limited contractors are invited to submit tenders, the lack of design and specification detailing during tender, has made the contractors to jack up the price to allow for many uncertainties. This is because once accepted, the tender price will be the final contract sum. It is not subject to change, unless there are variations required or instructed by the client. Such additional cost cannot be avoided because under this procurement system the contractor will to take much of the financial risk.However, as many have claimed, the significant cost saving in this type of procurement system is made through the reduction of the overall development period. The cost of contractor’s uncertainty can be set-off by the reduction in loan interest and early financial return or benefits. Cost saving may also be made when the contractor applies his construction knowledge and experience to simplify design and work. At the same further cost saving can be made when the client offer the contractor some form of incentive if he is able to save a significant amount of cost.

QualityThe integration of design and construction allows the contractor to utilize his knowledge and experience to develop much compacted and coherent work program and to develop more efficient design and project control programmed. At the same time it allows the contractor to be innovative to further improve the construction process and techniques thus allowing for better work and process quality.However, it is more often found that the quality of work under this contracting system tend to be questionable. The assigning of the designing and construction to a contractor has caused the client to loose control of the design and supervision of the work. This is especially so when the client does have his own team of consultants. As far the contractor is concerned, they tend to cut corners in order to maximize their profit, especially when they feel that they have under price their quotation during when tendering for the work.

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The Integrated Process of Project Designing and Construction in the Design and Build Procurement System

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Procurement Strategy

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Traditional Traditional deliverydelivery Design and buildDesign and build systemsystemTurnkey, Package dealTurnkey, Package deal

ClientClient

DesignerDesigner

ContractorContractor

ClientClient

DesignerDesigner

ContractorContractor

Inspector Inspector SupervisoSuperviso

r Q.S.r Q.S.

Inspector Inspector SupervisorSupervisor

SubcontractorsSubcontractors

Chapter 1 Cc603_rafik

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