Construction Management 101

We define construction as “to build” and a “project” “as any job that has a short term goal, limited funds, and initially an amorphous scope of work to get it done.” Upper management supplies a budget and a completion on date. Whether or not either is realistic, there has been a handshake in the boardroom or on the 19th hole and we are charged with building the road to get there on time without running out of gas. There are as many kinds and types of construction and projects as the people that put the jobs together. While the techniques and methodologies discussed herein can be useful for builders of residential and commercial big box construction projects, or IT projects with a well-defined project life cycle, the focus of this book will be on the end to end management of one-off, high stakes projects within a manufacturing or production background. The project may be initiated to capture short term profits from early adopters in a Schumpeterian market, where you make money and get out, or longer term, less risky ventures where long term growth is predicted and profits will derive from sales growth and decreasing manufacturing costs. In any case, the focus will be on getting the non-routine job done fast and with hereunto unforeseen efficiency in terms of cost and control. The job can be big enough that unforeseen subprojects emerge as the requirements reveal themselves. Some construction sub-scopes are shovel-ready before the engineering is 100% complete. We anticipate and budget for changes, because the press of time is so severe that we must get going before everything becomes clear. Interested readers will be corporate employees who have been designated as the project manager, whether or not they have prior project experience, or having had some prior experience completed the job late, or over budget, or in legal dispute, and wonder why. We also write to the owners of capital who wish to invest in new plant and production, as a guide to how these things should get done after the funds are approved. It doesn’t matter that the project manager had anything to do with the net present value analysis justifying the project (if there was one), or the schedule which may have been based on the overoptimistic sale of future production on an unrealistic yet specific date, or any other promises made by executives on a golf course without any knowledge of just what they were getting into on the 19th hole with that new customer. If the job is a repeat of existing process, or expansion of something more or less proven, the future may be bright. If you are building a job with next generation production equipment and unproven processes, just throw in a set of unknown actors and you may have a real tiger by the tail. Other interested readers, sooner or later, will be those two guys in the golf cart who have succeeded handsomely because they took the time to read the following or failed miserably and are now looking for a new job, clean out of corporate Mulligans. In short, a well-known tongue in cheek list of project stages goes like this, more or less consistent with Dante’s descent into hell: 1. Enthusiasm, 2. Disillusionment, 3. Panic and hysteria, 4. Hunt for the guilty, 5. Punishment of the innocent, and 6. Reward for the uninvolved. And in the end, the cycle repeats ad nauseam because in the owner’s political context, stages 4, 5 and 6 ring true. There are no lessons learned, except by the contractors who go on to the next customers and treat them to the most expensive lunch they ever ate on your own spent coin. This book is intended to help the reader understand the day to day skills necessary to avoid the foregoing six stages, finish the job exactly when promised, at the agreed upon price. We will do this by integrating existing processes, and understanding the who, what, when, where, how, and why of everything we do. The first chapter sets the stage and defines the project requirements. For the most part we will assume that we are presented with an existing building, or completed new facility and we are faced with building a new production facility and bringing it on line and into production.