The role of operational management in the construction industry project - Essay Example

? Project Management Strategic Issues: Construction of Szkieletor Table of Contents Table of Contents 2 Introduction 3 About the project 3 Reasons for project failure (cost increases encountered during the project) 5 Problem of administrative personnel 6 Miscommunication and coordination 6 Role of project management 7 Role of project managers 8 Analysis of Operational project management actions 9 Strategic project management 9 Strategic project management actions 9 Conclusion 12 List of References 14 Introduction The following report provides detailed findings which are fully analysed to assess role of operational management in the construction industry project. It gives an analysis of Szkieletor construction project that failed to be completed. The report includes a detailed introduction about the project and its objectives. Focus of this report is to understand problems that result to failure of such projects. Projects fail due to various barriers that emanate from internal organization as well as from external sources. However, the role that a project manager plays in the project process matters a lot. The report provides an analysis of actions to be taken by strategic project management which can enable planning and completing construction process in time and within set cost targets. A brief conclusion is provided touching on key lessons that project management can learn from experiences in the project. About the project Szkieletor also known as Skeletor is an incomplete building in Poland. It is located in the sides of Krakow near Rondo Mogilskie. The building stays incomplete in its construction since 1975. It is one of the tallest structures around and it was intended to be headquarters of the main Technical Organisation. The reasons for the incomplete building construction are a result of deterioration of the economy and high costs of construction materials. Szkieletor construction was intended to be made into an international four star luxury hotel, A-class offices, several commercial facilities and luxury apartments (Zawada , 2012). Construction of Szkieletor was based on location of apartments in relation to targeted market. Luxurious apartments constructed were targeting individuals who were well off in terms of income and thus payment. The offices and commercial facilities were to be constructed for those in a position to acquire them since the city was growing up fast enough to demand the offices. The costs of the apartments were to be set as per the market price. The adjustments of the project were flexible enough to incorporate the ever adjusting activities during the construction process. The cost budget was well set by qualified management team and construction process commenced. Several adjustments were made during the construction process so as objectives in the proposals would be met. The project management team selected to head and run the project was not qualified enough to address factors that would affect the project before commencing construction process. Lack of proper qualification may result into several inconveniences due to poor construction process and even failure of the project. The selected project management team should be made aware of the requirements of the project and the necessary resources availed to them. Duration that the construction process expected should also be conveyed out so that when construction strategies are being made time factor is kept in mind. Since the project management is the one supposed to control the project, it should be fit to undertake the given work. Where investment is involved there is an aspect of risk. If the risk is passed to a staff that cannot handle apartment construction then great losses are anticipated. It is required that the selection panel be careful to award the tender to the right team which will not cause defaults of the programs jeopardizing the whole project. Assessment of the extent of risk involved should be carefully done so that no mistakes are left out before the start of the project. Szkieletor project was unsuccessful in terms of quality and time. After the elapse of this period the project was not successfully running and it largely remained incomplete and unable to deliver as per the objectives of the panel. Quality of project is considered vital in projects like these (Arain, 2005, pp. 22-31). Reasons for project failure (cost increases encountered during the project) Several construction projects fail to be completed successfully within set programs just as the case of Szkieletor. Projects fail because operations managers do not ensure that all the steps outlined for the project are followed in detail. It is important that they estimate extreme complexity of every task that is set to be achieved. When financial resources set aside for the projects become insufficient due to changes in cost of construction materials including payments to labourers due to prolonged work, it results to incomplete work. The projects get considered to have failed since it does not meet specifications as per proposals just like was the case for Szkieletor (Melanson, 1993, pp.27-33). Management is expected to coordinate and ensure the project does not go over set budget limits. The limit set for budget expenditure should not be exceeded and hence attention should be placed on ensuring that the project is completed within the planned budget (Arditi & Gunaydin, 1997, pp.235-243). It is vital that construction costs be maintained low throughout the process. This should be done without compromising the quality of end product. This means that as costs are maintained low, within planned budget, consideration should be placed on resultant outcome of the project. Project costs are maintained low through appropriate estimation of additional cost and general value of project. Financial problems arising during construction process are as a result of poor financial planning. Those involved in handling project at most time make estimate for extremely low amounts of funds which cannot handle complexity of the projects. Ever-changing costs of construction materials may lead to effects on general cost since amount estimated for every unit is raised. Also inflation may hinder completion of project if it goes too high. For successful completion of projects, it is required that financial planner ensure funds allocated are safeguarded and used as per the program (Chan & Kumaraswamy, 1998, pp.17-29). Cost planning should include all likely changes that will affect construction process. Likely changes in increase in material cost should be noted down if there lays an expectation of cost increase within the period of undertaking construction project. Szkieletor planners did not put into consideration how the external factors in the environment affects the cost budget and resulting to inability to properly finance the project (Zawada , 2012). Management should have allowed flexibility of planned budget to cover for unexpected increases in number of resources needed. Problem of administrative personnel The management department given to manage this construction project was not fully qualified as per the rating of the standard of completed work. Since analysis was being done based on every step completed, it was noted that a lot of changes had to be made regarding the construction process (Arain, 2005, pp. 22-31). Management personnel assigned to various department were not qualified enough to handle the work hence resulting to inefficiencies. The complex work required several managers in dealing with the numerous details of every department. Addition of other personnel was not possible since it led to overstretching of the cost budget. Every project management personnel are supposed to deliver the work as per the direction of proposals. Lack of output delivery on expectations of set objectives will automatically indicate that management was inefficient and unqualified in conducting the construction project (Arain & Assaf, 2003, pp.69-80). Miscommunication and coordination The design team of any construction project play a vital role in the successful completion of a project. Therefore the management controlling construction project must ensure that there exists good communication and coordination between contractors and the designers. This will ensure that what is communicated is done and in case of any corrections on the designs, proper and timely information is conveyed to the contractors to avoid the mistakes of repeating steps. Every step under construction need to be assessed correctly to ensure that what is being done is correct. Alterations and changes made to the construction designs after construction will result to increases in construction costs. The materials that have already been wasted due to wrong steps taken may not be used again and this means that new construction materials have to be bought (Arain & Assaf, 2003, pp.69-80). Role of project management Project management in construction industry requires highly trained professionals. They are expected to show high degree of competence in various management fields they are assigned. Managers coordinate effectively so as to be able to deliver outcomes as per expectations of the project. This requires that they remain well organized in controlling the workforce. They are also expected to balance project requirements so that they work as specified. Since successful completion of project considers many aspects, managers are to ensure that projects are completed within specified time. They are also required to check step by step success and quality of construction work going on. During the construction process it is expected that they keep the panel informed of every step successfully covered and report any changes and delays that arise during the building process (Arditi & Gunaydin, 1997, pp.235-243). All managers in their position during construction are expected to define responsibilities under them so as to ensure that construction process is completed within set deadline and quality is maintained. As they interact with workers they are expected to maintain and implement codes of conduct and observe legal restrictions when managing construction process. Managers are hence liable for safety and health of workers under their supervision in case they do not ensure that workers maintain and work under building regulations. Project management will oversee project from initiation stage and all other stages involved in building process. These stages include; project planning and design stage, project execution and construction stage, project monitoring, evaluation and controlling systems, project completion and project execution with input from evaluation stage (Bromilow, 1974, pp.1-7). This was one of the many roles given to Szkieletor project management team to be able to successfully complete the project but it failed. Role of project managers Different roles are expected to be undertaken by the project management. They run throughout the building process life to ensuring continuous smooth running of the projects long after completion. Managers are required to gather all relevant information and extent of what they are expected to achieve. There is need to understand requirements so that outcomes reached at are as per what was initially specified. Construction managers are expected to know project details, deadline, timetable and how success and failure can be measured (HM Treasury guidance, 1997). They are also expected to be in continuous touch with supply so that they are informed earlier enough of any changes made in supply section that can affect construction process. Problem anticipation should be considered under this section since if financing of changes will be too high then project will need to be revised in time. Delivery of construction materials should be on time so that delays are avoided and construction work is not jeopardized or slowed down. Managers are also expected to maintain inventory management system so that materials acquired are stored well and retrieved easily when need arises. As inventories are not maintained, inventory costs increases and delays in project process are experienced. Delays in construction project automatically translate into increased costs of the project (Baxton, 2007, pp.56-77). Project manager’s most important duty is to ensure that quality work is maintained throughout the project. Therefore quality assurance personnel should remain accurate enough in assessing quality of project so as to fulfil the criteria of expected quality. When work is delivered poorly then repair and maintenance will be required hence increasing the overall costs. It is clear that objectives of Szkieletor project were not met because the managers did not have the qualifications required (Zawada , 2012). Analysis of Operational project management actions Strategic project management Strategic project management involves all processes of managing projects that are complex in nature by use of management techniques. It involves development of a strategic plan, refining of existing strategies and development of best ideas that can help in completion of the project successful. It requires revisiting of set strategies that is defining project after having an understanding of requirements and expectations of objectives to be met. After understanding the scope of the project, strategy is created to suit the construction project. All data available that is the funds and other resources are incorporated into project planning. The project managers then ensure that strategies are implemented as planned so that nothing is done out of place. This ensures controlled and timely delivery of work. Finally project managers ensure that they review the project and get necessary skills learnt during the whole project process (HM Treasury guidance, 1997). Before any project is undertaken a full anticipation of all the problems expected to be met along the way is analysed (Arditi & Gunaydin, 1997, pp.235-243). Strategic project management actions Szkieletor project had strategies to ensure that it comes out successful as per the objectives. Time is one important factor that all managers in construction project consider. They ensure that the project fits within specific deadline indicated in planning of the project. Flexibility of time is allowed in project plan but deadlines for completion of project remain fixed. In case the project is running out of time then managers are expected to organize workers in a way that they can have overtime work and which can be fixed within available financial resources. This is weighed within the limitations of the planned budget (Bromilow, 1974, pp.1-7). Overall cost of the project will remain fixed as budgeted and agreed upon. If financial resources that are budgeted for the project are unable to see successful completion of project then the project fails. Operation managers therefore ensure that they properly understand details of designs and make correct analysis of the cost before commencing the construction process. Visit of site should be continually done and cost be assessed by what has so far been completed (Melanson, 1993, pp.27-33). Every project in construction has set objectives required to be met. Understanding the scope of project is important to operation management since it will make them aware of what they need to accomplish. Managers will therefore take an action of continually defining there scope in various sections of the project management they handle. Confirmation should be done at every stage of the project so as to ensure that they remain focused. During construction all steps taken can be used to develop a preliminary plan. This action enables management to direct workers easily. They will be able to know what part should be undertaken first before other following steps. Subdivision of work is easy since managers will be able to put resources that can be used at the same time in use to avoid wastage. Construction requires highly trained personnel therefore it is important that before the tender gets awarded to any contractor the project management has high trust in them. This can be as from the past construction activities that the contractors have successfully completed. In case the past history of the contractor is reliable and consistent in terms of project delivery, completing in time and within cost budget then the tender is awarded. Every project involves some extent of risk which should be understood in detail and appropriate measures undertaken by the management (Arain, 2005, pp. 22-31). The project risk management team should be in a position to anticipate all expected risks and provide the necessary solutions to them. Risk management team should always be a head of all other departments to ensure that steps taken do not meet unexpected risks that will lead to termination or delay of the project (Arain & Assaf, 2003, pp.69-80). It should be availed with all necessary information from all departments of management work in line with construction designers. In case any risk has been foreseen proper consultation and design alterations can be made at an early stage before construction progresses. In any construction project, several roles are assigned to different departments. Those who are assigned the roles are required to meet the objectives of their positions so that the general outcome of the project stands out to be successful. It is hence important that each and everyone understands the role he is expected to play in the construction project. They are expected to understand to which extent different roles they play relate and ensure that they coordinate them effectively. When every person understands his role it becomes easy for project management to control the project well without many difficulties (Melanson, 1993, pp.27-33). Project management is responsible for every action taken and all outcomes of the project. Proper planning and implementation of various strategies they put in place ensure that construction process works out successfully. Therefore it is vital that project managers set project cost budget limit so that as the monthly report is analysed about extent of completion it will be easy to understand if the cost budget is within the set limits. Lack of understanding the cost budget limit might make the management team lose focus on budgeting and spending. There should exist in every project the set cost budget which should be used during the project. In case other changes and alterations occur during construction process all resources must be pulled together so that the budget limit is not extended. Also changes made should be reported and be included in proposals (Arain, 2005, pp. 22-31). The management should also be in a position to differentiate between the actual planned budgets from the forecasts made. It is important to note that budgets are approved to be able to complete the project by the client. The sum is allocated to the project with the aim that it completely sees the actual completion of the project. It is actually made before the start of the construction project and included in the construction strategies. All phases that are designed by the designers are made to fit within limits of cost budget. On the other hand, forecasts are unplanned for and not included in the budget. They relate to the budget in a way that they are made within construction site as every step is being completed. The contactor might confuse forecasts from the budget and hence be unable to contain the costs within the cost budget that has been approved by the board (Arain, 2005, pp. 22-31). Conclusion Several experiences can be learnt from Szkieletor construction project process by the operation management. Skills of how to create and implement project management strategies successfully are important since they enable them to handle any construction issue. Skills of anticipating and finding solutions to various problems arising during construction process can be learnt and incorporated when need arise. It is vital that external environment both present and in long run be anticipated fully. Also human aspect within the construct of a project management cannot be ignored if success is to be realized. It is thus of greater importance that a project manager gives this a keen consideration. List of References Arain FM (2005). Potential barriers in management of refurbishment projects. J. Independent Stud. Res., 3(1), pp. 22-31 Arain FM & Assaf SA (2003). Project design and construction interface dissonances. J. Res. Archit. Plann., 3(2), pp.69-80 Arditi D & Gunaydin HM (1997). Total Quality Management in the Construction Process. Int. J. Project Manage. 15(4): 235-243 Baxton, M., (2007). Delayed Construction. Britain: Bingham Press, 56-77 Bromilow FJ (1974). Measurement of scheduling of construction time and cost performance in the building industry. The Chartered Builder, 10: 1-7 Chan WM & Kumaraswamy MM (1998). Contributors to construction delays. Constr. Manage. Econ., 16: 17-29 HM Treasury guidance (1997), Essential Requirements for Construction Procurement Melanson, C (1993); “The Human Side of Project Management” – PMI Journal – PM Network. pp. 27-33 Zawada G. (2012). Szkieletor Tower Undefeated. Krakowpost [Online]. Available at: Accessed on 1st March 2012 Read More