Project Planning and Scheduling

UNIT 7 MATERIALS AND EQUIPMENT

Objectives
Perusal of this unit will enhance your
• understanding of the key role of materials and equipment in project management
• appreciation that projects, in essence, entail designing and indenting materials,
ordering and expediting materials and transporting and erecting materials
• comprehension of prioritising sequencing of materials and equipment in such a
manner as would facilitate their arrival at site in the sequence of erection
• clarity of basic concepts in effective materials management for ensuring timely
delivery without compromising on quality and at reasonable prices
• capability for laying sound foundations for proactive vendor and contractor
management, the two badly neglected parts of project management
Structure
7.1 Introduction
7.2 Importance of Materials and Equipment
7.3 Network-based Materials Management
7.4 Sectionalising Planning of Materials
7.5 Longest Delivery Item and Project Duration
7.6 Beating the Critical Path
7.7 Combating Inflation
7.8 Construction Equipment and Materials
7.9 Supporting Services for Construction Equipment acid Materials
7.10 Summary
7.11 Self-Assessment Exercises
7.11 Bibliography and Further Reading

7.1 INTRODUCTION
Project management entails designing, ordering, expediting, inspection,
transportation of materials and equipment in an orderly sequence and then erecting
them in different geographical locations and commissioning them into viable
operating plants A large project, in totality, may appear to he very gigantic and
complicated. Management of projects by network analysis provides an integrated
technique of planning and control by breaking the entire project into various
packages (systems) which are further blown into various functional components like
mechanical, piping, civil, structural, electrical, instrument, etc. Each of these
functions is further divided into design and indenting, ordering and payment,
expediting and inspection, transportation and storage, erection and commissioning.

7.2 IMPORTANCE OF PLANNING FOR MATERIALS

AND EQUIPMENT:
Procurement of materials and equipment spans across 80-85 per cent of the overall
project duration. If we carry out delay-analysis of projects in India, late delivery of
materials and equipment would emerge as the most important factor contributing to
delays in project implementation. If we skim, through the annual reports of
corporations implementing major projects, unforeseen delays (?) by vendors come in
as a convenient alibi for all acts of omission and commission by the project
36 managers.
The scenario in India is further complicated by the fact that most vendors overtrade Materials and Equipment
themselves and book orders much beyond their capacity and capability Project
managers have to act proactively and anticipate problem areas and anticipate
problems with contracts and supplies right at the stage of awarding contracts and/or
placing supply orders.

Besides, suppliers of speciality equipment have also a significant role to play in

furnishing relevant data on loading, foundations, height, location of incoming power
supply etc. without which design of civil and structural works, piping, electrical and
instruments cannot be finalized nor basic documents like detailed layout drawings
can be frozen. Supplies of high-technology equipment are also involved in erection,
testing and commissioning of these equipment and their synchronised performance
can make a major impact on the timely completion of the project.

7.3 NETWORK-BASED MATERIAL MANAGEMENT

Project management encompasses designing and indenting of materials, ordering and
expediting them and then transporting these materials to the construction site and
erecting them in respective geographical locations. Management of projects through
network analysis incorporates a systematic and comprehensive approach to materials
management. Effective materials management ensures right materials, in the right
quantity at the right time, at the right place and at the right price.

Network analysis of projects leads to prioritisation of all activities such that work on
the longest delivery items-is started first, followed by not-so-long delivery items,
followed by medium delivery items and ultimately followed by short delivery items
and so on. For any functional area also, schedule, blown up item-wise. is as shown
below:

Figure 1:

In engineering and technical projects, management of materials forms the kernel of

entire project management. The materials must be designed in the right sequence,
ordered, expedited and delivered to site in the sequence of their erection such that the
buildings and structures are constructed and otherwise made ready so that the
equipment can be erected directly on the designated locations without prolonged
storage and rehandling at construction sites. 37
Project Planning and Scheduling Networks also provide a detailed basis for interaction among vendors and purchasers
and contractors and clients. Close and intimate networking with vendors forms the
sine qua non in projects - a large number of them are dependent upon purchaser for
receiving information for °completing their respective designs and specifications.
Equally a number of suppliers specially for specialized and proprietary equipment
have to be furnished design data for proceeding with various components of the
project. In addition, suppliers of specialised machinery should also provide the
manuals for erection, testing, commissioning, operation and maintenance of their
equipment so that purchaser is able to take timely action for their detailed planning
and execution.

7.4 SECTIONALISING PLANNING OF MATERIALS

Projects comprise of various types of hardware. For the ease of planning and
scheduling, the entire project can be divided into several sectional components as
below:
Designing, ordering, expediting and construction of –
(a) civil works
(b) structural works
(c) mechanical works
(d) piping works
(e) electrical works
(f) instrumentation works etc.
This can be schematically show as below:

Figure 7.2
While doing this, projects can also be further classified geographical area wise on the
following lines
Within Battery Limits
38 Battery Limits refers to the main plant and equipment and may comprise of-
 (a) Plant I (or Main Building I) Materials and Equipment
(b) Plant II (or Main Building II)
Outside Battery Limits
These may he further grouped into -
a) Process Utilities such as
1. Raw Water including intake water works from canal, river etc. or tubewells
2. Filtration Plant
3. Cooling Towers
4. Chilled Water
5. Distilled Water
6. Boilers and Steam Pipelines
7. Fuel Oil System
8. Petrol, Oil, Lubricants etc.
9. Incoming Power Supply and Distribution
10. Power Substations and Switch Rooms
11. Raw Material Storages of various kinds
12. Packaging Material Storage
13. Stores for Maintenance and Spare Parts
14. Specialised Stress within Production Department
15. Storage of Safety Equipment
16. Storage of Dresses and Uniforms
17. Storage of Stationery
18. Storage for Laboratory Chemicals
19. Finished Product Warehouse
20. Workshops for Civil, Mechanical. Electrical and Instruments
21. Laboratories for Testing Raw Materials. in-stage production materials,
packaging materials and finished products
22. Fire Fighting System including Fire Engine/Tender
23. Inward Material receiving bay and area
24. Outward despatch bay and shipping area
(b) Amenities such as
1. Office Building
2. Training Centre
3. Security Office at the entrance gates for materials, workmen. st'f etc.
4. Time Office
5. Change Rooms. Washrooms, Lockers, Toilets etc.
6. Canteens and Rest Rooms
7. Roads, Culverts and Drains
8. Street Lighting etc.
All main plants process utilities, amenities etc. are inter - connected through service
pipelines, power-cables etc. Proper well defined cut-off lines must he decided before
hand so that responsibilities of individual persons get defined without any gaps and
overlaps.
Each of the process utility or amenity may have all or few of the above six
components. For example, project management responsibility of a general purpose
office building or store may vest in a member of civil engineering group who would
in turn have to seek assistance from other disciplines like electrical engineering for
power/electrification works within the proposed office, stores etc. Similarly, for
office equipment, furniture, instruments etc., help of specialist functions as
appropriate may be sought. 39
Project Planning and Scheduling Activity 1

If we are using computerised methods of project management: what is the

justification of providing a facility in the software which would enable listing of
activities separately for each section or function?

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7.5 LONGEST DELIVERY ITEM AND PROJECT

DURATION
Procurement of materials and equipment spans accounts for upto 85% of the overall
project duration. Their proper planning and scheduling assumes greater importance.
It is perhaps easy to comprehend that the overall project duration is dependent upon
the longest delivery item(s) of materials and equipment. An approximate method of
arriving at the overall project duration is as below:

T =A+L+B-

Overall

Where A = Minimum time required to design, indent and order the longest delivery
item

L = Longest delivery period

B = Minimum time required for the longest delivery item to be erected and
commissioned

This can be illustrated as below:

Figure 7.3

7.6 BEATING THE CRITICAL PATH

Projects do not sprout from nowhere - there is a phase of project conception,
formulation, evaluation etc. During this period project contours are conretised and
'vision' is converted into 'mission'. During this phase, usually core equipment which
are also normally among the longest delivery items get defined. These long-delivery
group of items stand out like a 'tomb stone' M the network and all large organisations
who have developed some maturity and capability in project implementation, seek
40 out ways and means of beating the critical path. The possible courses of action are :
(i) If the company is certain of going ahead with the project, it can seek advance Materials and Equipment
financial sanction of limited amount of funds for placing orders covering
longest delivery items. The damage may be limited to the advance payments
made and/or additional commitments as per the terms of contract.
(ii) The company could proceed and obtain quotations. negotiate prices and other
terms and conditions and should be ready to place the order the moment the
financial sanction is received.
Large companies and multinational corporations have more options and these can be
exercised for containing overall project duration.
7.7 COMBATING INFLATION
In most economies of the world, Inflation works out to be a significant factor; India is
no exception. Materials constitute 65m80% of the total project costs and although
project costs estimates provide for inflationary trends in economy in the form of
contingencies, currency fluctuations etc., project management is a time-framed
activity
Other factors remaining same, a common index of measuring progress of project
implementations is the 'speed at which we can commit and spend the sanctioned
amount'. This is a very commonly accepted parameter of describing the capacity and
capability of a project organisation. Once again, this brings into focus the importance
of materials and equipment in project management.
Besides, by awarding contracts for supplies and services, we are able to combat the
effect of inflation. After the project is financially sanctioned, the speed with which
we can commit the materials, equipment and services covering the entire scope of the
project will not only enable us to contain the impact of inflation on project costs hut
also achieve timely deliveries of equipment and consequently for the project as a
whole.
7.8 CONSTRUCTION EQUIPMENT AND MATERIALS
In addition to direct materials like plant and machinery for the projects, we also
require construction machinery and materials to aid and speed up construction. With
the advancement m construction technology the number and array of materials, tools
and tackles and equipment required during construction have increased greatly. The
availability of tools and tackles and resource equipment, which are highly
mechanized, has enhanced the quality and delivery of the construction phase with
consequent reduction of costs of construction.
Thanks to the protective regime of our economy for the last lour decades, India has
lagged behind in the construction technology. With the current trend of liberalisation
of economy next few years will witness major strides in technology transfers and
their absorption in construction.
By international standards, we take far too long time in executing projects despite the
fact that we have also completed some projects in time periods we can be rightly
proud of. For example, a flyover over the busy Kemp's Corner at Bombay was
completed in sixties in seven months whereas similar project, thirty years later are
taking two to three years, if not longer. Similarly, although Kudremukh Iron Ore
project was completed in time period comparable with the world standard, we have
taken a very long time in executing Vizag Steel Plant.
With the increasing use of expensive construction machinery we have to work out
detailed planning and scheduling of construction is such a manner as would require
these machines for short durations at one construction site. Pressures of competition
arising from liberalisation, privatisation and globalisation will lead to drastic
reduction in project durations.
Constructions schedules will have to be worked out in greater details so as to
optimise the engagement of expensive construction machines and equipment for
minimum periods for maximum output by working them for longer hours Or round
the clock. Periods of engagement of these machinery would require computing on per
diem basis to minimise heavy cost debits and remain competitive.
The immense advantage Japanese car manufacturers have gained by reducing the
launching
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Project Planning and Scheduling period of new car model to 16 to 18 months in comparison to American car
manufacturers' 30 to 36 months is worthy of emulation. Speedier implementation of
projects can propell a company to that winning advantage. Planning, scheduling and
deployment of construction machinery and materials play a vital role in this.

7.9 SUPPORTING SERVICE FOR CONSTRUCTION

MATERIALS AND EQUIPMENT
Most large projects are located in remote areas requiring special efforts in reaching
and servicing construction materials and equipment. Unfortunately, owing to
protected and restrictive environments, supporting logistic and financial services
have not grown at the rate they should have. With further liberalisation of economy, a
large number of specialist agencies are expected to start operating in the following
areas of concern to project and construction management:
(i) Lease financing of construction machinery for the period of construction only
(ii) Renting of construction machinery
(iii) Maintenance and servicing of construction machinery.
Besides, with heavy investment in infrastructure sector like roadways, railways,
telecommunication and related facilities, access and reach to various nooks and
corners of the country is expected to improve which in turn will give boost to the
logistics and other supporting services for construction projects.
Besides, we have to develop suitable framework for buying old construction
machinery reconditioning and retrofitting for hiring/leasing out to companies who
need these services.
India would require massive investment in supporting logistic activities before it can
develop capabilities of quality, cost and timely deliveries of international standard.
Activity 2
Speeding up project implementation is a prerequisite for entry into global project
management. Explain with justifications.
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7.10 SUMMARY
Materials and equipment play important role in project management, because the
procurement of these requires 80-85 per cent of the overall project duration.
Management of projects through network analysis incorporates a systematic and
compresive approach to materials management. Effective material management
ensures right materials, in the right of quantity at the right time, at the right place and
at the right price.
The overall project duration is dependent upon the congest delivery items of
materials and equipments. Hence possible courses of actions are to be followed in
beating the critical path. Construction schedules shall have to he worked out in
greater details so as to optimize the engagement of expensive construction machines
and materials.

7.11 SELF-ASSESSMENT EXERCISES

"
1. Management of materials and equipment forms the core of project management."
Support your views giving supporting evidence.
2. How does management of projects with the aid of network analysis helps design
and procurement of materials and equipment in line with the priorities?
3. Is there any quick method of estimating the overall duration of a project? Explain
the process with suitable justifications.
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4. "Meticulous Management of activities on the critical path is crucial to completing Materials and Equipment
projects on time." How can we 'beat' the critical path and improve our on-time
performance?

5. What do we need to do in India in order to speed up the projects and shorter

overall durations?

7.12 BIBLIOGRAPHY AND FURTHER READINGS

1. Albert Bathersby Project Management with Network Analysis, Pitman. London.

2. S .Choudhury Project Management, Tata McGraw-Hill. India.

3. P. Gopalkrishnan Text Book of Project Management, Macmillan. India. VE Rama

Moorthy

4. Vasant Desai Project Management, Himalaya Publishing House, India.

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