CHAPTER 2

CONSTRUCTION MANAGEMENT - OVERVIEW

2.1. Introduction
The Construction Industry differs from all other industries because of many specific features. Consequently it tended to be reluctant in approaching management. The management methods which have proved highly successful in factory-based industries (ex: a continuous chain of production are not therefore necessarily applicable in detail to construction engineering and erection. !ince no two pro"ects are exactly ali#e$ construction management requires particular managerial techniques and must be flexible in its approach to its specific tas#s. The last decades had demonstrated (because of the increasing demand for constructions$ which execution must be completed within a predicted budget and as quic#ly as possible$ high level of competition etc. the need of sound principles and specific techniques and methods of management for the benefit of all participants to construction pro"ects. %efore giving details of how construction management is particular$ some general information about the Construction Industry and its features will be given. This is to spotlight the reasons that give special features of the approaching of management in construction.

2.2. Construction industry

The Construction Industry is a conglomeration of diverse segments and products. The importance of the Construction Industry lies in the function of its products which provides the foundation for industrial production and housing. It refers to all types of activities associated with the erection and repair of constructed facilities such as: %uilding wor# - includes single family houses$ high-rise bloc#s of flats$ institutional and commercial buildings. %uilding wor# is mostly above ground level with structural safety and aesthetic consideration tending to dominate the design process. The design is usually per formed by architects and engineers and the construction executed by contractors (builders . %uilding wor# needs a wide range of different tradesman (structural$ electrical$ mechanical$ finishing and other specialty wor# $ is labour intensive and the cost of the wor# is largely derived from materials and labour. The mar#et for this type of constructions is large$ and very competitive. (ii) Civil engineering wor# - is mainly concerned with roads$ bridges$ railways$ tunnels$ marine structures$ pipelines$ sewage treatment plants$ etc. &ach pro"ect is normally a unique design. 'ost of these pro"ects are publicly owned and therefore financed by central(local government subsidies. These type of wor#s usually involves large- scale operations$ highly mechani)ed. Consequently plant costs form a large element of the total construction cost. The engineers and contractors engaged in civil engineering wor#s are usually highly speciali)ed since each segment of the mar#et requires different type of s#ills. (iii) *rocess plant erection(speciali)ed industrial construction - involves large-scale pro"ects with a high degree of technological complexity such as oil refineries$ steel mills$ chemical processing plants$ coal-fired or nuclear power stations etc. The owners usually are deeply involved in the development of such a pro"ect and prefer to wor# with designer-constructors such that the total time for completion of the pro"ect can be shortened. M in !" tur"s The Construction Industry differs from the manufacturing industries be cause of the following main features of any construction pro"ect: (i)

(i)

(ii) (iii)

It is uni#u"$ &ven then may loo# similar$ but because of their location$ each pro"ect is constructed on a site with its own peculiar problems. ,n the other hand$ for a given contract (a building for example it is unli#ely that two bidding contractors will consider the same construction methods to carry out the wor#s and consequently to submit the same offer in terms of cost and duration. It is co%%ission"d$ The vast ma"ority of the pro"ects are ordered before construction is commenced. Compare this feature with consumer goods (motorcars$ shoes etc. which are produced first and sold afterwards. -sually the contractor is paid at regular time intervals (monthly . It is construct"d in-situ$ This means that the wor#s are influenced by climate-factors and other influences which are not present in a stabile factory environment. *refabricating and precasting in a factory may assist construction on site but do not eliminate it. The various components still have to be transported and erected on suitable foundation on site . .part from these features$ in construction we are dealing with r"%ot" &oc tions' ()ysic & unc"rt inti"s' )i*) costs nd )i*)-incid"nc" o+ d"si*n-c) n*" + ctors' that all contribute to financial ris# and require a particularly flexible and dynamic approach to management in comparison with the management process required in any other industry. P rti"s to construction (ro,"ct. Constructions are built to satisfy people/s needs: need for housing$ need to shelter social or economic activities$ need for environment protection etc. The party which tries to satisfy its need for a constructed facility is the c&i"nt. The one who carries out the wor#s to construct the built facility is the contr ctor$ who puts into real shape the drawings and specifications made by the d"si*n"r.

(i)

T)" C&i"nt is that party that is the customer of the construction industry and proposes to purchase either a construction facility or one of the other services that are offered by the industry (ex: design$ constancy etc. . The Client is also #nown as the *romoter$ ,wner or &mployer. . Client may be an individual$ a group of people$ a private or public company or a local or central government authority. .mong anther things$ a Client not s#illed in construction practice will need to obtain expert advice on one or more of the following: 0easibility studies1 The design of the wor#s1 *reparation of contract documents1 Tendering procedure and evaluation of the tenders1 !upervisor of the construction wor#s1 Certification of completed wor# for payment.

0urther$ more the Client will need someone to carry out the construction wor#s. 2hen the Client decides to see# professional services for the above matters$ he can choose between several types of professional services$ either separately or in some combination$ but basi cally he will deal with the Consultant and the Contractor. The Client/s responsibilities are: (ii) 3efine the basic requirements of the pro"ect1 Commissions feasibility studies$ investigations and alternative solutions1 Commissions design by the &ngineer ( usually but not always 1 Commissions construction by the Contractor or Contractors1 ,btains legal authority for the pro"ect1 &nsures access to the site1 &nsures that Contractor receives sufficient information in time for construction wor# to proceed1 &nsures regular payments as construction proceeds.

T)" Consu&t nt is an organi)ation or a person possessing the necessary qualification to practice in one or more various branches: engineering$ architecture$ pro"ect management$ supervision of the wor#s$ etc. The Consultant is often referred as &ngineer.

The basic duty of the &ngineer is to design that pro"ect which will most satisfy the needs of the Client at the lowest predictable cost. The &ngineer should study every ma"or item of the pro"ect to determine if it possible to reduce the cost$ without affecting the quality and the time of construction. To accomplish this effectively$ the &ngineer (Consultant should be reasonably familiar with construction materials$ methods and costs. The Consultant(&ngineer$ acting on behalf of the client will underta#e the following tas#s as the pro"ect goes forward: a) -"si*n () s" : 'a#es feasibility study to find out the best pro"ect scheme. This might include: preliminary site investigation$ alternative solutions$ cost-benefit analysis$ ris#-analysis$ outline programs and budgets1 3esign the permanent wor#s1 b) T"nd"r nd Construction () s"s$ !ubmits a rough cost estimate (based on the detail design to the Client1 *repares all contract documents(drawings$ specifications$ bills of quantities etc. 1 Invites tenders$ analy)e them and ma#es recommendations for the client to nominate the winner contractor1 !upervises construction quality control (periodically and(or at control points $ technical assistance1 .uthori)es payments to the constructor(s 1 &xamines and decide upon contractor/s claims for extra payment and(or extra time1 Coordinate contractors (if required . (iii) T)" Contr ctor . .fter the engineering design and financing arrangements for the pro"ect are completed$ the Client will enter into a construction contract with one or more Contractors$ either through competitive bidding or directly by negotiation. . Contractor is an individual or a company that contracts to carry out the construction wor#s. If only one contractor is appointed$ he is #nown as general (main contractor. 5e will act as a constructor and(or coordinator of a larger number of sub-contractors who perform various specialties for the completion of the pro"ect (civil engineering wor#s$ services wor#s$ building wor#s etc. . This situation occurs because most of the times the particular types of wor#s need specialist s#ills$ experience and equipment$ and sub-letting could reduce the costs and increase the quality of the wor#s. *roblems may arise because the coordination of sub-contractors. The Contractor/s responsibilities are: 3esigns temporary wor#s1 'ay sublet wor#s if the Consultant permits or may be obliged to enter into sub-contracts with nominated sub-contractors and(or suppliers1 'ust conform to any of the &ngineer/s instruction1 'ust provide the &ngineer with a *rogram of execution of the wor#s$ witch must be followed1 2here sub-contractors carry out part of the wor#$ the 'ain Contractor remains as responsible for that wor# as if it were his own1 !ubmits interim (monthly claims for payment as the wor# proceeds1 'ust deliver the contract as stipulated in the contract documents in terms of time$ money and quality. (iv) M t"ri & nd E#ui(%"nt Su((&i"rs include ma"or material suppliers (as specialty contractors in structural steel fabrication$ ready- mixed concrete delivery$ reinforcing steel-bar detailers etc. and

ma"or equipment and plant suppliers (ex: manufactures of generators$ boilers piping1 suppliers of bulldo)ers$ cranes$ excavators$ concrete pumps etc.

2... T)" St *"s o+

Construction Pro,"ct.

In any construction pro"ect$ three ma"or distinct stages can be identified$ namely: *romotion (.ppraisal $ &ngineering and ,peration. These stages are shown in !i*.2.1.$ together with a typical cumulative cash flow curve for the whole pro"ect and with a graph showing the degree of influence over the pro"ect ma"or attributes :quality$ schedule and cost. PROMOTION In this stage$ the need for the pro"ect must be assessed and the li#ely de mand for the service or product must be evaluated1 the location and si)e of the plant or building must be defined and the cash flow predicted.

/ 0 PRO1ECT CASH !2OW

*8,',TI,9

&9:I9&&8I9: 3&!I:9 C,9!T8-CTI,9 C,''I!!I,9I: : *ay - bac# period

,*&8.TI,9

*ro"ect cash flow

; *ro"ect 3efinition

!anction

Commission Time

/30 INVO2VEMENT O! THE PARTIES C<I&9T C,9!-<T.9T C,9T8.CT,8(!

high

/c0 -EGREE O! IN!2UENCE OVER THE PRO1ECT 4UA2IT5 6 SCHE-U2E 6 COST

low

7
!i*. 2. 1 THE STAGES O! A PRO1ECT

The cash flow curve show the state of the Client/s ban# balance at any point in the time span of the pro"ect. It is the basis of all investment calculations. Throughout the promotion stage the promoter is not committed and can abandon the pro"ect at any timeif feasibility studies show that pro"ect is worthless-having incurred relatively modest expenditure. The situation changes at =sanction=$ when a scheme evolved from all promotion studies is approved. It is during the execution of this early phase that the ma"or decisions are made concerning overall pro"ect si)e and complexity$ pro"ect location$ time constraints$ desired level of quality etc. Therefore. to effectuate significant optimi)ation of quality$ schedule$ and cost$ pro"ect management is needed the most during this stage. Therefore$ the Client must be clear about his needs and the capital ex penditure he is prepared to incur. The greatest ris# to costs frequently arises in relation to ground conditions (especially in Civil &ngineering pro"ects . The &ngineer/s investigations can include: re-assessment of the Client/s requirements$ alternative solutions to the problem$ estimates of capital and operating costs of these solutions$ environmental impact assessment - in order to establish the optimum solution of the pro"ect. ENGINEERING The whole of the engineering phase is governed by the decisions made by the Client when sanctioning the pro"ect. In particular$ the choice of the commissioning date will determine the duration of the engineering phase and the overlap between the sub-phases of the engineering phase: design$ construction and commissioning. This will consequently influence the contractual relationships between the parties. -"si*n will normally be underta#en by the client or his consulting engi neer$ but exceptions can arise too. The 3esign sub-phase involves the following main tas#s to be carried out: ,btaining the detailed information and requirements for the pro"ect1 Considering alternatives$ ma#ing recommendations and preparing the contract documents (drawings$ specifications$ bills of quantities$ rough planning of the wor#s etc. 1 The right design is consequently included in the documents issued to ten dering contractors so that they may compile and submit a realistic price and schedule for the wor#. 3etailed design will often depend on information supplied to the designers by the successful contractor(s and suppli ers after they are appointed. The ideal of completing design before start ing construction is hardly reali)ed in most of the "obs. Construction involves carrying out and maintaining the wor#s according to the contract documents$ in a stated period of time$ for an agreed sum of money. 0or construction phase$ contractors and suppliers are responsible. Co%%issionin* is the period devoted to testing and ma#ing all the elements of the wor# as an integrated unit. The &ngineering stage (reali)ation of the pro"ect involves an increasing financial commitment by the Client. 5e will not receive any return on his investment until the pro"ect is commissioned. OPERATION ,peration and maintenance of the pro"ect is the client responsibility and is outside the scope of this lecture. In this stage$ the cash flow diagram shows the client moving out from financial deficit into credit$ and eventually achieving a healthy surplus (profit .

2.7 T)" s8i&&s r"#uir"d to construction % n *"rs.

In principle Construction 'anagement has the same core as general Industrial 'anagement which in fact appeared first. %ut the application of the common principles has to ta#e into account the particularities of the Construction Industry.

>

If it is to be efficiently conducted$ every construction engineering organi )ation or every construction pro"ect requires sound management. !uch management must be provided by civil or building engineers themselves$ since they are the people best qualified in their field. %ut as they advance in their profession$ they find themselves forced to delegate some technical aspects of their wor# to others$ while they concern themselves more and more with economical$ administrative and managerial functions. %ecause of the complex construction pro"ects that are underta#en today$ a con struction manager must be able to organi)e and conduct not only technologies but also human resources. Thus managers need to have #nowledge of a wide variety of techniques that will facilitate their "obs. 5ence$ a manager in construction industry needs s#ills that can be categori)ed under the following three headings: (i) (ii) (iii) Technical and related economical s#ills - this usually follows some formal education and training in the profession and enables the recipient to exercise expertise related to the problems and methods of the organi)ation in a proficient manner1 5uman relations s#ills - this is the ability to get on with other people and wor# in co-operation with them. This follows both from education and from personal traits and experience. Conceptual s#ills - this is the ability to see problems from a broad range of views and to provide solutions for the benefit of the whole rather than a small part of an organi)ation/s ob"ectives. ,ne of a manager/s pure functions is to solve problems. %ut before this can be done$ the problem needs to be established and defined. (The diagnosis stage . There are usually many indicators of the existence of a problem (ex: poor productivity$ poor quality of the wor#$ extra cost etc. . ,nce the problem has been diagnosed and defined$ a manager must develop a solution and then implement it$ to achieve the predicted ob"ective. . possible question that could arise now is whether managers must #now all the s#ills performed by the people they manage. This depends on such factors as: their level of management$ the type of organi)ation and the si)e of organi)ation. <evel of 'anagement: .s one moves up to scale$ operative s#ill requirements go down and managerial s#ills requirements go up. .t lower levels$ technical s#ills will be more important and in greater demand than at higher levels. &conomical #nowledge and conceptual s#ills will manifest in reverse. 5uman relation s#ill is li#ely to be in constant demand through the hierarchy. Type of ,rgani)ation: .lthough managers in some organi)ations do not need to #now operative s#ills$ technically oriented organi)ations tend to select managers with academic bac#grounds and practical experience in the technical specialty involved. The reason is that technical expertise is very helpful in giving instructions$ in planning wor# to be accomplished and in performing other management functions$ especially if the specialty?s language is highly technical. ,ne must not forget that competence is a very solid basis for constructing and maintaining a manager/s authority and power within organi)ation. !i)e of organi)ation: In a small organi)ation$ a manager may need to #now operative s#ills. In a large organi)ation managers cannot #now every operative s#ill. %ased on the above considerations$ we can now appreciate that the main ob"ectives of construction management are : The acquiring of contracts (wor# for organi)ation1 The development and completion of a pro"ect within the budget and the specified time1 The establishment of a reputation for high quality wor#manship and efficient performance1 The provision of safe and satisfactory wor#ing conditions for all personnel1 The formulation of sound decisions at the lowest practical management level$ through the delegation of authority1 The intelligent handling of human relations so that people are moti vated to give of their best within their mental and physical capacities1 The creation of on organi)ation that operates as a team and is not de pendent upon any single individual.

2.9. Construction (& nnin* nd or* ni:in*.

The successful reali)ation of a construction pro"ect or contract will depend greatly on its careful planning. The activities of designers$ manufacturers$ suppliers$ contractors and all their resources must be organi)ed and integrated to meet the ob"ectives set by the promoter or contractor. If the pro"ect is commissioned on time$ the client will save the costs of additional investment and of inflation that would arise from delay. !imilarly$ if the wor# of a contractor is thoroughly planned to achieve efficient utili)ation of a given level of resources$ and only those resources are provided$ the estimated cost will not be exceeded if the contract duration is not extended. The contractor will also avoid possible penalties due to contractual clauses enforcing the contract duration. P& nnin* Construction planning may be defined as understanding of what has to be built$ then establishing the right method$ the right plant and the right labour force to carry out the wor#s$ safely and to the quality required in the most economical way$ ta#ing into account the various restrictions$ to meet the client requirements. In developing a construction plan$ the ma"or concerns are: ti%", r"sourc"s and cost. Consequently$ construction planning involves the following main tas#s: 3efinition of the wor# content and restrictions of the pro"ect$ and establishing a set of logical interrelated wor# tas#s (activities(construction cycles 1 Choice among the various alternative means and methods of performing activities. &stimation of the required resources and duration for each individual tas#1 Identification of any interactions among the wor# tas#s (sequencing 1 &stimation of the pro"ect(contract time scale- usually on the basis of a managerial programming model (networ#1 line of balance and establishing the related programs for resources and cost. In addition to these technical aspects of construction planning$ it may be also necessary to ma#e organi)ational decisions about the relationships between pro"ect participants. In conclusion$ construction (& nnin* is t)" (roc"ss o+ n &y:in*' +or%u& tin* nd (ro*r %%in* t)" int"nd"d ctions +or t)" c rryin* out o+ (ro,"ct or contr ct. Sourc"s +or (& nnin* In his attempt to do the planning for a construction pro"ect$ the planner needs reliable information from the following sources: (i) 3rawings - will provide information about the wor# to be carried out. To be successful$ those who do the planning needs to be versed in construction technology$ be #nowledgeable in relation to plant and labour abilities and performance. Thus$ proper construction methods need to be chosen to enhance the desired strength and quality1 %ills of qualities - will provide a good idea of the physical scale of the wor#s1 !pecifications - may have a ma"or effect on the way in which the wor# is carried out: time for removal the forms1 methods for pouring the concrete (ex: continuously or =chess= pouring . specified sequence in which the client wants handover (this may not be that sequence giving the most efficient way to construct the wor#s . (iv) (v) (vi) <egislation - construction operations are affected by a great deal of legislation (safety measurements$ environment legislation$ fire protection$ etc. Codes and standards - have direct relevance to construction method assessment 8estrictions - related to resource provisioning$ transporting$ storing$ handling$ weather conditions etc. Pro*r %%in*

(ii) (iii)

Pro*r %%in* is the process of producing the time related schedule of the planning actions. A (ro*r % - is a time sequence visual presentation of the results of planning the construction methods to be adopted for management implementation in the field. It lin#s the pro"ect activities to their time (start time$ duration$ completion time $ resources and cost in a time scheduling fashion. !equences of activities will be defined and lin#ed to ensure the technical logic of carrying out the wor#$ to ensure that priorities are identified and that efficient use is made of expensive and scarce resources. T)" ro&"s o+ (ro*r %s$ . program should provide management with the capability to: (i) (ii) (iii) (iv) %e a vehicle for analy)ing the most efficient sequence of operations1 *rovide a mean by which progress can be recorded against planned (sustain the controlling function 1 %e a tool of management for highlighting areas which need attention (critical activities1 costly operations1 wor#s to be carried out in difficult weather conditions etc. 1 *rovide a method of communication to subordinates in the field. C& ssi+ic tion o+ (ro*r %s. *rograms can be classified according to their form of presentation$ moment of elaboration and to their orientation. (i) 0orm of presentation 9etwor#s1 <ine of balance1 :antt (%ar chart1 =!= curves1 etc. 'oment of elaboration *re-Tender stage - an overall appreciation of what has to be built and in what order1 *ost - Tender !tage - detailed presentation$ according to the user/s level and purposes1 'aster programs1 !ectional programs1 !ubcontractors programs. ,rientation Time programs1 8esource programs1 Cost programs. Contractors generally agree that the basis of presentation of these programs is best carried out on a bar chart format. The generation method is usually based on a networ# diagram and sometimes (wor#s having a repetitive structure on a line of balance diagram (see C) (t"r ; . Or* ni:in* There are at least three main aspects to be organi)ed in a construction firm: the organi)ation itself$ the pro"ects in which the company is involved with other participants and the wor#s under specified contracts to be carried on by that company. Or* ni:in* t)" or* ni: tion In setting up organi)ation for the Construction Industry it must not over loo#ed that it is sub"ect to many ris#s$ variable labour conditions and continual diversity in construction problems. 0urther more$ its operations may be very remote from its headquarters. The nature of wor# is quite di verse and requires different specialties and s#ills to be integrated for the benefit of the company1 at least five ma"or specialist fields can be recogni)ed in even the smallest construction pro"ect in which the company may be involved$ namely: engineering$ estimating and procurement$ supervision$ general cost account and personnel relations. In each division$ authority is delegated to the specialists in accordance with their duties and hierarchical position. These departments also need coordination so that the system could wor# effectively.

(ii)

(i)

In this respect$ the tas# of organi)ing is to create the proper structure of organi)ation. The result can the materiali)ed in an organi)ational chart$ showing the hierarchy of the company and the relationship between the various personnel. Or* ni:in* t)" construction (ro,"cts The main purpose here is to create that organi)ational structure and that relationship system between the parties of the pro"ect (client$ engineer$ contractor$ authorities etc. so that the goals of each part could be fulfilled as efficient as possible. Or* ni:in* t)" construction <or8s. This involves the establishing of efficient construction methods and proper lin#s between them such as labour$ plants and resources should perform the wor#s according to a program. It also consists in considering the necessary support to carry-out the wor#s: site layout facilities$ deposits$ proprietary equipment etc. ,n the other hand$ the determination of the most efficient wor# methods needs sound analy)ing techniques and performance measures of the individual wor#s and of the whole contract$ such as: 2or# study: a set of principles and techniques to determine the best way of performing a wor# tas# and to measure the time related consequences (method study1 wor# measurement . *erformance 'easures: a set of specific means and principles to be used for measuring the facts and for appreciating whether the wor#s were related in an effective way or not: (i) *roduction rate$ output rate$ rate of progress etc. (ii) -niformity and continuity of the wor#s in time for both labourer and sections of wor#.

CONC2USION The ability to manage engineering pro"ects involves not only engineering competence and a proper understanding of the tools of management$ but also #nowledge of the trends in society as a whole and a #een insight into human relations. It requires above all$ the willingness and the capability to cope with technical$ financial$ organi)ational$ environmental and human aspects of every management problem. . good manager should also be a person who initiate actions and ma#e good decisions. If engineers are not be able to do these$ other professions will challenge their claim to managerial positions within the construction industry. If this occurs$ the construction engineers will have only themselves to blame