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- 2nd 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- 2nd 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 Award Construction Handover Decommissioning
study
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
Design

Tender
SITE MANAGEMENT

INCEPTION DESIGN TENDER CONSTRUCTION HANDOVER /

CLOSE OUT

Copyright ©Fadzil CPIM UiTM2011

 Technical Project Management
Competencies
Inception Design Documentation &
Approvals

MANAGING PRE-TENDER
Project ACTIVITIES
Handover Project
Budget

Defects MANAGING Project MANAGING Tender

Liability PROJECT TENDER
Period
HANDOVER
Manager ACTIVITIEST
(DLP)
Contractor
Appointme
Final nt
Account MANAGING
CONSTRUCTION
ACTIVITIES

Quality Control Cost Control Time Health & Safety

Control

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
• Environment Tendering
Construction
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

Management Management Management Management
•Management is •Management is • Commences • Undertaken by the
performed by performed by the from site project owner (or his
contractor possession to agent/s)
client / consultant
/ contractor •Extends from the handing over the •Commences after
Contract and Site completed project the project is
• Extends from handed over by the
Management • Undertaken contractor
feasibility studies
stage starting from mostly by site
to the completion • To ensure that the
the tendering stage manages
of the project to project building or
completion • Management of infrastructure is kept
•May be work packages in its satisfactory
undertaken in • Undertaken in functioning
various ways and various forms and • Part of condition
various parties by various parties Construction
management •Can be performed
for the contractor in-house or by
• Mainly external consultants
undertaken by the
contractor
 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 - Environment
E - Communicating
N - 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 Projects Production

One-Off Repeat

IDEA BUILT IDEA GOODS & SERVICES

INFRASTRUCTURE
DESIGN FACILITY DESIGN Goods
PLAN Buildings PLAN
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 ultimate 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 consumption (supply chain).
• Another definition is provided by the APICS Dictionary when it defines SCM as the
"design, planning, execution, control, and monitoring of supply chain activities with
the objective of creating net value, building a competitive infrastructure, leveraging
worldwide logistics, 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).
• Construction 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
construction GDP at 3.7% per annum.
Construction's share to GDP is at 2.9%.
• Malaysia's population is estimated to grow at 1.1%
(2011 - 2015) reaching to 29.8 million persons in
2015 (2010 = 28.3 million persons).
• In terms of employment, construction 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

TAHUN
-4
 % 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.