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FAST TRACKING CONSTRUCTION(COST OVERRUN)
helpdesk@construction-productivity.co.ukwww.construction-productivity.
Fast-tracking Construction Projects & Cost Overrun
Fast-tracking Construction Projects & Cost Overrun
Fast-tracking Construction Projects & Cost Overrun
Fast-tracking Construction Projects & Cost Overrun
Fast-tracking Construction Projects & Cost Overrun
Fast-tracking Construction Projects & Cost Overrun
Fast-tracking Construction Projects & Cost Overrun
Changes at theHead office and
on site
Optionalchanges
(improves thechances of
expansion andsurvivor)
Essential changes(for survivor and high
productivity)
Suddenchanges
Gradualchanges
AnticipatedNot
anticipated
Fast-tracking Construction Projects & Cost Overrun
Causes ofchange
EconomicalEnvironmentalTechnological
SocialGovernmental/Political
Etc.
National&
international
External
Organizational changes
Internal
Changes
Direct Indirect
Badweather
Badworkmanship
Designerror
Reworkdue to
Omitting
Additionalwork
MaterialsMachinery/equipments
Skilledworkforce
Shortageof
Dispute
Communication
Cash flow
Materials
Lowe moraleamongstworkforce
Reorganizere schedule
change workmethods
Fast-tracking Construction Projects & Cost Overrun
1 2
12
14 17 19
13
15
16
18
3
5
4 9
6
11
7
10
21 22
20
S
8
DU=2
DU=4
DU=2
DU=6DU=8 DU=10
DU=3
DU=5
DU=1
DU=7DU=8DU=6
DU=9DU=7
DU=1
DU=5
DU=
DU=4
DU=6
DU=14
DU=12DU=10
A
B
D
F
G
K
C P Q
DU=6
DU=8
DU=3
DU=7
DU=5
UT
V
W
Y
H
L
CC
HH
EE
AA
FFX
GG
0 0
2 2
8 8
6 21
8 2914 35
DU=4E
19 42
19 43
16 16 26 26
26 48
38 38
DD
BB
22 43
32 5319 52
12 38J
20 46
32 53
R M
65 65
58 5826 49
52 52
Fast-tracking Construction Projects & Cost Overrun
Fast-tracking Construction Projects & Cost Overrun
Fast-tracking Construction Projects & Cost Overrun
Fast-tracking Construction Projects & Cost Overrun
Fast-tracking Construction Projects & Cost Overrun
Fast-tracking Construction Projects & Cost Overrun Since construction has a physical
manifestation, construction rework is normally perceived to have a bigger impact than change.
As a result, construction managers tend to avoid rework on problematic tasks by changing the scope of work, in particular under time constraints.
Types of Changes for Types of Changes for fast-tracked fast-tracked
Fast-tracked-Impact of Fast-tracked-Impact of changeschanges
Fast-tracked-Impact of Fast-tracked-Impact of changeschanges
Fig. 1 Park, M. (2001)Fig. 1 Park, M. (2001)
Change and ReworkChange and Rework
Fast-tracked-Impact of Fast-tracked-Impact of changeschanges
Table-1 Park, M. (2001)Table-1 Park, M. (2001)
Figure 2: Behaviours of Figure 2: Behaviours of Change and Rework Park, Change and Rework Park, M. (2001) M. (2001)
Fast-tracked-Impact of Fast-tracked-Impact of changeschangesWhere floor tiling has been
finished with less/more than the required height, although both change and rework have the same behaviour pattern (replacement) in solving the problem, the object would be the problem area in rework, while the previous work would be the object in change.
Fast-tracked-Impact of Fast-tracked-Impact of changeschangesSince construction industry is a
labour intensive industry construction, rework is usually accompanied with the demolition of what have been already built.
This has a bigger direct impact on the construction performance than the change option.
Fast-tracked-Impact of Fast-tracked-Impact of changeschangesBy adopting the change option, it is
possible to avoid rework on problematic tasks that may require more resources.
changed activity can also become a change source that can cause other subsequent changes.
This change might have more impact on the construction performance than the rework option in certain conditions.
Fast-tracked-Impact of Fast-tracked-Impact of changeschangesFor example, the increased concrete
height may trigger subsequent changes in succeeding tasks, i.e., reducing the size of ventilation ducts.
Where some of piles were not correctly positioned, it still made it possible to proceed with the superstructure without correcting the position of the piles by changing the position of columns.
Figure 3a: Change Option Figure 3a: Change Option Loop-Park, M. (2001), Loop-Park, M. (2001),
Figure 3b: Quality ManagementFigure 3b: Quality ManagementThoroughness Loop-Park, M. (2001)Thoroughness Loop-Park, M. (2001)
Figure 3c: Downstream Figure 3c: Downstream Reprocess Iteration Loop-Reprocess Iteration Loop-Park, M. (2001),Park, M. (2001),
Figure 3d: Feedback Figure 3d: Feedback Processes in Construction Processes in Construction ActivitiesActivities
Park, M. (2001),
Fast-tracked-Impact of Fast-tracked-Impact of changeschanges
Fast-tracking Construction Projects &Cost Overrun
Fast-tracking Construction Projects &Cost Overrun
Fast-tracking Construction Projects &Cost Overrun
Fast-tracking Construction Projects &Cost Overrun
RiskManagement
Riskassessment
Riskidentification
TIMECOST
QUALITYSAFETY
Procurement option
Risktreatment
HighProductivity
Qualitativerisk analysis
Quantitativerisk analysis
Risk review andmonitoring.
FEEDBACK
Brainstorming,Expert opinion,
Structured interviews,Questionnaires,
Checklists,Historical data,
Previous experienceetc.
Fast-tracking Construction Projects &Cost Overrun
Y
ResourcesLabour
MaterialsMachinery
Etc
N
Microin UK-Public
orPrivate
Civil EngineeringBuildingHousingschools
hospitalsother
Level of Risk with:
Projects in EUProjects in UAE
Projects elsewhere
Is itMacro
Identifyrisk
DemandFluctuationFinance
Weather
Use ofnew construction
methods
Designcomplexity
Fast-tracking Construction Projects &Cost Overrun
RiskMetrics
Predictivemetrics
Retrospectivemetrics
y Diagnosticmetrics
yes
yes
Forward-looking,based on
expectations.Y
Drawn fromcurrent project
status-throughoutthe work
Y
Backward-lookingderived from
resultsY
RISK METRICS:RELATES TO DISCOVERY ANDMINIMIZATION OF RISK
Fast-tracking Construction Projects &Cost Overrun
Changes inConstruction
Projects
OmissionAdditionErrors
DesignchangeBad
weather
site conditionsUncertainty
Lack of propersite investigation
Changesmade by the
client
Resources
Scope
Goals
Remove any Ambiguity
RESOURCESSCOPEGOALS
REMOVE ANY AMBIGUITY
LeadershipCo-ordinationcommunication
Team work MORE LEADERSHIP AND TEAM,WORK LESSCHANGES TO THE ORIGINAL PLANS
Fast-tracking Construction Projects &Cost Overrun
To calculate the cost overrun during Fast-tracked projects use Model below and suggested formulas.
To measure Items such as: Time (increase/decrease), Cost (increase/decrease), Labour (increase/decrease), Material (Material waste
increase/decrease)Machinery (efficiency
increase/decrease).
Fast-tracking Construction Projects &Cost Overrun Formula onePR (Loss/Gain) =MD [A-X] + HC(EC- AC)+ HL(EL- AL)
Formula twoAC = a EC (1+Σ xi) and similarly AL = a EL (1+Σ
xi)xi = % of influential factors such as weather, crew size, absenteeism, machinery, accidents on site, etc.
Influential factors (related to early stage of project) Economical Technological Customers Stakeholders Environmental Legislative Procurement route Organizational factors Financial factors Sustainability Etc
Process model of Change Management
Pre-construction Activities Client brief Project objectives Specification Design/build-ability Constructability Contractual arrangement Planning Scheduling Estimating
Labour Characteristics Subcontracting Labour Direct labour
Management System Planning Communication Controlling Co-ordinating
Resource Management & Weather Labour selection Labour control Material selection Material handling Plant Waste on site Delay and Disruption on site
Motivating Factors Hygiene Factors
Construction Productivity
Project Performance Time Cost Quality Safety Customer
satisfaction
Rewards
Effort
Ability and skill of management and workers
Site/Project Manager Characteristics Experience/capability Leadership style Authority/influence Goal commitment Involvement
Job Satisfaction
Product Improvement Tools (PIT) Earned Value Management (Evma) Lean Construction (Lcon) Benchmark (Ben) Front End Management (Fema) Just In Time (Jiti) Benchmarking (Bing) Quality Control (Qcon) Supply Chain Management (Scma) Buildability (Buil) Quality Assurance (Qass) Value Engineering (Veng) Buildability/Deconstruction (Buil/Deco) Quality Management System (Qmsy) Value Management (Vman) Otherp Product Improvement Tools
Fast-tracking Construction Projects &Cost Overrun
Fast-tracking Construction Projects &Cost Overrun
Fast-tracking Construction Projects &Cost Overrun
CostcontrolInput
DataProcessing
Output
ContractDocuments
Stored DataPrice book
etc
DataBase
DisplayCost
Overrun
LabourActivities
1-2,2-3,...
15-16
Materials
Machinery
FormulasAC = a EC (1+? xi) and similarly AL = a EL
(1+? xi)
FormulaPR (Loss/Gain)=MD [A-X] + {(EC . HC)+ (EL
. HL)}-{(AC . HC)+ (AL . HL)}
Labour Productivity (Pi) for time periodi=WHi / Qi
Total MD =Cost of material
Waste Waste
Quantity (TQ)
Delivered to site
(Estimate)
(Actual)
(Act-) % %
156 31.14 5% 6.50%
264 18.88 5% 6.50%
282 8 5% 7.00%
708 1.71 5% 6.50%
Costoverrun?
c
Yes
No
Highproductivity
Labour(Actual)
with cost overrunactivities
4-6
1-12
3-4
Labour(Estimates)
4-6
1-12
3-4
5-7
Materials(Actual)
with wasteincrease
4-6
1-12
4-6
Machinery(Actual)
Lossof
efficiency(%)
1-2
2-3
Materials(Estimate)
4-6
1-12
4-6
Machinery(Estimate)
1-2
2-3
3-5 Database
5-7
PR (Loss/Gain)=MD [A-X] +HC(EC- AC)+HL(EL- AL)
AC = a EC (1+? xi) and similarlyAL = a EL (1+? xi)
xi = % of influential factorssuch as weather, crew size,
absenteeism, machinery,accidents on site, etc.
c
Cost overrun documentLabour
MaterialsMachinery
send tomanagement team
0
25
50
75
100
125
150
Budget 5 10 15 20 25 30 35 40 45 50 55 60
Actuals 10 20 30 40 50 60
Earned 8 15 25 30 35 45
Forecast 70 80 90 100 110 120
J F M A M J J A S O N D0
25
50
75
100
125
150
5 10 15 20 25 30 35 40 45 50 55 60
10 20 30 40 50 60
8 15 25 30 35 45
70 80 90 100 110 120
J F M A M J J A S O N D
Time Now
Management Reports
Labour costoverrun
Materials costoverrun
Time overrun
ReportTime-cost.. overrun
for individualactivities
ReportTime-cost.. overrun
for the project
Fast-tracking Construction Projects &Cost Overrun PR(Loss/Gain) =MD [A-X] + HC (EC- a EC
(1+Σ xi)) + HL (EL- a EL (1+Σ xi)) + Σ (PIKt) /100 PC(est)
Also, add cost of Risk management team (both in-house and external experts)
(Rmi ) + (Rme ) (Rmi )=Risk management (In-house)(Rme )= Risk management (External))
Fast-tracking Construction Projects &Cost Overrun Planning engineer to decide% PC(est)= Fees for (Rmi ) + (Rme )Let us assume 0.50% of PC(est)= Fees
for (Rmi ) + (Rme )(Rmi ) + (Rme )= (Rtotal ) (Rtotal )= (0.5/100)xPC(est)PR(Loss/Gain) =MD [A-X] + HC (EC- a EC
(1+Σ xi)) + HL (EL- a EL (1+Σ xi)) + Σ (PIKt) /100 PC(est) + (Rtotal )
For risk management For risk management considerconsiderBionomial DistributionNow suppose that we want to
know the probability of getting k good result in n trials. We can call this event A.
P(A) = pk(1-p)n-k n!/(k!(n-k)!)Example: k =2 n=3There are 8 possible outcomes, 3
with the desired event – P(A)=3/8
Fast-tracking Construction Projects &Cost Overrun The number of combinations of r
objects taken from a group of n distinct objects is denoted by nCr and is given by:
nCr =n !
(n – r )! • r !
Fast-tracking Construction Projects &Cost Overrun Risk = penalty * likelihoodPenalty can be in dollars, lives,
injuries, amount deadline missed byLikelihood is probability that a
particular hazard will be “activated” and result
in an undesirable outcomeThe product can be considered as
an expected value of cost to project