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PROJECT TIME CONTROL IN BUILDING CONSTRUCTION

CHAPTER ONE

INTRODUCTION

Construction has turned into an ever more complex mesh of relationships between increasingly accelerating processes, decisions and actions. At the same time, however, there is a development toward sustainable Just as any other project, a construction project includes certain development phases that differ from each other in terms of the amount of time and financial funds needed for their completion. In financial terms, the construction phase of a construction project is by far the most dominant one. Research has shown that sometimes up to 95% of the total project cost is spent on the completion of this particular phase, which is why the costs incurred during the construction deserve special attention in terms of cost dynamics i.e. cost allocation in relation to time.

In the case of construction projects, the analysis of cost allocation in relation to time is a pressing issue. It partly pertains to the analysis of the regularity of the relationship between these two variables during various project phases or, in other words, the analysis of the possibility of applying the s-curve method in regards to certain activities and problems. When a construction contract is concluded, the total cost of works is defined, while the data about the monthly allocation of cost, for the presentation of which the s-curve method is mostly used, remain unknown. Research concerned with the use and development of the scurve method is very rare in Croatia. The analysis of literature [3], [4], [5], [6], [7], [12], [13], has shown that in several published works related to this topic and the authors mainly focus on the study of the curve trend analysis and the development of the information system for planning and controlling project cash flows.

The conducted research produced the data on construction projects executed in Croatia that were further analyzed on the basis of statistical methods for database processing and system theories. Various theoretical methods of project management, construction organization and planning were used in conducting specific parts of the research. Regression methods and best-fit analyses, especially the quantitative and qualitative analyses of the theory of risk management, were used in drawing up a methodology proposal for modeling the cost scurve. Project time control is that element of a project that keeps it on-track, on-time and within budget. Project time control begins early in the project with planning and ends late in the project with post-implementation review, having a thorough involvement of each step in the process. Each project should be assessed for the appropriate level of control needed: too much control is too time consuming, too little control is very risky. If project time control is not implemented correctly, the cost to the business should be clarified in terms of errors, fixes, and additional audit fees.

Control systems are needed for cost, risk, quality, communication, time, change, procurement, and human resources. In addition, auditors should consider how important the projects are to the financial statements, how reliant the stakeholders are on controls, and how many controls exist. Auditors should review the development process and procedures for how they are implemented. The process of development and the quality of the final product may also be assessed if needed or requested. A business may want the auditing firm to be involved throughout the process to catch problems earlier on so that they can be fixed more easily. An auditor can serve as a controls consultant as part of the development team or as an independent auditor as part of an audit. Businesses sometimes use formal systems development processes. These help assure that systems are developed successfully. A formal process is more effective in creating strong controls, and auditors should review this process to confirm that it is well designed and is followed in practice. A good formal systems development plan outlines

1.1   BACKGROUND TO THE STUDY

The survey shows that most projects encounter cost and time over-runs (Williams Ackermann, Eden, 2002,pl92). According to Wright (1997)'s research, a good rule of thumb is to add a minimum of 50% to every time estimate, and 50% to the first estimate of the budget (Gardiner and Stewart, 1998, p251). It indicates that project is very complex and full of challenge. Many unexpected issues will lead the project cost and time over-runs. Therefore, many technologies and methods are developed for successful monitoring and control to lead the project to success. In this article, we will discuss in the construction phase, how can a project manager to be successful in time and budget control. Another part we will discuss what pitfalls will wait for the manager in his endeavors to monitor and control the project.

An activity duration estimate must be based on the quantity of resources expected to be used on the activity. The estimate should be aggressive, yet realistic. Throughout the performance of the project some activities will take longer than their estimated duration, others will be done in less time than their estimated duration, and a few may conform to duration estimates exactly. Over the life of a project that involves many activities, such delays and accelerations will tend to cancel out one another. In order to establish a basis from which to calculate a schedule using the duration estimates for the activities, it’s necessary to select the estimated start time and required completion time for overall project. These times define overall window or envelope, of time in which the project must be completed. The projects required completion time is normally part of the project objective and stated in the contract. Once the, estimated duration for each activity in the network and an overall window of time in which the project must be completed, you have to decide whether the activities can be done by the required completion time. 

The key to effective project time control is to measure actual progress and compare it to planned progress on a timely and regular basis and to take necessary corrective action immediately. The project time control process involves regularly gathering data on project performance, comparing with the planned performance. This process must occur regularly throughout the project. It starts with establishing a baseline plan that shows how the project scope will be accomplished on time and within the budget. Once this baseline plan is agreed with the customer the project starts. A regular reporting period should be established for comparing the actual progress with the planned progress. Reporting may be daily, weekly, or monthly depending on the complexity and the duration of the project. During each reporting period, two kinds of data or information need to be collected.

1.2   STATEMENT OF PROBLEMS 

Ackermann, Eden, Howick and Williams (2000) point out the pitfall of using 0. They are: a) When a network is resource-constrained, there is no agreed definition of what a 'project time control ' actually is. b) Many effects, such as change orders, impact many activities simultaneously. In such cases, single-activity analyses in PRC do not really work, and more sophisticated analyses or network simulation is needed. c) PRC cannot take account of soft factors such as demotivation. Disruption affects productivity in a fashion that means it varies over time, PRC times do not usually take account of changes in productivity, let alone when it is a variable factor.
d) project time control (PRC) does not take into account management actions to deal with delays and disruptions.

Adding resource: Adding resource is most common methods for shortened project time. But there are limits, such as some of activities cannot be shortened by adding staffs and equipment and some time the relation between staffs size and time shorten is not linear. Adding resource, you cannot achieve as your want.

Overtime: This is the easiest way to add more labour and not add more staffs. But need to face the challenge of team numbers' antipathy and the low efficiency in the overtime work.

Outsourcing: This is also a common method to shortening the project time by subcontracting the activities. The issue is most of the time, the subcontractor need to warm up before start their project jobs.

NPV: The problem that exists within the field of NPV is that after getting a project authorized. There will be no further consideration given to the project's NPV until a post investment appraisal can be carried out. However, at this point the damage has been done (Gardiner and Stewart, 2000, p252).

1.3   OBJECTIVE OF THE STUDY 

Erel and Raz (2000) state that the project time control cycle consists of measuring the status of the project, comparing to the plan, analysis of the deviations, and implementing any appropriate corrective actions. When a project reach the construction phase, monitor and control is critical to deliver the project success. Project monitoring exists to establish the need to take corrective action, whilst there is still time to take action. Through monitoring the activities, the project team can analyze the deviations and decide what to do and actually do it (Gardiner and Stewart 2000,p252). The purpose of monitor and control is to support the implementation of corrective actions, ensure projects stay on target or get project back on target once it has gone off target (Erel and Raz, 2000,p253).

a) Do unstarted activities really have to await the completion of other activities before they can start? If no, start the activities

b) If an activity has to wait for the completion of other activities, can that activity be broken down into sub-activities and some of the sub activities completed at an earlier date? If no, break down the activity into sub-activities and start the urgent one at once.

Herroelen and Reyck (1999) also state that managers have to tackle the challenging problem of scheduling activities to minimize the project duration, in which the activities (a) are subject to generalized precedence relations, (b) require units of multiple renewable, non-renewable and doubly constrained resources for which a limited availability is imposed, and (c) can be performed in one of several different ways, refected in multiple activity scenarios or modes.

Optimal timing: Considering optimal timing of project monitoring and control points is significant to success (Falco and Macchiaroli,1998). Falco and Macchiaroli suggest that we should determine the optimal frequency of the monitoring and reviewing to different activities in different stages. It can help us to efficient monitor and correct control so as to reach time and cost target.

Crashing: In recent years, network crashing was developed along with the project time control method (PRC ) for planning and controlling large scale project. The purpose of crashing is the minimization of the pessimistic time estimate in PERT (Program Evaluation and Review Technique) networks by investing additional amounts of money in the activities on the project time control . Sometimes, crashing methods are required to combine in the monitoring and controlling process when the duration of the activity that has to be completed within a specified time (Abbasi and Mukattash,2001,pl81).

1.4 RESEARCH QUESTION

Is Probabilistic moment of risk: An activity (task) in most real-life processes is not a continuous uniform process. Tasks are affected by external events, which can occur at some point in the middle of the task. 

Why is it that event chains: Events can cause other events, which will create event chains. These event chains can significantly affect the course of the project. Quantitative analysis is used to determine a cumulative effect of these event chains on the project schedule. 

Critical events or event chains, is it the single events or the event chains that have the most potential to affect the projects are the “critical events” or “critical chains of events.” They can be determined by the analysis. 

Project tracking with events: Even if a project is partially completed and data about the project duration, cost, and events occurred is available, it is still possible to refine information about future potential events and helps to forecast future project performance. 

1.5  SCOPE OF THE STUDY

The best means of ensuring that the costs are kept to a minimum during any project is by utilizing a commercial construction costs management service. This is an establishment which is able to realistically look at the capital costs for any commercial building construction project. They not only look closely at the planning costs but also cost control services. Plus this service will ensure that the proposals provided on the construction project are documented as well as being completed within the pre-arranged costs and time framework. They will also establish the most economical means of ensuring that the project does not run over budget. Each construction project should employ an independent and professional cost manager or quantity surveyor who can police as well as have a clear overview of everything that is going on. This is to protect the financial interests of the individual who is having the construction project done. These people use their engineering skills and experience which they then apply to scientific principles and techniques. This allows them to analyze and develop the best action that should be taken in order to provide a good estimation of the costs involved. This will also enable them to control the commercial building construction costs once the project starts on site. By using a good set of cost management principles the cost manager or quantity surveyor will ensure that the construction project stays within the budget limits and still meets performance and quality targets. When a commercial construction project is being prepared the cost manager or quantity surveyor is an integral part of the team and can bring added value to any construction and design team. However if there are problems relating to commercial building construction costs exceeding the budget, then this may well cause problems for the person who was asked to control the costs initially.

1.6  SIGNIFIANCE OF THE STUDY 

Engaging a general contractor or construction manager earlier in the process is a good way to control time in the initial planning phases. These experts understand all legal requirements and can ensure all documentation is filed methodically and in a timely manner, reducing schedule delays early on. Some building owners are taking a more active role in the overall process and are functioning as a team member to streamline communications and drive faster completion of projects as well. Developers and business owners should encourage these approaches and work with general contractors, who have good relationships with established suppliers. This enables them to increase their aptitude to project and budget construction costs accurately through to the end of the building construction process.