Resource Allocation and Aggregation in Construction Project Management - Essay Example

Techniques available for Resource allocation and aggregation in Construction Project Management This paper gives an overall view of decision making, the importance of Resource management in the process of decision making and discusses a few techniques available for resource allocation and aggregation in construction Project Management. The techniques discussed are Network Critical Path Analysis, Bar Charts, S - Curves) Introduction Resource allocation is one of the most important aspects of Construction Management. Resources are the true sources of the cost of the project. The management responsibilities lies with the proper utilization of available resources and at the same time to ensure that project delay does not occur due to resource constraints. Resource management is more important in construction Management because common resources are utilized for different projects and it is essential that Project Scheduling be done keeping the resources availability into consideration. The project planning should be resource oriented scheduled. When we talk about resources for construction industry we will confine ourselves with human resources, financial resources and machinery and equipments. It is a common phenomenon that all projects suffer from resource constraint, abundant resources are not available at the disposal of the managers, nor is it desirable. The management skill lies with the optimum utilization of resources and that is possible only in case of resource constraints. Take example for an organization where simultaneously multiple projects are into operation, the available manpower, Machinery and Equipment needs to be properly deployed and needs to be planned along with the project plan so that same machineries can be used in all the projects. Skilled manpower also can be shared by the projects by simply proper planning of the projects. The activities of each of the projects needs to be scheduled in such a way that deployment of the skilled manpower and machinery is synchronized. The project scheduling exercise should include the resource scheduling also. Here we will first discuss the process of decision-making followed by the techniques available for resource allocation and aggregation. Decision Making: Every manager has to make decisions and certainly all the decisions made are under various uncertainties. The reason being that the decision-making requires the ability to forecast future events. To forecast future events it is needed to analyze the goals and the variables. A number of techniques have been developed to convert these various uncertainties into probabilities. We will start with categorization of the decisions a manger has to take: 1. Strategic: Strategic decisions are those which a company takes considering its overall Goal, and mainly depends on the external environment the company is in like product selection, Site selection, Profitability decision etc etc. 2. Administrative: Administrative decisions are mainly internal in nature. 3. Operative: Operative decisions are mainly relates to specific utility maximization and workflow oriented. The decisions are also can be classified in the flowing categories: 1. Goal-focussed decisions - where the decisions are made to decide on choice between alternative strategies and goals; 2. Problem-focussed decisions - This is basically reactive decisions, which are more specific and depends on some choice of action 3. Political appeasement - Some decisions need to be taken to maintain activities to satisfy or comply with people or procedures to maintain the workflow. Let's draw a model of Decision Making: The role of resource management in Decision Making: This is a simple model. As from the above stated model we can see that Resource management is a major role in decision-making. The decision process involves analysis of the information about alternative inputs and constraints (bounded rationalities) and Resources. Techniques available for resource allocation and aggregation: Now let's look into the types of techniques available for resource management in decision making for construction activities. Critical Path Network analysis: In critical path network analysis, the projects are divided into various activities. Here activity means an individual task. This activity has several dimensions i.e. time - how much time it is going to take, manpower - what kind of manpower is required, machinery - what kinds of machineries required, and financial resources. The activity is considered as an individual module with one input and one output. In the below mentioned model output of Activity A is input of Activity B. Output of Activity B is input of Activity C. Input output Model 1 Input output Model 2 In model 2, the output of Activity A is input of Activity B and Activity C, whereas outputs of Activity B and activity C are input of Activity D. Now once we modularize the total project into activities and prepare the inter-relations between the activities, we can find out the longest path which gives us the project length. It also gives some information about criticality of some activities, depending upon their importance. For example in re-inforced concrete mixing, the availability of steel rods is very important. With critical path network we will know when and which critical resources will be required. Some of the activities require completion of other activities, making it a complex web of activities. For multiple project management it becomes more complex as it has to consider of resource management of various projects. But here we will go with an example of a simple critical Path Network analysis. Here I will give a brief procedure of critical Path Analysis for time scheduling and financial scheduling of a project. In preparing this network I have taken help of the worksheet provided in the website: Critical Path method by Samuel L. Baker http://hadm.sph.sc.edu/Courses/J716/CPM/CPM.html A. Time scheduling: 1. List out the activities with the relevant parameters i.e. expected time needed for completion of the project. 2. Draw the diagram with the activities indicating the flow of activities 3. Set up a CPM spread sheet 4. Use pathfinder to get the paths 5. Paste the path information into the spread sheet 6. Calculate the path's time 7. Identify the critical path A. Financial scheduling and cost analysis 1. List the activities with details like financial cost of each activity 2. Draw the diagram with the activities indicating the flow of activities 3. Set up a CPM spread sheet 4. Use pathfinder to get the paths 5. Paste the path information into the spread sheet 6. Calculate the path's time 7. Identify the critical path 8. Calculate the actual Cost 9. Fill up the optimization form 10. Solve the costing 11. Economic analysis which may include various dimensions. For multiple projects, Critical Path Network analysis can be prepared considering other factors and parameters relevant to multiple projects. Bar Chart Presentation: Once the Critical Path Network is prepared it can be presented more cohesively in a bar chart for easy understanding by everyone. The Bar chart also helps regulating the process flow and monitoring the process. Any delay in process will be reflected in the bar chart. Resource allocation and aggregation: to get planned resources requirements resources can be applied to the Critical Network and the bar chart derived earlier, and by aggregating them. The totals can be plotted as a resource histogram Resource smoothing and levelling To arrive at a more efficient answer to the resource allocation, we can review the resource assumptions and manipulate the plan to arrive to a desired result. The activities, which have freedom of movement, i.e. independent, the non-critical or float activities, can be adjusted to optimize the resource demand. Where the process objective is to minimise the resource requirement it is called leveling. When the goal is to produce a gradual build up and then decline of the resources, often used as an economic way of progressing a project, it is called resource smoothing. Resource constrained Plans: In many a case the failure of networking planning in the field finds it attribution to the fact that the resource constraint did not receive proper considerations during initial project planning. It is often found that the activities with float are suddenly becomes critical and vice versa. This happens because resource constraints are overlooked during initial periods. Four distinct categories of resource allocation is identified: 1. Resource Smoothing: where to improve the efficient utilization of resources, the peak and trough requirements are smoothed. 2. Resource constraints or leveling: is used in case of fixed or even inadequate resource availability to meet the requirements of the network plan 3. Cost / Time trade offs: where a balance is stuck between cost and time on the assumption that quicker progress can be more costly in resources. 4. Time /Cost / payments trade offs: In cases where the contractual timing of cash flows itself become an influence on the optimization process. S-curve Analysis: The S curve is a graphical representation of the cumulative level of a particular resource throughout the project duration. It is a form of resource aggregation process. The S curve is a well know project management tool. In its complex form it displays the cumulative costs, labor hours or other variants plotted against times. The S-curve used as an indicator. It is used for many applications related to project management such as target, baseline, cost, time etc. The Various types of S-curves used are: Cost versus Time S Curve: In projects that contain labor and non-labor tasks. Target S Curve: reflects the ideal progress of the project if all tasks are completed as scheduled. Value and Percentage S Curves: Useful for calculating the project's actual percentage completed at any point of time. Actual S Curve: reflects the actual progress of the project to date. To produce an S -curve, a Baseline and Production schedule are required. The baseline contains information about Actual start date and finish date. It also can contain information about Man-hours and costs. The production schedule contains information about the actual percentage completed. Conclusions I have presented the outlines of the process of decision-making, the importance of resource management in the process of decision-making and a few techniques used in the resource allocation and aggregation. The techniques illustrated here are not comprehensive, but gives overall details. It is concluded that in the process of decision-making, resource management plays a vital role. In particular to the management of construction activities it is more important to give due consideration of resource allocation and aggregation during initial stages of project planning. Many a time the failure of the projects time schedule and cost over-run occurs only due to inadequate or non-planning of resource allocation and aggregation. The process is complicated but new tools are available including soft wares and spreadsheets. References Ammar, M A and Mohieldin, Y A (2002) Resource constrained project scheduling using simulation. Construction Management and Economics, 20(4), 323-30 http://taylorandfrancis.metapress.com/link.aspid=eb5fyrteh97updjm Baker L. Samuel, Critical Path method, http://hadm.sph.sc.edu/Courses/J716/CPM/CPM.html Fundamental Scheduling Procedures http://www.ce.cmu.edu/pmbook/10_Fundamental_Scheduling_Procedures.html Oakshaft, Les, Essential quanititative methods for business, management and finance, Second edition (2001),Palgrave, New York. What is an S curve, Project management training and resources http://www.visitask.com/s-curve.asp Read More