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Ministry of Transport URRAP-Training of Trainers for Contractors and Coordinators Project Management and Planning DAY 1- Friday August 02, 2013. Outline. Introduction Overview of the Construction Industry Project Management Framework. Outline. The Role of Effective Project Manager

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Ministry of Transport

URRAP-Training of Trainers for Contractors and Coordinators

Project Management and Planning

DAY 1- Friday August 02, 2013


  • Introduction

  • Overview of the Construction Industry

  • Project Management Framework


  • The Role of Effective Project Manager

  • Leadership and Human Resource Management


  • Contemporary themes of Construction planning

    • Scheduling

    • Resourcing

    • Monitoring and Control

    • Cash flow forecast and Control


  • The prevailing facts of the road sector

    • Cost overrun

    • Time overrun

    • Quality reduction


  • Considerable shortcomings are related with failure of the contractor’s performance in all over project management

    (Abd. Majid and McCaffer, 1998, Frimpong et al. 2003, Assaf and Al-Hejji., 2006).


  • Inefficiencies and ineffectiveness are part in day today activity in the construction sites

    • weak site organization;

    • Improper construction method;

    • Work discontinuity;

    • Rework: 10-15% contract value;

    • Improper resource allocation( Human, material, equipment) and under-utilization;

    • Poor cash flow: not to utilize advances properly, not to raise sufficient payment;

    • Attitude: not being self-contained…in identifying material sources, inaccurate setting outs, incomplete approval requests, resistance for changes…etc.

Overview of the construction industry1
Overview of the Construction Industry

  • High work demand in the market… 100s of thousands Kms

  • Less fragmented ( Specialized firms are growing so slowly)

  • Loose coupling between the industry and the supply chain

  • developing financial market

  • Relay on importation

Overview of the construction industry2
Overview of the Construction Industry

  • The Public sector is the major Client

  • Traditional procurement approach is predominant

  • Limited administration capability in most of the organizations, both private and public

  • Less focus on Research & Development

Overview of the construction industry3
Overview of the Construction Industry

  • Local Contractors and Consultants are taking the major share of the construction market

  • Limited financial and technical capability

  • Less focus on quality delivery

  • Less focus on organizational learning

What is a project
What is a project ?

A project is a temporary endeavour undertaken to create a unique product, service, or result.

(Source: Source: Project Management Institute ,PMIBoK)

What is project management
What is Project Management ?

Project management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements.

(Source: Source: Project Management Institute ,PMIBoK)

And emphasise on people
.... and emphasise on people !

“Projects do not succeed just by assiduous adherence to a mechanistic process”

(BS 6079 Part 1: Guide to project management)

Triple constraints of projects
Triple Constraints of Projects

Project Management





Project Management

What happens if the plan

was based on the wrong




Another view of the triple constraints
Another View of the Triple Constraints







Why do we have projects
Why do we have projects ?

  • Profitability

  • Market share

  • Competitive advantage

Business Goals





Projects take up investment
Projects Take up Investment

  • The Firm: An organization that bring together different factors of production such as labor, land and capital to produce a product or services which it hoped can be sold for a profit


    Entrepreneurs: Profits are a rewards of the Entrepreneurs to take risks

    Managers : hire ,fire , organize the business


Projects take up investment1
Projects Take up Investment

  • Normal profit : minimum level of reward to keep/attract the entrepreneur in the particular economic activity

    Profit = total revenues- total cost

  • Economic profit : considers alternative use of all resources

    Economic profit= total revenues – total opportunity cost of all inputs used

    Economic cost= explicit cost and implicit cost

Projects take up investment2
Projects take up investment

  • Opportunity cost of Capital : concerns the rate of return on the capital as all other business of similar risk are willing to pay

    Degree of risk and difficulty involved

  • Opportunity cost of Labor: concerns rate of return on the opportunity cost of time of doing similar job

  • Opportunity cost of land: concerns the rate of return on the capital as all other business of similar risk are willing to pay

Projects take up investment3
Projects Take up Investment

Returnon Investment





Goal = Finish As Soon As Possible

Goal of the firm: Profit maximization is a target

Project management framework
Project Management Framework

Project Procurement Management

Project Integration Management

Project Time Management

Project Scope Management

Project Risk Management

Project Communication Management

Project Cost Management

Project Human Resource Management

Project Quality Management

Project scope management
ProjectScope Management

Processes required to ensure that the project included all the work required and only the work required to complete the project

Project manager
Project Manager

Is the single integrative point of responsibility for the project

T he role of project manager
The Role of Project Manager

The planning and coordination of a project from inception to completion on behalf of a client, to deliver the client's objectives in terms of Function, Time and Cost

Project manager s responsibilities
Project Manager’s Responsibilities

  • Liaison with the client/sponsor

  • Develop and maintain project plans

  • Team leadership/Teambuilding ability

  • Cost effective work progress control

  • Cost control

  • Planning and technical decision making

  • Quality and safety management

  • Business and administrative aspects

Higher order objectives
Higher Order Objectives

  • Complete all projects efficiently & profitably

  • Balance long & short term priorities

  • Supply & allocate resources

  • Integrate multiple projects with other activities

Managing clients
Managing Clients

  • Agree project objectives – deliverables

  • Initial start up meeting

  • Interim reporting & reviews

  • Problem resolution

  • Manage the relationship

  • Under promise & over deliver

  • Always negotiate

Establish client s objectives priorities
Establish Client's objectives + priorities

  • Business aims

  • Project aims + scope

  • Priorities - quality, time, cost

  • Timescales

  • Understand uncertainty + risks

Design an organisation structure
Design an Organisation Structure

  • participants

  • relationships

  • decision points, key + operational reporting

  • integrating + coordinating

Common forms of structure
Common forms of structure

  • Functional

  • Product based

  • Geographical

  • Divisionalised

  • Matrix

Selection appointment of project team
Selection + appointment of project team

  • Scope + terms of reference

  • Selection criteria

  • PM's own appointment

  • Appointment agreements

  • Procurement route

Develop brief for project team
Develop brief for project team

  • translate client's objectives

  • state in terms of needs + outcomes

  • alternatives + evaluation

  • clarity + communication

Uncomfortable facts
Uncomfortable Facts

  • Left alone people will tend toward;

    • First come – first served

    • Enjoyable / familiar tasks first

    • Easy rather than difficult tasks

    • Simple vs complex tasks

    • Gain easy wins –short term rewards

    • Not favour releasing key resources / people

    • Provide the answer you want to hear

Establish information and communication structure
Establish Information and Communication Structure

  • Measurement of data + presentation

  • Communication channels

  • Meetings

  • Reporting mechanism

Facilitate the decision making
Facilitate the Decision Making

  • What?

  • By whom?

  • When?

  • At what Cost?

Question in groups
Question – in groups

Reference the distirbuted ‘direction finder’, how would you apportion your time (%) on a project?

P o l c model

Setting standards and assessing success in achieving objectives

Establishing objectives & planning work





Influencing and motivating team members in doing the work

Organising people, materials and scheduling

Leadership involves

Leadership involves:

  • Challenging the status quo

  • Inspiring a shared vision

  • Empowering others to act

  • Modelling the way

  • Motivating others



  • Working conditions

  • Interpersonal relations

  • Job Security

  • Salary

  • Status

  • Policy


  • Recognition

  • Responsibility

  • Achievement

  • Advancement

  • Work itself

  • Growth

Empowered Individuals:

  • Take risks

  • Gain knowledge, and

  • Develop new skills

Leadership – The 4 Basic Building Blocks




Goal setting


  • Involves the transfer of information and understanding

    • Are you really communicating when you talk?

    • How can you be sure?

  • Communication breaks down due to:

    • Biases and assumptions

      • Biases predetermine reality of how things or people are

      • Assumptions are about why people do things

    • The language used

    • Status

    • Not really listening


Overcoming Communication Barriers

  • Takes time

  • Involves conscious effort

  • Requires a structure


  • Could include:

    • memos

    • minutes

    • circulars

    • notices

    • meetings

Why do we have meetings
Why do we have meetings?

  • Exchange Information

  • Discussion on important issues

  • Make Decision

  • Team Building

  • … Management

Planning meetings
Planning Meetings:

Conducting a meeting without a plan is much like trying to build a house without a plan. It can be done but is likely to take much longer and have many more problems

Planning meetings1
Planning Meetings:

  • Determine the objective:

  • - Why do I want to hold this meeting?

  • - What do I want to achieve?

  • - Is it necessary?

Planning meetings2
Planning Meetings:

2 Determine who should participate:

3 Prepare the Agenda:

. Venue

. Date

. Start and Finish Times

. Agenda Items - What, Who, Timing


  • Advantages:

  • Builds trust

  • More people can do more things

  • Staff are more involved and committed

  • Staff grow and develop

  • Skills and knowledge of staff are used more fully

  • Individual performance can be measured

  • Opportunity for recognition

  • The manager has time for managing


  • Barriers:

  • I don’t have time

  • I don’t know how

  • I don’t know to whom I should delegate

  • It’s easier to do it myself

  • I don’t want to lose control

  • My staff lack experience and competence

  • My team members resist responsibility

  • My staff are not smart enough

  • My staff cannot be trusted to work on their own

Delegation Principles

  • Delegate the whole task to one person

  • Select the right person

  • Specify the required result

  • Delegate the responsibility and authority

  • Check for understanding

  • Set a date to review progress

  • Maintain open lines of communication

  • Don’t take the project back

  • Evaluate and recognise good performance

Benefits of Effective Work Assignment

For the Individual:

  • Has a clear understanding of what is required in doing the work

  • Is motivated and has ownership of the work

  • Is able to measure and adjust achievement towards the goal

Benefits of Effective Work Assignment

For the Manager:

  • Management is more effective due to a disciplined process of assignment

  • Fewer performance problems

  • A better base of coaching/help staff

  • A better base of monitoring staff performance

The process:

Work Assignment

Step 1 Explain the purpose and relevance… (Why)

Step 2 Explore the current situation

Step 3 Define the work [Description, Scope, Means]

Step 4 Specify authority and responsibility

Step 5 Ensure system and personal capability

Step 6 Agree performance management of the work

Don’t forget to check for understanding and agreement!


Performance Management

  • Performance Measures

  • What is being measured – outputs, outcomes or a mix

  • Performance Standards

  • Apply to a role or a process eg ‘response within 1 week’

  • Performance Monitoring

  • How and how often will information on performance be collected and reviewed

  • What reporting is required

Work Assessment - Feedback

  • The process of providing staff with information with respect to their actual performance

  • Should be used to not only get staff member back on track but to confirm that they are on the right track.

7 Reasons for giving feedback

  • Correction and consolidation

  • System improvements

  • Coaching

  • Learning and Development

  • Recognition and reward

  • Discipline

  • Evaluation

  • Be specific

  • Be honest

  • Stick to the facts

  • Maintain self-esteem

  • Listen and respond with empathy

  • Separate the problem from the person

  • Involve the employee

Elements of effective feedback

Critical, Complex and Difficult:


Because it provides staff with information with which they can evaluate and modify their performance

You have to be the task expert managing the technical aspects and, at the same time, manage a difficult person-to-person interaction

Main stages of a construction project
Main stages of a construction project

  • Inception

  • Feasibility

  • Design

  • Preconstruction

  • Construction

  • Commissioning and occupation

The project ‘moodograph’

Scale of enthusiasm


New Project

Project Timescale

Contemporary themes of planning
Contemporary Themes of Planning

Construction is Complex system

  • Uncertainty

  • Interdependency of operations

    • Sequencing of activities

    • Resource

  • Construction a Chaotic system:

    • dynamic

    • non uniform environment

  • Contemporary themes of planning1
    Contemporary Themes of Planning

    • It demands frame work

      • To structuring and managing the complexity of a project

      • To coordinates activities

      • To control the interfaces and delivery

      • To control effective use of resources

    Contemporary themes of planning2
    Contemporary Themes of Planning

    ‘If you fail to plan, then plan to fail’

    Contemporary themes of planning3
    Contemporary Themes of Planning

    Planning in management concept

    • Assists Objective setting and monitoring progresses

    • Avoidance of Sub-optimization

    • Facilitating communication and collaboration

    Contemporary themes of planning4
    Contemporary Themes of Planning

    Planning in Construction

    • Assists PM setting guide line for project

    • Execution, coordination

    • Forecast uncertainties

    • Identify constraints

    • Monitoring progress

    Effective planning contributes
    Effective Planning Contributes...

    • a disciplined approach

    • a crucial communication aid

    • identification of project risks

    • preparation of risk mitigation measures

    • formulation of contingency plans

    • fundamental project progress monitoring

    • anticipation of project delivery issues

    • evaluation of remedial options

    • confirmation of achievements

    Planning in construction
    Planning in Construction

    • A multi-staged process performed by different people at different stages for various purpose

    Planning view
    Planning View









    Preconditions and stability
    Preconditions and stability









    External Conditions

    Safe environment

    Planning encompasses
    Planning Encompasses...

    • schedule management

      • recording planned activities and dependencies

      • testing plan logic

      • highlighting critical activities

      • recording activity progress

    • achievement projections

    • resource management

    • costs management

    • exploring what-if scenarios

    S m a r t goals
    S.M.A.R.T. goals

    • develop a series of goals to define a logical sequence of achievements that, cumulatively, build towards successfully delivering the required project outcomes

    • goals should be SMART…

      • Specific

      • Measurable

      • Agreed

      • Realistic

      • Time-based

    • include these goals in the project plan as milestones

    Preparation of plan
    Preparation of Plan

    • Major Steps required to develop a schedule

      • Establish work breakdown structure (WBS)

      • Sequencing of activities by analysing their interrelations / interdependencies

      • Allocation of resources to activities

      • deciding time required for each activity

      • developing the overall time schedule of the project

        NB: The above are not a onetime done activity, need iterative process till optimal solution is obtained.

    Preparation of plan1
    Preparation of Plan

    • Resources planning:

      • Determining the labour requirement

      • Determining the material requirement

      • Determining the number of equipment required

      • Determining the cash requirement

      • Schedule the ordering of material, equipment, recruitment of labour and cash requirement together with the provision of lead-time for all.

    Preparation of plans major components
    Preparation of Plans ….Major components

    • Work method selection

    • Scheduling

      • Critical Path Method

      • Critical Chain Method

      • Location based/Repetitive Scheduling

      • The Last planner concept

        C) Cash flow forecast

    Preparation of plans
    Preparation of Plans

    • Work Method Selection

      • Analyzing the project scope: including quality assurance requirements against the time and cost implication

      • Understanding the whole process: mapping the process and pin point the required information

      • Reviewing the construction technique that goes with the company ability and the work demand

      • Defining the natural work flow within the sub-sequent work units

    Preparation of plans1
    Preparation of Plans

    • The Method Selection needs to provide Efficiency and Effectiveness, i.e.:-

      • Economical: too much focus on least expensive activity may adversely affect productivity and quality of works

      • Site specific

      • Safe

      • Reasonably considered social and environment issues

    Preparation of plans2
    Preparation of Plans

    • The Selected Method : address issues like:

      • The What? …. The activities

      • The Where?..... The location

      • The When? …. The duration

      • The How?...... The Construction Technique

        Typically done either simultaneously or in a series of iterations.

    Preparation of plan2
    Preparation of Plan

    • Scheduling Techniques:

      • Tools for construction planning and control

      • Used to estimate of overall duration

      • Basis for resources allocation & cost estimation

      • Control timing of activities thereby ensuring the timely completion of project

    • Principal scheduling techniques

      • Bar chart

      • Network Methods

      • Time-space diagram

    Preparation of plan3
    Preparation of Plan

    • Bar chart

      • Easiest to understand

      • Most commonly used

      • List of activities shown as “bar” plotted against time scale (start, duration, Finish)

    Preparation of plan4
    Preparation of Plan

    • Advantages of bar charts

      • Very simple presentation, easily understood

      • Good form of communication to non-technical personnel

      • Requires little training to use

      • Suitable to be used for planning time-phased resources (labor, material, equipment, budget)

    Preparation of plan5
    Preparation of Plan

    • Disadvantage of bar charts

      • Can not show interdependencies among the various activities

      • Critical activities that need attention and floats for non‑critical activities are not shown (complex projects).

      • Change in schedule requires redrawing of the chart.

    • Despite its disadvantages the bar chart is the most commonly used tool for planning and control

    Preparation of plan6
    Preparation of Plan

    • Network method

      • Suitable for large complex projects having many interdependent activities

    • Two commonly used network methods are

      • Arrow‑diagram

      • Precedence‑diagram

    • Main difference

      • Arrow diagram represents activities on arrows and the node represents the event at a time

      • Precedence diagram shows activities on nodes and the logical sequence of activities with arrows

    Construction planning cont
    Construction Planning(Cont.)

    ACT. 2








    Act. 4


    Act. 5


    Act. 1


    Act. 2


    Act. 3


    SS 2 weeks


    Preparation of plan7
    Preparation of Plan

    • Steps in developing a network diagram

      • Listing all project activities using WBS

      • Prepare an arrow‑diagram following the logical sequence of activities

      • Estimate activity duration

      • Calculate the time for events and determine floats and critical‑path (time analysis using forward and backward pass)

    Critical path method scheduling concept
    Critical Path Method: Scheduling concept

    • Predecessor

      • controls the start or finish of another activity

    • Successor

      • depends on the start or finish of another activity

    Activity relationships





    Activity relationships

    Finish to Start (FS)

    when A finishes then B can start

    (this is the default relationship type)

    Activity relationships1






    Start to Start (SS)

    when A starts then B can start

    Activity relationships2






    Finish to Finish (FF)

    when A finishes then B can finish

    Activity relationships3






    Start to Finish (SF)

    B cannot complete until A starts

    Activity relationships4






    Finish to Start with Lag/lead


    Should be carefuly reveiewed inorder to avoid miss use / overlaps

    It may bes better to deffine the activity itself inorder to avoid confusion

    And better control…specially for people who are not familiar with

    The hidden structure Concerete cure time

    Activity relationships5






    Start to Start with Lag/lead

    Excavation and pipe laying


    Scheduling concept
    Scheduling concept

    Forward Pass

    • calculates the early dates for each activity

    • early dates are the earliest times an activity can start and finish once its predecessors have been completed

    • the calculation begins with the activities without predecessors

      (Early Start + Duration) - 1 = Early Finish







    Scheduling concept1
    Scheduling concept

    Backward Pass

    • calculates the late dates for each activity

    • late dates are the latest times an activity can start and finish without delaying the end date of the project

    • the calculation begins with the activities without successors

      (Late Finish – Duration) + 1 = Late Start







    Float definitions
    Float- definitions

    Float generally is the amount of time an activity can slip from its early start without delaying the project

    • Total float: Time available before being critical

      • Late Dates - Early Dates = Total Float

    • Free float: Time delay without delaying subsequent activities

    • Independent float: Time delay without impact on preceding or succeeding activities

    • Activities with zero total float are critical

    Critical Path




    Preparation of plan9
    Preparation of Plan

    • Advantages of network methods

      • shows the logical interdependencies among activities and the effects of their changes on one another

      • shows critical activities and floats for non‑critical activities

      • estimates project duration more accurately by splitting the project into smaller activities (work contents)

      • doesn't require redrawing for changes

      • Resources levelling can be done by shifting around non‑critical activities

    Preparation of plan10
    Preparation of Plan

    • Disadvantages of network methods

      • Requires proper skill & training

      • Difficult for supervisors on site to easily understand and get necessary information. This normally leads to the use of network based bar charts on construction sites.

    Preparation of plan11
    Preparation of Plan

    • Time space diagram

      • Suitable for linear construction projects like highways, cannels, tunnels, sewer lines

    Preparation of plan12
    Preparation of Plan

    • Advantages of the method

      • Easily understood by all levels

      • Good means of communicating information to non-technically trained personnel

      • Varying performances can be clearly seen from the diagram i.e. change in slope

      • Location of the work along the project length can easily be seen at any given time

    Preparation of plan13
    Preparation of Plan

    • Disadvantages of the method

      • Interdependencies among activities are not shown

      • Critical and non-critical activities are not shown

      • Its use is limited to linear construction projects

    Plan information diffusion
    Plan Information Diffusion

    • Plans have to be communicated clearly and ‘no doubt should be left as to what is to be done and when’.

    • A well informed employee is committed to the plan which facilitates the monitoring and controlling process.

    • Clear information also increases commitment of subcontractors.

    Cost flow forecasting
    Cost Flow Forecasting

    • Cash is a life-blood of any business

    • Cash inflow is not an income: money entering -money leaving the firm

    • .

    Cost flow forecasting cont
    Cost Flow Forecasting …. Cont

    • Helps to :

    • To provide timely warnings…to take corrective actions

    • They also allow you to analyze whether a project will be sufficiently profitable to justify the effort put into it.

    • Be useful for analyzing owners’ personal finances. This is useful when making difficult financial decisions.

    Cost flow forecasting cont1
    Cost Flow Forecasting …. Cont

    • The Process of Cash flow forecast is similar to the process of production(SingleProject)

    Working capital

    Cash operation expense


    ( break into manageable size)


    Operation Income

    Cost flow forecasting cont2
    Cost Flow Forecasting …. Cont

    • The basic steps in cash flow forecasting are:

      • Set the period of forecast

      • Prepare manageable activity break down

      • Prepare a spreadsheet identifying revenues, costs and total cash flow

      • Estimate/forecast the corresponding values and calculate

    Factors affecting project cash flow
    Factors affecting project cash flow

    • Revenue factors

      • Advance payment: proper utilization to support the cash flow

      • Progress payment: timely delivery of the work and timely collect the payments

      • Interest on Payment: Sub clause 60.8

      • Retention release

      • Acceptable cost claims

      • Cost factors

      • Direct cost of factors of production: ( labour, material, equipment, finance...)

      • Indirect cost

        • Overhead and Profit, (Performance and other payment guaranties)

      • Subcontractors

      • Escalation...etc

    Factors affecting project cash flow1
    Factors Affecting Project Cash flow

    • Time

      • Project schedule: delays/ accelerations, change of work

      • Holidays and non-working days

      • Terms of the contract

      • Minimum amount of payment for IPC

      • Retention deduction

      • Advance recovery

      • Payment on remaining % for General Provisions

      • Unbalanced bids and the BoQ quantity changes

    Factors affecting project cash flow2
    Factors affecting project cash flow

    • Material related variables

    • Storage, lead time of procurement, credit terms, discount rate

  • Depreciation

    • Helps to recover fixed capital early

  • Implementation of plan and control
    Implementation of Plan and Control

    • Planning facilitate project implementation control

    • Firms has to Methodically and Continuously measure and evaluate the performance

    Implementation of plans and control
    Implementation of Plans and Control

    • Project performance measurement should evaluate

      • Productivity(efficiency)

      • Effectiveness of how the activities were done, i.e. no rework

      • Improved relations and communication

      • Overall satisfaction

    Implementation of plan and control1
    Implementation of Plan and Control

    • The performance monitoring system:

      • Timeliness

      • Standard,

      • Honest and

      • Clearly showing divergence

  • managers must evaluate the performance, and take corrective action when the project runs away from the plan.

  • Dynamics of planning
    Dynamics of Planning

    The employed performance measurement must lead to plan revision when there is divergence:

    Project plans are subjected to re-planning either

    • due to project goal change by the client or

    • plan change by site management due to influence of project micro and macro environment.

    Dynamics of planning cont
    Dynamics of Planning…….Cont.

    • Planning needs timely and frequent updating during construction due to following reasons:

      • Resources not available as planned

      • Productivity may be less than assumed

      • Unanticipated extra quantities

      • Design changes etc.

      • Unusual weather conditions

      • Differing site or soil conditions

      • Untimely payment for completed works

    • In such ever changing and dynamic environment plans age early:

    Implementation of plans and control1
    Implementation of Plans and Control

    • Earn Value Management has become an industry standard way to Performance management and forecast

      • measure the progress of a projects if accomplished is as planned in terms of Cost & Schedule of the work performed

      • identify schedule and budget variances throughout the life of a project

      • forecast its completion date and final cost

    • Value is “earned” as it is completed, based upon the WBS budgeted cost of work completed

    Earn value management















    Earn Value Management

    • ACWP – Actual Cost of Work Performed (spent cost)

    • BCWP – Budgeted Cost of Work Performed (Earned Value/Achieved Cost)

    • BCWS – Budgeted Cost of Work Scheduled (Elapsed Cost/Baseline Cost to Date)

    • BAC – Budget at Completion

    • EAC – Estimate cost at Completion

    • CV – Cost Variance

    • SV – Schedule Variance


    Earn value management1
    Earn Value Management

    • SPI: Schedule Performance Index (“Did a month’s of schedule produce a month of progress?”)


      • SPI<1 means project is running behind schedule

    • CPI: Cost Performance Index (“Did the progress we made cost what it should?”)

      • CPI= BCWP/ACWP

      • CPI<1 means project is going over budget

    • CSI: Cost Schedule Index (CSI=CPI x SPI)

      • The further CSI is from 1.0, the less likely project recovery becomes.

    Earn value management2
    Earn Value Management

    • Predicting future cash flow

    • Simple extrapolation

    • Final cost = cost of work done + (work left/past performance)

    • Assumes future performance is same as past (generally true)



    How far is the

    Completion predictable

    Securing smooth cash flow
    Securing Smooth Cash Flow

    • At Tender stage:Having as accurate estimate as possible Load money into early items such as excavation and substructures

  • Construction stage: from project activities

    • Submit interim application on time

    • Deal with defective work quickly to avoid delayed payment

    • Delay some activities

    • Value materials on site

    • Frequent inventory to spare parts and idle resources

    • Manage maintenance and other expenses

    • Agree in the value of variations as soon as possible

    • Keep good records and submit claims early

  • Securing smooth cash flow1
    Securing Smooth Cash Flow

    • Timely avail finance from other sources

      • Long term borrowing: has to be invested in capital assets

      • Short term borrowing: should be invested as working capital

        • Bank loans,

        • Bank overdrafts

        • Trade creditors: make maximum use of credit facilities..etc

    • Post-construction stage : to assure profit is maximized: agree on final account and collect outstanding retentions

      on time