CONSTRUCTION

MANAGEMENT
SYSTEM
CONSTRUCTION MANAGEMENT SYSTEM
SUB-TOPICS
• NEED FOR PROJECT MANAGEMENT • ESTIMATING THE PROJECT
• PROJECT MANAGEMENT • PROJECT COST ACCOUNTING
CHARACTERISTICS • RESOURCE MANAGEMENT
• DISCUSSION VIEWPOINT • PROJECT FINANCIAL CONTROL
• MANAGEMENT PROCEDURES • AUTOMATING PROJECT MANAGEMENT TASK
• TIME AND COST MANAGEMENT • MANUAL METHODS
• PLANNING AND SCHEDULING • DISCUSSION FORMAT
• CPM PROCEDURE • EXAMPLE PROJECT
• TIME MONITORING AND CONTROL
• PROJECT COST SYSTEM
CONSTRUCTION
MANAGEMENT
SYSTEM

A service that oversees and manages construction projects from

beginning to end (planning, design, and construction phases) by
utilizing various project management methods and techniques.
 CONSTRUCTION
MANAGEMENT SYSTEM

PROJECT MANAGEMENT

MANAGEMENT
MANAGEMENT MANAGEMENT

MANAGEMENT MANAGEMENT
2.1
NEED FOR
PROJECT
MANAGEMENT
PROJECT
MANAGEMENT
 The application of knowledge, skills, tools, and
techniques to project activities to meet the project
requirements.”
A BASIC project management
lifecycle covers four stages:

IV. CLOSURE
I. INITIATION

II. PLANNING III. EXECUTION

 INITIATION

In the initiation phase, you’ll define the project.

You’ll sort out the project goals, scope, and resources of the
project, and what roles are needed on the team. Clarifying
what stakeholders expect out of the project, and what
exactly the project is aiming to achieve (and why) will give
the project and team clear direction.
 PLANNING

In the planning phase, you’ll determine the steps to

actually achieve the project goals—the “how” of
completing a project.
 EXECUTION

Executing a project means putting your plan into action

and keeping the team on track. Generally this means
tracking and measuring progress, managing quality,
mitigating risk, managing the budget, and using data to
inform your decisions.
 CLOSURE

In the closing phase of the project management lifecycle,

you’ll conclude project activities, turn the finished product
or service over to its new owners, and assess the things
that went well and didn’t go so well.
It’ll also be a time to celebrate your hard work.
PROJECT MANAGEMENT

In other words, the purpose of project management is to plan

and manage a project to successfully complete its listed goals
and deliverables. It involves identifying and managing risks,
careful resource management, smart budgeting, and clear
communication across multiple teams and stakeholders.
NEED FOR PROJECT
MANAGEMENT
SIX REASONS WHY YOU SHOULD USE PROJECT
MANAGEMENT:

1. Realistic project planning

2. Clear focus and objectives
3. Strategic alignment
4. Managed process
5. Quality control
6. Reduced costs
2.2
PROJECT
MANAGEMENT
CHARACTERISTICS
PROJECT MANAGEMENT
CHARACTERISTICS

• Construction project management, however, applies to a given project, the various

phases of which usually are accomplished by different organizations.

• Thus, the typical project manager must work extensively with organizations other
than his own.

• In such circumstances, much of his authority is conferred by contractual terms or

power of agency and is therefore less direct than that of the usual business
manager.

• Project management is accomplished largely through the personnel of different

employers working closely together.
2.3
DISCUSSION
VIEWPOINT
PROJECT
MANAGEMENT
CHARACTERISTICS
• As mentioned previously, the responsibility for field construction
management rests with different parties, depending on owner
preference, and the nature of the contracting procedure. Whether the
owner, architect, engineer, general contractor, or a construction
manager performs such duties is very much a matter of context. The
basics of the pertinent management procedure are essentially the same,
however, regardless of the implementing party. Nevertheless, to show
detailed working and examples of such management methods, it is
necessary to present the material from the specific viewpoint of one of
the parties. Thus, where the nature of the discussion requires such
designation, the treatment of management methods herein will be from
the particular viewpoint of the general contractor.
2.4
MANAGEMENT
PROCEDURES
MANAGEMENT
PROCEDURES
• - Field project management starts with the onset of construction, at which point a comprehensive construction
budget and detailed time schedule of operations are prepared. These constitute the accepted cost and time
goals used as a blueprint for the actual construction process.

• -After the project has begun, monitoring systems are established that measure the actual costs and progress of
the work at periodic intervals. The reporting system provides progress information that is measured against the
programmed targets. Comparison of field expense and progress with the established plan quickly detects
exceptions that must receive prompt management attention.

• -The process just described is often called a management-by-exception procedure.

• -When applied to a given project, it emphasizes the prompt and explicit identification of deviations from an
established plan or norm. Reports that highlight exceptions from the standard enable the manager to recognize
quickly those project areas requiring attention.

• - As long as an item of work is progressing in accordance with the plan, no action is needed, but there are
always plenty of problem areas that do require attention.

• - In addition to cost and time, the field management system is necessarily concerned with the management of job
resources and with project financial control. Resources in this context refer to materials, labor, construction
equipment, and subcontractors.
2.5
TIME AND COST
MANAGEMENT
TIME AND COST
MANAGEMENT

• -Project time and cost management are based on time and cost schedules developed for the project and an
information system that will provide data for comparing expected with actual performance.

• -In a sense, all management efforts are directed toward cost control because expedient completion of safe and
high-quality projects represents both construction savings for the contractor and beneficial usage for the owner.

• -Costs and time can quickly get out of hand on construction projects where production conditions are volatile.
Job monitoring must detect such aberrations quickly. Cost and time control information must be timely with little
delay between fieldwork and management review of performance. This timely information gives the project
manager a chance to evaluate alternatives and take corrective action while an opportunity still exists to rectify
problem areas.

• - As long as an item of work is progressing in accordance with the plan, no action is needed, but there are
always plenty of problem areas that do require attention.
2.6
PLANNING AND
SCHEDULING
PLANNING AND
SCHEDULING

• Planning, the first step in the process of construction

• Planning establishes what is to be done and the order in which

it will proceed

• Planning function is accomplished by dividing the project

into many components or time-consuming steps or called
activities and establishing the sequence in which they
will be performed
2.7
CPM
PROCEDURE
CPM PROCEDURE

• The planning and scheduling of construction projects normally

uses a net work-based procedure referred to as the Critical Path
Method (CPM)

• CPM was developed specially to provide an effective and

workable procedure for planning and scheduling construction
operations.
2.8
TIME AND
MONITORING
CONTROL
TIME AND MONITORING
CONTROL

• When field operations begin, the order in which the project

proceeds is in accordance with an approved job plan

• During the construction period, advancement of the work is monitored

by measuring and reporting field progress at regular intervals.
2.9
PROJECT COST
SYSTEM
PROJECT COST
SYSTEM • The project cost system is concerned with the
control of expenses on current projects and
the gathering of production information for
use in estimating the cost of future work.

• It must ensure the correctness and

completeness of the recording of the
monetary transaction with regard to the
actual expenses which are book in the
company’s ledger.
PROJECT COST SYSTEM
PRODUCT
OVERVIEW
It keeps track of the construction project
budget, contracts, and progress payments.
Outputs financial reports and cost projections
automatically generate Account Payable entries.
STANDARD FEATURES

• Budget Data Entry and Versioning

• Contract Management
• Processing of Progress Payment
• Certificates
• Cost Projection
• Financial Reporting

Chapter 10 presents a detailed treatment of a project cost system.

2.10
ESTIMATING THE
PROJECT
ESTIMATING
THE PROJECT
-When the project design has been finalized, a complete and
detailed cost estimate is prepared.

-The contractor uses this estimate for bidding and subsequent

cost-control purposes.

-With cost-plus and construction management contracts, a similar

estimate is compiled, essentially for the owner’s cost-control
purposes during construction.
ESTIMATING
THE PROJECT
Six key areas in estimating the project;
Cost, time, scope, risk, resources, and quality

- Chapter 3 discusses estimating project costs and

preparing the project budget.
2.11
PROJECT COST
ACCOUNTING
 PROJECT COST
ACCOUNTING
-Project cost accounting is the process of obtaining actual
production rates and unit costs from ongoing projects

-This system provides the basic information for project

cost control and for estimating new work.

-Cost accounting, unlike financial accounting, is not conducted entirely in

terms of cost. Cost accounting tells us the expenses of each unit of each
product.
• Provides important insights to project managers
• Allows you to establish a reasonable budget for a project
• Improves resource management
• Helps you gather valuable insights for making bids on future projects
• Provides real-time updates on the project’s progress and profitability
2.12
RESOURCE
MANAGEMENT
RESOURCE MANAGEMENT
Resource – refers to manpower, construction equipment, materials,
and subcontractor.

Resource Management – is a process of planning and

allocating resource required to meet project objectives.
 DUTIES IN CONSTRUCTION
PROJECT MANAGEMENT
Manage Manage
Construction Subcontractor
Materials And Suppliers

1 2 3 4 5

Manage Manage Manage

Construction Construction Plant and
Personnel Labor Machineries
01 Manage Construction Personnel

3 TASKS INVOLVED
1. Establish staff requirement plan

2. Organize staff performance and monitoring process

3. Communicate staff employment terms & welfare provisions to

construction project
02 Manage Construction Materials
6 TASKS INVOLVED
1. Plan material requisition
2. Administer material requisition
3. Administer material delivery and storage
4. Communicate material management monitoring and control procedures
to project team
5. Monitor material storage
6. Materials claim and payment
03 Manage Construction Labor
5 TASKS INVOLVED
1. Plan Labor requirement and requisition
2. Administer labor requisition
3. Monitor and control labor performance communicate labor management
4. Monitoring and control procedures to project team
5. Administer Labor claim and payment
04 Manage Construction
Sub-contractor & Suppliers
5 TASKS INVOLVED
1. Plan sub-contractor appointment

2. Administer sub-contractor appointment

3. Communicate sub-contractor performance monitoring & control

process to project team & subcontractor

4. Monitoring & control subcontractor performance

5. Administer subcontractor claim and payment

05 Manage Construction Plant
and Machineries
6 TASKS INVOLVED
1. Plan plant & machinery requirement
2. Administer plant & machineries requisition
3. Organize Plant & machineries delivery, storage
4. Communicate plant and machinery usage, monitoring and control process to
project team
5. Monitor plant and machinery
6. Plant machinery claims and payment
2.13
PROJECT
FINANCIAL
CONTROL
 FINANCIAL CONTROLS
• Refer to the development of policies and procedures by an organization
to manage its financial resources and operate efficiently.

• It is essential for cash flow management, budgeting, and the

prevention of any fraud or theft

• it enables the business to track and oversee its financial activities to

grow and prosper.

An organization needs to implement a financial controls framework to

manage, document, analyze, and report transactions.
2.14
AUTOMATING
PROJECT
MANAGEMENT
TASK
WHAT IS TASK
AUTOMATION?
•This is essentially the process of using modern technology to eliminate
or minimize human involvement to complete a process or task.

•Hence, enables you to automate your project management.

BENEFITS OF AUTOMATION IN
PROJECT MANAGEMENT

1. Increases productivity
2. Reduces busywork
3. Supports integration
4. Streamlines communication
5. Maintains Quality
2.15
MANUAL
METHOD
MANUAL METHOD
-Also known as the hand method
-Computer applications does not mean that manual method have
no place in the system
-Project manager may rely on Hand Method for limited portion
of the project

-Deals with the manager’s intimate familiarity with the workings of

the procedures
A CONSTRUCTION PROJECT MANAGER IS
RESPONSIBLE FOR:

1.Estimating and negotiating project cost

2.Formulating the construction project
3.Managing construction scheduling and work timetables
4.Managing work orders
5.Determining the project management methods and
strategies
A CONSTRUCTION PROJECT MANAGER IS
RESPONSIBLE FOR:

6. Communicating with the project owner and stakeholders

7. Leading or interfacing with job site workers, teams

and other construction professionals on technical and
contract details.

8. Working with building, construction and regulatory

specialists.
2.16
DISCUSSION
FORMAT
DISCUSSION FORMAT
-In order to provide sense of continuity from one topic to another,
Example Project is used as a continuing basis for the succeeding
series of discussion.

-Two segments of the Example Project are used for illustrative

purposes where a considerable scope of construction activity is
needed to present a given management application
2.17
EXAMPLE
PROJECT
Several project management actions are
presented subsequently using segments of
the Example Project as the basis for
discussion.

Each major management responsibility is the

subject of a different chapter. The changes,
modifications, revisions, and corrections that
are discussed in any one chapter are limited
to that chapter and do not carry forward to
the next.
EXAMPLE PROJECT
EARTH DAM
EXAMPLE PROJECT
JOB MOBILIZATION

“Mobilization” Refers to the tasks that are precursors to doing the actual
building.
EXAMPLE PROJECT
6 SUBPROJECTS/SEGMENTS OF THE EXAMPLE
PROJECT (EARTH DAM)

1. River Diversion 4. Emergency Spill way

2. Borrow development 5. New highways bridge
3. Haul roads 6. Relocate pipeline
River Diversion Borrow Development Haul Roads

After the river diversion, borrow development, and haul roads have
been accomplished, construction of the dam itself can proceed.
 - While this preparatory work and the dam are under way, other segments
of the Example Project can progress simultaneously.
A concrete emergency
spillway is to be built at a A new bridge must be built
location removed from the where an adjoining
main dam itself. highway crosses a reservoir
inlet
The new reservoir area
necessitates the relocation of
five miles of existing natural gas
pipeline
- The closure and removal of the river diversion will be the final
major construction operation.

Diversion Closure