CHAPETR I

CONSTRUCTION RESOURCE MANAGEMENT

1.1 General Introduction

Construction Industry is an industry involved in the planning, execution and evaluation of all
types of civil works. Physical infrastructures such as Building, Communication and Energy
related construction works; Water supply and Sewerage civil works, etc are some of the major
projects / programs in the construction Industry.

Construction projects can be broadly classified as:

 Building Construction (includes facilities for habitation, institutional, educational, light

industrial (e.g. warehouse), commercial, social and recreational purposes),
 Engineered Construction (includes highway and heavy (e.g. dams, sewage plant)
construction), and
 Industrial Construction.

The main players in the construction industry are:

The Client: The client is the initiator and owner of the project

The Consultant: The consultant transfers the wish of the owner into realizable form and makes
the study, design and possibly the supervision.

The Contractor: The contractor is the one who performs the work.

Insurance Companies: A Contractor is required to provide bid bonds as a condition of being

allowed to bid, and then they must provide insurance for Performance bonds and payment
bond prior to award of the contract. Insurance companies provide bid bonds, performance and
payment bonds, and they also service the liability and property insurance needs of contractors.
Banks: Banks provide the working capital contractors need to build the project. Banks also
provide bonds for bid and performance.

Suppliers: The quality of a construction project is very dependent on the quality of the suppliers
used by individual contractors

1.2. Resources for the Construction Industry

For most of the construction projects, the resources to look into are the following;

1. Human Resources / Labor or Workmen

2. Financial Resources / Fund
3. Information Resources

4. Physical Resources such as Materials, Equipment and Other Assets

5. Services and Management.

Human Resources / workmen / Labor: All works involved, including the operation of
equipment cannot be executed without human labor. Labor in the form of technical and
managerial personnel and work forces in various trades and professions are essential to
carryout projects efficiently and effectively. All other resources are coordinated and generally
the work itself is executed by labor. Therefore careful planning, organizing and monitoring of
workmen are mandatory.

These resources are very much necessary and for the successful accomplishment of a project,
the availability of workmen from the top management including project manager to the daily
laborer staff level is very vital. These include professional, skilled, semi-skilled and unskilled
laborers. Human resources can be understood in two values: Capacity and Capability. While the
first refers to the quantity of labor for the scope defined; the second covers knowledge,
technology know-how and skill as per the demands of the scopes ability. Human resources
need to be attracted, selected, developed, motivated and retained if an organization needs to
successfully accomplish project objectives. They do need also be capable of:
  Communication – Inter - personal, group interaction – skills
 Problem solving / Conflict resolution / Negotiation Skills
 Facilitating / Decision – making Skills
 Writing skills for Proposals / Reports / ToRs ; and
 Hard Skills – Planning, Implementing, Leading and monitoring tools.

Financial resources / FUND: It is obvious that one of the basic resources in the construction
industry is Fund, which should be arranged before starting any project. The project to be
conceived shall be within the fund available for it. Usually funds are available from among
Governmental institution, Private institutions and Donors in the form of loan or assistance.

In the case of Governmental entities, since budgetary resources are scarce it is advisable and in
almost all cases that a priority shall be given to projects which are very useful and necessary to
the society. However, in the case of private organizations it is the business what mater.
The objective and goal of the project is achieved successfully if and only if the fund is
sufficiently flowing to carry out the project as planned. That is, it is the regular supply of fund
that keeps projects moving progressively. It is necessary to ensure financial planning for smooth
cash inflow and outflow to avoid delays in project activities. Financial resources shall be
planned and managed with special care due to the fact that all other resources very much
depend on the availability of funds.

Information Resources: Information can be understood in two terms: data whether processed
or not; and its technology. Both are vital for the successful implementation of projects.
Contextual information, data useful for estimating duration and costs; etc are some of
informational resources used in projects. Information technology both the hard and soft wares
have brought the processing and management of such information becomes important and
helpful in facilitating the comparison of several alternatives. This helps in optimization or
maximization of uses of project resources. As a result, informational resources need to be
managed. PMIS, M Project, Think tool, etc are some of the soft wares developed in managing
information resources.
Physical resources:

Materials: The very large portion of a project cost is gone to material cost. As the material
cost component of the construction industry covers between 55-70% of the total construction
cost, proper consideration shall be given in the planning stage to design with easily available
material without compromising the quality for the intended purpose and for proper flow and
storage of materials. Care shall be provided for materials easily spoiled by climatic and expiry
conditions. This undoubtedly will affect the project if not properly managed

Equipment: These days various plants, equipment, tools etc., are used very often in
construction activities. Provision of equipment replace the hard work that can be made by
human labor taking much time within reasonable period of time. Therefore it increases
efficiency and economy. Its initial cost though high, it works for long period of time under
adverse conditions with less manpower than working in its absence which will result to be
economical for long term investment. Depending on the types and nature of construction,
machinery at site includes batching plant, mixers, trucks, tractors, excavators, dampers, cranes,
vibrators, pumps etc.

Other assets: Physical Infrastructures and Owned Land are assets which can be collaterals
for capital base enhancement and credit facilities and are useful to develop the scarce financial
resources and getting into business access.

Services and Management:

Services: Services such as acquisition of land, provisions of water supply, electric power,
communication systems, etc., are very much necessary in the construction industry. Without
acquiring such services, it is too hard to implement construction activities successfully.
Therefore, well thought and due consideration shall be given to services and shall be
considered as one of the resources required for civil works projects.
Management: Management has come to employ a disciplined approach to the use of
available resources. To coordinate these resources and achieve the required goal, a system
shall be devised to plan, organize, execute, and control, the project. Such system which helps to
achieve the necessary goal is called Construction Management, without which it will be a
catastrophe both in cost and completion time to the project.

1.3. Objectives and Functions of Construction Management

1.3.1 Objectives of Construction Management

The main objectives of the construction management team should include:

 Project completion within the allocated budget and duration,

 Ensure that the production of construction works satisfy the client’s functional
requirements,
 Construction to specified standards,
 Provision of safe and satisfactory working condition.

Accordingly, construction project management may be defined as the overall control of the
total management process to optimize the three attributes of the process: Quality, Schedule
and Cost

1.3.2. Functions of Construction Management

The functions of construction management are the same to that of the five managerial
functions defined by Henry Fayol. The following seven functions can better classify the different
functions: Planning, Organizing, Staffing, Motivating, Communication, Measuring and
Correcting, and Coordinating.

i. Planning
Planning is a function of devising the cause for the future with a vision, formulated for the
future state of the organization or the project. Planning also involves preparation of
alternatives for achieving specified objectives. In preparation of plans the following questions
should be addressed:

 What to do?
 How to do?
 Where to do?
 Who is to do it?
 How much does it cost?

The detailing of the plan depends on:

 Size of the project

 Degree of difficulty
 Knowledge and experience
 Degree and extent of indeterminate operations
 Extent of internal and external constraints

Scheduling: Scheduling is timing of the work activities. During scheduling questions like when to
do it and how long it takes should be addressed

ii. Organizing

Organizing is required to achieve effective utilization of the people, facilities, equipment and
money available to the Organization. Organizing also involves establishing a workable
organizational structure to divide the work into manageable department/sections and delegate
tasks accordingly.

iii. Staffing:
Staffing involves assigning (employing) people to fill the posts created within the organizational
structure. Staffing also involves matching the organization’s needs with each employee’s goals
and desires, and it requires adherence to equal opportunity regulations.

iv. Motivating:

Motivation can be defines as follows:

 Motivation is the set of processes that moves a person towards a goal.

 Motivation is the internal or external forces that act on a person that arouse enthusiasm
and persistence to pursue a certain course of action.

Motivation is important in management of people because a motivated workforce will “go the
extra mile” to exceed performance expectations on the job. There are a number of theories
which formulate why people are motivated, from those Hertzberg’s two factor theory and
expectancy theory from content and process theories respectively are worth mentioning.

v. Communication:

Communication is a multifaceted management responsibility. Communication can be formal

and informal; it is both written and oral. It utilizes paper, telephone, face-to-face, and electronic
means. Construction Managers communicate goals and purposes; information, instructions,
and inducements. They also ensure that the messages are sent and received in the multitude
directions.

vi. Measuring and Correcting:

Measuring and Correcting involves:

 Measuring the actual performance

 Identify plan and schedule
 Compare plan against performance
 If there is discrepancy, identify the reasons
  Analyse the costs incurred
 Take remedial measures
 Observe quality of work

NB: - “People work for what you inspect, not for what you expect.”

vii. Coordinating:

Coordinating – conduct regular departmental and section heads meeting for discussion

1.4 Resource Management

The construction manager’s job during project operation is about monitoring and control, it is
also about the management of resources. Halpin and Woodhead (1998), in their introduction to
construction management, state that ‘construction management addresses how the resources
available to the manager can best be applied’. They suggest that the four primary resources to
be managed are the ‘four Ms’ of Manpower, Machines, Materials and Money. As cited in
network scheduling, the basic inputs to critical-path analysis are the individual project activities,
their durations, and dependency relationships. Accordingly, the forward-path and backward-
path calculations determine the start and finish times of activities.

The CPM algorithm, therefore, is duration-driven. Activities’ durations here are function of the
resources that are required (rather than available) to complete each activity. The CPM
formulation, therefore, assumes that all the resources needed for the schedule are available.
This assumption, however, is not always true for construction projects. Under resource
constraints, the schedule becomes impractical, cost and time are not accurate, and resources
may not be available when needed. In order to deal with such issue, a proper management of
available resources is required to adjust the schedule accordingly.

1.4.1 Resources:
Definition The first step in resource management is to decide exactly what resources are
considered important enough to be managed. The most important resources that project
managers have to plan and manage on day-to-day basis are people, machines, materials, and
money. Obviously, if these resources are available in abundance then the project could be
accelerated to achieve shorter project duration. On the other hand, if these resources are
severely limited, then the result most likely will be a delay in the project completion time.

1.4.2 Resource Allocation

Resource allocation, also called resource loading, is concerned with assigning the required
number of resources identified for each activity in the plan. More than one type of resource
may be assigned to a specific activity. For example, fixing steel plates on a certain foundation
may require different types of resources such as: welders, laborers and a certain type of
welding machine. From a practical view, resource allocation does not have to follow a constant
pattern; some activities may initially require fewer resources but may require more of the same
resources during the later stages of the project.