Construction Project Management Planning, Scheduling and Controlling Third Edition Construction Project Management Planning, Scheduling and Controlling Third Edition Lt.) K K Chitkara, AVSM Consultant and Trainer, Former Professor, College of Military Engineering, Pune McGraw Hill Education (India) Private Limited NEW DELHI McGraw Hill Education Offices New Delhi New York St Louis San Franscisco Auckland Bogotá Caracas Kuala Lumpur Lisbon Madrid Mexico City Milan Montreal San Juan Santiago Singapore Sydney Tokyo Toronto To The Martyrs who sacrificed their lives to free the Indian subcontinent from the colonial rule Let us resolve to perform with devotion and to strive towards excellence in all spheres of individual and collective activity, so that the nation constantly rises to higher levels of endeavour and achievement McGraw Hill Education (India) Private Limited Published by McGraw Hill Education (India) Private Limited, P-24, Green Park Extension, New Delhi 110016 Construction Project Management: Planning, Scheduling and Controlling, 3/Ed. Copyright © 2014, 2011, 1998 by McGraw Hill Education (India) Private Limited No part of this publication may be reproduced or distributed in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise or stored in a database or retrieval system without the prior written permission of the publishers. The program listings (if any) may be entered, stored and executed in a computer system, but they may not be reproduced for publication. This edition can be exported from India only by the publishers, McGraw Hill Education (India) Private Limited.
Print Edition ISBN (13): 978-93-392-0544-7 ISBN (10): 93-392-0544-8 EBook Edition ISBN (13): 978-93-392-0545-4 ISBN (10): 93-392-0545-6 Managing Director: Kaushik Bellani Publishing Manager—Professional: Mitadru Basu Manager—Production: Sohan Gaur DGM—Sales and Business Development —Professional: S Girish Deputy Marketing Manager—Science, Technology & Computing: Rekha Dhyani General Manager—Production: Rajender P Ghansela Production Manager: Reji Kumar Information contained in this work has been obtained by McGraw Hill Education (India), from sources believed to be reliable. However, neither McGraw Hill Education (India) nor its authors guarantee the accuracy or completeness of any information published herein, and neither McGraw Hill Education (India) nor its authors shall be responsible for any errors, omissions, or damages arising out of use of this information. This work is published with the understanding that McGraw Hill Education (India) and its authors are supplying information but are not attempting to render engineering or other professional services. If such services are required, the assistance of an appropriate professional should be sought.
Typeset at DigiConv Technologies, C-240, 103 1st Floor, Pandav Nagar, Delhi 110 092, and printed at Rajkamal Electric Press, Plot No. 2, Phase IV, HSIIDC, Kundli, Sonepat, Haryana 131 028 Cover Designer: Kapil Gupta RYACRDRZDZQLC Preface to the Third Edition 1. Salient Features This book, as mentioned in the ealier editions, is on the practical application of the knowledge and skills required in Project Planning, Scheduling and Controlling Techniques in the construc- tion project scope, time, resources, cost, risk and integration. The fast growing construction in- dustry, demands regular updating of the knowledge areas and skills in project management.
This updating of project management techniques is the main focus of this edition. In this Third Edition, within the limited scope and size of the book, the notable additions are as under: 1. Project Manager’s competency skills and project success strategy. Basic theory of probability distributions, probabilistic decision networks and decision trees.
Introduction to project management software including Enterprise Project Management, Monte Carlo simulation applications using Crystal Ball Software and risk quantification techniques using Project Risk Analysis software. Excel 2007-Solver software applications in solving problems related to resources allocation. Application of cloud computing in data processing. Construction Contract Accounting Standard, and construction workers safety guidelines.
An overview of construction contract administration and disputed claims management. Project internal performance audit guidelines. The structure of the Third Edition differs from the previous editions. Keeping in view the varying requirements of the readers, new topics and new appendices (fifteen to be precise) have been added in this Edition, and are placed at the end of each chapter.
Titles of the chapters are similar to the previous edition and the text is divided under the following heads: • Introducing Construction Project Management. It includes Chapters 1 and 2 which deal with ‘Construction Projects Management Framework’ and ‘Project Scope and Integration Planning’. They also provide an overview of the subjects covered in the book. Appendices include Project Manager’s competency skills and project success strategy development.
vi Preface to the Third Edition • Developing Project Construction Time Schedule. It consists of Chapters 3 to 6, on planning and scheduling of project construction time. It includes the processes of defining project activities, sequencing activities using network analysis techniques and scheduling project work. Appendices include project time-cost function, probabilistic decision networks and project management software applications.
• Developing Project Resources Plans. It includes Chapters 7 to 10. These are devoted to planning and forecasting requirements of construction manpower, materials and equip- ment. Appendices highlight workers incentive schemes, resources allocation using linear programming problems, equipment output norms, and time value of money.
• Planning and Budgeting Construction Costs. Chapters 11 and 12 cover methodology for planning and budgeting costs in construction projects.The relevant Appendices include breakeven analysis and capital investment analysis techniques. • Controlling Project Construction Plan. Chapters 13 to 18 deal with monitoring and con- trolling of project integration, scope, product quality, resources, costs, earned value, time schedule, management of risk costs, performance audit guidelines and project manage- ment information system.
The Appendices include: construction contract administration and claim management, construction contract accounting standard, construction workers safety checklist, probability distributions and Monte Carlo simulation using Crystal Ball software, introduction to Oracle risk management software, and application of cloud com- puting. Acknowledgements My special thanks are to Oracle/Primavera Systems of USA, for their permission to use the APEX sample project and their copyright documented material on Project Management soft- ware, Crystal Ball software and Oracle Risk Analysis. Readers can visit the Oracle/Primavera website to view the products. Engineering News-Record (ENR) has kindly granted permission to publish excerpts from the Construction Facts and other data included in this book.
Scott Lewis, Projects Edito- rial, Engineering News-Record, New York, for speeding up the permission. Thanks are to McGraw-Hill Education and authors of Cloud Computing for their permission to reproduce two tables in this edition. I am grateful to Mr. Sandeep Verma, FCA, LL., CPA, CFE for his valuable suggestions and comments, particularly, on cost and audit related topics covered in the book.
Sandeep Verma, is a professional accountant and an auditor in the USA, with extensive experience in international accounting and auditing in various industries. His areas of activities are spread out across the globe. Ajay Vikram Singh, Lead Auditor (OHSAS 18001:2007), M. (Mathematics) and ex- pert in computer technology and construction workers safety management, has made valuable Preface to the Third Edition vii contribution in developing soft copy of this edition.
His suggestions with regard to rearranging the topics especially those related to worker safety are invaluable. The author appreciates his valuable contribution and untiring efforts in manuscript compilation of this book. This Third Edition of the book would not have been possible without the professional and academic experiences gained from a number of organisations, both in India and abroad, in which the author had the privilege to serve and participate. In gratitude, I salute my past and present superiors, colleagues and subordinates for their direct and indirect contribution in developing this book., the executives, sponsoring editor, production manager, marketing manager and the staff of McGraw-Hill Education, India, and their copyeditors for their untiring efforts in bringing this book in its present form.
Despite the best efforts, the author, supporters and contributors including Oracle/ Primavera Systems, and ENR of USA; accept no responsibility for any inaccuracy, errors or omissions in the contents of this book. K K Chitkara, AVSM E-mail: chitkarakk@gmail.com Website: www.com Preface to the First Edition Construction Project Management, in its present form, is the end product of my over 25 years experience at senior level of planning and managing major construction projects, both in India and the Middle East; and imparting instructions on the subject to practicing professionals, engineers and engineering students. Project is a mission, undertaken to create a unique facility, product or service within the specified scope, quality, time, and costs. With the emerging global opportunities, projects cross geographical boundaries, corporate channels, traditional systems and cultural diversities.
The knowledge areas needed to manage such projects comprise project management techniques, general management practices and technology-related subjects. The project management techniques of planning, scheduling and controlling are the tools and devices that bind the subject’s knowledge areas. These techniques can be applied to all types of projects. This book covers their application in the field of construction.
The construction industry accounts for 6–9% of the Gross Domestic Product (GDP) of many countries. The value of annual construction activity in the world exceeds one trillion dollars. Unfortunately, due to the secretive nature of construction business, knowledge gained in planning, scheduling and controlling construction process is rarely disseminated. Consequently, the cost of inefficiency is being incurred as a recurring cost.
Moreover, in various businesses, the rate of business failure of construction contractors is one of the highest. One of the reasons for this high rate of failures is the lack of knowledge. There is a vast scope for improving performance through knowledge in the construction industry, where men, materials, machinery, money and management work together to build a facility. Perhaps, it is one of the rare industries in the world that can provide such a vast scope for cost and time reduction at micro-level.
This book describes the planning, scheduling and controlling of time and cost in construction projects. Though vital for performance improvement, this subject is often neglected. The subject covered in this book is divided into four parts spanning eighteen chapters and the text is illustrated with real life cases: Construction Project Management Overview Chapters 1 and 2 provide an intro- duction to the subject. They cover the nature of construction industry, describe con- struction project concepts and characteristics, and outline project development process.
x Preface to the First Edition While highlighting salient features of the project management process, they explain the causes for project failures, outline approach and importance of planning, schedul- ing and controlling in construction projects, including the functions and role of the chief planner. Time Planning Chapter 3 describes the methodology for breaking down project work into activities and for activity duration estimation. Chapters 4 and 5 cover the methodol- ogy for modelling and time analysis of CPM, PERT and Precedence networks. Preparation of time-limited and resources-limited schedules are described in Chapter 6.
Resource Planning This part containing six chapters is devoted to the strategy for planning manpower, construction materials, plant and machinery, production costs and project budget. Planning Control System This part containing six chapters deals with organization of control system; techniques for controlling resource productivity, costs and time; codi- fication of planning system; and management of project information system using com- puters. Each chapter of Construction Project Management can be expanded into a volume, but its scope has been restricted to the present size by making trade-offs between technique elaboration and their application coverage. A comprehensive bibliography has been included to supplement information on each topic.
A CD-ROM covering lesson plans and self-test exercises for on-line study of the subject covered in the book is being prepared, and is likely to be available by the end of 1999 This book is designed for use by: Project managers and their team members Managers in corporate office dealing with the managment and execution of construction projects Academician, trainers and trainees connected with project management Consultants and specialists like architects, engineers, quantity-surveyors, accountants and other managers associated with projects Practicing engineers and students studying construction management and those new to the concept and techniques used in Project Management The subjects covered mainly deal with contractor-oriented Project Management, as well as client-directed Project Management. This book presupposes fundamental engineering knowledge and familiarity with construction process and practices.