Muungani R.

Quantity Surveying Department

NUST
Project Management
 Can be defined as:
 The planning, monitoring and control of all aspects of a
project and the motivation of all those involved to achieve
project objectives on to time, and to cost, quality and
performance (BS6079 Guide for Project Management, as
cited by Fewings, 2005)

 The art of directing and coordinating human and material

resources through the life of a project by using modern
management techniques to achieve predetermined goals of
scope, cost, time, quality and participant satisfaction
(Project management institute, as cited by Fewings, 2005)
 A construction project mean different
things to different people
 Can mean building a house, a high rise
building, a dam, an industrial plant, an
airport, or even remodeling or
upgrading a facility (Ritz, 1994)
 Can be taken to comprise individual
activities, each of which:
Has a definite objective to be achieved,
Has well defined specifications,
Temporary in nature and has well defined
start and completion dates, and
Consumes resources
Resources Management
Resources for the Construction Industry
 Materials
 Manpower
 Machinery and consumables
 (Funds)
 Space
 Time
 Subcontractor?
1. Purpose of Resources Management
 The basic aim of Resources Management is
to supply and support project operations so
that the established time can be met and
costs can be kept within the construction
budget (Sears and Clough, 2008) under
predetermined quality and project scope
 A project manager must determine long-
range resource requirements for general
planning and short-term resources for
detailed planning
 Client categories
 Public or Private
 Profit or Non-profit
 Business case – the need to justify a need
 In this case all categories of clients will have
a business case [which define the client’s
objectives in the context of the project]
 During planning the PM must establish
which resources will be needed, when they
must be on site, and the quantities
 Arrangements must be made for their
timely arrival with regular follow-ups so as to
ensure that promised delivery dates are kept
 Where shortages or delays are anticipated,
the project manager must devise appropriate
remedial measures
 Who is this Project Manager?

Two Project Managers are under

consideration here: Consultant Project
Manager and Contractor’s Project Manager
 Feasibility – alternative analysis & gap
analysis
 Cost-benefit analysis
 Funding and investments appraisals
 Payback period
 Accounting rate of return
 Discounted cash flows
 Internal rate of return
 Sensitivity analysis
 Different ways of looking at a project depending
on the viewpoint of the participant
 Different parts of a life cycle are often managed by
different people and not all organizations are
involved in the project all the way through from
inception to completion
 e.g. main contractor gets involved from tendering
to completion, but for them it’s a complete project
with inception and completion
 There is therefore a need to be flexible when
viewing a project life cycle
 e.g. Different forms of procurement put
emphasis on different phases of the cycle,
like the Design, Build, Finance and Operate
(DBFO) which has a strong contractor
involvement in the inception, feasibility,
design, construction and operation phase of
the project, which is not the case in
traditional procurement
2. Project Organization
 Managing resources or a project is a
centralized system of planning, organizing
and controlling the field work to meet the
aforesaid project objectives
 These are however not done in a
compartmentalized way but they do overlap
and are done concurrently
 This means a project manager must plan,
organize, and control every activity on the
project (Ritz, 1994)
2.1 Organizational Overview
 The level of authority a PM enjoys is denoted
by the organizational structure in which it is
being done (Heldman, 2007)
 Organizational structure involves, in
addition to task organizational boundary
considerations, the designation of jobs
within an organization and the relationships
among those jobs.
http://www.referenceforbusiness.com/mana
gement
Organizational Structure

 Note: Never allow the organizational

structure to get in the way of meeting
project objectives
 Depending on authority, their title might
even change to project leader, project
coordinator, project expeditor
 The general goal of any organizational
structure is to define:
 the work to be done,
 the people doing the work, and
 the workplace
 Work to be done is a function of project
scope
2.2 Organizational Design
 Most organizations lean towards the
functional or military style, using both
vertical and horizontal structures
 The vertical structure shows the number
of layers in the organization
 Note that every layer implies a
communication filter and every filter is a
potential chock point for the necessary flow
of vital information
 The horizontal dimension depicts the span
of control
 If span becomes unreasonably too big,
supervision is compromised
 There is no limit on span size although 6 is
normally considered appropriate in most
management circles
Why?
 Communication filters are added on both
horizontal and vertical
Comparison of tall and flat structures
 2.3 Different Organization Structures
 All organizations are structured in one of the three ways:
 functional structure;
 projectized structure; and
 matrix structure
 Variations and combinations do exist among these three
structures, e.g. a weak matrix, balanced matrix or a strong
matrix
 It pays to understand the organizational structure of the
entity in which one works – eases management of
resources. The level of authority the PM enjoys is denoted
by the organizational structure
(Heldman, 2007)
a. Functional Structure/Organization (Heldman, 2007)

 Centered on specialties and grouped by

functions, e.g.HR, Finance, Marketing
department, etc
 Work is specialized & requires people with set
of skills and experience to perform specific
duties for the department
 Each employee reports to one manager, and
ultimately one person on top is in charge
Functional (cont)
 Each department is managed independently and has a
limited span of control
 If a need arise for any resource across, a chain of
command is followed
 Projects are undertaken in a divided approach, e.g.
marketing department will work on their portion of the
project & then hand over to IT to do their part, etc
 If team members from different departments are
called to work together, they will remain loyal to
their functional managers – project manager has
little authority
Functional (cont)
Resource Pressures
 Competition for resources can become fierce
when multiple projects are undertaken within a
functional organization
 Results in frustration and political infighting
 One department thinks that its project is more
important than another, and will do anything to
get that project pushed ahead of others
 (solutions???)
(stakeholder buy-in, prioritization, etc)
b. Projectized Structures/Organizations
 Nearly the opposite of functional structure
 The focus of this type of organization is the
project itself
 The thrust is to develop loyalty to the project
itself and not to a functional manager
 Organizational resources are dedicated to
projects in such organizations
 PM almost have ultimate authority over
resources and reports to the CEO
Projectized (cont)
 Supporting functions such as HR and accounting may
report to the PM as well
 PM responsible for making decision regarding the
project, and acquiring and assigning resources
 Project teams are formed and co-located (physically
work at same location)
 Project team members report to the project manager,
not functional or departmental manager
 Drawback – project teams are dissolved at the
conclusion of the project
c. Matrix Structures/Organizations
 This takes the best of both the functional and project
structure to come up with one
 Employees in a matrix organization report to one
functional manager and to at least one project
manager
 Also possible that employees can report to multiple
project managers if they are working on multiple
projects concurrently
 Functional managers take the administrative portion
of the duties and assign employees to projects
 They also monitor the work of their employees on the
various projects
Matrix (cont)
 Project managers execute work assignments on
various projects
 Both PM and functional manager share the
responsibility of performance reviews for the
employees
 The project team is free to focus on the project
objectives with minimal distractions from the
functional department
 If a PM is counting on a certain employee to work
on a project, the PM should determine their
availability up front with the functional manager
Case for discussion – take the case of a medium
to large scale building contractor during
tendering

Which department or
who does what and
under whose supervision
in your organization?
The corporate organizational structure

 In as much as project organizations are set to serve a

particular project, they must also blend in with the
corporate organization and policies
 Corporate organizational structures also vary greatly
depending on size of firm and market type
 Both line and staff home office constructional
people usually move into the organization from
service in the field.
 Makes it easier for the PM to relate to the corporate
structure
 A shorter line of communication especially
with distant sites is always an advantage
 Organizational structures often affected by
firm’s position in the business cycles
 Home office organizations tend to grow in
good times and shrink in bad
 Size of home office organization has direct
bearing on general and administration
expenses added to contract bid – affects
number of projects being won
 2.4 Constructing Project Organizational
Structure
 Choosing the right project organization is the
first and probably the most important key to
successful project management
 Simplicity is beautiful regardless of size
 It shows key project functions and players in
an easily understood format
 Good practice to have the chart early in the
project even if some positions may not have
been filled
 Step 1. definition of project
 Size of project
 Strategic importance
 Integration requirements (departments involved)
 Complexity
 Budget and time constraints
 What level of resources are available
 Stability of resource requirements
 Step 2. determination of key tasks
 Step 3. breaking down the project into tasks
 Step 4. list any hampering factor associated with the
project
 Step 5. choose the structural organization form
 A project execution plan goes a long way
shaping the overall organizational chart since
it defines how the work will be executed;
 Location can also affect shaping of the same –
separation of design and construction;
 After all concerned parties have approved the
basic structure PM can proceed with reviewing
and selecting key personnel to fill the slots –
Team building
3. Field Procedure Manual (FPM)
 The heart of operating procedures for any
construction project
 A key PM responsibility in organizing
construction project operations
 Document lays ground rules under which the
field organizations will function in executing
the work
 The PM has the prime duty of seeing that the
FPM is produced in time and that it works
effectively for the life of the project
 Almost every company has a standard table of
contents that is geared to its type of work
FPM (cont)
 Equips the team members with the: who,
what, when, where, how and why of the
project without any false starts
 Important especially if the members have not
worked together before
Table of Contents for a FPM
 Funds appropriation and authorization procedures
 Contractual matter
 Project organization
 Project personnel policies
 Project coordination
 Planning and scheduling
 Project procurement procedures
 Field warehouse procedures
 Time-keeping methods
 Heavy construction equipment and tools
 etc
 All other project operations like designing and
procurement are there to support field operations
where the end product is being created
 The staff functions of project control that started
in the head office carry over into field operations,
and as the field operations gain momentum the
project control functions gravitate to the site
NOTE
“The head office and site operations probably
exhibit the worst compartmentalization
syndrome within the contractor’s organization”
Discuss!!!!!
Measures taken by PM to counter the challenge?
An organization is most effective when:
 Leaders articulate a clear and compelling
vision and model integrity, accountability,
and innovative thinking;
 It employs high quality, ethical and
committed individuals;
 All its members know what is expected of
them;
 Diverse perspectives and experiences are
sought and valued;
 Respectful behavior is expected at all levels
 Its members are employed to make decisions
and take calculated risks;
 Flexibility is permitted wherever possible;
and
 Organizational leaders move quickly, but
prudently, to address or remove individuals
whose actions and performance are
inconsistent with organizational needs and
values
4. Resources Planning
4.1 Why Planning?
 In view of the present day resource limitations,
optimum use of resources is essential.
 A project must be efficiently planned to make
optimal use of limited resources;
 Its the starting point of all management
functions. It leads to the organization of
activities followed by directing, controlling and
co-coordinating of the same (Gahlol and Dhir,
1992).
 Spearheads the successful conclusion of any
project or the effective control of resources.
 Enhances management of construction risks
and devises safe working methods (Cooke
and Williams, 2004).
 A critical process throughout all stages of the
construction process from inception to
commissioning.
The Planning Process
 The client’s Project Manager and the
contractor are the key planners.
4.2 Overview of client planning process
(Cooke and Williams, 2004)
During Designing Stage
Purpose:
 Appraise options
 Confirm business case
 Prepare strategic brief
 Assemble team (Team Building)
 Devise risk management plan and
assessment
 Choose procurement arrangement
 Health and safety plan and file
 Prepare client’s master program
 Budget and cash flow
 Prequalify contractors
 Organize and administer the tender stage
 Prepare contract documents
 Sign contract
During Construction Stage
 Pre-start meeting
 Check bonds and insurances
 Check construction health and safety
 Contract administration
 Make contractor payments
 Monitor progress
 Report to client
 Administer defects liability period
 Sign off final accounts
4.3 Contractor’s Planning Process
4.3.1 Pre-tender planning
 Pre-tender planning by the contractor may
be defined as the contractor’s planning
considerations during the preparation of an
estimate and its conversion into a
commercial bid.
 The contractor usually prepares a pre-tender
program as an aid to the tendering process.
(Cooke and Williams, 2004)
The planning steps may include:
 examining drawings and specifications in
order to identify various items of work;
 doing site investigations and market surveys
to assess the availability and prices of
materials, manpower, machinery and other
facilities;
 identifying alternative methods of executing
the work so as to select the most suitable and
economic method;
 estimating quantities of different
operations (depending on type of
procurement method) and time
requirements for their completion;
 preparing tentative schedule in line with
stipulated completion time; and
 deciding the overheads and profit margins
and finalizing the tender sum in line with
stipulated time.
 Planning at this stage will assist the contractor’s
estimator to price key method related items and time
related items.
The purpose of pre-tender planning includes:
 Decision to tender
 Pre-tender program
 Pre-tender arrangements
 Site visit report
 Enquiries with subcontractors and suppliers
 Tender method statement
 Build up estimates
 Build up preliminaries and generals
 Response for pre-tender H & S plan
 Tender risk assessment
 Adjudication management
 Analysis of tender performance
4.3.2 Pre-contract planning
 This normally takes place between the
period of contract award and
commencement of works on site,
provided the procurement route is
traditional, and may be different if the
procurement route is different.
Purpose of planning at this juncture includes
allowing for:
 Provision of a broad outline plan or strategy for
the project
 Pre-contract meeting and arrangements for
commencing work
 Schedule key dates with respect to key material
and subcontractor requirements
 Site layout planning
 Construction method statement
 Establish a construction sequence on which the
master program may be based
 Material, plant, and labour requirements
schedule
 Contract budget forecast
 Risk assessment
 Preparation and approval of H & S plan
4.3.3 Contract planning
 During this stage the master program is further
developed through stage programs.
 Alternatively, the contractor might produce a series
of short term programs at weekly or fortnightly
interval so as to plan day to day work in detail.
 The contractor does contract planning in order to
maintain control and ensure that the project is
completed on time and within cost limits.
 Subcontractors contribute to the planning process by
either submitting their work programs for approval
or through discussions with the main contractor.
Purpose of planning at this stage includes:
 Daily & weekly planning (short term) and
monthly planning (long term) so as to
monitor the master program
 Progress reporting (reviewing project and
reporting on variances)
 Cost-value reconciliation
 Report to management
 Review/update of health and safety plan
Effective planning is normally presented in
form of a graphical schedule which is known
as a program.
A Program
Normally includes:
 Duration of operations
 Type and quantity of materials and
equipment
 Delivery dates
 Manpower requirements
5. Method Statements
 Their preparation forms an essential part if
contractor’s planning process
 They underpin the programme and explain how the
work is to be carried out
 May be categorized into three:
 the tender method statement
 the construction / work method statement
 the safety method statement
 The tabular format is probably simpler and easier to
read rather than the report format although both are
equally useful
6. Resource Allocation/Leveling
 When activities are conducted simultaneously,
it leads to simultaneous demand for resources
 This leads to peak resource demand at certain
stages of construction
 Peak demands over short periods maybe
undesirable since, in terms of labour, it will
lead to a hire and fire situation
 Instead its more desirable to have an
approximately uniform requirements
 This brings about rescheduling and
modification of resource requirements
 A resource graph or resource profile normally
useful for regulating resource demands
 Need to identify activities as either
interlinking or continuous activities in the
process
 Continuous – ones started must be
completed, while interlinked activities can be
stopped and restarted again later
 Floats are used in the process of
rescheduling and modification and
cumulative resource requirements are plotted
 Floats are utilised by delaying the activities to
cut down the demand for that particular
resource, and the process is called resource
leveling
[The question below provides an
opportunity for pupils to master this
process]
In-class Assignment
END