AR 523A: PROJECT MANAGEMENT

Midterm Handouts

1. Introduction to Decision Making

Decision making is the fundamental process of management. Most of the efforts of, managers are related to this process. Unfortunately,
decisions do not always turn out as planned.
Who make decisions? Only executives make decisions. This is by virtue of his position or authority. Decision-making is only one of
manager's tasks. It is but a small fraction of his, time. But to make decisions is his specific work.
a. Effective Decisions
What is a decision? Decision is a judgment. It is a choice between alternatives. It is rarely a choice between right or wrong. It is at best
a choice between almost right and probably wrong. If I have to judge, I must have alternatives among which to choose. A judgment in
which t can only say “yes or no” is no judgment at all. Only if there are alternatives can I hope to get insight into what is truly at stake.
Managers who make effective decisions know that one does not start with facts, one starts with opinions. But opinions are nothing, but
untested hypotheses and as such, are worthless unless tested against reality.
Effective manager knows that unless a decision has degenerated into work, it is not a decision; it is at best a good intention. While the
decision itself is based on the highest level of conceptual understanding, the action to carry it out should be as close as possible to the
working level and as simple as possible.
Right decisions grow out of the clash and conflict of divergent opinions and competing alternatives. Effective managers, encourages
opinions. But he insists that people who voice out an opinion must also take responsibility for defining what factual findings can be
expected and should be looked for.
The main task of a manager is not administration. It is the making of policy, the making of the right decision. The first rule in decision
making is that, one does not make a decision unless there is disagreement Right decision demands adequate disagreernent first.
There is one final question the effective decision maker asks: Is the decision really necessary? One alternative is always the altemative
of doing nothing
b. Effective Managers
Effective managers are expected to make effective decisions. Decisions with significant impact on the entire organization, its
performance and results, defines the manager.
Effective manager does not make a great many decisions. He concentrates on the important ones. He tries to make the few important
decisions on the highest level of conceptual understanding. He tries to find the constant in a situation. He is therefore not overly
impressed by speed making decision.
Effective managers know that a decision must be based on principle and should be made on the rnerits of the case. They should know
that the intricate decision is that between the right and the wrong compromise and have learned to distinguish one from the other. They
know that the most consuming step in the process is not the making of decision but how to put it into effect.
Effective managers insist on alternatives, so that he can choose the one appropriate one. Unless one has considered alternatives, one
has a closed mind.
Effective decision maker constantly monitors the result of the decision to ascertain that the desired objectives have been achieved. If
they have not, the decision maker may have to re-start the entire process, or perhaps a review of the situation may reveal the following:
1 An error in the actual implementation
2 An error in calculation

2. Decision Process
Effective decisions are made through a systematic process defining clearly the elements in a distinct sequence of steps. Most
successful decision making follows a process that consists of the following steps:
1. Identify the problem
2. Specify objectives and the decision criteria
3. Develop altematives
4. Analyze and compare alternatives
5. Select the best alternative

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 6. Implement the chosen alternative
7. Monitor results to ensure the desired results are achieved.
The success or failure in making decision often depends on how well each of these steps is handled.
Identifying the Problem is the focal point of the process. Solutions must address the basic problem not the symptoms. The decision
maker must identify the criteria by which proposed solutions will be judged. Common criteria often relate to:
1. Capital 5. Return of Investment
2. Time 6. Increase in Costs
3. Profits 7. Risks
4. Maintenance
The ability to satisfactorily handle probers often depends on the degree of success one has in developing suitable alternatives. Much
depends on the experience and creativity of the decision maker as well as on the nature of the situation.
As a general rule, efforts expended in carefully identifying alternatives can result to substantial dividends in terms of the overall
decision. One alternative that is frequently overlooked possibly because it seems too simple is to do nothing. The beauty of doing
nothing lies not only in the fact that no time or effort is needed but also in that it may cost nothing and requires no implementation.
Analyzing and comparing alternatives, often benefits from the use of mathematical or statistical techniques.
Selection of the best alternative will depend on the objectives of the decision maker and the criteria that are being used to evaluate
alternatives.
Implementing the chosen solution simply mean, carrying out the actions indicated by the chosen alternative. If the alternative
selected is to do nothing, no action will be required to implement. There are many decision makers who use this approach by default.
By the time they get around to make a decision, it is too late. Decision process is not always completed in a sequential manner.
Instead there is certain amount of back- tracking and feedback involved specially in terms of developing and analyzing alternatives.
For instance, if none of the alternatives analyzed can achieve the desired result, additional alternatives must be developed. Or perhaps
the problern has not been clearly identified; hence, additional work must be done there as well as on the other steps in the process.
Reasons why Manager Insist on Disagreernent before Decision Making.
1. It is only the safeguard against the decision maker's becoming the hostage of the organization. Everybody always wants
something from the decision maker. Everybody is a special pleader trying often in good faith to obtain the decision he favors.
2. Disagreernent alone can provide alternatives to a decision. A decision without an alternative is like a desperate gambler’s throw,
no matter how carefully thought through it might be, there is always a possibility that the decision will prove wrong either because it
was wrong at the start or because of a change in circumstances that makes it wrong. If one has think of alternatives during the
decision making process, one has something to fall back on, something that has already been anticipated, that has been studied,
and understood. Without such an alternative, one is likely to flounder dismally when reality proves a decision to be inoperative.
3. Disagreement is needed to stimulate the imagination. But imagination of the high level is not in abundant supply. Neither is it as
scarce as is commonly believed. Imagination needs to be challenged and stimulated or else, it remains dormant, not being used.
Disagreement if forced to be reasoned, and documented, is the most effective stimulus we will have.
Effective manager organizes disagreement because this will protect against being taken in by seemingly honest but false or incomplete
information. It gives him the alternative to choose and make decision. He does not start out with the assumption that I am right and he is
wrong. He starts out with the commitment to find out why people disagree. The effective executive is concerned first with understanding.
Only then, does he think about who is right and who is wrong.
Effective managers know that there are fools around and that there are rnischief makers. But they do not assume that the man who
disagrees with what they themselves sees as clear and obvious, is therefore either a fool or a knave.
Every decision is like surgery. It is an intervention into a system and therefore carries with it the risk of shock. One does not make
unnecessary decisions any more than a good surgeon does unnecessary surgery. There is a saying that, there are no inherent reasons
why medicines should taste horrible, but effective ones usually do. Similarly, there is no inherent reason why decision should be
distasteful, but most effective ones are.
Individual decision makers like individual surgeons differ in their styles. Some are more radical or more conservative than others. But
generally, they agree on rules.
One has to make a decision when a condition is likely to degenerate if nothing is done. This also applies with respect to opportunity. If
the opportunity is important and is likely to vanish unless one acts with dispatch, one acts and one makes a radical change.

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 Effective decision makers, compares the risk of action to the risk of inaction. A decision may not be pleasant, or is not going to be
popular, or not going to be easy, but a decision requires courage as much as it requires judgment.
An effective executive when confronted with the demand for another study of previous decision asks: is there any reason to believe that
additional study will produce anything new? Is there reason to believe that the new is likely to be relevant? And if the answer is "No" as
it is usually is, the effective rnanager does not permit another study. He does not waste the time of good people to cover up his own
indecision.
Reasons for Poor Decisions
Sometimes despite the best efforts of the manager, a decision turns out to be poor due to unforeseeable circumstances. Although such
occurrences are not very common, but more often, failure can be traced on some combination of the following reasons:
1. Errors made in the decision process
2. Bounded rationality
3. Sub-optimism
In many cases, the manager fails to appreciate the irnportance of each of the above step in the decision process. Sometime this is due
to a manager's style of making quick decisions or failure to recognize the consequences of a poor decision.
The manager's ego can be a factor. This usually happens after a period that he has experienced a series of successes when some
important decisions turned out right. Under such circumstances, the manager begun to get the impression that he can do no wrong. He
has already that mentality of infallibity that will not commit mistakes, and soon the trouble begins. He failed to recognize that some of
those successes were only due to luck than to any special abilities of his own.
A part of the problem may be of the manager’s unwillingness to admit a mistake. Some managers demonstrate an inability to make a
decision, sitting down on matters, when the decision should have long been rendered.
Bounded Rationality. A term which refers to the limit as control on making decision because of costs, human abilities, time, technology
and the availability of information.
Sub-Optimization. Is the result from each different department's attempt to reaching a solution that is optimum for their department?
Unfortunately, what is optimum to a particular department may not be optimum for the entire organization as a whole. In many
instances, managers fail to appreciate the importance of, each step in the decision process that was just outlined. They may skip a step
or not devote enough efforts to complement before jumping to the next step. This might be due to a manager's style of making quick
decisions or a failure to recognize the consequence of a poor decision.
a. Elements of Decision Process
There are five elements in the process of decision making.
1. See if the problem was generic and could only be solved through a decision established by a rule, or principle.
2. Define the specifications which the answer to the problem had to satisfy, that is, of the boundary conditions.
3. The thinking through what is right, that is, the solution which will satisfy the specifications before attention is given to the
compromises, adaptations, and concessions needed to make the decision acceptable.
4. The building into the decision of the action to carry it out.
5. The feedback, which tests the validity and effectiveness of the decision against actual course of events.

The second element in the decision process is clear specifications as to:

1. What the decision has to accomplish?
2. What are the objectives, the decision has to reach?
3. What are the minimum goals it has to attain?
4. What are the conditions it has to satisfy?

In science, these are known as the "boundary conditions.” A decision to be effective, need to satisfy the boundary conditions. It
needs to be adequate to its purpose. Any serious short-fall in defining these boundary conditions is almost certain to make a decision
ineffectual, no matter how brilliant it may seem.
Everyone can make the wrong decision. In fact, everyone will sometimes make a wrong decision. But no one needs to make a
decision which on its face falls short of satisfying the boundary conditions.
One has to start out with what is right rather than what is acceptable precisely because one always has to compromise in the end. But
if one does not know right to satisfy the specifications and boundary conditions, one cannot distinguish between the right compromise
and the wrong compromise and will end up by making the wrong compromise.

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 The next major element in the decision process is converting the decision into action. A decision will not become effective unless the
action commitments have been built into the decision from the start. In fact, no decision has been made unless carrying it out in specific
steps. Until then, these are only good intentions.
Finally, a feedback has to be built into the decision to provide a continuous testing against actual events of the expectations that
underlie the decision. Decisions are made by men. Men are fallible. At their best, their works do not last long. Even the best decision
has a high probability of being wrong. Even the most effective one eventually becomes obsolete.
Budgeting the Time
Effective manager know that time is the limiting factor. He does not start with his work. He starts with his time. And he does not start
out with planning, but start by finding out where his time will actually goes. Our daily accomplishments are set by time-the scarcest
resource. In the process, we call accomplishment as Time.
Time is a unique resource. Its supply is totally inelastic. No matter how high the demand, the supply will not go up. There is no price
for it. Moreover, time is totally perishable and cannot be stored. Yesterday's time is gone forever and will never come back. Time is
therefore exceedingly short of supply.
Time is absolutely irreplaceable. There is no substitute for time. Everything we do requires time. All works takes place in time and uses
up time. Yet, most people take for granted this unique irreplaceable and necessary resource. Man is ill equipped to manage his time.
Unless it is managed, nothing else can be managed.
The main task in the work of a manager is the time spent working with people. By nature, people are time consumers and most people
are time wasters. To spend a few minutes with people is simply not productive.
Relations with other knowledge workers are really time-consuming. Whatever the reasons, the knowledge worker makes much greater
time wasted than the manual worker on his superior as well as on his associates. Mixing personal relations and work relations is time
consuming. The more people are together, the more time will be consumed for interactions. Thus, less time will be available to them for
work accomplishment and results.
The larger the organization, the less actual time will the manager will have to manage out of the little time at his disposal. The more
people there are in an organization, the more often does a decision on people arise. But fast personal decisions are likely to be wrong
decisions.
People decisions are time consuming- Just to get the work done with people requires lots of time- thought and judgment. Time waste is
often a result from over staffing. The symptom of over staffing could be if the chiefs and of course the manager in particular spend
more of their time, on problems of human relations, on feuds and frictions, on disputes and questions of cooperation etc. When the
work force is almost certainly too large, people gets into other's way. Then people have become an impediment to performance, rather
than the means thereto.
Meetings. Another common time waster is mal-organization. Its symptom is an excess of meetings. Meetings are defined as
concession to deficient organization for one either meets or one works. Certainly, one cannot do both things at the same time. We
meet because people holding different jobs have to cooperate to get a specific work done. We meet because the knowledge and
experience needed in a specific situation are not available in one head, but have to be pieced together out of the experience and
knowledge of several people.
If executives in an organization spend more than a fairly small part of their time in meeting, it is a sure sign of mal-organization.
Meeting should be purposefully directed. An un-directed meeting, is not just a nuisance, it is a danger. An organization in which
everybody meets all the time is an organization in which no one gets anything done.
Meetings have to be the exception rather than the rule. When people in organization find themselves in meetings a quarter of their time
or more, there is time wasting mal-organization. As a rule, meetings should never be allowed to become the main demand on an
executive’s time. Too many meeting is indicative of poor job structures and wrong organizational components. They signify that
responsibility is spread out and that information is not directed to the people who need it.
Employee Discipline
Discipline is a means that management uses to bring employees behavior under control. Its purpose is not retribution or vengeance but
to impress upon the employee the need to do things in a prescribed manner. Discipline is an employer’s action against and employee
for infraction of company policies or rules. The purpose is preventive & it is a form of control to protect both: company and employees.
3. Principles of Discipline
1. Disciplinary action should not be taken unless there is an obvious necessity for it.
2. The reasons for disciplinary action should be made clear.

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 3. Give the man a chance to present his -side of the story and do not argue.
4. There should be no favoritism or discrimination in any disciplinary action.
5. Reprimand should be given as soon as possible after the occurrence of the act. Right timing is important, but first has all the facts.
6. Forgive and forget. When disciplinary action has been given, the supervisor should resume a normal attitude toward the offending
employee.
7. Never discipline anyone in the presence of others.
8. The discipline that is inflicted must be just, but sufficiently severe to meet the requirements of the situation.
9. Disciplinary measure should be applied by the immediate superior of the employee affected, rather than by some higher executive.
10. In general, negative disciplinary action cannot be successfully applied to large groups of employees representing a substantial
portion of one's organization. If there is poor discipline among a large group, it is possible that there is sorncthing vitally wrong in
the situation. The remedy is correction of the situation, not disciplinary action.
11. In determining the nature and degree of disciplinary action that is made necessary by same improper act of an employee, the
intent should be considered.
12. Discipline should be constructive. It should show the offender how to correct his errors and leave him willing and anxious to
improve rather than feel bitter and resentful.
13. Except in cases of extremely serious offenses, no disciplinary action should be permitted to take place until the supervisor has
actually talked the situation over with the employee.
14. Discipline should not be administered on an entirely routine basis. Each case should be treated individually. You cannot discipline
a group to teach a few offenders.
15. Maintain a constant & sincere interest in your people's welfare on & off the job, it reduces the need for disciplining to a minimum.
16. Motivation is the secret of good discipline. When a man is sufficiently motivated, discipline will take care of itself

4. Construction Pre-Planning
a. Planning
Planning is an art, and the art of planning exist only among human beings. This power to be able to plan distinguishes man from the
other members of the animal kingdom.
The environmental development through planning is a natural field for Architects as they are in a better position because of their training
and experience. However, for a good planning, intelligence and experience are necessary. And for a plan to be successful, it must be
prepared by those were trained and qualified.
The pre-planning stage establishes and determine the direction and success of any construction project. Unfortunately, it seems that
some engineers and constructors have not given the pre-planning special emphasis despite their one direction of going there.
Past experience have proven that there is no short cuts to sound construction pre-planning. There is no new procedure to replace the
following four basic rules for any job.
1. The construction superintendent should be included in the consultation at the very start of the planning stage. Do not just
present him later the finished plan and say: "here is the plan for you to implement.”
2. Make a job breakdown into components. This will simplify the whole program.
3. Prepare a construction plan that will be consulted constantly. Do not just file it in a drawer only to accumulate dust.
4. Take advantage of new tools, which have demonstrated in saving time, money or confusion. For instance, a computer can be
used to layout on one sheet a detailed schedule according to number of days, crafts, man-hours, costs, procurement and
completion of a process.
For Whom and What are We Planning for?
1. We are planning for the owners of the company when we plan to achieve a profit by operating at the minimum capacity,
utilizing the available resources.
2. We are planning for the employees when we plan to create or maintain jobs.
Planning Functions' has Four Different Dimensions, namely:
1. Planning is a philosophy
2. Planning is integration
3. Planning is a process

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 4. Planning is a collection of procedures.
Planning is a philosophy. Looking ahead is a way of thinking, a concern about the future effects of today's action. Planning involves a
state of the mind that recognizes the need for orderliness and the value of direction. Individual planners may sway between optimism
and pessimism, but they dare not stray too far from reality.
Planning is integration. Both long and short range plans provides a unified structure to give purpose to the organizational units
involved. Broader plans consider the client, the supplier and other peripheral contact of the company.
Planning is a process. Goals and objectives are the most obvious consequence of the planning process. A loose objective of survival
or of making profit is poor guidelines clearly in-adequate for steering an enterprise. A running plan includes;
1. The strategy that defines how much has to be done to achieve the objectives.
2. The sequence of events that satisfies those strategies and
3. The assignment that lead to the accomplishment of the events.
Planning is a collection of procedures. All companies make plans ahead to some extent and apply their own methods of doing so.
In small company, one person may do it all, but larger companies have standard procedures for formulating and carrying out plans.
b. The Project Manager
The central figure in a project is the project manager. He bears the ultimate responsibility for the success or failure of the project. His
role in the construction is one of an organizer; a person who is capable of working through others to accomplish the objectives of the
Project. The job of project manager can be both difficult and rewarding. However, the reward of the job of project manager comes from:
1. The benefits of being associated with a successful project
2. The personal satisfaction of seeing it through to its conclusion
3. The challenge of the job, and working with other people.
Project construction management differs much from management of more traditional activities. It is a, unique one-time operation with
one major objective - to accomplish a specified task, in a limited time framework. The main feature in project construction is the Project
Manager who oversees a variety of operations that involves repetitive activities, and other various works.
Project Manager must often function in an environment that is beset with uncertainties. He has to coordinate and motivate people who
sometimes owe their allegiance to other managers in their functional areas.
There are people who work on a project that possesses specialized knowledge and skills that the project manager does not have.
Nevertheless, the project manager is expected to guide and evaluate their respective works. He may not have the authority he needs to
accomplish all the objectives of the project, but instead, he relies on persuasion and cooperation of others to realize the project goals.
Generally, construction projects have some elements in common. The problems of planning and coordinating project activities can be
quite formidable for large projects, which typically have hundreds or even thousands of activities that must be carefully planned and
monitored if the project is to proceed according to the following schedule at a reasonable cost.
1. Project goals must be established and priorities are set.
2. Different works must be identified and time estimate must be determined.
3. Resource requirement must be projected, and budget must be prepared.
4. Once underway, progress must be monitored to assure achievement of the goal.
The project manager s mission is to plan, coordinate, control and accomplish. His achievement can probably be traced to his success in
managing people. Similarly, people at every tier of corporate hierarchy, exercise essentially the same management principles to lead
other people towards the accomplishment of organizational objectives.
Managerial competence is a function of a manager's character, knowledge, and experience. These three ingredients interact to mold a
particular style of management. Styles may be altered or fashioned by education gained from formal training and work seasoning. An
advantage of studying management techniques is the opportunity it allows to explore and develop managerial skills without suffering the
consequences of trial and error learning.
c. The Worksheet
The initial move to get the project under way is for the Project Manager to convene u preliminary discussion on the documents, and to
gather more information as may be available at the early stage. There should be additional and pre-planning information available such
as, the client's required operational date.
What the Project Manager needs to know are:
1. The logical construction sequence that must be followed.

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 2. The quantity and the delivery date's of various materials to be used.
3. How much and what kind of manpower will be needed.
4. When to start and complete the job on time.
The first step in construction pre-planning is to prepare a graph and plotting the anticipated date of delivery of all major equipment at the
site. The optimum time for each construction activities could be analyzed. Severe craft peaks and uneconomical use of equipment will
appear on the projected graph, which could then be adjusted to prevent future conflicts in the field.
By working backward from the expected completion date, the experienced project manager can predict the latest possible starting date
for any of the activities that make up the whole construction project. The worksheet represents a plan of action presented graphically by
a critical sequence of functions of subsidiary activities contained within a compact period of time.
d. Timetable
The project manager should conduct one or more informal sessions with key personnel assigned to the project such as:
1. The construction superintendent
2. Job buyer
3. Drafting room coordinator
4. Job expediter.
During the session, the preliminary construction program or work sheet is reviewed to determine whether engineering work and
procurement of materials can be accomplished at the rate and in the sequence as programmed in the schedule.
The sequence of construction activities, which are related to optional early and late starts, will serve as a running list of individual job
components, with notations to work activities with greater importance and priority over the others.
Specifications for equipment and materials, which are in the development, should be processed according to their importance or
urgency in the overall project. The design and drafting effort can be organized to produce those drawings that are necessary at the early
stage of the construction program for field installation or to complement an urgent purchase of materials.
At this early stage of construction development, it is essential and timely for the procurement committee to place orders for long term
delivery of items at an early phase of the project. The relative urgency of the on-site receipt as scheduled may be used in establishing a
shop fabrication schedule with the supplier.
One important function of the construction planner is the preparation of an accurate manpower estimates assigned to each function.
This can be done on the basis of manpower category of the works like working on foundations and underground facilities or by craft
such as carpenters, tinsmith, plumber, electrician, laborers or by group methods. The manpower distribution and classifications can be
done in two ways: by manual or by the use of computer. By manual method, it takes more time but results in a more accurate and
realistic summary as an anticipation of the need without reverting to an average manpower distribution.
On the other hand manpower distribution by computer, lessen the engineers time but the result is less realistic because it is applied on
the average manpower loadings to the computer. The manpower summary result will be lower than might be realistically anticipated.
Where time is available, the manual method prepared by an experienced engineer is preferred.
In either case, what is needed is the rate of anticipated manpower expenditure on the basis of work category or classification or on the
basis of crafts. In addition, it is a worthwhile instrument in establishing the limit extremes of manpower application to summarize the
manpower loading in two ways:
1. With all functions performed in their earliest position on the timetable.
2. With all functions performed m their latest starting position.
Project Engineer's Review
The Project Engineer must:
1. Review the timetable thoroughly
2. Raise questions on its overall logic and workability
3. Offer constructive criticism on detailed work functions and interrelated activities
Invariably this review will result in a minor revision of the schedule. After gathering most of the detailed information and made part of
the timetable, the entire program is broken down into several component parts.
After the projects have been delineated on the timetable as a separate job with minor qualifications, it can be considered as a project
itself. As the project becomes an active construction program in the field, its progress, man-hour utilization, field labor expenditures,
quality and quantity of suspension, and major material status are all monitored and recorded at the field and home office.

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 The manpower assignment for each activity on the timetable is then translated into a graphical presentation, showing the anticipated
manpower expenditures and the target progress of the work in percentages.
1. By graphical reporting, manpower and percentage accomplishment is easier to evaluate showing the general direction and
condition of the job.
2. Data are received by way of one page weekly progress report and a weekly field payroll report.
3. A field man-hour report is submitted every month.
By close control and evaluation of field cost and man-hour expenditures it can easily detect the following:
1. Possible budget man-hour overruns
2. Craft peaks
3. Weakness in supervision coverage
4. Inadequacy of tools and equipment
The manpower and "Percentage Complete" graph will indicate the possibility of sustaining a successful rescue operation by keeping a
constant watch and taking possible action as soon as the program begins to lose ground. The graph indicates the necessity of having
pre-planned schedule to provide a basis for monitoring, assisting, controlling and adjusting a program when it deviates from the
prescribed path.
A daily look at the graph, alerts the Project Manager and his home office to the possible need for a radical action such as:
1. Manpower reallocation for elaborate re-scheduling or
2. For a speedy economic analysis of the whole project to determine whether extra manpower or two shift operation may be
necessary.
A periodic visit to the construction site is necessary for various members of the central construction department staff to audit the
program so that:
1. A first hand review of the progress is made and the general status of the work is compared with the timetable and discussed
with the key field supervisory staff.
2. Home office assistance is offered to the field superintendent in pushing particular phases of the project that may be held up in
such areas as drafting of procurement
3. Suggestions are made and discussed with the field organizations as to how its progress can be improved.
Discussions and review of construction problems at the site assures a clearer understanding of the work status for the following actions:
1. Alternate solutions may be reviewed.
2. Exchanging ideas for a better solution.
3. To implement results as agreed in the meeting.
The site review, gives everyone an opportunity for a general discussions of ideas and techniques on concurrent construction work. The
best pre-planning approach requires a constant attention to a construction project. Above all pre-planning should be flexible enough to
give it a chance to adjust quickly and radically at any time when it is necessary.

5. Preliminaries and Site Management

After a contract is awarded, the contractor has to:
1. Determine the key personnel to supervise the work
2. Make provisions for the equipment to be used.
3. Determine the location and methods of correcting temporary structures such as:
a. Job offices
b. Storage sheds
c. Workshops
d. Roadway, etc.
e. Bank house for workers and facilities.
The layout of these structures should be planned carefully, in anticipation of its removal during the excavation of the permanent works
more particularly, the storage and its contents, which might cause disorganization and delays.
The job should be adequate, but not excessively staffed, to ensure efficient execution of the work. Large construction work needs
competent foremen. The contractor must be selective in sending men of proven ability and qualification to start the work even if they are
replaced later by selected personnel engaged locally.

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 The construction site should be maintained in strict tidiness and in an orderly routine because it has a psychological effect on the staff
and workers, which promote conscientious service. Remember that the owner would like to see the actual work get- ting under way in
its fullest operation and orderliness.
In carrying out the construction work, idle time and unnenecessary cost should be avoided. Time saving devices such as telephone,
loudspeakers, signal posts, traffic control, sign board location and other economy measures should be installed immediately upon
commencement of the work. Before the work get started, it should be first established from which the buildings may be demarcated on
the ground
The excavator with his equipment should start cleaning, stripping and digging operations. Material deliveries should also start as soon
as possible and a labor force started the excavation for the foundation work, etc. If all these operations get under way without undue
delay, the job will have a healthy aspect, high morale and satisfaction of all concerned from the owner to the contractor and down to the
lowly laborers.
The contractor should procure sufficient copies of the plan and specification to distribute among his supervisory staff. This will
thoroughly acquaint them with the details of the job. Like- wise, the sub contractors and consultant should be furnished with the plans
and specifications so that. There is no excuse for mistake and delay on this account.
Preliminaries in Organizing a Construction Job
Project undergoes series of stages which includes:
1. Planning
2. Execution of major activities
3. Project phase out
Project construction life cycle requires various requirements such as:
1. The site must be found and boundaries relocated
2. Plan must be drawn
3. Plan must be approved by the owner
4. Building permit must be secured
5. Succession of personnel follows
Succession of personnel is the rotation of personnel who will be doing different kinds of job according to their specialties. For instance:
1. Those doing the site relocation and preparation, and laying of foundation.
2. Erecting the foundation and column, floor and roof framework.
3. Constructing walls and partitions
4. Plumbing and water supply connections including drainage system.
5. Mechanical equipment
6. Electrical and communication wiring system
7. Installation of kitchen, bathroom fixtures and appliances.
8. Interior finishing work
9. Doors and windows
10. Painting and varnishing, and other finishing works.

The main objectives in the preliminaries of organizing a construction job are:

1. To secure the necessary licenses and building permits
2. Prepare a time and progress chart
3. Have an access to the site or a temporary roadway.
4. Construction of boarding, fences, and temporary shed.
5. Construction of temporary field offices for the staff.
6. Arrangement for canteen facilities.
7. Cleaning and leveling the site.
8. Demolition of existing structures
9. Disposal of materials obtain from the demolition
10. Shoring to adjoining structures
11. Arrangement for temporary water and electric supply
12. Allotment and preparation of storage space for use of contractor and sub-contractors
13. Allotment of space for borrows pits or other sources of fill to be brought in.
14. Provision for drains 4nd soak-ways.
15. General site problems including any special features.

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 Organization of the Work
Organization of the work, consist of making proper assignments and sequence of the works in a systematic order aimed making the
best use of labor, materials and time. The organization of the work is the responsibility of the Contractor under the direction of the
supervising Architect or Engineer. There are two independent but related spheres of control are responsibility that exists in the project
construction, namely:
1. The owner is represented by his Architect or Engineer
2. The contractor
Each has their own duties to perform in the interest of their employer - the owner. Most of their respective duties and responsibilities
were stipulated and defined in the contract, and will be better exercised if each one appreciates the duty' and responsibility of the other.
The contractor is generally responsible the owner for the following duties:
1. Providing and making access roads with due regard the convenience of construction.
2. Erection of site office in a central position to facilitate checking of all site activities.
3. Erection of store shed of adequate capacity to ensure:
a. Protection of materials against damage
b. Protection of materials against deterioration.
c. Prevent materials from wastage and pilfering.
4. Construction of temporary quarters and ancillaries for labor with due regard to site of works, amenities & hygienic conditions.
5. Appointment of supervisory staff possessing technical knowledge and capable of controlling the work and labor.
6. Early arrangement for construction equipment i.e.
a. Scaffolding d. Ladders
b. Formwork e. Tools
c. Instruments and machinery with necessary screw fuel and parts etc.
The Engineer or Architect on behalf of the owner is also responsible for the following duties:
1. As representative of the owner
a. Act as interpreter of the plan
b. As guardian and arbiter between the owner and contractor
2. Maintain site records and documents like:
a. Layout plans
b. Contract documents
c. Time and progress chart
d. Work diary
e. Contractor's order book
f. Records of tests
g. Progress report
h. Measurement book- etc.
a. Planning Program and Progress Chart
The most important part of the works organization is:
1. The preparation of a comprehensive time and progress chart for the execution of the work.
2. The periodic revision of the chart as circumstances demand, and the regular comparison of progress chart made with the
program.
The project manager is required to prepare an approved time and progress chart, which is generally part of the main contract
documents.
1. The time and progress char must show an analysis of the chief elements and types of construction involved in the project
2. The scheduled dates of commencement and completion of every stage of the main contract and of sub-contracts.
Without proper program, the construction work can be disorderly managed. The time and progress charts serve as the coordination and
control of all the work under the different sub-divisions of the contract. With this time and progress chart it is easy to pinpoint where the
delay has occurred, and who is responsible for the delay.
Likewise, because of a clear definition of the dates, all parties concerned have to assume their tasks making much easier for the
contractor to finish the job on time.
Besides of being the standard requirement, the chart, automatically shows and offer the following information:
1. The sequence of operations

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 2. The target time and date for their completion
3. The rate of which they must be carried out
4. The owner's staff and the contractor's staff should be familiar with the information given in the chart and should constantly
strive to carry out the work according to the projected rate of accomplishment.
5. If some operations are to be done by sub contractors, they should be notified in advance and given a clear understanding of
what exactly is expected from them.
6. The chart also tends to prevent changes in design and lay-out with consequent delays and increased in cost. It also provides
essential information regarding labor, materials and plant requirements.
From this program, the owner can be furnished with particulars of the likely financial requirements during the period of construction, and
will be able to coordinate his program for bringing the scheme into use.
b. Maintaining Time and Progress Chart
The making of time and progress chart is a matter of trial and error. It requires consideration of alternative methods and the effect of
each event, resulting in an orderly arrangement of event and an ultimate savings of time and cost.
The chart should be flexible so as to permit modifications to meet unknown contingencies that may arise. It will enable those in-charge
of the work to see the effect of the contingency' It will be on subsequent operations and to make the necessary adjustments to bring the
program back into line.
The chart is divided into many horizontal spaces as are required for the major operations of the job. The vertical columns provide space
for:
1. A description of the items
2. The target date for letting the sub-contract or purchase order.
3. Anticipated starting date, the expected completion date and sufficient number of monthly columns to cover the total time for
completion.
4. One or two extra columns for the possible over-run.
After the form is drawn up, the next step is to complete the description column in approximately the same order as the operations will
take place on the site, except that operations be-longing to the same trade or classification of work which should be grouped together
regardless of the time when they will be executed, and the mechanical trades are entered last.
The target dates for buying materials should be worked back from the starting date and time allowance for the operations requiring shop
drawings and fabrication. The progress is shown in green color for on time, and red for behind schedule.
The ideal chart shows the progress line green throughout the contract period. On large project, a separate chart is provided showing a
date of delivery and a date of using up of all principal materials and laborers of each category employed on the main contract and of the
sub-contracts.
The time and progress charts are kept up to date so that when the Owner or the Engineer visits the site, they could see a true
comparison between the actual progress against the scheduled program. Within the first week of each month, the contractor shall
forward to the engineer or architect a progress report showing particulars of the work done in workshop and on the site, also giving the
present position, the rate of progress, estimated time of completion and hold-ups for the delay if any.
c. Planning and Scheduling with Gantt Chart
The Gantt chart is a tool used for planning and scheduling simple projects. With the chart, the project engineer can initially schedule
project activities, and to monitor progress over time by comparing planned progress to actual progress.
To prepare the chart, the project manager has to identify the major activities that would be required. Estimates for each activity are
made and the sequence was determined. Once completed, the chart indicates which activities were to occur including their planned
duration, and when they were to occur.
As the project progresses, the project manager would be able to see which activities were ahead of schedule and which activities were
delaying the project. This will enable the project manager to direct attention where it was needed most to speed up the project to catch
up with the schedule.
The advantage of the Gantt chart is its simplicity, making it very popular. Gantt chart however, fails to reveal certain relationships
among activities that can be crucial to effective project management. For instance, if one of the early activities would have to be
delayed, it is because they could not start until that activity was completed. Conversely, some activities may be delayed without
affecting the overall project schedule.

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 A Gantt chart does not directly reveal this information.
Gantt Charts are useful for simple projects where
activities are simultaneous or where a string of
sequential activities are involved. Om more complex
projects, Gantt chart can be useful for initial project
planning, which then gives way to the use of networks
called PERT and CPM.
Material Supply
The buying of materials is an important activity in all
construction works. The contractor has to determine his
material requirements and scheduled the sequence of its
deliveries. There are items which require time for the
preparation of shop drawings and fabrication before
installation. Hence, the list of material requirements from
the bill of quantities should be made without delay.
The contractor should refer the material quotations
received at the time of preparing his bid for the 1ob
which can be used as the basis of negotiations with the
suppliers. A large number of quotations may be obtained
from the suppliers, and to facilitate their analysis, a
comparative statement should be made for each
classification of the quotations received, listing along
with the price any conditions by which may be qualified.

A purchasing program for construction materials should be prepared according to its priority. In the absence of this purchasing program,
the materials are likely to arrival at the site either too soon with consequence of prolonged storage and possible deterioration or too late
deliveries which will cause undue delay of the work.
Confusion usually results from delay and shortage of materials of day to day requirements if they are ordered at the eleventh hour. The
purchasing program will facilitate the withdrawal of materials and ensure prompt delivery by the supplier because of the planned
schedule of deliveries. Purchase orders are prepared in triplicate, with original going to the job site. A purchase order form should
contain all the information such as:
1. Description of the materials
2. Quantities required
3. Time and place of delivery
4. Unit price
5. Amount
The purchasing clerk of the contractor must have experience in identifying the variety of materials and supplies in general demand for
construction work including the trade names, the quality and local practices that govern the prices. He must work in close liaison with
the contractor's staff who prepares the details of requirements to meet the work pro- gram. He should work in conjunction with the
storekeeper at the site regarding the chasing of deliveries where suppliers fail to comply with their commitment.
Financial and Budgeting
Money is a universal lubricant, which keeps a business enterprise dynamic. Without sufficient financing, a business can-not get started.
And without adequate budgeti4g, a business once started, cannot reach its full potential.
The business must have sufficient capital structure to sustain its growth. It also needs a sound profit plan or budget to support and
control its day to day operations. Thus, a healthy construction company is one, which has sufficient resources and the capability of
controlling its cash flow.
Construction business requires sufficient funds to cover its operation to maintain equipment, purchase of materials and sup-plies, to pay
salaries and wages, to cover storage fees, transportation and reserve for other services including SOP. These are current operations
where the funds to cover them are called working capital.
Profit Motive. In a competitive construction business, the profit motive is a predominant factor of considerations for upon it may rest the
justification for and in fact the very survival of the company. No one feels secure about investing in or doing business within a venture
that appears to be skidding down-ward.

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 The Budget. The budget is the long term responsibility of management to use investment that will yield the largest possible profit and it
is the function of budgeting to plan that profit profile.
A budget is a means toward an end, not an end within itself. Budget was made to serve a purpose. They established goals wherein
each department and its workers must contribute their designed share in accordance with the unified plan. The budget must lead to
precision and confidence among the employees under the following principles:
1. A department head knows what was laid out for his department to accomplish.
2. He knows what is expected of him.
3. He knows when he has done a good job or when and where he is falling behind. With this, much of the worry of uncertainty is
eliminated
Budget should be a conservative aid to all departments within the organization toward their common goals. Unfortunately, this purpose
is frequently misunderstood, giving an early impression and meaning to the budget as:
1. A control of expenditures established in the minds of the subordinates. An attitude that budget is only a negative control for
which belief has led to the "padding" of department budget.
2. The idea therefore in each department is to propose as large an allotment of expenditures as possible that when all budgets
were assembled and that reduction is necessary each department felt that it was the subject of discrimination. Thus, the
budget has become a "sore spot" and a factor of disintegration among the personnel.
A budget properly planned and operated, may have a constructive influence on the personnel of an organization. It must serve as a
means of bringing understanding of the common goals of all who belong to the organization, and all who serve it. In this capacity, the
budget will serve as a coordinating and unifying influence to all concerned.
Types of Budget. There are two principal types of budget:
1. The static or fixed budget
2. The variable or flexible budget
Static Budget. This type of budget depends upon the ability to predict income with at least a reasonable degree of accuracy. A fixed
sum of money is allocated for expenditures with a fixed budget of operations for a specified period.
Variable Budget. This type of budget recognizes the unreliability of income prediction and makes provisions in advance for variations in
construction expenditures in accordance with variation in income. Variable budget is constructed in anticipation of 'variables income. It
provides advance for orderly change in the volume of construction and expenditures.
Fixed Cost is one that is constant in total amount for a given period. For example: the salaries of major executives, capital tax,
depreciation and the like, remain fixed regardless of the volume of construction activities.
Variable Cost increases or decreases in proportion with the volume of production or construction activities. Other items such as direct
labor and direct material cost vary in proportion with the amount of contract which is called variable costs.
In general, simplicity in budgeting should be held as a primary virtue. Detailed clerical work in the preparation and operation of a budget
should be held to a minimum. These principles not only eliminate unnecessary costs in budgeting but in general, promote clearer
interpretation and control of the budget.
There are two types of variable budget:
1. Step budget
2. Variable rate of cost per unit of work
Step budget is a series of budget set up at different level of construction volume or contract. This is anticipated on variations in volume
where changes in cost will occur such as additional shifts, building and supervisory personnel.
Variable rate cost is calculated as an average rate between two points of minimum and maximum construction operations.
Budget Preparation
The preparation of budget estimate in each department is a committee proposition. This is under the principle of participation as a
means toward cooperation. Participation in the preparation of a budget serves to familiarize the personnel with the problems involved.
With their knowledge of the problems and the feeling of being part in setting the goal and limitation of the department, the personnel
give more effective consideration and cooperation on the budget preparation.
The head of the department may act as the chairman of the department committee, but in no case of a large department. He should
delegate responsibility for the gathering details for the committee. In other words, he should have an organization within his own
department for the preparation of the budget that follows the general patterns of the budget organization for the company as a whole.

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 This organization will not only lead to a better budget preparation but will also serve as a mechanism for budget control.
The Financial Budget
Financial budget represents a summary of the anticipated income and disbursement for the budget period. The purpose is to plan for
the allocations of working capital as presented by the current assets of the company. Data for financial budget are de- rived from the
budget as prepared by the different department.
The financial budget must anticipate the cash receipt by months, quarter or other designated period and make allowance for the raising
of additional fund if needed to meet the current expenses. This means that income from accounts receivables, notes receivables, cash
transaction and others, must be budgeted as accurately as possible.
Expenditures may be planned in consideration of the following:
1. The absolute necessities of the budget of various department such as weekly or monthly requirements of materials for
construction, payroll etc.
2. Limitation of available cash.
It is not considered a good management to have large amount of cash lying idle to meet unusually large expenditures. The interest
being paid for such idle money has to be considered. There are many problems arising out of attempted control of working capital, but
these problems must be anticipated and alternatives are selected to meet them.
Short-term loan is availed of whenever there is large construction contract. Financial budget acts as a negative control over other
department, especially when capital is limited but urgently needed in time of rapid construction where additional capital and equipment
is necessary. In most instances, financial budget provides a systematic and positive approach towards the attainment of the
coordinated plans and divisions.

Different Approaches to Project Management

There are a number of approaches to managing project activities including agile, interactive, incremental, and phased approaches.
Regardless of the methodology employed, careful consideration must be given to the overall project objectives, timeline, and cost, as well as
the roles and responsibilities of all participants and stakeholders.
The traditional approach
A traditional phased approach identifies a sequence of steps to be completed. In the "traditional approach", five developmental components
of a project can be distinguished (four stages plus control):
 initiation;
 planning and design;
 execution and construction;
 monitoring and controlling systems;
 completion.

Typical development phases of an engineering project

Not all the projects will visit every stage as projects can be terminated before they reach completion. Some projects do not follow a
structured planning and/or monitoring stages. Some projects will go through steps 2, 3 and 4 multiple times.
Many industries use variations on these project stages. For example, when working on a brick and mortar design and construction, projects
will typically progress through stages like Pre-Planning, Conceptual Design, Schematic Design, Design Development, Construction Drawings
(or Contract Documents), and Construction Administration.
The Cone of Uncertainty explains some of this as the planning made on the initial phase of the project suffers from a high degree of
uncertainty. While the terms may differ from industry to industry, the actual stages typically follow common steps to problem solving-
"defining the problem, weighing options, choosing a path, implementation and evaluation."
Critical chain project management
Critical chain project management (CCPM) is a method of planning and managing projects that puts more emphasis on the resources
(physical and human) needed in order to execute project tasks. The most complex part involves engineering professionals of different fields
(Civil, Electrical, Mechanical etc.) working together. It is an application of the Theory of Constraints (TOC) to projects. The goal is to increase
the rate of throughput (or completion rates) of projects in an organization. Applying the first three of the five focusing steps of TOC, the

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system constraint for all projects is identified as are the resources. To exploit the constraint, tasks on the critical chain are given priority over
all other activities. Finally, projects are planned and managed to ensure that the resources are ready when the critical chain tasks must start,
subordinating all other resources to the critical chain.
Regardless of project type, the project plan should undergo Resource leveling, and the longest sequence of resource-constrained tasks
should be identified as the critical chain. In multi-project environments, resource leveling should be performed across projects. However, it is
often enough to identify (or simply select) a single "drum" resource-a resource that acts as a constraint across projects-and stagger projects
based on the availability of that single resource.
Extreme project management
In critical studies of project management it has been noted that several PERT based models
are not well suited for the multi-project company environment of today. Most of them are
aimed at very large-scale, one-time, non-routine projects, and currently all kinds of
management are expressed in terms of projects.
Using complex models for "projects" spanning a few weeks has been proven to cause
unnecessary costs and low maneuverability in several cases. Instead, project management
experts try to identify different "lightweight" models, such as Agile Project Management
methods including Extreme Programming for software development and Scrum techniques.
The generalization of Extreme Programming to other kinds of projects is extreme project
management, which may be used in combination with the process modeling and
Planning and feedback loops in Extreme programming
(XP) with the time frames of the multiple loops. management principles of human interaction management.

Event chain methodology

Event chain methodology is another method that complements critical path method and critical chain project management methodologies.
Event chain methodology is an uncertainty modeling and schedule network analysis technique that is focused on identifying and managing
events and event chains that affect project schedules. Event chain methodology helps to mitigate the negative impact of psychological
heuristics and biases, as well as to allow for easy modeling of uncertainties in the project schedules. Event chain methodology is based on
the following principles.
 Probabilistic moment of risk: An activity (task) in most real-life processes is not a continuous uniform process. Tasks are
affected by external events, which can occur at some point in the middle of the task.
 Event chains: Events can cause other events, which will create event chains. These event chains can significantly affect the
course of the project. Quantitative analysis is used to determine a cumulative effect of these event chains on the project schedule.
 Critical events or event chains: The single events or the event chains that have the most potential to affect the projects are the
“critical events” or “critical chains of events.” They can be determined by the analysis.
 Project tracking with events: Even if a project is partially completed and data about the project duration, cost, and events
occurred is available, it is still possible to refine information about future potential events and helps to forecast future project
performance.
 Event chain visualization: Events and event chains can be visualized using event chain diagrams on a Gantt chart.
Agile project management
Agile project management approaches based on the principles of human interaction management are founded on a process view of human
collaboration. This contrasts sharply with the traditional approach. In the agile software development or flexible product development
approach, the project is seen as a series of relatively small tasks conceived and executed as the situation demands in an adaptive manner,
rather than as a completely pre-planned process.

Source: Project Construction Management

Max B. Fajardo, Jr.
Project Management

Dennis C. de Villa
February 2012

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