Managing Construction Projects - Report Example

MANAGING CONSTRUCTION PROJECTS By Executive Summary Constructing the Team, Rethinking Construction and Never waste a Good crisis are reports that were written with the aim of improving the UK construction industry that was on the edge of ending. The construction industry did not fully satisfying its clients in terms of cost and quality of production of built assets. This was the driver to the drafting of the three reports that were aimed to improve the UK construction Industry to be a global leader. In this report we aim at reviewing critically the reports in relation to the various impacts they have had on management and procurement of construction projects. Each report is reviewed separately and its impacts in the construction industry. The report aim to review the current trends in the UK construction industry that came up as results of the recommendations and reforms discussed in the three reports. The trends discussed are the trends on procurement and management practices construction projects. These trends include partnering, value management, application of Total Quality Management (TQM) in the procurement practices and the sustainable construction practices of built environment (Amaratunga & Haigh, 2011, p 75). Constructing the Team was drafted with the main aim of finding the value of money through the reduction of costs by about 30%. This has been achieved by changing the unpredictable nature of the construction industry which was thought to be fragmented, ineffective and not capable of providing quality work to its clients (Latham, 1994, pp. 61-72). This has led to the formation of partnering and integrated methods of project management. There has been recent increase in the underlying number of bodies and forums that provide complete guidelines for the adoption of value management. Rethinking Construction proposed various new adaptable practices in the industry that would be sustainable for years to come. It focused on adopting better procurement procedures, good construction methods, increased profitability and GDP, consistent units, reduced defects and wastage among other problems. Some of the targets set in the reports have been implemented whilst others targets is still pending due to the economy. The challenge encountered in implementing Egan’s report is the changing trends in the world where strong environmental lobbies advocate for sustainable construction industry through built environment. Never Waste a Good Crisis was drafted in response to the changing economic situations in the UK construction industry and to follow up on targets set by Egan and to come up with better practices. This report has fostered the concept of built environment and corresponding low carbon economy that is presently being utilized in the UK between changing economy. Various initiatives were implemented in response to the issues highlighted in the reports. These include; New Engineering Contract (NEC), the Institution of Civil Engineers (ICE), the Building Services Research and information Associations (BSRIA), Construction Industry Research and Information Association (CIRIA), The Housing Grants Construction and Regeneration Act. These initiatives were formed to enforce the issues in the reports. The formation of these initiatives however does not assure accomplishment because of the underlying nature of the construction industry. The three reports have been given a push by external and internal trends which are indicative of a future that is quite challenging for the UK construction industry. These trends are; client wants, social and technological change, competitive pressures caused by globalization, and the desires of a progressing complicated economy. Introduction Constructing the Team, Rethinking Construction and Never Waste a Good Crisis, were reviews written with the aim of improving effectiveness, quality and efficiency in the UK construction industry and ensure client satisfaction. There was the need for the ‘value of money’ which was as a result of the fact that the UK construction industry failed to satisfy client more often. In ‘Constructing the Team’ there is need for healthy relationship among the parties involved in the construction projects. There is the need to give construction a new direction as we forecast the changing future. There is need to modernize the UK construction to change with the world trends. ‘Never Waste a Good Crisis’ was written to follow up ‘Rethinking Construction’. It focuses on the concept of built environment to adaptability to changing economy. Critical Review and Findings Constructing the Team There exists massive concern pertaining to the ‘value for money’ in the industry which was known for its failure to ensure client satisfaction. There were surveys conducted by associations like the National development office to determine the levels of client dissatisfaction. This has had attention in the construction industry as Latham sought to recommend the best management practices that would ensure the ‘value for money’. The report was drafted in response to the statistics that the construction industry performed below average compared with the other industries in the UK (Latham, 1994, pp. 61-72). They were thought to be wasteful in their practices and never delivered the expected quality value to its clients The industry’s unpredictable nature that was adversarial in terms of contracting agreements and could likely be faced by disagreements. The production line is also different from other production lines in the economy where each building in the industry was viewed a separate entity. This report was drafted to investigate likely problems in the industry which was found to be fragmented, ineffective, adversarial and not capable of providing quality work to its client. Latham proposed an integrated structural system that focused on greater partnering and better teamwork with the less adoption of the adversarial structure. Latham made various recommendations to help lessen the problems discussed in the report that faced the industry. These formed the core of the report and they led to major impacts in the industry. The first recommendation was directed to the government’s practice of being the best client (Latham, 1994, pp. 61-72). He proposed that the government should show commitment in depicting itself as a good practice client. He recommended the adoption of the New Engineering Contract (NEC) which is a group of construction contracts that was formed to foster healthy partnering between the contractors and the clients who are offered the service. The NEC contracts were meant to stimulate good management and should be flexible to be adopted in major and minor construction projects. Latham also recommended the encouragement long-term contracting establishments through partnerships Latham suggested that consultants, contractors and sub-contractors working in the industry should be approved by public sector registrar to be formed. This would ensure that they have required knowledge for ensuring an effective and competitive industry practices as by the required standards. In addition, he recommended standardization and incorporation of the various contract documents used in the industry. There were recommended publication of necessary codes of practices to control and standardize practices of the parties involved within the underlying the construction process as a whole It was proposed that every party in the construction process should deal fairly and rationally with each other and with the parties involved in the supply chain to ensure quality in the product output and a good atmosphere that fosters interdependence relationship. In this view there were also to be records that was consistent and that clearly outline specific roles of all the parties involved in the construction process (Jim, 2009, pp. 6-16). Latham also recommended steps measures to deal with risk and resolution of disputes that arise in the day-to-day construction activities There were to be employed procedures for the smooth interim and quick resolution of disputes. The prime focus of the report was to develop suitable measures that would eradicate the expenditure in construction by about 30% in duration of about 5 years. This step was to counter the misconception in the industry that cost-effectiveness could lead to the achievement of the value for money. Latham outlined the desire need for formulation of project procedures that focused on the assessment of needs and the observation of the available resources. In a broader aspect, the report focused on two aspects that were consistent progressive. First, it was important to set clearly defined goals and objectives and secondly the goals and the objectives were to be met cost-effectively with regard to the construction practices Latham’s report has led to major transformations in the UK construction industry attributed to the concerns and recommendations highlighted in the report. The government recommended for the adoption of value management in the construction practices through complete guidelines and mandatory requirements of these practices in the construction contracts. For instance, the Institution of Civil Engineers (ICE) and the Building Services Research and information Associations (BSRIA) came up with guidelines on the proper use and utilization of the value management norm of practice (Jim, 2009, pp. 6-16). This was also supported by the Construction Industry Research and Information Association (CIRIA) which went further to publish a guide to the value management The Latham report led to the rise of the number of forums and boards formed to oversee the implementation of the various proposals for change highlighted in the report. The Construction Industry Board is one of the forums formed among others that were later recommended by Egan in his report. The Housing Grants Construction and Regeneration Act were also formed and it spelt out payment practices that would control ‘set off’ between the parties involved. Recently, the government encouraged partnering and collaboration among the teams involved in construction. Rethinking Construction Within this report revealed that the construction industry was achieving below the expectations and the requirements of the clients. The construction industry was discovered to have a potential of generating a GDP of 10% and employ nearly 1.4 million people (page 7) that was deteriorating at that moment (Fairclough, 2001, pp. 9- 20). Despite the excellence of the construction industry in terms construction methods, procurement methods and project delivery, there was still need to modernize the industry to tackles some problems facing it and have so far not been tackled. The too low profits in the industry were not able to sustain a significant development. Thus, there is need for enhancing better profitability (John, 2002, pp. 11-35). Numerous companies within the industry were found to be involving little or no investment in research and development procedures and in capital. Research and development was found to have a drop of almost 80% from 1981 and the value of capital investment has reduced to a third of the values recorded twenty years ago. There was also the concern of training crisis whereby it was discovered that there was a great decline in the numbers of trainees in the labor force to replace the old labor force. Therefore the workforce did not obtain the necessary technical and managerial skills to ensure better performance and client satisfaction. There was also a poor career configuration to develop organization and supervisory standards Most of clients still selected contractors and designers on the underlying foundation of the value of the tenders regardless of the method and means employed by the respective teams in construction. This resulted into poor low priced projects that did not offer best value. The main reason for the report was the fact that clients were dissatisfied by the services offered by the construction company in the public and private sectors of the industry. The deliveries of projects were very unpredictable terms of meeting the set budget and completion on time and still assure the quality desired (Jim, 2009, pp. 6-16). The construction industry was actually viewed as a poor investment in the City Fragmentation in the UK construction industry was also a barrier to construction despite its advantages. The vast employment of subcontracting practices brought about discontinuity in the teams involved in construction. Continuity is vital in assuring efficient working. The ambition of the team to write the report was driven by the fact that there were massive improvements in the other sectors of the economy and thus the need for quality and quality improvements in the construction industry. There was a feeling that such improvements could be spread around the UK construction industry and availed to all the clients served by the very same industry. The five drivers of change that were discussed in the report and that were proposed to be implemented in the UK construction industry were: committed leadership, a concentration on the prevailing customer, integrated procedures and teams, a quality motivated agenda and obligation to populace. The occurrence of defects was also to be reduced by about 20% annually. In order to achieve the above named targets particular alterations were to be enacted to the processes followed in the industry towards the delivering of projects. It was proposed that the industry forms an integrated plan revolving around three elements: development of projects, implementation of projects and merging of supply chain and production of units The report advocates for the utilization of techniques for waste elimination and value development for the client. It was proposed that the industry provides working conditions that would ensure safety and decency. In addition to this there was to be an improvement in the supervision and management skills in general at all grades in the industry. The industry was to design projects that ensured ease in the actual construction by utilizing standard processes and units. The industry was also to replace the usual tendering competitions for securing contracts with better practices that utilize the measurement of a firm’s performance regarding efficiency and quality in the delivery of projects With regard to house building there was the need for an improved performance. This was to be achieved if the local authorities and corporate clients’ housing associations worked with the house building industry to ensure the improvement of the strategies and the technologies and form products that meet the required standards (Mohamed, Jacqueline & Andrew, 2006, pp.65-72). It was also proposed that the major stakeholders in the industry should offer leadership through the implementation of various standards projects that will clearly spell out the approach described. Clients in the private and the public sector should sponsor the standard projects Egan’s report led radical changes in the construction industry in terms of performance. This was enabled through a sequence of change plans. An overall assessment of the changes with regard to the five drivers of success described above shows significant changes in the construction industry by the year 2001. A Strategic Forum was formed with the goal of overseeing reforms in the UK construction industry (Egan, 2002, pp. 10-32). This forum culminated into revised targets and goals that were set with the aim of achieving a reform of the industry at the close of the year 2007. Moreover, it was later postponed to the year 2012 thus aiding in setting up of new targets. Much emphasis was laid on the Construction Commitments made in 2012, which mainly fostered modern practices in the construction activities for the hosting of the 2012 Olympic Games A survey conducted by Andrew and his team in his report ‘Never Waste a Good Crisis’ shows the significant changes that the recommendations in Egan’s report brought about. There has been major emphasis on partnering and integration. This, however, was restricted and never reached the supply chain because of high chances of incurring loss in trying to pass the risk to the supply chain and in turn getting rid of these risks as a team (Mohamed, Jacqueline & Andrew, 2006, pp.65-72) By 2008 there was still fragmentation in the industry. There were efforts to adopt measures of structural flexibility but these just resulted in a sector with many firms with less employee capacity and less innovation. Egan’s targets could not be adopted fully because the industry was in a coarse low road towards proper development. Never Waste a Good Crisis This report was written by Andrew Wolstenholme after Egan’s report to seek to determine the progress the UK construction industry had made after ‘Rethinking Construction’ as published. Andrew describes that the changes that Egan’s report brought about were incomplete and there was need to take a new direction to take advantage of the crisis in the UK economy. This would be done by the refreshment of the process and adopting the concept of built environment which is what the UK economy so much deserves There has been some documented progress in the industry but not as was anticipated and this report reviews this progress and the factors that impeded the full implementation of the concern and issues raised by Egan in his report (Don, 2010, p14). In some successful projects the norms and principles highlighted in his report have been improperly implemented. A good case is the housing sector where the practices of value management have not been adopted because the construction process is not taken with a lot of seriousness. There have been many forthcoming challenges as recorded in the report in the view of the changing economy and the rising economic crisis (David, 2013, pp. 5-18). A significant number of clients have already put to a halt their long-term investment strategy. There is an anticipated long duration of recovery from the current economic crisis and this puts the capital budgets at risk. The government is pressured to cut on the public expenditure. The impending crisis in UK construction industry entails incapability and unsustainability of infrastructural chain for future UK economy To handle the crisis and make good use of the existing scarce resources calls demands setting up of proper connection amongst the government, clients and suppliers. They should adopt a new direction for the construction industry based on the new idea built environment (David, 2013, pp. 5-18). It involves comprehending how value is formed over the life cycle of a construction component, other than just considering the costs incurred in building the component. Moreover, it also encompasses incorporation of insignificant straight costs of construction and design and the likely impacts it will have on users in the future with regard to of whether it is business, environmental or socially formation There is need to abolish the current business set-ups that foster the reward of short term performance but instead focus on trends and practices of the suppliers to deliver long-term quality and sustainability that ensures total performance in the long-term for the built assets in the industry. This would be achieved by shifting the attention from the clients to the suppliers. Customer revolutions days ought to be abolish and rather substituted by the more dynamic suppliers’ activities that mainly demonstrate how it can form a social, economical and environmental value-added process (Wolstenholme, 2009, pp. 14-26). This would be achieved by the same principles highlighted in Egan’s report of innovativeness, collaboration and integration in the carrying out of the construction activities. Therefore the clients should adopt procurement processes that offer reward to supplier for their value-adding solutions The government as a major policy maker should create a working environment that encourages the implementation of modern processes of construction through innovations. This report suggests that the industry is moving in the right path even though the targets of Egan have not been met. This is because the crisis was utilized and a self sustaining built environment fostered. The future agenda oversees a step to eradication of the challenges that face the adoption of built environment and a low carbon economy. In fact in his own words Egan admits that they had achieved a bit of progress but with the changing economic times and the pressure from the environmentalist that was about time better methods were adopted to make better use of the crisis in the country. Conclusion In conclusion, it is justified to say that the three reports led to major changes in project management and procurement methods in the UK construction industry. Latham’s report led to the formation of the Construction Industry Board (CIB) to direct the reforms drafted in the report. Latham’s targets have been met and there are significant changes in the industry. Ethan’s report was drafted to give an additional update on the development. It was also meant provide a strategy to be followed for the years that were to come on that were adaptable to the changing needs of clients and the industry in general. Although Egan’s targets were not fully achieved due to changing economies, Andrew’s report provides a framework for practices that are well adapted to the users’ future needs. The changing trends in world called for a different construction approach that would ensure sustainable construction. This gave rise to the built environment concept that forms the basis of Albert’s report. There are challenges faced in the implementation of the issues in the three reports. This is majorly due to the changing trends in the construction practices in the world and the changing economies and clients’ needs. It is thus right to say that the three reports have had an impact in the UK construction industry despite not being implemented fully due to the various challenges facing the UK construction industry. Bibliography Wolstenholme, A. (2009). Never Waste a Good Crisis: A review of Progress since Rethinking Construction and thoughts for our Future. Jim, N. (2009). Never waste a good crisis: Lessons in staying ahead for Industrial Manufacturing leaders. UK: PricewaterhouseCoopers John, C. (2002).Rethinking Construction in the Scottish House building Industry. Davis Langdon Consultancy, Princess House London. Egan, J.(1994). Rethinking construction: The report of the Construction Task Force to the Deputy Prime Minister, John Prescott, on the scope for improving the quality and efficiency of UK construction, 8-36 Mohamed,O.,Jacqueline,G & Andrew, P. (2006). Architect and contractor attitudes to waste minimisation, 65-72 Fairclough, J. (2001).Rethinking Construction innovation and research: A review of Government R & D Policies and Practices. Amaratunga, D., & Haigh, R. (2011). Post-disaster reconstruction of the built environment rebuilding for resilience. Chichester, West Sussex, U.K., Wiley-Blackwell. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=693809 David, W. (2013).Municipal Waste Management in the United Kingdom. Copenhagen Resource Institute, http://www.cri.dk/ Egan, J. (2002). Accelerating Change: Strategic forum for construction Taylor, S. (2001).Offsite Production in the UK Construction Industry, Don, W. (2010). “Never waste a good crisis”. Latham, M. (1994). Constructing the team: Joint Review of Procurement and Contractual Arrangements in the United Kingdom Construction Industry Read More