028 fast-tracking projects & cost overrun

FASTTRACKING
CONSTRUCTION
(COST OVERRUN)
helpdesk@construction-productivity.co.uk
www.construction-productivity.

Fast-tracking Construction
Projects & Cost Overrun

Projects & Cost Overrun
Since construction has a physical
manifestation, construction rework is
normally perceived to have a bigger
impact than change.
As a result, construction managers tend
to avoid rework on problematic tasks by
changing the scope of work, in particular
under time constraints.

Types of Changes for fast-Types of Changes for fast-
trackedtracked

Fast-tracked-Impact of changesFast-tracked-Impact of changes

Fig. 1 Park, M. (2001)Fig. 1 Park, M. (2001)

Change and ReworkChange and Rework

Table-1 Park, M. (2001)Table-1 Park, M. (2001)

Figure 2: Behaviours of Change andFigure 2: Behaviours of Change and
Rework Park, M. (2001)Rework Park, M. (2001)

Where floor tiling has been finished with
less/more than the required height,
although both change and rework have
the same behaviour pattern
(replacement) in solving the problem, the
object would be the problem area in
rework, while the previous work would
be the object in change.

Since construction industry is a labour
intensive industry construction, rework is
usually accompanied with the demolition
of what have been already built.
This has a bigger direct impact on the
construction performance than the
change option.

By adopting the change option, it is
possible to avoid rework on problematic
tasks that may require more resources.
changed activity can also become a
change source that can cause other
subsequent changes.
This change might have more impact on
the construction performance than the
rework option in certain conditions.

For example, the increased concrete
height may trigger subsequent changes in
succeeding tasks, i.e., reducing the size of
ventilation ducts.
Where some of piles were not correctly
positioned, it still made it possible to
proceed with the superstructure without
correcting the position of the piles by
changing the position of columns.

Figure 3a: Change Option Loop-Figure 3a: Change Option Loop-
Park, M. (2001),Park, M. (2001),

Figure 3b: Quality ManagementFigure 3b: Quality Management
Thoroughness Loop-Park, M. (2001)Thoroughness Loop-Park, M. (2001)

Figure 3c: Downstream ReprocessFigure 3c: Downstream Reprocess
Iteration Loop-Park, M. (2001),Iteration Loop-Park, M. (2001),

Figure 3d: Feedback Processes inFigure 3d: Feedback Processes in
Construction ActivitiesConstruction Activities
Park, M. (2001),

Projects &Cost Overrun

To calculate the cost overrun during Fast-
tracked projects use Model below and
suggested formulas.
To measure Items such as:
Time (increase/decrease),
Cost (increase/decrease),
Labour (increase/decrease),
Material (Material waste increase/decrease)
Machinery (efficiency increase/decrease).

Formula one
PR (Loss/Gain) =MD [A-X] + HC(EC-
AC)+ HL(EL- AL)
Formula two
AC = a EC (1+ xΣ i) and similarly AL = a EL (1+ xΣ i)
xi = % of influential factors such as
weather, crew size, absenteeism,
machinery, accidents on site, etc.

Influential factors
(related to early stage
of project)
Economical
Technological
Customers
Stakeholders
Environmental
Legislative
Procurement route
Organizational factors
Financial factors
Sustainability
Etc
Process model of Change Management
Pre-
construction
Activities
Client brief
Project objectives
Specification
Design/build-
ability
Constructability
Contractual
arrangement
Planning
Scheduling
Estimating
Labour
Characteristics
Subcontracting
Labour
Direct labour
Management
System
Planning
Communication
Controlling
Co-ordinating
Resource
Management &
Weather
Labour selection
Labour control
Material selection
Material handling
Plant
Waste on site
Delay and Disruption on site
Motivating Factors
Hygiene Factors
Construction
Productivity
Project
Performance
• Time
• Cost
• Quality
• Safety
• Customer
satisfaction
Rewards
Effort
Ability and skill of
management and workers
Site/Project
Manager
Characteristics
Experience/capability
Leadership style
Authority/influence
Goal commitment
Involvement
Job
Satisfaction
Product Improvement Tools (PIT) Earned Value Management (Evma) Lean Construction (Lcon)
Benchmark (Ben) Front End Management (Fema) Just In Time (Jiti)
Benchmarking (Bing) Quality Control (Qcon) Supply Chain Management (Scma)
Buildability (Buil) Quality Assurance (Qass) Value Engineering (Veng)
Buildability/Deconstruction (Buil/Deco) Quality Management System (Qmsy) Value Management (Vman)
Otherp Product Improvement Tools

PR(Loss/Gain) =MD [A-X] + HC (EC- a EC
(1+ xΣ i)) + HL (EL- a EL (1+ xΣ i)) + Σ
(PIKt) /100 PC(est)
Also, add cost of Risk management team
(both in-house and external experts)
(Rmi ) + (Rme )
 (Rmi )=Risk management (In-house)
(Rme )= Risk management (External))

Planning engineer to decide
% PC(est)= Fees for (Rmi ) + (Rme )
Let us assume 0.50% of PC(est)= Fees for
(Rmi ) + (Rme )
(Rmi ) + (Rme )= (Rtotal )
(Rtotal )= (0.5/100)xPC(est)
PR(Loss/Gain) =MD [A-X] + HC (EC- a EC
(1+ xΣ i)) + HL (EL- a EL (1+ xΣ i)) + Σ
(PIKt) /100 PC(est) + (Rtotal )

For risk management considerFor risk management consider
Bionomial Distribution
Now suppose that we want to know the
probability of getting k good result in n
trials. We can call this event A.
P(A) = pk(1-p)n-k n!/(k!(n-k)!)
Example: k =2 n=3
There are 8 possible outcomes, 3 with
the desired event – P(A)=3/8

The number of combinations of r
objects taken from a group of n
distinct objects is denoted by nCr and
is given by:
nCr =
n !
(n – r )! • r !

Risk = penalty * likelihood
Penalty can be in dollars, lives, injuries,
amount deadline missed by
Likelihood is probability that a particular
hazard will be “activated” and result
in an undesirable outcome
The product can be considered as an
expected value of cost to project

028 fast-tracking projects & cost overrun

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