Overview of construction sector in India (construction management )

Unit - I Overview of construction
sector
Prepared by
Prof .S .J .Shinde(ME CIVIL)
Construction Management
Dept. of Civil Engineering
SHINDE .S.J ME Civil(construction
management)

sector (08 hours)
• Role of construction industry in infrastructure
development,
• Components of infrastructure sector,
• Construction industry nature, characteristics,
size, structure,
• Role in economic development,
• Construction management – necessity,
applications
management)

sector
Project management consultants – role, types,
selection and appointment process,
• Project overruns and means to combat them,
• Project monitoring and reporting systems,
managerial correspondence and
communications,
• Generation and identification of project
investment opportunities
management)

Unit II Construction scheduling, work
study and
work measurement
CONTENTS (08 hours)
• Construction scheduling - Construction project
scheduling – purpose, factors affecting
scheduling, time as a control tool, work
breakdown structure, project work breakdown
levels, line of balance technique, repetitive
project management
management)

• Unit II Construction scheduling, work study
and work measurement (08 hours)
• • Work study and work measurement -
Definition,
• objectives, basic procedure of work study,
• symbols, activity charts, string diagrams, time
• and motion studies. (5 Hrs.)
management)

Unit - III Labour laws and financial aspects of
construction projects (9 Hrs.)
• Labour laws –
– Need and importance of labour laws,
• Study of some important labour laws associated
with construction sector-
– Workmen compensation act 1923,
– Building and other construction workers act 1996,
– Child labour act,
– Interstate migrant workers act.
(3 Hrs.)
management)

Unit - III Labour laws and financial aspects of
construction projects (9 Hrs.)
• Financial aspects of construction projects
• Capital investments:
– importance and difficulties,
– means of finance,
– working capital requirements,
– project cash flow projections and statements,
– project balance sheet,
– profit loss account statements
(6 Hrs.)
management)

• Unit - IV Elements of risk management and
• value engineering (8 Hrs.)
• Risk management
• Introduction,
• principles, types, origin, risk control,
• use of mathematical models: sensitivity
analysis, breakeven analysis, simulation analysis,
decision tree analysis,
• risk identification, analysis and mitigation of
project risks,
• role of insurance in risk management.
management)

• Unit - IV Elements of risk management and
• value engineering (8 Hrs.)
• Value engineering (3 Hrs.)
• Meaning of value,
• value analysis,
• value engineering and value management,
• energy resources,
• consumption patterns,
• energy cost escalation and its impact.
management)

Unit - V Materials management and human resource
management (8 Hrs.)
• Materials management
• Materials flow system,
• Role of materials management in construction
management and its linkage with other functional
areas, vendor networking, buyer-seller relationships,
• EOQ model and its variations,
• Material codification and classification,
• concept of logistics and supply chain management, role
of ERP in materials management – material resource
information systems, (5 Hrs.)
management)

Unit - V Materials management and human
resource
management (8 Hrs.)
• Human resource management
• Human Resource in Construction Sector,
• Staffing policy and patterns,
• Human Resource Management Process,
• Human Resource Development Process,
• Performance Appraisal and Job Evaluation,
• Training and Career planning,
• Role of ERP in Human Resource Management –
Human
Resource Information System (HRIS)
management)

Unit - VI Introduction to artificial intelligence
techniques
• Basic terminologies and applications in civil
engineering
• (a) Artificial neural network
• (b) Fuzzy logic
• (c) Genetic algorithm
management)

ROLE OF CIVIL ENGINEERS IN
INFRASTRUCTURE DEVELOPMENT
Engineers have always played a vital important role in
developing a nation’s way of life and standard of living.
Civil engineers are responsible for the well-being of the
entire population via water treatment, wastewater
treatment, air pollution control, road design, and design
of dams/buildings/bridges.
From constructing bridges and highways to exploring
the
vast earth beneath us, engineers are helping to keep our
nation moving and safe.
management)

CONSTRUCTION INDUSTRY AND
DEVELOPMENT
One major sector of the economy which is receiving
increasing in the emerging nations is construction.
• An industry present in every developmental activity.
• Construction contributes to economic development by
satisfying some of the basic objectives of development
including output generation, employment creation, and
income generation and re-distribution.
• It also plays a major role in satisfying basic physical and
social needs, including the production of shelter,
infrastructure, and consumer goods.
management)

DEVELOPMENT
Construction's requirements for goods and services
from other industries are considerable; the
development of the construction industry therefore
stimulates these ancillary industries, thus encouraging
further economic growth.
• Infrastructural services make some contribution to GDP,
but they also stimulate the development of other
industries which, in turn, contribute more directly to
economic growth.
• Construction's contribution to employment creation is
parallel to its contribution to output generation.SHINDE .S.J ME Civil(construction
management)

DEVELOPMENT
Since the construction industry as a whole is largelymade
up of small firms, it provides entrepreneurial
opportunities for many small businessmen, thereby
helping to re-distribute income.
• Construction plays a vital role in economic growth and
development, but it is also important in terms of
satisfying basic physical and social needs, the first of
which is shelter.
• Closely related to society's need for shelter is its need
for basic infrastructural services such as water supply,
waste disposal, power, transportation, and
communications.
management)

DEVELOPMENT
Community development also involves establishing
various institutional, commercial, and manufacturing
services.
• Since it is the construction industry which creates the
physical facilities required to meet these varied social
needs, construction thus has an important impact on
social as well economic growth and development.
management)

COMPONENTS OF INFRASTRUCTURE
Infrastructure is basic physical and organizational
structures necessary for the operation of a society or
enterprise, or the services and facilities necessary for
an economy to function.
• INFRASTRUCTURE can be defined as "the physical
components of interrelated systems providing
commodities and services essential to enable, sustain,
or enhance societal living conditions”.
• The term typically refers to the technical structures that
support a society, such as roads, water supply, sewers,
electrical grids, telecommunications, and so forth.
management)

Infrastructure facilitates the production of goods and
services, and also the distribution of finished products
to markets, as well as basic social services such as
schools and hospitals; for example, roads enable the
transport of raw materials to a factory.
• It can be generally defined as the set of interconnected
structural elements that provide framework supporting
an entire structure of development.
• It is an important term for judging a country or region's
development.
management)

“Hard" infrastructure refers to the large physical
networks necessary for the functioning of a modern
industrial nation.
• Transportation infrastructure; Energy
infrastructure;
Water management infrastructure;
Communications
infrastructure; Solid waste management
management)

management)

• Soft" infrastructure refers to all the
institutions which are required to maintain the
economic, health, and cultural and social
standards of a country, such as the financial
system, the education system, the health care
system, the system of government, and law
• enforcement, as well as emergency services
management)

Classification of Construction Industry
1. Based on Size (amount of investment required)
• Small scale (< 1 crore)
• Medium scale ( 1crore < investment < 100 crores)
• Large scale (> 100 crores)
2. Based on Ownership
• Private (private promoters and investors, profit
maximization and better returns)
• Public (owned by state, 51% shares of govt.)
• Joint sector (govt. +private)
• Military
management)

Classification of Construction Industry
3. Based on Use
Residential
Commercial
Industrial
Utility
4. Based on Activity
Industrial (production of goods)
Non-Industrial (for the benefit of the society -- health
care, educational, irrigation, soil conservation,
pollution control, highway, water supply….)
5. Based on Nature
Light
Heavy
Industrial
6. Based on Location
National
International
management)

ROLE IN ECONOMIC DEVELOPMENT
Is the second largest industry in India after agriculture.
Integral part of the economy and a conduit for a
substantial part of its development investment.
Poised for growth on account of industrialization,
urbanization, economic development and people's rising
expectations for improved quality of living.
Constitutes 40% to 50% of India's capital expenditure
on projects in various sectors such as highways, roads,
railways, energy, airports, irrigation etc
It employs 31.46 million personnel comprising both
skilled and unskilled workers, technicians, foremen,
clerical staff and engineers.SHINDE .S.J ME Civil(construction
management)

CONSTRUCTION INDUSTRY IN INDIA
Makes a significant contribution of about 11% to the
nation’s gross development product (GDP).
After independence the need for industrial and
infrastructural developments in India laid the foundation
stone of construction, architectural and engineering
services.
In the first five-year plan, construction of civil works
was allotted nearly 50 per cent of the total capital outlay.
During the past 50 years the Indian Construction has
accounted for around 40 per cent of the development
investment.
management)

PREVIOUS FIVE YEAR PLANS
management)

PREVIOUS FIVE YEAR PLAN
management)

CONSTRUCTION INDUSTRY
To keep pace with the projected high growth rate of the
Indian economy; new policy measures, institutional
reforms and resource mobilization are required to build
new infrastructure.
The construction industry has been witness to a strong
growth wave powered by large spends on housing, road,
ports, water supply, rail transport and airport
development.
The most significant criteria for a continued growth rate
of an economy rests on the provision of a quality
infrastructure.
management)

TWELFTH FIVE-YEAR PLAN (2012-2017)
Government of India’s “faster, sustainable and more
inclusive growth” approach to the Twelfth Five Year Plan
aspires to build infrastructure at an unprecedented scale
requiring investments of nearly Rs. 41 lac crores
(Planning Commission Report 2012-17).
The Planning Commission of India has proposed an
investment of around US$ 1 trillion in the Twelfth fiveyear
plan (2012-2017), which is double of that in the
Eleventh five-year plan.
management)

TWELFTH FIVE-YEAR PLAN (2012-2017)
management)

CONSTRUCTION MANAGEMENT –
NECESSITY, APPLICATIONS
management)

NECESSITY OF CONSTRUCTION
MANAGEMENT
Present day construction projects are becoming complex and
costly as compared to previous times.
This complex nature places a heavy demand on the
management skill of those involved in every phase of the
management of construction work.
Nowadays, large industrial projects are increasingly being
handled as turnkey assignments requiring co-ordination of
project engineering and management activities on site
and at corporate office.
This is further necessitated by the impressive increase in
overseas construction exports and international
contracting.
management)

MANAGEMENT
A large number of business firms and organisations in the
private and public sectors are engaged in construction
activity.
Many are expanding their business into this industry.
In this context, construction management as a
professional function has assumed great importance.
Management of construction confines to management of
actual construction.
Construction management encompasses the whole
process right from the conception stage to the completion
of construction.
management)

MANAGEMENT
Task of construction manager is much complicated than
that of a contractor.
Heavily involved during the pre-design and design stage.
Feasibility and environmental impact studies also require
special skills for site selection and zoning.
If not an expert in this field, has to coordinate the experts
and provide leadership and direction.
The design phase demands value engineering studies and
alternative construction methodology studies have to be
undertaken.
Preparation of contract documents and specification has
to be done.
management)

MANAGEMENT
In the construction phase, contracts have to be
administered, cost to be controlled, schedule to be
controlled, submittals to be managed, change orders to
be negotiated, work to be coordinated and inspected.
In the post construction phase, marketing and property
management of the completed facility is also involved.
A successful project manager requires familiarity with
modern theories and techniques of management and
engineering.
management)

PROJECT MANAGEMENT….
• PLANNING
• • QUALITY CONTROL
• • PROBLEM SOLVING
• • COMMUNICATION
• • MANAGING CHANGE
• • RISK MANAGEMENT
• • STRATEGIES AND APPLICATIONS
• • BUILDING CONFIDENCE
management)

PROJECT MANAGEMENT
CONSULTANCY (PMC)
• A project management consultancy is a
professional consulting firm with knowledge and
experience in the specialized area, for assisting
organizations to improve their practice of project,
program and/or portfolio management.
• Project mangers
• Building surveyors
• Quantity surveyors
• Architects
• Interior designers etc
management)

FUNTIONS OF PMCTo support clients
in the construction
To support in
maintenance aspect
of property
To maintain
budget
Decide the timing
of work to be done.
Transferring the
investments into
project
management)

SELECTION OF PMC
• Define what you want to do before you plan
for it
• Select the firm
• Negotiate terms and contract with
consultancy
management)

Responsibilities of PMC
• Handling the project by analyzing the goal and
works that will be done
• Handling all the people involve with the
project
• Ensuring that all the information is enough
to make the project flow consistent
• Handling the connection with all the parties
that involve with the project.
management)

Responsibilities of PMC
Dealing with the time according to plan.
Surveying the quality to ensure the work is
satisfying
Managing the cost of the project, so that the
project will be done at the minimum cost which
is according to the amount of money that been
provided by the clients
management)

Role of PMC
To achieve the corporate goals and
project objectives.
To lead, guide, coordinate and
synchronize the professional inputs from
various specialist consultants.
Monitoring, controlling, solving problems,
conflicts management and making
decisions
management)

Need for consultancy
Shortage of specialized staff.
Shortage of supervisors which can be attached
with single project.
Faster execution of project and in short span of
time
Fund management.
Commensurate with govt.
To implement the requirement of loan providers.
management)

Benefits of PMC
The execution of projects within shorter
time span.
Availability of expertise of each field
under control of single authority.
Flexibility is always available with PMC
Rigid rules for recruitment need not be
followed.
management)

TYPES OF PROJECT MANAGEMENT
CONSULTANTS
1. General Management
Planning, strategy, corporate policy, control,
facilities management, materials management
2. Personnel
Training, recruitment, employee benefits
3. Administration
Office management, office planning design &
space utilization.
management)

TYPES OF PROJECT MANAGEMENT
CONSULTANTS
4. Finance and Accounting
Cost accounting, tax advice, investment
5. Research and Development
Project determination & evaluation, cost control
6. Market Information
Project determination & evaluation, cost control
management)

Need of Project Management
Consultants
1. The need for personnel
Put out a great amount of work over a short
period of time
Unique expertise on short-term or project
basis
2. The need for fresh ideas
Employees too close to problem to understand
all ramifications
management)

Need of Project Management
Consultants
The need to train employees
Construction operations are becoming more and
more complex Consultant troubleshoots to pull
off a complete turn around.
management)

PROJECT OVERRUNS AND MEANS TO
COMBAT THEM
TYPES OF PROJECT OVER RUNS
• COST OVERRUNS
• MATERIAL OVER RUNS
Cost and Project Cost Management
Cost is a resource sacrificed or foregone to achieve a
specific objective, or something given up in exchange.
• Costs are usually measured in monetary units, such as
Rs, $ etc
• Project cost management includes the processes
required to ensure that the project is completed
within an approved budget.
management)

Estimates and cost overruns
A large number of studies show the fact that cost
overrun affects projects in all industries, in all
countries either in the public or in the private sector
Cost Overrun = Actual Cost – Estimated Cost
The problem is that several cost estimates are usually
produced during the project life cycle, but there is no
standard rule to determine which one must be
considered for computing the cost overrun
management)

Cost Control
Project cost control includes:
– Monitoring cost performance.
– Ensuring that only appropriate project changes
are included in a revised cost baseline.
– Informing project stakeholders of authorized
changes to the project that will affect costs.
• Many organizations around the globe have
problems with cost control.
management)

Material Overruns
Try and order ahead for delivery by suppliers.
• This will ensure that your product or service will
be in stock.
• Discourage pickup of material by your personnel.
• It bleeds profit and uses up labor hours.
• By allotting some time on a regular basis cross
check supplier prices.
• Choose some frequently ordered materials and
get prices to see where you should be buying from
.get multiple prices on large material orders
• ask for discounts on materials you buy frequently
and in large quantities.
management)

Construction Organization
Normally, the construction organization is run
through following departments:
• Engineering Department
• Purchase Department
• Finance Department
• Personnel and Administrative Department
• Marketing and Sales Department
• Accounts Department
• Legal Department, and
• Electronic Data Processing (E.D.P.) Department
management)

FUNCTIONS OF ENGINEERING
DEPARTMENT
Survey projects.
• Prepare plans and drawings.
• Estimate the quantity of work and
project cost.
• Finalize specifications.
• Prepare and update work, material
and financial schedules.
• Entrust work to contractors and
supervise the same.
• Procure material.
• Prepare rate analysis and contractors'
bills and check suppliers' bills.
• Maintain quality and speed of work.
management)

FUNCTIONS OF PURCHASE
DEPARTMENT
Study the material schedule.
• Submit the cash flow requirement.
• Implement the sanctioned budget.
• Place the order for materials.
• Conduct market surveys.
• Select quality materials.
• Develop good, reliable suppliers.
• Update market rates.
• Prepare the annual budget.
• Procure and allocate funds.
management)

FUNCTIONS OF FINANCE DEPARTMENT
Preparing the annual budget as per policy
decision.
• Allocating the funds to various departments.
• Arranging for funds through clients, bankers,
and depositors to achieve the target.
• Reconciliation of utilization of funds.
• Allocation of funds as per the priority.
management)

FUNCTIONS OF MARKETING AND
SALES DEPARTMENT
Survey the buyer's trend.
• Search for good locations.
• Provide guidelines for drawings and
specifications.
• Ensure sale of schemes.
• Assist in the flat owner 's registration.
• Monitor payment recovery.
• Prepare documents for loan facilities.
• Issue the final possession letter.
• Make comparative selling price surveys.
management)

FUNCTIONS OF ACCOUNTS
DEPARTMENT
Prepare accounts and balance sheets.
• Make tax payments.
• Get the balance sheet audited.
• Maintain debit and credit records for all suppliers,
contractors and
consultants.
• Check all bills.
• Submit periodical statement of
accounts to management.
• Make staff payments.
management)

FUNCTIONS OF PERSONNEL AND
ADMINISTRATIVE DEPARTMENT
•Formulate rules and regulations.
• Allocate departmental space.
• Provide staff incentives.
• Submit reports to the Government.
• Maintain musters and pay rolls.
• Arrange functions and training programs.
• Encourage extra curricular activities.
• Maintain attendance records,
provident fund records etc.
management)

FUNCTIONS OF LEGAL DEPARTMENT
Check all documents concerning property.
• Give title clearance.
• Prepare legal agreements.
• Submit legal documents to the concerned
Government authority.
• Attend and plead on behalf of the organization.
• Form societies/apartments.
• Prepare the sale deed.
management)

Overview of construction sector in India (construction management )

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