A brief introduction and overview of construction management and its application. A guidance for civil engineers teachers and students. To get these slides please visit http://www.xubitech.com/

1. CONSTRUCTION
MANAGEMENT
Overview and Concepts

2. 2
Course Name Construction Management
Instructor Dr. Nadeem Ehsan
Ph.D. University of Michigan, Ann Arbor, USA
Semester Spring, 2016
Credit Hours Three (03)
Email m4nadeem@yahoo.com

3. 3
• Dr. Nadeem Ehsan is a civil engineer from Military College of
Engineering, Risalpur. He has done his M.Sc. in Construction
Engineering and Management from University of Michigan, Ann Arbor,
USA. He has also done M.Sc. in Materials from University of Michigan,
Ann Arbor, Michigan, USA. He has done his Ph.D. in Project
Management from University of Michigan, Ann Arbor, Michigan, USA.
• Dr. Nadeem Ehsan has vast experience of Project Management
assignments at National and International level. He has worked as
Project Director for NASA on a project for “Intelligent Unmanned Aerial
Vehicle for Bio Sphere Monitoring”, from 1989 to 1992. He has also
worked in University of Michigan Transportation Institute (UMTRI)
from 1989 to 1993 on research for the evaluation of damage caused by
the trucks and other heavy vehicles on roads. He is a leading figure in
the field of Project Management and has been teaching Project
Management courses at CASE. In recognition to his services at various
National Level Projects, he received Presidential Pride of Performance
award in 2003. He has also been awarded Sitara-i-Imtiaz in 2008.
Instructor’s Profile

4. 4
Reference Books
1. Construction Management Principles and Practice
By Alan Griffith and Paul Watson
2.Managing the Construction Process; Estimating, Scheduling and
Project Control 4th Edition.
By Frederick E. Gould
Teaching Assistant : Muhammad Zubair
E-mail: zubair674@yahoo.com
Yahoo Group const-mgmt-sp16@yahoo.com

5. 5
Course Schedule
The course consists of 16 Week Schedule out of which there
will be One Week for Mid Term examination and One
Week for Final Examination.

6. 6
Course Contents
Week Concepts
1 Course Introduction
2 Corporate and Project Management
3 Effective and Efficient Site Management
4 Planning and Programmes
5 Operation, Cost Planning and Monitoring Expenditure
6 Plant and Materials
7 Risk Management
8 Mid Term
9 Quality Assurance
10 Health and Safety
11 Environment
12 Procurement Rules
13 Case Study - Exercise
14 Post-Contract Review
15 Project Presentations
16 Final Paper

7. 7
• Construction industry in Pakistan is among the largest
industries from the perspective of spending.
• In the past, the industry has been progressing haphazardly in
Pakistan, without proper direction and maintaining any useful
statistics.
• There are many civil engineers in the country, but they mostly
lack any formal or judicious academic background in the
construction management field. Therefore, we, at CASE, have
decided to fill this deficiency and educate people in the science
of construction management.
• The aim is to provide trained professionals to the industry who
can regulate the procedures on the basis of new technology and
new direction.
• It is also aimed at providing adequately trained professionals in
the public sector who can tend to mega projects using public
money.
Brief Description of the Course

8. 8
Grade Distribution
Mid Term Exam 20%
Final Exam 30%
Homework/Assignments 15%
Quiz 10%
Group Project 25%
Total 100%

9. 9
Class Participation (On Campus Students Only)
•Asking questions and discussion of course material will be
encouraged.
Project Instructions (DLs Only)
•DLs must actively partake in completion of final projects and
assignments to get good grades.
Assignments
•Submitted work for this course must be original. Individual
homework means individual effort.
•Timely submission of Homework /Assignments is
mandatory and if not turned in when due, the student will be
graded negatively.
•DL students must email the assignments to TA on the due
date.
Instructions for students

10. 10
Quiz Policy
•There will be surprise quizzes.
Final and Midterm Papers
•Students must pay full attention to lectures, assignments and
recommended material/books to perform well in exam.
Assembly
•The students should be in classroom five minutes before schedule time
so that he/ she participates in the lesson from the very beginning
Attendance
•100 % attendance is desirable.
Code of conduct
•The students must comply with the professional ethics
Misc
•All classes are Smoke and Mobile Free.
Instructions for students

11. What is Construction?
• Application of art and science
• Inherently dangerous
• Organized chaos
• Mankind using creativity, knowledge, strength,
determination, and persistence to control his
environment
11

12. Construction differs from manufacturing:
• Not performed in controlled conditions,
therefore highly impacted by weather and
other environmental conditions
• Seasonality
• Each project is unique
• Remotes sites with various access problems
12

13. Construction differs from manufacturing:
• Process is not as predictable
• Difficulty in applying automation
• High potential for encountering unforeseen
conditions
• Costs can vary according to conditions
13

14. Construction differs from manufacturing:
• Difficult to manage and supply utilities and
other resources.
• Technical innovations are adopted slower.
• Success is dependent upon the quality of its
people.
• Very custom-oriented
• Product can be of mind-boggling size, cost, and
complexity
14

15. Construction Sector
• Construction sector, the world over, is
considered to be a basic industry on which the
development of the country depends to a great
extent, the growth of a country and its
development status, is generally determined by
the quality of its construction companies and
their capability.
• Construction as an industry is 6% -9% of
the gross domestic product (GDP) of developed
countries.
15

16. Construction Sector
• Global construction sector to expand in real
terms by an annual average of 3.2% within our
forecast period of 2015-2020 to a nominal value
of more than USD6.0tn, with Asia cementing its
position as the world's largest construction
market.
16

17. Global Construction Industry Forecast
Share of spending by region: 2015-20

18. Global Construction Industry Forecast
Top 10 Largest Economies (Trillion $): 2010-50

19. Pakistan Construction Sector
• Pakistan’s construction industry has been expanding
significantly on back of rising infrastructure activities,
increasing demand from housing sector, and construction
recovery. The outlook is positive for 2016 ahead of
Chinese $46billion investment on infrastructure, an
expected cut in interest rate, and falling oil, coal and
electricity prices.
• The central bank in its recently issued annual report on the
state of economy said the construction industry grew by
9.3% in the fiscal year 2014-15 against the set target of
5.7%.
19

20. Pakistan Construction Sector
• GDP contribution only 2.4% as compared to
Employment contribution 6.1%- Low productivity.
• Provides linkage to 40 building material industries.
• It provides jobs to about 6.1 per cent of the total
employed labor force or to 2.43 million persons.
• Per capita consumption of cement in Pakistan is one of
the lowest among the developing countries i.e. 72 kgs
as compared to 603 Kgs in Japan, 600 Kgs in Thailand,
450 Kgs in China, 261Kg in USA and 99 kgs in India.
20

21. – Existing house stock: 19.30 Million
•39 % Kucha houses
•40 per cent semi-Pucca houses.
•21 per cent Pucca houses
– 6.5 Million houses backlog.
– 25,000 houses for public servants in five years.
– Annual Requirement 650,000 Houses
– Annual Production /Supply: 350,000
– Annual short fall: 300,000
– Workers Welfare Fund was established for providing
low cost housing
Housing Sector

22. – The current road network in the country is about
263,415 kms
– NHA road network is around 12,131 kms, 33
highways and strategic roads.
– 79 projects of 12,131 kms are ongoing at a cost Rs.557
billion.
– Annual growth rate of 7.0 per cent for passenger
traffic and 6.0 per cent for freight traffic
– Karachi Circular Railway comprising of 50 kms track
approved at PKR 247 Bn
– Pakistan Railway has started three trains from Lahore
to Karachi on public private partnership
Transport Sector

23. Aviation Sector
• Benazir Bhutto International Airport (BBIA) in
Islamabad spread over 3,200-acre
• Passenger handling capacity of 9mn in 2014 expected
to increase to 15mn passengers by 2019 and 25mn
passengers by 2024
• The airport, which will be Pakistan's first Greenfield
airport, entails an investment of more than PKR 80bn
• The 1,800km pipeline project Turkmenistan-
Afghanistan-Pakistan-India (TAPI) is estimated to
cost US$7.6bn, with the supply of gas through the
pipeline to fulfill the increasing energy demand in
India and Pakistan

24. Future demand of Construction industry
• Construction demand is increasing due to:
– Increased Government Spending on Infrastructure
Development for
– Housing Sector
– Improvement of Water Resources
– Development of Roads Network
– Development of Ports
– Development in Aviation
– Increased World Bank and Asian Development Bank
Loans for Infrastructure Development
According to an estimate, $57.85 Billion will be spent on
infrastructure development and construction in Pakistan in
the next five years 24

25. • Coordination
• Planning & Scheduling
• Purchasing & Expediting
• Supervision
• Cost Control
• Documentation and Reporting
Construction Management Functions
25

26. • Quality Control/Quality Assurance
• Estimating
• Safety and Risk Management
• Contract Administration
• Claims Analysis/Avoidance
Construction Management Functions
26

27. Construction Engineering Functions
• Preparation and Review of Shop Drawings
• Constructability & Sequencing Studies
• Value Engineering
• Erection Diagrams and Procedures
• Survey & Layout
27

28. Executive Functions
• Corporate Management
• Strategic Planning
• Marketing & Business Development
• Public Relations
• Labor Relations
• Ultimately responsible for quality, safety,
production, and general financial health.
28

29. THE CONSTRUCTION INDUSTRY
• Construction Industry
Divisions
– Residential Construction
– Building Construction
(Institutional & Commercial)
– Heavy Construction
– Industrial Construction
FIGURE . Distribution of U.S. new construction
volume. (Source: Bureau of the Census)

30. Residential Construction
• Types
– Single family houses
– Multi family dwellings
– High-rise apartments
• 30-35 % of the industry
• Low capital and
technology requirements
30

31. • 35-40 % of construction
market
• Larger and more
complex than residential
• Various owners (mostly
private)
• Designed by architects
and engineers
Building Construction
31

32. • Institutional and
Commercial Construction
– Schools and Universities
– Hospitals
– Recreational facilities
– Shopping centers
– Warehouses and light
manufacturing
– Office buildings (single
story to sky scrappers)
– Hotels, convention
centers, and theaters
Building Construction
32

33. • Horizontal Construction
• 20-25% of the construction industry
• Mostly public financing or large
consortium
• Mass quantities of basic materials:
earth, rock, steel, timber, and
concrete
• Constructors need knowledge of
engineering and geology
• Engineers and builders are often
specialized
• Contracts awarded through
competitive bidding
Heavy Construction
33

34. • Highway & Bridges
• Railroads & Urban
Transit Systems
• Tunnels and Dams
• Airports
• Canals
• Port & harbor structures
• Pipelines
• Water treatment &
distribution systems
• Power & communication
networks
Heavy Construction
34

35. • Very large scale projects
• High degree of
technological complexity
• Designed and built by the
largest firms with the
highest level of technical
sophistication
• Represent 5-10% of the
market
Industrial Construction
35

36. • Complex mechanical systems, process piping, and
instrumentation
• Civil, but also mechanical, chemical, and electrical
engineering disciplines involved
• Mostly private ownership
• Negotiated contracts are typical
• “Turnkey” contract arrangements are common
• Design-constructor must be intimately familiar
with the technology and operations of the facility36
Industrial Construction

37. •Petroleum refineries
•Steel mills & aluminum
plants
•Chemical processing
plants
•Fossil fuel & nuclear
power plants
•Other heavy
manufacturing facilities 37
Industrial Construction

38. Participants in the Construction Process
1. Owner
• Private or public
• Conceives the construction project
• Increasing level of sophistication
38

39. 2. Designer
• Architects
• Size of firms ranging form single
practitioner to large integrated firms
• Mostly building and residential
construction
• Engineers
• Civil, mechanical, structural, electrical,
chemical, environmental, geotechnical, and
multidiscipline 39
Participants in the Construction Process

40. 3. General Contractor
• General contractor also called “Prime”
contractor
• Specialty contractors working as
subcontractors
• Organization ranges from small, one-person
company to large, integrated A/E/C firms
• Part of a design-build team
40
Participants in the Construction Process

41. 4. Construction Manager
 Two principle divisions of CM
• CM for Fee (management services only)
• CM At Risk
– Operates similarly to a GC or DB with no
labor or capital equipment
• Can encompass the management of the design
process as well as construction
• CM services including inspection and overall
project or program management
41
Participants in the Construction Process

42. 5. Suppliers
 Manufactures, distributors, research, promotions
 Materials and equipment sales
 Equipment Rental
6. Fabricators
 Structural steel, pre-castors, wood products
6. Labor/Trade Unions
42
Participants in the Construction Process

43. 8. Government
 Federal, local, and quasi-government
 Owner/client
 Non-ownership functions
 Taxation and regulation
 Local: County/City/Township Building
Officials, Planning Boards, and Zoning
Commissions
 Quasi-government agencies: development
authorities
43
Participants in the Construction Process

44. 9. Utility Companies
 Electric, communications, water, gas,
sanitary sewer
 Private petroleum pipelines
 Owner or service provider
 Integral part of the process
 Existing facilities in conflict with new
construction
 Interruption of service can be very costly
44
Participants in the Construction Process

45. 10. Industry Associations
 Organizations of construction
contractors
 Organizations of the design and
management professions
 Construction material and equipment
suppliers and product research
 Construction labor organizations
 Coordination and arbitration
 Inspection, specifications, and costs 45
Participants in the Construction Process

46. 11. Professional Services
 Business/management consultants
 Legal council
 CPA firms
 Surety Companies
 Financial Institutions/Lenders
 Insurance agents
46
Participants in the Construction Process

47. 12. Adjacent Owners and the Public At-Large
 Existing businesses, institutions, and
residences adjacent to the constructed facility
 Civic organizations and community groups
 Railroads and public lands
47
Participants in the Construction Process

48. Issues and Problems
• Incorrect Project Estimates
– Not based on prevailing market rates.
– Current data about input prices not available.
– Non Responsive bids.
– Incorrect estimates leads to releases of funds.
– Lack of qualified quantity surveyors.
– Estimates are based on preliminary designs and at
detailed design stage, many parameters change.
– Estimates are tended to be on lower side.
48

49. Issues and Problems
• Financial Issues
– Lack of financial facilities restrict growth of
construction industry.
– Disbursement and payments procedures
cumbersome and lengthy, lead to delays.
– Cost of doing business is high.
– Payment procedures hamper progress.
49

50. • Management Deficiencies and Capacity Building
– Some Contractors and Consultants lack
professional management
– Inadequate Research and Development.
– Lack of capacity in the project managers.
– Inadequate capacity of contractors to ensure
value addition in construction sector.
– Limited use of IT in Construction Industry 50
Issues and Problems

51. • Trade Policy and Regulatory Framework
– Import policy regarding construction equipment
is not rationalized.
– Trade Policy does not facilitate constructors.
– Regulatory Framework discourages international
contractors / consultants.
– Audit should play a positive role.
51
Issues and Problems

52. • Unprecedented Increase in Construction Material Cost
– Price variation due to Govt. policies.
– No insurance cover provided
– Rapid escalation and instability of market prices is
causing serious problems in managing cash flows.
– Lack of data on materials availability affects project
planning and execution.
– Government controlling agencies are not in a position to
control cartels and monopolies.
– Shortage of major construction materials---Bitumen, steel
etc.
52
Issues and Problems

53. • Size of Projects and Quantum of work
– Current practice in some sectors of splitting major
projects into a number of smaller projects
discourages foreign investors / contractors.
53
Issues and Problems

54. • Human Resource and Management
– Shortage of qualified and skilled manpower at all
levels.
– Lack of vocational training facilities for the
development
of required human resources.
– Quality of human resources available with clients,
contractors and consultants needs improvement.
54
Issues and Problems

55. • Escalation of Material Costs
– Prevailing bidding documents do not cater for due
escalation.
– Statistical bulletin---Not reflective of real market
rates.
– All major material inputs should be covered in
permissible escalation.
55
Issues and Problems

56. • Integrated Construction Contract and Project Design
– Deficient and non-comprehensive
– Liable to abrupt changes which adversely affect cash flow,
budget and time frame.
56
Issues and Problems

57. Project Life Cycle
57

58. Life Cycle of a Constructed Facility
1. Concept and Feasibility
2. Engineering and Design
3. Procurement
4. Construction
5. Startup and Implementation
6. Operation or Utilization
58

59. That’s End ……
59