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Success factors enhancing business performance of engineering procurement construction 2


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Success factors enhancing business performance of engineering procurement construction 2

  1. 1. INTERNATIONALMechanical Engineering and Technology (IJMET), ISSN 0976 – International Journal of JOURNAL OF MECHANICAL ENGINEERING 6340(Print), ISSN 0976 – 6359(Online) Volume 4, Issue 1, January - February (2013) © IAEME AND TECHNOLOGY (IJMET)ISSN 0976 – 6340 (Print)ISSN 0976 – 6359 (Online)Volume 4 Issue 1 January- February (2013), pp. 30-43 IJMET© IAEME: Impact Factor (2012): 3.8071 (Calculated by GISI) ©IAEME SUCCESS FACTORS ENHANCING BUSINESS PERFORMANCE OF ENGINEERING PROCUREMENT CONSTRUCTION (EPC) INDUSTRIES M.D.Nadar1, Dr. D.N.Raut2, Dr. B.E.Narkhede3 and Dr.S.K.Mahajan4 1 Research scholar- Production Engineering 2 Dean Administration-VJTI, Mumbai 3 HOD- Production Engineering Department, VJTI, Mumbai 4 Director- DTE, Government of Maharastra, Mumbai Email: mdnadar@yahoo.com1,, ABSTRACT Engineering procurement construction projects play an important role in national economic development. India, which contributed approximately 8.5% to the total of India’s GDP. Project schedule slips, budget overruns, compromised quality, resulting claims and counter-claims problems have plagued the industry. The reasons for poor project performances abound. Previous researches have dealt much with the problems of project risk and uncertainty, variations in project outcomes, work fragmentation, complex relationships among stakeholders and activities, and excessive phase overlaps in general. In this paper dealt with EPC industries project success factors Construction projects are implementing different phases., viz., conception phase, definition phase, planning phase, scheduling phase, controlling phase and termination phase Various factors affect construction projects performance and success of projects i.e., completion periods of projects , project budget and better service to owner’s of project. The objective of this paper studying success factors variables, project functions, project activities, of project team members, project team members skills, attitude, experience, project tools, methods of project implementation enhancing the business performance of engineering procurement construction industries. Construction projects completion times are in line with owner’s requirements, and identifying gap reduction factors between project budget and project cost and improving business performance enhancing factors for construction project industries. To collect data, to record the collected data in tabular format, to analyze the recorded data by using statistical procedure and interpret ate success factors plays role in the EPC industry business operations. 30
  2. 2. International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 –6340(Print), ISSN 0976 – 6359(Online) Volume 4, Issue 1, January - February (2013) © IAEMEKeywords: project team, project planning, project manager, project packages, projectactivities, project schedule slips, project budget overrun, project cost1. INTRODUCTION The purpose of this paper is studying to overcome construction projects complexitiesproblems through successful factors of projects functions from conception phase totermination phase [1] (functions starts from conception phase, definition phase, planningphase, scheduling phase, implementation phase, monitoring and controlling phase andtermination phases). Identifying complex functions with various variables to enhancecomplex function performance in construction projects operations [7]. Success factors tooptimize the complexities of construction projects. Exhausted literature survey and EPCindustry site visits are used to design and to develop the questionnaire. The questionnairecirculates amongst engineering procurement construction industries, Consultant, owners,Construction management CEO, programme managers, project managers around 500numbers questionnaires are mailed, personally submitted with request, and received43numbers. Questionnaires The questionnaire contents five parts viz., part-A(Companyinformation), part-B(Measuring project success), part-C(Factors affecting project success),part-D(Use of computer packages for project management) and part-E(Project delay).Questionnaires analysis gives various functions complexities in execution of constructionprojects and corresponding variables (task, resources, time, and precedence) favors forsuccess of functions and affecting success of construction projects execution.2. RESEARCH METHODOLOGY • To interview senior management of contractor, Construction management, consultant and owner of the project, EPC industry project head and visit to meet construction project site head interact and to collect the research related data and information • To collect research related data and information of EPC industry through literature survey of referred research problems related national and international journals • To design and to develop questionnaire with five parts of questionnaire part- A(Company information), part-B(Measuring project success), part-C(Factors affecting project success), part-D(Use of computer packages for project management) and part-E(Project delay). • Data and information of EPC industries related business operations problems collected through questionnaires. • To record data and information from the collected questionnaires in the excel sheet and in the tabular format. Statistical tools are using to analyze the data and information. • To observe and compare the business operations of EPC industries research related different problems and various characteristics of business operational activities, various operational factors to enhance the business performance activities and characteristics of operational variables [7]. To conclude the variables and factors are involves in success of EPC industries business operations. 31
  3. 3. International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 –6340(Print), ISSN 0976 – 6359(Online) Volume 4, Issue 1, January - February (2013) © IAEME3. QUESTIONNAIRE DESIGN This paper addresses studying and identifying the factors to stream line the inputvariables (resources, planning, scheduling) and driving factors to controlling (monitoring,updating) business operations of EPC industries. The questionnaire design and frameworkbased on rigorous survey of EPC industry business operations related research journals ofnational, international literatures. And continuously visiting the site of EPC industryproject execution and contact project site head for collect data and information relatedresearch variables and factors. The questionnaire consists of the following data andinformation collecting tools (questions). The questions divided in to five parts. part-A(Company information), part-B(Measuring project success), part-C(Factors affectingproject success), part-D(Use of computer packages for project management) and part-E(Project delay).3.1 Questionnaire – Company informationQuestionnaire contents company’s information are company’s name, location of businessoperation, capacity of business operation in terms of manpower, turnover yearly, projectsize in terms of project cost, project duration and manpower involves in the executedproject.3.2. Questionnaire – Measuring project success factorsThe executed project details includes project site, project details like type of the project i.e.,mechanical, electrical, plumbing, HVAC, civil etc., technical capacity, type of the operationalfunctions i.e., design, supply, installation, testing and commissioning, and project cost,projected executed time duration planned and actual, project success factors activities intactical management planning like design planning, project site execution planning,manpower planning and material, machines and equipments [13] delivery planning to sitedaily, weekly and monthly, safety, security and housekeeping planning, project selection,material handling planning, risk mitigation etc., what are methods are using to drive thesuccess factors.3.3. Success factors importance in project executionVarious factors are measuring relatively in the project execution monitoring phase, welldefined tasks, responsibilities, reporting hierarchy organizations, project frequent feedback,well defined control procedures, use of management tools like PERT/CPM, use contingencyplans, absence of lengthy procedures and absence of legal hurdles. The scales are definedrelatively in between (1-7) 7 is most important and 1 is least important. Construction projectsuccess are defined different ways in questionnaire like project completion with in plannedschedule, planned budget and minor delay[17], minor escalated budget, deliveredconstruction project meets client’s quality, technical specification, functional envisaged bythe client, project benefits meets client’s satisfaction, commercially profitable to client, meetsclient’s objective of their business. The scales are defined relatively in between (1-5) 1 ismost important and 5 is least important. Precautionary measures to optimize the successfactors are defining the following questions and scales are defined relatively in between (1-5)1 is most important and 5 is least important. The questions are error free estimation ofproject completion time and project cost, composition of project team, choice of projectleader, adequate of project funding, minimal start up difficulties, public support, project 32
  4. 4. International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 –6340(Print), ISSN 0976 – 6359(Online) Volume 4, Issue 1, January - February (2013) © IAEMEprogress monitoring and control techniques. Attributes of project organizations are playsroles in construction project success. The questions are defines the follows co-ordinationamong the major functions, informal structure, funding support and resources allocation,stability of policies and well defined reporting hierarchy and scales are defined relatively inbetween (1-5) 1 is most important and 5 is least important. Construction project success isdefined in the questions of qualities of project team and project manager size of the team,team spirit, job knowledge, willingness to learn, cost conscious, commitment to other projectsand commitment to project dead line and administrative authority, technical competence,leadership style, timely decision making skills, communication skills, attitude andcommitment , clarity of purpose, unbiased, involvement in details and scales are definedrelatively in between (1-5) 1 is most important and 5 is least important. Construction projectssuccess further consider the client attributes and projects characteristics. The followingfactors are given below in the questionnaire frequent interaction with project team, fastresponse to project team queries, prompt payment of bills, co-ordination with projectteam[11], commitment with project team [3,4,5,11,12], incentives for successful completion,good rapport with organization etc., and size of the project, manpower requirement, technicalcomplexities of project, technical skills requirements, Stringent quality / tolerancespecifications, frequent changes to design requirements and special requirements of materialsand equipments and scales are defined relatively in between (1-5) 1 is most important and 5 isleast important. External factors are deviating the construction project success state andthese factors are presented in the questionnaire non –availability of materials in time, non-availability of technical personnel, co-ordination with multiple agencies [14, 15], unexpectedground conditions, price escalations, changes government policies, legal disputes,discrepancies in contract documents, bad weather and mistakes and repetitions of activitiesand scales are defined relatively in between (1-5) 1 is most important and 5 is least important.3.4. Computer packages tool role in construction project successConstruction Project Company uses computer packages factors (computer hardware,software, internet facility, E-mail facility, fund transfer, telephone facility etc.,) involves insuccessful project execution process. How far computer packages tool contribution toconstruction project success defined the questions and scales are defined relatively inbetween (1-5) 1 is most important and 5 is least important. Planning, scheduling, resourceallocations, resource histograms, budgeting, cash flow, crashing, report generation, projectbudgeting, project updating, project change management, on-line project status, planning forremaining work, earned value analysis, multi-project planning, multi-project resourcesharing, contractors monitoring, bill of materials, materials tracking and management,transportation and distribution, risk mitigation, supply chain management, warehouse andstores management functions, accounting, bill payment, bill collection, shift-wise planning,integrated equipment maintenance, integrated shop floor planning, integrated qualityplanning and control, information communication / transfer [2,12] and Email / EDI support3.5. Project Delay factors: Construction project delay [17] causes are based on managerial degree of decision makerfavors to owners, quality of owner’s project manager, expected profit rate, marketstandardization degree, strategic orientation, ability solve the design problems, risk controlcapability, resource utilization degree, the number of follow-up of projects, the proportion ofeducational and experience literacy of project team members. 33
  5. 5. International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 –6340(Print), ISSN 0976 – 6359(Online) Volume 4, Issue 1, January - February (2013) © IAEME4. QUESTIONNAIRE RESPONDENTS The questionnaire respondents are executives, contract management, consultant,architect, owners and contractor’s Project manager, program manager, Procurement manager,executives, projects of civil, HVAC, MEP etc., Table 1 Type of Industry Region Type Mumbai –and Around Govt. Public Sector / the Mumbai Private/Partnership or Propietorship Less than 6 months 7 Typical duration of 6-24 months 14 Projects in last FY 24-36 months 24 More than 36 months 7Total questionnaires are received from respondents are 52 Programme mangers and Projectmanagers of contractors and construction management are 14 and 20 respectively out of 52respondents, Project managers of consultancy 10 out of 52 respondents, Contractor ChiefExecuting officer 4 out of 52 respondents and project owner of 4 out of 52 respondents. Therespondents industries based on ownerships are Government, propertiership, public sectorand private partnership.5. SURVEY RESEARCH FINDINGS Research finds variables for success of EPC industry operations are project successfactors for Environments of monitoring of progress of project implementation, projectsuccess declaring environments, project enhancing factors, project implementing contractors,construction management and consultancy attributes, executing project managers qualities,project implementing team members qualities, attributes of qualities, complexities ofprojects, attributes of project owners and attributes of external factors.5.1. Research analysis of monitoring of project process methodsProject progress implementation Monitoring climate involvement in project success is givenbelow. Table 2 Code Factors Success factors % C11 Well defined tasks and responsibilities 10.98% CI2 Well defined reporting hierarchy 11.98% C13 Well defined control procedures 13.48% C14 Frequent feedback 12.31% C15 PERT / CPM Techniques 11.15% C16 Computer based Techniques 10.98% C17 Use of contingency plans 10.98% CI8 Absence of lengthy procedure 9.32% C19 Absence of legal Hurdles 8.82% 34
  6. 6. International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 –6340(Print), ISSN 0976 – 6359(Online) Volume 4, Issue 1, January - February (2013) © IAEME Figure 15.2. Research analysis of Environment of project success: Project success environmentdeclaring factors are given below. Table 3 Code Factors Success factors % C21 Project completed within planned due date 13.5% or minor delay C22 Project completed within planned budget or 11.39% minor escalation C23 Project meets technical /quality 6.33% specification of the client C24 Project provides satisfactory benefit to the 18.74% client (C24) C25 Project delivers the functionality envisaged 16.46% by the client (C25) C26 Project achieves stated business objectives 16.46% of the client (C26) C27 Project is commercially profitable for the 17.72% client Figure 2 35
  7. 7. International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 –6340(Print), ISSN 0976 – 6359(Online) Volume 4, Issue 1, January - February (2013) © IAEMEProject success environments are declared the factors from more important to leastimportant are projects provide satisfactory benefits to clients to project meets technical /quality specification of the client5.3. Research analysis of Enhancing factors for project success in EPC industryEnhancing project success environment through the following factors are given below. Table 4 Code Factors Success factors % C31 Accurate initial estimates (Cost and time). 14.2% C32 Composition of project team. 18.0% C33 Choice of project leader. 12.1% C34 Adequate funding to completion. 18.4% C35 Progress monitoring and control techniques. 16.7% C36 Minimal start-up difficulties 13.0% C37 Public support for the project 7.5%Project enhancing factors are ensuring the success of project implementation viz., adequatefunding for completion, composition of project team and project monitoring and controltechniques. Figure 35.4. Research analysis of project implementing operational factors of contractors,construction management organizations and consultancy organizations characteristicsinfluencing the project success. The following factors are influencing the success of theproject implementation in EPC industries. Table 5 Code Factors Success factors % C41 Informal structure. 12.3% C42 Funding support. 18.2% C43 Allocation of resources. 14.5% C44 Stability of policies. 19.5% C45 Co-ordination among major functions. 16.4% C46 Well defined reporting hierarchy. 19.1%Policy remains same for all project owners encourages the success of project implementationlike the quoting project price, method of project operational policies, project team 36
  8. 8. International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 –6340(Print), ISSN 0976 – 6359(Online) Volume 4, Issue 1, January - February (2013) © IAEMEmotivational scheme, well defined organization hierarchy etc., funding support of stakeholders, contractors and vendors allocation of resources are make success of projectimplementation, co-ordination amongst project implementation team in multi major functionslike HVAC, Civil, plumbing, Electrical, Building Management Systems (BMS)etc., Figure 4project implementation viz., stability of organizational polices, well defined reportinghierarchy, adequate funding for completion of project, co-ordination amongst contractor,construction management and consultancy operational functions of project implementation,allocation and available of resources on time of activities execution and project execution totake place as team and follows as informal structure in the project implementation.5.5. Research analysis of qualities of project manager characteristics is influencing theproject success. The project manager characteristics are influencing the project success in theproject execution are listed in the following success factors table. Table 6 Code Factors Success factors % C51 Technical competence. 20.00% C52 Administrative authority. 6.27% C53 Leadership style. 9.02% C54 Clarity of purpose. 11.37% C55 Timely decision making. 15.69% C56 Communication skills. 16.08% C57 Attitude and commitment. 11.76% C58 Involvement in details 9.80%Project manager plays crucial role in the success of project implementation of constructionindustries operations. Technical competence characteristics of project manager are given thebelow. Technical qualification, technical skills and technical experience are contributing inthe success of project implementation. Project manager communication characteristic reducesthe hierarchical communicational gaps own organizations, communication process in theconstruction execution are existing amongst construction management, project owner andconsultancy. Project manager plays role as information receiver and distributor. Projectmanager timely decision making characteristic, attitude and commitment, clarity of purposefactors are important in the project implementation success. 37
  9. 9. International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 –6340(Print), ISSN 0976 – 6359(Online) Volume 4, Issue 1, January - February (2013) © IAEME Figure 55.6. Research analysis of qualities of project team characteristics is influencing the projectsuccess. The project team characteristics are influencing the project success in the projectexecution are listed in the following success factors table. Table 7 Code Factors Success factors % C61 Small size of the team. 6.56% C62 Job Knowledge. 16.39% C63 Team Spirit. 14.34% C64 Willingness to learn 19.26% C65 Cost Consciousness 15.57% C66 Commitment deadlines 19.26% C67 Absence of commitments to other projects. 8.61% Figure 6Project team efforts are required to develop willingness to learn, commitment to deadline.These efforts are lead to major project success contribution. Job knowledge, costconsciousness and team work factors plays in the project success. 38
  10. 10. International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 –6340(Print), ISSN 0976 – 6359(Online) Volume 4, Issue 1, January - February (2013) © IAEME5.7. Research analysis of qualities of project owner characteristics is influencing the projectsuccess. The project owner plays major role in the success of the project implementation. Theproject owner characteristics are listed in the following success factors table. Table 8 Code Factors Success factors % C71 Frequent interaction with project team. 13.21% C72 Fast response to queries 15.47% C73 Clarity of purpose 15.09% C74 Good rapport with project organization. 10.57% C75 Commitment to the project. 13.58% C76 Prompt payment of bills. 13.21% C77 Incentives for successful project completion 7.92% C78 Co-ordination with project Team 10.94%Project owner roles are important in the project execution success fast response to queries ofconsultant, contractors, construction management reduce the delay of project activities, theproject product purpose clarity are required to be known by the client, frequent interactionwith project team, commitment to the project and prompt payment of bills enhance theproject success. Figure 75.8. Research analysis of project complexities is resisting the project success. The projectcomplexities plays major role in the success of the project implementation. The projectcomplexities characteristics are listed in the following success factors table. Table 9 Code Factors Success factors % C81 Large size of the project. 5.33% C82 Large manpower requirement. 10.66% C83 Non-similarity to previous projects 14.34% C84 Technical complexity of the project. 15.98% C85 Stringent quality / tolerance specifications 17.62% C86 Special technical skill requirements. 11.89% C87 Frequent changes to original design specifications. 11.48% C88 Special material / equipment requirements. 12.70% 39
  11. 11. International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 –6340(Print), ISSN 0976 – 6359(Online) Volume 4, Issue 1, January - February (2013) © IAEMEProject complexities are resisting the project execution success are ranking in the table-9.Large size of the project increase the complexity of project characteristic resisting the successof the project execution, consequently large manpower requirements increase the difficultiesand complexity of managing project execution it may lead to affect project success inconstruction industry. Similarly the ranking of project success resisting factors are technicalskills requirements, frequent changes of original design specifications, special materials andequipments requirements, non-similarities of previous projects, technical complexity ofprojects and Stringent quality / tolerances specifications resisting the project Figure 85.9. Research analysis of project External factors resisting the project success. Externalfactors plays major role in the success of the project implementation. External factorscharacteristics are listed in the following success factors table. Table 10 Code Factors Success factors % C91 Non availability of materials in time 12.64% C92 Non-availability of technical personnel 13.75% C93 Coordination with multiple agencies 13.01% C94 Unexpected “ground” conditions 10.08% C95 Price escalations. 9.67% C96 Changes in Government policies. 8.18% C97 Legal disputes 9.67% C98 Discrepancies in contract documents. 5.95% C99 Mistakes and repetitions of activities. 9.67% C910 Bad weather. 6.69%External factors ranking are described the descending order in the success point of view.Discrepancies in contract documents resisting the project progress and lead to delay in theproject completion, Bad weather, changes in government polices, price escalations, legaldisputes, mistakes and repetitions of activities are lead significantly to hurdle the projectprogress, unexpected ground conditions may lead to disturb the project considerableprogress. Finally the following factors non availability of materials in time, co ordination ofmultiple agencies and non availability of technical personnel. 40
  12. 12. International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 –6340(Print), ISSN 0976 – 6359(Online) Volume 4, Issue 1, January - February (2013) © IAEME Figure 96. SUMMARY OF RESEARCH ANALYSIS AND PROJECT SUCCESS IN EPC INDUSTRY Projects are successfully implemented when controlling the following factors areoperational systems of contractors, consultants and construction management most importantto enhance the EPC industry business success External factors resisting the project success.External factors plays major role in the success of the project implementation. Externalfactors characteristics are listed in the following success factors table. Table 11 Code Factors Success factors % C1 Project monitoring methods 11.4% C2 Project success environment 11.4% C3 Project success enhancing factors 11.4% C4 Operational systems of contractor, 12.5% consultant and construction management C5 Qualities project manager 10.8% C6 Qualities project team 11.8% C7 Client characteristics 11.1% C8 Project complexities 10.4% C9 External factors 9.1% Figure-10 41
  13. 13. International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 –6340(Print), ISSN 0976 – 6359(Online) Volume 4, Issue 1, January - February (2013) © IAEME7. CONCLUSION This paper reports the findings of an Action Research based investigation, which wasconcerned with determining whether best practice used in other EPC industries to facilitatethe success of construction business process. The ranking of success factors gives ideas toimplement the EPC industries project follows the guide lines to success of the project in theform of cost, time and quality development. The results of this research suggest that: Theoperational methods of contractor, consultant and Construction management is to beimproved. Theses all success factor related to quality of project operational systems.Contractor, subcontractors, construction management and consultant the quality successfactors are considered the following sequences. The qualities of project team, projectmonitoring methods, project success environment, project success enhancing factors, clientcharacteristics, project manager attributes. Project complexities and external factors are tolimit the success of project implementation.EPC industry success factors are implementing methodology to be developed is scope of thispaper. Like subcontractor rating, vendor selection, supplier certification, project teamtraining, project manager qualities training program, Design and development ofconstructional process operational systems in construction activities8.ACKNOWLEDGMENT We express our sincere thanks to our institute management of VJTI for allowing uswork on construction management, we extend our sincere thanks to Dr.L.Ganapathy(Professor in NITIE-Mumbai) give us proper guidance to search the construction industryproblems, our thanks to Shri. Dharmaraj, Adhithya Erode. who give us vision, mission andfinancial support for this research work and also make me to develop this paper we extendour sincere thanks to Dr. K.M.Vasudevan pillai and Dr.R.I.K.Moorthy, CEO and PrincipalPillai Institute of Information Technology New Panvel , for giving us continuous motivationand time to complete this research work paper publication and last but not least our thanksto our family members for giving us patience to complete the paper publication.9.REFERENCES[1] Evbuomwan NFO, Anumba CJ. An integrated framework for concurrent life-cycle designand construction. Adv. Eng. Software 1998;29(7–9):587–97.[2] Latham M. Constructing the team: joint review of procurement and contractualarrangements in the United Kingdom construction industry: final report. London: Departmentof the Environment; 1994.[3] Payne J, Thomas K, Perkins M, Parker R, Small J. Working in an integrated team,E3112. London: Construction Productivity Network; 2003.[4].Alshawi M, Faraj I. Integrated construction environments. Construction Innovation2002:233–51.[5] Loo R. Assessing ‘‘team climate’’ in project teams. Int J Project Manage 2003;21(7):511-7.[6] CII, Procurement and materials management: a guide to effective project execution,Construction Industry Institute, Implementation Resource 7-3, 1999.[7]Y.Y. Su, L.Y. Liu, Real-time tracking and analysis of construction operations, Proc.,Construction Research Congress, ASCE, Grand Bahama Island, Bahamas, 2007. 42
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