ICFAI UNIVERSITY

DEHRADUN
Gopal Krishan

[OPERATIONS MANAGEMENT IN CONSTURCTION]
IBS Enrollment No.: 09BS0002792 IUD No.: Course Code: Course title: Submitted to: Submitted on: 0901202792 SLOM502 Operations Management Sanjay H. Rao 4th Jan, 2010

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Contents
Introduction to the assignment:...................................................................................................... 4 Complexities in a construction project .......................................................................................... 4 Operations management in a construction project: ...................................................................... 4 1. Site of the construction .......................................................................................................... 4 Factors in the site that affects the construction ......................................................................... 5         2. Geotechnical test .......................................................................................................... 5 Boundaries: .................................................................................................................. 5 Access Road: ................................................................................................................ 5 Service availability: ..................................................................................................... 5 Storage area .................................................................................................................. 5 Logistics ....................................................................................................................... 6 Waste disposal ............................................................................................................. 6 Weather conditions and place of site .......................................................................... 6

Layout plan: ............................................................................................................................ 7 a. Accommodation............................................................................................................... 7 b. Raw material storage ................................................................................................... 7

c. Location of the fixed plant .............................................................................................. 8 3. Plan of the project................................................................................................................... 8 A. B. C. D. E. F. G. H. 4. 5. 6. Constructability analysis ............................................................................................. 8 Code analysis ............................................................................................................... 8 Financial feasibility analysis:...................................................................................... 8 R-charts and P-charts: ................................................................................................. 8 Gantt Charts ................................................................................................................. 9 WBS ............................................................................................................................. 9 Interface mapping ...................................................................................................... 10 The network schedules .............................................................................................. 10

Material procurement: .......................................................................................................... 11 Quality management: ........................................................................................................... 11 Cost control:.......................................................................................................................... 12 Value chart ............................................................................................................................ 12

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Critical ratio .......................................................................................................................... 13 7. Production control: ............................................................................................................... 13 Complete Kit: ....................................................................................................................... 14 8. 9. Process control: .................................................................................................................... 14 Waste management and monitoring: ................................................................................... 14 A process for monitoring ..................................................................................................... 15 10. Safety management: ...................................................................................................... 15

References: .................................................................................................................................... 16

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Introduction to the assignment: Since World War II the infrastructure development
has taken a sky reaching height and construction projects are getting more and more complex in nature. We see the apartments in our locality, infrastructure of the companies and admire the beauty of them especially when we see the façade of the buildings. But what we overlook is the pain, the work, the processes and the people who had worked day and night to build that building. Because of the increasing complexities and the expanding sizes of the construction projects, it became necessary to put in a serious study that can help us in solving the problems faced by managers during the construction project life cycle. A very essential part of the construction management is the operations management in it as there is involvement of a lot of people, their individual interests, machines, tools, material, equipments, place, organizations, wastages, pollution and disturbances in one single project.

Complexities in a construction project: To complete any project, there is a need
for proper planning and planning becomes more and more difficult with the complexity of a project. However, complexity is just one of the dimensions of a construction project; it is a major dimension and requires a special level of management. Complexities are caused in a construction project because of the presence of a number of factors that affect the movement of the project towards completion. Moreover, these factors, though vary from each other, are interrelated to an extent that failure of one of the factors can lead to a pause in the smooth functioning of the project. Factors which are involved in the construction project run to a long list. Some of them which are directly related to the success of the project are:             Site of the construction People and area around the site Government, especially the municipal corporation Parties involved in the project Engineers Labours Raw material Machines and fixed plants e.g. cranes and concrete mixers Legal regulations Logistics Weather conditions Technology

To cater to the complexities of a construction project, we need to understand each of the factors and plan for any consequences that can happen. Also it is important that all the decisions are to be taken before the beginning of the construction project because any decision taken in time and before always has a greater impact on the success of the project.

Operations management in a construction project: 1. Site of the construction
a. The site of the construction is the most important factor in a construction project because i. It costs a lot 0901202792 Page 4

ii. It is the place where the construction work is going to happen

Factors in the site that affects the construction :
 Geotechnical test: The site is first tested on the geo technical basis like the soil test, the water level test which tells about the success and possibility of making the construction project.  Boundaries: The boundaries of the site are important factor when it comes to operations management during construction. If the boundaries are too close to the construction site, it becomes difficult for raw material storage, accommodation place for labors, fixed machines like cranes to operate properly. Also, the cranes cannot cross the boundaries because if the cranes are hanging over neighbor’s building it becomes a matter of trespassing.  Access Road: It is important that the site is accessible through roads. If it is not close to the public roads, there is a need to build temporary roads for the transportation and logistic operations. Building temporary roads also require material and therefore it is important to see as to what is the best alternative of making an access road. For example, places where there are heavy rains bricks road are required, if the transportation is going to be too frequent and heavy on the road one needs to build concrete or tar coal roads. Also, if the construction is going on too lose to the public road, appropriate safety measures have to put hoardings to ensure the safety of the public. In case, if the road has to be blocked by the construction works, there is a need to manage the traffic by using man or to make an alternate route for the traffic passing by that route. This thing happened on the NH7 when the Hyderabad International Airport was under construction. Above is the diagram after the construction of the over bridge and the roads was over but before that, there was only the NH7 and a road going towards the airport. Thus, traffic was controlled there manually till the work was not complete.  Service availability: during the construction and after the construction is over, many a services are required. Water, power, sewerage, telephone line, etc. are required during the construction itself. If there is no water supply at the place of construction, appropriate measure to store water must be taken before itself. Similar thing is with power. If there is no power or too frequent power failure, generators needs to be arranged. Sewerage facilities are required for disposal of the waste water.  Storage area of the raw material and the semi finished things should be as close to the place as 0901202792 Page 5

possible. Just like it is shown in the picture, the under construction GMR airport project at Hyderabad. There is a lot of area around the construction site and there is no problem of the storage and processing the raw material. But at the same time, a construction site which is right beside the public road, it is difficult to manage the raw material storage because of less space availability.

 Logistics: The construction site, if it is close to a river bank or close to water bodies it becomes even more difficult to manage the logistics part. Also, the material may be so much that mere trucks cannot carry the raw material required. Thus there may be a need for a railway track to get the raw material into place.

 Waste disposal: The waste of the construction site also have to be disposed off and there is transportation required for that as well. If the construction site is over a river for a dam or a bridge, the waste cannot be dumped into the river just like that. It has to be taken out and then disposed off at a proper place.  Weather conditions and place of site: A construction going on a plane is easier than one going on at polar caps. ICEHOTEL, situated in the village Jukkasjärvi, Sweden is build every year and there people have to work at a temperature of less than -5 degrees. If the temperature increases slightly the ice will start melting and the construction could not be done. Even then the project has to be finished within time because one day delay in project completion can be a loss of millions of dollars to the owners. Similarly, the construction project becomes difficult to complete in an area where there are heavy rainfalls. If the weather conditions are too hot, the distance 0901202792 Page 6

between the concrete mixer and the place where it has to be set should be least otherwise the concrete will dry up before setup. 2. Layout plan: In a huge construction project like that of the Hyderabad International Airport, it is important to have a good facility layout plan so that the costs of moving things, wastage of time due to distances, cost of installing the fixed plants like cranes and concrete mixers etc. can be minimized. a. Accommodation: For the working staff accommodation needs to be required near the site itself. The eating places and changing places should be closest to the site to reduce the time wastage. Places are required for the offices of site manager, planner, site engineers, etc. The plan of the office also depends on whom is the room meant for. For example, an engineer would require a large table in his room to put the charts and maps whereas a planner would require space on the walls to hang on the plans and diagrams etc. b. Raw material storage: Raw material should be stored close to the construction site itself. In certain cases it is possible that the area is not sufficient around the construction site to do all the activities like in the case of a flyover being built on a busy road. Thus the components of the flyover can be built at an open ground nearby the construction site and then the parts can be transported to the site. The way the raw material is stored is also important because generally there is an understanding between the supplier and the user as to how the raw material is going to be 0901202792 Page 7

3. Plan of the project

stored. If not stored in a proper way, there is no insurance claim or no return of the material purchased. So to avoid this, the raw material has to be stored in a proper way. c. Location of the fixed plant: Fixed plants like tower cranes, hoists and concrete mixer need electricity. The concrete mixer has to be closer to the place of main use to reduce transportation time. Hoists should be placed at the centre of the building so that the distance is minimum and equal to all directions. Positioning of tower crane can be according to the inner and outer radius of the crane. As in the diagram, the crane is set at the center and the inner and outer radius can cover the whole area of the construction site.

Figure 1Management of Construction by F. Lawrence Bennett

A construction plan is made keeping in view the life cycle of the project. It starts right from the pre-project phase where the decision about the organizational structure for the project is decided. Also the relationship between the parties and the way the contractor will be paid is decided. It lays the foundation of the construction project. After that it is the planning that has to be done for the project. The construction planning has to be done very carefully because decisions taken at the beginning of the project are going to have a greater impact in the later stage of the project. There are a lot of tools that are used for the construction project planning. A. Constructability analysis: It is the analysis done by the experts in the construction projects during the early design and planning phase to ensure that the project is buildable, cost effective and efficient and maintainable. B. Code analysis: There are a number of codes that have to be analyzed in a construction design like fire code, building code, plumbing code, electrical code, etc. C. Financial feasibility analysis: We can financially analyze the feasibility of the project by using the project appraisal techniques like IRR, NPV, etc. D. R-charts and P-charts: The P-graph is the product graph wherein the ordering of production and materials, bills of materials and ordering the operation tasks are represented. It defines the work to be done. The R-graph is the resource graph in which the resources allocated to the different units, factories, departments and groups. 0901202792 Page 8

These resources allocated helps to control cost as well as the groups have to work according to the resources provided. These resources provided gives capability and capacity. E. Gantt Charts: In large projects there are thousands of tasks involved and scattering them becomes a difficult task. Gantt chart can be used to avoid this. Gantt chart is the most widely used tool for planning a project and it is the same for a construction project as well. Software like MS Project helps us making the Gantt charts in which we can plan the schedule of the project. To have an effective planning for the project and to scatter the tasks we have to decompose the project into stages. This can again be done in several ways: Sequential processing: whereby the project is divided into separate stages and each stage is carried out successively in sequence. Parallel processing: whereby the project is divided into independent parts such that all stages are carried out simultaneously. Staggered processing: whereby the stages may be overlapping, such as the use of phased design-construct procedures for fast track operation.

  

The decomposition of a project is important because there can be a problem of congestion. Congestion may be in the form of part or workstation. Part congestion is a result of a lot of activities going on at the construction site. Workstation congestion occurs because in a manufacturing process the product or part can be at one workstation in one time but in construction one part can be worked on by many a workstations at the same time. Thus along with part congestion, workstation congestion also occurs in a construction project. Therefore a lot of problems like material flow can be avoided if there are minimum numbers of activities carried out on site. F. WBS (work breakdown structure) and linear responsibility chart: The work breakdown structure and linear responsibility charts are again effective tools to plan for a construction project.WBS divides the whole project into smaller jobs to be accomplished level by level. This is done by first identifying the jobs, and then breaking that job into smaller parts again till a complete picture of the work is visible. 0901202792 Page 9

For example in the diagram below there is only one job of a complete bridge project that is project mobilization and it has been broken down to lowest possible level. Similarly, all the work is broken down. After this all the tasks are assigned to some person giving direct and indirect responsibilities. This graph gives a clear picture as to if a task is not done in time we can know who is the person directly responsible, who is indirectly responsible and who are the people who are supposed to check the work status. This is an effective way to plan and it also helps in the process control as everyone knows one’s role to play and moreover when the work is getting measured, it will be done anyways.

Figure 2 Management of Construction by F. Lawrence Bennett

G. Interface mapping: TREND (Transformed relationships evolved from network data) This analysis is done to illustrate the important linkages between different groups. It helps in determining the responsibility of every person in the project, the contribution of each piece of work in the project, the budget allocated to a group and schedule of the work to be done. H. The network schedules: Also known as critical path method a network schedule is used to know how the activities are inter-related and how long it is going to take to finish each task. This further helps in making a critical path for the project and also to make the Gantt chart because we must know what the pre-requisites for a task are and when the task can be started. In a network schedule model there is a limit given to the task and by this we can find out the early start and early finish time. Similarly we can also assign the late time when we can start the work and accordingly we will get the late finish time. The difference between late finish and early finish is the slack time. Wherever the slack time is equal to zero days, the task is critical and has to be considered.

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A critical path method is based on certain assumptions like the time for the work to be done can be estimated in advance and it is going to be the same which has a lot of critics.

4. Material procurement: A construction project is an assembly operation. This operation involves multiple purchased parts and processed things to be assembled into one product and that becomes a building. Now to have an operation like this done, it is important that all the required raw materials are present at the time when the work is in progress. For a construction project the material not only includes the concrete, bricks, tools and equipments. It also requires the designs; workers, engineers, space, weather conditions and connecting the workers. The variability in the availability is obvious. The total probability of availability of all these things at the same time is the product of probability of availability of individual items and this value becomes smaller and smaller as the number of items increase. Thus it is crucial to make sure that the availability is reliable. Flows in the material from the suppliers vary. Things arrive early or late. This variability makes it difficult to match load and capacity. Consequently, productivity and progress are impacted by work flow, even if construction methods are adequate. Moreover there is a process that has to be followed for the procurement. It is important that the supply of the material in time is reliable. To tackle this Just in time method can be used for material procurement. In this approach the construction operations are viewed as flow and JIT and lean production systems are applied to the construction wherein cycle time for the procurement process is taken into consideration and the objective is to reduce the cycle time. Because there is a process through which the materials are procured, the cycle time for this process has to be less and that can only be achieved when there is absolute trust and reliance in the suppliers about the standards, quality and quantity of the material supplied. 5. Quality management: The parties that are interested in the project are also concerned about the quality of the project under construction. Thus quality check has to be done on every stage and every step of the construction. Quality check for all the material that is going to be used, the work which is done and then comparing it with the standards helps in controlling the quality of the project. There are quality 0901202792 Page 11

standards also for the quality check like ISO. So if the suppliers have these quality certifications it is good for the quality of the project as well. Moreover, during the quality check following graph can be used which is used for more or less all the tasks in the industry.
Respond immediately Respond when there is time Allowed variance Allowed variance Respond when there is time Respond immediately Standard Level

There should be standards laid down for every work let it be the plaster thickness, concrete mixture, quality of raw material, fixtures fitting, etc. and then should be checked with the actual work done standard. If the quality crosses the allowed variation limits, there is a need for immediate action against it. 6. Cost control: Finance is a critical part of any project and the project if not finished within the budgeted cost will take a lot of time to start giving returns. Therefore it is very essential to control the cost of the project. It is done by budgeting, timely reviews, milestone reports, comparison of total expenses with the actual cost, etc. Also is becomes important to control cost in the very initial stage till the mid of the project completion because as the project progresses the ability to control the cost also reduces. As shown in the diagram below, as the project reaches the further stages, the total cost increases and ability to influence decreases. It is important to finish the project in the 100% cost that has been budgeted.

Value chart is a tool used for cost control in a construction project. As shown in the figure below, a value chart gives us the comparison between the budgeted cost at different stages of the project and the actual cost that has been incurred on the project till a certain time.

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The cost schedule plan here gives us the actual cost planned at the different stage of the project. We plot the graph of the value of the work done and then we put on the actual expenses that have been incurred on the graph. Value of the work is the cost that should be incurred with relation to the amount of work done. The distance between the cost schedule plan and the value completed gives us the schedule variance. The difference between actual cost curve and value curve gives us the spending variance. Another dimension of a value chart is the Critical ratio. Critical ratio is calculated by using a formula: Critical ratio = x

The critical ratio tells us the variance of the project from the plan. Cost can also be controlled by making the daily budget with the help of the network schedule diagram. We already have the task that has to be accomplished in a day time and we know the materials required for it so we can assign a budget to each day and with that we can control cost. 7. Production control: In a construction project many a times there is a condition that people work under suboptimal conditions and that becomes the cause of under utilization of resources. Suboptimal conditions arise because of non availability of all the resources at the same time. It so happens that workers have to work without all the resources available. This thing is reflected in waiting time of labor and the machines. This leads to increase in men and machine costs. Also lower production due to starvation is commonly found in a construction project. Thus, our objectives in production control are avoiding excessive buffers; avoiding lost production; avoiding working in suboptimal conditions; avoiding the cascade of point wise deviation to other tasks. To avoid such work under suboptimal conditions there should be some buffer work always kept ready which is suitable for all the worker classes. With this if a group of workers who cannot start their work because of some reason can be put to the task and there will not be any waiting time. Also the prerequisites for the tasks which are scheduled to be 3-4 weeks ahead must be ready before hand. For example if there is an independent task which is a 0901202792 Page 13

prerequisite for another task scheduled for future can be worked upon so that there is no waiting for the next task to begin. Complete Kit: This is another way to control the production which says that work should not start until all the materials are present. This will avoid the work in suboptimal conditions. Measurement and monitoring aspect of construction: The tasks when are broken in the WBS, we know the amount of work to be done. With the help of that we should have a regular check on the tasks completed. Gantt charts again are useful in monitoring the progress of the project and then a PPC (percent plan completed) report should be made. This report helps in controlling many a things at the same time like cost, production, schedule, etc. Change without communication: It is a major cause of delay in projects. If there is any change in the project due to customized requirements by the parties or due to any other reason, it becomes a difficulty to manage it and if it is not properly communicated it becomes a cause for delay of the project. Therefore, any change in the tasks should be properly communicated to avoid any confusions and unnecessary delays. 8. Process control: Process control can be done by various methods like work study, time study, stemming and congestion study. The basic aim of process control is to maintain the continuous flow and completion of tasks. The problem of stemming from the one-of-a-kind features can be alleviated by using standard parts, solutions etc. Interference between tasks can be reduced through procurement strategies for example there should always be only one company working on site. This also reduces the chances of congestions that arise due to crowding at the site. There may be congestion due to oversize of the group onsite. The work is done in suboptimal conditions, there will be less planning and no proper insight into the problem if any problem is faced, there will be multiple stops and starts, etc. This leads to underutilization of resources. Thus planning in WBS should be done carefully to have a proper control on the processes. Another important thing is to make individual work at the level of the project. If the project is going at a high pace and individual should also have the same pace to finish the identifying tasks for a time frame within the time frame otherwise all the further tasks will get delayed. In order to achieve this, there has to be a proper link between the input of raw materials and the output that is the construction. Following measures should be taken further to ensure proper process: Engineering design professionals to provide sufficient manpower to complete the design within a reasonable time limit. Construction supervisors with capacity and experience to direct large projects. The number of construction workers with proper skills to do the work. The market to supply materials in sufficient quantities and of required quality on time. The ability of the local infrastructure to support the large number of workers over an extended period of time, including housing, transportation and other services. Technological problems should be eliminated and technology compatible to the project should be used. 9. Waste management and monitoring: Wastes in a construction project affects the total cost of the project. In order to control costs it is crucial to manage the wastes. Buffer of stocks should be avoided at every stage of the project. Material 0901202792 Page 14

waste due to rain, theft, handling, are all buffer in the material. Buffer in the work flow is the time for the project completion. It leads to the loss of site costs, financial costs, and fluctuation in prices and lost of opportunity. In order to control wastes, there is a need to monitor well. Tools which can be used for monitoring are: Milestone reports: These are preplanned reports which are to be generated at a certain stage in the project. These reports tell the project completion and cost incurred status. Also we know the material used for the part of work done. Comparing it with the planned material consumption we can know the excess of material used and then we can put control on the waste. A process for monitoring can be: Objective of the monitoring, budget allocated technology and method used: objective of monitoring, budget allocated for monitoring, etc. Collect data: about the work that has been done till date. Make charts and graphs: make the cost incurred charts, material used graph, etc. Reports: by using the data reports like routine, exception and special analysis reports should be made. Measure statistically: everything should be measured in numbers so that controlling becomes easier. Audit the data: the data that has been collected should be audited to check the authentication of the data because it may be possible that the person at the site may manipulate the data in order to cover the delays in the project. Early warning signals to potential problems Flag the deviations Meetings: meetings should be conducted to take the corrective measures to bring the work back to the normal track as have been planned. 10. Safety management: Construction is a hazardous business and though it is not one of the major objectives of management, it has to be followed. There are a lot of causes of accidents on construction sites like trapped by something, falls from height, struck by moving objects, etc. There should be hoardings, fencing and nets should be put in places where there are chances of things falling from height and where there are pits dug. Proper first aid kits available, ambulance available in case it is a huge project and if the site is far from a hospital.

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Proper warnings also should be placed wherever required. This helps in avoiding accidents to a greater extent and it is abiding by law also to have proper warnings placed.

References:
1. The management of construction, a life cycle approach by F. Lawrence Bennett, PE, PhD, published 2003 by Butterworth-Heinemann 2. Construction Supply chain modeling: A research review and interdisciplinary research agenda by William J. O’Brien, Kerry London and Ruben Vrijhoef, Aug-2002, Brazil. 3. Project management: A managerial Approach 4/e by Jack R. Meredith and Samuel J. Mantel, Jr. Published by John Wiley & Sons, Inc. 4. http://pmbook.ce.cmu.edu/02_Organizing_For_Project_Management.html 5. Management of production in construction: A theoretical view by Lauri Koskela, 26 th to 28th July 1999, University of California, CA, USA 6. A concept of project complexity – a review by David Baccarini, International Journal of project management Vol. 14, No. 4, pp. 201-204, 1996 7. Operations management in construction by Chris March, Spon Press Publication

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