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The way construction activity is being undertaken has seen dramatic changes elsewhere over the past few years. Not only is new technology invading construction sites, but also the procurement and management of construction projects is evolving. Other industries around the world have been applying these new ways of thinking very successfully, so why not construction in South Africa?
The construction sector is one of the largest and most important sectors in the South African economy, providing jobs to more than ?? people. The national investment in the built environment is valued at over R?? billion, contributing ??% to GDP (Gross Domestic Product) and providing added value assets worth over ??% of GDP (SA Reserve Bank, Stats SA).
A New Zealand study by BERL (Nana, 2003) shows that a 10% efficiency gain in building and construction results in at least 1% increase in GDP. Furthermore, their study shows that such efficiency gains lead to reduced economy-wide production costs, enabling better competitiveness of goods and services. These efficiency gains have a positive impact on every other economic sector in the economy.
If we are to take advantage of the rising demand for low to mid-priced houses in this country, it has been suggested that we need to implement more efficient construction practices (Trade and Industrial Policy Strategies (TIPS), 2010). But this effort will require better and more efficient construction practices to maintain overall operating margins, as this segment generally has lower This paper presents a model of a cost effective approach to the construction of houses based on the identification and levelling of the skills resource requirements for each activity throughout the project.
2 Traditional approaches
When we look at the trends in construction technology we find a very mixed and ambiguous picture. Little has changed in the use of the materials and techniques since the introduction of mechanization to construction over a hundred years ago. However, incremental changes and improvements are actually occurring in traditional materials and techniques, such as bricklaying. Failure to recognize the impact of various innovations and adapt to changing environments has unfortunately forced many organizations out of the mainstream of construction activities.
Traditional project management in construction has sought the efficient utilization of labour, material and equipment. Improved labour productivity could be pursued continually by those responsible for cost control of constructed facilities. New materials and material handling provide ample opportunities for cost reduction. New equipment and innovative methods makes possible the introduction of wholesale changes in construction technologies. But have these opportunities been implemented?
New ways to improve productivity should focus on minimizing waste ï¿½ waste of time, money and materials. Planning more efficient operations for construction projects remains, but there are limits to such tactical planning and it only optimizes the particular process. What is needed, however, is to improve productivity by an order of magnitude if possible.
Strategic planning should identify the overall process and investigate potential options along which improved goals may be found on the basis of available resources. With the benefits of today's high technology, some alternatives have good prospects of success because they can take advantage of the efficiency of both the human mind and software algorithms.
3 New techniques
The South East Centre for the Built Environment has identified ten Best Practice approaches to assist an organization to benefit from the enormous changes that are taking place in the construction industry (SECBE 2010). They report that companies implementing best practice consistently report significantly higher profits, increased customer and employee satisfaction, improved safety and productivity and reduced environmental impact. We look at three of these key business practices with the potential to leverage significant added value and shape the direction of the industry to manage the overall project process, including procurement, partnering and lean construction.
Procurement, the procedure of establishing the most suitable technique of managing the construction project, suggests that improvements in the management of projects could provide the reduction in project completion time that would lead to lowering in costs. To guarantee the timeous delivery of a project, new forms of contractual arrangements are needed to ensure all key parties to work together as early as possible (CCG 2010). It is seen that ï¿½better forms of selection and contract arrangements are replacing lowest price tendering and lump sum contractsï¿½.
Partnering, a management system based on a collaborative approach to working, has been demonstrated that by working cooperatively it is possible to provide much greater value for money for the client, better profits for the companies involved, better quality and more certainty of project completion (CCG 2010). This requires a ï¿½different style of working compared with the traditional adversarial approach that has been common in the construction industry for many yearsï¿½.
Lean Construction, an approach to managing production activity, systematically seeks to reduce or remove ï¿½any processes that add cost but do not add valueï¿½. This approach maximizes value provided to the customer while minimizing waste in the design, construction and use. The five principles of Lean are (SECBE 2010):
ï¿½ specify value from the customerï¿½s perspective
ï¿½ identify and integrate the processes that deliver value
ï¿½ make value flow by eliminating bottlenecks and disruption
ï¿½ produce only what is wanted when it is wanted
ï¿½ pursue perfection through continuous improvement
Although construction is different from manufacturing, Lean Production Management principles can be inherent throughout the life of a construction project. One of the key principles behind lean construction is the integration of processes (Womack and Jones, 2003). The aim is to get construction activity to flow through the elimination of factors causing delay or disruption. It has been estimated that 30-40% of construction activity does not add value for the client (Lean Construction Institute). Examples include waiting for information and materials, reworking due to defects, double handling of materials, unnecessary movements around site due to poor site layout and access arrangements, and compulsory competitive tendering.
4 Model for efficient housing construction
The essence of the best practice approaches applied to house construction is that we need to develop a model that can be jointly managed by both the client and the contractor with the least wastage of resources. For this to be effective it needs to recognize the limitations of emerging and small contractors in terms of management sophistication and skills capacity, by minimizing the changes to the traditional approaches.
The model developed here requires the:
ï¿½ development of a schedule of activities,
ï¿½ assignment of resources to each activity,
ï¿½ development of a critical path barchart for the project,
ï¿½ levelling of resources through aggregation and rescheduling, and
ï¿½ adherence to the barchart to the completion of the project.
It is found that project scheduling is more easily advocated than carried out in practice as project scheduling is quite often regarded as a frustrating exercise and adhering to the schedule can be even more daunting. Still more demanding will be project scheduling when the available resources are limited, and resource levelling is a basic requirement to prepare a valid project schedule.
Too often we hear construction managers complain that they are burdened with projects with near impossibly short deadlines for completion. To overcome this problem, it is obvious that both project managers and construction are involved in the scheduling and resource levelling.
When performing project scheduling, the construction manager will invariably schedule most tasks sequentially, whereas the project manager will generally have to combine certain tasks to make optimum use of available labour and plant. For this reason, the project manager will mainly schedule the tasks concurrently and, occasionally, sequentially.
Project Management Scheduling and Resource Levelling can be best accomplished if carried out methodically and in a planned manner, making use of Project Management software such as MS Project.
5 Resource scheduling
Resources are the means of construction needed to complete a project. Resource scheduling involves the assignment of resources to each activity so that each activity becomes a project in itself. The main resources include: time, labour, material, machinery and money. Proper allocation of labour, material and machinery for the duration of the activity will produce the total cost of that activity. The project usage is then a summation of the scheduled resource usage for each activity.
The objective of resource levelling is to determine how to minimize the fluctuation in labour teams required on the job, while at the same time maximizing labour productivity with maximization of the learning-curve. Construction managers typically would like teams to work on familiar work through the project. Productivity will increase as workers become familiar with the site, materials, and job conditions.
Factors beyond the control of the project manager govern the cost of material. The designer specifies the quality of materials required to be installed. Buyers receive bids for the required materials at a competitive price. Materials are delivered to the site to be available to workers as and where needed, whereas the lack of on-site storage seems to be a major project constraint that can be explicitly modelled and managed. Otherwise, the optimum position of materials on the site should be chosen to minimize moving around the site, since moving materials increases costs without any specific work result.
Not all of the equipment used on construction sites should be considered in the project plan. Contractors, and their workers, normally provide the small tools used to complete their work, which is not generally included in the project schedule. There is certain equipment, such as hired plant and scaffolding, which can impact the overall sequence and duration of the project. Although scaffolding is temporary construction equipment not installed with the project, its presence or absence may influence progress on activities at or near where workers are employed.
The scheduling of materials and machinery has little impact on the final cost or duration of the project, provided that they are always available when and where required. Hence, if we are going to effect major savings on the project costs we need to focus our attention on the allocation of both labour and time.
A workable model of the project can be developed where the construction manager defines each activity, estimating its duration and labour content, ensuring that everything required for the completion of the project is included. When this is carried out in conjunction with the project manager there is little room left for any misunderstanding of the requirements to complete the project.
The project manager is responsible for optimizing the schedule and levelling the resources, together with ensuring that the material and machinery are delivered to site and are available at the right time and location.
6 Labour levelling
Resource levelling ensures that resource demand is limited by resource availability. Resource smoothing ensures that there is continuity in resource usage throughout the duration of the project. Labour levelling and smoothing are usually considered in conjunction with each other.
Ideally, there would be a build-up of the labour usage at the beginning of the project to a constant level with a decrease at the end of the project. This will, however, also depend on whether labour resources are assigned to a particular project or utilized in gangs across several projects and whether all labour should be kept gainfully employed. We will begin by looking at the issues involved in labour levelling where a bar chart is used as the main planning technique for a simple project, as resource levelling is based on a time frame and bar charts are drawn to a time scale, whereas networks are not.
Obviously, we cannot get rid of resource needs just by having as much of it as we wish. The procurement of labour is one issue and the efficient use of that labour is another. Control over labour resources is only possible for those tasks under your control as the construction manager. Hence, sub-contractor labour issues are beyond your control.
The basic tool used for resource levelling is the resource histogram. Each bar on the histogram sums the number of labour units needed for that day. The initial histogram will look like a Manhattan skyline, indicating lack of productivity where some workers have nothing to do during the troughs. Where the contractor has other jobs nearby, then these workers could move to another job to fill the gap but this introduces unnecessary job interdependence. To improve the productivity, other activities need to be rescheduled in parallel to accommodate these otherwise slack workers. If this rescheduling is not planned, an inexperienced project manager may see everyone being busy and apparently productive and wonder at the end of the job how money was lost when everything appeared to be going along so well.
Often unscheduled rescheduling occurs which may result in quality control problems. For example, where a team wants to complete the finishing of an item out of sequence so that they do not need to return to it at the end of the job. Workers trying to optimize their own efforts will often act in ways that can cause problems for the rest of the project. Completing work out of sequence often results in removal and rework to accommodate existing work, requiring the incorrectly sequenced work to be reorganised or repaired. Anticipating these complications requires an experienced project manager and should be identified in advance when a detailed evaluation of resource levels is undertaken.
Improvements to the level of labour requirements can be made by:
ï¿½ adjusting the start of certain activities,
ï¿½ adjusting the duration of certain activities and so changing the demand for labour over the duration of the activity or,
ï¿½ a combination of both of these adjustments.
Many problems arise with using the bar chart as a simple tool for labour levelling. For example, without any information about the interdependency of activities, if we delay a task by extending the duration of the activity or by starting later than originally planned, the impact this has on the overall project cannot be evaluated.
The critical path is not obvious from a bar chart, although critical activities may be deduced by inspection. Delaying or extending activities which are on the critical path will extend the overall duration of the project and must avoided ï¿½ but they can be moved off the critical path. Also, the availability of float or slack is not obvious. Management of this attribute can be utilized to adjust the labour requirements.
When using project management software, levelling typically means resolving over allocations or conflicts in the project plan by getting the software to calculate delays and automatically update tasks. The adjustments made are not usually obvious to the inexperienced user. It is recommended that manual levelling using the software be carried out iteratively by adjusting tasks until resources are level and smooth.
Labour levelling is the process of smoothing out daily labour demands. Although the perfect solution can never be obtained, often the worst of the unevenness can be eliminated through the process of selective rescheduling and adjustment of noncritical activities.
7 Case Study
The owners of a property in Durban North had waited fifteen years to be able to commence development of their property ï¿½ eleven years to transfer the title, then a further four years to get plan approval. In 2006 the retired couple set aside an amount of R400 000, had plans drawn up and submitted to the Metro. They planned to add another storey in two phases. By the time the plans were approved, building costs had more than doubled.
In the first phase the outbuilding roof would be removed containing a single garage and a small flat, slab over the area and a small 39m2 two bedroom flat built above. They would move into this flat while the second phase was being built.
During the second phase the main building would be extended by 1.8m to add en suites to two of the existing bedrooms, remove the roof and slab over the whole area with balconies extending around three sides (360m2). A new storey would be built and the roof replaced.
Quotes were received for the first phase and a suitable Master Builders: House Building and Small Contracts Agreement signed on 4 February 2010 for R135 000, with a completion date two calendar months from the start date. The medium sized contractor came with suitable credentials which included a recent Builder of the Year award, and a recommendation from the consultant engineer.
The Contractor went overseas at the end of March leaving a few workers on site - without materials or supervision. The Owners had to purchase materials in order to complete the work. By June the work had still not been completed, nor the Contractor sighted. The Owners terminated the contract without paying the outstanding balance.
Quotes were obtained for the second phase which varied from R235 000 for labour only to over R600 000 for completion of the full contract. These were all outside the finance available from the Owners. Furthermore, all submissions expected that the project would take five months to complete.
Due to the unsatisfactory completion of the first phase, the Owners decided to manage the second phase themselves. The husband has construction management experience (but was pressed for time) and the wife is at home full time and had overseen and purchased the extra materials required to finish the first phase.
The labour only contractor came back with a new offer of R180 000 but would still need five months to complete. He had a team of eight workers with mixed skills available full time for the duration of the project. He was prepared to provide his team of eight for R16 000 per fortnight, including his overheads and profit, giving a total of R174 000 for 5 months. The Owner reckoned he could reduce the time to three months if they managed the project, much to the disbelief of the Contractor.
The following Sunday the Owner and Contractor sat in front of MS Project and the Contractor broke the contract down into meaningful tasks, each with an estimate of the duration and the labour. The initial time came to five months (Figure 1).
In this project, the labour team consisted of a mix of carpenters, plumbers, plasterers, bricklayers and so on who could double as labourers as and when the need arises. The Contractor said that he would be available as a ninth labour unit from time to time as necessary. Subcontractors would be brought in during peak activity such as pouring concrete.
The Owner levelled the labour resource by moving tasks around and adjusting the order of doing things. Many tasks were able to be adjusted to run simultaneously and the estimated durations of other tasks were altered proportionally with labour content. The new labour levelled network was now 91 days - from an initial 150 days (Figure 2).
The Contractor was happy with the new figure but felt happier if the total time could be adjusted to 100 days. This was agreed and a suitable simple contract drawn up and signed. Work commenced on 16 June. The scheduled completion time was 4 October but the contract was extended an extra fortnight to allow for completion of Phase 1 and other extras the Owners introduced. All parties were happy with the outcome.
The paper reports on the findings of a case study whereby the manager supplies all the materials ahead of time and the contractor supplies all the labour requirements according to a revised schedule where the labour resource is levelled and smoothed, with many activities could be carried out in parallel rather than sequentially. Simple management of the resource usage resulted in a forty per cent reduction in labour costs, completed within budget and in three months rather than the five months estimate.
The approach used in the case study provides a learning curve for the emerging contractor who also acquired new skills for himself and his team. The contractor has been enabled to use simple resource levelling and smoothing to utilize his labour force more efficiently and effectively. He can now quote more competitively in the secure knowledge that the contract can be completed within his quoted time and price. His team are now enhancing their skills to become qualified artisans.
The model has only been applied in one study but is applicable to all construction on various projects. It is especially relevant to affordable house construction projects where more quality houses can be produced within a given budget and time.
The knowledge that underpins this example has produced an efficiency gain of forty per cent (Nana 2003). If we can take this knowledge, nurture it, share it and implement it throughout the construction industry we could witness a dramatic change in the way construction activity is undertaken. This is not only in the form of new techniques and technology, but also in the way that construction projects are procured and managed. Such a gain in efficiency could have a dramatic impact on the GDP.