Project Overview

Discuss about the STEP Project Management Guide For Science Tech.

Construction projects management is among the most complex to manage because of the dynamics involved in such projects, including the need to procure quality materials, manage resources including labor and finances, ensure the building is structurally sound, and complete the project according to scope and schedule without overshooting any constraints. Construction a residential house, for example, requires not only constructing the main house but putting in place the requisite fixtures and fittings; further making the project more complicated. As such, the right p project management approaches are needed, with the project manager able to strictly control the project scope, schedule, and budget, as well as resources.  This paper is a residential house construction project for a four bedroom double story residential house. The paper outlines the schedule of tasks for the construction, along with their associated costs and resource requirements. A Work breakdown Schedule (WBS) is also developed, with each task in the WBS allotted a budget estimate.  A time analysis is done for the project, including the ES, LS, and the float, along with a Gantt chart that will form the project schedule baseline.  PDM diagrams are also developed to show the dependencies of the tasks and an analysis done for the project resources.  A detailed strategy for how to make the best use of the available resources is also made, and a risk management plan outlines.  Strategies for crashing the network are also discussed, along with the merits and demerits of using such a strategy after which a cash flow analysis is made, along with the profitability for the project

The project is for the construction of a double story four bedroom residential house to be located at []; the house will have a master en suite bedroom. All bedrooms are located on the first floor of the house, while the ground floor will house a living room, a kitchen, a spacious garage for two cars, and a dining area. The house will as well have an outdoor dining area and a family room as well as a media center. The ground floor of the house will also have a laundry area and connection to the first floor will be a stairwell adjacent to the laundry area, off the media center with one bathroom being located on the ground floor; the ground floor will measure 13 x 26.517 square meters. The first floor will have the master bedroom with a retreat balcony; in total there will be three balconies and an office as well as a retreat area. The first floor will measure 12.9 x 26.4 square meters. The house will be constructed with a hip slanting roof type.  Given the size of the house and roof type, the roof needs steel support beams which will be achieved via a double fink type truss. Because of a second floor, there will be need for additional structural supports; the walls will remain the same such that the joists for the first floor ceiling will also serve as joists for the second floor. The stair case adds new challenges; however, the stair will be set at 3/7ths from the top to bottom of every riser.  The building will support a load of the first floor and roof; as such, it is proposed that reinforced cement concrete (RCC) be used for the construction for durability and strength. As such, it will have a RCC frame/ skeleton with beams and pillars to provide strength and support with the floor made of a concrete slab as will be the first floor. The structural RCC columns will run from the foundation to the roof, with the beams running across at spacing of 5 meters, running across the building on the first floor. The pillars will have steel reinforcing for strength; the remaining spaces will be filled with bricks (masonry brick), with the stair case also supported using steel and RCC with hand rails made or steel and topped with plastic railings for comfort.  The entrances (main entrance and windows will be made off glass, and Australian standards for foundations will be used to support the whole building. The floor slab will have coarse material, followed by gravel and then concrete, with a damp proof course added for waterproofing.  The truss will be made of steel with bolt attachments to give rigidity and strength, while the roof will be made of tiles made of composite fiber to give strength, beauty, and remain light enough so there is not much stress weight on the truss and support columns and beams.  The foundation will be dug to 1.8 meters depth for support and load bearing from ground slab.

Project Timeline and Cost Estimates

The tasks are shown in the table below and constitute the WBS for the construction of the building; some tasks are dependent on each other, while others can be done concurrently as will be shown in the Gantt chart

The construction project for the house will require various resources that include labor (human labor for construction), technical expertise for drawing and development of bill of quantities, a computer, Auto CAD software, and project management software. The construction project will require various materials including wiring and cables, sand, ballast, water, hand tools, machine tools, excavator/ diggers, coarse rock, damp proofing material, tiles (wooden and ceramic), glass windows, timber, reinforcing steel, steel beams, roofing tiles, ceiling board, bulbs, plumbing pipes and fixtures (taps), basins and sinks, shower heads, hot water system, doors, paint, marble, electrical fixtures and fittings.  These are shown in the image below with their associated costs; costs have been gleaned from suppliers within Sydney and labor costs represent standard Australian labor costs for construction

The costs and the cost estimates have been developed based on available quotations and prices from online sources that supply building materials, such as DH gate, among others.  The prices are accurate as at the time of writing this paper (26^th May, 2018). The labor costs are charged at $ 22.5 per hour, the basic payment for construction sector workers. The estimate has an added value of contingency, which has been set at 10% of the total estimated construction costs. A contingency budget refers to money that has been set aside for covering unexpected costs when the construction project is going on. This amount is usually on the reserve and is not allocated to any one area of work.  The average rate for the contingency budget is between 5 and 10%; for this project, the budget has been set at the maximum, given the intricacies and complexities associated with construction projects.  The contingency is a downside to any risks that may be associated with the project and is an allowance for unknown risks; for instance, the need to replace an equipment or for logistics.

Early Start: the early start for the construction project is the earliest time when the project can commence and the earliest that it can finish. The early starts for the various activities in the WBS have their earliest starts on the start day for the entire project. The earliest start for the entire project is the 30^th of May 2017; with all activities undertaken as per the attached Gantt chart, the earliest finish will be after 30 weeks on January 2^nd 2019; the assumption made is that the work will be undertaken between Monday and Friday, with no work undertaken over the weekend. The earliest finish will be January 30^th. The latest start for the project is on June 3^rd  June; evaluating all the tasks and activities, the latest finish, considering activities being undertaken late or extending their time period is on February 8^th 2019, five weeks later the possible early finish.  These were calculated by taking a backward pass through the project network path.

Project Resource Analysis

The main resource required for the project is labor and financial resources, as well as material resources.  The resources will become more critical, especially human labor from week 16, when shuttering for the columns start, all the way until when the stair case has been constructed. This is because during this period, a lot of tasks will be undertaken concurrently so that when a task is finished, one is started immediately or two started immediately that task has been finished. There will always be peaks where a lot more labor is required that had been initially allocated; for instance, during the laying for the first floor concrete slab, more labor will be required as well as requisitioning for products (cement, water, sand) and steel rebar to provide the necessary reinforcement.   Different resources will be required in large amounts depending on the task; for instance, the placement of the coarse stones in the foundation will consume all the requisitioned material (all fifteen tons), while applying the sand and concrete in the foundation will also consumer substantial amounts of materials. As such, these materials availability must be planned for in advance and availed in sufficient amounts; the phase will also see substantial use of cement for making the concrete as well as water.  Because excavators and back hoes will be used for this phase, there will not be much use of human labor; although it will consume a lot of financial resources in purchasing the required materials.  The placement of steel rebar will also take a lot of resources (financial, labor, and materials in the form of the rebar steel). The phase takes up much more labor because placing the reinforcing rebar is done manually by hand; no machine assistance with the exception of transporting the steel rebar’s to the site. Their costs also mean a lot of financial resources will be committed to the project.  The phase of building the columns and beams will also be labor and material intensive; whenever labor is used intensively, financial resources are consumed at a higher rate because labor must be paid for weekly, and labor is the largest single cost for the entire project.  Putting up the walls with bricks also will consume a lot of resources. Obviously, as with any project, there are phases where resource utilizations peak and periods when there is low utilization of resources, especially at the beginning periods for the project and at the end of the project. This requires efficient resource utilization and management so that, for instance, financial resources are not consumed in purchasing materials that are not needed immediately; for instance, roofing bricks do not have to be purchased at the start of the project, though this is a common practice with such projects to purchase and avail all or most required materials at the start of the project.  This will affect the cash flows significantly. As such, the PMBOK recommends that resource utilization be leveled; resource leveling in the context of project management refers to the technique of adjusting the start and finfish dates for projects based on the constraints of resources with the aim of balancing resource demands with the availability of supply.  When undertaking project tasks, it is common for the project manager to simultaneously schedule tasks (as has happened in this project); this means that more resources such as people and machines are needed beyond what is available. The project has established that daily labor demand is for six people; when more tasks are initiated at the same time, it may mean hiring additional labor and/ or materials.  Where single person is required to perform more than a single task, then the tasks must be accordingly rescheduled or undertaken sequentially so that the constraint of labor resource is managed efficiently.  Thus, rescheduling tasks is one method of leveling out resource utilization; this can be achieved well through the use of project management software and adopting a systems thinking approach to managing the project.  The software is useful in resolving conflicts regarding the need for a specific resource for more than a single task.  The software performs an excellent job of automatically calculating delays and then accordingly updating the tasks so that some tasks are delayed until the requisite resources become available.  When projects are complex, resources can be allocated across multiple tasks that are undertaken concurrently and so resource leveling must form part of the project scheduling process.  Especially, resource leveling becomes even more important when some people are unable to attend work, or when some tasks are affected by among other things, weather patterns and the need for reworks.   The table below shows the resource analysis for the project.

Strategies for Project Resource Utilization

All projects, including this project, is an integration of different tasks and teams working together to ensure success of the project.  Each team and team member relies on the other to successfully complete their tasks; projects fail or fail to meet their objectives because resources are poorly allocated and utilized.  The efficient use of resources not only results in the project being optimized, but ensures that the available budget and resources are not overshot, adversely affecting the project.  To efficiently use the available resources, the following strategies are helpful;

Determine project scope in detail and strictly control scope changes:  before allocating resources, the scope of the project must be determined with high levels of accuracy and detail so that the right decisions can be made on how to handle the project resources. A clear project scope is essential in effective and creative allocation and management of resources

Identification of required resources: This implies determining what resources are required for the scope of the project to be met and successfully delivered. The project manager must know the available resources and determine what is needed

Detailed project planning: This entails determining all the tasks necessary to complete the project and establishing the requirements for completing these tasks. The project schedule and WBS are useful tools for determining what resources will be needed to complete various tasks; as such, the process of allocating resources must be done as accurately as possible.  Using the tools of WBS, project schedule, and project management software, the project manager will be able to know where resources will be required and at what instance; this will ensure project resources are effectively utilized.

Adopt systems thinking in resource use and management of the project: Systems thinking is a holistic approach to viewing a project, in which the project manager understands that the project is like a system made up of different elements that have inputs, processes and tools, and outputs.  This holistic approach, as well as the use of creative project management methodologies is important tools for effective resource management. The systems thinking approach not only allows a high level view of the project, but ensures the project manager knows how each element affects others.  This implies adopting approaches such as just in time. Just-In-Time Resourcing (JIT-R) is a useful tool and approach for managing resources in complex projects which entails getting the right staff with the required skills for the project, at the right time. It means there are no resources that lie idle; in this case construction project, it is not advisable to purchase all materials for the entire project at the start, because there is a cost associated with managing inventory at the site. Further, it is not important to bring an electrician on site when the foundation is still being set, as such, the electrician or electrical sub-contractor should not be hired at the commencement of the project.  There is also no need to have an excavator stationed permanently on site, even when the task of the excavator is already done or is not yet due.  Using the JIT approach will ensure, for instance, that the roofing specialist comes in just when the roofing process is about to start and the painter comes in when painting process is just about to begin. These approaches when used together with project management principles and tools, including project management software will ensure efficient and better management of resources to deliver the project successfully.

Risk Management Strategies

Despite the best project plans, most, if not all projects, experience issues that require changes to be made as the project is being executed. This usually implies that the project schedule and scope has to be changed midway through the project, an approach that is likely to incur more costs and delay the project.  Such situations require creativity by the project manager, using tools such as project crashing. Project crashing refers to a method by which project duration is shortened by reducing the required time of one or a given number of tasks found in the critical path to less than the normal activity time in order to complete the project sooner than defined in the PERT or CPM. One method of crashing or reducing the duration of a project is through assigning more labor to the project activities such as using overtime or by using more material resources such as equipment (Badiru, 2009).  For instance, the process of placing or building the first floor slab for this project or placing concrete in the foundation would require a lot of man hours in terms of labor; a better solution would be to allocate a machine ( a concrete pouring of slabing machine) to undertake the task far more efficiently and within a far shorter time period. The machines will work much faster than humans can and its labor costs are not as high as using labor. This way, the project managers will attain a reduction in costs while also successfully crashing the project CPM.  For example, in the project plan, the required time to place the hardcore, the sand blinding, concreting, damp proof course, and allow time for curing is a total of five weeks. Using a machine, the hardcore can be placed within a day or two, and the sand also poured within a period of two days. Human labor can then be used to place the dam proofing material, and then a machine used to pour the foundation slab concrete, taking just about two days. Essentially, the duration for all the tasks will be reduced to just two weeks.  Using human labor, the normal activity cost would be around $ 5000 per week; using a machine that can be hired at a rate of $ 700 per day, the crash time will ensure the costs are significantly reduced to just about $5200, instead of the $15000it would have cost to use human labor for those tasks. The same applies to placing the first floor RCC slab, a machine can do it within a day, charging say $ 1000, plus labor of $ 100, rather than using human labor to complete it over a week at $ 5000. The total crash cost divided by total crash time, gives the new crash costs per week; in this case it is $ 240 per week (1200/5). The main advantage of crashing through shortening time duration, such as using machines or adding labor ensures that a troubled project that has fallen behind schedule can be rescued and the original schedule and time regained.  It is also a useful method when there are forced scope changes or interferences such as weather induced delays so that the delivery date (time constraint) is not exceeded. It is also a useful method for lowering costs, paying for overtime for say four days may result in a task being completed within four days, instead of the originally scheduled five days, ensuring cost savings and faster execution of tasks. The major disadvantage of crashing is that it can lead to extra financial resources being used for the project. This means that while a project may be delivered on time, it can overshoot the budget. As such, a project manager needs to use the systems thinking approach to manage the project crashing initiative as this will help them know how crashing affects other elements of the project, including stakeholder expectations.

Cash Flow Analysis and Profitability

As with any other project, the construction project is subject to risks: risks will always be associated with projects; the important thing is to know how to handle these risks through an elaborate risk management plan.  A risk management plan refers to a document prepared by the project manager to predict risks, estimate the impacts of such risks, and define mitigation and contingency measures against these risks (Cretu, Stewart , & Berends, 2011).  The risks inherent to this project include the following;

The cash flow analysis evaluates how cash will be used in the project, as well as expected cash; for this project, most cash will be expended during construction, while cash inflows will occur at the end when the project has been completed. The cash flow analysis is undertaken by constructing and evaluating the cash flows. This project makes the assumption that the finished house will sold at the end of its construction at current rates.  The cash flow diagram was prepared in MS Excel as shown below;

The assumption made is that the money used for the construction is borrowed from a bank at 6% per annum and at the end of the construction, the house is sold for $ 690000. At the initial phases, the cash outflows will be much less as this involves the planning and design phases and getting things in place before commencing the project. However, as construction begins, cash outflows increase because of labor and materials costs, and they decline at the sixth and seventh months, when the construction is complete and the project is delivered. All this time, the cash flows are negative as resources and cash are being expended to construct the house. However, at the end of the project, there is a massive positive cash flow from the sale of the house at $ 690000

From this evaluation, the project is a profitable one; this is because it is envisaged to consume a total of $ 352765.05 if the contingency amount is also gobbled up; the house will be sold for about $ 690000. Factoring in a capital gains tax at 15% which comes to 50585.2425, the project will make a pr9ofit of $ 286649.70

References

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Badiru, A. B. (2009). STEP project management: guide for science, technology, and engineering projects. Boca Raton, CRC Press.

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Burtonshaw-Gunn, S. A. (2017). Risk and Financial Management in Construction. Hoboken, Wiley.

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Cretu, O., Stewart, R., & Berends, T. (2011). Risk management for design and construction. Hoboken, Wiley.

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Mardzuki, M. , R. (2013). Project crashing in construction industry: investigation of the strategies, challenges and impacts. Kuantan, Pahang, UMP.

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Parker, D. W., & Craig, M. A. (2008). Managing projects, managing people. South Yarra, Vic, Macmillan Education.

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Smith, N. J., Jobling, P., & Merna, T. (2014). Managing risk in construction projects. West Sussex [u.a.], Wiley.

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