Construction Project Management KUMAR NEERAJ JHAAssociaté Acquisitions Editor: Anita Yadav Associate Production Editor: Amrita Naskar (Composition: Sangnee Media Solutions Pvt. Lid Printer: India Binding House Copyright © 2011 Dorling Kindersley (India) Pvt, Ltd This book is sold subject to the condition that it shall not, by way of trade or otherwise, be lent, resold, hired out, or otherwise circulated without the publisher's prior written consent in any form of binding or cover other than thal in Wi it is published and without a similar condition including this condition being imposed on the subsequent purchaser and without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, ‘mechanical, photocopying, recording or otherwise), without the prior written permission of both the ‘copyright owner and the above-mentioned publisher of this book. ISBN 978-81-317-3249-6 First Impression Published by Dorling Kindersley (India) Pvt. Ltd, licensees of Pearson Education in South Asia Head Office: 7th Floor, Knowledge Boulevard, A-8(A), Sector ~ 62, Noida, UP 201309, India Registered Office: 11 Community Centre, Panchsheel Park, New Delhi 110017, India.CONTENTS LIST OF FIGURES xxi LIST OF TABLES xxi LISTOF BOXES _xxxvii FOREWORD xxxix PREFACE xli ABOUT THE AUTHOR _ xliii Chapter__1_ Introduction ] LL_GENERAL 1 1.2 A CONSTRUCTION PROJECT 2 1.2.1 Phases of a Construction Project 3 IMPORTANCE OF CONSTRUCTION AND CONSTRUCTION INDUSTRY 7 INDIAN CONSTRUCTION INDUSTRY 8 CONSTRUCTION PROJECT MANAGEMENT AND ITS RELEVANCE 9 Role of Project Managemen: 9 Why Construction Project Management? I PARTICIPANTS/STAKEHOLDERS OF A CONSTRUCTION PROJECT UL Architect I Client (Owner) 12 Constructor 12 Engineer (Consultant) 12 Subcontractor/Supplier/ Vendor 2 Lawyer, Insurer, etc. R LZ_ORGANIZATION OF THE BOOK References Review Questions 15 Chapter 2 Project Organization 16 2.1 INTRODUCTION, 16 2.2. CONSTRUCTION COMPANY 16 2.3. FORMS OF BUSINESS ORGANIZATION 2.3.1 Sole Proprietorship 7 23.2 Partnership 17 2.3.3 Corporation I7 23.4 Limited Liability Company (LLC) 18 2.3.5 Private Limited Company 18 23.6 Public Limited Company 18| viii | contents 2.3.7 Government Enterprises 18 2.3.8 Joint Ventures 18 2.4 STRUCTURE OF CONSTRUCTION ORGANIZATION 19 24,1 Centralized Functional 22 2.4.2 Decentralized Multidivisional 22 2.5 ORGANIZING FOR PROJECT MANAGEMENT 23 2.5.1 Classical (Functional) 23 2.5.2 Pure Project or Product Management 24 25.3 Matrix Organizations 26 2.6 MANAGEMENT LEVELS 28 2.6.1 Director Level 28 2.6.2__President Level || 2.6.3 Construction Management Level 29 2.64 Project Management Level 30 2.6.5 Functional Management Level 30 2.7 TRAITS OF A PROJECT MANAGER 31 271 Strategies for Enhancing the Performance of a Project Manager 34 2.8 IMPORTANT TRAITS OF A PROJECT COORDINATOR 35 2.8.1 Team Building Skill 36 282 Contract Implementation Skill 36 2.8.3 Project Organization Skill 37 5 5 Sa mH 2.10 FACTORS BEHIND THE SUCCESS OF A CONSTRUCTION Chapter ORGANIZATION 38 References 41 Review Questions 42 3 Construction Economics 44 INTRODUCTION, 44 ECONOMIC DECISION-MAKING 44 Out-of- pocket Commitment 45 Payback Period. 45 Average Annual Rate of Return 46 TIME VALUE OF MONEY 46 CASH-FLOW DIAGRAMS. 47 Project Cash-flow and Company Cash-flow Diagrams 50 Using Cash-flow Diagrams 58 USING INTEREST TABLES 66 EVALUATING ALTERNATIVES BY EQUIVALENCE 66 Present Worth Comparison 07 Future Worth Comparison 69 ‘Annual Cost and Worth Comparison 69 Rate of Return Method oOcontents | ix | 3.7 EFFECT OF TAXATION ON COMPARISON OF ALTERNATIVES 71 . 3.8 EFFECT OF INFLATION ON CASH-FLOW nR 3.9 EVALUATION OF PUBLIC PROJECTS: DISCUSSION ON BENEFIT-COST RATIO 7 3.9.1 Benefit/Cost Criteria z. References 75 Solved Examples 75 Review Questions 88 Chapter 4 Client's Estimation of Project Cost. 4.1 INTRODUCTION 4.2. APPROXIMATE METHODS OF ESTIMATION 92 4.2.1 _ Preliminary Estimate for Buildings 93 4.2.2 Preliminary Estimate for Industrial Structures 94 4.3. TYPES OF ESTIMATES 95 43.1 Rough Order of Magnitude Estimates 95 43.2 Client's Indicative Cost Estimate 96 43.3 Client’s Preliminary Cost Estimate 96 43.4 Client's Detailed Estimate 96 43.5 Client's Definitive Estimate 97 43.6 Revised Estimate 98 43.7. Supplementary Estimates 98 43.8 Project Closure Cost 98 4.4 METHODS OF STRUCTURING PROJECT COSTS 98 4.5 ILLUSTRATIVE CASES IN PREPARATION OF ESTIMATE 98 45.1 Case 1: Multi-level Car Parking Facility 98 45.2 Case 2: Preliminary Estimate for Construction of Sewage Treatment Plant 104 References 107, Solved Examples 107 Review Questions 108 Chapter 5 Construction Contract 110 5.1 CONSTRUCTION CONTRACT 10 5.2 CONTRACT DOCUMENT iW 5.2.1 The Contract Drawings di 5.2.2 ‘The Specifications 1 5.2.3 ‘The General Conditions of Contract (GCC) dL 5.2.4 The Special Conditions of Contract (SCC) 112 52.5 The Bill of Quantities (BOQ) 12 5.3 CLASSIFICATION OF ENGINEERING CONTRACTS 113 5.3.1 Separated Contract 14 5.3.2 Management Contract 116 53.3 Integrated Contract 17[x | contents Discretionary Contract 118 BIDDING PROCESS 119 Pre-qualification Process 120 Notice Inviting Tender 124 Submission of Bids 126 Analysis of Submitted Tenders 126 Basis for Evaluation and Acceptance 127 Letter of Intent 127 Work Order 127 Agreement 127 CPWD CONTRACT CONDITIONS 128 FIDIC FORM OF CONTRACT AGREEMENT 131 Need and Principles of FIDIC Contracts 132 Salient Features of FIDIC Form of Contract 133 SUBCONTRACTING 135 Classification of Subcontractors 136 Selection of Subcontractors 137 Work Order 137 Terms and Conditions 138 Subcontractor Management—Some Guidelines 139 References 140 Review Questions 140 _& Construction Plannin INTRODUCTION 142 TYPES OF PROJECT PLANS. 143 Time Plan 144 Manpower Plan 144 Material Plan 144 Construction Equipment Plan 144 Finance Plan 144 WORK-BREAKDOWN STRUCTURE 45 Methodology of WBS 145 PLANNING TECHNIQUES—TERMINOLOGIES USED 145 Event and Activity 147 Dummy Activity 147 6.4.3 Network a 6.44 Precedence | 8 6.4.5 Network Logic 150, 6.4.6 Duration of an Activity 153 6.4.2 Forward and Backward Pass __153 6.4.8 Float or Slack Time 156 6.4.9 Path and Critical Path 157 6.5 BAR CHARTS 158 6.6 PREPARATION OF NETWORK DIAGRAM 8Bcontents | xi | 6.7 PROGRAMME EVALUATION AND REVIEW TECHNIQUE (PERT) 162 6.8__ CRITICAL PATH METHOD (CPM) 165 69 LADDER NETWORK 8G 6.10 PRECEDENCE NETWORK 6.11 _THE LINE-OF-BALANCE (LOB) 178 12 NETWORK TECHNIQUES ADVANTAG! 184 References 185, Solved Example 186 Review Questions 189 Chapter___7_ Project Scheduling and Resource Levelling 197 Z1_INTRODUCTION i197 7.2__ RESOURCE LEVELLING 198 ‘23__RESOURCE ALLOCATION 202 7.4__IMPORTANCE OF PROJECT SCHEDULING 207 (7.5 OTHER SCHEDULES DERIVED FROM PROJECT SCHEDULES 209 7.5.1 Preparing Invoice Schedule 209 7.5.2 Schedule of Milestone Events 212 7.5.3 Schedule of Plant and Equipment 213 7.5.4 Schedule of Project Staff 213° 7.5.5 Schedule of Labour Requirement 213 3.6 Schedule of Materials Requirement 214 7.5.7 __ Schedule of Specialized Agencies 214 7.5.8 Schedule of Direct Costs 216 7.5.9 Schedule of Overheads 216 Schedule of Cash Inflow 216 Schedule of Cash Outflow 217 Eka cnasiic AREER 217 References 222 Review Questions 222 Chapter. 8 Contractor's Estimation of Cost and Bidding Strategy 226 CONTRACTOR'S ESTIMATION AND BIDDING PROCESS 226 8.1.1 Get Involved in Pre-qualification Process — 226 6.1.2 Study the Tender Document, Drawings and Prepare Tender Summary 227 8.1.4 Arrange for Site Visit and Investigation 228 8.1.5 Consultation, Queries and Meetings, and Other Associated Works 229, 8.1.6 _ Prepare Construction Schedule and Other Related Schedules 229 Collect information 230 ‘Determining Bid Price 231 Copyrighted material| xii | contents 8.1.9 Analysis of Rates 236 8.1.10 Fix Mark-up 240 8.1.11 Computing Bid Price 243 “BLI2 45 81.13 Post-submission Activities 45 8.2 BIDDING MODEL 45 8.21 Game Theory Models 246 8.22 Statistical Bidding Strategy Models 246 8.23 Cash Flow-based Models 253 83 DETERMINATION OF OPTIMUM MARK-UP LEVEL 254 84 BIDDING AND ESTIMATION PRACTICES IN INDIAN CONSTRUCTION INDUSTRY 254 8.4.1 Prevailing Estimation Practices 254 842 Use of Statistical/Mathematicc! Tools in Estimation 255 8.4.3 Breakup of Mark-up 255 844 Labour Cost Estimation 2 8.45 Plant and Equipment Cost Estimation 255 8.4.6 Dealing with Uncertainties 256 8.4.7 Average Range of Mark-up 256 848 Mark-up Distribution 256 8.49 Mark-up Range 257 84.10 Summary and Conclusion from the Study 257 References 257 Solved Examples 259 Review Questions 281 9 Construction Equipment Management 285 91 INTRODUCTION. 285 9.2 CLASSIFICATION OF CONSTRUCTION EQUIPMENTS 286 EQUIPMENTS 286 9.3.1 Economic Considerations 287 9.32 _Company-specific 287 933 _ Site-specific 287 9.3.4 Equipment-specific 287 9.35 Client- and Project-specific 288 9.36 Manufacturer-specific 288 94 EARTHWORK EQUIPMENTS 288 95 _CONCRETING EQUIPMENTS 291 96 HOISTING EQUIPMENTS 292 9.6.1 Hoists 292 962 Cranes 292 97 PLANT AND EQUIPMENT ACQUISITION 298contents | xiii | 9.10.1 Straight-line Method 301 9.10.2 _ Sum of Years Digit Method 301 9.10.3 Declining Balance Method 303 9.10.4 Sinking Fund Method 305 9.10.5 Accelerated Depreciation 306 9 EXAMPLE OF DEPRECIATION CALCULATIONS FOR EQUIPMENT AT A SITE 307 9.12 THE EFFECT OF DEPRECIATION AND TAX ON, SELECTION OF ALTERNATIVES 308 9.13 EVALUATING REPLACEMENT ALTERNATIVES 313, 9.14 ADVANCED CONCEPTS IN ECONOMIC ANALYSIS. 315 9.14.1 Sensitivity Analysis 315 9.14.2 Breakeven Analysis 320 Solved Examples 323 References 329 Review Questions 330 Chapter 10 Construction Accounts Management 333 10.1 GENERAL 333 10.2. PRINCIPLES OF ACCOUNTING 334 10.3. ACCOUNTING PROCESS 334 10.4 CONSTRUCTION CONTRACT REVENUE RECOGNITION 336 10.4.1 Cash Method of Revenue Recognition 337 10.4.2 Straight Accrual Method of Revenue Recognition 337 10.4.3 Completed Contract Method of Revenue Recognition 337 10.4.4 Percentage of Completion Method of Revenue Recognition 337 10.5 CONSTRUCTION CONTRACT STATUS REPORT 338 10.6 LIMITATIONS OF ACCOUNTING 339 10.7 BALANCE SHEET 339 Liabilities 341 Assets 342 PROFIT AND LOSS ACCOUNT 343 WORKING CAPITAL 345 Need for Working Capital 346 Operating Cycle 346 Components of Working Capital 347 Determination of Working Capital 348 Financing Sources of Working Capital 349 RATIO ANALYSIS 352| xiv | covrents 16.10.1 Liquidity Ratios 353 10.10.2 Capital Structure Ratios 354 10.10.3 Profitability Ratios 355 10.10.4 Activity Ratios 357 10.10.5 Supplementary Ratios 358 10.11 FUNDS FLOW STATEMENT 358 10.11.1 Changes in Working Capital or Funds 360 10.11.2 Determining Funds Generaied/Used by Business Operations 360 10.11.3 Application of Funds Flow Statement 360 References 361 Review Questions 362 Chapter 11 Construction Material Management 365 11.1 INTRODUCTION 365 11.2) MATERIAL PROCUREMENT PROCESS IN, CONSTRUCTION ORGANIZATION, 367 11.3 MATERIALS MANAGEMENT FUNCTIONS 368 11.3.1 Materials Planning 368 11.3.2. Procurement 368 11.3.3 Custody (Receiving, Warehousing and Issuing) 369 11.3.4 Materials Accounting 370 11.35 Transportation 370 11.36 Inventory Monitoring and Control 370 11.3.7 Materials Codification 371 11.3.8 Computerization 372 11.3.9 Source Development (Vendor Development) 372 113.10 Disposal 372 114 INVENTORY MANAGEMENT 372 11.4.1 Inventory-related Cost 373 11.4.2. Functions of Inventory 373 41.4.3 Inventory Policies 374 411.44 Selective Inventory Controt 376 11.45 Inventory Models 381 Solved Examples 384 References 388 Review Questions 388 Chapter 12 Project Cost and Value Management 390 1241 PROJECT COST MANAGEMENT 390 12.1.1 Resources Planning Schedules 390 12.1.2 Cost Planning 390 12.13 Cost Budgeting 391 12.14 Cost Control 391 12.2 COLLECTION OF COST-RELATED INFORMATION 391 12.2.1 Labour Cost 392 12.22 Material Cost 39312.23 12.24 12.25 123 12.4 12.5 12.6 127 12.8 12.8.1 12.8.2 12.8.3 12.8.4 Chapter_13 13.1 13.2 13.2.1 13.2.2 133 13.3.1 13.3.2 13.3.3 13.4 13.5 13.5.1 13.5.2 13.5.3 13.6 13,7 IBA 13.7.2 13.7.3 138 13.9 13.10 13.10.1 CONTENTS Plant and Equipment Cost Subcontractor Cost Overhead Cost COST CODES COST STATEMENT VALUE MANAGEMENT IN CONSTRUCTION STEPS IN THE APPLICATION OF VALUE ENGINEERING DESCRIPTION OF THE CASE VALUE-ENGINEERING APPLICATION IN THE CASE PROJECT Foundation Design Flooring System Precast vs In-situ Construction Discussion of Results References Review Questions _Construction Quality Management __ INTRODUCTION CONSTRUCTION QUALITY Definition of Quality Evolution of Quality INSPECTION, QUALITY CONTROL AND QUALITY ASSURANCE IN PROJECTS Inspection Quality Control (QC) Quality Assurance (QA) TOTAL QUALITY MANAGEMENT QUALITY GURUS AND THEIR TEACHINGS Deming Juran Philip Crosby COST OF QUALITY ISO STANDARDS. Benefits of ISO 9000 Principles of Quality Management Systems ISO 9001-2000 Family of Standards CONQUAS—CONSTRUCTION QUALITY ASSESSMENT SYSTEM AUDIT CONSTRUCTION PRODUCTIVITY ‘Typical Causes of Low Labour Productivity References Review Questions lw 395, 395 396 396 396 399 400 402 404 404 407 410 au 412 412 414 414 415 415 416 AI7 418 418 419 420 421 421 422 424 424 427 427 428 429 431 432 433 434 435 436| xvi | contents Chapter 14 Risk and Insurance in Construction 14.1 INTRODUCTION 142 RISK 14.3 RISK IDENTIFICATION PROCESS 14.3.1 Preliminary Checklist 14.3.2 Risk Events Consequences Scenario 14.3.3 Risk Mapping 14.3.4 Risk Classification 14.3.5 Risk Category Summary Sheet 144 RISK ANALYSIS AND EVALUATION PROCESS 14.4.1 Data Collection 14.4.2 Modelling Uncertainty 14.4.3 Evaluation of Potential Impact of Risk 14.5 RESPONSE MANAGEMENT PROCESS: (RISK TREATMENT STRATEGIES) 444 14.5.1 Risk Avoidance 444 14.5.2 Loss Reduction and Risk Prevention 444 14.53 Risk Retention and Assumption 445 14.5.4 Risk Transfer (Non-insurance or Contractual Transjer) 445 14.5.5 Insurance 445 146 INSURANCE IN CONSTRUCTION INDUSTRY 445 14.6.1 Fundamental Principles of Insurance 445 14.6.2 _ Insurance Policies for a Typical Construction Organization 446 14.6.3 Project Insurance 447 14.6.4 Marine-cum-Erection Insurance 448 Contractor's All-risk Insurance (CAR Insurance) 448 Marine/Transit Insurance 449 Fire Policy 449 Plant and Machinery Insurance 450 Liquidity Damages Insurance 450 Professional Indemnity Policy 450 COMMON EXAMPLES OF BUSINESS AND PROJECT RISK 450 RISKS FACED BY INDIAN CONSTRUCTION COMPANIES ASSESSING INTERNATIONAL PROJECTS: 450 14.8.1 Risks in International Construction 452 References 454 Review Questions 455 Chapter 15 Construction Safety Management . 457 15.1 INTRODUCTION 457 15.2. EVOLUTION OF SAFETY 459 15.3 ACCIDENT CAUSATION THEORIES 460Chapter 5.4 15.4.1 15.4.2 15.5 15.5.1 15.5.2 15.6 15.7 15.8 15.9 15.10 15.10.1 15.10.2 15.10.3, 15.10.4 15.105 1510.6 15.10.7 15.10.8 15.10.9 15.10.10 15.10.11 15.10.12 15.10.13 15.10.14 15.11 16 Project Monitoring and Control System 16.1 16.2 16.2.1 16.2.2 16.2.3 16.3 16.4 16.4.1 16.4.2 16.4.3 16.5 CONTENTS FOUNDATION OF A MAJOR INJURY Unsafe Conditions Unsafe Acts HEALTH AND SAFETY ACT AND REGULATIONS Building and Other Construction Workers (Regulation of Employment and Condition of Services) Act 1996 Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Central Rules, 1998 COST OF ACCIDENTS ROLES OF SAFETY PERSONNEL ‘CAUSES OF ACCIDENTS PRINCIPLES OF SAFETY SAFETY AND HEALTH MANAGEMENT SYSTEM Safety Policy and Organization Safety Budget Safety Organization Education and Training Safety Plan Safety Manual Safety Committee Incentive Programmes Accident Reporting, Investigation and Record Keeping Incident Investigation and Analysis Accident Statistics and Indices Safety Inspection Safety Audit Workers’ Health and First-aid Facibities RESEARCH RESULTS IN SAFETY MANAGEMENT References Review Questions INTRODUCTION UPDATING Updating Using Bar Chart Updating Using PERT/CPM. Updating Using Precedence Network PROJECT CONTROL SCHEDULE/TIME/PROGRESS CONTROL Monthly Progress Report Measuring Progress at Site ‘Typical Reports to Aid the Progress Review COST CONTROL | wii | 462 464 465 468 469 470 470 472 473 477 478 478 479 479 480 480 481 481 481 481 482 484 486 486 487 487 483 490 494 494 494 495 495 497 499 499 500 501 501 501| xviii | contenns Chapter_17__ Construction Claims, Disputes, and Project Closure 523 Profit/loss at the Completion of Contract Stage-wise Completion of Cost Standard Costing S-Curve Unit Costing CONTROL OF SCHEDULE, COST AND TECHNICAL PERFORMANCE—EARNED VALUE METHOD. Terminologies of Earned Value Method ILLUSTRATIONS OF COST CONTROL SYSTEM MANAGEMENT INFORMATION SYSTEM References Review Questions CLAIM Sources of Claims Claim Management Some Guidelines to Prepare the Claims DISPUTE Causes of Disputes Dispute Avoidance vs Dispute Resolution Mechanisms of Dispute Resolution Causes Leading to Arbitration Advantages of ADR Over Legal Proceedings in a Court Some Dos and Don'ts to Avoid Dispute CORRESPONDENCE PROJECT CLOSURE Construction Closure Financial Closure Contract Closure Project Manager’ Closure Lessons Learned from the Project References Review Questions Chapter 18 Computer Applications in Scheduling, 18.1 18.2 18.2.1 18.2.2 18.2.3 _ Resource Levelling, Monitoring, and Reporting INTRODUCTION POPULAR PROJECT MANAGEMENT SOFTWARE Primavera Milestone Professional Construction Planning System 502 502 502 502 504 508 510 517 520 521 521 523 523 524 524 525 525 526 527 528 529 529 530 531 531 533 533 533 534 534 534 536 536 537 537 537 53818.2.4 18.2.5 18.2.6 18.3 183.1 18.3.2 18.3.3 18.3.4 18.3.5 18.4 184.1 18.4.2 18.5 18.5.1 185.2 18.5.3 18.5.4 185.5 18.5.6 CONTENTS: AMS Realtime Projects Project KickStart MS Project FUNCTIONS OF PROJECT MANAGEMENT SOFTWARE Scheduling Function Resource Management Function ‘Tracking or Monitoring Function Reporting Function Additional Functions ILLUSTRATION OF MS PROJECT Definitions of Some Terminologies Working with MS Project ILLUSTRATION OF PRIMAVERA Adding a New Project Preparing Schedule Resource Levelling Tracking the Project Reporting Some Additional Features References Review Questions Chapter 19 Factors Behind the Success of a Construction 19.1 19.2 19.3 19.4 19.4.1 194.2 19.5 19.6 Project GENERAL PROJECT PERFORMANCE MEASUREMENT CRITERIA FOR PROJECT PERFORMANCE EVALUATION PROJECT PERFORMANCE ATTRIBUTES Success Attributes/Factors Failure Attributes EFFECT OF OTHER ELEMENTS ON PROJECT PERFORMANCE, ‘THE THEORY OF 3CS AND THE IRON TRIANGLE References Review Questions Answers to the Objective Questions _ Appendices _ lndex | xix | 538 538 538 538 539 539 540 540 540 541 541 543 552 552 553 554 556 560 563 566 567 570 570 570 571 373 573 573 575 576 587 589aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.| di | usr or toures Figure 3.16 Figure 3.17 Figure 3.18 Figure 3.19 Figure 3.20 Figure 3.21 Figure 3.22 Figure 3.23 Figure 4.1 Figure 4.2 Figure 4.3 Figure 5.1 Figure 5.2 Figure 5.3, Figure 5.4 Figure 5.5 Figure 5.6 Figure 5.7 Figure 5.8 Figure 6.1 Figure 6.2 Figure 6.3 Figure 6.4 Figure 6.5 Figure 6.6 Figure 6.7 Figure 6.8 Figure 6.9 Figure 6.10 Figure 6.11 Figure 6.12 Figure 6.13 Figure 6.14 Figure 6.15 Figure 6.16 ‘Cash-flow illustration of uniform series compound amount factor Cash-flow illustration of uniform series present worth factor Cash-flow illustration of sinking fund deposit factor Cash-flow illustration of capital recovery factor Cash-flow illustration of arithmetic gradient factor Cash-flow illustration of geometric gradient factor ‘Types of problems in present worth analysis, Cash-flow diagram to illustrate the IRR Layout of car parking Cross section showing different levels of car parking Layout of sewage treatment plant for a township ‘Types of specifications Categories of contract ‘Typical certificate issued by the bank showing credit limit enjoyed by the applicant Atypical format for details of similar works done A typical format for showing concurrent commitment A typical format for showing details of technical and administrative personnel ‘Atypical format for showing details of plant and equipment Different types of subcontract agreement Illustration of a work-breakdown structure of an IT park project Example of events and an activity Illustration of a dummy activity Example of AOA network Incorrect activity representation Several activities starting from node 10 and terminating at node 80 Correct representation of network of Figure 6.5 Illustration of dummy activity Example of an AON Example of a burst situation Example of a merge situation Incorrect representation Correct representation of Figure 6.12 Activity A precedes activity B Activity C has A and Bas predecessors Ac ies B and C having predecessor A 63 22rD 65 70 100 101 105 12 4 121 122 122 123 123 136 146 147 147 148 148 148 149 149 149 150 150 150 150 151 151 151aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.| xxvi | UST OF FIGURES Figure 11.6 Figure 11.7 Figure 11.8 Figure 12.1 Figure 12.2 Figure 12.3, Figure 12.4 Figure 12.5, Figure 12.6 Figure 12.7 Figure 12.8 Figure 12.9 Figure 12.10 Figure 12.11 Figure 13.1 Figure 13.2 Figure 13.3 Figure 13.4 Figure 13.5 Figure 13.6 Figure L4.1 Figure 14.2 Figure 14,3 Figure 14.4 Figure 14.5 Figure 15.1 Figure 15.2 Figure 15.3 Figure 15.4 Iustration of ABC analysis Inventory behaviour under EOQ model Total cost curve—FOQ model Major cost heads and relevant documents to assist in cost compilation A typical format for recording daily labour attendance A typical indent format for requisition of material used in projects Cost statement of plant and equipment for a given month Cost statement—without plant cost allocation Integrated cost statement Cost statement summary Schematic diagram depicting different steps in the application of VE in design-and-build project Break-up of cost of different structures for the case project Break-up of cost of different items/elements in warehouse structure Fest diagram for warehouse foundation A sample checklist for formwork inspection ‘The PDSA cycle Juran’ quality trilogy “Triple Role’ concept as applied in construction Quality cost breakdown Cost versus quality level—classic view (adapted from Brown and Kane 1984) A simplified risk management process Risk identitication process Risk mapping Risk analysis and evaluation process Risk treatment strategies Comparison of the frequency rates for construction and all other industries in Japan Details of man-hours worked and decline of frequency rate of accidents over the years Foundation of major injuries (Heinrich 1959) Foundation of major accidents/injuries (Bird and Loftus 1982, cited in Mining Safety Handbook) 378 381 382 392 393 304 397 397 398 398 401 403 404 405 419 421 423 424 425 425 440 442 42 443 444 458 459 463 163aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.LIST OF TABLES Beas Table 2.1 Glossary of project coordinator’s traits (Katz 1974, Pettersen 1991, ‘Goodwin 1993, Kerzner 2002, El-Sabaa 2001) 33 Table 2.2 Success variables for construction organization 3 Table 3.1. Details of transactions carried out by M/s Alpha Industries for April to June 48 Table 3.2 Summary of transactions for April to June 48 Table 3.3 Monthly invoice for the example problem 51 ‘Table 3.4 __ Computation of cash inflow and cash outflow for the example problem 53 Table 3.5 Cumulative cash-flow with and without mobilization advance 55 Table 3.6 Cash-flow computations for the fictitious example 56 Table 3.7 Summary of net cash-flow for different margins 56 Table 3.8 Summary of net cash-flow for different margins for different rete condition: 5 Table 3.9 Computation of month-wise cash requirement for the project 0 Table 3.10 Summary sheet of interest formulae 66 Table 3.11 Illustration for IRR 70 Table 3.12 Illustration of effect of taxation on comparison of alternatives R Table 3.13. Data for B/C ratio computation 74 Table 3.14 Solution for B/C ratio problem 4 Table 3.15 Computation for incremental analysis 74 Table 4.1 _ Estimation of preliminary costs of different civil engineering jobs 93 Table 4.2 Types of estimates used in the construction industry 96 Tables.2Detaile of 1h 9 Table 4.4 Abstract of estimated cost or bill of quantity 7 Table 4.5. The prevalent structured approach 99 Table 4.6 Plinth area calculation 100 Table 4.7 Preparation of estimate for schedule items based on C.P.W.D. PAR—2007 102 Table 4.8 Preparation of estimate for non-scheduled items 108 Table 4.9 Abstract of cost estimate for Multi Level Car Parking Facility Project, 103 Table 4.10 Summary of civil works 104 Table 4.11 Abstract of cost estimate for civil works for a sewage treatment plant 106aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.Table 15.1 Table 15.2 Table 15.3 Table 15.4 Table 15.5 Table 16.1 Table 16.2 Table 16.3 Table 16.4 Table 16.5 Table 16.6 Table 16.7 Table 16.8 Table 16.9 Table 16.10 Table 16.11 Table 16.12 Table 16.13 Table 18.1 Table 19.1 Table 19.2 Table 19.3 ustormers | 00 | Statistics of man-hours worked and frequency rate of accidents ‘over the years for a large Indian construction company Cost associated with an injury Causes of fatalities (based on about 500 accidents in a large construction company) Distribution of construction accidents (USA—1985~89) Distribution of construction accidents (UK—1998-99) Cost details of example project Extract from bill of quantity for the boundary wall construction project Cost-code details for the example project Budgeted expenditure Expressions for computing EAC BCWS, BCWP and ACWP values (Rs (000) for house construction example Information related to each work package (BCWS, BCWP and ACWP) Cost code details Budgetary cost estimate for all the activities of the example project Details of cost data at the time of monitoring Details of actual costs incurred Actual costs incurred cost code-wise Cost code-wise variance details Some typical tabular and graphical reports generated by P3 Rank of success attributes (yi = 4.5) based on performance criteria Rank of failure attributes (1 < 3.5) based on performance criteria Pooled list of factors identified under various performance evaluation parameters 458 47. a74 476 477 504 507 307 508 512 513 516 817 517 518 519 519 519 561 577 579 582aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.Box 1.1 Box 5.1 Box 5.2 Box 5.3, Box 13.1 Box 14.1 Box 18.1 Box 19.1 LIST OF BOXES Unique features of a construction project Suggested guidelines for establishing pre-qualification criteria Notice inviting tender, ABC Institute, New Delhi FIDIC forms of contract Quality definitions Common examples of business and project risk Summary of different types of reports in MS project Success attributes/factors 125 125 132 415 451 551 574aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.Copyrighted materialaa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.Introduction General, a construction project, importance of construction and construction industry, Indian construction industry, construction project management and its relevance, participants/stakeholders of @ construction project, organization of the book 1.1 GENERAL Construction, in one form orthe other, has been practised since the dawn of civilization. In the Indian context, people were familiar with construction using burnt bricks as far back as 2600 Bc. The townships of Mohen- jo-daro and Harappa provided its citizens with the comfort and luxury that was unheard of in other parts of the world during those days. The Ashoka Pillars erected around 250 Bc, also known as monoliths, were one of the finest examples of craftsmanship. These monoliths of height in the range of 13 m to 15 m were made of a single block of sandstone. The polish to the sandstone was such that the monoliths appeared as if they were made of metals. The top of these monoliths was crowned with figures of the lion, the elephant and the bull. ‘The Grand Anicut situated in southern India is one of the oldest water diversion projects in the world. This is an example of the familiarity of the people of second century 3c with dam construction. That the dam is still in use speaks of the quality of construction practised in those days. The strength, symmetry and aesthetics of Qutab Minar in Delhi prove beyond doubt that the Indians of thirteenth century were familiar with the nuances of construction. The Taj Mahal, completed in 1653, isan outstanding example of architecture. Under the British regime, some of the most challenging construction of roads, railways and irrigation projects were undertaken. Some of the important construction works undertaken during this period are—construction of light railway lines in 1845, construction of the first railway bridge over Thane Creek in 1854, construc- tion of the first narrow gauge line in 1862, construction of the Ganges Canal consisting of main canals and distribution channels between 1842 and 1854, construction of a major bridge in Dehri-on-Sone in 1900, and construction of Juhu Aerodrome in Mumbai in 1928. Chander (1989) reports that during the British period a number of specialized departments such as the Public Works, Survey of India, etc. were established. Construction on large scales for secretariats. residential complexes and other building projects were undertaken in Delhi when the national capital was shifted from Kolkata (earlier Calcutta). After the completion of this massive project, the need was felt t« look after these constructed facilities. Central Public Works Department (CPWD) was, thus, established in 1930 principally to take care of these facilities. However, the pressure of the Second World War saw the need of constructing structures for military purposes as well. CPWD was entrusted with this job anc an expansion of CPWD to other major cities—namely Mumbai (earlier Bombay), Kolkata and Chenna' (earlier Madras)—took place.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.intropuction | 5 | 5. Estimation of the project cost and duration 6. Approval of the project cost 7. Studying and determining the technical specifications of the materials Studying the impact of the project on the safety and health of the community and environment 9. Establishing criteria for the selection of project location 10. Advising members of the task force (consultant, engineering, etc.) on the approved funds for the project 11. Establishment of milestones for the project for review and approval 12. Describing the responsibilities and authority of project parties 13. Pre-establishing a system to prepare for ‘change order’ procedures 14, Establishment of design criteria for structural specifications 15. Conducting a feasibility study of the proposed project Project Phase ‘The project phase is also referred to as project implementation phase, project realization phase, or project materialization phase. It can be broken down into five sub-phases as shown in Figure 1.2. The sub-phases are discussed below in brief. Best Tondorng |_| Execution |__| ceue cost phase phase phase igure 1.2. The five general phases under the project phase Basic design phase The activities in this phase are carried out by an engineering organization or an archi- tect. During this phase, the documentation for tendering and contracting the physical construction or for procuring equipment is prepared. It involves performing basic design calculation, preparing tender drawings, preparing design and material specification, etc. The changes, if any, from the initial scope of work are recorded. Regular design and specification review meeting is one of the important features of this stage of the project. Detailed design phase Detailed design may be carried out in-house or through contracting. In some cases, such as ‘item rate’ contract, it may be required to carry out the detailed design before starting the ten- dering process. However, in some cases, such as ‘design build’ contract or ‘lump sum’ contract, the tendering process can start immediately after the completion of basic design and specifications. Tendering phase Tenders are issued ifit is decided to execute the project through contracting. The prepa- ration of clear and precise documents is essential to eliminate any dispute about scope of work at the contract tender preparation includes preparing the specifications and agreement conditions, preparing bill ies and estimating the contract value. It also includes issuing of tender document to the interested applicants, holding meetings, receiving bids and evaluating them. After the bids are evaluated, recommenda- tions are made for the successful contractor and approvals sought to place a contract, and finally the contract is awarded. Execution or construction phase _ Immediately after the contract is awarded, construction phase begins. In cases where the detailed drawings and designs were not available as part of the tender document, the contractor proceeds with the preparation of detailed design and drawings, and follows it up with the construction. In someaa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.wiropucron | 9 | infrastructure in the developed world. For example, the average ship turnaround time in Singapore is just six hours. Traffic is expected to increase further, which will throw up a huge potential for investment and construc- tion. ‘This sector is set to grow since development of small ports and inland waterways is a part of the prime minister's investment policy decision. ‘The water and effluent treatment sector is also bound to grow in the near future. Already, there is an increase in investments in improvement of civic facilities in rural and urban areas, in order to improve water supply and address sanitation-related issues as envisaged in the Tenth Five Year Plan. There is plan to link the major rivers of the country, which will bring huge invest ments into the construction sector. There are many projects in the planning stages to bring water from rivers to cities through pipelines. Further, enforcement of stringent norms for discharge from industries under Environmental and Pollution Act will also spur growth in the effluent treatment sector. ‘The restructuring of state electricity boards, setting up of new substations and switch yards, implementa- tion of accelerated power development and reforms programme (APDRP), and revamping of transmission lines to reduce transmission and distribution losses from 35 per cent-40 per cent to international norms of, 8 per cent-10 per cent are sure to bring momentum to electrical projects. Privatization of transmission and distribution systems will further increase investments. India suffers from perennial power shortage and there is a huge potential in the field of power, as new additions in power-generation capacity are required. National Hydroelectric Power Corporation (NHPC) and Nuclear Power Corporation of India Limited (NPCIL) have plans for huge capacity building in the hydel power sector and nuclear power sector, respectively, In thermal power, large private investments are in the pipeline and a number of independent power producers (IPPs) are in final stages of financial closure. Also, there are increased investments in captive power plants by large industries in cement, aluminium, sugar, etc. India has considerable natural gas reserves. There are plans to invest in pipelines to save on transporta- tion costs. Similarly, there are plans to lay pipelines from ports to refineries to carry crude and finished prod- ucts to different destinations, apart from projects for expansion of refineries and LNG storage facilities. All these are bound to throw up opportunities in the hydrocarbon sector. In addition to the above-mentioned opportuaities, there are promising prospects in bulk materials- handling projects. While development of ports would require investment in port-handling equipment, invest- ‘ment in thermal power sector would call for more coal-handling plants, and increased food production would mean more opportunity for grain-handling plant construction, Here, it must be noted that the indigenous construction industry is bound to face increasing competition from multinational companies, Already, projects including major portions of Delhi Metro, some high-value hydroelectric jobs such as Uri Project, high-tech projects such as Bangalore Infotech project and Chennai Tidel Park project, and power projects such as Enron have seen a major chunk of construction going into the hands of multinational companies. A number of MNCs such as Skanska, Hyundai, Bechtel, Kumi Gumi, Obayashi and Toyo are now operating in India. The future is going to be quite competitive and the domestic companies who can face the challenges posed by the MNCs will emerge stronger: 1.5 CONSTRUCTION PROJECT MANAGEMENT AND ITS RELEVANCE 1.5.1 Role of Project Management Project management as defined by PMBOK 2000 is the application of knowledge, skills, tools and techniques to a broad range of activities to meet the requirements of the particular project. Munns and Bjeirmi (1996) define project management as the process of controlling the achievement of the project objectives. Utilizing the existing organizational structure and resources, it seeks to manage the project by applying a collection of tools and techniques, without adversely disturbing the routine operations of the company. The function ofaa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.inrroouction | 13 | 1.7 ORGANIZATION OF THE BOOK ‘The book is intended to be used by students of construction management as well as practising professionals. Further, among practising professionals, personnel of both the client organization and the contracting orga- nization would find the book useful. ‘The book is presented in 19 chapters. The first two chapters introduce the readers to the construction project and the construction organization. Thereafter, the book has been organized in a manner similar to the different stages or phases through which a typical construction project passes. In Chapter 3, readers are introduced to the construction economics, which may be useful for selection of projects. The concept of ‘time value of money’ has been explained and different methods of project evaluation have been discussed. In Chapter 4, the process of preparation of estimates of the proposed project by a client or an owner organization has been discussed. These estimates serve a number of functions as outlined in this chapter. Owner/client organization may choose to get the project executed through a contracting organization and, accordingly, the various aspects of contract management have been presented in Chapter 5. In Chapter 6, different planning techniques, which may be useful to both the client organization and the contracting organization, have been discussed. After the project plans are made, the ways to convert the plans into schedules are put forth. The project-scheduling and resource-levelling aspects have been covered in Chapter 7. ‘The estimation of cost and preparation of bid are important functions of any contracting organization. In Chapter 8, the estimation process from the point of view of the contracting organization has been discussed in detail. The bidding strategy and the process to determine the optimal markup have also been covered in this chapter. Chapter 9 to Chapter 17 mostly cover topics pertinent during the execution stage of the project. In Chapter 9, the aspects of construction equipment management are covered. Here, the important factors in the selection of equipment and the issues in selection of major plant and equipment are discussed, in addition to presenting the advanced concepts in economic analysi Construction accounting is different from the accounting practices adopted for other industries. In Chapter 10, the salient features of construction accounting are explained. The emphasis is not on preparation of balance sheet and profit-and-loss account for a construction company, but on the interpretation of figures contained in the financial statements. Materials constitute a significant portion of the cost of a construction project, and Chapter 11 addresses all the salient aspects of materials management. Chapter 12 covers cost management and value engineering aspects in the context of a construction project. Ina recent survey, a majority of Indian construction professionals have rated quality performance in a construction projectas one of the topmost performance parameters in termsof importance. The different facets of construction quality have been covered in Chapter 13. Construction being a risky business, with incidences of a number of failures of construction companies year after year, it is pertinent to cover construction risk management. In Chapter 14, construction project risk management has been covered with special emphasis on insurance. Risk in international construction has also been discussed in this chapter. Construction safety is of paramount importance in modern construction, more so in the light of the number of legislations being enacted presently. In Chapter 15, the major issues in construction safety manage- ment are elaborated. Projects, if left on their own, are most likely to get completed at extra cost and beyond the stipulated time frame. It is, thus, imperative to monitor them on a regular basis so that suitable corrective measures can be taken appropriately and in good time. In Chapter 16, the monitoring and control systems pertinent to construction projects are explained. In Chapter 17, construction claims, disputes and project closures have been taken up.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.prouecr oncazaion | 17 | resources that carries out the above-mentioned functions. These functions are not limited to areas within the construction organization itself, but include the interwoven relationships with other stakcholders as well. The stakeholders could be architects, engineers, other general contractors, subcontractors, manu- facturers, material suppliers or vendors, equipment distributors, labour, government agencies and the general public. ‘The broad aim of an organization is twofold—to divide responsibility according to the technical knowl- edge and to divide that responsibility by degrees of executive ability. The extent to which authority, work, or responsbility is delegated (the entrusting of authority and responsibility) is, therefore, an important feature of any organization. For the purpose of the upcoming discussion, we follow the definitions given by Kerzner (2004) for authority, responsibility and accountability. Authority is the power granted to individuals (possibly by their positions) so that they can make final decisions for others to follow. Responsibility is the obligation incurred by individuals in their roles in the formal organization in order to effectively perform assignment. Accountability is the state of being totally answerable for the satisfactory completion ofa specific assignment. 2.3 FORMS OF BUSINESS ORGANIZATION A construction organization can take any of the following forms of business organization, 2.3.1 Sole Proprietorship This kind of organization is owned by a single person. ‘The owner is licensed with the government. ‘This form of organization is widely used in service industries. No formal charter of operation is required in such arrangements, Also, there are few government regulations to which such organizations are subjected. Such organizations do not have to pay corporate income taxes and their earnings are subject to personal income tax. The proprietor of such organizations has unlimited personal liability for debts and they also find it difficult to obtain a large sum of moncy for the business. The organization lasts as long as the proprietor lasts. 2.3.2 Partnership When two or more persons associate to conduct business, a partnership is said to exist. ‘This ranges from informal oral understandings to a formal agreement filed with the respective ministry/body. Similar to pro- prietorship, in partnership there is ease and economy of formation as well as freedom from special govern- ‘ment regulations. The profits generated out of the business are taxed as personal income tax in proportion to the partners’ claims, whether they are distributed or not. In the event that a new partner joins the business, the old partnership ceases and a new one is created. In case of dissolution due to disputes, the distribution of assets can be made based on the agreement formulated while forming the partnership organization. The ‘major disadvantage in such organization is that of impermanence, the difficulty faced in transferring owner- ship, and the unlimited liability. 2.3.3 Corporation A corporation is an artificial being, invisible, intangible and existing only in contemplation of the law (Marshall 1819, available at http://www:1700s.com). Being a mere creation of the law, it possesses only those prope that the charter of its creation confers upon it either expressly oras incidental to its very existence. It exists asa separate legal entity and apart from its owners, Consequently, owner's liability is limited to his or her investment.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.molect orcanizarion | 21 | + ‘The line and staff structure offers ample opportunity for the growth of employees. It also offers good training opportunity to the employees. + The quality of decisions arrived at in « problem situatien is high, as careful thought is given to arriving at the decision. Disadvantages: + There isa lack of well-defined authority structure. « The structure is suitable mostly for large organizations where there is constant need for employing people with specialized skills. + There is always.a possibility of conflict arising out of various reasons, which may prove to be detrimental for the growth of the company. + The distinction between line function and staff function is difficult to make. With the increase in size and complexity of projects, the line and staff type of organization fails to deliver. ‘This is because line and staff organization tends to load a few men at the top of the hierarchy with more duties than they can handle efficiently. This eventually gave rise to adoption of the departmental organization. ‘One typical departmental organization is shown in Figure 2.3. The departmental or functional organization has departments with department heads. The department heads have control of the functions allocated to them and they are free to communicate directly with the field forces. In this organization structure, the top- hierarchy people are relieved from much of the heavy burden. The structure combines the best of the military- or line-type structure and the ‘line and staff” structure. It also leaves functional managers in direct charge of the work and ensures them the support of a highly trained technical staff. President Contract Engineering |__| Planning Department Department Department Materials Finance Department Department Project Manager [Resident Engineer] [ I I I 1 Safety |... [Fed]... Quality [Materials and Labour Department] [Feld Superintendent Engineers Department_|~ Procurement Jr Engineer Jr Engineer ur Engineer Foreman Foreman Foreman Figure 2.3_Depertmental organizaton, authority, comm:aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.prosect orcanization | 25 | General Manager Td Material Accounts! Procurement] | Finance Human Herat ces | [Construction] | Engineering ||| Tendering 1 ' 1 Project A Project B Project Figure 2.5 Project organization _ ‘The advantages of pure project orga tions are: + The project manager maintains complete authority over the project and has maximum control over the project. + The lines of communication are strong and open, and the system is highly flexible and capable of rapid reaction times. Thus, the structure can react quickly to the special and changing project needs. + Theprejectis the only real concem of the project employees. The pure project structure provides a unity of purpose in terms of effectiveness. It brings tagether all the administrative, technical and support personnel needed to bring a project from the early stages of development through to operational use. + The appraisal of employees is based upon the performance of the project. « The focus of resources is towards the achievement of organization goals rather than the provision of a particular function. ‘The disadvantages are: + There could bea duplication of efforts. + Itis very difficult to find a project manager having both general management expertise and diverse func- tional expertise. + Theadmi + Due to the fear of impediments in career growth, some employees may not prefer to leave their departments, strative duties of a project manager may be demanding and the job could be quite stressful. ‘The pure project or product organizations are unusual in the construction industry (Newcombe et al. 1990, cited in Uher and Toakley 1999). In order to address some of the disadvantages of the pure project structure, ‘partial projectization’ has been used in some cases. Here, the critical functions such as engineering and construction are assigned to the project manager, while functions such as procurement and accounting are performed within the functional departments, The advantages of such partial projectization are: + The project manager can spend more time directing the project-related activities of the major functional group.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.mrorect orcanization | 29 | 2.6.2 President Level ‘The primary functions at this level are acquiring business and formulating the company’s immediate objec- tive, in line with the board's plans and strategies. This level requires a much more detailed and departmental- ized format of the environmental, competitive and internal information. It also requires progress reports that summarize, for each project, its status, current and future cost and schedule performance, and problems, with management actions underway to resolve them. ‘The various positions in President level and their hierarchies are given in Figure 2.8. From Director lovol i President [Client Agency Vice-President] Vice-President Vice-President] Vice-Presicent| JOperations. Engineering [Administration Finance Director of Procurement [Pubic Relation] _ Director 2.6.3 Construction Management Level ‘The major functions at this level are—obtaining and monitoring work for the company at the district or divisional level. This level requires summary formats of the three basic types of information (environmental, competitive and internal) that apply to the geographic areas. In addition, this level requires a clear and straightforward summary format of information on general progress, financial status, schedule status, procurement status and engineering status on each project under their jurisdiction. ‘The various positions in Construction Management level and their hierarchies are given in Figure 2.9. From President level a = } + i a + oa Procurement | [Operations |. [Chief Direct/Division| [Assistant Deputy] ! ‘ Manager Manager [Estimator] | Engineer [Engineer ' ' Construction _ Tease a To Project Management Level [Latour Relations iManger F Figure 2.9._Postions in construction menagement levelaa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.morect orcanizarion | 33 | + Prudent risk-taker: This refers to a willingness and ability to identify and understand risks but not to take arisky approach in an unwise or reckless fashion. + Fairness: This refers to a fair and open attitude, which respects all human values. + Commitment: This refers to a very strong overriding commitment to the projects success, user satisfaction and team coordination, + Conflict resolution: The project manager should be able to resolve conflicts arising among his team members. + Project manager needs solid basic experience in the relevant field. He should be multidiscipline-oriented, He should also be global-problem-oriented, i.e., he must consider the external, political, legal and envi- ronmental aspects. + Project manager should have leadership skills. He should be a clear leader and director with sufficient authority. He should have the capability to elicit commitment from his team members. He should be able to identify and solve the problem, and be able to balance technical, economics and human factors. He should also have the spirit of entrepreneurship. + ‘The project manager should master the basics of planning, budgeting, coordinating and assessing finan- cial reports, and following up. + A good manager and administrator, he should have the knowledge and understanding of estimating sys- tems, cost control, scheduling control, quality and safety. He should be able to develop procedures and be able to implement them. + He should be an effective problem solver and decision maker. He should possess good analytical abilities and should be proficient in the social skills. + Effective communication skill is identified as one of the most important skills for a project manager. Other researchers such as Goodwin (1993) have also stressed the importance of verbal and written communication skills. The project manager should have the requisite interpersonal and negotiating skills. + The project manager should have the right temperament, and should be able to keep his calm. He should be realistic, dedicated, generous, stable, quick-thinking, disciplined and persistent. + The project manager should be creative in dealing with information and problems. Information- processing skill allows the manager to obtain, use and disseminate information. Among the various literature cited above, the empirical research has been by Spitz (1982). She concluded that the priority of skills of a project manager vary depending on the phase in which the project presently exists. She has also tried to assess the skill needed in each of the phase of a project. Table 2.1 Glossary of project coordinator’s traits (Koiz 1974, Pettersen 1991, Goodwin 1993, Kerzner 2002, El-Sabao 2001) Description of Traits Definition Team-building skills 1. Concern for conciliation ‘The act of placating and overcoming distrust and animosity 2. Concern: for other's ego Not to remain self-centred; respect other’s individuality; regard for other's t interest, power and happiness 3. Understanding of human Understanding the science of the human soul, specifically the systematic or prychology scientific knowledge of the powers and function of the human soul 4. Analytical skills Ability to look logically at a technical situation (Continued)aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.PROJECT ORGANIZATION 2.8.3 Project Organization Skill ‘The project coordinator must be able to perceive the project as a system by keeping @ global perspective and not thinking about one aspect at a time. The project coordinator must be good at keeping good working relationships with client and consultants. A project coordinator has to work with many different groups or departments to perform his duties, and this requires a cordial and cooperative relationship, which can be achieved through good interpersonal and communication skills. The project coordinator must be good at liaison and he should also ensure proper quality of workman- ship. The project coordinator must be able to plan, should have requisite knowledge of project finance, and should be able to ensure tim ess. 2.9 ETHICAL CONDUCT FOR ENGINEERS In day-to-day life, an engineer faces a number of situations in which he has to choose between the well-being of the project he is working on and the well-being of the society at large. An action taken by him may be beneficial for the project but it may endanger the ecosystem. For example, the alignment of a highway may be passing through a dense forest and construction may harm the trees, animal lives, etc. In such cases, he will be ina dilemma regarding the well-being of the project versus the well-being of the entire ecosystem. Should the engineer emphasise on project at the cost of different forms of life and the environment? In some situations, he may be advised to expedite the construction works even at the cost of compromis- ing on sound engineering practices. As another example, let us take the case of a transit mixer full of concrete reaching the concrete location after initial setting time of the concrete is over. Should the concrete be poured or should it be thrown out? There may be situations in which some of the construction materials have been rejected by the client. In such situations, should you try to use them in the project in a clandestine manner or should you waste the money of your employer? Consider another situation in which you have to choose, from your project team, between a stronger colleague and a weaker colleague in terms of their positions in the hierarchy. In that situation, let us assume that the stronger colleague is at fault. Should you be aligning with the stronger colleague or with the weaker colleague? In delicate or confusing situations, the concerned engineer may have the option to consult some experts and act on their recommendations, or he may act according to the wishes of the superior ignor- ing the ethical part of the problem, or he may himself weigh different arguments for and against, and take a decision ‘The decision taken by an engineer has far-reaching consequences and, therefore, he should be even- handed in taking different points of view into consideration. Many temptations come in the way of discharg- ing duties in the course of one’ career. The engineer should be able to resist these temptations by controlling his desires in view of the larger public interest and the welfare of mankind. ‘An engineer should not only be having expertise in his/her professional field, but also be familiar with ethical rules and codes of conduct of his/her profession. Ethical rules and codes of conduct vary across business organizations, What is acceptable in one organization may not be acceptable in another. ‘This may even vary with time and culture. Some of the keywords included in newly drafted ethical rules pertain to environment and sustainable development. The commonly preached ethical rules extracted from American Society of Civil Engineers (ASCE), Japan Society of Civil Engineers JSCE, German nal Association for Bridge and Structural Engineering (IABSE) Engineering Association, and Internat are given below: + The engineer should contribute to the development of the nation and the promotion of human welfare through their professional knowledge. He/she should honour human life without discriminating againstaa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.PROJECT ORGANIZATION | 41 REFERENCES 1 10. We 13. 14 15. Adams, J.R. and Barndt, S.E. 1978, ‘Organizational life cycle implication for maior projects’, Project Management Quarterly, 9{4), pp. 32-39. Anderson, 5.D., 1992, ‘Project quality and project managers’, International Joumal of Project Management, 10(3), pp. 138-144. El-Sobaa, 5., 2001, ‘The skills and career path of an effective project manager’, International Journal of Project Management, 19(2001), pp. 1-7. Enshassi, A., 1997, ‘Site organization and supervision in housing projects in the Gozo Strip’, Intemational Journal of Project Management, 15(2), pp. 93-99. Fryer, B.,, 1979, ‘Management development in the construction industry’, Building Technology and Manogement, May, pp. 16-18. Gaddis, PO., 1959, ‘The project manager’, Harvard Business Review, May/Jun, pp. 89-97. , Masters dissertation, Indian Institute Gorg, S., 2007, ‘Factors for the success of a construction organi of Technology, Delhi, india. Goodwin, 8S.C., 1998, ‘Skills required of effective project managers’, Journal of Management in Engineering, ASCE, 9(3), pp. 217-226. Goodwin, 8.S.C., 1993, ‘Skills required of effective project menagers’, Journal of Management in Engineering, ASCE, 9(3}, pp. 217-226. hitp://wwen. wikipedia.org, viewed on 14 September 2009 ffor information on Indian construction industry) http://www. History] 700s.com (for definition of corporation by Chief Justice John Marshall in 1819) viewed on 07.03.2010. . Sho, K.N., 2004, ‘Factors for the success of o construction project: An empirical study’, Doctoral disserlction, Indian Institute of Technology, Delhi, India Kotz, D. and Kohn, R.L., 1978, The Social Psychology of Organisations, John Wiley, USA, Kot, RL, 1974, ‘Skills of on effective administrator’, Harvard Business Review, September/October, pp. 90-102. Kermer, H., 2004, Project Management: A Systems Approach ta Planning, Scheduling ond Controlling, CBS Publishers & Distributors, New Delhi, Indio. Laufer, A. Woodward H. ond Howell, G.A:, 1999, ‘Managing the decision-making process during project plonning’, Jounal of Management in Engineering, ASCE, 15(2), pp. 79-84 . Newcombe, R., Langford, D. and Fellows, R., 1990, Construction management organization systems, Mitchell, London, p. 219. |. Odusomi, K.T., 2002, ‘Perceptions of construction professionals concerning important skills of effective project leaders’, Journal of Monagement in Engineering, ASCE, 18(2), pp. 61-67. . Ofori, G., 1994, ‘Construction industry development: Role of technology transfer’, Construction Management and Economics, 12, pp. 379-392 Ogunlona, 5.0., li, H. and Sukhera, FA., 2003, ‘System dynamics opproach to exploring performance enhancement in a construction organization’, Joumal of Construction Engineering and Management, 129(6), pp. 528-536,aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.construction economics | 45 | which an engineer has to takea decision among the competing alternatives. These are referred toas problems of pres- ent economy. In such situations, the decision maker may not consider the time value of money. ‘The three most common methods of evalustion—‘out-of-pocket commitment’ comparison, ‘payback period; and the ‘average annual rate of return’ methods—in which the time value of money is not considered are discussed in the following sections. 3.2.8 Out-of-Pocket Commitment Suppose a pre-cast concrete factory has to produce 100,000 railway sleepers per year. An economic choice has to be made between using steel formwork and wooden formwork, The life of steel formwork is estimated to be ‘one year, while that of wooden formwork is one month. ‘The costs of preparing one set of steel formwork and ‘one set of wooden formwork are Rs, 400,000 and Rs. 50,000, respectively. It is further estimated that the labour costs for fixing and removing the steel and wooden formwork are Rs. 10 and Rs. 9 perssleeper, respectively. Now, this is a situation wherein we may not need to consider time value of money, and use the lowest out-of-pocket commitment criteria to choose the most economical alternative. ‘The out-of-pocket commitment is the total expense required for an alternative. For example, the out-of pocket commitment for steel formwork option would be the sum of total labour cost incurred for production ‘of one lakh sleepers/year plus the cost of the steel formwork/year, that is, Rs. 100,000 X 10 + Rs. 400,000 = Rs, 1,400,000 Similarly, the out-of- pocket commitment for wooden formwork option is = Rs. 9 X 100,000 + Rs, 50,000 X 12 = Rs. 1,500,000. Since the out-of-pocket commitment for steel formwork is lesser than that for wooden formwork, the decision would be to choose the ‘steel formwork’ option. 3.2.2 Payback Period ‘The payback period for an investment may be taken as the number of years it takes to repay the original invested capital, and serves as a very simple method for evaluation of projects and investments. Though this method does not take into account the cash flows occurring after the payback period, given the ease of com- putation involved, the method is widely used in practice, and it is understood that the shorter the payback period, the higher the likelihood of the project being profitable, In other words, upon comparing the two projects or alternatives, the option with the shorter payback period should be selected. « Forexample, leta contractor have two brands of excavators, A and B, to choose from. Both the brands are available for adown payment of four lakh rupees. Both brands can be useful for a period of four years. Brand A is estimated to give a return of Rs. 50,000 for the first year, Rs. 150,000 for the second year, and Rs. 200,000 for the third and fourth year. Brand B, on the other hand, is expected to give a return of Rs. 150,000 for all the four years. The payback period for both the brands is calculated in the following manner. ‘The payback period for Brand A = 4 years, as the initial investment of four lakh rupees is recovered in three years (50,000 + 150,000 + 200,000 = 400,000). The method does not consider the returns after the pay- back period. Hence, in this case the return of fourth year (Rs. 200,000) is simply overlooked. For Brand B, the return is Rs, 300,000 up to the end of second year and in the third year it equals Rs, 450,000. ‘Thus, the investment amount of Rs. 400,000 is recovered somewhere between second year and third year, which can be found out by interpolation. (400,000 — 300,000) (0.000 = 300,000) = 2.67 Years = 2 Years and 8 months. Hence, the payback period for Brand B = 2 + 3-2 x Here also, asin the first case we neglect the return that is expected beyond the payback period. Hence, itis beneficial to buy Brand B excavator as it has a lesser payback period.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.CONSTRUCTION Economics. | 49 | Rs. 250,000 Ris, 180,000 Rs. 150,000 1 sue incoming ‘Month April May June -ve Rs, 105,000 ‘ eutoctha Rs. 130,000 Fs. 280,000 for example problem (Altern incoming Month April ay vane outgoing Re. 30,000 flow diagram for example problem +ve Time J) incoming 0 1 2 3 4 f { I" 7 ve outgoing Rs, 100 Ris. 100 Rs.100 AS. 100 Rs.100 | Rs. 100 Rs.200 Rs.200 Rs.200 "As.200 Rs. 200 Rs. 200 3.4 Costd diagrams largely concentrate on periodic costs or expenditures. Illustrative representations of the diagrams are shown in Figure 3.4 and Figure 3.5. Cash-flow diagrams are frequently utilized for finding the equivalence of money paid or received at dif- ferent periods, for the purpose of comparison of different alternatives and for a host of other objectives, as we shall see in due course. Clearly, as one party spends an amount of money, another party has to earn it, and it is inevitable that the cash-flow diagram would depend on which perspective is taken. ‘Thus, an entry corresponding to an expenditure of Rs. 100,000 for the supply of structural steel on June 16 (refer to Example 3.1) would Rs, 200 Rs.200 Rs.200 Rs.200 As.200 Rs. 200 Re, 100 Res. 100 Rs. 100 Re. 100, Re. 100 | Re. 100 +ve Tei incoming 0 nn -ve outgoingaa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.consrauction econowies | 53 | (panunuoy) 3809 [PIO} J0 HOD storsenuoogns sol 861 «ssh «BL KERR HTD IL Bt OO SpIEMOL SD — ZI 3809 [BO JOmSSO [euareUL res LBDT «LUST OTTH PASH ISH ALEC RET BEL 0 spremon ys 11 3809 [E903 JO %OTD NT G6 OG LEST. LOT VT GLI «IFS ME SOO 3NOgE| SPHEMO} IS OL osOl 9461 ASH PB'OL FEES OER FIO LOH BEIT EO (1406:0)3809 POL 6 s8u1081n9 sSurtuoout O0'00S | OO'SLF OO'SLE (Z'GEH SHELH LEELE PI'LOE OR'EET OSO9T O'6OI 10'%L | Pseudo activity}—-->|_Inspect EW. 10} 0 | 15 15} 0 | 19 19] 0 | 22 Injroduction of pseudo method to renrese tol 5 [5 1] 4 [17 = ss. os wo] o [5 i] o [a7 Figure 6.34 $$ relationship with lead-lag factor of 3 days ‘The given relationship can be represented using a pseudo activity, as in Start-to-start (SS) ‘Task B cannot start until task A starts if they are associated in a S$ relationship. For example, if we have two tasks ‘pour foundation’ and ‘level concrete, then ‘level concrete’ cannot begin until ‘pour foundation’ begins. Astart-to-start relationship can also be associated with the lead-lag factor, as shown in Figure 6.34. There are two ways in which a start-to-start relationship with lead and lag factor can be represented in precedence network. One way is to split the preceding activity in two components, A, and A,,and proceed as shown in Figure 6.35. The disadvantage would be the additional list of activities and a lengthy network. This is similar to the approach used in PERT/CPM in order to accommodate such type of relationships. “The same can again be represented using two activities. Start-to-finish (SF) ‘Task B cannot finish until task A starts. ‘The SF relationship is not that common in precedence network, but it has been included in the discussion for the sake of completeness. A SF relationship can be there with lead- lag factor, as shown in Figure 6.36, and this can also be represented by splitting a predecessor activity such as Ainto A, and A, as shown in Figure 6.37. ‘The illustration of different relationships used in precedence network and their corresponding equivalent for conventional networks shows that all the types of relationships can be represented in conventional networks by splitting activities into multiple segments, though that will enlarge the arrow networks toa great extent. The precedence network, on the other hand, is smaller, easier to develop and to calculate, and clearer to interpret. Precedence network resembles an AON diagram with activities on nodes or boxes and precedence rela- tionship shown as arrow. However, precedence network without arrows is also possible. The numbering of activity follows rules similar to those followed in PERT and CPM. ‘The time estimate for the activity could be igure 6.33. 10 3 AL 0 13 13 2 By 0 15 10 13 3 6 15 2 By ° 7 15. 17 Figure 6.35, aship with lead-lag factor of 3 days[172 | construction pRoJecT MANAGEMENT vol 4 [14 1s[ 3 [8 A B io. 0 [15 15] 0 [18 Figure 6.36 _ Sf telotionship with lead-| tol 4 [4 v4] 4 [15 15] 3 [18 Ay Ap B To] 0 [4 14] 0 [15 1] 0 [18 Figure 6.37 _SF relationship with lead-lag factor of B days one time estimate or three time estimate, though the three time estimate has to be converted to a single time before being used in precedence network ‘There could be many variants of the boxes or nodes in a precedence network, depending on the infor- mation the user desires to display using these boxes. For illustration, a typical box used for all the preceding examples has been divided into three horizontal parts, top, middle and bottom. The top is again divided vertically into three compartments, left, centre and right. Similarly, bottom portion is also divided into three departments, left, centre and right. ‘The top left compartment gives the earliest start time, ‘The top centre compartment gives the activity duration. The top right compartment gives the earliest finish time. The middle portion gives activity description. The bottom left compartment gives the latest start time. The bottom centre compartment gives the total float. The bottom right compartment shows the latest finish time. ‘The process of forward pass and backward pass and the identification of critical path and critical activi- ties are explained with respect to Figure 6.38. which is the precedence network for the example of retaining TE] PE) APS) Se] ere ew) _b*| ew, be em ey eile brew orotay] Lotsa} | [zoselzet | [solztae! | aolzal aa 21773] | eT s} | TTT] | Peres] | Pore oo; Ll cc, LS} co, LT co, tcc: zpopah tele ra) [ealselzat [Befestsalfaayael a] vr eel [ESEAED eS MEDRAES ‘Ghz _[-{_ cay] Ga. |] cag Fas [zo}- [23] 6 [50 [33] 9 ao} [aol 2] 50 31079 ot TOLTO LAA] |, FeoLTOTSH] |, (Soyo |, fropToyso] |, (sorsopeo) a Ws Tol 020+) [20] 0[30-) [Soo] 40-4 a0] o [sot [Bd] 0 ]60 aol aaa] |, (oole [aa] | (ao[e Fe, | 3{ re, 1S re: szlsejsa] [Saleelse] [Sel tel ss] [ale [56] [Blo ea) Figure 6.38 Example of precedence network for repaiive workCONSTRUCTION PLANNING | 173 | wall construction. Since the relationships that are used in Figure 6.38 are FS only, there is no difference in the computation procedure of forward pass and backward pass. ‘The forward pass gives the early start and early finish times of all the activities shown in the network, similar to the computations done in case of PERT and CPM. ‘The computation is shown in Table 6.5 for a few activities for illustration. In the table, EST, represents carliest start time of activity having activity code 10, EFT,, represents earliest finish time of activity having activity code 10. FS ,, ,, represents the lead lad factor of finish to start type. FS ,,, , = 0 means activity with activity code 20 can start immediately after the comple- tion of activity with activity code 10. The duration of activity with activity code is represented by d,,. Other representations in the table can be similarly interpreted. The process is reversed for backward pass. Using the same logic but starting at activity FE,, a late finish is determined. In majority of the cases, the late finish is taken to be the same as the early finish, that is, day 62, although it is possible to insert a higher number as the late finish. In that case, backward pass would not end at time period 0. In this example, the late finish of activity FE, has been taken same as the early finish. The late start is calculated by subtracting the activity duration from the late finish. The process is repeated, taking the lower value on the backward pass and adding a lead/lag factor until a late start for activity EW, is calculated. The backward computations for some of the activities are shown in Table 6.6 for illustration. In the table, LST,,. represents latest start time of activity having activity code 250. LFT,,,, represents latest finish time of activity having activity code 250. Other representations in the table can be similarly interpreted, Critical path(s) is (are) identified next. ‘The critical path consists of activities with zero float logically linked between the start activity and the finish activity, Float is the difference between the late start and the carly start. The critical path in this example is EW,-CC,-CR,-CW,-CW,-CW,-CW,-CW,FE, It is interesting Table 6.5 Explanotion of determination of erly sor ond ealy finish activity Himes Activity Code _Activity Duration (days) EST Remarks 10 EW, 2 0 Ostart activity, EST,, = 0 2 EW, 2 2 EST, = EFT, + FS, Hence, EST, =2 +0 30 EW, 3 4 EST, ~ EFT, + FS, 6 EFT, = EST, +4, Hence, EST,,=4 +0 Hence, FFT,, = 4+2 40 EW, 2 6 EST, = EFT,, + FS... 8 EFT, = EST, +d,, Hence, EST, = 6 + 0 Hence, EFT, = 6 +2 7) EW, 2 8 EST, = EFT, + FS, 10 ERT, Hence, EST, =8 +0 Hence, EFT, = 8 +2 60 ce, 1 2 EST, = EFT, + FS, 5 3 EFT, = Hence, EST, = 2 +0 Hence, EFT, = 2 +1 70 ce, 1 4 EST, = Max(EPT,, + 5 ERT, = EST, +d., FS. p EFT ig + F8qr) Hence, EFT, = 4+1 Hence, EST,, =4 +0 250 FE, 2 60 vo = MAX(ERT,, + 62 = EST,,, + dy, PSone EFT iy + PSsye210) Hence, EFT,,, = 60 + 2 Hence, EST,,, = 60 + 0 .1.174 | construction PROJECT NANAGEMENT Table 6.6 Explanotion of determination of late finish and late start activity times Activi Code - Activity Duration (days) _LFT _Remarks LST Remarks 250 FE, 2 62 IFT, = EFT,, 60 IST, =LFT,,,- d,, 240 FE, 2 60 58 LST, =LFT,,-d,, 230 FE, 2 58 56 FT, ~ d,, 20 «FE, 2 56 54 =LFT,,,~ d,, 210 FE, 2 54 52 LST,,=LFT,,,-4,, 200 CW, 10 60 50 LST, = LET y, ~ dyy 199 Cw, 10 50 40 LST, — LET, ~ d,, 189 CW, 10 40 LET, =Min(LST,,,—~ FS yy 30 IST 9 — FS ini) 10 EW, 20 LET, = Min LST, ~ FS, IST, — FS, to note that critical activity has identical early start and late start. The critical path is shown with dark arrows in Figure 6.38. The bar chart resulting from the network of Figure 6.38 is shown in Figure 6.39. ‘The top bars in Figure 6.39 show the bar chart based on early start time, while the bottom bars represent the bar chart based on late start time. The breaks or splits in bars for some activities represent ‘start’ and ‘stop’ of those activities. For example, in the bar chart based on carly start, the activity CC is not done on a continu- ous basis; instead, it has been done in five segments and, accordingly, the split in bar is shown in Figure 6.39. In precedence network, forward and backward pass algorithms change if the network has other two types of relationships, namely FF and SE. In the forward pass, an activity start time is calculated with FS and $S relationships and the finish time is calculated with FF and SF relationships, along with the activity duration. If the early start and the early finish I ed Sy ATT] . HAHA 1 ca hart resulting from the network of Figure 6.38CONSTRUCTION PLANNING | 175 | so calculated differ by more than the activities duration, then the activity is split according to the rules out- lined in the algorithm. Analogous procedure exists for the backward pass. ‘We take up the problem of retaining wall construction again and draw the network as given in Figure 6.40. However, now let us assume that the activity splitting is not allowed. In other words, EW, CC, CR, CW and FE activities once started in any of the five sections have to be completed in all respect. ‘The forward and backward pass computations are given in Table 6.7 and Table 6.8. Table 6.7 _Explonotion of determination of early stor and early finish activity times Node Activity Duration EST Remarks EFT Remarks 10 EW 100 Ostart activity, EST,, = 0 10 EFT, = EST, +4, 20 cc 5 6 EST, = Max of [EST,, + SS, 11 ERT, = EST, +4,, +2 2,EFT,, + FF, — 4, Hence, EFT,, = 6 +5 = 11 +1~-5=6]=Max.of 2,6) 30 CR 35 7-_-EST,, = Max.of [EST,, + SS... 42. ERT, =EST, +4, +157, EFT, + FE, ~ dy = 11 Hence, EFT, = 7 + 35 = 42 +7 ~35= 17] = Max.of 7, —17) =7 40 cw 50. 14 EST, = Max. of [EST, + 8S, 4, 8 EFT, =EST,, +d, =7%7= 14 EFT, + FFy «dy Hence, EFT,, = 14 + 50 = 64 = 42+ 10-50 =2] = Max. of (14, 2) = 14 50 TE 10°56 EST, = Max. of [EST,, + SS, 66 EFT, = EST, +4, = 14+ 10=24, EFT, + FF, Hence, EFT, = 56 + 10 = 66 = d,= 4 +210 56] = Max. of (24, 56) = 56 Table 6.8 Explanation o! determination of late finish and late stor activity times Node Activity Duration LFT Remarks 50 FE 10 66 LFT,,= EFT, 40 cw 50 04 Min. of [LFT,, — FF, 5 6-2 = 64, LST, ~ SSy 4, t dy 6 — 10 + 50 = 96), = Min[64, 96] = 64 30 cR 35 42° LET, = Min.of (LFT, — FF, 4, 7 LSTy= LPT, ~ 4, =42 =64~ 10 -35=7 +4,,= 4-7 +35 Min[54, 42] = 42 20 ce 5 11 LFT,, = Min. of [LFT,, ~ FF, 6 = LET, ~ no-o» + day =7-1+5=11) Min(35, 11] = 11 10 EW 10 10 LFT,,= Min. of [LST, — FF, 4) 0 Ist, =LFT,,~d,=10 T~1=10, LST,,~ 88, 5, + 4, —10=0 gta he Min. (10, 14] 14][176 | constrUcTION PROJECT MANAGEMENT SS-2 SS-7 SS=10 0 | 10 é [1 7 [4 14 | 64 86 | 66 ew]iod cc | 5d cR | 35a cw | 504 Fe | 100 o | 10 e |i 7 | @ 14 | 64 6 | 66 FRa4 FF -7 FF = 10 FF a2 Figure 6.40 Revised nework of retaining wall construction est | eft Activity | Duration ist [rt ‘The bar chart resulting from the network of Figure 6.49 is shown in Figure 6.41, Incidentally, the bar charts based on early start of activities and late start of activities are similar(why??). It can be observed from the two bar charts (see Figure 6.39 and Figure 6.41) that the project dura- tion has increased from 62 days, when activity splitting was allowed, to 66 days when activity splitting was not allowed. “The critical path obtained in a precedence network may not be a neat path (not connected clearly in a back-to-back sequence as in PERT/CPM). This has been illustrated in Solved Example 6.1 ‘There is an interesting feature of precedence network pertaining to critical activities. In conventional networks such as PERT and CPM discussed earlier, the increase (decrease) in critical activity duration would result in increase (decrease) in project duration. However, in case of precedence network, the increase in criti- cal activity duration may not always result in Increase in project duration. There could be three possibilities associated with increase (decrease) in duration of critical activity, with reference to the impact on project duration, These are shown in Table 6.9. Duration acini 9] rol] 4 @ 6 es] ew oc on ow Feaa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.constuction puNNING | 179 | ‘The line-of-balance technique assumes that the rate of production for an activity is uniform. In other words, the rate of production of an activity is linear. In line-of-balance, the time is usually plotted on horizon- tal axis, and units or stages of an activity on the vertical axis. The production rate of an activity is the slope of the production line and is expressed in terms of units per time. “The line-of- balance technique uses man-hour estimate and optimum crew or gang size. The line-of- balance diagram can be plotted once the man-hour estimates and optimum size of crew are determined by the planner based on his or her experience, or in consultation with the implementing agencies such as vendor or subcontractor, ‘The two oblique and parallel lines used in line-of-balance technique denote the start and finish times, respectively. of each activity in all the units from the first to the last. The slope of the lines is equal to the actual rate of output of the activity. This has been explained in detail in later sections. ‘The line-of balance technique finds favour in the construction industry mostly for the execution of repet- itive unit projects such as mass housing, high-rise buildings, tunnels and highways. A typical line-of-balance diagram is shown in Figure 6.47 for a housing project. ‘Total time = 100 days 10 8 8 7 Be 35 ga 23 Completion rate: one house every five days 2 +4 ° 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Time (Days) rom Forsch| 180 | construction PRouECT MANAGEMENT Consider an example to illustrate the construction of LOB for scheduling of a housing project, where 10 houses are to be constructed. For simplicity, let us assume that substructure, superstructure and finishing are the only three activities involved in the construction of a house. Further, let us assume that substructure, superstructure and finishing take 10, 20 and 15 days, respectively, for a single house. ‘To provide for the margin of error in the time taken to complete each of these operations, the time buffer is usually placed in-between two activities. Let us assume the buffer in this case to be of five days. Thus, the construction of a single house needs 55 days to complete (10 + 5 + 20 + 5 + 15 = 55). That is, the first house is completed in all respect on the 55th day from the start. It is further assumed that now onwards, every Sth day one house is to be com- pleted, i.c., second house on 60th day from start, third house on 65th day, and so on, and the last, or 10th, house gets completed on the 100th day. ‘This is called the rate of construction, and in this case, the rate of construction is one house every five days. This rate is represented diagremmatically for all the three activities, and completion dates are drawn for each of the 10 houses. Thus, the substructure, superstructure and finishes of all houses are joined by sloping lines. ‘These form a series of bands, which are the LOB schedules, for each activity, It can be seen that in this case, all the sloping lines are parallel to the handover line. Each activity is proceeding at the rate of one house per week, at the same rate as the handover schedule. ‘To provide a margin of error and to ensure that one activity does not interfere with another, time buffer of five days has been selected for each activity, though only as an example, In practice, each time buffer would probably be different. The construction manager selects the buffer according to his own experience and his own forecast of the risks, difficulties, or delays that may occur, For example, if in a particular locality carpenters were known to be in short supply, longer buffers would be inserted after activities involving carpenters. Conversely, only very small buffers may be required when little difficulty is expected in achieving planned gang size and output. ‘The crew size is determined in such a way that production rate of all the activities become more or less uniform. ‘The buffer can be uniform or non-uniform depending on the situation. In practice, each time the buffer would probably be different, For example, if in a particular locality welders were known to be in short supply, longer buffers would be inserted after activities involving welders. Conversely, small buffers would be suffi- cient when not much difficulty is foreseen in mobilizing the required crew size. Arditi et al. (2002) list out some of the challenges associated with LOB scheduling: + developing an algorithm that handles project acceleration efficiently and accurately, ‘+ recognizing time and space dependencies, + calculating LOB quantities, + dealing with resource and milestone constraints, + incorporating the occasional non-linear and discrete activities, + defining a radically new concept of criticalness, + including the effect of the learning curve, + developing an optimal strategy to reduce project duration by increasing the rate of production of selected activities, + performing cost optimization, and + improving the visual presentation of LOB diagrams. ‘The LOB technique is highly effective in determining areas of weakness, and focusing the attention of the manager on items requiring more immediate attention, especially for repetitive works. However, the LOB has not found lasting popularity in construction industry, mainly due to the widespread availability of com- mercial software for network-based techniques and the non-availability of appropriate commercial software having capability to make LOB diagrams. An attempt to develop a computer application was made by Psarros (1987) but it was not free from flaws. Subsequently, Suh in 1993 developed a program called RUSS.CONSTRUCTION PLANNING | 181 | FE, OF O ps3 OF Os OF Os 2000 F-O ____ Figure 6.48 Logic diagram of constrcticn of one segment of retaining wall We consider the same example of retaining wall construction to illustrate how LOB can be used for scheduling of a project . In this example, 5 sides (each of 100 m length, called one segment) are to be con- structed. Thus, there are five segments to be constructed. A step-by-step method for preparing a LOB is given in the following section, Step 1: Construction of Network or Logic Diagram for One Segment As a first step, usually a logic or network diagram for one of the many units to be produced is prepared and incorporated into the LOB schedule. ‘The logic diagram for one segment of retaining wall is as given in Figure 6.48). The same notations have been used for this illustration also. For example, EW, represents the earthwork in segment one; CC, represents cement concrete in segment one; and so on. The durations are also assumed to be the same as for the previous illustrations. “The estimation of duration is dependent on the quantity of each of the activities and the associated crew. ‘The quantities involved and the number of workers assumed are shown for all the activities associated with the construction of retaining wall, in Table 6.10. It is assumed that there will be work for 12 hours each day. It is also assumed that the formwork, rein- forcement and concreting would be done by the same set of workers. Step 2: Buffer Estimation and ‘Start’ and ‘End’ Buffer Identification ‘The buffers are estimated in such a manner that the crew of one activity does not interfere with the crew of another activity. The buffers, B, for this illustration have been estimated and shown under the dotted arrows. For example, B = I means a buffer of one day between the earthwork (EW) and cement concrete activities. It would be pertinent here to distinguish between start and end buffers. In case the rate of construction (speed) of a subsequent activity is faster than the activity under consideration, buffer is kept at the end. Con- versely, if the rate of production of subsequent activity is slower than the activity under consideration, the buffer is placed at the start. For example, completion of earthwork is achieved in 2 days while the completion of cement concrete is achieved in 1 day itself. Naturally, the speed of the latter activity is faster than that of the former. Thus, in order to avoid the interference of the latter crews with the crews of earthwork activity, it is desirable to have the end buffer and derive the start of cement concrete as shown in Table 6.11. Now, Toble 6.10 _The culcviation of duration of activities for retwining wall construction No.of ‘Theoretical Duration (t) Quantity for Productivity Man-hours workers duration days taken for Activity fone segment assumed _peractivity assumed _(days)_‘ LOB schedule. Earthwork 100 m® 3 MH'/m 300 B 192 2 Cement concrete 8m? 20 MH/m’* 160 3 1.03 1 Concrete raft 70 m’ formwork 4MH/m 2treinforcement — 60 MH/t 880 iw 6.67 7 24 m' concrete 20 MH/m* Concrete wall 500 m* formwork 4 MH/m* 44 treinforcement 60 MH/t 354 30 9.76 10 625m’ concrete 20 MH/m* Fencing 100 m 1.5 MH/m* 150 7 179 2aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.constauction piawnine | 183 | The start day of concrete raft for fifth segment = start day of concrete raft for segment one + T (duration for completing concrete raft in four segments) =10 + 28 = 38. In this manner, the computations are completed, It may be noted that the start day of_ast segment iscom- puted first, followed by the start day of first segment for an activity that has an end-buffer association with its succeeding activity, while the reverse manner is followed in case of start buffer. Step 4: Drawing line-of-bolance chart ‘The resulting start and finish times for each activity for all the segments are shown in Figure 6.49. Step 5: Adjusting the schedule It can be noted from Figure 6.49 that the rates of construction of different activities are not uniform. In other words, these are not ‘balanced’ and some improvement is desirable. In order to bring about a more ‘balanced’ schedule, a number of steps can be taken. For example, the crew size can be adjusted since we cannot make changes either in the quantity or in the assumed productivity. From the above figure, it can be seen that we can reduce the speed of cement concrete activity by reducing the number of crew. Also, we can try to increase the speed of the activities ‘concrete raft’ and ‘concrete wall’. This can be achieved by increasing the speed of construction of these activities by increasing the number of crews. ‘The ideal situation would be to aim for ‘parallel scheduling, as shown in Figure 6.47 for the housing construction example, wherein the rate of construction of each of the activities is same. In our retaining wall example, it is also possible to achieve a parallel scheduling by decreasing the specd of cement concrete activity and increasing the speed of concrete raft and concrete wall activities to two days per segment, and thereby reducing the overall duration for the construction. However, such reduction in duration should be checked for its technological feasibility as well as its cost-saving potential. For example, if it is found that the extra cost incurred in increasing the crew size and thereby reducing the overall duration has more cost associated with it than the saving it generates by decrease in indirect cost, there is no point in such reduction in duration, Thus, there could be many possible schedules and the choice of a particular schedule will be dependent on the decision maker and the situation prevailing at that time. Needless to say, the computations for start and finish times of some of the activities may undergo change. The revised computations for start and finish times after adjusting the crew size are shown in Table 6.12. ‘The overall completion time is now 29 days as against 74 days. Also, note that the buffer between the activities concrete wall’ and ‘fencing’ has now been changed to 4 days from the previous buffer of 3 days. The revised LOB schedule based on these Wall section 0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 Days Figure 6.47 LOB schedule for constuction of reteining woll| 184 | construction provect MANAGEMENT Wall section computations for our retaining wall example is shown in Figure 6.50. As explained earlier, there could be farther improvements as well. 6.42 NETWORK TECHNIQUES ADVANTAGES Having completed a discussion on the basic definitions above, the following paragraphs discuss some of the salient features of two of the most popular networks used in project planning—critical path method (CPM) and project evaluation and review technique (PERT). Network planning can be used for computing project completion time, identifying critical activities, etc. In fact, in PERT the uncertainty involved in completing an activity ina certain time can also be built in. It may be pointed out that not any network diagram can be called a PERT diagram (or chart) to distinguish it from a bar chart! Historically, PERT was developed for use in the aerospace industry and is most frequently used in R&D programmes. As a technique, PERT incorporates the uncertainty in the estimated time for completion of an activity by using the optimistic, mean and pessimistic times to define the likely time of completion of an activity, and then using the latter in further calculations to determine the times for project completion, etc. As mentioned above, these networks can also be used for purposes such as resource allocation and monitoring. Indeed, in order to he effective, the network needs to be constantly updated (through feedback depending upon actual progress in different activities) and revised schedules drawn up. It may be remembered that critical activities identified at any stage may change as the project progresses, though simply a change in the actual (or likely) date of completion does not necessarily require reworking and redrawing the network. In other words, an important aspect ‘of monitoring project progress is to assess any changes in the set of critical activities, and make appropriate adjust- ments in resource allocation, etc. Some of the advantages of network-based scheduling are highlighted below: (a) Facilitates focusing attention on specific objectives (b) ‘The results of planning activities can be clearly seen (©. Mathematical computation for determining parameters such as early and late start and finish dates can be easily carried out, In fact, the exercise can be computerized for large projects, and enable construction management to benefit from the higher speeds of calculation available, data storage and retrieval, ete. (a) Activities on the critical path and those with float can be easily identified. This enables the manager to raw a list of activities that require closer attention, and take timely corrective action in case of slippage. In other words, ‘management by exception’ is made possibleCONSTRUCTION PLANNING | 185 | (e) Facilitate identification of possible conflicts in the schedule of activities, in terms of sharing of resources, etc. Asa corollary, resources can be dynamically reallocated taking account of emerging changes in the criticality of activities, etc. (f) Facilitates drawing up of summaries, monitoring and review reports for consultants, clients, etc. (g) Provide an overall graphic master plan of a complex project, clearly showing job interrelationships (h) Helps in drawing up alternative plans of work—different alternatives can be examined by varying the pattern of resources allocation (which in turn changes the time estimates for the constituent activities) (1) Cost-time studies can be carried out and an optimum project duration depending upon different levels of resource commitment can be found REFERENCES 1. Arditi, D., Tokdemir O.8. and Suh K., 2002, ‘Challenges in Line of Balance Scheduling’, ASCE Journal of Construction Engineering and Management, 128(6), pp. 545-556. 2. Arditi, D., Tokdemir ©.B. and Suh K., 2001, ‘Effect of learning on line of balance scheduling’, International Journal of Project Management, 19(5}, pp. 265-277, 3. Burke, R., 1996, Project management: Planning and control, 2nd ed., West Sussex (UK): Wiley. 4, Callahan, M.T., Quockenbush D.G. and Rowings J.E., 1992, Construction project scheduling, New York: McGraw-Hill 5. Chitkora, K.K,, 1998, Constuction project management: Planning, scheduling and controlling, New Delhi: McGraw-Hill Choudhary, S., 1988, Project Management, New Delhi: Tata McGraw-Hill 7. Harris, R.B. and Loannou RG., 1998, ‘Scheduling projects with repeating activities’, Journal of Construction Engineering and Management, ASCE, 124(4): 269-78. 8. Issues and Considerations in Project Management, available at http://www. maxwideman.com/issacons. 9. Johnston, D.W., 1981, ‘Linear scheduling method for highway construction’, Journal of the Construction Division, 107(CO2), pp. 247-261 10. Khisty, C.l,, 1970, ‘The opplication of the “Line of Bolonce” technique to the construction industy’, indian Concrete Joumal, July, pp. 297/300-319/320. 11. Lumsden, B, 1968, The Line of Balance Method, Tarrytown: Pergamon, 12. Lutz, LD. ond Halpin D.W., 1992, ‘Analyzing linear consiruction operations using simulation and line of bal- ‘once’, Proceedings of Transportation Research Board, 71st Annual Meeting, Transportation Research Record 1351, Transportation Research Board, National Academy Press, Washington, D.C., pp. 48-56. 13. Nunnally, 5.W,, 1993, Construction methods and management, 4th ed., New Jersey (USA): Prentice-Hall 14, Overlender, G.D., 1993, Project management for engineering and construction, USA: McGraw-Hill 15. Psarros, M.E., 1987, 'SYRUS: A program for repetitive projects’, Masters thesis, Department of Civil Engineer- ing, Illinois Institute of technology, Chicago. 16. Shtub, A., Bard J. and Globersons S., 1994, Project management, engineering, technology ond implementa- fion, international edition, London: Prentice-Hall 17. Suh, K., 1993, A Scheduling System for Repetitive Unit Construction Using Line-of-Bolonce Technology, PhD thesis submitted at the Hlinois Institute of Technology, USA.| 1B6 | constRuction pRouecT MAKAGENMENT 18. Suhoil, S.A. and Neale RH., 1994, ‘CPM/LOB: New methodology to integrate CPM ond Line of Balance’, Journal of Construction Engineering and Management, 120(3), pp. 667-684. 19. Turban, E., 1968, ‘The line of balance scheduling highway maintenance projecis’, Journal of Industrial Engineering, 1919), pp. 440-448 20. Weist, J.0. ond Levy FK., 2005, A Management Guide to PERT/CPM wih GERT/PDM/DCPM and other Networks, 2nd ed., New Delhi: Prentice Hall. 21. Weest, J.D, 1981, ‘Precedence Diagramming Method: Some unusual choracierisics and their implications for project managers’, Journal of Operations Management, 1(3), pp. 121-130. SOLVED EXAMPLE Example 6.1 For the network drawn in Figure Q6.1.1, perform the forward pass and backward pass. Calculate the early start, early finish, late start and late finish times for each of the activities. Find the critical activities and com- ment on the critical path(s). 18 CR [19 34 | [20] 4% [es ololo ols |s wl 1 [33] | | p{ cw] 2 san [1 sited] 3 Retartans| 6 | | | [20] 0 | 6 oo 0 ve] 12 [17 wle fe] | FBE=0 FS=0 6] 5 [7 Fencing] 10 ols [8 t9[ 1 [20 FS=1 6] 0 [7 Shutrfab | 4 >| Wall shutr] 8 13] 13 | 18 19[ 0 [ 20) Figure Q6.1.1 Example of @ precedence network with FS, FF, $8 and SF relationshipsCONSTRUCTION PLANNING | 187 | Solution ‘The computation of early start and late start times for all the activities of the network (Figure Q6.L.1) has been performed in Table $6.1.1, while the computation of late start and late finish times of all the activities have been performed in Table $6.1.2. It is evident from Table $6.1.1 and Table S6.1.2 that manual com- putations become complicated when there are relationships other than the finish to start in a precedence network. The use and interpretation of precedence networks with other than FS precedence relationship requires considerable care. The type of precedence relationship that occurs along the critical path must also be taken into account. Total slack/float for each activity has been computed using the following relationships: ‘TF = LST — EST ‘TE = LF ~ EFT ‘The total float values are given in Table $6.1.3. Toble $6.1.1__ Forward pass explanation forthe retwork cf Figure @6.1.1 Node Activity Duration (Dur) EST _Remarks EFT_Remarks 1 Start 0 00, Start Activity 0 EFT, =EST, +dur, EST, =0 =0+0=0 2 EW 10 0 EST,=EFT,+FS,, 10 EFT, = EST, +dur, =0+0=0 =0+10=10 3 Steel 5 0 EST,-EFT, +FS,, 5 EFT,~EST,+ dur, fabrication 040= 045 4 Shutter 5 0 EST,=EFT,+FS,, 5 BFT,=EST, +dur, fabrication ie =045=5 5 PCC 5 12. EST,=EFT,+FS,, 17 EFT, = EST, +dur, FS, = 2, EST,=10+2=12 =1245=17 6 Rebar 1 12. BST, =max. of [EFT, + FS, 13. BFT,= EST, +dur, transport =6;and EST, +SF, dur, =12+1=13 =12+1 2] = max, of(6, 12) = 12 7 Concrete 15 19 max, of [EST, +8, , 34 EFT, = EST, + dur, raft =19415=M 1741-15 =3,and EET, + FS, = 13+0= 13] = max. of (19, 3, 13) = 19 8 Wall 1 19 EST, = max. of [EFT, + F 20 EST, + dur, shutter 6,and EST, + SE, , =1941=20 =1941-1219 max, of (6, 19) = 19 9 Concrete 45 20 EST,=max. of [EFT, +FS,,= 65 EFT,= EST, +dur, wall 20, EPT, + FF, ,— dur, 204 45 = 65 =3443~45 and EST, +85, , = 19+1 = 20] = max. of (20, 8,20) = 20 10 Fencing 5 65 EST,,=EFT, +FS,,, 70 EFT,,~EST,,+ dur, =65+0=65 54+ 5=70| 188 | consteuction prouecr maNaGeMenT Table $6.1.2 Backward poss explanation for Figure Qé. 1.1 Node Activity Duration dur, LFT Remarks 10 Fencing 5 70 Taking LET, same as EFT, 9 Concrete 45 65 Wall 8 — Wall Rait 1 20 7 Concrete 15 uM Raft 5-3, IST, ~ SS, , + dur, 20-1 +15, and LST, - SE, , +dur,= 20-1415] = Min of (62,34,34) = 34 6 Rebar 1 19 -FS,, ‘Transport 9-0=10 5 PCC 5 17 LET,=Minof [LFT,~FF, , 4-1, LST, ~ SS," + dur, 9-7 +5, and IST, + dur,=18~1+5] Min of (33, 17. 4 Shutter 5 18 Fabrication 3 Steel 5 "7 Fabrication 2 EW 10 10 1 Stare 0 ° Min of [LST, - FS, =O, LST, LST,-FS, ,= 13-0] = Min of (0, 12, 13) LST Remarks 65. LST,,=LFT,,-dur,, 70~ 5 20 LST, = LET, ~dur, 65 ~45=20 19 LST,=LFT,-dur, 20-1=19 19 LST, =LPT, =dur, =M-~15=19 13. LST,=LET,—dur, =18-5=13 12 LST, =LFT,—dur, 17-5=12 LET, 0 Total slack/float for each activity has been computed using the following relationships: TE=LST- EST TF =LFT-EFT The total float values are given in Table $6.1.3. Teble $6.1.3_Coleulotion of floats of activities Node EST Ist Float (LST — EST) i 0 0 0 7 o 0 0 3 o 2 2 4 o 13 13 5 n 2 0 6 RB 18 6 7 v 19 0 8 » 19 0 9 20 » 0 o 10 6 65consteuction tannins | 189 | 9 -->| 10 Figure $6.1.2 Critical path 2 for network of Figure 6.1.1. ‘The critical paths for the network are 1-2-5-7-9-10 (see Figure $6.1.1) and 1-2-5-7-8-9-10 (see Figure $6.1.2), As is evident from Figure $6.1.2, the critical path so obtained is not a neat path (not connected clearly in a back-to-back sequence as in PERT/CPM) since activity 8 is also critical. ‘The identification of different types of critical activities from the network (see Figure Q6.1.1) is left as an exercise for the readers. [ REVIEW QUESTIONS 1. State whether True or False: 0. Work-breakdown structure is a breakdown of project activity schedules from weekly to daily and from daily to hourly schedules for minute control b. Work-breakdown structure is a breakdown of project into its components that enables mecningful orgeni- zation of project scope. ¢. Gantt chars are useful in working out the period-to-period requirements of resources on a project d. A Gonti chart can't identify ‘critical’ aciivitias e. Gantt chart is more effective than ‘network diagram’ for presenting project schedules to the company management, f. Arrow diagramming method of network representation con show different types of relationships such as stor-start ond finish-finish g. If the early occurrence fime and the late occurrence time for the staring and finishing events of an activity are same, the cctiviy is always a critical activity. hh. In octivity on arrow (AOA) type of neWwork diagram, the length of arrow has no relation to its time durction. i. AON networks can represent online fiish-star! type of relationships between activities. i. ‘Slack’ is the extra fime available to perform an activity without affecting the project completion time. k. ‘Float’ on the activity indicates the duration by which total estimated durotion of activity can be reduced while crashing.[190 | construction pRouect MANAGEMENT |. Flootis the difference between “ime available to perform a task’ and ‘time required to perform the tosk’ 1m. ‘Total floot’is the sum of ‘free float ond ‘independent float’, 1. PERT is used for scheduling produc! development projects ©. PERT is an acronym for Project Estimation and Review Technique. p. There is only 0 50 per cent chonce for compleiing a project in the scheduled time calculoted using PERT model. 4. PERT ie used when estimates for task durations can be worked out using pest data 1. Concept of ‘crashing’ is not applicable to PERT model. s. CPM is an acronym for Cost and Profile Monitoring. t. Critical path method aims at optimizing project duration at minimum cost. U. Critical path is the shortest poth in the project network v. Critical path is the longest path in the project network Ww. Critical path duration is the minimum time required to complete the project. x. Critical path method uses ‘three time estimation’ for estimating task durations. y. There can be only one critical path in o project network 2, In precedence network, the activities ore represented by arrows and the events are represented by nodes. aa. Sometimes, it is necessary to inoduce ‘dummy’ activities in precedence networks for maintaining relation- ship logic. bb. Line-of-balonce (LOB) technique is used te balonce work at different workstations in a mass-produciion assembly line. cc. Line-of-balance technique is useful for planning the construction of a number of similar structures dd. Line-of-balance charts are also known os Gantt charts after the name of the engineer who introduced the technique 2. Short-answer type questions ‘0. What is WBS? How is this helpful in planning, monitoring and controlling the programme of projects? b. Describe the process of drawing a Gantt chart for project schedule. What ore the advantages and limita- tions of Gent charts? c. How is the eslimelion of time duration ef an ocivity diflerent in PERT ond CPM approaches? Under what situations are these approaches more suitable? 4d. Differentiate between CPM and PERT madels for project scheduling +e. What is meant by line-of-bolance technique, and what are its specific uses and edventages in project plan- ning? lilustraie your answer with o suitable example What do you understand by a dummy activity in an AOA network? In which situotions does it become nec- essary to add o dummy activity in a network? Iilustrate with suitable examples. g. Differentiate and compare between ‘activity on arrow’ network diagrams and ‘activity on node’ network diograms. h. What are the diferent steps involved in finding the probability of completing a project in the desired dura- tion under certainty, using PERT approach? Enumerate the advantages of using the AON network instecd of the AOA network,consteuction etannine | 191 | i. Explain the reasons for the need to develop the PERT methodology for scheduling and monitoring of proj- ects. What is the process of review adopted in PERT? k. Define ‘critical path’ in o CPM network. |, How do you ensure timely completion of a project using CPM? m. Does the eriical poth, once identified, remain the same fill completion of project? If not, what are the reasons for is change? 1. What do you understand by the terms ‘total float’ and ‘Iree float’ in project schedule? ©. How are the floots useful in elfective monagement of projects? 9. What do you understand by the ‘three time estimates’ method for network scheduling? Illustrate youranswer by giving the appropriate formulae and the circumstances under which it is adapted. 4. What is the probability of completing the project within the total scheduled time calculated on the basis of ‘three time estimate’ method? 1 What ore the advantages of the precedence network over the conventional ‘arrow diagram’ network repre- sentation for project schedules? s. How do you indicate ‘delays’ and ‘overlaps’ between related activities? 1. Activity ‘A’ has estimated @ duration of 18 days as a predecessor to octivity ‘8’, which hos an estimated duration of 25 days. Calculate the ‘earliest star!’ for activity ‘B’ ifthe relationship between the two is i. FF +14 days ii. $5 + 10doys il, FS ~7 dys iv. SF + 32 days ve F5-+ 9 days Numerical Problems 1, The mean time for project completion using PERT method of fime estimation is 25 weeks with a standard deviation of 3 weeks. What is the duration beyond which the project completion is not likely to extend? 2. A project network hos five paths—P1, P2, P3, P4 and P5. The total activity duration computed along each of these poths are—22, 31, 20, 30 and 19 doys, respectively, What is the minimum duration for project completion? 3. The eatly occurrence time and the late occurrence time of the stariing event of an activity are 10 and 12, respectively. The early occurrence time and the late occurrence time of the tinishing event of the same the activity ore 22 and 26, respectively. If the estimoted duration for the activity is 10 time unite, what total float available for the activity? 4, Two project activities ‘X and ‘B’ (B being dependent on A) have a finish-finish relationship with 8 doys ‘lag’ The estimated durations for the activities are 10 days and 15 days, respectively. If actvily ‘is scheduled to start on the 12th day from the beginning of project, on which day can you schedule to stort activity ‘8’ 5. For the network shown in Figure Q6.5.1 {0} What are the cfiticol poth and the project duration? {b} Ifthe estimated duration for activity ‘C’ is revised to 8 days, will the critical path remain the same as earlier? 6. Referring to the list of activities below (see Figure Q6.6.1), find out the total time for project completion, critical path, eorly ond late start and finish dates, and total floats available on non-critical activities.| 192 | cowsreuction rovect MANAGEMENT (7 days) Figure Q6.6.1 7. For the octvity table given in Table @6.7.1, find the expected time for completion of projec with 84.1 per cent probability. Table Q6.7.1, Activity (2) (1.6) (2,3) 4) 3.5) (4,5) (6,7) (8) 7.8) 8, Draw the nelwork for the data given in Table @é.8. 1, pertaining to a small construction project. Compute the event times for all the activities. Find out the criical path. Also, calculate the three floots for the non- critical activities, 9. The average time for projec! completion using PERT method is 32 weeks, with o stondord deviation of the longest path being 4 weeks. Using the Y vaive table for normal distribution curve, {ind the: (a) probability cof completing the project in 32 weeks, {b) probability of completing the project in 36.6 weeks, and (c} probability of completing the project in 29 weeks 10. Identify different paths in the network and the citical path for the network shown in Figure Q6.10.1. Also find the project duration, Eoch node shows activity name and their estimated durationn construction tannin | 193 | Table 06.8.1 oo Activity Duration (in weeks) Depends upon A 4 ~ B 2 A c 2 ABE D 2 GL E 6 DGH F 2 A G 2 E ¢ H 3 GL K 3 A L 3 BK Figure Q6.10.1 For the network shown in Figure @6.11.1, calculate the project duration. Also, identity the critcal and non-critical activities. Find the floats in non-critical activities, Figure 6.11.1 A sal project has 12 aciivities—A, B, C, D... L. The relationship among these activities is given in the network shown in Figure Q6.12.1. The three estimates of duration for each of these activities are given in Toble Q6.12.1. (1] Drow an activity on node (AON) network for the project. (2) Calculate the minimum expected completion time for the project. (3) Calculate the probability hat the project would be completed within 25 doys. (4) Calculate the probability that the project cannot be completed within 30 doys.aa You have either reached a page that is unavailable for viewing or reached your viewing limit for this book.CoNsraucTiON ianNins | 195 | 14. A construction company engaged in undertaking small projects has recently been awarded a project. The project activities and the estimated time for their completion ore listed in Table @6.14.1, along with the information on immediate predecessors. (a) Construct « network for the project (b} Determine the critical path and the project completion time (c) What is the probablity of completing the project in the completion time you have arrived at? (d) Determine the time interval within which the probability of completion of the project will be 90 per cent. Table 6.14.1 _— Days Immediate Activity t t t, predecessor x 8 10 12 = B 6 1 9 - € 3 3 4 - D 10 20 30 A = 6 7 8 c dl 9 10 n B,DE G 6 7 10 BDE H 4 15 16 F 7 10 n 13 F a 6 1 8 GH x 4 7 8 LH i ee 15. Anew product is to be relecsed on « deadline for which 25 days are left. The remaining activities in product launch with their inierdeperdercies, the expected overage times ond the standard deviations are given in Tobie Q6.15.1. Drow o project network using AOA convention ond find the probobiliy of compleiing the project in time. Preceding activities Expected duration t, _ Standard deviation S, ~ 6 15 05 10 0s as 0s 10 20 05 1s me noe Prmooa>>el =o1196 | 16. CONSTRUCTION PROJECT MANAGEMENT Convert the project network of Figure Q6.16.1 to activity on orrow (AOA) convention. Figures inside the node under actvily nome indicote ducetion in doys. __ Figure Q6.16.1. . You have to construct © building to se! up your office. You own a plo! of 100 squore yards (30 feet x 30 fee!) in a prime location. For the time being, you ore in a position to construct ground floor alone due to financial constraints. So, you hove decided fo construct a simple RC structure. It consists of individual footing for 16 columns (columns are spaced every 10 feet in both directions) and a plinth beom at obout 1 m from the existing road level, All he columns are going up to roof level, and you plan to have an RC roof sicb and beam. The in-between space is constructed by using locally available bricks. There is earth filling up to plinth level, and after proper compaction of filled-up earth, flooring is laid. Other activities include plastering, ovinting, doors and windows, plumbing and electrical work, For your ready reference, the estimated duration for individval octivties and their dependence are listed in Table Q6.17.1. How much fime will take to construct the building? Table Q6.17.1_Aciivily details Duration Activity No.__Activity description (days) Depends on i Site clearance 2 2 Excavation in foundations 6 1 3 Foundations including plinth beam 10 2 4 Column casting up to roof level 10 3 5 Slab and beam of roof, a 4 6 Earth filling and flooring 10 SPS + 10d 7 Brickwork 10 SES +74 8 Doorsiwindows 3 EE 9 Phistering 10 788 + 7d 10 Painting 7 988 +74 u Plumbing 7 7EF + 3d 2 Electrical works 7 1Ss 13 Handover 1 10, 11, 12,