BASICS of CONSTRUCTION PROJECT MANAGEMENT

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1 BASICS of CONSTRUCTION PROJECT MANAGEMENT 1 Outline What is a project? What is a construction project? Program & Portfolio Characteristics of a Construction Life Cycle Areas to Manage in Construction Comparison of Construction to Operations What is a typical Work Breakdown Structure of a Construction Key Success Factors of a Construction Common Issues in Construction s 2 1

2 Speaker Profile A certified Management Professional (PMP) Completed a Diploma in Management Currently the Head, ICT Delivery & Program Management of a EPC Company Manager practitioner for 5 years and more than 13 years in the IT industry focused on Pharmaceutical, Manufacturing, and Construction domains Experienced in Software Development Lifecycle (SDLC), systems implementation and Integration Implemented enterprise systems such as SAP ERP, HCM, Primavera P6 EPPM, CRM, DMS, etc. Conducts various trainings - Management Trainings (Fundamentals, PMP Review, Basic scheduling, etc.), Basic Programming, SQL Programming Active Member of PMI Philippines Chapter 3 Overview In the context of this discussion, Construction Management can be described as: The art and science of coordinating people, equipment, materials, money and schedules to complete a specified project on time and within an approved cost. 4 2

3 What is a PROJECT? A is a temporary endeavor undertaken to create a unique product, service or result. PMBOK is a work or undertaking with a planned beginning and end to produce a distinctive outcome such as a product, service or result intended to satisfy specific requirements or higher purposes - OP3M 5 What is a Construction? A Construction is a type of project undertaken in unique, physical and complex environments under defined timelines, often under contract, to build a unique and tangible product called a Facility that will produce the intended product or service of the mother project or to serve the purpose of a higher project. - OP3M 6 3

Construction Management Principal objective of a project manager (construction manager) is to complete each project on time and within budget,

Optimize the three attributes: Quality, Cost, and Time; 7 Program and Portfolio Company Portfolio related or unrelated projects &/or programs --

& Eng g Execution Program related projects managed and coordinated to optimize benefits and improve control compared to managing the projects

4 Construction Management Principal objective of a project manager (construction manager) is to complete each project on time and within budget, while maintaining acceptable levels of quality, safety and risk. Optimize the three attributes: Quality, Cost, and Time; 7 Program and Portfolio Company Portfolio related or unrelated projects &/or programs -- managed to meet strategic business objectives Dev. & Eng g Execution Program related projects managed and coordinated to optimize benefits and improve control compared to managing the projects individually Management Office (PMO) D Business Units Transmission & Substation Power Generation is a group or department within a business, or enterprise that defines and maintains standards for project management within the organization A Telecoms C B Intro to Construction Management - Optima P3 Management, Inc. 8 4

5 Characteristics of a Construction A Temporary Work A defined or dictated start and completion dates Tasks or activities may be standard or repetitive Large workforce and resources -specific assignments and duties and authority Produces a Distinctive Outcome Outcome is a tangible product a unique facility Specific deliverables and unique configuration built in unique environments Plans and methods are tailor-fit to each project Work packages performed by different project teams 9 Characteristics of a Construction For Specific Requirements or Higher Purpose output, e.g. power plant, produces the desired product, services or output of the real project, e.g. electricity On-budget and timely completion of scope are of the essence to fit window of opportunity Impact or benefit may be realized long after completion1 Progressively Elaborated Requirements, plans and baselines continuously evolve, refined, detailed and updated from concept to close Characterized by periodic or unplanned changes to baselines, plans, and systems 1A Guide to the Management Body of Knowledge, Fourth Edition, Management Institute, Inc. 2008, p

6 Life Cycle Business Development Identification, selection of projects/programs as per Sales Pipeline Alignment with corporate strategic plans Building of new customer lines Retention activities for current customers Initiation & Planning Opportunity Management Identification of projects to participate Bidding and proposal participation (Pre-Bid meetings, Bid Conference, Site Visit and Inspections, etc.) Estimating, Detailed Engineering, BOQ, Bid Results, Win Loss Analysis Hand-over to Execution group Assignment of Manager Perform the Scope Assessment, Team assignment, Work package creation/updating, prepare other subsidiary plans (Procurement, Quality, etc.) Finalize project plan and schedule. Schedule and Cost baseline creation Obtain Customer sign-off Execution Site Mobilization and Execution of Site activities L4/L5 detailing schedule / Lookahead plan and resource allocation Prepare and submit PR, PR Approval, PR to PO Process Perform support activities (QA, QC, Safety, Security inspections) Progress reporting (accomplishments, trending reports) & Forecasting / Lookahead planning Closure Verify completion and acceptability of all deliverables Turn over project to the next phase or to customer Secure formal acceptance of the project s product Closing all Procurements and Contracts Performing Financial and Administrative Closure 11 Operations vs. s Operations On-going, don t want to end, with repetitive outputs A beginning and end, with unique outputs Performed by people who efficiently use resources People and resources sourced through operations If operational objectives are not met, new directions are set Ends whether project objectives are met or not Managers perform Planning, Organizing, Leading and Controlling functions Managers perform additional Initiating and Closing functions Uses operations management systems and processes Uses project management systems in conjunction with operations management systems 12 6

7 Areas to Manage in a Scope Management Define and control what is and what is not included Quality Management Plan, ensure and control quality and acceptance Human Resource Management Plan, organize, manage, develop the project team Procurement Management Outsource resources and deliverables Time Management Define and sequence activities, estimate resources and durations, develop schedule and manage completion Cost Management Estimate, budget and control project costs 13 Areas to Manage in a Risk Management Identify and analyze uncertainties and impacts, prepare responses and monitor risk occurrence Communications Management Generate, collect, distribute, store, retrieve, and dispose project information Stakeholder Management Identify and analyze stakeholder needs to effectively engage them in project decisions and execution Integration Management Combine, unify and coordinate all project processes of the different areas 14 7

Additional 4 Areas to Manage in a Construction Safety Assure that construction project is executed with proper care to prevent accidents that may cause personal injury and/or property damage

8 Additional 4 Areas to Manage in a Construction Safety Assure that construction project is executed with proper care to prevent accidents that may cause personal injury and/or property damage Environment Ensure that impact of project execution to surrounding environment will be within legal limits Financial Acquire and manage financial resources and cash flow Claim and Dispute Eliminate or prevent construction claims from arising and for the expeditious handling when they occur 15 Typical Organization Director Quality Head QA, QC, Safety, Security, Environment Support PMO Contract Admin Procurement Purchasing Finance Accountant Manager HR Admin Recruitment IT Admin Engineering Planner/Scheduler Construction Manager Site Supervisors Controls Site Resources Materials Management Document Controller HR Coordinator Equipment Resource Coordinator 16 8

9 Example WBS Construction 17 Typical WBS of a Construction PROJECT Management Procurement Work Packages Facility 1 Facility 2 Quality Structural Structural Safety & Environment Electrical Electrical HR / Resource Requirement Plan Civil Civil Integration to Overall Execution Plan Execution 18 9

10 Key Success Factors Established Bidding and Estimation Process Management Office Resource Management Planning and Scheduling Well defined Organization Document Management System, Cost and Progress Monitoring and Tracking Good Closure Activities Solid Contract Administration which includes variation management 19 Common Issues/Problems of Construction s Lack of Integrated Process Squandered resources Lack of transparency & Cost Control Inconsistent delivery & project quality No Single System to manage bidding to close out Reactive approach Low Accountability & Predictability on Risks 20 10

11 Questions? 21 End of Presentation. THANK YOU! Contact: Ramon Navarro III, PMP / mhon_navarro@yahoo.com 22 11

Project Management Framework with reference to PMBOK (PMI) July 01, 2009

Project Management Framework with reference to PMBOK (PMI) July 01, 2009 Introduction Context Agenda Introduction to Methodologies What is a Methodology? Benefits of an Effective Methodology Methodology