Projects within Shard Program - Essay Example

?Running head: SHARD TOWER PROJECT Shard Tower Project ID Number) (Unit (Unit Submitted) Introduction The Shard is 1,016ft tall, which is also known as London Bridge Tower. In Western Europe, this is the tallest building comprising apartments, hotels, restaurants, hotels and galleries. Designing of the Shard tower was done in 2000 by Renzo Piano and in 2007 construction begun. In July 2012, the project was completed and opened by Prime Minister of Qatar, Hamad bin Jassim bin Jaber Al Thani. The opening ceremony was also attended by Prince Andrew, Duke of York (Mace Group 2010). The tower is serviced and maintained by central London’s amenities, facilities and transport infrastructure. The tower is located next to London bridge station thus making it easier for people to connect from the station to work place (Sellar Group 2011). This paper will focus on the Shard tower project and the project management. The core objectives of the Shard project was to; make positive changes, improving one’s life chances, ensure development in growth areas and deliver quality and standard public service This paper aims to look at project management in the construction industry and the relationship between the levels of risk management and the different stages of a construction project. The conventional techniques of project management will be mentioned as well as the current innovations in the field. Moreover, the paper will discuss the benefits and costs, barriers, of the trends and finally discuss relevant recommendations. Projects within Shard programme 1. Southwark tower demolition Stephen Furnell assisted by Len Abbott in the year 1969 to 1970 designed the Southwark tower. The tower was the head quarter of price waterhouse. The tower had 25-storey office (The Rubble Club 2009). The building was demolished to allow construction of Shard tower. It was the tallest building to be demolished in the United Kingdom. They demolition was done behind acoustic screen so that they could reduce noise pollution levels. 2. Fixing glass The Shard tower is also known as the shard of glass. The reason behind the name it is because the tower is covered in glass, which makes it crystal. The developers designed a glass roofed, which was done by Renzo Piano building. The design included both the ceiling and floor, which brought light to the offices during dimmest days. 3. Sensors The sensors activate grey blinds on each glass panels. In 2009, Claxton gave advice operational and budget for developing blind control system. The blind system control was to take and avail readings from sensors. The sensors would communicate to shreds to either lower or raise heat entering the tower. The solar track servers were installed in the basement while photometer and radiometer sensors we installed on the roof. The sensors positioned at the roof are called level 96. Claxton were able to successfully install solarTrac system, which is a product of Mechoshade. 4. Kone jump lifts The first Kone jump lift was installed in Shard Tower in August 2010. The jump lift is a self-climbing system developed by Kone. The lift uses the building shafts during construction. The lift can accommodate 21 people and 1600kg. Its main use was to carry Shard site workers up and down the construction site. Mace, the Shard principal contractor, collaborated with Kone to ensure the jump lift meets the standards and quality of the delivery program. Tony Palgrave, the Mace construction director, suggested that the jump lift was a solution to transporting materials and people effectively and quickly. It has been the safest way to move up and down the building. Michael Williams, KONE U.K. managing director, said feel privileged working together with Mace in the Shard tower project. They ensure that the lifts were well installed to unsure they ran smoothly (Chatham 2010). Project management Robert Deatker was the project director at the London Bridge quarter and Shard Tower. Robert says the work of the project management is to knot thing together. Project manager should ensure there no delays and massive spending of the project resources and capital. At the end of the project the team, client and contractor should be happy, all issues resolved and the project was completed smoothly (Taylor 2012). The Shard project has two features. These features are transience and uniqueness. Designing of the Shard tower was done in 2000 by Renzo Piano and in 2007 construction begun. In July 2012, the project was completed and opened by Prime Minister of Qatar, Hamad bin Jassim bin Jaber Al Thani. Prince Andrew, Duke of York also attended the opening ceremony(Mace Group 2010) the Shard tower project is unique because it is the tallest building comprising apartments, hotels, restaurants, hotels and galleries. The following are the Shard Tower project principal contractors; 1. Mace group- project management, 2. Jumping lift- Kone U.K., 3. Demolition of Southwark Tower- Keltbray, 4. Facades- Scheldebouw, 5. Managing of steel- Corus/ CBUK, 6. The financial advisor- QNB Capital, 7. Services Engineer- Arup, Project developer-Sellar property, 8. Affiliate architect- Adamson associates 9. piling- Stent. (Reed Business Information UK, Ltd 2008). 10. Mark Delving- logistics manager (As Easy As Riding A Bike 2012). 11. Project quantity surveyor- Davis Langdon, 12. The structural engineer- WSP and 13. Principal Architect- Renzo Piano Building Workshop. The Shard project management and contractor advisor was issued to Turner & Townsend. Involvement of Turner & Townsend was to restore confidence to Qatari investors. The Shard project director, Bernard Ainsworth said Turner & Townsend was involved in the project to strengthen the management and the team (Richardson 2008). The duty of the project manager was to estimate cost. It is assumed that as the project grows bigger, the cost of project management will reduce. This was observed from repeated activities economies of scale. Certain factors may increase the cost of project management. These factors include; 1. Technology The technology used may have increased the cost of the Shard Tower project. The project was designed using advanced architectural technology. The building stable and safe frames were designed using design and analyzing software. This helps the Shard to move almost 20 inches up during high winds. The building has emergency routes and firefighter lifts (Mechan 2012). Shangri- La Hotel involved many electronics such as LCD televisions, body contouring technology and hi-fi equipment (Shangri-La International Hotel Management Ltd. 2012). The glass technology used was to save energy by using glass chemicals and breeze in the winter garden. The heat from the offices is reused in the residential areas. The glass used on the Shard Tower is not tinted or mirror glass but modern glass technology, which is clear with less iron glass. In England, the modern glass is known as extra white glass. Piano states that the building will appear different from other towers and the appearance will be like “massive glass meteorite” (Piano 2012). 2. Complexity The facilities included in the Shard tower could have contributed to the increase of the project budget. The building comprises apartments, hotels, restaurants, hotels and galleries. It has an Asian style shopping mall and the shopping outlets have already being taken. The shopping mall is known as urban or modern shopping center (Littlefield 2012, pp 18- 19). 3. Experience Architect Renzo Piano has good experience on designing the towers such as Centre Pompidou, Paris (with Richard Rogers) in 1977 and San Nicola Stadium, Bari, Italy in 1990, New York Times Building, California Academy of Sciences and many more. The rest of the team was experience and had worked on other projects. Experience may be a factor that could have lead to increase of the project budget. 4. Levels of supervision When the budget of building the tower increased, Turner & Townsend was assigned project management and contractor advisor. Involvement of Turner & Townsend was to restore confidence to Qatari investors. 5. Project schedule Designing of the Shard tower was done in 2000 and in 2007 construction begun. In July 2012, the project was completed and opened. The time taken could have lead the building materials to go up due to economic recession. 6. Field location The project is located in on London south bank, HMS Belfast, Tower Bridge and the Gherkin building. Southwalk tower demolishing may have also contributed to the increase of the Shard budget. 7. Ownership Multiple partnerships played a big role in negotiation and assistance needed. The investors i.e. Qatar investors were able to add the project budget needed tho complete Shard tower. Need for project and risk Management Risk management is vital to not only the construction industry but also other organizations. Zawada (2008), comments that in general, risk management helps organizations avert risks and minimize their impacts or occurrences. He continues to add that risk management is important when it comes to identifying and defining risks in an organization including the present risks an organization is facing and those that are in the periphery. Moreover, by analyzing and evaluating the key organization risks possible solutions to them are met by the organization’s risk management team. He argues that, the risk management process facilitates the identifying of potential risks as well as the probability of them occurring and the impending impacts if the risks occur. In light of this, an organization’s management team is able to make predictions on when and why risks occur hence they can strategically plan on how to avoid them. He concludes by stating that risk management enables an organization to recognize the risks to prioritize over others and how to control them. Finally, he adds that an organization is able to evaluate the outcome of risk management projects within itself and find out whether the endeavor was successful or not. If unsuccessful, the organization has the option of going back to the drawing board and brainstorm on where the process failed. Techniques used in Risk Management The following are the commonly used techniques used in risk management; organizational charts and flow charts, administering questionnaires, physical risk inspection, the fault tree, a business impact evaluation and risk assessment as indicated by the Risk Management Guide in the article, Risk Management Techniques (2012). Risk Management Processes It mainly involves five steps: Risk identification, risk assessment and evaluation, planning and mitigation, monitoring and implementation and measuring and controlling the results, as shown below, Brooks and Chance (2012). Figure 1.1 Risk Management Processes Risk Management in the Construction Industry The construction industry is characterized by very intricate projects and various sources of risks state Miller& Lessard (2001). This is because it involves many stakeholders and conditions that may change during say a construction project that may turn out to be detrimental than initially planned or estimated, need to be carefully considered when it comes to risk management. Just like any other industry, the construction industry has its own distinct risks a reason why the industry as well as construction projects require constant decision making as a result of several sources of risk and uncertainties that the project participants have little or no control over, Baloi & Price (2003). The risks inherent in the construction industry are divided into two categories: the technical and social risks. The table below outlines these risks Figure 1.2 Risks in the Construction Industry Social Risks Technical Risks Commercial Construction Economic Legal Financial Logistics Political Natural Sources of Risk in the Construction Industry As mentioned earlier the risks in the construction industry have various sources. The table below shows those sources Figure1.3 Sources of Risk The Risk Management Process in the Construction Industry Simon &Burtonshaw (2009), suggest that there is a correlation between the different processes of risk management and the stages of the construction hence it is possible to undertake risk management at different levels of a construction project as shown below in figure 1.4 Figure1.4 The Relationship between Risk Management and construction project stages Current Innovations in Risk Management Risk management is evolving and will continue to evolve as new innovations in the field come up, Anderson (2007). The following are the current trends in risk management. Enterprise Risk Management (ERM) This trend is here to stay and has helped redefine the risk management process. It is a more holistic approach towards risk management and involves the concept of segregating risks and managing them in isolation, Hurbert (2004). In other words ERM involves defining risk measurements, creating risk policies, establishing a capital allocation process and governance and strategy, Anderson (2007). Enterprise Governance It involves embracing the compliance theory .Unlike ERM, this approach encompassing both the holistic approach as well as ensuring that the workforce involved in the risk management process perform hence this approach is performance oriented, Hurbert( 2004). Credit derivatives This concept keeps evolving and it relates to credit risk. Credit risk affects all organization as they all want to balance their balance sheets. A credit derivative is a form of a contract a financial institution possesses to protect itself from risks such as a borrower failing to repay a loan. This approach reduces the capital such institutions have to set aside to take care of possible defaulters, Chance &Brooks (2012). By freeing up capital using this approach, institutions are able to take on much challenging risks. Business Continuity Catastrophic events such as 9/11 or the tsunami in Asia have brought into perspective the aspect of business continuity. It stresses on planning for the continuity of a business’s future in light of uncertain adversities to come, Hurbert (2004). Risk Adjusted Profit Measures (RAPM) has gained popularity globally. These measures address weaknesses in the accounting function such as return on equity (ROA) and can be compared to the risk adjusted capital (RAC). It is noteworthy that these functions cannot fully solve economic realities of organizations as they do not take into consideration the inherent risks within organizations operations Hurbert, (2004). Cost and Benefits of the Innovation Risk Management The Benefits Every innovation in any field has its costs and benefits. The benefits of the innovations mentioned above include the following: Firstly, they will create a consistent system of identifying, communicating and managing risk. Second, the innovations will enable organizations such as the construction industry establish links between strategic plans and risks. Third, the innovations will help organizations align risk tolerance from the management level to the staff level. Fourth, they will create a coordinated method of managing risks throughout all departments in an organization. Fifth, in reference to credit derivatives, the trend will enable organizations evade possible defaulter and efficiently allocate capital. Lastly the innovations will promote a risk awareness and management culture, Anderson (2007). The Costs The costs that organizations will incur by adopting these new innovations can be categorized into three i.e. the costs of entry, the costs for ongoing maintenance and the costs for managing the risks in a project. Costs of entry Venturing into the current trend of risk management will cost the organization in terms of techniques, tools and training hence it should be well aware and willing to invest in it, Hillson (2004). If these costs are not paid the risk management process will not deliver any results. Costs for ongoing maintenance Hillson (2004), states that for the risk management process to be effective these costs need to be planned for as the risk management process needs to be kept fresh and up to date otherwise it will crumble. This also applies after an organization ventures into the current trends of risk management. Managing the Risks in a project Organizations also need to set aside money for assessing and addressing risks on projects they set out to undertake whether or not they have ventured into using the current trends of risk management, Hillson (2004). The Barriers Hindering Organizations from Adopting the Innovations Even though some organizations including the construction industry have adopted these innovations others still need a paradigm shift as they are inflexible and rigid to the current trends in risk management, Hurbert (2009). The barriers hindering organizations from adopting the current innovations include: behavioral and cultural barriers. Behavioral barriers It is difficult trying to take an organization out of its comfort zone. It is even harder trying to inculcate a new approach of risk management to the workforce. It requires a degree of training and organizations need to invest some money as well as time in it, which is probably why most organizations haven’t adopted the new trends, Harner (2010). Cultural barriers This relates mostly to the corporate culture prevalent in a country, region or time and is also hard to crack, for instance, the corporate risk culture of certain corporate may prevent it from cultivating a new one. What strategies are they accustomed to and are they willing to bend them for new one? In most cases the answer is no, Harner (2010). Recommendations Below are the recommendations; That areas of further research in risk management be explored Organizations in the construction industry as well as other industries adopt the current innovations in risk management. That organizations invest sufficiently in their risk management projects. Project success Although the project went through a number of challenges, such as lack of finance, it was a success. Qatari investors came on board and offered financial assistance to complete the shard tower. The Tower was constructed exactly how Piano had designed it and more structures were added later. Conclusion This paper has looked at the definition of risk management, the importance of risk management to organizations including the construction industry, the various techniques used in risk management as well as the steps in the risk management processes. It has also discussed risk management in the construction industry, risks inherent in the industry and the sources of these risks. The current innovations in the field of risk management have been listed and briefly discussed; the paper has also touched on the costs and benefits of the innovations. The paper concludes with discussing the barriers that hinder organizations from adopting the current innovations in risk management and offers suitable recommendations. Organizations should critically consider adopting the current innovations in risk management as they bear additional and relevant benefits. References As Easy As Riding A Bike . May 7, 2012. http://aseasyasridingabike.wordpress.com/2012/05/07/the-race-to-construct-the-shard/ (accessed December 2012, 2012). Chatham, Jennifer. "KONE Jump Lifts Installed in the Shard." March 2010. http://www.kone.com/countries/SiteCollectionDocuments/MP/EW1103-Jump%20Lifts%20in%20Shard.pdf (accessed November 30, 2012). Mace Group. The Shard. 2010. http://www.macegroup.com/projects/shard-london-bridge (accessed November 29, 2012). Reed Business Information UK, Ltd. "Shard builder pins down materials costs." Contract Journal (Reed Business Information UK, Ltd) 444, no. 6686 (July 2008): p38-38. Sellar Group. London Bridge Quarter. 2011. http://www.londonbridgequarter.com/the-place/overview (accessed November 30, 2012). Taylor, Laura. Association of project management. February 1, 2012. http://www.apm.org.uk/news/shard#.ULkdxNmM6_I (accessed 12 1, 2012). Anderson, M.R. (2007). New Approaches to Risk Management. [Internet]. 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