. Critical Chain Project Management Applied In Construction Business
Introduction 5
Chapter I: A Theoretical Approach of Project Management for Construction 6
I.1 Construction Project Basics 6
I.1.1 What is Project Management for Construction? 6
I.1.2 Main Stages in Project Management for Construction 10
I.1.3 Labor, Material and Equipment Utilization 12
I.1.3.1 Labor Productivity 12
I.1.3.2 Materials Management 13
I.1.3.3 Construction Equipment 14
I.1.4 Constructed Facilities and Costs 15
I.1.5 Risk Associated with the Construction Process 17
I.1.6 Professional Construction Management 21
I.1.7 Leadership and Motivation for the Project Team 22
I.1.8 Design and Construction as an Integrated System 25
I.2 Developing the Plan 26
I.2.1 Basic Concepts in the Development of Construction Plans 26
I.2.2 Choice of Technology and Construction Method 29
I.2.3 Defining Work Tasks 30
I.2.4 Defining Activity Logic 34
I.2.5 Estimating Resource Requirements for Work Activities 37
I.2.6 Allocation of Construction Costs over Time 38
I.2.7 The Critical Path Method 39
I.2.8 THE CRITICAL CHAIN METHOD 40
Step 1: Identify the project constraint 43
Step 2: Exploit the constraint 45
Step 3: Subordinate merging paths to the critical chain 46
Step 4: Elevate the constraint 47
Chapter II: IMPACT SA – Company Presentation 49
II.1 Presentation 49
II.1.1 Mission 49
II.1.2 Realised Projects 49
II.1.3 Products 51
II.1.4 Actual Projects 52
II.1.5 Future Projects 53
II.2 Organization of the company Impact SA 54
II.2.1 Type of organizational structure 54
II.2.2 What is a Project Manager within the Company? 57
Chapter III Simulating a Construction Project – The Innovative Learning Campus 62
III.1 Project initiation process – Pre-construction Phases 62
III.2 Planning the construction project 64
III.2.1 Choosing the software tools 64
III.2.2 Defining General Project Information and The Project Calendar 65
III.2.3 WBS and Task Logic 66
III.2.4 Setting up Resources 67
III.2.5 Allocating Resources 68
III.2.6 Adding buffers to protect the critical chain 69
III.3 Exploiting the plan using buffer management 71
III.4 Communication Project Information to Stakeholders 75
Chapter IV: Conclusions and Recommendations 78
IV.1 Improving the project management system is a necessity 78
IV.2 The throughput world 79
IV.3 External Constraints 80
IV.4 Critical Chain and Win-Win relationships 81
IV.5 Number of Tasks 81
IV.6 Cutting the project buffer 82
IV.7 Extending the critical chain to multi-project environments 82
IV.8 Improving project management with help of software tools 83
Bibliography 85
Introduction
The goal of this paper is to present the advantages occurring from the introduction of the Critical Chain Method in the construction projects with the help of modern technology and software tools.
Chapter 1 presents some general concepts on which project management is based and around which MS Project, the software program used for the simulation, is designed to function. Details about the construction projects are presented here along with the Critical Chain Method and how it is likely to improve the performance of a project.
Chapter 2 gives a short presentation of IMPACT SA, the company where the study case was conducted
Chapter 3 is an application of the concepts presented in the first chapter to a simulated construction project. The case study revolves around the implementation of the critical chain method to a single project and also describes how a project manager can use a software tool (in this case MS Project 2002) for this purpose.
Chapter 4 concludes the paper and gives some recommendations on how to implement this method.
This research paper was written with the help of the staff of the Planning and Control Department at Impact SA, whom I would like to thank for giving me the opportunity to see how project management is applied in a real life business environment. Impact has an organizational structure which encourages the development of several projects in parallel and this is why project management and the project manager are crucial to the company’s activity.
Chapter I: A Theoretical Approach of Project Management for Construction
I.1 Construction Project Basics
I.1.1 What is Project Management for Construction?
Like the five blind men encountering different parts of an elephant, each of the numerous participants in the process of planning, designing, financing, constructing and operating physical facilities has a different perspective on project management for construction. Specialized knowledge can be very beneficial, particularly in large and complicated projects, since experts in various specialties can provide valuable services. However, it is advantageous to understand how the different parts of the process fit together. Waste, excessive cost and delays can result from poor coordination and communication among specialists. It is particularly in the interest of owners to insure that such problems do not occur. And it behooves all participants in the process to heed the interests of owners because, in the end, it is the owners who provide the resources and call the shots.
By adopting the viewpoint of the owners, we can focus our attention on the complete process of project management for constructed facilities rather than the historical roles of various specialists such as planners, architects, engineering designers, constructors, fabricators, material suppliers, financial analysts and others. To be sure, each specialty has made important advances in developing new techniques and tools for efficient implementation of construction projects. However, it is through the understanding of the entire process of project management that these specialists can respond more effectively to the owner's desires for their services, in marketing their specialties, and in improving the productivity and quality of their work.
Improvement of project management not only can aid the construction industry, but may also be the engine for the national and world economy. However, if we are to make meaningful improvements, we must first understand the construction industry, its operating environment and the institutional constraints affecting its activities as well as the nature of project management.
The management of construction projects requires knowledge of modern management as well as an understanding of the design and construction process. Construction projects have a specific set of objectives and constraints such as a required time frame for completion. While the relevant technology, institutional arrangements or processes will differ, the management of such projects has much in common with the management of similar types of projects in other specialty or technology domains such as aerospace, pharmaceutical and energy developments.
Generally, project management is distinguished from the general management of corporations by the mission-oriented nature of a project. A project organization will generally be terminated when the mission is accomplished. According to the Project Management Institute, the discipline of project management can be defined as follows:
Project management is the art of directing and coordinating human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives of scope, cost, time, quality and participation satisfaction.
By contrast, the general management of business and industrial corporations assumes a broader outlook with greater continuity of operations. Nevertheless, there are sufficient similarities as well as differences between the two so that modern management techniques developed for general management may be adapted for project management.
The basic ingredients for a project management framework may be represented schematically in Figure 1-1. A working knowledge of general management and familiarity with the special knowledge domain related to the project are indispensable. Supporting disciplines such as computer science and decision science may also play an important role. In fact, modern management practices and various special knowledge domains have absorbed various techniques or tools which were once identified only with the supporting disciplines. For example, computer-based information systems and decision support systems are now common-place tools for general management. Similarly, many operations research techniques such as linear programming and network analysis are now widely used in many knowledge or application domains. Hence, the representation in Figure 1-1 reflects only the sources from which the project management framework evolves.
Figure I.1.1: Basic Ingredients in Project Management
Specifically, project management in construction encompasses a set of objectives which may be accomplished by implementing a series of operations subject to resource constraints. There are potential conflicts between the stated objectives with regard to scope, cost, time and quality, and the constraints imposed on human material and financial resources. These conflicts should be resolved at the onset of a project by making the necessary tradeoffs or creating new alternatives. Subsequently, the functions of project management for construction generally include the following:
Specification of project objectives and plans including delineation of scope, budgeting, scheduling, setting performance requirements, and selecting project participants.
Maximization of efficient resource utilization through procurement of labor, materials and equipment according to the prescribed schedule and plan.
Implementation of various operations through proper coordination and control of planning, design, estimating, contracting and construction in the entire process.
Development of effective communications and mechanisms for resolving conflicts among the various participants.
The Project Management Institute focuses on nine distinct areas requiring project manager knowledge and attention:
Project integration management to ensure that the various project elements are effectively coordinated.
Project scope management to ensure that all the work required (and only the required work) is included.
Project time management to provide an effective project schedule.
Project cost management to identify needed resources and maintain budget control.
Project quality management to ensure functional requirements are met.
Project human resource management to development and effectively employ project personnel.
Project communications management to ensure effective internal and external communications.
Project risk management to analyze and mitigate potential risks.
Project procurement management to obtain necessary resources from external sources.
These nine areas form the basis of the Project Management Institute's certification program for project managers in any industry.
The development of a construction plan is very much analogous to the development of a good facility design. The planner must weigh the costs and reliability of different options while at the same time insuring technical feasibility. Construction planning is more difficult in some ways since the building process is dynamic as the site and the physical facility change over time as construction proceeds. On the other hand, construction operations tend to be fairly standard from one project to another, whereas structural or foundation details might differ considerably from one facility to another.
I.1.2 Main Stages in Project Management for Construction
Forming a good construction plan is an exceptionally challenging problem. There are numerous possible plans available for any given project. While past experience is a good guide to construction planning, each project is likely to have special problems or opportunities that may require considerable ingenuity and creativity to overcome or exploit. Unfortunately, it is quite difficure sufficient similarities as well as differences between the two so that modern management techniques developed for general management may be adapted for project management.
The basic ingredients for a project management framework may be represented schematically in Figure 1-1. A working knowledge of general management and familiarity with the special knowledge domain related to the project are indispensable. Supporting disciplines such as computer science and decision science may also play an important role. In fact, modern management practices and various special knowledge domains have absorbed various techniques or tools which were once identified only with the supporting disciplines. For example, computer-based information systems and decision support systems are now common-place tools for general management. Similarly, many operations research techniques such as linear programming and network analysis are now widely used in many knowledge or application domains. Hence, the representation in Figure 1-1 reflects only the sources from which the project management framework evolves.
Figure I.1.1: Basic Ingredients in Project Management
Specifically, project management in construction encompasses a set of objectives which may be accomplished by implementing a series of operations subject to resource constraints. There are potential conflicts between the stated objectives with regard to scope, cost, time and quality, and the constraints imposed on human material and financial resources. These conflicts should be resolved at the onset of a project by making the necessary tradeoffs or creating new alternatives. Subsequently, the functions of project management for construction generally include the following:
Specification of project objectives and plans including delineation of scope, budgeting, scheduling, setting performance requirements, and selecting project participants.
Maximization of efficient resource utilization through procurement of labor, materials and equipment according to the prescribed schedule and plan.
Implementation of various operations through proper coordination and control of planning, design, estimating, contracting and construction in the entire process.
Development of effective communications and mechanisms for resolving conflicts among the various participants.
The Project Management Institute focuses on nine distinct areas requiring project manager knowledge and attention:
Project integration management to ensure that the various project elements are effectively coordinated.
Project scope management to ensure that all the work required (and only the required work) is included.
Project time management to provide an effective project schedule.
Project cost management to identify needed resources and maintain budget control.
Project quality management to ensure functional requirements are met.
Project human resource management to development and effectively employ project personnel.
Project communications management to ensure effective internal and external communications.
Project risk management to analyze and mitigate potential risks.
Project procurement management to obtain necessary resources from external sources.
These nine areas form the basis of the Project Management Institute's certification program for project managers in any industry.
The development of a construction plan is very much analogous to the development of a good facility design. The planner must weigh the costs and reliability of different options while at the same time insuring technical feasibility. Construction planning is more difficult in some ways since the building process is dynamic as the site and the physical facility change over time as construction proceeds. On the other hand, construction operations tend to be fairly standard from one project to another, whereas structural or foundation details might differ considerably from one facility to another.
I.1.2 Main Stages in Project Management for Construction
Forming a good construction plan is an exceptionally challenging problem. There are numerous possible plans available for any given project. While past experience is a good guide to construction planning, each project is likely to have special problems or opportunities that may require considerable ingenuity and creativity to overcome or exploit. Unfortunately, it is quite difficult to provide direct guidance concerning general procedures or strategies to form good plans in all circumstances. There are some recommendations or issues that can be addressed to describe the characteristics of good plans, but this does not necessarily tell a planner how to discover a good plan. However, as in the design process, strategies of decomposition in which planning is divided into sub problems and hierarchical planning in which general activities are repeatedly subdivided into more specific tasks can be readily adopted in many cases.
From the standpoint of construction contractors or the construction divisions of large firms, the planning process for construction projects consists of three stages that take place between the moment in which a planner starts the plan for the construction of a facility to the moment in which the evaluation of the final output of the construction process is finished.
The estimate stage involves the development of a cost and duration estimate for the construction of a facility as part of the proposal of a contractor to an owner. It is the stage in which assumptions of resource commitment to the necessary activities to build the facility are made by a planner. A careful and thorough analysis of different conditions imposed by the construction project design and by site characteristics are taken into consideration to determine the best estimate. The success of a contractor depends upon this estimate, not only to obtain a job but also to construct the facility with the highest profit. The planner has to look for the time-cost combination that will allow the contractor to be successful in his commitment. The result of a high estimate would be to lose the job, and the result of a low estimate could be to win the job, but to lose money in the construction process. When changes are done, they should improve the estimate, taking into account not only present effects, but also future outcomes of succeeding activities. It is very seldom the case in which the output of the construction process exactly echoes the estimate offered to the owner.
In the monitoring and control stage of the construction process, the construction manager has to keep constant track of both activities' durations and ongoing costs. It is misleading to think that if the construction of the facility is on schedule or ahead of schedule, the cost will also be on the estimate or below the estimate, especially if several changes are made. Constant evaluation is necessary until the construction of the facility is complete. When work is finished in the construction process, and information about it is provided to the planner, the third stage of the planning process can begin.
The evaluation stage is the one in which results of the construction process are matched against the estimate. A planner deals with this uncertainty during the estimate stage. Only when the outcome of the construction process is known is he/she able to evaluate the validity of the estimate. It is in this last stage of the planning process that he or she determines if the assumptions were correct. If they were not or if new constraints emerge, he/she should introduce corresponding adjustments in future planning.
I.1.3 Labor, Material and Equipment Utilization
Good project management in construction must vigorously pursue the efficient utilization of labor, material and equipment. Improvement of labor productivity should be a major and continual concern of those who are responsible for cost control of constructed facilities. Material handling, which includes procurement, inventory, shop fabrication and field servicing, requires special attention for cost reduction. The use of new equipment and innovative methods has made possible wholesale changes in construction technologies in recent decades. Organizations which do not recognize the impact of various innovations and have not adapted to changing environments have justifiably been forced out of the mainstream of construction activities.
Observing the trends in construction technology presents a very mixed and ambiguous picture. On the one hand, many of the techniques and materials used for construction are essentially unchanged since the introduction of mechanization in the early part of the twentieth century. In contrast to this view of one large project, one may also point to the continual change and improvements occurring in traditional materials and techniques.
I.1.3.1 Labor Productivity
Productivity in construction is often broadly defined as output per labor hour. Since labor constitutes a large part of the construction cost and the quantity of labor hours in performing a task in construction is more susceptible to the influence of management than are materials or capital, this productivity measure is often referred to as labor productivity. However, it is important to note that labor productivity is a measure of the overall effectiveness of an operating system in utilizing labor, equipment and capital to convert labor efforts into useful output, and is not a measure of the capabilities of labor alone. For example, by investing in a piece of new equipment to perform certain tasks in construction, output may be increased for the same number of labor hours, thus resulting in higher labor productivity.
Construction output may be expressed in terms of functional units or constant dollars. In the former case, labor productivity is associated with units of product per labor hour, such as cubic yards of concrete placed per hour or miles of highway paved per hour. In the latter case, labor productivity is identified with value of construction (in constant dollars) per labor hour. The value of construction in this regard is not measured by the benefit of constructed facilities, but by construction cost. Labor productivity measured in this way requires considerable care in interpretation.
I.1.3.2 Materials Management
Materials management is an important element in project planning and control. Materials represent a major expense in construction, so minimizing procurement or purchase costs presents important opportunities for reducing costs. Poor materials management can also result in large and avoidable costs during construction. First, if materials are purchased early, capital may be tied up and interest charges incurred on the excess inventory of materials. Even worse, materials may deteriorate during storage or be stolen unless special care is taken. For example, electrical equipment often must be stored in waterproof locations. Second, delays and extra expenses may be incurred if materials required for particular activities are not available. Accordingly, insuring a timely flow of material is an important concern of project managers.
Materials management is not just a concern during the monitoring stage in which construction is taking place. Decisions about material procurement may also be required during the initial planning and scheduling stages. For example, activities can be inserted in the project schedule to represent purchasing of major items such as elevators for buildings. The availability of materials may greatly influence the schedule in projects with a fast track or very tight time schedule: sufficient time for obtaining the necessary materials must be allowed. In some case, more expensive suppliers or shippers may be employed to save time.
Materials management is also a problem at the organization level if central purchasing and inventory control is used for standard items. In this case, the various projects undertaken by the organization would present requests to the central purchasing group. In turn, this group would maintain inventories of standard items to reduce the delay in providing material or to obtain lower costs due to bulk purchasing. This organizational materials management problem is analogous to inventory control in any organization facing continuing demand for particular items.
Materials ordering problems lend themselves particularly well to computer based systems to insure the consistency and completeness of the purchasing process. In the manufacturing realm, the use of automated materials requirements planning systems is common. In these systems, the master production schedule, inventory records and product component lists are merged to determine what items must be ordered, when they should be ordered, and how much of each item should be ordered in each time period. The heart of these calculations is simple arithmetic: the projected demand for each material item in each period is subtracted from the available inventory. When the inventory becomes too low, a new order is recommended. For items that are non-standard or not kept in inventory, the calculation is even simpler since no inventory must be considered. With a materials requirement system, much of the detailed record keeping is automated and project managers are alerted to purchasing requirements.
I.1.3.3 Construction Equipment
The selection of the appropriate type and size of construction equipment often affects the required amount of time and effort and thus the job-site productivity of a project. It is therefore important for site managers and construction planners to be familiar with the characteristics of the major types of equipment most commonly used in construction.
The volume of production realized by equipment depends on the capacity of the equipment, the user, and the supervisors at the construction site. There is sometimes the tendency to overuse the equipment to increase the production, but the equipment is made to be efficient on long term. The gains from production obtained by overusing the equipment will be exceeded by additional costs for repairs and the effects of shortening the life of the equipment. Usually a high cost with repairs indicates a high degree of obsolence, bad maintenance or bad usage. They may also show a bad selection of the equipment to be used, supervision and usage inefficiency.
Equipment is distributed by activities according to the initial schedule and is allocated and leveled to improve the program for budget, construction time and equipment availability.
I.1.4 Constructed Facilities and Costs
The costs of a constructed facility to the owner include both the initial capital cost and the subsequent operation and maintenance costs. Each of these major cost categories consists of a number of cost components.
The capital cost for a construction project includes the expenses related to the initial establishment of the facility:
Land acquisition, including assembly, holding and improvement
Planning and feasibility studies
Architectural and engineering design
Construction, including materials, equipment and labor
Field supervision of construction
Construction financing
Insurance and taxes during construction
Owner's general office overhead
Equipment and furnishings not included in construction
Inspection and testing
The operation and maintenance cost in subsequent years over the project life cycle includes the following expenses:
Land rent, if applicable
Operating staff
Labor and material for maintenance and repairs
Periodic renovations
Insurance and taxes
Financing costs
Utilities
Owner's other expenses
The magnitude of each of these cost components depends on the nature, size and location of the project as well as the management organization, among many considerations. The owner is interested in achieving the lowest possible overall project cost that is consistent with its investment objectives.
It is important for design professionals and construction managers to realize that while the construction cost may be the single largest component of the capital cost, other cost components are not insignificant. For example, land acquisition costs are a major expenditure for building construction in high-density urban areas, and construction financing costs can reach the same order of magnitude as the construction cost in large projects such as the construction of nuclear power plants.
From the owner's perspective, it is equally important to estimate the corresponding operation and maintenance cost of each alternative for a proposed facility in order to analyze the life cycle costs. The large expenditures needed for facility maintenance, especially for publicly owned infrastructure, are reminders of the neglect in the past to consider fully the implications of operation and maintenance cost in the design stage.
In most construction budgets, there is an allowance for contingencies or unexpected costs occurring during construction. This contingency amount may be included within each cost item or be included in a single category of construction contingency. The amount of contingency is based on historical experience and the expected difficulty of a particular construction project. For example, one construction firm makes estimates of the expected cost in five different areas:
Design development changes,
Schedule adjustments,
General administration changes (such as wage rates),
Differing site conditions for those expected, and
Third party requirements imposed during construction, such as new permits.
Contingent amounts not spent for construction can be released near the end of construction to the owner or to add additional project elements.
I.1.5 Risk Associated with the Construction Process
The programming of capital projects is shaped by the strategic plan of an organization, which is influenced by market demands and resources constraints. The programming process associated with planning and feasibility studies sets the priorities and timing for initiating various projects to meet the overall objectives of the organizations. However, once this decision is made to initiate a project, market pressure may dictate early and timely completion of the facility.
The uncertainty in undertaking a construction project comes from many sources and often involves many participants in the project. Since each participant tries to minimize its own risk, the conflicts among various participants can be detrimental to the project. Only the owner has the power to moderate such conflicts as it alone holds the key to risk assignment through proper contractual relations with other participants. Failure to recognize this responsibility by the owner often leads to undesirable results. In recent years, the concept of "risk sharing/risk assignment" contracts has gained acceptance by the federal government. Since this type of contract acknowledges the responsibilities of the owners, the contract prices are expected to be lower than those in which all risks are assigned to contractors.
In approaching the problem of uncertainty, it is important to recognize that incentives must be provided if any of the participants is expected to take a greater risk. The willingness of a participant to accept risks often reflects the professional competence of that participant as well as its propensity to risk. However, society's perception of the potential liabilities of the participant can affect the attitude of risk-taking for all participants. When a claim is made against one of the participants, it is difficult for the public to know whether a fraud has been committed, or simply that an accident has occurred.
Risks in construction projects may be classified in a number of ways. One form of classification is as follows:
Socioeconomic factors
Environmental protection
Public safety regulation
Economic instability
Exchange rate fluctuation
Organizational relationships
Contractual relations
Attitudes of participants
Communication
Technological problems
Design assumptions
Site conditions
Construction procedures
Construction occupational safety
The environmental protection movement has contributed to the uncertainty for construction because of the inability to know what will be required and how long it will take to obtain approval from the regulatory agencies. The requirements of continued re-evaluation of problems and the lack of definitive criteria which are practical have also resulted in added costs. Public safety regulations have similar effects, which have been most noticeable in the energy field involving nuclear power plants and coal mining. The situation has created constantly shifting guidelines for engineers, constructors and owners as projects move through the stages of planning to construction. These moving targets add a significant new dimension of uncertainty which can make it virtually impossible to schedule and complete work at budgeted cost. Economic conditions of the past decade have further reinforced the climate of uncertainty with high inflation and interest rates. The deregulation of financial institutions has also generated unanticipated problems related to the financing of construction.
Uncertainty stemming from regulatory agencies, environmental issues and financial aspects of construction should be at least mitigated or ideally eliminated. Owners are keenly interested in achieving some form of breakthrough that will lower the costs of projects and mitigate or eliminate lengthy delays. Such breakthroughs are seldom planned. Generally, they happen when the right conditions exist, such as when innovation is permitted or when a basis for incentive or reward exists. However, there is a long way to go before a true partnership of all parties involved can be forged.
During periods of economic expansion, major capital expenditures are made by industries and bid up the cost of construction. In order to control costs, some owners attempt to use fixed price contracts so that the risks of unforeseen contingencies related to an overheated economy are passed on to contractors. However, contractors will raise their prices to compensate for the additional risks.
The risks related to organizational relationships may appear to be unnecessary but are quite real. Strained relationships may develop between various organizations involved in the design/construct process. When problems occur, discussions often center on responsibilities rather than project needs at a time when the focus should be on solving the problems. Cooperation and communication between the parties are discouraged for fear of the effects of impending litigation. This barrier to communication results from the ill-conceived notion that uncertainties resulting from technological problems can be eliminated by appropriate contract terms. The net result has been an increase in the costs of constructed facilities.
The risks related to technological problems are familiar to the design/construct professions which have some degree of control over this category. However, because of rapid advances in new technologies which present new problems to designers and constructors, technological risk has become greater in many instances. Certain design assumptions which have served the professions well in the past may become obsolete in dealing with new types of facilities which may have greater complexity or scale or both. Site conditions, particularly subsurface conditions which always present some degree of uncertainty, can create an even greater degree of uncertainty for facilities with heretofore unknown characteristics during operation. Because construction procedures may not have been fully anticipated, the design may have to be modified after construction has begun. An example of facilities which have encountered such uncertainty is the nuclear power plant, and many owners, designers and contractors have suffered for undertaking such projects.
If each of the problems cited above can cause uncertainty, the combination of such problems is often regarded by all parties as being out of control and inherently risky. Thus, the issue of liability has taken on major proportions and has influenced the practices of engineers and constructors, who in turn have influenced the actions of the owners.
Many owners have begun to understand the problems of risks and are seeking to address some of these problems. For example, some owners are turning to those organizations that offer complete capabilities in planning, design, and construction, and tend to avoid breaking the project into major components to be undertaken individually by specialty participants. Proper coordination throughout the project duration and good organizational communication can avoid delays and costs resulting from fragmentation of services, even though the components from various services are eventually integrated.
Attitudes of cooperation can be readily applied to the private sector, but only in special circumstances can they be applied to the public sector. The ability to deal with complex issues is often precluded in the competitive bidding which is usually required in the public sector. The situation becomes more difficult with the proliferation of regulatory requirements and resulting delays in design and construction while awaiting approvals from government officials who do not participate in the risks of the project.
I.1.6 Professional Construction Management
Professional construction management refers to a project management team consisting of a professional construction manager and other participants who will carry out the tasks of project planning, design and construction in an integrated manner. Contractual relationships among members of the team are intended to minimize adversarial relationships and contribute to greater response within the management group. A professional construction manager is a firm specialized in the practice of professional construction management which includes:
Work with owner and other firms from the beginning and make recommendations on design improvements, construction technology, schedules and construction economy.
Propose design and construction alternatives if appropriate, and analyze the effects of the alternatives on the project cost and schedule.
Monitor subsequent development of the project in order that these targets are not exceeded without the knowledge of the owner.
Coordinate procurement of material and equipment and the work of all construction contractors, and monthly payments to contractors, changes, claims and inspection for conforming design requirements.
Perform other project related services as required by owners.
Professional construction management is usually used when a project is very large or complex. The organizational features that are characteristics of mega-projects can be summarized as follows:
The overall organizational approach for the project will change as the project advances. The "functional" organization may change to a "matrix" which may change to a "project" organization (not necessarily in this order).
Within the overall organization, there will probably be functional, project, and matrix sub organizations all at the same time. This feature greatly complicates the theory and the practice of management, yet is essential for overall cost effectiveness.
Successful giant, complex organizations usually have a strong matrix-type sub organization at the level where basic cost and schedule control responsibility is assigned. This sub organization is referred to as a "cost center" or as a "project" and is headed by a project manager. The cost center matrix may have participants assigned from many different functional groups. In turn, these functional groups may have technical reporting responsibilities to several different and higher tiers in the organization. The key to a cost effective effort is the development of this project sub organization into a single team under the leadership of a strong project manager.
The extent to which decision-making will be centralized or decentralized is crucial to the organization of the mega-project.
Consequently, it is important to recognize the changing nature of the organizational structure as a project is carried out in various stages
I.1.7 Leadership and Motivation for the Project Team
The project manager, in the broadest sense of the term, is the most important person for the success or failure of a project. The project manager is responsible for planning, organizing and controlling the project. In turn, the project manager receives authority from the management of the organization to mobilize the necessary resources to complete a project.
The project manager must be able to exert interpersonal influence in order to lead the project team. The project manager often gains the support of his/her team through a combination of the following:
Formal authority resulting from an official capacity which is empowered to issue orders.
Reward and/or penalty power resulting from his/her capacity to dispense directly or indirectly valued organization rewards or penalties.
Expert power when the project manager is perceived as possessing special knowledge or expertise for the job.
Attractive power because the project manager has a personality or other characteristics to convince others.
In a matrix organization, the members of the functional departments may be accustomed to a single reporting line in a hierarchical structure, but the project manager coordinates the activities of the team members drawn from functional departments. The functional structure within the matrix organization is responsible for priorities, coordination, administration and final decisions pertaining to project implementation. Thus, there are potential conflicts between functional divisions and project teams. The project manager must be given the responsibility and authority to resolve various conflicts such that the established project policy and quality standards will not be jeopardized. When contending issues of a more fundamental nature are developed, they must be brought to the attention of a high level in the management and be resolved expeditiously.
In general, the project manager's authority must be clearly documented as well as defined, particularly in a matrix organization where the functional division managers often retain certain authority over the personnel temporarily assigned to a project. The following principles should be observed:
The interface between the project manager and the functional division managers should be kept as simple as possible.
The project manager must gain control over those elements of the project which may overlap with functional division managers.
The project manager should encourage problem solving rather than role playing of team members drawn from various functional divisions.
While a successful project manager must be a good leader, other members of the project team must also learn to work together, whether they are assembled from different divisions of the same organization or even from different organizations. Some problems of interaction may arise initially when the team members are unfamiliar with their own roles in the project team, particularly for a large and complex project. These problems must be resolved quickly in order to develop an effective, functioning team.
Many of the major issues in construction projects require effective interventions by individuals, groups and organizations. The fundamental challenge is to enhance communication among individuals, groups and organizations so that obstacles in the way of improving interpersonal relations may be removed. Some behavior science concepts are helpful in overcoming communication difficulties that block cooperation and coordination. In very large projects, professional behavior scientists may be necessary in diagnosing the problems and advising the personnel working on the project. The power of the organization should be used judiciously in resolving conflicts.
The major symptoms of interpersonal behavior problems can be detected by experienced observers, and they are often the sources of serious communication difficulties among participants in a project. For example, members of a project team may avoid each other and withdraw from active interactions about differences that need to be dealt with. They may attempt to criticize and blame other individuals or groups when things go wrong. They may resent suggestions for improvement, and become defensive to minimize culpability rather than take the initiative to maximize achievements. All these actions are detrimental to the project organization.
While these symptoms can occur to individuals at any organization, they are compounded if the project team consists of individuals who are put together from different organizations. Invariably, different organizations have different cultures or modes of operation. Individuals from different groups may not have a common loyalty and may prefer to expand their energy in the directions most advantageous to themselves instead of the project team. Therefore, no one should take it for granted that a project team will work together harmoniously just because its members are placed physically together in one location. On the contrary, it must be assumed that good communication can be achieved only through the deliberate effort of the top management of each organization contributing to the joint venture.
I.1.8 Design and Construction as an Integrated System
In the planning of facilities, it is important to recognize the close relationship between design and construction. These processes can best be viewed as an integrated system. Broadly speaking, design is a process of creating the description of a new facility, usually represented by detailed plans and specifications; construction planning is a process of identifying activities and resources required to make the design a physical reality. Hence, construction is the implementation of a design envisioned by architects and engineers. In both design and construction, numerous operational tasks must be performed with a variety of precedence and other relationships among the different tasks.
Several characteristics are unique to the planning of constructed facilities and should be kept in mind even at the very early stage of the project life cycle. These include the following:
Nearly every facility is custom designed and constructed, and often requires a long time to complete.
Both the design and construction of a facility must satisfy the conditions peculiar to a specific site.
Because each project is site specific, its execution is influenced by natural, social and other location conditions such as weather, labor supply, local building codes, etc.
Since the service life of a facility is long, the anticipation of future requirements is inherently difficult.
Because of technological complexity and market demands, changes of design plans during construction are not uncommon.
In an integrated system, the planning for both design and construction can proceed almost simultaneously, examining various alternatives which are desirable from both viewpoints and thus eliminating the necessity of extensive revisions under the guise of value engineering. Furthermore, the review of designs with regard to their constructability can be carried out as the project progresses from planning to design. For example, if the sequence of assembly of a structure and the critical loadings on the partially assembled structure during construction are carefully considered as a part of the overall structural design, the impacts of the design on construction false work and on assembly details can be anticipated. However, if the design professionals are expected to assume such responsibilities, they must be rewarded for sharing the risks as well as for undertaking these additional tasks. Similarly, when construction contractors are expected to take over the responsibilities of engineers, such as devising a very elaborate scheme to erect an unconventional structure, they too must be rewarded accordingly. As long as the owner does not assume the responsibility for resolving this risk-reward dilemma, the concept of a truly integrated system for design and construction cannot be realized.
It is interesting to note that European owners are generally more open to new technologies and to share risks with designers and contractors. In particular, they are more willing to accept responsibilities for the unforeseen subsurface conditions in geotechnical engineering. Consequently, the designers and contractors are also more willing to introduce new techniques in order to reduce the time and cost of construction. In European practice, owners typically present contractors with a conceptual design, and contractors prepare detailed designs, which are checked by the owner's engineers. Those detailed designs may be alternate designs, and specialty contractors may also prepare detailed alternate designs.
I.2 Developing the Plan
I.2.1 Basic Concepts in the Development of Construction Plans
Construction planning is a fundamental and challenging activity in the management and execution of construction projects. It involves the choice of technology, the definition of work tasks, the estimation of the required resources and durations for individual tasks, and the identification of any interactions among the different work tasks. A good construction plan is the basis for developing the budget and the schedule for work. Developing the construction plan is a critical task in the management of construction, even if the plan is not written or otherwise formally recorded. In addition to these technical aspects of construction planning, it may also be necessary to make organizational decisions about the relationships between project participants and even which organizations to include in a project. For example, the extent to which sub-contractors will be used on a project is often determined during construction planning.
Forming a construction plan is a highly challenging task. As Sherlock Holmes noted:
Most people, if you describe a train of events to them, will tell you what the result would be. They can put those events together in their minds, and argue from them that something will come to pass. There are few people, however, who, if you told them a result, would be able to evolve from their own inner consciousness what the steps were which led up to that result. This power is what I mean when I talk of reasoning backward.
Like a detective, a planner begins with a result (i.e. a facility design) and must synthesize the steps required to yield this result. Essential aspects of construction planning include the generation of required activities, analysis of the implications of these activities, and choice among the various alternative means of performing activities. In contrast to a detective discovering a single train of events, however, construction planners also face the normative problem of choosing the best among numerous alternative plans. Moreover, a detective is faced with an observable result, whereas a planner must imagine the final facility as described in the plans and specifications.
In developing a construction plan, it is common to adopt a primary emphasis on either cost control or on schedule control as illustrated in Fig 2.1. Some projects are primarily divided into expense categories with associated costs. In these cases, construction planning is cost or expense oriented. Within the categories of expenditure, a distinction is made between costs incurred directly in the performance of an activity and indirectly for the accomplishment of the project. For example, borrowing expenses for project financing and overhead items are commonly treated as indirect costs. For other projects, scheduling of work activities over time is critical and is emphasized in the planning process. In this case, the planner ensures that the proper precedence among activities is maintained and that efficient scheduling of the available resources prevails. Traditional scheduling procedures emphasize the maintenance of task precedence (resulting in critical path scheduling procedures) or efficient use of resources over time (resulting in job shop scheduling procedures). Finally, most complex projects require consideration of cost and scheduling over time, so that planning, monitoring and record keeping must consider both dimensions. In these cases, the integration of schedule and budget information is a major concern.
Figure I.2.1 Alternative Emphases in Construction Planning
Construction planning is not an activity which is restricted to the period after the award of a contract for construction. It should be an essential activity during the facility design. Also, if problems arise during construction, re-planning is required.
I.2.2 Choice of Technology and Construction Method
As in the development of appropriate alternatives for facility design, choices of appropriate technology and methods for construction are often ill-structured yet critical ingredients in the success of the project. For example, a decision whether to pump or to transport concrete in buckets will directly affect the cost and duration of tasks involved in building construction. A decision between these two alternatives should consider the relative costs, reliabilities, and availability of equipment for the two transport methods. Unfortunately, the exact implications of different methods depend upon numerous considerations for which information may be sketchy during the planning phase, such as the experience and expertise of workers or the particular underground condition at a site.
In selecting among alternative methods and technologies, it may be necessary to formulate a number of construction plans based on alternative methods or assumptions. Once the full plan is available, then the cost, time and reliability impacts of the alternative approaches can be reviewed. This examination of several alternatives is often made explicit in bidding competitions in which several alternative designs may be proposed or value engineering for alternative construction methods may be permitted. In this case, potential constructors may wish to prepare plans for each alternative design using the suggested construction method as well as to prepare plans for alternative construction methods which would be proposed as part of the value engineering process.
In forming a construction plan, a useful approach is to simulate the construction process either in the imagination of the planner or with a formal computer based simulation technique. By observing the result, comparisons among different plans or problems with the existing plan can be identified. For example, a decision to use a particular piece of equipment for an operation immediately leads to the question of whether or not there is sufficient access space for the equipment. Three dimensional geometric models in a computer aided design (CAD) system may be helpful in simulating space requirements for operations and for identifying any interferences. Similarly, problems in resource availability identified during the simulation of the construction process might be effectively forestalled by providing additional resources as part of the construction plan.
I.2.3 Defining Work Tasks
At the same time that the choice of technology and general method are considered, a parallel step in the planning process is to define the various work tasks that must be accomplished. These work tasks represent the necessary framework to permit scheduling of construction activities, along with estimating the resources required by the individual work tasks and any necessary precedence or required sequence among the tasks. The terms work "tasks" or "activities" are often used interchangeably in construction plans to refer to specific, defined items of work. In job shop or manufacturing terminology, a project would be called a "job" and an activity called an "operation", but the sense of the terms is equivalent. The scheduling problem is to determine an appropriate set of activity start time, resource allocations and completion times that will result in completion of the project in a timely and efficient fashion. Construction planning is the necessary fore-runner to scheduling. In this planning, defining work tasks, technology and construction method is typically done either simultaneously or in a series of iterations.
The definition of appropriate work tasks can be a laborious and tedious process, yet it represents the necessary information for application of formal scheduling procedures. Since construction projects can involve thousands of individual work tasks, this definition phase can also be expensive and time consuming. Fortunately, many tasks may be repeated in different parts of the facility or past facility construction plans can be used as general models for new projects. For example, the tasks involved in the construction of a building floor may be repeated with only minor differences for each of the floors in the building. Also, standard definitions and nomenclatures for most tasks exist. As a result, the individual planner defining work tasks does not have to approach each facet of the project entirely from scratch. The problem of how many tasks we should use in a project will be further debated in the sub-chapter dedicated to the Critical Chain Method.
While repetition of activities in different locations or reproduction of activities from past projects reduces the work involved, there are very few computer aids for the process of defining activities. Databases and information systems can assist in the storage and recall of the activities associated with past projects. For the scheduling process itself, numerous computer programs are available. But for the important task of defining activities, reliance on the skill, judgment and experience of the construction planner is likely to continue.
More formally, an activity is any subdivision of project tasks. The set of activities defined for a project should be comprehensive or completely exhaustive so that all necessary work tasks are included in one or more activities. Typically, each design element in the planned facility will have one or more associated project activities. Execution of an activity requires time and resources, including manpower and equipment, as described in the next section. The time required to perform an activity is called the duration of the activity. The beginning and the end of activities are signposts or milestones, indicating the progress of the project. Occasionally, it is useful to define activities which have no duration to mark important events. For example, receipt of equipment on the construction site may be defined as an activity since other activities would depend upon the equipment availability and the project manager might appreciate formal notice of the arrival. Similarly, receipt of regulatory approvals would also be specially marked in the project plan.
The extent of work involved in any one activity can vary tremendously in construction project plans. Indeed, it is common to begin with fairly coarse definitions of activities and then to further sub-divide tasks as the plan becomes better defined. As a result, the definition of activities evolves during the preparation of the plan. A result of this process is a natural hierarchy of activities with large, abstract functional activities repeatedly sub-divided into more and more specific sub-tasks. For example, the problem of placing concrete on site would have sub-activities associated with placing forms, installing reinforcing steel, pouring concrete, finishing the concrete, removing forms and others. Even more specifically, sub-tasks such as removal and cleaning of forms after concrete placement can be defined. Even further, the sub-task "clean concrete forms" could be subdivided into the various operations:
Transport forms from on-site storage and unload onto the cleaning station.
Position forms on the cleaning station.
Wash forms with water.
Clean concrete debris from the form's surface.
Coat the form surface with an oil release agent for the next use.
Unload the form from the cleaning station and transport to the storage location.
This detailed task breakdown of the activity "clean concrete forms" would not generally be done in standard construction planning, but it is essential in the process of programming or designing a robot to undertake this activity since the various specific tasks must be well defined for a robot implementation.
It is generally advantageous to introduce an explicit hierarchy of work activities for the purpose of simplifying the presentation and development of a schedule. For example, the initial plan might define a single activity associated with "site clearance." Later, this single activity might be sub-divided into "re-locating utilities," "removing vegetation," "grading", etc. However, these activities could continue to be identified as sub-activities under the general activity of "site clearance." This hierarchical structure also facilitates the preparation of summary charts and reports in which detailed operations are combined into aggregate or "super"-activities.
More formally, a hierarchical approach to work task definition decomposes the work activity into component parts in the form of a tree. Higher levels in the tree represent decision nodes or summary activities, while branches in the tree lead to smaller components and work activities. A variety of constraints among the various nodes may be defined or imposed, including precedence relationships among different tasks as defined below. Technology choices may be decomposed to decisions made at particular nodes in the tree. For example, choices on plumbing technology might be made without reference to choices for other functional activities.
Of course, numerous different activity hierarchies can be defined for each construction plan. For example, upper level activities might be related to facility components such as foundation elements, and then lower level activity divisions into the required construction operations might be made. Alternatively, upper level divisions might represent general types of activities such as electrical work, while lower work divisions represent the application of these operations to specific facility components. As a third alternative, initial divisions might represent different spatial locations in the planned facility. The choice of a hierarchy depends upon the desired scheme for summarizing work information and on the convenience of the planner. In computerized databases, multiple hierarchies can be stored so that different aggregations or views of the work breakdown structure can be obtained.
The number and detail of the activities in a construction plan is a matter of judgment or convention. Construction plans can easily range between less than a hundred to many thousand defined tasks, depending on the planner's decisions and the scope of the project. If subdivided activities are too refined, the size of the network becomes unwieldy and the cost of planning excessive. Sub-division yields no benefit if reasonably accurate estimates of activity durations and the required resources cannot be made at the detailed work breakdown level. On the other hand, if the specified activities are too coarse, it is impossible to develop realistic schedules and details of resource requirements during the project. More detailed task definitions permit better control and more realistic scheduling. It is useful to define separate work tasks for:
those activities which involve different resources, or
those activities which do not require continuous performance.
For example, the activity "prepare and check shop drawings" should be divided into a task for preparation and a task for checking since different individuals are involved in the two tasks and there may be a time lag between preparation and checking.
In practice, the proper level of detail will depend upon the size, importance and difficulty of the project as well as the specific scheduling and accounting procedures which are adopted. However, it is generally the case that most schedules are prepared with too little detail than too much. It is important to keep in mind that task definition will serve as the basis for scheduling, for communicating the construction plan and for construction monitoring. Completion of tasks will also often serve as a basis for progress payments from the owner. Thus, more detailed task definitions can be quite useful. But more detailed task breakdowns are only valuable to the extent that the resources required, durations and activity relationships are realistically estimated for each activity. Providing detailed work task breakdowns is not helpful without a commensurate effort to provide realistic resource requirement estimates. As more powerful, computer-based scheduling and monitoring procedures are introduced, the ease of defining and manipulating tasks will increase, and the number of work tasks can reasonably be expected to expand.
I.2.4 Defining Activity Logic
Once work activities have been defined, the relationships among the activities can be specified. Precedence relations between activities signify that the activities must take place in a particular sequence. Numerous natural sequences exist for construction activities due to requirements for structural integrity, regulations, and other technical requirements. For example, design drawings cannot be checked before they are drawn. Diagrammatically, precedence relationships can be illustrated by a network or graph in which the activities are represented by arrows. The arrows in Figure 2.2 are called branches or links in the activity network, while the circles marking the beginning or end of each arrow are called nodes or events. In this figure, links represent particular activities, while the nodes represent milestone events.
Figure I.2.4.1 Illustrative Set of Four Activities with Precedences
More complicated precedence relationships can also be specified. For example, one activity might not be able to start for several days after the completion of another activity. As a common example, concrete might have to cure (or set) for several days before formwork is removed. This restriction on the removal of forms activity is called a lag between the completion of one activity (i.e., pouring concrete in this case) and the start of another activity (i.e., removing formwork in this case). Many computer based scheduling programs permit the use of a variety of precedence relationships.
Three mistakes should be avoided in specifying predecessor relationships for construction plans. First, a circle of activity precedence will result in an impossible plan. For example, if activity A precedes activity B, activity B precedes activity C, and activity C precedes activity A, then the project can never be started or completed! Figure 2.3 illustrates the resulting activity network. Fortunately, formal scheduling methods and good computer scheduling programs will find any such errors in the logic of the construction plan.
Figure I.2.4.2 Example of an Impossible Work Plan
Forgetting a necessary precedence relationship can be more insidious. For example, suppose that installation of dry wall should be done prior to floor finishing. Ignoring this precedence relationship may result in both activities being scheduled at the same time. Corrections on the spot may result in increased costs or problems of quality in the completed project. Unfortunately, there are few ways in which precedence omissions can be found other than with checks by knowledgeable managers or by comparison to comparable projects. One other possible but little used mechanism for checking precedence is to conduct a physical or computer based simulation of the construction process and observe any problems.
Finally, it is important to realize that different types of precedence relationships can be defined and that each has different implications for the schedule of activities:
Some activities have a necessary technical or physical relationship that cannot be superseded. For example, concrete pours cannot proceed before formwork and reinforcement are in place.
Some activities have a necessary precedence relationship over a continuous space rather than as discrete work task relationships. For example, formwork may be placed in the first part of an excavation trench even as the excavation equipment continues to work further along in the trench. Formwork placement cannot proceed further than the excavation, but the two activities can be started and stopped independently within this constraint.
Some "precedence relationships" are not technically necessary but are imposed due to implicit decisions within the construction plan. For example, two activities may require the same piece of equipment so a precedence relationship might be defined between the two to insure that they are not scheduled for the same time period. Which activity is scheduled first is arbitrary. As a second example, reversing the sequence of two activities may be technically possible but more expensive. In this case, the precedence relationship is not physically necessary but only applied to reduce costs as perceived at the time of scheduling.
In revising schedules as work proceeds, it is important to realize that different types of precedence relationships have quite different implications for the flexibility and cost of changing the construction plan. Unfortunately, many formal scheduling systems do not possess the capability of indicating this type of flexibility. As a result, the burden is placed upon the manager of making such decisions and insuring realistic and effective schedules. With all the other responsibilities of a project manager, it is no surprise that preparing or revising the formal, computer based construction plan is a low priority to a manager in such cases. Nevertheless, formal construction plans may be essential for good management of complicated projects.
I.2.5 Estimating Resource Requirements for Work Activities
In addition to precedence relationships and time durations, resource requirements are usually estimated for each activity. Since the work activities defined for a project are comprehensive, the total resources required for the project are the sum of the resources required for the various activities. By making resource requirement estimates for each activity, the requirements for particular resources during the course of the project can be identified. Potential bottlenecks can thus be identified, and schedule, resource allocation or technology changes made to avoid problems.
Many formal scheduling procedures can incorporate constraints imposed by the availability of particular resources. For example, the unavailability of a specific piece of equipment or crew may prohibit activities from being undertaken at a particular time. Another type of resource is space. A planner typically will schedule only one activity in the same location at the same time. While activities requiring the same space may have no necessary technical precedence, simultaneous work might not be possible. In this section, we shall discuss the estimation of required resources.
The initial problem in estimating resource requirements is to decide the extent and number of resources that might be defined. At a very aggregate level, resources categories might be limited to the amount of labor (measured in man-hours or in dollars), the amount of materials required for an activity, and the total cost of the activity. At this aggregate level, the resource estimates may be useful for purposes of project monitoring and cash flow planning. For example, actual expenditures on an activity can be compared with the estimated required resources to reveal any problems that are being encountered during the course of a project. However, this aggregate definition of resource use would not reveal bottlenecks associated with particular types of equipment or workers.
More detailed definitions of required resources would include the number and type of both workers and equipment required by an activity as well as the amount and types of materials. Standard resource requirements for particular activities can be recorded and adjusted for the special conditions of particular projects. As a result, the resources types required for particular activities may already be defined. Reliance on historical or standard activity definitions of this type requires a standard coding system for activities.
Example: Resource Requirements for Block Foundations
In placing concrete block foundation walls, a typical crew would consist of three bricklayers and two bricklayer helpers. If sufficient space was available on the site, several crews could work on the same job at the same time, thereby speeding up completion of the activity in proportion to the number of crews. In more restricted sites, multiple crews might interfere with one another. For special considerations, such as complicated scaffolding or large blocks (such as twelve inch block), a bricklayer helper for each bricklayer might be required to insure smooth and productive work. In general, standard crew composition depends upon the specific construction task and the equipment or technology employed. These standard crews are then adjusted in response to special characteristics of a particular site.
I.2.6 Allocation of Construction Costs over Time
Since construction costs are incurred over the entire construction phase of a project, it is often necessary to determine the amounts to be spent in various periods to derive the cash flow profile, especially for large projects with long durations. Consequently, it is important to examine the percentage of work expected to be completed at various time periods to which the costs would be charged. More accurate estimates may be accomplished once the project is scheduled, but some rough estimate of the cash flow may be required prior to this time.
Consider the basic problem in determining the percentage of work completed during construction. One common method of estimating percentage of completion is based on the amount of money spent relative to the total amount budgeted for the entire project. This method has the obvious drawback in assuming that the amount of money spent has been used efficiently for production. A more reliable method is based on the concept of value of work completed which is defined as the product of the budgeted labor hours per unit of production and the actual number of production units completed, and is expressed in budgeted labor hours for the work completed. Then, the percentage of completion at any stage is the ratio of the value of work completed to date and the value of work to be completed for the entire project. Regardless of the method of measurement, it is informative to understand the trend of work progress during construction for evaluation and control.
I.2.7 The Critical Path Method
The most widely used scheduling technique is the critical path method (CPM) for scheduling, often referred to as critical path scheduling. This method calculates the minimum completion time for a project along with the possible start and finish times for the project activities. Indeed, many texts and managers regard critical path scheduling as the only usable and practical scheduling procedure. Computer programs and algorithms for critical path scheduling are widely available and can efficiently handle projects with thousands of activities.
The critical path itself represents the set or sequence of predecessor/successor activities which will take the longest time to complete. The duration of the critical path is the sum of the activities' durations along the path. Thus, the critical path can be defined as the longest possible path through the "network" of project activities. The duration of the critical path represents the minimum time required to complete a project. Any delays along the critical path would imply that additional time would be required to complete the project.
There may be more than one critical path among all the project activities, so completion of the entire project could be delayed by delaying activities along any one of the critical paths. For example, a project consisting of two activities performed in parallel that require three days each would have each activity critical for a completion in three days.
Formally, critical path scheduling assumes that a project has been divided into activities of fixed duration and well defined predecessor relationships. A predecessor relationship implies that one activity must come before another in the schedule. No resource constraints other than those implied by precedence relationships are recognized in the simplest form of critical path scheduling.
To use critical path scheduling in practice, construction planners often represent a resource constraint by a precedence relation. A constraint is simply a restriction on the options available to a manager, and a resource constraint is a constraint deriving from the limited availability of some resource of equipment, material, space or labor.
The possibility of interrupting or splitting activities into two work segments can be particularly important to insure feasible schedules in the case of numerous lead or lag constraints. With activity splitting, an activity is divided into two sub-activities with a possible gap or idle time between work on the two sub activities. The computations for scheduling treat each sub-activity separately after a split is made. Splitting is performed to reflect available scheduling flexibility or to allow the development of a feasible schedule. For example, splitting may permit scheduling the early finish of a successor activity at a date later than the earliest start of the successor plus its duration. In effect, the successor activity is split into two segments with the later segment scheduled to finish after a particular time. Most commonly, this occurs when a constraint involving the finish time of two activities determines the required finish time of the successor. When this situation occurs, it is advantageous to split the successor activity into two so the first part of the successor activity can start earlier but still finish in accordance with the applicable finish-to-finish constraint.
I.2.8 THE CRITICAL CHAIN METHOD
Critical Chain is a project management method that results form the application of Dr. E. Goldratt “Theory of Constraints”. First presented in his bestseller, “The Goal”, TOC sustains that the throughput of any system is determined by just one constraint any given moment in time. In order to improve the performances of the system one must make the best possible use of the constraint. Any improvement anywhere else is useless, since in is the constraint that determines the efficiency of the system as a whole.
One of the key elements in the TOC is uncertainty. All projects have a certain degree of uncertainty. Usually, this uncertainty is included in the task duration estimate. Task performers deliberately give a longer estimate for a task to protect themselves from uncertainty. As a result project schedules contain a large amount of safety. Then why don’t we see many projects that deliver early? Most projects deliver right on time, or around the delivery date. The rest overrun the schedule by tens or even hundreds of percentage points. How is this possible if there is safety included for every task?
The explanation comes from a better understanding of statistical fluctuations in the duration of task, combined with dependent events, human nature and multitasking.
For dependent events (in our case tasks linked in a network dependency of tasks) any overrun of schedule adds up as an overrun of the entire schedule. If a task on the critical path is late, it will pass the delay to the next task, and so on. We would expect to find the same when a task is ahead of schedule. Yet, negative differences are not evened out by positive ones. This happens because human nature comes into play. People who work to milestone dates rarely understand the need to turn in work completed early. In fact what occurs is a manifestation of the Parkinson Law: the work expands to fill the allotted time. This means that even if nothing bad happens the safety included in the plan is used up anyway, such that there are no positive variations to make up for the negative variances. This also happens because people fear that, should they turn work in early, management will impose the same completion time for the next time, thus stripping off the safety. Another cause for this is the so called “The Student Syndrome” : when given estimates that they feel are longer than the necessary time to complete the tasks, people usually put little effort in working at the task at the beginning and do most of the work late in the assignment. If one resource gets its activity done early, chances are that the next critical resource will not be available to work at the next task. The positive variance is lost and wait time is introduced. Actual schedule will grow due to activity dependence.
Multitasking further delays the project by delaying all the tasks that a resource is working at the same time. If a resource is working at three activities, each estimated to take one day, then none of the activities will be completed until the third day. Assuming these activities are from three different projects, multitasking delayed the schedule for the first program with two weeks and the schedule for the second with one week. We will see later how the Critical Chain method addresses these issues.
Dr. Goldratt invented five focusing steps as a process to get the most out of a system. Figure I.2.8.1 summarizes the five steps.
Step 1: Identify the project constraint
Defining the constraint of a project in terms of schedule derives from the impact that schedule has on project cost and project scope. Independent variables that influence a project result include the demanded scope, the project system definition, and the resources available to work on the project. The project system outputs are dependent variables (delivered scope, cost, and schedule). As schedule increases with fixed deliverable scope, cost usually increases. As scope increases with fixed cost (or resources), schedule tends to increase. As scope increases with fixed schedule, cost tends to increase. Therefore, it is appropriate to focus first on delivering the project on time.
The evident constraint of a project is the chain of tasks that takes the longest to complete. To perform any task on a project, two things are necessary: the task input form a predecessor and the resources to perform the task. (The predecessor may simply be a start authorization fro the first task tin a chain of project tasks.) The definition of the critical path does not explicitly address the potential resource constraint.
Figure I.2.8.2 illustrates a typical critical path project schedule. The letters represent unique resources. If we assume we have only one resource of each type then it becomes clear that we will fail to meet the schedule, because each resources can only work at one task at a time.
Figure moves tasks to eliminate the overlap of resource demands. The three resulting paths all have float, so there is no critical path defined as the path with zero float. More importantly, the initial critical path is not the constraint to completing the project. Because the resource constraint is often a significant project constraint, the Critical Chain method always considers it.
If we don’t have any resource constraints, the critical chain will be the same as the initial critical path.
Figure I.2.8.3 Leveling the resources leads to gaps in the critical path.
Figure I.2.8.4 The critical chain includes both the resource and task logic constraint to completing the project on time or sooner.
The PMBOK Guide definition of the critical path states that the critical path may change during the performance of the project. That occurs when project tasks experience common cause variation and redefine the longest path to complete the project. This is one of the most serious mistake that managers can make: to treat common cause variation (which is normal and will happen) like special cause variation. The team does not focus on the constraint and chases an ever changing critical path.
Step 2: Exploit the constraint
Exploiting the critical chain means reducing both the planned time and the actual project performance time. CCPM exploits the critical chain by understanding the variation.
It is normal to have common cause variation in the performance time of tasks. Although the time to perform individual project tasks may be independent of each other, project tasks networks define task dependence. By definition of the project logic, the successor task cannot start until the predecessor task is complete.
CCPM accounts for common cause variation as an essential element of the project management system. The process removes identifiable special causes of variation, including resource unavailability and common resource behavior patterns, including the student syndrome and multitasking. CCPM project managers use resource buffers to identify and ensure availability of resources on the critical chain.
Taking into consideration that task estimates include a lot of safety, CCPM seeks to use better estimates. These estimates are only 50% probable, therefore there is only a 50% probability that the task performer will finish the task in the estimated time. The project manager recognizes that actual performance time includes common cause variation and does not criticize task performers for individual task duration performance. So where does all the safety go? Instead of trying to protect each individual task, CCPM protects the entire project by placing the safety into a project buffer, at the end of the project. It is a mathematical fact that variances of the sum of samples from a series of independent distributions add. The variance is the square of the standard deviation. The standard deviation is proportional to the amount of variation in a single task. In other words, the uncertainty in the sum of tasks is the square root of the sum of squares of the individual variations. The allowances that protected each task will add up as the square root of the sum of squares, a much smaller amount that the sum of variances, and will form the project buffer. The reason for this smaller amount is that some of the individual variances will cancel out.
In order to protect the critical task from delays due to resource unavailability, CCPM provides the resource buffers. These buffers are different from the project buffer because they don’t represent tasks in the project network. Instead they are just an information tool to alert the project manager and performing resources of the impending necessity to work on a critical chain task.
Step 3: Subordinate merging paths to the critical chain
Most projects have multiple task paths. All task paths must merge into the critical path by the end o f the project, if for no other reason than as a milestone that identifies project completion. The merging of task paths creates a filter that eliminates positive fluctuations and passes on the longest delay. The reason is that merging task paths means that all the feeding paths are required to start the successor task. Therefore, the successor task cannot start until the latest of the merging tasks completes. Figure I.2.8.5 illustrates the filtering effect of merging paths.
Figure I.2.8.5 Merging paths cause critical chain delay if any of the feeding chains is delayed.
CCPM protects the critical chain from potential delays by subordinating critical chain feeding paths: placing an aggregated feeding buffer on each path that feeds the critical chain. This innovation immunizes the critical chain from potential delays on the feeding chains and also provides the means to measure progress on the feeding chains, while keeping focus on the critical chain. Figure I.2.8.6 illustrates the placement of the feeding buffers. It includes paths that merge with the critical chain at the end of the project. The feeding buffer provides a measurement and control mechanism to protect the critical chain. The figure also illustrates how buffers absorb the late paths.
Figure I.2.8.6 Feeding buffers absorb the delays in feeding paths
Step 4: Elevate the constraint
As said earlier, the system optimum depends on the level of usage of the constraint. Pursuing local optima anywhere else except the constraint does nothing to improve the system optimum. It actually gets the performance worse.
If management judges the performer of each task based on completing their task on the estimated milestone date (local optima), the system as a whole will not operate at the optimum level. Human behavior as well as statistical fluctuations will prevent tasks from being completed early.
Critical Chain provides dates only for the start of task chains and the end of the project buffer. For the rest of the project, the plan provides approximate start times and estimated task duration. Critical chain project managers don not criticize performers who overrun estimated task durations, as long as the resource started the task as soon as they had the input, worked 100% on the task (no bad multitasking) and passed on the task output as soon as it was completed. They expect 50% of the tasks to overrun.
The fifth step is not necessary for the critical chain, since the critical chain will not change during project performance. This step is used in production, where it is possible to find new constraints that limit further improvements of output after the first constraint has been broken.
Chapter II: IMPACT SA – Company Presentation
II.1 Presentation
Impact SA is a commercial joint-stock company, with private capital, activating in the construction for dwellings field. It has been founded in 1991, through public subscription. Starting with 1996, it is quoted on the Romanian Stock Exchange Market Bucharest, and from 1998 it has been a member of National Association of Home Builders- USA. It is an active participant at the most important events in the real estate field, in the country and abroad as well. Impact SA has 1400 shareholders. The main categories of services offered by the company are construction and development of dwellings (Deluxe, Prestige-accessible, In red, Freedom-wooden villas, as well as wooden houses in bundle and dwellings on the client’s field) in own residential areas, as well as construction of deposits and bays
II.1.1 Mission
The mission of Impact SA is that the employees make come true the real estate dreams of the clients. This means that Impact SA should identify a clean area, town-related through modern roads, offer services for all financial possibilities, execute the construction and finishing in a durable and quality manner, offer guarantees for good execution and methods of payment (advance, rates) as flexible as possible, adapted to the clients’ possibilities. Thus, Impact SA offers the pleasure to live.
II.1.2 Realised Projects
In 1995, IMPACT SA started the first residential project- Alfa which holds 40 dwellings and was finished in September, 2001.
In this first area, Impact built only luxury villas. The value of the first residential project amounts 6,5 million dollars. The successful realization of the first project determined the success of the name of the company in the world of real estate promoters acting on the market in Bucharest. Starting a project through own possibilities and being supported by a banking credit contracted in 1995 (reimbursed in 15 months) Impact proved the stability and success of a well organized business.
In 1998 Impact launched a second project-Beta- with 70 dwellings: luxury villas and a new product: accessible villas. The value of the investment was 7 million dollars. The residential area Beta was finished in 2002.
Gamma and Delta started up in 1999, respectively 2000. Together these two residential areas gather over 250 diverse dwellings: personalized luxury villas, accessible villas, and wooden villas. The estimated value of the two projects is 20 million dollars.
In July 2001 the construction of the residential area Epsilon started, containing 56 dwellings- mainly luxury and accessible villas- and the headquarters of the company Impact SA – a class A office building. The site is located on the border of the lake Pipera and this is why it will have a special lake front and arrangement. The value of the Epsilon project is 4,5 million dollars.
The residential site- Zeta, Baneasa 6 contains almost 50 dwellings and is placed close top the Epsilon site, on the road Pipera- Tunari. The value of the project Zeta is estimated at 4,5 million dollars.
In 2003, the construction of a new site started- Class. This site has 143 villas, a total area of 75000 square meters. The total value of the investment is 13,5 million dollars.
According to the development plan of the company for the next years, forecasting the extension to other towns, Impact SA started the construction of the residential site Boreal, in Constanta. The residential site Boreal is located on an area of 95000 square meters, owned by Impact, and is placed close to the Constanta- Ovidiu-Bucharest road, 3,5 kilometers from the beach. The value of this project is 18 million dollars.
The year 2002 started with the extension of the activity field by creating the own commercial center for materials and construction systems- DePACT. The activity of the center is oriented to depositing and commercializing of materials and construction systems, some of these products being made by the workshops of Impact SA.
Another important project is the offer of wooden houses for vacation. These houses are delivered in a “bundle”, meaning that the beneficiary receives all the necessary elements to build the house, a manual for assembly instructions, and other necessary indications for building-up. Hereby, the owner can build his house in only three days, helped by three friends, without needing industrial equipment. Such a house will be seen in the residential site Epsilon- Impact, placed on the road Pipera-Tunari, Bucharest.
II.1.3 Products
In the 12 years of activity, the company has been trying to diversify the types of services offered. In the year 1991, Impact SA had as main activity the renting of own properties; in the year 2002, the activity of the company focused on the construction of villas placed in own residential sites. The real estate development programs for villas with the sale in installments are addressed to young people as well as to families from middle class and upper class.
DeLuxe Villas – have a built spread area between 156.3 and 415 square meters, and the price is between 550Euro and 650Euro per spread constructed square meter. The team VARID (Stands for Seller, Architect, Designer, Installation, Form Master) offer assistance to the beneficiary all along the execution contract.
Prestige Villas- have a built spread area of 115 to 230 square meters. The price for a Prestige villa varies between 330 and 420 Euros per built spread square meter. The Prestige villas have at disposal the installation of the TV and Internet cable, guarantee for a year and for ten years concerning the hidden vices, just like all the villas built by Impact.
Freedom Villas- Some of the 21 types of Prestige Villas (accessible), can be wooden made. More than this, Impact has 20 more proposals for designs for Freedom villas, the wooden villas. These houses have between three and seven rooms, distributed on at least two levels. The wooden villas Freedom are good to be used all along the year, because they are thermally isolated. The price per built spread square meter is between 250 and 292 Euros, and the built spread area varies between 90.1 and 209 square meters.
Vacation Houses- A total utile surface- 33 square meters, terrace 9,5 sqm, the built spread area 44,45 sqm; the construction will have 2,82 meters height. It ensures the comfort for vacation for a family with 4 members. The terrace allows the placement of furniture and window boxes. The elements of the wooden house in bundle are made from fir wood, treated against insects, bacteria and fire. The product is delivered in packs together with the building up instructions.
Deposits and Halls – the advance has to be minimum 20% of the value of the contract. There can be granted credits on three years with 14% annual interest rate, the field is mortgaged, the builder being privileged upon the executed construction.
All the types of dwellings built by Impact can be purchased in installments. The advance represents 15% of the total value of the product, and the payment period varies between 4 and 10 years. The relationship with the client becomes a trio: client, Impact, bank. The banking partner credits the client who pays entirely the value of the contract, being able to intervene in three stages: finances the Impact projects, finances directly the client through mortgage credits-at the beginning of the partnership with Impact, finances the client through a system of credits for the amount remained for payment, after the client receives the dwelling, by paying the advance and a part of the installments. Along with the credit through different banks which impose specific conditions, Impact uses its own system of crediting the persons who want to buy a dwelling. The advantage of the system used by Impact is that the company requires as conditions only the payment of the advance (15% of the price) and the contract for a life insurance which is supposed to cover the remaining amount. The period of payment is of maximum 10 years, and the interest rate is fixed, 14% per year, without fees.
II.1.4 Actual Projects
The residential site Class is the newest project of the company. This is placed in the north of Bucharest, on the road Pipera-Tunari, having view to the lake Pipera, on a field of 75000 square meters, and belonging to Impact. The field is 13 kilometers far from the center of the town and 5 kilometers far from the intersection with National Road Bucharest-Ploiesti. According to the plan of distribution, Impact will build 23 villas Deluxe, on lots between 500 and 1000 square meters, and 107 Prestige Villas (accessible) on lots between 350 and 470 square meters.
The architecture projects have 12 options for buildings with utile areas between 130 and 315 square meters.
Junior Site- is placed in Baneasa-Pipera. The construction started in April 2004 The villas will be lobby+first floor or lobby+first floor+attic, brick houses with parking places.
In 2004 Impact opens in Bucharest other three residential sites: “Greenfield”, “Flori de Tei”, “Jeans”, meaning more than 500 villas.
In June the company launched in Constanta the site Boreal. Boreal is the first residential site in Constanta, the first real estate project outside Bucharest. In order to offer the option of a new lifestyle, Impact started in Constanta the construction of Boreal. The finish date is supposed to be in 2007. The total area of the site is 90000 sqm, and it will contain 238 distributed sites,- luxury villas, accessible, vacation houses. The total value of the investment is 25 million dollars.
II.1.5 Future Projects
In the next three years, Impact SA wants to develop its activity by offering accessible dwellings to a wider category of population, and by extension in 12 more Romanian cities: Pitesti, Ploiesti, Cluj, Târgu Mures, Timisoara, Brasov, Oradea, Arad, Iasi, Bacau, Galati, Craiova and almost all the districts of Bucharest. Annually, the development will continue with the opening in 4 towns. In 2011 the company will be present in 39 towns.
A new challenge is represented by the export of wooden houses in bundles. The company already negotiates with representatives from Greece, Spain and Israel.
In the next four years, Impact plans to open construction sites for residential development in Bulgaria, Hungary, Serbia and European Community.
II.2 Organization of the company Impact SA
II.2.1 Type of organizational structure
The company Impact SA is organized in a matrix structure. The new type of structure, the matrix, is more and more applied in the organization of the enterprises/companies dealing with simultaneous achievement of more projects which, each of them, need the professionalism and performances of the employees from different departments. The matrix structure is a combination of functional organization and project oriented organization, looking to incorporate the advantages of both types of structure, and to remove their lacks through a system with “multiple command”. The matrix structure is formed through some intercrossed vertical and horizontal lines; the vertical line represents the line of command, the official one and corresponds to a functional department of the company, while the horizontal line which crosses the vertical lines defines the project or the working group, those experts from different fields of activity gathered together to work in common. For each project there is made a working interdisciplinary group; the members of this group are subordinated to the department they belong to as well as to a project manager responsible with the work of the group and the result of the respective activities performed. Thus, in the matrix structure, the employees have effectively two bosses, so they are under double authority:
the chief of the specialized department where he/she comes from- indicated by the vertical line;
the chief of the project, who has as objective the accomplishment of a project.
Figure II.2.1 Matrix organization
The phases which can assure the successful assimilation of the matrix organization are:
1 – traditional pyramid – a single command at top managers level;
2 – temporary outside the classical structure – when working groups are created just for special and urgent projects;
3 – permanently outside the classical structure- when each project has a defined purpose and groups are formed for each purpose;
4 – the mature matrix – the phase in which both dimensions of the structure are well balanced and fixed, when the power becomes equal from both directions.
The matrix organization has the following advantages:
The project is in the centre of the attention of the company. The project manager is responsible with the timely realization of the project, with the quality and the forecasted costs.
Each project has access to the resources of the functional departments, which avoids the increase in efforts happening in the case of pure project organization.
Allows a rapid decision making process and an increased adaptability to the requirements of the beneficiary and of the superior management of the company.
Permits the utilization within the project of the same technical and managerial procedures used at company level.
Permits a better evaluation of the resources for the accomplishment of the objectives of more projects approached in parallel, so that the global performance will be optimized at company level.
The disadvantages of such an organization structure might be:
It can generate conflicts between the project managers in the process of resource allocation. The project managers are more interested in accomplishing their own objective and not to optimize the realization of objectives at the company level.
The project manger has administrative authority; the managers of the functional departments take technical decisions. The success of the project depends in a great part upon the capacity of the project manger to negotiate for the procurement of the necessary resources and technical assistance.
It doesn’t always assure a good control of the budget.
There is not respected the principle of single decision and action, which can lead to the dilution of the authority and responsibility and also create confusion between subordinates.
It encourages the bureaucracy and increases the managerial and administrative costs.
II.2.2 What is a Project Manager within the Company?
In the company Impact SA, the project managers belong to the construction segment, the planning department, and are subordinated to a chief project manager.
The chief project manager has as main responsibility the coordination of the planning activity and the monitoring of the execution processes in entirety, for all the projects. A project manager takes a project from the very beginning with the theme till the reception of the production and must be permanently informed about the stage of the project. Thus, the entire attention is focused on the successful achievement of the objective, from all points of view. The reliability of the information provided by the project manager is the main preoccupation of the partners, employees and beneficiaries. The project manger has to be the leader who ensures the cohesive force which gathers the different elements and parts implied in the project, determining them to work together to come to a successful end.
The main responsibilities of a chief project manager within the company Impact SA are:
Designs the Organizational Chart for the Planning and Control Department
Organizes the project teams of the Planning Department
Writes the Job Designs for the Planning Department
Participates at the designing of the responsibilities of the Planning Department staff
Participates to the writing of the annual firm budget
Elaborates the annual plan for the designing and construction activities
Estimates the annual needs for designs and resources, according to the detailed plan of the construction activities
Estimates the annual need for training for the staff of the Planning Department and elaborates the training plan
Trains the staff of the Planning Department in the work norms and regulations
Estimates the annual need of Planning Department personnel
Develops projects for the implementation of the Primavera Software
Implements the DevPlan software in the activity of the Planning Department
Implements the Charisma Program
Makes scenarios for the annual projects
Develops technical solutions for work organization in order to reach the goals at scheduled dates and in an efficient manner
Monitors and verifies the budget
Monitors and verifies the realization of MBO objectives for projects and for planning department
Makes forecasts for possible problems with costs, time and quality
Takes action to remove the problems
Monitors and controls the planning, insurance and allocation of human, material resources, equipment and subcontractors
Manages resources according to the seasonal constraints, working conflicts and other conjuncture uncertainties
Organizes coordination meetings
Takes decisions concerning the subcontractors according to their performance
Identifies the risks in planning and execution of construction
Monitors and verifies the obtaining in time of the necessary legal documents to start the construction
Checks the signature in time of the dwelling calendars
Verifies the documents from contracting and recontracting and additional
Makes proposals for vacation planning of the employees in his department
Makes proposals for penalties and rewards for members of his department
Participates at interviews for selection and employment of project managers
Makes proposals for promotions
Analyzes critical situations and decides for urgent meetings
Monitors and verifies the documentation and the necessary inventory from DEPACT
The project management in the company Impact SA deals with planning, organizing, coordination and control of the project, from the beginning till it comes to an end, with the main purpose to accomplish the requirements of the client concerning the production of a viable objective from financial and functional point of view, respecting the quality standards, the costs and completion period established. The main phases which a project manager takes into consideration when initiating a new project are:
Identification, analysis, formulation
Establish the final objectives
Analyze the existent situation
Identify the necessities
Analyze the necessities and establish the priorities for these necessities
Decision upon the opportunity of the project
Define the idea of the project
Consult with the potential beneficiaries
Prepare, estimate, commitment
Specify the objectives and results
Identify the necessary resources for the project
Identify the available resources for the project
Distribution of the project on activities
Conceive the final form and project planning
Implement, monitor, report
Mobilize the resources for objectives accomplishment
Permanently monitor and create report forms
Continuously communicate with the decision board and the members of the project team
Identify the problems
Solutions to remove the disfunctionalities
Modify the planned results and objectives with realizable ones
Final Evaluation
Evaluation of the entire accomplishment of the distributed tasks
Identify the best solutions for future projects
Identify the resources and needs for the future
Because a good project management requires that relevant information is obtained and analyzed in a rapid and appropriate manner, the specialists in project management within the company use a set of software for planning and controlling the projects. The most used programs are:
Microsoft Project 2003 – Comes from Microsoft products family, having as basis Microsoft Project Standard launched in 2000 and developed with Microsoft Project 2002. This software permits the interactive modeling, and going out from different representations (like Gantt, PERT, calendar), the administration of project evolution in time. The activities are classified in main activities and subordinated activities. This classification can be modified immediately, at any organization level; the user can intervene upon the activities and can observe the temporal and financial incidents caused by the decisions taken. The program permits the work with different plans in time (baseline, interim plan) and with interdependent projects. It is also familiar with the correspondence with other programs such as Microsoft Excel or Word and allows Web design. Reports created are also a very useful tool when the project manager wants to communicate the results or to collaborate with other departments of the company. It shows a general view of the project as well as a very detailed view of each factor and element included in the project.
Primavera Enterprise for Construction P3e/C is a multi-user, multi-program, multi-project system. It is projected to work with databases like Oracle or MS SQL, permitting the planning and control of all projects developed by the company, taking into consideration the time and the resources/costs. It is a good support for the decision making process. It consists of more programs which are helpful tools in project management:
Primavera Enterprise for Construction P3e/C is an instrument for project management including functionalities which ensure the planning, reporting, control over resources and management of risk.
Primavera Portfolio Analyst is an analysis instrument on projects portfolio which offers a global image of the stages of project execution.
Primavera Progress Reporter is a Web type application which permits the collection of data concerning the human resources implication in the development of the activities as well as the automated update of consumption.
Primavision is a Web type application which sustains the managerial process through delivering synthetically information.
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Chapter III Simulating a Construction Project – The Innovative Learning Campus
In order to demonstrate how Critical Chain would improve the For the purpose of simulation how Critical Chain would apply to a construction project, I used the project of a residential building, with ground-floor and first floor.
III.1 Project initiation process – Pre-construction Phases
Several phases are included in this process. These phases describe the project in details, explain the financing sources and the parties involved in the project. It was not the purpose of this paper to go into details about the steps prior to the construction process per-se. The project manager will take part to all these activities, but we chose to focus on the planning and controlling of the construction works. Following, there is a short description of these phases:
Stakeholders’ Endorsement
The beneficiary ( the investor ) – the one who provides the necessary funds, from own sources or borrowed, and establishes the main criteria referring to the dimension, production capacity, completion time, quality and value. Some of the parties that could be interested to invest in the campus could be : faculties that want to enrich their academic offer, The Ministry of Education, The Ministry of Tourism, companies interested in training their employees according to the latest standards, local businesses that are interested in the development of the area, the town hall, etc.
The architect – designs the construction facility according to the requirements of the beneficiary.
The Contractor – implements the design by executing the construction works.
Suppliers of materials – supply necessary material according to a contract concluded with the contractor. In our case Impact would come with some of the materials, form own stocks, and contract other suppliers for the rest.
Suppliers of equipment and means of transportation – rent equipment to contractors and assure the transportation of materials, equipment and workforce to the site. In our case we would own the necessary equipment but we would still need to contract a transporter for the materials and workforce.
The Public Authority – issues legal permits necessary to obtain the construction authorization.
Pre-feasibility and Feasibility Studies
General data
Technical data about the investment
Data concerning the workforce involved
The general estimate of the investment
The main technical and economic indicators of the investment
The financing sources
Legal permits and authorizations
Site graphical representation
Architecture designs for the main construction facilities
The Technical Project
Written part
Drawings part
Public auctions, Offer and Contracting
III.2 Planning the construction project
III.2.1 Choosing the software tools
Project management is a broadly practiced art and science. At its heart, project management is a toolbox of skills and tools that help you predict and control the outcomes of endeavors an organization undertakes. A good project management should answer to the following questions:
What tasks must be done to produce the deliverable of the project?
Who will complete these tasks?
What’s the best way to communicate project details to people who have an interest in the project?
When should each task be performed?
How much will it cost?
What if some tasks are not completed as scheduled?
The best project management tool in the world can never replace a good judgment. However, the tool can and should help accomplish the following:
Track all the information you gather about the work, duration and resource requirements for the project;
Visualize and present the project plan in standard, well-defined formats;
Schedule tasks and resources consistently and effectively;
Exchange project information with other applications used by the enterprise;
Communicate with resources and other stakeholders while the project manager retains the ultimate control of the project;
Manage projects using a program that looks and feels like other desktop productivity applications.
Many projects are not managed with a real scheduling tool, but they should be. It’s common to see task and resource lists from spreadsheet programs such as Microsoft Excel, or even nicely formatted Gantt charts from drawing programs. In our project we used Microsoft Project 2003 which includes a scheduling engine- a computational brain that can handle issues such as ripple effects when task 1 in a 100-task sequence changes its start date. This scheduling engine can also account for nonworking time such as weekends when calculating a task’s start and finish dates.
We will give a detailed account of all the steps we went through when implementing the plan with this software tool.
III.2.2 Defining General Project Information and The Project Calendar
First of all we should specify whether we want to plan from a defined start date of the project and schedule our activities from that date, or schedule from the desired finished date of the project. In practice many projects are scheduled from the finish date, because contractors have a specific date at which they have to deliver the building to the beneficiary. Nevertheless some managers believe that early start schedules reduce project risk by getting things done early and that late finish schedules accomplish the following:
Reduce the impact of changes on work already performed;
Delay the project cash outlay;
Give the project a chance to focus by starting fewer simultaneous task chains, allowing the project team and processes to come up to speed.
Much project management guidance recommends that project managers use early start schedule. Early start means permitting all the noncritical path tasks to start earlier than necessary to meat the schedule date. People working on these task know that there is slack in their task and don’t feel an urgency to work 100% on the task (student syndrome). Therefore CCPM uses late start for all project tasks.
The next step was to define the general working time for the duration of the project. Because of the nature of the construction activity and the specific climate of our country, some of the tasks can only be scheduled in the summer time, whereas others can be worked on during cooler weather too. Following the suggestions of the project managers at Impact, we defined the calendar with 10 hours of work every day, with a half hour lunch break, during the March 1 – November 15 period, and 8 hours every day for the rest of the year. The legal holidays would be counted as non – working days, whereas some of the Saturdays would be considered non – default working days, in order to finish the project as sooner. Sundays can be defined as non – default working days as well. In fact, Sundays are used as a time reserve, which can be used, should the project be in danger of running late.
The calendar was set up this way to match the practice in the real world. However, by setting up the date of project completion to 15 of November, I made sure that none of the works will be performed in the cold season.
III.2.3 WBS and Task Logic
The Work Breakdown Structure or WBS is a framework to define project scope. It defines project scope hierarchically, form the complete project level to the work package level. Work packages complete the hierarchy by specifying the project tasks necessary to deliver the scope.
Tasks are the most basic building block of any project. They represent the work to be done in order to accomplish the goals of the project. They describe project work in terms of sequence, duration and resource requirements.
When creating the task list we used the standard estimates of durations for a house provided by the project managers at Impact. These estimates are the 100% certainty estimates. We will use these, for now, and apply the 50% estimates as soon as we have identified the resources needed for each task. Due to the particularities of the construction activities, the fixed duration property was applied to all the tasks. Fixed duration means that a particular task will take the same amount of time to be completed even if more workers are allocated to it. Should the manager allocate more workers to such a task, MS Project will recalculate the amount of work corresponding to the task, or the time each resource spends at this task. The duration of the task itself will not change.
When importing the task list we used a top – down planning, that is we first identified the major phases in the project – such as foundations, lobby, first floor, attic – before filling in the task required to complete these tasks. This approach works from specific to general. To each project phase corresponds a certain WBS. Our tasks were sequenced according to the technological order in a construction process. Tasks were laid out as Late Finishing tasks, like the Critical Chain methods recommends. In MS Project that corresponds to assigning a Start As Late As Possible constraint to all tasks. Some of the tasks were sequenced in parallel, meaning that they can be worked at during the same period of time, others require a finish – start relationship (when one task cannot start before the other one finishes).
The Import Wizard works in such manner that you can specify in the Excel worksheet the name, duration and predecessors of the task. Then everything is imported in MS Project and translated into Gantt Charts or Task Sheets or other views.
III.2.4 Setting up Resources
Next step was to set up the resource sheet of the project. The resource sheet is a database with all the resource types that are needed for the project. These resources were set up as Work (people and machines) and Materials. I processed the bills of quantities afferent to the construction and extracted, for each task, the resources that were needed to complete each task. All these resources were introduced in the database along with their type, standard rate and measure unit (material label).
Resource availability is how many of each type of workers or machines we have available. It is expressed in percentages and can even be less than 100%, meaning that a worker is not available all day long to work to a task. Resource availability was set after discussing with project managers from Impact SA. It reflected the typical construction site team.
Figure III.2.4 Excel to Project
Because usually the tasks don’t need more workers of each type than the smallest allowed team, we will not encounter severe over allocation. As a result the critical chain equals the critical path.
We can group resources into resource groups. The purpose of this activity is to enhance the reports qualities later on. Suppose we would like to see a detailed report of all activity for a certain group of resources. We can define these groups at any moment.
III.2.5 Allocating Resources
Now that we had a task list and a resource list, we needed to allocate resources to each task. Again, we had to process the bills of quantities to find out how much of each resource is allocated to each task. A bill of quantity gives a detailed account of the materials, machine-tools and worker hours needed to complete each task. These data were formatted in Excel to match the import format of MS Project, and then were imported as work assignments.
Figure III.2.5 Excel to Project
Once the resources allocated, we are presented with a Gantt Chart of late finishing, fixed duration tasks with 100% certainty duration estimates. The length of the critical chain and therefore the project is 196 days.
III.2.6 Adding buffers to protect the critical chain
The tasks in the project have 100% estimate durations. The safety in each task is meant to protect the tasks form running late. The ensure local optima but not the system optimum. As explained in the theoretical part, all the safety needs to be placed at the end of the project. The result: statistical fluctuations are accounted for and human behavior patterns that lengthen the project are avoided.
As Larry Leach illustrated in his book, “Critical Chain Project Management”, 100% task estimates are two or more times larger than 50% estimates. Following this reasoning I cut the duration of the tasks by 50% and the differences were added up as the square root of the sum of squares in the project buffer and the feeding buffers. The new critical path had a length of approximately 100 days (some numbers were evened up).
In doing this I encountered a problem: the project buffer size was calculated as only around 14 days. The reason for this is that the construction project has many small tasks of comparable length. The square root of the sum of squares returns an inadequately small project buffer. When sizing the buffer one should be careful that the buffer does not represent less than 25 percent of the critical chain. Also no one task should represent more than 20 percent of the critical chain or more than 50% of the project buffer. The reason for this is that the uncertainty of such a task would dominate the chain, leaving little possibility for the other tasks to make up for an overrun on the dominant task. To solve this problem I simply used 25% of the length of the critical chain to size the buffer. This number is actually recommended by Dr. Goldratt for managers that begin to experience with critical chain. Therefore I sized the buffer at 25 days.
Feeding buffers were sized in the same manner as the project buffer. The length of the critical chain, including the project buffer was now around 125 days. That’s 37.5 percent lower than the initial critical path and actually has better protection, ensuring that the project will finish on time or earlier.
Figure 3.2.6 Project Buffer
Due to the reduction of duration estimates, the software program will calculate a lower cost for the project. In order to protect the project from cost variation incurring from schedule variation, a cost buffer must be used. The amount of this cost buffer can be calculated in the same way as the length of the project buffer: sum the squares of the difference in cost for 100% estimates and 50% estimates, and then take the square root. I decided to simply use the sum of the difference, meaning that the new cost + the cost buffer will equal the old cost. The reason for this is that human bias can influence costs greatly. I felt that for a beginner’s approach to TOC and Critical Chain it is safer to just use the same cost and simply let the schedule help save costs.
III.3 Exploiting the plan using buffer management
To judge project performance properly, a manager needs to compare it to the original plan. This original plan is called the baseline plan. The baseline is a collection of important values in a project plan such as the planned start dates, finish dates and the costs of the tasks, resources and assignments. When saving a baseline MS Project takes a snapshot of the existing values and saves it for future comparison. We could save multiple baselines, as the planning process advances and more details are added. We could preserve a snapshot for each variant of the plan and compare with what actually happens.
Before we start the activity and record actuals we can effectuate what – if analysis. Once we save an interim – plan, we can modify the duration of any task and see how it impacts on the rest of the project. We could add other tasks or simulate for temporary unavailability of certain key resources and see how that would change our over allocation figures and the project duration. This way we could propose solutions to possible problems even before they occur.
Once a project has begun, the project manager’s decisions focus on how to deliver technical quality on time and for or under the estimated cost. Project – level decisions may include:
Disposition of material that is not up to specifications (for example a stairway that is not like the client has specified);
Request for additional time or money to complete activities;
Requests to add or reduce scope;
Unanticipated resource conflicts;
Late activities that may threaten the delivery date;
Unanticipated external influences like accidents, weather, new government regulations, unfulfilled assumptions (for example the soil conditions might prove bad, dictating a need to put in pilings before construction);
Recovery from mistakes.
Effective measures, as Dr. Joseph Juran identified them must:
Provide an agreed – on basis for decision making;
Be understandable;
Apply broadly;
Be easy for anyone to understand the same way;
Be economic to apply;
Be compatible with existing designs of sensors;
Provide early warning of the need to act;
Deliver control data to the person who must act;
Be simple.
Measures drive actions that move the project toward the goal. In “The Haystack Syndrome”, Dr. Goldratt notes:
The first thing that must be clearly defined is the overall purpose of the organization – or, as I prefer to call it, the organization’s goal. The second thing is measurements. Not just any measurements, but measurements that will enable us to judge the impact of a local decision on the global goal.
The improved measurement system for CCPM follows the practice established by Dr. Goldratt for production operations. It uses buffers (i.e. time) to measure task chain performance. The end of the project buffer is a fixed date: the project delivery date. For buffer management purposes, the ends of feeding buffers are also fixed. Buffer penetration is determined by asking people working on tasks, “When will you be done”. In MS Project this duration will be recorded in the Remaining Duration field of the Tracking Task Table. That allows the project manager to project forward using the downstream task duration estimates to predict how much of the buffer would be used up if they complete at that time.
CCPM sets explicit action levels for decisions. The decision levels are in terms of the buffer size, measured in days:
Within the first third of the buffer: Take no action.
Penetrate the middle third of the buffer: Assess the problem and plan for action.
Penetrate the final third: Initiate action.
These measures apply to both the project buffer and the Critical Chain Feeding Buffers. The project team will monitor the project buffers and each CCFB weekly. The week is the common unit for monitoring progress in constructions. Managers should be careful to monitor buffers at least as frequent as one-third the total buffer time. In our case the project buffer is 25 days, meaning that if we monitor the buffer every week we comply with the rule. Figure shows an example of using the buffers. The three Xs show three potential amounts of buffer penetration corresponding to the above criteria.
Figure III.3.1 Buffer penetration provides action decisions.
If the buffers are negative (i.e. latest task on the chain is early relative to schedule date) or less than one third of the buffer late (in this case less than 8 days late), no action needs to be taken. If the buffer penetrates the second third (more than 8 days late, but not more than 16) then the project team should plan for actions to accelerate the current or future tasks and recover the buffer. If the task performance penetrates the buffer by more than two thirds (17 days late or more) then the team should take the planned action. This mechanism provides a unique anticipatory project management tool with clear decision criteria.
Project mangers can update the buffers as often as needed by simply asking each of the task performers team leader how many days they have to the completion of the task. They should not put pressure or comment upon that estimate, since it is normal to have variances and tasks that exceed the original estimates.
An enhancement in the use of the buffer for long critical chains is to plot trends for buffer utilization. The buffer measure then becomes similar to a control char and can use similar rules. Penetration in the red zone requires action. For points trending successively in one direction requires action. Table III.3 provides some ideas of actions to reduce schedule buffer penetration, as adapted from “Critical Chain Project Management”, by Larry Leach.
A good idea is to also measure buffer penetration as a percentage of critical chain use. This helps preventing that the buffer get used too early in the project. However, trending buffer penetration has several advantages over this approach. It is much simpler to use and it also preserves the time history of date, improving control of the process.
III.4 Communication Project Information to Stakeholders
Reports are predefined formats intended for printing Microsoft Project data. We can’t enter data in the reports or work with on the screen, but we can format it and choose the desired form for printing. The report is a useful tool in communicating data to other people, perhaps other employees or stakeholders. It makes it easy to share data between the departments of a company. MS Project can also export data in Excel, where in can be formatted and represented in form of graphs and charts.
The graph below was printed using the Analyze Time scaled Data in Excel. It represents the total work, total cost and over – allocation values over the project weeks. It is a very useful tool, because it shows us when the most expensive activities occur and compares the total cost with the total work. This way we can make better estimate about the future need for cash and avoid the situation of not being able to finance our project. Also, this graph, along with other cost overview tools, can help us identify the most costly resources and when they perform their work. We can then monitor more closely their activity in order to make sure that we stay within budget and that these important activities are performed in a proper manner.
Figure III.5.1 Data exported from Project and graphed in Excel
Reports can give useful information to other departments. For example you could have a report show what materials are needed in the following weeks, how much they cost and what tasks they are allocated to. This way the acquisition department will make sure that we will never run out of necessary materials. Accounting can forecast the costs and estimate budgets.
To-do list reports can be sent to the employees, letting them know what their responsibilities are and when they will need to work on each task.
Other reports focus on the current activities. They can provide the project manager with information about tasks that are currently underway and need special attention. We can also print a list of tasks that did not start as scheduled or tasks that took longer than estimated. Then we can investigate to see the cause for these events. We can find out who immediately who was assigned to the task.
Figure III.5.2 Example of Material Usage Report
Chapter IV: Conclusions and Recommendations
IV.1 Improving the project management system is a necessity
Construction is one of the most important activities in a country’s economy. It accounts for a great part of the GDP and also provides the population with the needed housing and infrastructure.
In the last years there has been an increasing need of affordable housing for young people. Affordable implies lower production costs for the contractor and also more houses delivered in the same period of time. As shown in the theoretical chapter, the Critical Path method is no longer actual and neither efficient. Attempts to improve the process obtained only poor results because they were addressing the wrong problem: they all implied “doing more, better”. That is, doing what they were doing before, but at a greater pace. This led to increasingly complicated schedules, very long and incomprehensive reports, even worse uncertainty management and only temporary, short lived good results.
TOC provides the necessary tools to change this reality and attack the real problem: the constraint of the system.
Right now the constraint that prevents companies from making more money now and in the future is the project management system itself. Managers and business people should look into the concepts presented in TOC and apply the TOC tools to change their organizations.
IV.2 The throughput world
Dr. Goldratt found that most of the time system constraints trace back to a flawed policy, rather than to a physical constraint. In “The Goal” he demonstrated that policy constraints derived from a flawed system of accounting. Accounting systems in use today were developed around the turn of the century and have changed little since.
Dr. Goldratt defined the old accounting system as the “cost world”, because it operates on the assumption that product cost is the primary way to understand value and make business decisions. That requires the allocation of many expenses to products, through elaborate product-cost schemes, such as activity-based costing. Such schemes may leas do erroneous decisions.
A new way of accounting was defined in “The Goal”, which Dr. Goldratt called the “throughput world”. It rests on three definitions:
Throughput: All the money made from selling a product (revenue minus cost of raw materials);
Inventory: All the money tied up in fixed assets to enable the throughput (fixed assets and inventory are treated the same);
Operating expense: All the money spent to produce the throughput
All decisions and measures relate to the global goal and often lead to different decisions than those dictated by the cost-world.
For example, in the cost world, managers measure operating efficiency of local workstations. Financial people count inventory as a company asset. If no product is needed for customers then they produce product for inventory, increasing assets and making the company look good. But inventory costs money to produce and to store, hurting the cash flow and reducing disposable cash. The accounting system says it’s good but it’s bad for business. J
People, regarded as the biggest competitive edge, are represented as expenses. They look bad and are the first to go when business looks bad, therefore hindering the ability to make money now and in the future.
Top managers should recognize the importance of throughput over cost and not impose cost-world measurements over project managers
IV.3 External Constraints
Projects may have external constraints, which can influence the project lead time and which are not under the control of the project teams. Examples of such constraints are regulations, inspections and permits.
Project managers should give external constraints the five focusing steps treatment. First they must be identified. If they are only potential constraint they could deal with them as part of project risk management. If there’s a big chance that they become actual constraints, they should be on the critical chain.
The second step is to exploit the constraint. For example, in the case of regulations and permits for construction managers should make sure that the regulator agent meets its needs completely. That means providing them with the information they need the first time.
The third step is to subordinate to this constraint. This means to invest additional time to ensure good working relationship with any people or agencies that may become external constraints.
The fourth step is elevating, but this is an improbable decision in the case of external constraints.
IV.4 Critical Chain and Win-Win relationships
The way projects are managed today enforces a win-lose relationship between the project manager and the task performer. If the task performer delivers the task on time then it is good and gets a reward, but if the task performer delivers the task late then follows a punishment. People working on date-driven schedules will loose motivation if they repeatedly fail to meet the deadlines through no fault of their own.
Many managers try to reward people so they get motivated to achieve. A much better idea is to help the people achieve and then they will become motivated. Intrinsic rewards are much better than external ones. Actually rewards, just as punishments, are a form of external influence. Critical chain provides a good opportunity to create win-win situations through which people will be able to achieve, and will then become motivated. Because the project manager praises people not on the basis of conformance to the planned schedule, but rather on the basis of working 100% to the current task and turning in the results as soon as it is ready, it is easier for resource to achieve (when dedicated to their work).
IV.5 Number of Tasks
Managers are inclined to believe that a much more detailed schedule is a good way to manage uncertainty. Software tools that provide capabilities of handling very detailed information tacitly encourage the development of schedules ranging in the hundreds or even thousands of tasks.
Yet, when projects overrun the schedule, they do so by tens or even hundreds of percentage points. Can these percentages really be found in fractions of percentage point task? If a project has 100 tasks the average duration of each task is already al low as just 1 percent of the total project.
Excessively detailed schedule are hard to follow and they leave room for a multitude of potential task dependencies. This is very hard to handle even with advance scheduling tools, and their relevance is questionable.
It is better to keep the schedules around a few hundred tasks at most. This ensures focus and provides an easier to follow and understand schedule.
IV.6 Cutting the project buffer
Project managers are often asked to accelerate schedules. With CCPM there may be a tendency to look at the project buffer and suggest that reducing the buffer would be a painless way of reducing the planned project lead time. Reducing the buffer has no impact on project execution time. It only reduces the chances that the project will meet the promised lead time and cause excessive buffer triggers. Excessive buffer triggers lead to unnecessary change action, which damages project performance. Therefore, managers should not cut the project buffer.
If external needs require the manager to cut the buffer then the manager should check to see if the remaining CCFB and project buffers provide adequate protection to the remaining tasks on the critical chain and the feeding chains.
IV.7 Extending the critical chain to multi-project environments
Critical chain can greatly improve multi-project environments. First it identifies a multi-project constraint, called the drum. As its name suggest, the drum acts as a rhythm setter for all the projects of the company. All projects are scheduled according to the specific date when they need the drum resource. Priorities are clearly defined according to the order that the projects will get the drum resource. Resource leveling becomes a much easier task, because once the conflicts for the drum resource are resolved, most of the remaining conflicts disappear as well
IV.8 Improving project management with help of software tools
We can make two analogies with the activity of the project manager. First, when the project is in its planning part, the project manager behaves as the pilot of a plane before take of: he/she gathers information and coordinates, to which he will refer later, to see where he stands, compared to the desired results. What the project manager does through in the control stage is similar to what a numerical controller does to a numerically controlled machine tool: whenever the tool exceeds some specific working parameters for the products it manufactures, the controller sets the machine back on the right track. In the same way, when a project is deviating from the normal course of activity, a project manager must identify the situation promptly and take corrective action. He/she needs accurate information in a timely fashion that tells him/her where the project is, where it is going and what corrective action he/she must take in order to get the project back on track. Using a software tool to process information, a project manager has much better chances of taking the right decision at the right time. Not only that, but he can forecast future events and anticipate the need for future decisions.
Uncertainty will always be a part of any project and no planning and control activity, no matter how efficient and good will ever change that. However, what a good planning can do is to keep the team as close as possible to the desired track and to maintain the focus needed for dealing with unexpected events and sudden changes, should they occur.
Trust is a key issue in the activity of the project manager. If the other team members do not trust the manager’s decisions anymore it is better for the project manager to let somebody else take over his/her responsibilities. Otherwise the activity will be compromised, because the team will not be motivated and will not respond promptly to the requests of the project manager. A software tool can help a lot when relevant information must be obtained in order to take advised decisions that will impose the project manager as a trustworthy leader.
Conflicts are inherent in any organization and a construction contractor is not an exception. Project managers may find themselves competing with other project managers for resources. Sometimes keeping a project on the right track may depend a lot on the project manager ability to negotiate for resources. If the project manager brings reasonable arguments sustained by documents to support his claims for resources, it is more likely that he/she will receive these resources. A good scheduling engine can provide the project manager with the answers to questions such as: “why should I allocate these resources to your project?”, “why can’t these tasks wait and be worked on later?”, “why should your project have priority?”. Conflicts can occur with other departments too. With the help of the software tool, communication can be greatly improved and the conflicts can be minimized.
Bibliography
TOC Books:
Goldratt, E.M., “The Goal”, Great Barrington, MA: North River Press, 1984
Goldratt, E.M., “It’s not luck”, Great Barrington, MA: North River Press, 1994
Goldratt, E.M., “Theory of Constraints”, Great Barrington, MA: North River Press, 1994
Goldratt, E.M., “Critical Chain”, Great Barrington, MA: North River Press, 1997
Leach, Larry, “Critical Chain Project Management”, Artech House, 2000
Project Management Books:
Chris Hendrickson, Carnegie Mellon University Pittsburgh, PA, USA – “Project Management for Construction”
Cleland D.I.- “Project Management. Stategic Design and Implementation”, McGraw-Hill, 1990
C.Opran, S.Stan, S.Nastasa, B.Abaza- “Managementul Proiectelor”, Edit. Comunicare, 2003
Victor Radu, Doru Curteanu – “Managementul Proiectelor de Constructii”, Edit. Economica, 2003
Microsoft Manuals:
Carl Chatfield, Timothy Johnson -“Microsoft Project Version 2002”, Microsoft Press, 2002
Carl Chatfield, Timothy Johnson -“Microsoft Project Version 2003”, Microsoft Press,2003
Critical Chain Articles:
Delivering Project Benefits Faster using the Theory of Constraints By Tony Cardella
http://www.goldratt.co.uk/lib/delproben.htm
Late Night Discussion Number 7 by Dr. Eliyahu M. Goldratt
http://www.goldratt.co.uk/lib/lnd7.htm
Late Night Discussion Number 12 by Dr. Eliyahu M. Goldratt
http://www.goldratt.co.uk/lib/lnd12.htm
My Saga to Improve Production by Eliyahu M. Goldratt
http://www.goldratt.co.uk/lib/saga.htm
Program Management – Turning Many Projects into Few Priorities with TOC by Patrick, Frank.
http://www.focusedperformance.com/articles/multipm.html
Critical Chain Case Studies on http://www.goldratt.co.uk/lib/lib-cc.htm
Better On-Line Systems
Habitat For Humanity
Harris Semiconductor
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