Dire Dawa University

Institute of
Technology
School of civil engineering
and Architecture
Principles Of Construction
Management
BY: Mohammednur H.
 Chapter Five
Project Constraints’ Management
Project Scope Management
• No matter how well a project has been planned, there
will always be changes in scope. The general rule is
that if the work performed is not in the contract it is a
change in scope. The best approach is to not perform
the work until proper authorization has been granted.
• Project scope Management Involves the processes
required to insure that the project includes all the
work required.
Chapter Five…
• Project Scope Management generally has three
major processes: Project Scope Definition,
developing scope management plan and Change
Monitoring
• Scope management begins with scope definition,
which refers to the client’s brief, essentially the
client’s objectives or the desired end product. Once
the scope definition of the project (or the client’s
objectives) is down in writing, scope management
planning can begin. Without a clear scope definition,
proper scope management is virtually impossible.
Chapter Five…
❖ Tools and processes of scope definition :
✓ Expert judgement
✓ Statutory requirement
✓ Stakeholder requirement
✓ Product analysis
✓ Alternative generation
✓ Design, Specification and Drawing
Chapter Five…
• The Scope management plan is developed during
the pre-construction conceptual phase and refined in
the development phase. Scope must be developed to
a point where a program and a budget can be fixed to
it
• In other words, it clearly outlines the extent of the
project, available budget, and times frames where
three fundamentals must be agreed and signed off by
the client:
• Extent defined by drawings and specifications
• A budget based on the drawings
• A program to identify the project time frame
Chapter Five…
• Determining reasonable scope changes, subdividing
the project into manageable components, creating
WBS, developing scope change approval methods
are main parts of scope management plan process.
• The agreed scope framework forms the construction
project baseline against which all design, cost and
program objectives are measured.
• The Change Monitoring Process of the Project
Scope is a estimate to scan the major deliverables or
outputs of the project and carryout change
management.
Chapter Five…
❖Tools and processes of change monitoring:
✓ process inspection
✓ variance analysis
✓ scope validation/ verification
Chapter Five…
Project time management
– Project Time Management includes the processes
required to manage the timely completion of the
project. The project time objective specifies the
project completion time.
– Most projects are not completed on estimated
time because of the absence of a project time
planning and scheduling.
Chapter Five…
• There are three fundamental stages to this
process:
◆ Planning stage
◆ Sequencing stage
◆ Scheduling stage
❑ Planning stage: This is where the construction
manager identifies all of the activities needed to
build the project. The number of activities and the
level of detail needed in the schedule will vary from
job to job. The more complex the project, the more
detailed the activity list will be.
Chapter Five…
• Tools processes of time planning:
✓ Project Document
✓ Decomposition
✓ Define Units of Measure
✓ Project Scope Baseline/WBS
✓ Environmental Factors
✓ Organizational Process Assets
Chapter Five…
❑ Sequencing stage: Once you have identified
all of the activities that need to be performed on your
project, it is time to develop the sequencing of those
activities, or network logic.

• In other words, in what order must these activities

occur and which ones can occur simultaneously?
This is where we begin to consider and define the
relationships among the various activities.
Chapter Five…
• Tools and processes of Sequencing:
✓ Activity list
✓ Milestone list
✓ Project document
✓ Project management plan
✓ Change requests
Chapter Five…
❑ Scheduling stage: Now that all of the activities
are identified and all of the sequencing is figured out,
it is time to assign durations to each activity. After
all, we don’t really have a useable schedule until
time is factored into the equation.
▪ Once you come up with how long you think each
activity will take, it is time to start putting all of this
information together to create the schedule network
and use it to determine the overall project duration.
Chapter Five…
• Tools and processes of Scheduling:
✓ Scheduling methods and software
✓ Project calendars
✓ Resource breakdown structure
✓ Resource calendars
✓ Enterprise environmental factors
✓ Organizational process assets
✓ Three-point estimating
Chapter Five…
Project Network Diagrams
❑ A project network diagram is a schematic
display of the logical relationships among, or
sequencing of project activities.
❑ Network diagrams give us a structural tool that
combines activity relationships and activity
durations to best determine the right schedule for
the project.
Chapter Five…
Presentation of network diagram
• There are two techniques used to develop a network
diagram. The first is called the activity-on-arrow
(AOA) method because activities are noted on the
arrow. The second technique is called the activity-on-
node (AON) method because the activity is notated
on the node.
▪ The activity-on-node technique, also called
precedence diagramming, is the method of choice for
most of the industry.
Chapter Five…

1. Activity on
arrow notation

2. Activity on
node notation.
Chapter Five…
Critical Path Method
• It is the most widely used scheduling technique. It
represents the set or sequence of predecessor/
successor activities which will take the longest time
to complete. It is defined as the longest possible path
through the "network" of project activities.
• The duration of the critical path represents the
minimum time required to complete a project. Any
delays along the critical path would imply that
additional time would be required to complete the
project.
Chapter Five…
Example:-

B(1) E(4)

F(1) H(3)
A(2) C(2)

D(1) G(3)

• There are three paths on this diagram.

Path 1: A-B-E-H (10days) Path 3: A-D-G-H (9days)
Path 2: A-C-F-H (8days)
• Since path-1 takes the longest duration, it is known as the
critical path. So the shortest amount of time needed to
complete this project is 10 days.
Chapter Five…
Calculation of event times:
1. Earliest start time: this is the earliest time that an
activity can start. it represents the earliest event time
of the preceding activity.
2. Earliest finish time: it is he earliest time, when an
activity can be finished: EFT= EST+activitiy
duration.
3. Latest Start Time ( LST):It is the latest possible
time that an activity can start without affecting
the project completion time.
Chapter Five…
4. Latest finished time: this is the latest time, when an
activity may be completed without affecting the
project completion time. it represents the late event
time of the succeeding event.
i.e. LFT=LST +Activity Duration
5. Total Float Time (TF):Total float time is the amount
of time that an activity can be delayed without
affecting the total project completion time.
TF = LFT –EFT
Chapter Five…
Example: precedence relation
Activity Duration Predecessors
A 3 ----

B 2 ----

C 5 A

D 4 A

E 6 B,C

F 2 B,C

G 3 D,E

H 2 D,E

I 7 F,G

J 5 H,I
Chapter Five…

b. Critical path

Path 1=A,D,H&J , Length = 3+4+2+5=14

Path 2=A,D,G,I&J Length =3+4+3+7+5=22

Path 3=A,C,E,H,&J, Length = 3+5+6+2+5=21

Chapter Five…
Path 4= A,C,E,G,I&J, Length = 3+5+6+3+7+5=29
=longest path is critical

Path 5=A,C,F,I&J, Length = 3+5+2+7+5=22

Path 6=B,F,I,&J Length = 2+2+7+5=16

Path 7=B,E,G,I&J Length =2+6+3+7+5=23

Path 8=B,E,H&J Length = 2+6+2+5=15

Chapter Five…
• Total floating time computation
Based on the given duration, TF will be as follow:-
 Chapter Five…
Advantages of network Disadvantages of the
scheduling network scheduling
▪ Requires and promotes the ▪ Not readily understood as
planner to think logically, a graphical statement of
▪ Activities upon which the the contract duration,
contractor must concentrate ▪ Updating calls for a
high efforts during the redrafted network from
project are identified in the the date concerned
process of planning,
▪ Non critical activities are
also identified and resource
leveling is facilitated
Chapter Five…
The Bar Charts
• Bar charts present the project schedule plotted to a
horizontal line scale.
• The bar lines represent the time period allocated to
each operation and the relationship between the
commencement and completion of each can be
readily observed.
• For planning purposes, bar charts are not as useful
since they do not indicate the precedence
relationships among activities.
Chapter Five…
• Bar chart example
Chapter Five…
Advantages of Bar chart:
▪ Useful to report information to people who are
concerned about a project but may not be involved
in day-today management.
▪ A simple format and readily understood at all levels
of management,
▪ It can provide a quick, visual overview of a project
in convenient way to monitor job progresses,
schedule equipment and crews and record project
advancement.
Chapter Five…
Disadvantages:
▪ Interdependencies among activities are difficult to show.
The bar chart itself doesn’t provide a basis for
ascertaining which activities are critical and which are
floaters.
▪ It is not an adequate planning and scheduling tool
because it doesn’t portray a detailed, integrated and
complete plan of operations.
 Chapter Five…
The Line of Balance Scheduling
Technique
•The Line of Balance
schedules are a series of
inclined bar lines, one for
each activity.
•The difference between
Line of Balance Schedules
and a traditional bar chart is
the balance lines are inclined
at different slopes to denote
the rate of working of the
various operations.
Chapter Five…
Project cost Management
• For cost management and control on a project, the
construction plan and the associated cash flow estimates
can provide the baseline reference for subsequent project
monitoring and control.
• Project Cost Management involves:
✓ Cost Estimating(bid offer, engineers estimate)
✓ Budget and Cash Flow Management
Chapter Five…
Budgeting and Cash Flow Management
1) The Contract Budget in monthly or Cumulative form:

This chart may be based on an analysis of the Contract

work plan or alternatively an empirical approximation.

2) Monthly or Cumulative Self-Cost of Projects & Project

Expenditure.

▪ Cumulative Self Cost = (Cumulative Contract

Budget) – (Project Markup) – (Cost for mobilization)
Chapter Five…
(Mark-up = General Overhead cost + Profit
release)
▪ Cum. Expenditure = Cumulative self-cost +
mobilization

3) Income Forecast.: The revenue to be collected from the

project on monthly basis equates from the cumulative
value minus the retention money, previous payments
and other deductions such as advance payments.
Chapter Five…
4) Gross and Net Cash Requirements of Projects:
▪ Net Cash required = the cumulative Income (in step
3) – the Cumulative Expenditure (in step 2)
▪ Gross Cash required = the cash required before
monthly payment i.e. :
=Net cash required (monthly) – monthly income
Or, the cumulative Income (in step 3) – the Cumulative
Expenditure (in step 2) ; but the cumulative income
prior to receiving the monthly payment.
Chapter Five…
• Example: Prepare the gross and net cash requirements
for the project
Month 1 2 3 4 5 6
Monthly 8,000 10,000 12,000 14,000 10,000 6,000
Value (Birr)
• Profit included in the estimate is 12 %
• Payments are to be made monthly (after the end of the month)
• Retention money for every monthly payment – 3 % where 1.5% will
be released during the completion period and the remaining at the
expiry of defects liability period.
• Defects liability period – 6 months
• No advance payment
• 5 % of the total project cost is used as mobilization cost.
 Chapter Five…
1. Cumulative contract value forecast from the monthly value forecast
Month 1 2 3 4 5 6
Cum. Forecast (Birr) 8,000 18,000 30,000 44,000 54,000 60,000
2. Cumulative self-cost of contract & expenditure:
▪ Cumulative self-cost =Cumulative contract value – profit release - mobilization cost
▪ Cum. Expenditure = Cumulative self-cost + mobilization
Month 1 2 3 4 5 6
Monthly Value (Birr) 8,000 10,000 12,000 14,000 10,000 6,000
Profit 12%(Birr) -960 -1,200 -1,440 -1,680 -1,200 -720
Mobilization-5%(Birr) -400 -500 -600 -700 -500 -300
Monthly self cost (birr) 6,640 8,300 9,960 11,620 8,300 4,980
Cum. self-cost (Birr) 6,640 14,940 24,900 36,520 44,820 49,800
Monthly exp.(birr) 7040 8,800 10,560 12,320 8,800 5,280
Cum.Exp. (Birr) 7040 15,840 26,400 38,720 47,520 52,800
 Chapter Five…
3) Cumulative Income
Income month( i+1)= Cum. Contract Value month(i) – retention –
previous payments
Month 1 2 3 4 5 6 7 12
Monthly 0 8,000 10,000 12,000 14,000 10,000 6,000
Value
(Birr)
Retention 0
0 -240 -300 -360 -420 -300 -180
(3%)
Monthly 6000-180
Income 0 7,760 9,700 11,640 13,580 9,700 +0.015(60,0 900
(Birr) 00)=6720
Cumm.
Income 0 7,760 17,460 29,100 42,680 52,380 59,100 60,000
(Birr)
 Chapter Five…
4) Gross and Net Cash Requirements
▪ Net cash required (monthly) = Cum. Income after receipt of each
monthly payment - Cum. Expenditure
▪ Gross cash required (monthly) =Net cash required (monthly) –
monthly income OR = Cum. Income prior to receiving monthly
payment - Cum. Expenditure
Month 1 2 3 4 5 6 7 12
Monthly Income
0 7,760 9,700 11,640 13,580 9,700 6,720 900
(Birr)
Cumm. Income
0 7,760 17,460 29,100 42,680 52,380 59,100 60,000
(Birr)
Cum.Exp. 7040 15,840 26,400 38,720 47,520 52,800 52,800 52,800
(Birr)
Net Cash Req’d 7,200
(Birr)
-7040 -8,080 -8940 -9,620 -4,840 -420 6,300
Gross cash Req’d
-7,040 -15,840 -18,640 -21,260 -18,420 -10,120 -420 6,300
(Birr)
Chapter Five…
Project Quality Management
• Quality can be defined as a “degree to which a set of
inherent characteristics of an object fulfills
requirements.” Simply stated, quality is meeting
customer (end users’) requirements.
• A system of quality management includes all
activities of the overall management function that
determine the quality policy, objectives, and
responsibilities and their implementation
Chapter Five…
• Project Quality Management involves the following
processes:
✓ Setting Quality Standards to achieve both technical
and managerial competence,
✓ Scheduling inspections,
✓ Managing any required rework,
✓ Documentation.
➢ Majorly, there are three areas of quality management:
quality planning, quality assurance, and quality control. It
is important that a distinction be made between them.
Chapter Five…
o Quality planning- The process of identifying quality
requirements and/or standards for the project and its
deliverables and documenting how the project will
demonstrate compliance with quality requirements.
o Quality Assurance— Quality assurance is concerned
with developing a formal structure, organization and
operational procedures to ensure specified quality
throughout the total construction process.
o Quality control—The process of monitoring, and then
recording results of executed activities to assess quality
performance and recommend necessary changes.
Chapter Five…
▪ ISO 9000 series quality systems constitute four parts as
shown hereunder:

ISO 9000

Guidelines for Application Quality Assurance Models

ISO 9004 ISO 9001 ISO 9002 ISO 9003

Chapter Five…
❑ Quality Assurance System: ISO 9000
➢ ISO 9001:
▪ Contains 20 clauses of the quality system
▪ Organizations involved in the design process and seeking
certification need to comply with ISO 9001 requirements. E.g.
consultants, architects, and design and build companies.
➢ ISO 9002:
▪ This is applicable to manufacturing and/or installation
companies requires process and inspection control during
production and/or service delivery.
Chapter Five…
• This standard applies to most construction organizations,
where evidence of inspection and tests, during a
construction process, has to be provided to clients.
➢ ISO 9003:
• This applies to organizations where quality assurance
systems can be based upon final inspection of product or
service only. E.g. business in warehouse stock.
• This part of the standard has limited application in the
construction industry.
Thank you!