Project Management for Construction Projects

Actual cost of work performed
a.k.a. actual cost (AC)

= what is paid for an activity

Budgeted cost of work performed
a.k.a. earned value (EV)

= total cost * % work done

The expected cost needed to complete all the remaining work in the project.

Original estimate                  ECT = BAC - BCWP

Cost deviation accounted   ECT = (BAC - BCWP) / CPI

The expected total cost of the project.

EAC = ACWP + ECT = BAC - CV

Critical path ignorant

SPI is not intuitive (measures SPI in cost and not units of time)

Needs a lot of information

Difficult to implement (need to track costs and progress, %completion hard to track)

It includes all the processes and activities that determine quality policies, objectives, and responsibilities so that the project will satisfy the needs, for which it was undertaken.

Planned systematic actions established to get a level of confidence that project design documents comply with applicable codes and criteria and that the resulting construction complies with the contract documents.

The main difference between internal and external failure costs is the moment in time when the failure is discovered.

Internal: when poor-quality products are discovered before they are delivered

External: after delivering (e.g. customer complaint cost, product return cost, warranty claim cost...)

Aims to:

• increase the probability and impact of positive events
• decrease the probability and impact of negative events
• to create value
  resources expended to mitigate risk should be less than the consequence of inaction

1. Plan risk management

2. Identify risk

3. Qualitative analysis

4. Quantitative analysis

5. Plan risk response

6. Monitor and control risk

The RBS is a hierarchically organized depiction of the identified risks arranged by risk category and subcategory that identifies the various areas and causes of potential risks.

The identified risks are summarized in a risk register (or risk portfolio).

After identifying the risks, the risks need to be described in as much detail as is reasonable.

Qualtitative Risk Analyis

• used for initial assessments (fast and not much data needed)
• based on subjective opinions --> very dependent on the expert's opinions
• a prioritization of risk reduction measures is difficult

Quantitative Risk Analysis

• most important risks (established with quantitative RA) are further examined
• data needed
• developed model should always be validated
• Approaches:
  • expected values
  • decision trees
  • simulations (e.g. Monte-Carlo)
  • etc..

Strategies to reduce the risks to an acceptable level.

Reaction options to negative risk:

• Acceptance
• Avoidance
• Mitigation / Reduction
• Transfer of risks

Reaction options to negative risk (opportunities):

• Exploiting (eliminate uncertainty --> ensure it happens)
• Sharing (involve a third party who is best able to capture the opportunity)
• Enhancing (increase probability or impact)
• Accepting (not actively pursue it)

The closeout is the last subphase of the construction/implementation phase of a project.

Is often not properly carried out --> leads to discontent

Includes

• Handover of the project to the end client
• removal of defects
• final invoices for the contractors
• check if every contractor completed their work

1. Project closeout
2. Client closeout
3. Organisational closeout
4. Final report
5. Team closeout

A stakeholder is a person or an entity, which is involved in or affected by a project.

Some might even have influence on the project.

Distinctions:

• Direct stakeholders: directly associated or involved
• Indirect stakeholders: indirectly (e.g. national or local government)
   
• Positive stakeholders: likely to have a favourable impact
• Negative stakeholders: likely to have a detrimental impact

1. Identify stakeholders

2. Plan communication

3. Distribute information

4. Manage expectations

5. Report performance

A power interest matrix (or mendelow's matrix) can be used to visualise the stakeholder of a project.

An instrument for the stakeholder management,
which controls how the communication between the stakeholders takes place.

• what kind of information should be received by which stakeholder
• how and when the information is delivered

Not all information should be shared with every stakeholder!

As a project manager, not only competent knowledge but also social and interpersonal skills are important.

• Team building
• Motivation
• Communication
• Influence
• Decision-making
• Political and cultural awareness
• Negotiation

Agile project management

• iterative and incremental approach
• instead of sticking to a pre-defined plan
  --> tries to flexibly respond to changes and uncertainties during a project
• these responses are done with a step-by-step approach
• all about efficient communication
• instead of insisting on pre-defined processes
  --> work procedure, which suits the participating individuals the most

"A way to design production systems to minimise waste of materials, time, and effort in order to generate the maximum possible amount of value."

"Just-in-time" concept:

To only produce "what is needed, when is needed, and in the amount is needed."

"Jidoka" concept:

Can be loosely translated as "automation with a human touch" and means that the equipment stops immediately when a problem in the production line occurs, thereby preventing defective products from being produced and allowing the workers to directly solve the problem.

1. Identify customers and specify value

2. Identify and map the value stream

3. Create flow by eliminating waste

4. Respond to customer pull

5. Pursue perfection (iterative process --> cycle begins again)

Lean technique for how a workspace can be efficiently and effectively organised.

Sort (sorting out all unnecessary items at a location)

Straighten (creating a smooth, straight workflow)

Shine (cleaning and inspecting on a regualr basis)

Standardise (standardisation of the first three "S" pratices)

Sustain (sustaining the established processes through self-discipline)

A lean technique used to identify the cause-and-effect relationships regarding a particular problem.

Improving communication and promoting collaboration

Eliminating waste and errors

Direct intervention to drive immediate and apparent change

Improving work planning and forward scheduling

Specifying value from the perspective of the costumer

Identify the processes that deliver costumer value (the value stream)

Ensuring the work environment is clean and safe

Time (looking for things, ordering materials)

Transport (materials, handling deliveries)

Staff downtime (waiting for instructions, information and deliveries)

Rework and corrections (correcting poor or incorrect work and updating plans)

Overproduction (producing more than needed)

Inventory (too much or too little stock on hand)

Following features of the LPDS are essential:

• the project is structured and managed as a value generating process
• project control has the job of execution instead of reliance on after-the-fact variance detection
• optimisation efforts are focused on making workflow reliable instead of improving productivity
• pull techniques are used to govern the flow of materials and information
• capacity and inventory buffers are used to absorb variability
• feedback loops are incorporated at every level, dedicated to rapid system adjustment

• Collaborative and iterative project planning system
• Planning takes place on different process levels
• should yield to a completion of the project
  because problems are discovered and solved before they become an impairment
• results in a more reliable schedule
  because the people, which actually do the work, are directly involved in the planning

Project management is the discipline of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria.

A project is an organized effort with a specific goal.

General definition:

1. Starting the project
2. Organizing and preparing
3. Carrying out the project work
4. Closing the project

According to SIA 112:

1. Strategic planning
   1. Definition of needs, solution strategies
2. Preliminary studies
   1. Project definition, feasibility study
   2. Selection procedures
3. Project development
   1. Preliminary project
   2. Construction project
   3. Permit-obtaining procedure / submitted project
4. Invitation to Bid
   1. Invitation to bid, comparison of quotations
5. Construction / Implementation
   1. Construction project
   2. Implementation
   3. Commissioning, completion
6. Management
   1. Operation
   2. Maintenance