Project Management

Development Economics
Presentation

L E E R E N JE T 0 3 1 9 058 S I ON G JI A YI I 0 3 1 8239
N G A H YEA ZHE 0 3 2 3 204 TA N JI A YI 0 3 1 9476
TA N K I A H CHU N 0 3 2 4414 YA P JI A E N 0 3 1 9550
YEO DOR E E N 0 3 1 6224
PROJECT OBJECTIVES
The objectives identified for the proposed development are:

1. To provide targeted population which are students with affordable accommodation (low cost
houses)
2. To establish more business and employment opportunities. (double storey shop/office)
3. To promote neighborhood economic activity.
SITE PLAN
PROCUREMENT
METHOD

DESIGN-BID-BUILD
 Element Design-Bid-Build Design & Build Management

P Control Client has the Contractor takes

Contracting

Management

R control over the

design
control on the design contractor will take
control of managing

O Risk No early input from

the contractor, lack
Contractor takes up
single-point
Not suitable for
inexperienced client

C of advice from them responsibility

U Cost Initial low cost,

without cost
certainty
Saving in
construction cost,
with price certainty
Reduction in cost
due to competitive
tender

R Complexity Desirable to have all Client’s requirement Complex

E information at tender of detail will

stage determine the time in
pre-tender stage
management as
design and
construction

M integrated at early
stage

E Time Separate stage for Parallel in design and Able to overlap

T design and
construction, which
is time-consuming
construction stage,
results in time-
saving.
design and
construction stage,
results in time-
saving.
 Stadium Sultan Mizan Zainal
Abidin, Terengganu

Leaning Tower of Teluk Intan,

Perak, 1885
QUALITY
MANAGEMENT
What is Quality Management?
A process that ensures that all activities in a project are effective and efficient in relation to the
purpose of the objective and its performance.
A continuous process that starts and ends with the project and it mainly focusing on improving
stakeholder’s satisfaction through continuous and incremental improvements. In overall, it
achieves that by the continuous improvement of the quality of material and services provided to
the clients.
Purpose of Quality Management
 To ensure the project will meet or exceed client’s needs and requirements.

 To ensure project delivered on time with minimal budget.

 Develop a good working relationship between all parties and understand their needs and
requirement may achieve overall satisfaction of the project.
 Characteristics of Quality
Functionality – a degree by which equipment used in projects are performing.

Performance – how well a product or service performs.

Reliability – the ability of the service or product to perform under normal conditions without any
unacceptable failures.
Relevance – a characteristic of how a product or service meets the actual needs of the beneficiaries.

Timeliness – how the product or service is delivered in time to solve the problems.

Suitability – defines the fitness of its use, it appropriateness and correctness of the product.

Consistency – services or product are delivered in the same way and performs without failure.
Quality Planning
 Systematic process which identify the quality standards of the project and determine the ways to satisfy
the quality requirements.
Quality Planning
 According to PMBOK, some principles have to be respected in planning the quality as follows:

Customer satisfaction
• Quality is defined by the requirements of customer.

Prevention over inspection

• It is better to prevent mistakes than to inspect the result and repair the defects.

Management responsibility
• Cost of quality must be approved by management.

Continuous improvement
• Becoming better is a structured process.
Implementation of Quality Management
Pre - Construction Stage
 Define scope and metrics of the project required to achieve and confirm it for a successful outcome
of products.
 Cost-benefit analysis - helps in weighing the benefits of quality efforts against costs to determine
appropriate quality level and requirements.
 ISO 9001 - provide an effective Quality Management System for improving and monitoring all areas
of the project.
 QLASSIC sets a new benchmark to the quality of workmanship (aims to achieve the high score of 80
and above).
 Project quality plan (PQP) will be prepared in order send to PM for review and COO for approval.
 Quality Assurance
• Defined a set of procedures designed to ensure that quality standards and processes are adhered to
• Final product meets or exceeds the required technical and performance requirements
• Purpose of quality assurance is there to provide assurance to a client that the standard of workmanship
within the contractor´s premises of the highest level of quality
• Quality assurance practices will not only help avoid expensive delays, they also ensure that the methods
followed to complete projects are safe and sound workers are fully protected from any failures or
accidents as a result of poor workmanship.
Benefits of Quality Assurance
Make the Aids the
employees Increased the industries to focus
Improves the flow
understand the effectiveness of on its processes
of work within the
different inter the construction to satisfy those
companies
linkages within industries needs and
the departments expectations

Helps in Reduces the Helps to identify

understanding Helps all the operational the problem
the wants and departments to costs of the areas within the
expectations of work efficiently construction companies very
the client companies early
Implementation of Quality Management (QA)
Construction Stage
 Quality Assurance team members will be formed and to prepare a report on the evaluation
regarding every part of the company
 Generate the test process, checklists, related activities and identifying all requirements of
team members are well prepared before performing a task
 Monitor regularly along with the project manager on plans, schedule and budgets
Quality Control
A techniques that compares the actual quality performance and verifies that the product that
meets the quality requirements.
A process that monitors the project results and also to regulate whether are they complying
with relevant standards

Three paired concept from quality control that must be aware of :

1. Prevention and inspection
2. Attribute sampling and variables sampling
3. Tolerances and control limits
Tools and Techniques for Quality Control
Control Charts
A graphical display of data that illustrates the results of a process over time.
The purpose of a control chart is to prevent defects.
The chart allows the determine whether a process is in control or out of control over specified
length of time. When it is in control, the process should not be adjusted but it can be changed
in order to provide improvements.
Control charts are most often used to monitor repetitive activities in the production process
Tools and Techniques for Quality Control
Pareto Diagrams
A histogram that orders the data by frequency of occurrence.
It shows how many issues were generated by a type of category of identified cause.
Based on Pareto’s rule, which states that 80 percent of the problems are often due to 20
percent of the causes. The assumption is that most of the results in any situation are
determined by a small number of causes and helps identify the responsible for the majority of
quality problems.
Tools and Techniques for Quality Control
Inspection
A general activity that is being conducted at most of construction projects.
Example: measuring, examining and testing undertaken to determine whether the results are
conform to the requirements. Inspection can be carried out on any level of a single activity or
final product.
Tools and Techniques for Quality Control
Fishbone (Ishikawa) Diagram
This diagram was founded by Dr. Kaoru Ishikawa ,a Japanese quality control expert.It identifies
many possible causes for an effect or problem.
Fishbone diagram are usually used when identifying possible causes for a problem and also to
support the team’s thinking which tends to fail.
Implementation of Quality Management (QC)
Construction Stage
Organise meetings for performance evaluation regularly.
Examples: evaluation the performance of suppliers on their Quality, Delivery Performance, Technical Support,
Responsiveness, Pricing, Safety & Health and Accuracy.
Workmanship inspection on site to prevent defects, fail approval on authority requirement.

Post Construction Stage

Request details from contractors for temporary records like:
Testing and Commissioning Schedule, Project Archiving records
 Conduct Pre-CPC inspection before the defect liability period to ensure no issues after the completion of project
Prepare Quality Correction Request which it is a document to capture on any items that are defective and does not
comply with requirements and criteria in accordance to construction drawing. Internal quality audit, management
review, control of records will be compiled for legal necessity and for future reference on future projects.
Outcome of implementing Quality Management in proposed
project.
PROJECT RISK ANALYSIS

clients/
possibility and
consultants are ensure that help to achieve
impact of
aware and projects run objectives of
negative risks can
planned for the smoothly project
be decreased
predictable risk

Steps to be taken

Step 3: Determine
Step 1: Identify the risk Step 2: Carry out risk
strategies to minimize the
according to categories assessment by risk matrix
risks
STEP 1: CATEGORIES OF RISK
1. Project risk - uncertain event or condition that will affect on at least one project objective when it
occurred

a. Legislation & Bureaucratic

• Statute that existed for many years can be repealed or replaced – cause major impact to proposed or
ongoing project
• Eg: Governmental legislation
• Bureaucratic – contractor fail to commence work until get approval from the State or successfully
submitted all the necessary documents for applications to Construction Industry Development Board
(CIDB)
• CIDB Act 520 - construction personnel are compulsory to register with CIDB
• - all construction site supervisors and skilled construction personnel as specified in the Third
Schedule must be accredited by CIDB
• - if fail, fine (not exceeding RM5000) and penalty imposed
STEP 1: CATEGORIES OF RISK
1. Project risk - uncertain event or condition that will affect on at least one project objective when it
occurred

b. Poor Site Condition

• Eg: existing underground problems, insufficient of load bearing capacity, and insufficient of existing
services on site
• Affect viability of project

c. Financial

• Short-term finance – required to cover costs during the development process

• Long-term finance - necessary to cover cost of holding the completed development or secure buyer
for completed scheme
• Fail to obtain fund for construction or apply financial loan
• - cause the project failed to proceed or operated (if completed)
2. Technical risk - risks that threaten the quality and timeline of a project.
- includes all the risks that may be encountered during design stage and construction process.

Quality of building

Technical risks occur when there are changes in project scope and requirements,
and if there are design errors or omissions. It affects design buildability and
efficiency.

Resources

Uncertainty of resources, availability of materials, material deliveries problem and

even material failures are some common risks for a construction project.

Time

Late issuance of drawings and instructions might cause construction delay which will
affect the project timeline and eventually lead to late completion of construction.
2. Technical risk - risks that threaten the quality and timeline of a project.
- includes all the risks that may be encountered during design stage and construction process.

Professional team

Errors and mistakes made by professional team such as inaccurate contract time
estimates and construction procedures bring threats to the project.
Experience of labours and coordinators are important to ensure the project runs
smoothly.
 .
3. Predictable risk - Risk that are known to the possibility of occurrence during whole
development process.

•When the construction parties did not have a detailed

communication.
1) Poor coordination between •This may lead to
contract parties - Inefficiency of work
- Lack of information exchange which might cause quality
defects, mistake, slower work done and dispute

•Next to Taylor’s University

•Noise and vibration
2) Impact to adjacent buildings •May cause interruption or structural damages if not given
proper protection.
4. Unpredictable risk
• Injuries

Accident • Death
• Will cause unknown delay to the site, even the chance of happening
is very low.

Damages to • Vandalism
• Sabotage
• Additional cost incurred to provide maintenance or repairing work
property for damages.

• Extreme bad weather conditions

Force majeure • Natural disaster

• Rarely happens, but the damages caused to the project is
uncountable.
5. Business risk

a. Inadequate return for investor/ stakeholders

• Getting lower than anticipated profits / experience loss rather than earning profit
• underestimation of Gross Development Value(GDV) which helps to establish capital and rental value
of property after completion sales and revenue
business stop expanding,
demand is not high enough, business start to report losses &
try to reduce wages /stop hiring new workers (to cut cost),
b. Oversupply (demand<supply) unemployment rate

• vacancies unit which failed to generate profit and developer will suffer loss
• influenced by economic activity such as economic downturn which has a domino effect to higher
unemployment rate and subsequently causes drop in consumer spending as well as lower investment
STEP 2: CARRY OUT RISK ASSESSMENT BY RISK MATRIX
 Ranking and Level of Impact of Risk
Rank Risk Type of Risk Rating Level of Impact

1 Impact to Adjacent Building- Noise & Vibration Predictable Risk 20.00 Catastrophic

2 Time - Late issue of essential document & Delay in completion Technical Risk 20.00 Catastrophic

3 Team professionalism - Experience of labour and coordinator Technical Risk 16.00 Catastrophic

4 Bureaucratic Project Risk 15.00 Unacceptale

5 Finance Project Risk 15.00 Unacceptale

6 Quality of building - Buildability & Design deficiencies Technical Risk 12.00 Undesirable

7 Market - Low consumer demand Business Risk 10.00 Undesirable

8 Accident - Death on site & Site accident Unpredictable Risk 10.00 Undesirable
 Ranking and Level of Impact of Risk
Rank Risk Type of Risk Rating Level of Impact
Resource - Availability of materials, Material deliveries & Material
9 Technical Risk 9.00 Undesirable
failures

10 Poor Site Condition - Load bearing capacity, ground problem Project Risk 8.00 Undesirable

Coordination between contract parties - poor communication

11 Predictable Risk 6.00 Acceptable
level

Economic situation - Downturn in economics

12 Business Risk 5.00 Acceptable

13 Force Majeure Unpredictable Risk 5.00 Acceptable

14 Damages to property - Vandalism, Sabotage & Theft Unpredictable Risk 4.00 Acceptable

15 Low/inadequate return for investor - Underestimation of GDV Business Risk 4.00 Acceptable

16 Legislation Project Risk 4.00 Acceptable

LEVEL OF IMPACT
CATASTROPHIC
UNACCEPTABLE
UNDESIRABLE
ACCEPTABLE
STEP 3: DETERMINE STRATEGIES TO MINIMIZE THE RISKS
CATASTROPHIC

• Appropriate foundation and construction techniques which generate less

Impact to adjacent building noise and vibration

Time ( late issue of • Improve Planning Management

document, delay in • Assign clear roles and responsibilities
completion) • Clear communication between parties

• Hire workers with good technical skills and abilities, along with the sense
Team professionalism of coordination and inter-personal skills
(Experience and knowledge)
 UNACCEPTABLE

Bureaucratic Finance
Prepare complete and detailed document Prepare strong financial statement of the
within the time frame company
 UNDESIRABLE

Quality of Building • State clear specification

(Buildability, Design • Identify project buildability attributes and construction performance in
Deficiencies) terms of time, cost and quality

Market (Low Demand) • Ensure a proper market analysis is conducted

• Initiate a compulsory safety meeting everyday
Accident (Death, Site
• Ensure all workers are equipped with safety equipment
Accident)
• Provide a proof which the workers had attended safety training

Resource (Availability of • Implementation of proper materials scheduling, purchasing and

Materials, Material procurement.
Failures • Practice on proper waste management
Poor Site Condition (Load
Bearing Capacity, Ground • Initiate ground investigation
Problem)
CONCLUSION

Highest level of impact

-need greatest priority to
take action

need a great deal of time and

attention on discovering
solutions to mitigate the
threats to project objectives

Require action as well

Prepare contingencies plan &

strong risk response plan for
threats that cannot be
mitigated/avoided