Construction Project in China - Case Study Example

Individual Reflection: Advanced Risk Management Introduction This is my personal reflection based on my experiences as an intern in a construction project that was being carried out in China. The reflection is based on the risk that the project faced and how the individuals who were in charge of the project managed the risk. The reflection is based on the work that I did as an intern in the construction project. The construction project was about the erection of a 13-storey building for a government department in China. The purpose of undertaking the project was to provide the government department that was involved in the project with commercial offices. Therefore, the government department and the construction contracting company that won the tender were the two main players in the life cycle of the project. The entire project was budgeted to cost eight million Chinese yuan. This amount of money was expected to cater for all the activities of the project which included demolishing the existing buildings at the site and setting up the new commercial building. The reflection is based on the Gibb’s reflective cycle. The elements of this cycle were used as the basis for reflecting on how risk management was carried out in the project. The focus of the reflection is on how the project life cycle was affected by delays. The delays were caused by different factors, some of which had been anticipated while others had not been anticipated. The occurrence of these factors caused the implementation schedule of the entire project to delay by seven months. It also led to an increase in additional costs of the project. Therefore, in this reflection, I reflect on my feelings about the risk of the project, its success and failures and what could have been done better. I also analyse the risk, and reflect on an action plan that could be used if such a scenario occurs again in the future. Description of the risk of the project By Chinese standards, a construction project that requires a 13-storeyed structure to be put up is a relatively small project. This is the case even one considers that the scope of the work for the project entailed demolishing the structures that were occupying the site of the project first before starting to construct the actual building. Furthermore, the main client for the project was a government department. To me, this meant that the project was supposed to run in the most efficient manner. I expected that the project deliverables would be delivered within the specified time frame and that the objectives of project quality and cost would be met without any problems occurring. One of the risks that actually materialised and had a considerable effect on the outcome of the project was delay in the implementation of the project schedule. This risk materialised because of the manner in which the project management team handled the risk factors that are associated with it. There are several risk factors that contributed to the maturation of this risk. One of them was caused by the occurrence of a prolonged rainy season. Although it had been taken into consideration that the life cycle of the project would run into the rainy season, it had not been anticipated that the season would extend and as a result, cause delays in the implementation of the project. Another risk factor that contributed to the occurrence of delays in the implementation of the project was related to changes in the design of the project. Unanticipated changes made it necessary for the design of the project to be adjusted. These adjustments translated into additional work and this resulted into delays in implementing the specific activities of the project. The third risk factor that was tied to the risk of delay in delivering the project was a result of poor relationship between the project managers and the client. Bureaucratic procedures and lack of a direct relationship between the project manager and the client contributed to the final occurrence of delays in the delivery of the project. My feelings about the risk of the project From my understanding of risk management in projects in general and in construction projects in particular, I expected that the project management team would be well prepared to manage all the risks that are associated with the project. However, I discovered that the project was faced by different types of risks. These risks were caused by several factors that occurred at different stages during the life cycle of the project. Furthermore, the risk factors varied in terms of the aspects of the project that they threatened to affect and the severity of their effect. In theory, it has been stated that risk management is increasingly becoming one of the most important components of any construction or engineering project (Hillson 2009, p. 11; van Wyk, Bowen & Ankintoye 2008, p. 149). The importance of risk management in construction projects seems to stem from the fact that when risks do actually occur, they compromise the extent to which the objectives of the project are achieved. Therefore, project managers tend to devote a lot of time understanding risk factors and managing them. My experience while interning at the construction project showed me that although the need for effective project risk management practices is well known, managers of construction projects usually fail to adhere to the specific procedures that they are supposed to follow in order to effectively manage the risks that are associated with their projects. In addition to this, I also feel that as much as project managers may be aware of the risks that are involved in the process, they may not be able to anticipate all events that may occur in the future. The occurrence of unforeseen circumstances may easily jeopardise all the risk management plans that had been put in place. Interestingly, it was the development of unforeseen circumstances that actually led to the fruition of the delay risk in the construction project. Evaluation of the success and failures in managing the risk I think that there are several good and bad things that happened in the course of managing the risk that the project faced. One of the good things that happened is that the project management team had identified specific risk factors that they believed would lead to delays in delivering the final project if they ever occurred. The team had anticipated that changes in the scope of the work would be made necessary if additional tasks needed to be carried out. Regardless of the relatively small size of the project, the team had anticipated that it was highly likely that the specifics of the project would require that additional tasks be carried out. True to their prediction, the need to avoid causing damage to adjacent structures as a result of the dewatering process made it necessary for additional activities to be included in the project schedule. These additional activities consumed more project time. Another good thing is that project team had already planned for additional time as a result of the rainy season. The team was aware that the project life cycle would run into the rainy season and they knew that this would result into additional project activities. On the other hand, one of the things that went wrong with regard to the manner the team identified, analysed and responded to project time-related risk factors is related to how they managed delays that were caused by poor relationship between them and the client. I think that the project management team simply failed to foresee this development and take the necessary steps to avoid or minimise its damage. This explains why at some point, the project manager had to stop the project because of disagreements with the client about the need for additional funds to cater for changes in the scope of the project. As well, although the team had foreseen that the rainy season would affect the project time, they underestimated the impact. They simply failed to take into consideration the possibility that rain was a natural phenomenon and that it could take longer than they had expected it to take. Indeed, the prolonged rainy season led to the maturation of the delay risk for the project. Analysis of the situation In my opinion, the risk of delay in delivering the final product is not new. It is observed that time-related risk in construction projects is of great significance because it is usually tied to the other two basic aspects of a project: cost and scope (Rezaian 2011, p. 218). Any change in the scope, time or cost definitely affects the other two aspects of the project. This was the case with regard to this construction project. From the beginning, the project management team was acutely aware of the risk that they faced when implementing the project. They also knew that the maturation of any risk related to any one of the three aspects of the project would definitely affect the other two. I also believe that the approach that the project management team used to manage project risks was appropriate for the specific risks that were encountered in the course of the life cycle of the project. Prior to the actual implementation of the project, the managers developed a project risk management framework. The framework contained a detailed listing of possible risks that the project could experience, the risk factors that could trigger the actual risk and the potential effect of the risk. This way, the management team ranked the risks in terms of the likelihood of their occurrence and severity of their effects. Kikwasi (2011, p. 304) notes that the best approach that companies use to manage risk involves identifying potential risks, analysing the likelihood of their occurrence and planning on what needs to be done to respond to the risks if they occur. Similarly, Jun, Qiuzhen and Qingguo (2011, p. 924) observe that project managers use different approaches to manage specific risks that are encountered during the life cycle of their projects. Conclusion It can be seen that the project suffered from the effects of the risk of delays in the implementation of its activities because of several factors. I think that this scenario developed because the project managers failed to effectively monitor the progress of the development of risk factors that had been identified before or simply could not anticipate the development of some factors. Therefore, I think that there are several things that should have been done to avoid the scenario in which the completion of the final project was delayed by seven months. However, the most important one is that the managers should have factored in delays arising from misunderstandings with the client. Since the contractors are not new with regard to working with government departments as clients, one would expect that they are well aware of the bureaucratic bottlenecks that are usually encountered when one is handling government projects. Doing this would have gone a long way in helping them to minimise the impact of the risk on the project. Action plan Given a chance, I would have used an integrated risk management strategy to manage the risks of the project. According to Toth and Sebestyen (2014, p. 512) integrated risk management approach should be used in the construction sector because it can be used to help different stakeholders avoid particular risks that they are not well equipped to handle. The same authors also say that this approach can be used to monitor the development of risk factors and apply the right steps to respond to them. Similarly, Gao (2010, p. 53) notes that using an integrated risk management approach in construction projects entails developing a hierarchical risk breakdown structure. Such a structure identifies specific risk factors, classifies them, determines their probability of occurrence and details their consequence. Elements of time, impact and description that are associated with different risk factors are also included in the framework. Therefore, I believe that using an integrated approach can offer a far more comprehensive framework that can be used to successfully manage the development of risk factors and successfully minimise the overall impact of delay in the completion of the project. References Gao, Y 2010, ‘Research on the integrated risk management information system of construction project,’ in DD Wu (Ed), Modelling risk management in sustainable construction, London, Springer, pp. 47-54. Hillson, D 2012, Managing risk in projects, Gower, London. Jun, L, Qiuzhen, W & Qingguo, M 2011, ‘The effects of project uncertainty and risk management on IS development project performance: a vendor perspective,’ International Journal of Project Management, vol. 29, pp. 923-933. Kikwasi, GJ 2011, ‘An assessment of risk management practices by consultants in Tanzania,’ Proceedings of the 6th Built Environment Conference, 31 July to 2 August, JHB, South Africa, viewed 25 March 2016, . Rezaian, A 2011, ‘Time-cost-quality risk of construction and development projects or investment,’ Middle-East Journal of Scientific Research, vol. 10, no. 2, pp. 218-223, viewed 25 March 2016, . Toth, T. & Sebestyen, Z. (2014). ‘Integrated risk management process for building projects,’ Procedia Engineering, vol. 85, pp. 510-519, viewed 26 March 2015, via http://ac.els-cdn.com/S1877705814019444/1-s2.0-S1877705814019444-main.pdf?_tid=a4bfc6e0-f328-11e5-9ede-00000aab0f02&acdnat=1458979339_d7cfde4f4e193a4be1373074f0075df8 van Wyk, R, Bowen, P & Akintoye, A 2008, ‘Project risk management practice: the case of a South African utility company,’ International Journal of Project Management, vol. 26, pp. 149-163. Read More