Type Of Project Management

And Project Characteristics

BSS666: LECT 2
 Project Management

Contents:
• Historical Development of Project Management
• Projects and Production
• Construction Project & Its Characteristics
• Project Management, Construction
Management & Site Management
• Project Success & Project Objectives
• Project Management Structures
• Construction Industry Stakeholders
• Construction Supply Chain
• State of the Malaysian Construction Industry
• Function & Roles of the Project Manager
 Reading list
 Smith, N.J (2002). Engineering Project Management- 2 nd Edn,
Blakewell Science, London:
- Chapter 1: Project & project Management
- Chapter 5: Project Stakeholders
- Chapter 15: Supply Chain Management

 Ruskin, A.M. & Estes, W.E (1995). What Every Engineer Need to
Know About project Management- 2 nd Edn., Marcel Dekker Inc., USA
- Chapter 2: Roles and Responsibilities of the Project Manager

 Handouts:
- Project management (Wikipedia)
- Historical Development of Project Management: Nature of
Construction Projects; Construction & Site Management (Fadzil
Hassan)
- The Malaysian Construction industry (Norzalima, Siti Sarah,
Fadzil Hassan)
 Project Management
Historical Development of
Project Management
• In the medieval times, construction
projects were relatively simple -
Tradesmen were employed directly by
employers to complete the job.

• End of 18th century - building works

became more complex
- General supervision of the various
trades and their organisation in
construction projects began to be
placed in the hands of master
craftsmen

• The master craftsmen - charged a fee,

or took a profit on the total value of the
work for their responsibility
Historical Development of
Project Management (Cont’d)

 The growing national economy

from the wealth generated from
the Industrial Revolution and
rapid industrialisation - generated
huge demand for new buildings
and built infrastructure.

 This period - founding of general

builders, specialist firms and
specialist professions in the
construction industry began

 The First World War, and the

resulting activities - accelerated
accelerate demand for built
infrastructure and alter the shape
of the construction industry.
Historical Development of Project
Management (Cont’d)
 As projects grew even more complex -
more was demanded from builders

 ‘Contracting’ became very popular and

necessary during this period - emergence
of the general building contractor

 Development of new materials,

technology, increasing use of specialists
and sub-contracting practices

 Builders need to be more methodical in

managing the construction project – the
‘modern construction firm’ was pioneered
(Powell, 1980).

 Following the Second World War, -

increased demand for commercial and
industrial infrastructure resulted in larger
and far more complex projects to match
the advanced technological systems
employed in buildings.
Historical Development of Project
Management (Cont’d)

• Rationalisation and high

competition - resulted in sharp
undercutting of profits among
builders

• Trade Unionism and new labour

and environmental laws meant
builders have to adhere rigidly to
the terms and procedures of the
contract and control closely the
production process to be
profitable.

• The need for specialists both in

design and construction begin to
take place.
Historical Development of Project
Management (Cont’d)

• Contractual arrangements - shifted

away from the traditional form with
need for a more integrated design and
production system which require close
collaboration among members of the
building team.

• More and more knowledge and skills

are demanded from the manager
managing the project process - the
project manager’s job specification
has since changed, and more is
demanded from them to deal with
such complexities.

• This is expected to be a continuing

phenomenon
 What is a Project?
Definition:
“ A project is a temporary endeavor undertaken to
create a product or service”
(PMI, US)

“Achievement of a specific objective, which

involves a series of activities and tasks, which
consume resources, has to be completed within
prescribed specifications and having a definite
start and end dates”
(Building Property Review, 1996)
 Project Management
Definition:

“is the discipline of planning, organizing, and managing resources to bring

about the successful completion of specific project goals and objectives…..
having specific start and completion dates—undertaken to create a unique
product or service”
(Wikipedia, 2008)

“the art of directing and coordinating human and material resources through
the life of a project by using modern techniques to achieve pre-determined
goals of scope, time, quality and performance criteria”
(PMI, USA)

“the planning. organizing, monitoring and control of all aspects of a project,

and the motivation of all involved to achieve the project objectives on time to
cost, quality & performance”
(Assoc. Of UK Project Managers)
 Key Elements of a Project

• Unique, one off undertaking

• Temporary, limited life span, temporary in nature

• Specific Objectives

• Causes change, risky & many uncertainties

• Demands effective utilisation of resources (human,

money, plant and materials, technology etc.)

• Numerous collaborating organisation;

• Many inter-related activities that operate on a

demanding time scale

• Geographical dispersion of sites of production.

• As the project gains momentum, money is spent at a

very fast rate.

• Harsh construction working environment
 Scope of Management in
Construction Projects
Project Management
Facilities Management / Maintenance
Management/Operations Management
Project
Facilities/Maintenance/Operations
Manager
Design Process Management Manager
(Consultants)
Construction Project Contract Management
(Contractor)
Design
Development
Tender
Feasibility study Award Construction Handover Decommissioning

Construction Site Management

Documentation (Construction Manager)
& Tendering

(Construction Costing) Copyright ©Fadzil CPIM UiTM2011

(Project Costing)

(Whole Life Costing)

 Stages in a Construction
Project (Project Life Cycle)

CONSTRUCTION MANAGEMENT

Maintenance
Construction
Feasibility

Design

Tender
SITE MANAGEMENT

INCEPTION DESIGN TENDER CONSTRUCTION HANDOVER /

CLOSE OUT

Copyright ©Fadzil CPIM UiTM2011

 Technical Project Management
Competencies
Inception Design Documentation &
Approvals

op le
Pe
gi ng MANAGING PRE-TENDER at on
an a p lic
M ACTIVITIES p
IT A
Project
Handover Project
Budget

Defects MANAGING Project MANAGING Tender

Liability PROJECT TENDER
Period
HANDOVER
Manager ACTIVITIEST
(DLP)
Contractor
Appointme
Final nt
Account
at on MANAGING
p p lic CONSTRUCTION e o ple
IT A ACTIVITIES i ng P
anag
M
Quality Control Cost Control Time Control Health & Safety

Copyright ©Fadzil CPIM UiTM2011

 Determine
Client’s Project Planning Schematic Detail
Quality Approval Design
Brief Requirement
Design
s
DESIGN
FEASIBILITY
Inception DEVELOPMENT Design
Preliminar Development Authorities
y Estimate Preliminary Approvals
Site Design
Analysis
Budget
Cost Detail Cost Final
Allocation
Planning Estimate Cost
Estimate

Tender
Final Account • Time
Documentation
• Cost
Defects Liability
Period • Quality
Management Project
• Health & CONSTRUCTION Tendering TENDER
Testing & Safety
Commissioning
•
Tendering
Environme
Construction
nt
HANDING Progress
Contract Tender Analysis &
OVER Report
Administration Project Award

Cost Control
Close Out

Activities within the Project Management stages

 Key Concepts of Project
Management (Oberlender,
2000)
1. Ensure that one person, and only one person, is
responsible for the project scope, budget and schedule
2. Don’t begin work without a signed contract, regardless of
the pressure to start
3. Confirm that there is an approved scope, budget and
schedule for the project
4. Lock in the project scope at the beginning and ensure
there is no scope growth without approval
5. Make certain that scope is understood by all parties,
including the owner
 Key Concepts of Project
Management (Oberlender,
2000)
6. Determine who developed the budget and schedule,
and when they were prepared
7. Verify that the budget and schedule, and when they
were prepared
8. Verify that the budget and schedule are linked to the
scope
9. Organise the project around the work to be
performed, rather than trying to keep people busy
10. Establish a work breakdown structure that devides
the project into definable and measurable units of
work
 Key Concepts of Project
Management (Oberlender,
2000)
11. Establish a project organisational chart that shows
authority and responsibilities for all team members
12. Build the project staff into an effective team that
works together as a unit
13. Emphasise that quality is a must, because if it does
not work it is worthless, regardless of cost or how fast
it is completed
14. Budget all tasks, any work worth doing should have
compensation
15. Develop a project schedule that provides logical
sequencing of the work required to complete the job
 Key Concepts of Project
Management (Oberlender,
2000)
16. Establish a control system that will anticipate and
report deviations on a timely basis so corrective
actions can be taken
17. Get problems out in the open with all persons
involved so they can be resolved
18. Documents all work, because what may seem
irrelevant at one point in time may later be very
significant
19. Prepare a formal agreement with appropriate parties
whenever there is a charge in the project
20.Keep the client informed, they pay for everything and
will use the project upon completion
FACTORS IMPACTING THE
PROJECT MANAGEMENT
• Size and structure of the • Planning policy within the
management organisation organisation

• Types, nature and variety of • Technical and management

work carried out expertise
Scope of Management within the
Context of Construction

Project Construction Site Maintenance

Managemen Managemen Managemen Management
t t t • Undertaken by
• Management is the project owner
• Management • Commences (or his agent/s)
is performed performed by from site
the contractor possession to • Commences after
by client / the project is
consultant / • Extends from handing over
handed over by
contractor the Contract and the completed the contractor
Site project
• Extends from • To ensure that
Management • Undertaken the building or
feasibility
stage starting mostly by site infrastructure is
studies to the from the manages kept in its
completion of tendering stage satisfactory
the project • Management of functioning
to project
work packages condition
• May be completion
undertaken in • Part of • Can be performed
• Undertaken in
Construction in-house or by
various ways various forms
management external
and various and by various
consultants
parties parties for the • Mainly
 Scope of Management of
Construction Projects
MANAGEMENT
PROCESSES SATISFACTION
OF ALL PARTIES
RESOURCES
M - Planning & OBJECTIVES
A Forecasting Materials
N - Time
- Organising Manpower
- Cost
A - Directing/ Machinery
- Quality
G Leading - Health &
E - Coordinating & Safety
M Controlling -
E - Communicating Environmen
N - t
Motivating
T PROFIT &
BUSINESS
“Systems” within the Construction
Project Environment
ENVIRONMENT

MANPOWER
MANAGEMENT INFORMATION SYSTEM
STRATEGIC SYSTEM

MANAGEMENT SYSTEM
MATERIALS
MANAGEMENT
MARKETING
CONSTRUCTION
PLANT PRODUCTION
MANAGEMENT MANAGEMENT

FINANCIAL
MANAGEMENT
ORGANISATIONAL SOCIAL SYSTEM
SYSTEM

Figure 2.1: The inter-phasing systems within

construction production management (Newcomb et
al (1993)
 Projects and Production
• Time
• Time
• Cost
• Cost AIM
• Quality
• Quality
• Quantity
• Place

Construction Production
Projects Repeat
One-Off

BUILT
IDEA IDEA GOODS & SERVICES
INFRASTRUCTURE
DESIGN FACILITY DESIGN Goods
PLAN PLAN
Buildings Service
Roads

Highways

Dams

Etc
 Successful Projects: Meeting the
Project Objectives

Completion on Time

Meeting Meeting
Health & Safety Environmental
requirements … Requirement
Standards….
“Satisfactory
delivery of the
project”

Within the targeted Meeting the

project cost standard of
Fulfilling all quality specified
contractual
agreements and
obligations…..
 Project Stakeholders
 Construction projects are not owned
by a single ‘party’ but operates within
a conglomerate of organizations

 Stakeholders:
- Parties (individuals/groups or
organizations) that are/or can
influence the project

 Primary stakeholders:
- Parties that immediately influence
or can influence the project
(sponsors, clients, building team,
sub-contractors, purchasers (buyers),
local authorities)
 Construction Supply Chain
Management
• Definition
• Supply chain management (SCM) is the management of a
network of inter-connected businesses involved in the
ultimate provision of product and service packages required
by end customers.

• Supply chain management spans all movement and storage

of raw materials, work-in-process inventory, and finished
goods from point of origin to point of consumption (supply
chain).

• The system of organizations, people, technology, activities,

information and resources involved in moving a product or
service from supplier to customer.

• Main supply chain in construction : sub-contractors,

suppliers and manufacturers.

• Can have a significant influence to the construction project

outcome
 Definition SCM
• Supply chain management (SCM) is the management of a network of interconnected
businesses involved in the ultmate provision of product and service packages required
by end customers (Harland, 1996).[2] Supply chain management spans all movement
and storage of raw materials, work-in-process inventory, and finished goods from point
of origin to point of consumpton (supply chain).
• Another definiton is provided by the APICS Dictonary when it defines SCM as the
"design, planning, executon, control, and monitoring of supply chain actvites with
the objectve of creatng net value, building a compettve infrastructure, leveraging
worldwide logistcs, synchronizing supply with demand and measuring performance
globally."
 State of the Malaysian
Construction Industry
• GDP in 2015 is expected to be RM 740,250 million
(2009 = RM 521,095 million).
• Constructon GDP in 2015 is expected to be RM
21,818 million (2009 = RM 17,321 million).
• GDP is expected to grow at 6.0% per annum and
constructon GDP at 3.7% per annum.
Constructon's share to GDP is at 2.9%.
• Malaysia's populaton is estmated to grow at 1.1%
(2011 - 2015) reaching to 29.8 million persons in
2015 (2010 = 28.3 million persons).
• In terms of employment, constructon in 2015 is
expected to employ 776.5 thousand persons or
5.9% of total employment (2009 = 762.4 or 6.6%).
• Cyclic fluctuations in demand and supply
• Interlinked with the manufacturing, banking,
industrial, oil and gas and other service sectors

• At its best:
1. Able to produce/construct projects with
outstanding performance standards
( examples: YTL, IJM, Garmuda, Eversendai
Corporation)
2. Participation in the global market by Malaysian
contractors
Construction Industry as the Enabler of Government’s Socio-Economic Policies
(Source: CIDB, 2005)
Malaysia’s National GDP and Construction GDP (1974-2000)
(Source : Bank Negara)
 KELUARAN DALAM NEGARA KASAR MALAYSIA (1966 - 1990)
14

12

10

8
KDNK (%)

0
1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

-2

-4
TAHUN
 % Growth 2001 2002 2003 2004 2005 2006f

Agriculture -0.6 2.6 5.7 5.0 4.8 5.0

Manufacturing 5.9 4.1 8.3 9.8 4.8 4.9

Mining -1.5 4.0 5.9 3.9 1.5 4.7

Construction 2.1 2.3 1.9 -1.5 -1.1 3.0

Services 6.0 6.4 4.4 6.8 5.8 6.1

Malaysian Real GDP by Sectors, from 2000 – 2005 % Growth

(Source: Department of Statistics)
 Year In Rm Millions – 1987 GDP Construction sector Construction
prices Growth contribution to GDP sector growth (%)
GDP Construction (%) (%)
(Note A) sector output

2000 209,959 6,964 8.9 3.3 0.6

2001 211,227 7,108 0.6 3.4 2.1
2002 220,422 7,251 4.4 3.3 2.0
2003 232,496 7,359 5.5 3.2 1.5
2004 249,314 7,248 7.2 2.9 (1.5)
2005 262,175 7,133 5.2 2.9 (1.6)
2006e 277,673 7,097 5.9 2.7 (0.5)
2007f 294,373 7,310 6.0 2.5 3.0
e – estimate, f – Average 5.46 3.0 0.7
forecast

Malaysian Construction Industry and the Economy (Source: CIDB, 2005)

GDP Growth (%) by State at Constant Price 2000 Year
2010
At constant In percentage (%)
1990 2000 2001 2002 2003 2004 2005
prices

Malaysia 3.6 3.7 3.6 3.5 2.9(a) 3.0

Singapore 7.0 7.0 6.0 5.3 4.6 4.0
China 5.2 5.1 5.2 5.3 5.4 5.0
Korea 7.2 7.3 7.0 7.4 7.3 N/A
India 4.9 4.8 4.9 5.3 N/A 7.0
Australia 5.3 5.7 6.4 6.5 6.0 6.0
New 3.7 3.7 3.9 4.1 4.3 4.0
Zealand
Construction Contribution to GDP by Country (Source : CIDB, 2005)
 State of the Malaysian Construction
Industry (Cont’d)
The Problems:
• Serious time and cost overruns, quality
problems
• Rapidly deteriorating infrastructure
• High cost to users of privatised
infrastructure project (tolls, levies)
• Over-reliance on foreign labour (at its
height employs over 1 million foreign
labour)
• Bad paymasters and non-payments,
litigations and disputes
• Difficulty in changing - little innovation
and still very traditional
• Abandoned projects
• Not able to satisfy the needs of the end
users
• Average of 5000 reported
accidents/year
The Malaysian Construction Industry
To address the problems:
• The Institution of the Malaysian Construction Industry Development
Board (CIDB)
• Establishment of the Construction Industry Master Plan (CIMP)
• 7 Strategic Thrust to promote reforms in the CIMP
• Aim - to transform its construction industry to be among the best in
the world.
• It is envisioned the Malaysia’s construction industry in 2015 to be
characterized by the following;
- Efficient and productive industry 
- Consolidated industry
- Innovative industry 
- Environmentally responsible industry 
• CIMP is a comprehensive plan charting the strategic
position and future direction of the Malaysian
construction industry over the next 10 years. Â It is
intended to provide industry stakeholders with a clear
direction of the Malaysian construction industry through its
clearly defined vision, mission, critical success factors,
strategic thrusts, recommendations and action plans.

• The CIMP is also intended to ensure that the construction

industry is well positioned to support the nation's overall
economic growth and in meeting various challenges, such
as the need to enhance productivity and quality along the
entire construction industry value chain.
7 strategic thrust
• Strategic Thrust 1, strengthening the institutional frameworks especially among
Government Ministries, agencies, private sectors and other stakeholders.

• • Strategic Thrust 2 aims to provide a conducive environment for Green Technology

Development. This includes the introduction and implementation
of innovative economic instruments as well as the establishment of effective fiscal
and financial mechanisms to support the growth of green industries.
On this note, the Government has officially launched a fund amounting to RM1.5
billion to encourage business investment in green technology, green
construction and innovation.

• • Strategic Thrust 3 will seek to intensify human capital development by availing

training and education programmes and by providing financial packages and
incentives for students embarking on green technology related subjects.

• • Strategic Thrust 4, of the Green Technology Policy is to Intensify Green

Technology Research and Innovation towards commercialisation.

• • Strategic Thrust 5, the final thrust is for green technology to move forward banking
on strong promotion and public awareness as Green Technology is a new sector for
the country and not many people could relate well to this subject.