MANAGEMENT INFORMATION SYSTEM

FOR A GRADE-1 BUILDING CONTRACTOR

by
M. VUAYANANDHA

DEPARTMENT OF CIVIL ENGINEERING

UNIVERSITY OF MORATUWA
MORATUWA, SRI LANKA
 MANAGEMENT INFORMATION SYSTEM
FOR A GRADE-1 BUILDING CONTRACTOR

by

M. VUAYANANDHA

A PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT OF

T H E REQUIREMENTS FOR T H E D E G R E E OF MASTER OF

ENGINEERING IN CONSTRUCTION M A N A G E M E N T

JULY 1995 67^7^

Supervised by Mr. JUSTIN D E SILVA

Coll.

624 "95"

69.oo3
DEPARTMENT OF CIVIL ENGINEERING
FACULTY OF ENGINEERING
UNIVERSITY OF MORATUWA

67990
 ABSTRACT

This report is the outcome of a study carried out

to evaluate the Management Information Systems used

by Local Contractors, with grade I l i s t i n g ,

registered with the Institute for Construction

Training and Development (ICTAD), with the aim of

improving same to enhance their Planning and

Progress Control functions, after identifying the

probable flaws.

The Construction Industry in Sri Lanka encounters

much greater challenges today than anticipated a

decade ago, due to factors such as shortage of

resources, more stringent regulations and controls,

rapidly changing technologies, very heavy

competition and high social demands. This

necessitates a dynamic and efficient Construction

Management System through which quick and accurate

decisions could be taken by the Top Management.

Planning and Progress Control are two key functions

of any Construction Management System, which to a

great extend depend on accurate data and smooth

flow of information.

The survey carried out and interviews conducted

during this study revealed that Data Management and
Flow of Information were the two main problems
identified by the local contractors, which were
affecting their Planning and Progress Control
func t i o n s .

I
Therefore, i t was decided to carry out a case study

using a model construction organization, identify

the problems in their Management Information System

that are affecting the Planning and Progress

Control functions, obtain the current practices of

similar organizations in the industry by way of

questionnaire surveys, and, recommend remedial

measures for this organization using these data and

others collected from Literature surveys.

The major findings of this study ares-

fa) Lack of a data base.

(b) Inability to retrieve appropriate

information.

(c) Ineffective information system

(d) Lack of a division, to co-ordinate the

flow of information, and to analyze the

collected data.

(e) Poor analysis of information.

(f) Lack of appropriate and timely corrective

ac t i o n s .

(g) Very poor control on performance.

Though the above findings are specific to the model

organization, a similar study of another

organization would lead to identifying its specific

problems in the information system so that remedies

could be sought to improve their Planning and

Progress Control functions.

II
For any information system to be effective and

successful, i t should be an integrated Man/Machine

system for providing information to support the

operation, management and decision making functions

in an' Organization. It should u t i l i z e computer

hardware and software, manual procedures,

management and decision models, and a data base.

(Davies, 1974)

The flow charts proposed for the model organization

using the existing functional units are shown in

figures 1 and 2 in the next two pages. Figure 1

shows the procedures recommended for Pre-Tender

stage and figure 2 covers the Post Tender

procedures. By entrusting specific responsibilities

to the already defined divisions in this

organization, i t is passible to get the system

operating effectively and successfully, without

over stressing any one • unit, and thereby improve

the Planning a Progress Control capabilities.

Ill
 PLANING f, PROGRES8 QUANTITY SURVEYING FINANCE/
DIRECTORATE , CONTROL & CONSTRUCTION ADMINISTRATION
ESTIMATING

COLLECT
TENDER
DOCUMENT8

SELECT TEAM FOR TENDER

8TUDY TENDER DOCUMENT8

8END OUT ENQUIRIES VI8IT 8ITE

OBTAIN CLARIFICATIONS

ATTEND PRE-TENDER MEETING

\/_

WORK OUT METHOD OF CONSTRUCTION OPTIOH8

CARRY OUT
8CIIEDULE FEEDBACK BASIC PRICING

3L
\1/
MEET TO DECIDE METHOD OF CONSTRUCTION/ SUB CONTRACTORS/ 6UPPLERB/ MARK UP ETC.

\ /

PREPARE PROGRAMME PRICE TENDER

V \ /
PREPARE
PREPARE CASH FLOW RESOURCE
SCHEDULES'

\ /
PREPARE 8ITE PREPARE
ORGANIZATION TENDER
SUMMARY

JUL

OBTAIN BOND8 AND GURANTEE8

EVALUATE TENDER
1 (illMMARY & MAKE
UlNAL ADJUSTMENTS

V
WRAP UP TENDER

SUBMIT TENDER

FLOW CHART FOR PRE TENDER PROCEDURES

RECORD & ANALYZE RECOMMENDED FOR THE MODEL ORGANIZATION.
TENDER RESULTS

FIGURE 1
 QUANTITY SUfTVEYItlO PLANING & PROGRESS FINANCE/
DIRECTORATE » CONTROL CONSTRUCTION ADMINISTRATION
ESTIMATING

\
nECEIPT 0F LETTER
OF AWARD

V
COLLECTION OF TENDER OOCUMEHTB/
CONSTRUCTION DOCUMENTS

OBTAIN BONDS/OUnANIEEB/ INSURANCE; ESTABLISH JOB NO.

BELEOT PROJECT STAFF/ SUB COPNTTTACTORS

TAKE OVERBITE

Jl.
STUDY
COHBmUOTKJN
DOCUMENTS

OICUBB * FINALIZE METHOD OF OONBTTTUOTION

VI/
MODIFY/ PREPARE
WORKING
PROGRAMME

PREPARE RESOURCE SCHEDULES A INFORM

RELEVEN T 8ECTTONS

\/_

NEGOTIATE WITH SUPPLIERS/SUBCONTRACTORS

I
AO REE ON PROGRAMMES/ SCHEDULES

INFORM SITE OF
AGREEMENTS
REACHED

\(_

FURNISH OATA USED IN TENDER T O SITE

COMMENCE
.CONSTRUCTION

3 l
OBTAIN REGULAR FEEOBACK FROM BITE
ON RESOURCE UTILISATION/ OUTPUT/
EXTnA WORK/ VARIATIONS

V
COMPARE ACTUAL
PERFORMANCE WITH
PLANNEO PROQREE8

&
CHECK DEVIATIONS
ANALYSE AND
DETERMINE PROBABLE
CAUSES

INFORM DIRECTORATE
PROJECTS STATUS;
PROBLEMS/ REMEDIAL
ACTIONS PROPOSED

OBTAIN RUUNQ FROM DIRECTORATE

NOTIFY BITE ANO IMPLEMENT CORRECTIVE ACTIONS

FLOW CHART FOR POST TENDER PROCEDURES

RECOMMENDEO FOR THE MODEL ORGANIZATION.

FIGURE a
 ACKNOWLEDGEMENT

I am e x t r e m e l y g r a t e f u l to the Management of T u d a w e Brothers

Limited for r e l e a s i n g me to follow this c o u r s e of study,
inspite of the c o n s e q u e n c e s to the Company, and g r a n t i n g me
an o p p o r t u n i t y to m a k e my c o n t r i b u t i o n , atleast in a small
way, to the C o n s t r u c t i o n Industry.

My sincere t h a n k s are also due specially to the M a n a g i n g

Director and D i r e c t o r , F i n a n c e and A d m i n i s t r a t i o n of T u d a w e
Brothers Limited for g r a n t i n g me a free access to every
information I required to m a k e this study a s u c c e s s .

This study w o u l d not h a v e been p o s s i b l e if not for the

valuable guidance and the leadership on the d i r e c t i o n s of
research p r o v i d e d b y the research s u p e r v i s o r M r . Justin De
Silva. I wish to express my sincere g r a t i t u d e to him as
well.

My c o l l e a g u e s in the industry, who w i l l i n g l y p e r m i t t e d me to

pick their b r a i n s and e x p e r i e n c e s , too cannot b e ignored at
this juncture. Every bit of information c o l l e c t e d at the
discussions and meetings held with them, has made its
contribution in f o r m u l a t i n g the p r o p o s e d i m p r o v e m e n t s . As
they did not w i s h to be identified, I take this o p p o r t u n i t y
to thank e v e r y one of them for their v a l u a b l e c o n t r i b u t i o n s .

I should also thank my colleagues working abroad, in

international C o n t r a c t i n g Firms for their c o n t r i b u t i o n s by
sending v a r i o u s formats and systems adopted by t h o s e firms,
in r e s p o n s e to my r e q u e s t s , which were h e l p f u l in d e v e l o p i n g
the formats p r o p o s e d .

Finally, my t h a n k s go to each and every m e m b e r of staff at

T u d a w e B r o t h e r s Ltd. for accommodating my i n t e r v i e w s during
their b u s y s c h e d u l e s and assisting me in every p o s s i b l e way
to s u c c e s s f u l l y c o n c l u d e my study and p r o d u c e this r e p o r t .

•r
VI
 CONTENTS
PAGE NO.

Chapter 1.0 - Introduction

1.1 Importance of Data Collection and Flow of

Information 01

1.2 Background 04

1.3 Objectives 09

1.4 Methodology 10

1.5 Achievements 11

Chapter 2.0 - MIS for Planning and Progress Control

2.1 Management Information System (MIS) 14

2.2 Planning and Control 17

2.3 Questionnaire Survey 19

2.3.1 Need for a Survey of the local Construction

Industry 19

2.3.2 Development of the Questionnaire 19

2.3.3 Questionnaire Survey Procedure and Response 20

2.4 Problems identified from the Questionnaire

Survey 21
2.5 I n f e r e n c e s made f r o m t h e feedback received
for the Questionnaire 23

Chapter 3.0 - Study of t h e p r e s e n t Data Management

System and i d e n t i f i c a t i o n o f a r e a s for
improvement

3.1 Introduction to the Organization selected for

Case S t u d y 25

3.2 Operation of Divisions and identification of

problems 26

3.2.1 Tendering Department 26

3.2.1.1 Tendering Policy 26

VII
 PAGE N O .

3.2.2 Planning and Progress Control Department 29

3.2.2.1 Pre Tender Planning 29

3.2.2.2 Post Tender Planning 30

3.2.2.3 Progress Control 32

3.2.3 Purchasing Department 33

3.2.4 Stores 36

Chapter 4.0 — Improvements proposed -

Pre—Construetion Phase

4.1 Proposed Improvement to Tendering Department 37

4.1.1 Proposed Tendering Policy 37

4.1.1.1 Problems in the Present System 37

4.1.1.2 Suggested selection criteria 39

4.1.2 Recording tender results 46

4.1.3 Tender Department Staff 47

4.2 Proposals for Systematic Approach to Tendering 49

4.2.1 Extracting Data, Distributing Work, and

Preparing Tenders 49

4.2.2 Planning at Tender Stage 57

4.2.2.1 Preparation of Construction Plan 59

4.2.2.2 Preparation of Resource Schedule 62

4.2.2.3 Preparation of Cashflow Forecast 64

4.2.3 Use of Computers in Estimating 67

VII I
 PAGE NO.
Chapter 5.0 Improvements Proposed —
Construction Phase

5.1 Planning Division 71

5.1.1 Liaison with Construction Division 71

5.1.2 Liaison with Purchasing Division/Stores 73

5.1.3 Liaison with Plant & Equipment Division 74

5.1.4 Liaison with Finance Division 75

5.2 Progress Control Divison 76

5.2.1 Progress Report proposed on major

projects t o Management 76

5.2.2 Data Required f o r the proposed Progress

R e p o r t and methods p r o p o s e d for
c o l l e c t i o n of such data 77

5.2.2.1 Job No./Project Name 77

5.2.2.2 Duration 78

5.2.2.3 Average Mark-up 78

5.2.2.4 Physical Progress 79

5.2.2.5 Financial Progress 81

5.2.2.6 Project Cost 83

5.2.2.6.1 Proposed Improvements to the

Costing System 86

5.2.2.7 Remedial action and follow up 89

5.2.3 R e c o r d s r e c o m m e n d e d t o be m a i n t a i n e d
a t s i t e s and f e e d back c a l l e d for 89

Chapter 6.0 - Conclusions and Recommendations

6.1 Conelusion 95

6.1.1 Tender Stage 95

6.1.2 Construction Stage 96

IX
6.2 Recommendations 98

6.2.1 Tender Stage 98

6.2.2 Construction Stage 99

6.3 Suggestions for future research 102

References 105

ANNEXATIONS PAGE NO.

I] Flow Chart of Project Control System 106

2] Questionnaire forwarded to selected Grade-I Local

Contrctors 107

3] Questionnaire Survey Conclusions 115

4] Organization Structure of Tudawe Brothers Ltd. 118

5] Information on New Tender being priced 119

6] Allocation of Responsibilities - New Tender 120

7] Site Visit Report 121

8] Flow Chart for determining the cost in estimating 124

9] Data Form for Bid Bond 125

10] Tender Summary 126

I I ] Typical Bar Chart with Resources 127

12] Resource Schedule Format 128

13] Cashflow Forecast Format 129

14] Materials Schedule for Purchasing Division/

Stores 130

15] Plant & Equipment Schedule 131

16] Progress Report Format for Management 132

17] Physical Planned Progress Comparison Sheet 133

18] Cost Comparison Sheet of Projects 134

19] Plant Hire Rates 135

X
 PAGE NO.

20] Plant Usage Records from sites 136

21] Construction Accessories Hire Charges 137

22] Documents maintained at sites 138

23] Work Record Sheet 139

24] Record of Work Executed 140

25] Day Works - Costing Sheet 141

26] Summary of Claims - Extra Works 142

27] Summary of Claims - Variations 143

28] Requisition Forms for Site Stores 144

29] Resource Allocation Sheet 145

30] Planned and Actual Performance

Comparision Sheet 146

31] Materials Reconciliation Format 147

XI