PRODUCTION ORGANISATION & HUMAN RESOURCE MANAGEMENT

Progress Recording, Cost Optimisation & Acceleration

11th August 2010

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

Project | control | progress recording | cost | acceleration | summary

Project Stages
Appraisal Proposals Design
Production Information Construction Phases Post Construction

Pretender

Precontract

Contract

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

Project | control | progress recording | cost | acceleration | summary

Planning tools

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

Project | control | progress recording | cost | acceleration | summary

Planning tools

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

Project | control | progress recording | cost | acceleration | summary

Planning tools

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost | acceleration | summary

Why do you need to plan?

Cost

Time

Quality
BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost | acceleration | summary

Monitoring & Controlling Progress

Prepare Master Programme

Replan and implement

Determine Action

Measure Performance

Compare actual with planned

Assess Deviation

Ahead/Behind

Denyer, 1972

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control |

progress recording | cost | acceleration | summary

Control of Progress Control is comparing, at regular intervals, the actual work achieved with that planned Necessary corrective action can be taken to bring work back on schedule Use of monthly and weekly meetings are invaluable in helping control progress work not proceeding as planned can be considered in detail explanations can be assessed best solutions can be discussed and implemented Communications on progress can be made with other parts of the organisation BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control |

progress recording | cost | acceleration | summary

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control |

progress recording | cost | acceleration | summary

Progressing activities on a precedence diagram Progressing work and updating information directly on a network

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control |

progress recording | cost | acceleration | summary

Assigning target dates to activities

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control |

progress recording | cost | acceleration | summary

Updating activities inline with actual progress

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control |

progress recording | cost | acceleration | summary

Network showing completed, started and remaining activities

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | Controlling Costs

cost | acceleration | summary

Cost control should enable the cost of each stage, activity or unit to be determined and compared with target costs to ascertain any deviations

The timing of cost information is all important and ideally should be done as work is being carried out
Problems can be identified early and remedial action taken as appropriate Most project management systems provide for this and enable resources and resources representing sections of work to be assessed in terms of cost and income The collection of cost information may be carried out via time sheets, weekly summary sheets and the measurement of work completed Cost control information is also be useful for the estimation of costs on future projects

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording |

cost | acceleration | summary

Time/Cost optimisation A technique used to find the most economical way of carrying out a project in terms of time and cost The cost of a project can be considered a combination of direct and indirect costs The variation in duration of critical activities will affect these cost and the total cost of the project To accelerate activities is more expensive in terms of direct costs As a project duration increases so will the indirect costs Time/Cost optimisation is concerned with establishing project duration at minimum cost BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost |

acceleration | summary

Time/Cost optimisation The reduction in duration of an activity can be achieved through increased resources, working overtime or additional shifts The reduction in time is termed crashing for which there will be an associated crash cost Cost slope for activities can be determined by as follows cost slope = (crash cost - normal cost) / (normal duration crash duration) Critical activities can be accelerated in the order of least cost slope Direct and indirect costs can be calculated for each project duration to obtain the optimum cost BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost |

acceleration | summary

Linear relationship between time and cost for an activity

Multi-linear relationship between time and cost for an activity

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost |

acceleration | summary

Discrete time and cost relationship for an activity Non-linear relationship between time and cost for an activity

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost |

acceleration | summary

Cost curves to establish the least cost for optimum project duration

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost |

acceleration | summary

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost |

Activity Duration (days) 20 54 Maximum Compression (days) 5 -

acceleration | summary
Normal Cost () 4,700 5,485 Cost Slope ) 20 -

A B

11

6,536

First 3 days 35 per day 85 per day thereafter

First 2 days 40 per day 95 per day thereafter 55 90 150

15

3,400

E F

26 Method (1) 20 Method (2) 13

10 10 3

3,950 1,100 1,400

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost |

Activity Duration (days) 20 Maximum Compression (days) 5

acceleration | summary
Normal Cost () 4,700 Cost Slope ) 20

First Compression Compress activity A by 5 days = 5 x 20 = 100

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost |

Activity Duration (days) 11 Maximum Compression (days) 4

acceleration | summary
Normal Cost () 6,536 Cost Slope ) First 3 days 35 per day 85 per day thereafter 55

26

10

3,950

Second Compression Compress activity C by 3 days = 3 x 35 = 105 Compress activity E by 3 days =3 x 55 = 165 Total 270

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost |

acceleration | summary

Third Compression Compress activity D by 2 days 2 x 40 = 80 Compress activity E by 2 days 2 x 55 = 110 Total 190 Fourth Compression Compress activity E by 1 day 1 x 55 = 55 Compress activity C by 1 day 1 x 85 = 85 Total 140

Fifth Compression Compress activity E by 3 days 3 x 55 = 165 Compress activity D by 3 days 3 x 95 = 285 Total 450 Sixth Compression Method (2) selected Compress activity F by 3 days 3 x 150 = 450

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost |

Compression Normal First compression Second Compression Third Compression Fourth Compression Fifth Compression Sixth Compression Compression cost () None 100 270 190 140 450 450 Normal Cost () 25,471 Direct Cost () 25,471 25,571 25,841 26,031 26,171 26,621 27,071

acceleration | summary
Indirect Cost () 7,080 6,480 6,120 5,880 5,760 5,400 5,040 Total Cost () 32,551 32,051 31,961 31,911 31,931 32,021 32,111 Duration (Days) 59 54 51 49 48 45 42

In-direct cost are 120 per day. The optimum cost is 31,911 with a duration of 49 days

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost | acceleration |

summary

Summary Progress recording is an essential part of controlling work in order to identify problems and initiate remedial action Recording progress can be carried out in connection with bar charts and networks Cost optimisation is a technique used to find the most economic way of carrying out a project in terms of time and cost

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost | acceleration |

summary

Activity
The construction of part of a commercial development is represented by the activities shown in Table 1.
Activity Reference A-B* A-C A-D B-C* B-F C-E* D-H E-H* F-G G-H Duration (weeks) 14 6 25 17 12 14 8 8 11 13 Crash Duration (weeks) 11 6 17 15 11 12 7 7 10 10 Cost () 7300 9100 15100 9100 4100 5600 11100 2000 7600 2300 Crash Cost () 7600 9100 19100 11100 4600 6300 12100 2300 8300 2300

* critical activities

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT

project | control | progress recording | cost | acceleration |

summary

Activity
The indirect costs associated with the development are 1700 per week.

1. Using cost optimisation techniques, determine the optimum duration and cost for the work. 2. Describe three situations where cost optimisation techniques may be used in practice.

BSc (Hons) BUILDING CONSTRUCTION MANAGEMENT