CONSTRUCTION

PROJECT MANAGEMENT
UNIT 01
INTRODUCTION TO CPM

CONSTRUCTION

PROJECT

MANAGEMENT

Action of
building
something
Temporary
task to
create
unique
product
Organizati
on and
Coordination

Overall
Planning,
Coordinati
on and
Control of
a Project
from
Beginning
to the
End.

Why construction industry need

management ?
Use of High Tech Technology.
In 1800s use of steam based tools and machineries (Cranes, Hoists,
Dozers, Excavators) started.
It was replaced with electrical technology and internal combustion
engines and it is still upgrading with use of advanced concrete
Involvement of Different professionals.
Business promoters/ clients
Construction management consultants
Architects / Engineers
Banking and financial institutions
Input suppliers
Contractors

Why construction industry need

management ?
It is a unique project every time with
different challenges.
Time
Space and place
Cost
Use

Construction process gets more complex as the

nature and extent of construction gets large.

Facts of construction industry?

Important

indicator

investment

of

the

opportunities

development
across

as

it

various

creates
related

sectors.
The construction sector is a major employment driver, being
the second largest employer in the country, next only to
agriculture. (Agriculture 55% and Const. Industry 11%
according to economic sector 2010)
About 250 ancillary industries such as cement, steel, brick,
timber

and

building

construction industry.

material

are

dependent

on

the

Facts of construction industry?

A unit increase in expenditure in this sector has a
multiplier effect and the capacity to generate
income as high as five times.
Construction industry being a growth wheel
(contribution to GDP with about 8%).
50% of total expenditure of Five year plans
goes to construction development.

Overall Picture
Construction project management is all about
managing a construction project with high degree
of management techniques to plan, co-ordinate
and organize all available resources in most
efficient

manner

to

complete

the

project

successfully in framed time and cost with best

quality.

CONSTRUCTION
PROJECT

What is Construction Project?

A construction project is high value, time bound

special construction mission of creating a construction

facility or service, with predetermined performance
objective defined in terms of quality specification,
completion time, budgeted cost and other specific
constraint .
It needs to complete with the accomplishment of the mission

purpose.
It is unique all the time.
It is headed by project manager.

Characteristics of Project
Project is always a New (implies as it is different from
routine works) and Unique Endeavour that is not done before
(same work has been carried out at same place with same
resources) and it is subjected to risks and uncertainties.
Temporary organization is created to attain it.
project is temporary endeavor or mission to create a unique
product or service or result with well defined beginning and end.
Projects has specified constraints.
Predefined objectives.

Construction Project PERFORMANCE

OBJECTIVES:
1. SCOPE defines the deliverables (quantities of
work, nature of work)
2. QUALITY of work to be achieved (in terms of
specifications)
3. RESOURCES are necessary to perform the work
(efficiency and utilization)
4. TIMELY COMPLETION (speed of the execution)
5. COST and the Budget expenditure

Construction Project
CLASSIFICATION
Based on the nature of construction facility,
1. Building construction (Residential, Commercial, Educational,
Recreational, Hospitals, Hotels, Offices etc.)
2. Infrastructure

construction:

Economic

development

needs

projects (Electricity, Transport, Irrigation, Housing, Water supply,

Sanitation also covers Public Construction such as Health care,
Education etc.)
3. Industrial construction (Manufacturing and Processing plants
like mills, petroleum, refineries, factories etc.)
4. Special

Purpose

projects

(environmental

emergencies, utility services, etc.)

protection

work,

Construction Project
CLASSIFICATION
Based on the time of construction,
1. Long-range strategic program / projects (over 5 years )
2. Medium duration projects ( 3 to 5 years )
3. Normal duration projects ( 1 to 3 years )
4. Special short-term projects ( less than 1 year )
Based on the cost of construction,
1. Mega value projects(over $ 500 million)
2. Large value projects ($ 100 million to $500 million)
3. Medium value projects ($ 10 million to $ 100 million)
4. Small value projects (less than $ 10 million)

Construction Project
ENVIRONMENT

A project exists in association with its Internal and

External risk prone environment, which cause frequent
changes.

Internal

Environment:

corporate

objectives,

stake

holders interest, resource problems, conversion process and

people management.

External environment: changes in social, political, legal,

economic and financial factors.

Construction Project
UNCERTAINTIES
Initially detail of work not precisely defined.
Scope of work gets modified during execution.
Nature of work varies from job to job.
Site locations are mostly in remote areas (less or no
basic facilities available).
Places of work are spread out (specially where const.
site is large)
Resource requirements and organization of work differ
with each task.

Construction Project
UNCERTAINTIES
Investments involved are large and the decision
entails (something that is inferred) risks.
Sometimes project is affected due to unforeseen
natural calamities.
New dimensions are added to the project due to
rapidly changing technology, fast moving economic
conditions and susceptible environment.
The environmental changes, difficulties, uncertainties
and risks pose never ending resource management
problems.

Construction Project
UNCERTAINTIES
These

problems

raise

issues

about

how

much

required, where the resources are going to come from,

when should they be inducted at the site, where
should they be housed, how their utilization an be
optimized, and when they should be demobilized.
due to uncertainties it has been seen The
studies reveal that most of the construction
projects face time and cost overruns due to
management failures.

Project Life Cycle

Each construction project has a pre-determined duration
with a definite beginning and an identifiable end.
Each project is divided into several phases.
A project starting point is the time when the idea or the need
is conceived by the client and its end marks the time when
the mission is accomplished.
The time between the start and completion of a project
represents the PROJECT LIFE CYCLE.
Collectively, a project life cycle comprises of the
project phases, from the beginning to the end of the
project.

Project Life Cycle

These phases in a project life cycle are divided in
following for management control,
1. Project initiation or scope formulation
2. Project planning
3. Project execution
4. Project control and
5. Project close-up

Project Life Cycle

Typical Construction Project Life Cycle:

Effort v/s Time

Project Life Cycle

Typical Construction Project Life Cycle Pattern :

Cumulative Effort v/s Time

Project Life Cycle and some Common

Attributes

In a project life cycle, there is a gradual build up in the use of

resources from the start of the project. It is followed by a
long duration plateau during the execution phase, where most of
the expenses are incurred and towards the end, there is a rapid
run-down as the project draws to a conclusion.

The probability of successfully completing the project is

lowest at the start of the project and hence the risk and
uncertainty are the highest. The probability of completion
gradually increases and the risks reduce as the project progresses.

The ability of the stakeholders to influence the final cost of

the project is the highest at the start and gets progressively lower
as the project continues.

Construction Project common

attributes
Though Project is a unique task but they have certain common attributes

Time

Product
Quality
Resources

Cost

Work scope

Construction Project common

attributes
Use and allocation of resources through project phases

Level of
effort

Formulation

Planning /
Design

Execution and Control

Stages /Phases of
Construction

Close up

Construction Project common

attributes
The probability of success of project at start is low and risk is high and as the
project progresses it flips.

High

High

Project
Risk Curve

Project
Success Curve

Probability
of project
success

Project
risk

Low

Low
Start

Time

End

Construction Project common

attributes
The ability of influence the scope of the work of a project within a budgeted cost by
Stakeholders.

High

Stakeholders ability to
influence changes in
scope of work

Project
risk

Low
Start

End
Time

Phases of Construction Project

The project life cycle of a construction project generally follow similar pattern.

It is divided into several phases for management control.

Phases in a Project Life Cycle

Level of activity Vs Time

Processes in Phases of
Construction Project
Project
Initiation
Phase
Project
Planning
Phase
Project
Executing
Phase
Project
Controlling
Phase
Project
Closing Phase

Phases of Construction Project

Project phases

Processes Phase wise

Project Initiation Phase

Need identification
Feasibility study
Investment appraisal
Project scope definition
Project charter

Phases of Construction Project

Project Initiation Phase

This aims at the formulation of the project scope and the

implementation

strategy,

if

the

project

is

approved

for

implementation.

The end of this phase marks the client go ahead / nogo decision.

The project Charter (project Manager/Engineer) outlines the

project scope, objectives, preliminary plans, and organization for
the execution of the project.

The end of the initiation phase marks the start of the project
management process.

Phases of Construction Project

Project phases

Processes Phase wise

Project Planning Phase

Designs and drawings planning

Time planning
Resource planning
Cost planning and budgeting
Communications planning
Quality planning
Organizational planning
Risk management planning
Construction contracts
procurement planning

Phases of Construction Project

Planning phase

The objective of this phase is to develop a workable plan to

accomplish the project mission.

In its broader sense, planning involves intellectual thinking in

advance (What, When, Where, How, Who); all the thinking is
channelized to generate and evaluate options for evolving the
action plan.

Planned thinking follows a systematic approach.

Planning techniques are the tools used to systematize and

transform the mental planned thinking into an integrated
project plan with the aim of reaching specified goals. Major
contracts are finalized at the end of this phase.

Phases of Construction Project

Project phases

Processes Phase wise

Project Executing Phase

Project site organization

Resources mobilization
Scope quality assurance
organization
Team development
Information distributions
Contract administration
Safety management

Phases of Construction Project

Executing phase

This concerns with coordinating and managing people and other

resources to carry out the plan.

It is the projectmanager who is accountable to the client for the

entire construction phase. He ensures smooth functioning at site
and makes decisions when the site faces problems.

He manages the entire construction process so as to achieve the

assigned project objectives.

At site, the contractors construction managersexecute their

assigned works to achieve the contractors objectives.

Client project manager manages the contractors employed at

site with the help of his supervisory team that reports to him for
decisions.

Phases of Construction Project

Project phases

Processes Phase wise

Project Controlling Phase

Overall scope change control

Resources control
Schedule control
Cost control
Quality control
Risk response control
Performance reporting

Phases of Construction Project

Controlling phase

During the implementation phase, the project control aims to track

the progress of work as per the planned schedule and take
corrective actions including re-planning, when necessary, to achieve
the project objectives.

Project control follows a system concept. Each organizational unit in a

project,

and

sub-systems

are

highly

inter-dependent

and

interactive.

Each sub-system accounts for its performance and reports the

deviation between the actual and the planned to the Project
Control Centre.

Receiving the performance data, and if required suggestion and

modifications are done to achieve the projects objectives.

Phases of Construction Project

Project phases

Processes Phase wise

Project Closing Phase

Administrative close
Contract close-out
Lessons learnt

Phases of Construction Project

Closing phase

This formalizes the acceptance of the project and brings it

to an orderly end.

After completion by the contractor, it is the project team of the

client that hands over the project to him (client).

The team also prepares a project completion report which

includes the scope and schedule of work, the important events,
the contract executed, the addresses of the suppliers of materials
and equipment, the equipment maintenance manual, the as-built
drawings, the costs involved, the problems encountered during
execution, the lessons learned and the minor defects noticed at
the time of handing over.

Fast Track Development Approach

Owners
Decision

Owners
Decision
Engg.
Drawings
Constructio
n

Total Time

Sequential Traditional
approach

Engg.
Drawings
Constructio
n

Total Time

Fast Track approach

Participants involved in Project

(Start-End)

Project stakeholdersor participantsare the individuals and organizations who

are actively involved in project execution or successful project completion.

Business
Promoters/Owners

Input Suppliers

Architects- Engineers Asso.

Contractors

Construction Magt.
Consultants

Project Managers

Project Feasibility - Purpose

Construction project are capital intensive.

Capital expenditure decisions have long-term effects,

are irreversible, and involve substantial outlays (a
grate extent of spending money).

The basic characteristic of a business- related capital

project, like real estate and privatized public infrastructure
construction is that it needs a huge investment of funds in
the expectation of a stream of benefits extending far into
the future.

Project Feasibility - Objectives

The objective of feasibility study, invariably
Is to analyze the factors affecting the viability of a project and
to present the findings with recommendations in the form of a
project feasibility report for implementation.
A feasibility report forms the basis for the investment
decisions made by the project promoters, for the support extended
by the financial institutions, for the clearance given by the
appropriate approving authorities, and for giving an insight to the
project manager into the techno-economic basis on which the project
is approved.

Analyzing Factors affecting Project

Feasibility

The factors influencing the feasibility vary with the nature of the
project, e.g. the risk factor in a privatized infrastructure five years'
duration road project is far more dominant than that in two-year
duration lump-sum road construction contract.

The typical factors considered in the feasibility study of a

business related construction project, like real estate development and
privatized infrastructure construction, are

Market analysis

Technical and Ecological analysis

Financial and economics analysis

The analysis of factors generates enough information to select

the most appropriate course of action for implementing the
project, if feasible.

Market analysis
This is concerned primarily with the aggregate demand and
market share. Variety of information are needed such as
Sales trends in the past and the present sales level.
Past and present supply position.
Competition.
Cost structure.
Consumer behavior, intentions, motivation, attitudes, preferences
and requirements.
Distribution channels and marketing policies in use.
Administrative, technical and legal constraints.

Technical analysis
This seeks to determine whether the pre-requisites for the successful
commissioning of the project have been considered and reasonably good
choices have been made with respect to location, size, process etc. or not. It
includes
Preliminary investigations, tests and pre-feasibility studies already done.
Conceptual design and specifications
Layout of the site, buildings and plant.
Construction methodology.
Availability of resources manpower, raw materials, power and other inputs.
Equipment and machines required.
Necessary auxiliary equipment and supplementary works.
Pollution control measures. (Environmental Clearance certificates)
Work schedules, Approximate cost breakdown.

Financial analysis
Determination of Investments and returns are analyzed. It includes
Cost of project.
Investment outlay (planning).
Break-even point.
Cash flows of the project.
Projected financial position.
Risks analysis and contingencies.
Projected profitability.