1.

INTRODUCTION TO
CONSTRUCTION
INDUSTRY

CEng 504
ENGINEERING MANAGEMENT

By
TADESSE AYALEW
LECTURER
MEKELLE UNIVERSITY, CIVIL ENG.
DEPT
 Course outline
1. Introduction to the3. Procurement processes
construction industry and project delivery
 Nature and systems
 Procurement processes
characteristics
 Ethiopian construction  Project delivery systems
industry 4. Planning and scheduling
 Major players in the techniques
construction industry  Planning principles
 Project life cycle  Work breakdown structures
(project phase) (WBS)
 Scheduling techniques
2. Construction  Critical path method (CPM)
Management  Program Evaluation Review
 Construction
management processes 

 Project management Techniques (PERT)

 Major categories of
 Time cost trade off
construction project
 Course outline
5. Quality management in 7. Economic evaluation of
construction projects or an
 Principles of quality investment
management  Time and money
 Quality assurance and relationship
quality control  Evaluation Techniques
6. Resources 8. Insurance and safety in
management in construction industry
construction (reading assignment)
 Resources allocation and 9. Introduction to
leveling computer application in
 Financial management construction
 Human resources management (Optional)
management 10. Selected case studies
 Materials management related to the course (
Study of Construction
Two Themes:
1. CONSTRUCTION TECHNOLOGY
– Relates to methods and techniques used to place the physical materials and
elements of construction at the Job site
2. CONSTRUCTION MANAGEMENT
– Addresses how available resources will be applied
Money Manpower

Materials Machines
1.1 Construction Industry Overview

Construction covers a wide range of products, services and

activities.
The Construction industry is an important part of the nation’s
economy.
• In many countries the industry contributes more than 10 of
the GDP,
•In Ethiopia the contribution of the industry to the national
economy for some years is as follows;
 1995 1996 1997 1998 1999 2000
Industry/Year 2002/ 2003/ 2004/ 2005/ 2006/ 2007/
03 04 05 06 07 08
Agriculture, Hunting and 44.9 47.0 47.4 47.1 46.3 44.6
Forestry
Animal Farming and 14.8 14.3 13.5 12.7 12.3 11.8
Hunting
Manufacturing 5.5 5.2 5.2 5.2 5.0 4.8
Electricity and Water 2.4 2.3 2.2 2.1 2.2 2.2
Construction 5.7 6.1 5.8 5.7 5.7 5.7
Whole Sale and Retail 12.5 11.8 11.8 12.5 13.1 13.4
Trade
Hotels and Restaurants 2.4 2.3 2.3 2.4 2.7 3.0
Transport and 5.9 5.7 6.1 5.8 5.6 5.8
Communications
Public Administration and 4.8 4.3 4.2 4.0 3.7 4.2
Defense
Education 2.8 2.8 2.8 2.8 3.0 3.1
Health and Social Work 0.9 0.9 1.0 1.0 0.9 1.0
Construction Industry: Nature & Characteristics

Too Many Participants

Construction Industry involves many people, organization, agencies,
ministries, designers, contractors, project managers, equipment suppliers,
material suppliers, testing Laboratories.)

Architect
Subs Owner

Contractor Suppliers

Engineer Vendors
Public
Too Many Participants
Job
Supervisors Subs
Corporate
Management
Owners

Field Labor
RE Agents

Suppliers

Design
Center

Sales &
Marketing
Manufacturers

Accounting
Banks &
Mortgage
Lendors

Scheduling

Local
Municipalities

Purchasing Estimating
Construction Industry Versus Manufacturing Industry

What differentiates the construction industry from other industries is

that its projects are large, built on- site (the factory is brought to the job
site), and generally unique.
Organizations change from Project to Project
On-site work stations are not permanent
Operations are conducted outside and thus subject to weather
Construction can involve large-scale heavy assemblies that can be
difficult to handle and fasten
The owner is usually highly involved in the construction process
while the purchaser of manufactured goods is not
Manufacturing versus Construction Process.
 1.2 Construction Industry in
Ethiopia Past and Present
The role the construction industry plays in socio-
economic development is significant.
The industry is a distinct sector of the economy,
which makes its direct contributions to economic
growth.
It provides the basis upon which other sectors can
grow by constructing the physical facilities required
for the production and distribution of goods and
services.
It is a major source of employment, directly and
indirectly
 1.3 The Construction
Team

The principal participants/key players in any construction

project include:
 The Owner

 The Design Professional (Architect & Engineers)

 The Contractor
 The Construction Team

CONTRACT CONTRACT

ARCHITECT CONTRACTOR
The Parties in Construction
Owner Designer

OWNER

Contractor

R
O
CT
RA
A/

NT
E

CO
Contractual Relationship
No –Contractual Relationship
 The Owner

The owner, (also called the client)

The owner is responsible for:
Funding and paying bills for the construction of project.
Determining what the project will include (also called
the scope of the project), when the project can begin
and must end (the schedule),
Receive the ultimate benefits of the finished project.
 The Owner ( Contd..)
Owner organizations can be broken into two major
categories, public and private.
A public agency exists for the ultimate benefit of the
citizens, the general public. Examples of public
projects:, an highway, or an University.
A private organization can be described as any
individual, partnership, corporation, or institution that
builds a project for its own use or for resale.
The owner enters into separate contract with Architect and
contractor.
 The Design Professional
The major role of the design professional:
Is to interpret or assist the owner in developing the
project's scope, budget, and schedule and to prepare
construction documents that will be used by the
construction contractor to build the project.
The architect typically sub-contracts portions of work to
other design professionals such as structural engineers,
landscape architects, electrical & mechanical engineers
In almost all cases the design professional is a licensed,
registered professional who is responsible for the physical
integrity of the project.
In the United States each state licenses architects and
engineers who are allowed to practice within that state.
Engineering Committee in Saudi Arabia grants licenses to
 The Contractor
The contractor is entity that enters into a contract with the
owner to construct the project
The Contractor is responsible :
for the interpretation of the contract documents and the
physical construction of the project rests with the
construction contractor
In a traditional arrangement where the owner, design
professional, and contractor are separate companies, the
contractor is termed a prime contractor and is
contractually responsible for delivering a completed
project in accordance with the contract documents.
In most cases the prime contractor divides the work
among many specialty contractors called subcontractors.
On a large project these subcontractors may also divide up
the work into even smaller work packages
CONSTRUCTION INDUSTRY
1.4 The Life Cycle of a Civil Engineering
Project
Civil Engineering project starts with idea,
requirement to fulfill demands, will to
provide basic facilities to the citizen by
the state.
Project ends with the infrastructure of
facilities, recreational center, industrial
plants in operation as reality.
The phases through which a civil
engineering project passes are:
1. Conceptual and Feasibility Studies.
2. Engineering Design.
3. Contracting and Procurement
4. Construction.
5. Commissioning of a project Start-up and
Implementation
6. Utilization and Maintenance.
 1. Conceptual and Feasibility Studies
In this stage, ideas generated by individuals /
a group of people are studied.
Following important points are carried out to
establish the viability of the project
 Conceptual development of the model and its studies
 Technical and economic feasibility studies
 Environmental and social impact assessment
 Land and geological survey-location of the project
 Enumeration of major problems in translating the
project to reality
Outcome of this phase: A report dealing with
investigation and studies concerning the problems to
be encountered and its solution.
2. Engineering Design
In this stage, project takes the definite
shape. All the technical issues related to the
project are carried out. Engineers come out
with the best alternatives available.
Design phase of project is carried out in
two phases
Preliminary design

Detailed design
Preliminary design
This stage involves primarily the studies of various
design alternative, their economic comparative
studies and architectural aspect.
Also, in this stage, detailed field investigation such
as;
 soil testing,
geological,
hydrological data collection,
market survey, etc are carried out.
Depending on the nature of the project, various
data is collected.
It is difficult to say the end of feasibility study and
the start of preliminary design. These steps are also
a part of feasibility study.
Detailed Design
In this stage, the project is broken down into its
components and each of the elements are
analyzed and designated, such that the engineer
renders the explicit drawings and specifications
which is used for construction
The following are the outcome of this phase
 Drawing of the structures/facilities to be

constructed
 Specifications of component to be employed

which contain detailed description of the

facilities to be constructed
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 Construction Bid Documents
Structural Mechanical
Architect Engineer And
Electrical Eng.

CAD Drafting
Software

Mechanical
Architectural Structural
Specifications & Electrical
Drawings Drawings
Drawings

Construction Bid Documents

32
3. Contracting and Procurement
In this stage, the bill of quantities are
prepared, final cost estimate is worked out.
Most of the agreements are signed and
relationships between different parties
involved is defined
Following points are generally addressed
during this time.
 Tender notices are advertised
 Qualification of contractor / suppliers is studied.
 Contract is awarded to execute the work
 For many of the projects, such as industrial projects,
industrial material and equipment to be installed is
purchased
4. Construction
This is the most important phase of a civil
engineering project, where the major
portion of the money is invested.
A lot of issues of project management are
involved during this phase.
The project is realized in the real world.
The main work involved during
construction is to answer the following
questions
 How to do the particular construction (Construction
Methods)
 How to organize labor, materials and equipments to
accomplish the construction (Resources Management)
 How to breakdown the overall work into small identifiable
work called activity and put them in sequence (Construction
Planning)
 How to calculate the time and resources required to complete
the activity and obtain the criticality of the activity
(Construction Scheduling)
 How to distribute the labor and equipments, in order to
accomplish the work in the given time (resource allocation)
 How to prepare the bill for the money invested in the
construction to get the payment from the client (Construction
Finance)
 How to conform the construction is according to drawing the
specifications (Quality of conformance)
How to implement the safety measure taken during
construction (Construction safety)
How to organize the different personals or the
company involved in the construction and define
relations among them (Constructional Organization
management, construction sub contracting,
construction Supervision and method of reporting)
How to check whether the project is according to
construction schedule and quality (Construction
supervision)
What to do if things are not moving according to
plan (Disputes arbitration, Labor laws, Penalty)

Outcome of this stage : Facility or

structures
5. Commissioning of a project
Aim of this phase is to check that the
project has been carried out according to
the contract document.
All the facilities developed should function
properly as envisaged in the design.
Also during this stage changes in the
design during the construction is properly
documented for the purpose of technical
performance and financial implications.
Following activities are carried out during
this stage -
Check if each component is functioning
according to design and specification
Check if the entire system is
functioning accordingly as desired
To remove the defect if any during
construction work
Dream has come to reality
Operational and maintenance
instruction manuals are also prepared
during this phase
6. Utilization and maintenance
Basic infrastructure facilities created
should be utilized to its fullest capacity
Regular repair of the part getting
damaged has to be accomplished
This stage has become a very important
stage in dealing with project when we
talk about the life cycle cost of the
project.
Development, Design, Construction, and
Management Process

Sales,
Identify Plan & Architectural Operation
Secure Marketing
& Acquire Develop Engineering Construction &
Financing &
Real Estate Project Design Management
Promotion

Architect Architect

Contractors

Developers

Owners
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Thank you