BUSINESS ECONOMICS AND ENTREPRENEURSHIP

1. BUSINESS ECONOMICS AND ENTREPRENEURSHIP Aleš Tomek Hal Johnston

2. List of Lessons • Emerging Trends AT & HJ • Business Strategies AT & HJ • Financial Management AT & HJ • Risk Management AT & HJ • Project Management AT & HJ • Advanced Systems AT & HJ • Standard Contracts AT & HJ • Cash Flow Planning AT & HJ • Sustainability Concepts AT & HJ • Summary AT & HJ

3. Topic for TodayProject Management Hal Johnston Faculty of Civil Engineering Department of Economics and Management Czech Technical University in Prague

4. Project Management for Superior PerformancePart 1 - Introduction Czech Technical University in Prague

5. Objectives • Today we will present the following: • Reasons for a different type of management for project-based firms • Attributes of construction projects requiring special management techniques • Goals and objectives of construction projects • Management techniques that can be used to successfully meet the goals and objectives of construction projects

6. Introduction to Project Management • Management is a discipline • Large, broad-based field • Project management • Management of several projects • Separate entities • Finite time frame • Associated with completion date • Primary purpose: to achieve project goals

7. Attributes of Construction Projects • Include: • Specific parameters (e.g., budget) • Finite durations • Located away from company • Each project requires separate management • Single source of responsibility • Separate cost accounting element

8. Attributes of Construction Projects (cont’d.) • Single project can have thousands of parts, systems, and equipment • Substantial purchases may be required • Substantial subcontracting is used • Construction companies have numerous projects at the same time • Single owner or customer • Each site is controlled by the contractor

9. Goals and Objectives of Construction Projects • Project goals • Example: successful and profitable • Objectives • Definable tasks that support goals • Time frame and level of quality • Cost control and safety program effectiveness • Customer satisfaction • Effective management of subcontractors

10. Management Techniques to Achieve Project Goals and Objectives • Management techniques • Necessary to control project building • In order to achieve objectives • Wide variety • Takes a team to design and build facilities • Managers control all variables

11. Organization of the Project Delivery System • Needs to be cost-effective • Personnel varies according to project • Project duration, size, and contract type • Amount of self-performed work • Personnel available and crew size • Multiple areas of work and contracts • Reporting requirements to the customer • Extent of cost control and reporting required • Public versus private work and market

12. Leadership • Attributes: • Vision of entire project • Plans for achieving completed project • Insistence of meeting financial goals • Understand crews and provide motivation • Communication • Maintain relationships with upper management • Critical decision timing • Company loyalty

13. Problem Solving • Considerations: • Full impact on subcontractors, suppliers, and contractor • Cost impact • Time impact • Best solution for project conditions • Best method of resolving conflicts

14. Reporting and Record Keeping • Provides: • Communication between field and home office • Communication with client and consultants • Systematic and regular analysis of current conditions by field personnel • Historical record for project documentation

15. Planning and Scheduling • Enables completion on a finite date • Plan: organizes the project • Schedule: tool for communicating the plan • Flexible • Can be modified to changing conditions • Initial planning: project management basis • Continual planning and scheduling: addresses conditions that arise

16. Cost Control • Containing construction costs • Within budget established by cost estimate • Involves use of comparison • May indicate a need to change methods, techniques, or crew composition • Can help achieve additional profits • Ensures accurate cost database

17. Flow of Cost Information Delmar/Cengage Learning

18. Quality Management • Has become an important part of project management’s tasks • Quality has several meanings • Meeting expected level of material • Maintaining the level of workmanship • Earning general customer satisfaction

19. Safety Management • Proactive safety management program • Economic benefits • Workers’ compensation premiums • Insurance premiums • Tied to company-wide performance record • Goal: prevent all jobsite accidents

20. Contract Compliance • Submittals include: • Material and permanent equipment submittals • Shop drawings • Project meetings • Change control, documentation, and compensation • Progress payments and project closeout

21. Computerized Record Keeping • Helps compile, organize, and analyze project progress information • Time, cost, and project data recorded on the jobsite • Timely production of quality, usable information • Facilitates problem solving and communication during the project

22. Summary • Construction organizations: • Rely on project management to manage profit centers • Goals of a construction project: • To be successful and profitable • Variety of techniques used

23. End of Part 1 of topicsQuestions?

24. Project Management for Superior PerformancePart 2 - The Project Team Czech Technical University in Prague

25. Objectives • Part 2 will introduce the following: • Traditional delivery system and the relative roles within that system • Roles and responsibilities of the participants in the traditional system for the owner, architect, and contractor • Construction management form of the construction delivery system and the relationships of the roles within that system • Design-build delivery system with examples of the roles and responsibilities within that system

26. Roles, Responsibilities, and Authority of Project Participants • Delivery systems • Provide a matrix of organization • Formal and informal contractual relationships between participants • Standard contractual forms are available for each delivery system • Professional and trade associations • Produce and endorse contractual agreements

27. The Traditional Contract Project Delivery System • Referred to as “design-bid-build” • Primary contractual parties: • Owner, architect, and contractor • Neither the architect nor the contractor does 100% of the work assigned • Each makes an agreement with others involved to accomplish specific areas of work

28. The Traditional Construction Delivery System Delmar/Cengage Learning

29. The Traditional Contract Project Delivery System (cont’d.) • Methods of compensation: • Lump-sum contract • Cost, plus a fee • Cost plus, with guaranteed maximum price • Unit price contract

30. Responsibilities of the Contractual Parties • Owner: • Paying for the work and project coordination • Site, scope, and documents • Architect: • Project design and construction documents • Contractor: • Labor, material, equipment, expertise, and means to complete the project

31. The Owner’s Roles During the Construction Phase The Owner’s Organization for the Construction Project Delmar/Cengage Learning

32. The Architect’s Roles During the Construction Phase Architect’s Organization Delmar/Cengage Learning

33. The Contractor’s Roles During the Construction Phase Contractor’s Project Organization Delmar/Cengage Learning

34. Contractor’s Project Organization, Project Manager, and Superintendent Parallel Delmar/Cengage Learning

35. Other Roles in the Construction Process • Significant roles played by other entities • Majority are regulatory agencies List of Typical Inspections Delmar/Cengage Learning

36. Communications in the Traditional System Communication Matrix, Traditional System Delmar/Cengage Learning

37. The Construction ManagementDelivery System • Contractor-based management systems • Applied early in the project • Provides more tools and controls • Forms of CM: • Agency CM • CM-at-Risk, CM/GC, Multiple Prime, or Guaranteed Maximum Price (GMP)-CM

38. Organization of the CM Delivery System (Agency CM) Delmar/Cengage Learning

39. Roles of the CM Project Team Construction Management Roles Delmar/Cengage Learning

40. Communications in the CM Delivery System Communications in the Construction Management System Delmar/Cengage Learning

41. The Design-Build Delivery System • Single-source procurement • Design and construction provided for GMP • “Cost not to exceed” price • Often includes a cost-savings split clause • Design-build firm • Facilitator for designers and constructors

42. Design-Build Organization II Delmar/Cengage Learning Design-Build Organization I Delmar/Cengage Learning

43. Design-Build Organization IV Delmar/Cengage Learning Design-Build Organization III Delmar/Cengage Learning

44. Communications in the Design-Build Delivery System Design-Build Communications Delmar/Cengage Learning

45. Engineering-Procurement-Construction • Referred to as E-P-C • Common for heavy construction facilities • Industrial plants, power plants, refineries, etc. • E-P-C firm provides: • Engineering • All materials and equipment • Construction

46. Summary • Primary construction delivery systems: • Traditional system (i.e., design-bid-build) • CM system • Design-build system • Each system is effective in certain situations • Project communications vary

47. End of part 2 - topicQuestions?