The Use of Planning and Control Techniques in Construction Projects in Thailand

Many developed planning and control techniques have been applied in the construction industry. With the increasing availability of various management techniques evolved from past, to select an appropriate technique to manage construction projects is becoming a crucial challenge. As the project management objectives are time, cost, and quality, this study will more focused on comparing between planning and control technique of medium-scale and large-scale projects those are operating in Thai construction industry. Analyzing will conduct in term of merely cost and time rather than quality follow to the study of Laufer and Tucker (1987). They further pointed out that between cost and time, formal planning effort of most construction companies has been primarily focused on time planning, and to a lesser extent on resource allocation and its cash-flow implications. However the emphasis in schedule and budget planning and control of a construction project is because of the realization by the contractor and the owner of the severe implications of schedule and budget overruns. In today's fast-paced construction environment, project owners are increasingly placing greater demands on contractors to complete projects in record time and under budget. This is because time and cost is critical for owners in attaining first in the market advantage over competitors. In short, no party would gain from schedule and budget overruns.

Regarding to above-mentioned problems, efficient planning and control techniques are an approach to alleviate and solve the problems. However in large-scale construction projects, there will be numerous, dynamic, and complex interaction among activities and planning/control system comparing with medium-scale one. The uncertain and rapid changing conditions are always happen, the unanticipated problems might be issued anytime. Consequently, the practiced planning and control techniques will be so complex and complicated. The important question is raised that how the construction projects manager could utilize such techniques effectively and efficiently.

Mr. Kriengkai Payapwattanawong made a research which major objective is to find approaches in improving planning and control practice in Thai construction projects. In order to achieve his objective, the following minor objectives need to be accomplished: (1) to identify criteria considered for adopting and installing planning and control techniques covering majority of planning and control techniques available in the market; (2) to apply such criteria to examine the planning and control practiced of both large-scale and medium-scale Thai construction projects and identify the strengths and weaknesses of their planning and control techniques employed; and (3) to recommend appropriate approach for both large-scale and medium-scale Thai construction projects to adopt and install an efficient planning and control techniques that could enhance project planning and control capability.

Conclusions

The needs to more effective and appropriate planning and control technique

The study shows that respondents rank the criticality level of ‘Effective and appropriate planning and control techniques’ as high whereas only medium satisfaction level of ‘their currently used techniques’ is emerging. This reflects that the investigation for improving the currently used techniques is necessary.

The critical criteria considered for adopting and installing planning and control technique

Results showed that both medium and large-scale construction projects primarily give important to requirement of contract/clients, ease for using and understanding, and available of sufficient knowledge and expertise of planner. Moreover, capability in application with computer software and ease of updated are also considered as critical criteria. However, the analysis shows that there are no significant differences between high influence criteria of medium and large-scale construction projects. Even though there are no significant differences in high influence criteria, significant differences are found between low and moderate influence criteria of medium and large-scale construction projects. Complexity of work (activities), Operation cost, Accuracy of technique, Well-known and widely used technique, and Modernization of technique (Development level) are significantly considered more by large-scale project comparing with medium-scale one. This means that large-scale projects require more advanced and high capability of planning and control techniques for cope with more management difficulties. However, these criteria are not appeared in high level of influencing for adopting and installing the techniques.

The currently practiced planning and control techniques in Thai construction projects

The survey result indicated innovative and advanced planning and control techniques are very infrequently used. However, it has trend to be more used of advanced techniques in large-scale construction projects. But not explicitly emerge. They perceive that their used techniques are easy for using and understanding. Large-scale projects primarily accept that the techniques are widely used and familiar for using. On the other hand, medium-scale projects have perceived that their used techniques can facilitate to achieve better understanding objectives and easy to determine critical path. But their used techniques are still difficult to model ‘real world’, failed to predict problems, and inadequate for complex projects. These might be cause of lacking of training and expertise in their projects.

The obstructions of implementing the better or advanced planning and control techniques in Thai construction projects and suggestions for improvement

It was found out that most of large-scale and medium-scale Thai construction projects find advanced planning and control techniques a definite advantage. A key factor in all successful applications is personnel training of familiarization and advanced techniques’ benefits acknowledgement.

The Thai construction projects need to improve some aspects in the planning and control system areas as presented in the table below, and then the efficient and effective construction management would be achieved.



His thesis abstract is copied and posted.

Abstract

Increasing global competition and rapid technological development are pushing many industries to give more attention to improving the planning and control. Construction is one of the largest industries in many countries. However, the industry has been experiencing such problems as cost overrun, delayed completion, disputes and even litigation. Planning and control techniques are identified among the top potential areas needing improvements. Adopting and installing the efficient technique is important for more effective management. However, an efficient technique is difficult to be adopted and installed. This research aims to identify the criteria considered for successful adopting and installing the techniques, as well as pointing out key problems and difficulties faced of both medium and large-scale construction projects. The currently applied techniques, their strengths, and weaknesses are also examined. Structured questionnaires were conducted with project engineers of 31 medium-scale projects and 35 large-scale projects. The t-test and mean ranking as statistics test methods were used to analyze the data and compare the different between study groups. The results show that the techniques using of both parties is not much different. Advanced techniques are infrequently adopted and installed. However, significant differences were found between some criteria of two parties. These criteria are considered for adopting and installing the technique such as knowledge and expertise user requirement. As consequence, the study helps planners of both medium and large-scale projects to recognize and evaluate the effectiveness of their current used techniques. It also provides suggestions to overcome some practical problems and obstructions if the new techniques are applied in their construction projects.

Management Of Mega Projects: Case Study Of The Second Bangkok International Airport

Second Bangkok International Airport is one of the large engineering projects in the history of Thailand. Construction work of this project is divided into several packages and each package comprises of several projects which are running parallel to each other. Each project is designed and constructed by a number of intercontinental firms and involves many suppliers from different countries. Literature entitles such mega construction projects as programs. Management of such programs is not only complex but also multifaceted. Studying this mega project which has been declared as ‘national priority’, as a whole and specifically from management point of view would be of vast interest.

Mr. Shamas-ur-Rehman Toor conducted a research study in 2005 to study the aspects of interface management, coordination and communication among numerous partakers of the project. The questions explored in his research were:

1. How do different parties (Clients, Consultants, Designers, and Contractors) communicate and coordinate on this large construction project; what kind of communication and coordination tools are they using in their work? And what problems are they facing in doing it?

2. What are the key leadership traits of successful project leaders on large construction projects, and how are they affected by the involvement of participants from a range of national and cultural backgrounds?

3. What are the Key Performance Indicators (KPIs), Critical Success Factors (CSFs), and most significant problems faced on large construction projects? What special issues arise due to the presence of a range of different cultural elements on such mega projects?

4. To what extent can we generalize, with validity, the findings related to this airport construction project and what further research do the findings indicate we should undertake?

Conclusions

Results have shown that perception of different project participants is similar about the subject of communication and coordination interface management on large project and the case study project. Though satisfaction on current health of communication and coordination interface management has been low, usefulness of information has been rated satisfactory. Low satisfaction has been a result of several barriers which are: language, lack of experience of staff, lack of experience of project manager, lack of experience and knowledge of subcontractor, difference in local construction practices, lack of cooperation of government agencies, lack of foremen’s experience and knowledge and bureaucratic behavior of employer.

In second part of this study, traits and skills of project leaders which make them successful were investigated. Different leadership behaviors were also examined to find which styles were more important for success. As a result, four Rs were devised: revolutionary, resolving, reverent and rewarding. These four characteristics of project leaders are crucial for success on large construction projects. Moreover, it was found that communication, team, personal and interpersonal and management skills were most important for project leaders. Technical skills were rate low on importance scale along with computer and specialty trades’ skills. It was also found that poor communication skills, wrongful use of authority and lack of experience make project leaders incompetent.

In third part, critical success factors, key performance indicators and problems on large construction projects were aimed for investigation. Among the top critical success factors, effective planning and control, sufficient resources and clear and detailed written contract, defined goals and competent project manager were given higher ranking. Among the key performance indicators, the traditional triangle of completion on time, under budget and according to specification was given high rating along with two more indicators which are safety and efficiency. It reveals that project managers are conscious about the traditional iron triangle of project management but they do consider safety and efficiency as important measures of performance on large construction projects.

His thesis abstract is copied and posted.

ABSTRACT

Construction industry due to its complex nature and dynamic environment is considered to be a difficult area to conduct research. Numerous studies have been conducted on various topics of project management. These studies have their own boundary conditions, limitations and constraints. Generalizing the results for the whole construction industry after analyzing few projects in particular area is difficult. Also, every project in construction industry is different from others in many ways even when it is copied from another similar project. That is the reason that case studies have become common in research related to construction industry. The current research is also a case study of a construction project which is situated in Thailand. Suvarnabhumi Airport is considered to be the biggest construction project in the history of Thailand. The project is exceptional in many terms. It comprises of five work packages and forty eight construction contracts. Several experts from all over the world are participating in the project in different capacities. With a budget of approximately four billion USD, the SBIA has been declared as ‘national priority’ by Thai government.

The current research explores several areas of project management in context of large construction projects, especially the Second Bangkok International Airport. The research has been divided in to three parts. In the first part, it explores the tools and techniques used by project participants to develop communication and coordination interface management on large construction projects. It also investigates the problems faced during developing communication and coordination on complex construction projects. Results have shown that perception of different project participants is similar about the subject of communication and coordination interface management on large project and the case study project. Face-to-face meetings, formal letters and memos, telephones and e-mails have been considered to be used the most on project as communication channels. Though satisfaction on current health of communication and coordination interface management has been low, usefulness of information has been rated satisfactory. Low satisfaction has been a result of several barriers which are: language, lack of experience of staff, lack of experience of project manager, lack of experience and knowledge of subcontractor, difference in local construction practices, lack of cooperation of government agencies, lack of foremen’s experience and knowledge and bureaucratic behavior of employer.

Several problems being faced in coordination on project were due to tight schedule, limited budget, getting access to work area, lack of authority with project manager, absence of most of designers from site, sharing of cost conflicts, several design changes and use of huge and unnecessary documentation. Most of the communication and coordination problems were overcome through face-to-face meetings, telephone calls, using personal informal relations, and letters and memos. Also, severity of problems related to communication and coordination interface management was rated higher by the contractors as compared to other groups. Designers were the other extent as they rated the severity of problems lower.

In second part of this study, traits and skills of project leaders which make them successful were investigated. Different leadership behaviors were also examined to find which styles were more important for success. As a result, four Rs were devised: revolutionary, resolving, reverent and rewarding. These four characteristics of project leaders are crucial for success on large construction projects. Moreover, it was found that communication, team, personal and interpersonal and management skills were most important for project leaders. Technical skills were rate low on importance scale along with computer and specialty trades’ skills. It was also found that poor communication skills, wrongful use of authority and lack of experience make project leaders incompetent. In context of organizational factors which make project leaders ineffective, lack of resources, lack of planning and control, lack of synergy b/w organizational strategy and performance and lack of top management commitment were rated the top factors which make project leaders ineffective.

In third part, critical success factors, key performance indicators and problems on large construction projects were aimed for investigation. Among the top critical success factors, effective planning and control, sufficient resources and clear and detailed written contract, defined goals and competent project manager were given higher ranking. Thirty nine CSFs were given to the respondents and factor analysis was conducted on top twenty which produced four critical COMs for success of large construction projects. These COMs are comprehension, competence, commitment and communication. Among the key performance indicators, the traditional triangle of completion on time, under budget and according to specification was given high rating along with two more indicators which are safety and efficiency. It reveals that project managers are conscious about the traditional iron triangle of project management but they do consider safety and efficiency as important measures of performance on large construction projects.

Respondents were also asked about the problems they face on large construction projects. Problems related to several human and system groups were presented to rating. Results have shown that higher rating was given to human related problems in organizations. Also, higher mean scores were given by the contractors as compared to other project participants. Moreover, problems related to client, designers, contractors and project management/consultants have been ranked high. Only few problems related to labor, site and environment, finance, communication and other factors could achieve high ranking.

The current research has explored several areas of project management and gives a very broad view of how success can be achieved on large construction projects. The study explores the problems which are potential for large construction projects, suggests critical success factors as input to project, devices KPIs to measure the performance on intervals, gives an overview of leadership required for execution and tools, techniques and practices to overcoming communication and coordination issues and developing an adequate communication and coordination interface management system. Wisely considering all these areas definitely leads to the success of a large construction project.

Keywords: Interface Management, Communication and Coordination, Project Success, Leadership, Critical Success Factors, Key Performance Indicators, Problems, Large Construction Projects

Social Impact Assessment Development for Road Projects in Thailand

Infrastructure projects are utilized for public that played an important role for development in any country. Due to the lack of construction resources or financial allocation, the feasibility study is used to decide which project is the most effective. Environmental Impact Assessment (EIA) was regulated on legal framework in many countries before constructing the project. The EIA study of the project is normally assessed the impacts which are typically in environment. Presently the social and economic impacts are increasing in attention from the public. EIA includes the socio-economic and partly the social study. This creates some confusion on what are the differences between EIA and SIA (Social Impact Assessment).

In Thailand, the feasibility of highway projects has mostly focused on the EIA which only includes the small part of social dimension. In fact, EIA deems the social changes and indirect social impacts but it is not SIA; so that the real social impacts are not covered. The Department of Highways (Thailand) hired the consultant companies to conduct merely the feasibility study and environmental impact assessment of some of the highway projects. These studies gave some social attentions; but not fully covered because they only studied on the social changes or indirect impacts from biological changes which in terms of the public health; property compensation; socio- economic; aesthetic; tourism. For example, the view of public health concerns only pollution occurred during the construction phrase but neglects the accessibility of local people to the health facilities. In the aspect of property compensation, it is reported only how much cost of compensation is or how many relocated area are that is neglected the cohesion of community, structure of institution, interaction among people. This is shown that the recent feasibility study requires further consideration on SIA.

Thailand faces the above problems when conducting SIA. Miss Siriporn Sumonwattanadej conducted a study which was focused on modifying the feasibility standards guidelines to be more completed and able to reflect the nature of local environment. The main objective of her research is to develop the specific guidelines of SIA for road transportation in Thailand. The secondary objectives of her study are as follows:
(1) To review the current SIA implementation of road projects in Thailand
(2) To examine the gap between SIA guidelines from Thailand and other countries
(3) To map between the current SIA implementation from other countries with existing guidelines from Thailand for assessing social impacts.
(4) To recommend the new SIA guideline for Thailand.

Conclusions

The Current SIA Implementation in Thailand

The collected EIA feasibility study of road projects in Thailand plays attentions on social concerns in terms of land use, quality of life, and public participation. Social impacts herein are resulted from the changes of environment. Land use impacts mainly focus direct impacts from expropriation such as residents, agriculture area, and commercial area. Quality of life emphases impact assessment from pollution and relocation of facilities and services. The public participation is conducted for surveying people’s attitude and needs, and informing the relocated people. Both negative and positive impacts are studied by EIA study, however negative impacts are mainly considered. Impact analysis of this study generally assesses direct impacts because further analysis requires budget, researches, models, tools or techniques.

Usefulness of Developed SIA Guideline
Usefulness of SIA guideline is retrieved by comparing between the existing SIA implementation and the proposed SIA guideline. The existing scopes of social assessments are identified boarder. Developed guideline is proposed to fit for road projects in Thailand. It yields usefulness below:

a) Clear Impact Identification - Main methodology of guideline development is use data sorting and data mapping; the impacts are sorted into the developed matrix.

b) Assessment in Community Level - The existing community profile uses questionnaires in sampling groups to draw community characteristics. This method is economic for developing countries.

c) Assessment in Actual Land Use of Community - The SIA guideline assesses not only property expropriation but also people’s living on their land use. Living of people related to their land use is condition of resident, agriculture activities, and operation of religious rituals. Mobility and accessibility of residents in community are assessed. The land use is not only physical aspect but also psychological aspect; so that religious rituals are accounted in this guideline.

d) Social Value Identification - Social values of community are subjective and unique assessment; thus residents are a key to evaluate these values.

e) Assistance Programs of Relocation - Relocation impact assessment cannot stop only fair compensation for relocated people because it is not guarantee that their replacements are enough decent living. If relocated people are low income or distinctive; they may face exploitation on their quality of life.

f) Boarder Safety Impacts - Safety of motorists is considered in engineering design; however safety impacts of residents are not accounted. SIA guideline yields boarder safety for community that considers unsafe conditions on patterns of pedestrians, bicyclists, motorcyclists and hired motorcyclists, and users of local buses. Life of community is safe; this benefit is overestimated.

g) Boarder Economic Impacts - EIA study uses results of random sampling to draw the socioeconomic condition of study area and to predict what economic changes are. The opponents of this assessment argue that economic of community is not only income or employment but also viability of economic sectors or components.

h) Disadvantage Identification - Civil rights system between developed and developing countries are definitely different so that implementation of civil rights in developing countries consumes additional resources as limited. Actually, this is true only in one respect; but it is not a reason to neglect civil rights in feasibility study.

Limitations of Developed SIA Guideline

One of purposes in this study is SIA guideline development from the existing social concerns in EIA; thus SIA of Thailand is not fully implemented yet. This guideline can raise awareness of human and community impacts from road project; and it clearly figure out scope of impact assessments and impact indicators. It is claimed that it is not applicable for

a) Systematic Assessment - Nature of social impacts is subjective depending on characteristics of residents; so that social impacts may not be measured in numerical value. Evaluating system of SIA guideline attempts to use same systematic assessment on each impact. But it is limited because social impacts are sense evaluations of community and various kinds of impacts.

b) Multistage Assessment - Data mapping is a main process to develop SIA guideline; therefore results of impact assessments depend on characters of data sources. Collected literature studies have not clearly defined impact assessment in various stages of project; so that multistage of assessment is limited on this guideline. Nevertheless, impacts on construction and operation stages are identified in some impacts; but planning stage cannot capture what impacts are, and monitoring stage has lack of proposed assessment.

c) Data Mapping - One of expected results from data mapping is that the developed SIA guideline can identify techniques of specific impacts. It is found that the techniques are designed for assessing impacts in particular study area; so that they have limitation to apply for Thailand. Each assessment requires some special data, models, or programs to analyze effects such as land consumption standard, property price model, or computer visual simulation. These tools are not available or developed in Thailand; thus some techniques are invalid. However the proposed assessments in this guideline are developed in similar assessment concept; it means that social issues, indicators, and impact analysis can be applied.

d) Further Study - The impact assessments proposed in SIA guideline is able to reveal and mention what social impacts should be. Precise assessments require their further studies in order to analyze each impact as has been pointed out that social impacts are particular and distinctive. It is recommended that these further studies should be conducted by partial assessment of each impact category or perspective for enclosure area; so that board view of SIA will use many techniques to examine social impacts in particular or proper.

SIA Guideline Instruction

According to usefulness and limitation, instruction of SIA guideline assesses social impacts from road projects in Thailand. The guideline can assess social impacts of new road and existing road projects; its assessment mentions to assess effects from highways, motorways, and expressways. For new project, it can apply in feasibility study on alternative selection; likewise its assessment can monitor impacts from the existing roads. Instruction of SIA guideline implementation is described following.

a) SIA guideline requires project information to assess project’s effects; this adequate information is available after alignment selection in feasibility study. Therefore its assessment can evaluate social impacts during project design and alternative selection in feasibility study.

b) The checklist of SIA guideline can review what necessary data are, what impacts should be. It figures out the sensitive areas or communities in order to further assess social impacts on these areas. SIA guideline starts to assess impacts.

c) SIA guideline has two main parts: community profile and impact assessments. It assists to profile the mentioned areas or communities to collect and prepare community data for assessing impacts. The assessments use the developed profile as a baseline to consider what anticipated changes are; these changes can bring about any impacts according to guideline. These changes are associated with social conditions, economic characteristics, land use characteristics, and physical features, and relocation programs according to guideline.

d) Impact assessments propose guideline to evaluate human, economic, land use, aesthetic and livability, and relocation impacts. The identified changes can analyze their impacts by using proposed forms and questions based this guideline. It is kept in mind that social impacts are dynamic and divergent; the dynamic environment results in difficulties of data validation and impact projection. The divergent impacts are caused side effects and cumulative impacts in other impacts. Thus impact analysis should not limit only this guideline.

e) Assessment is summarized to readable documentation for disclosing to stakeholders in order to plan mitigation plans responding to these impacts.

Recommendations

Recommendations are proposed for success of SIA guideline implementation and further study in future. Successful SIA implementation requires effective public participation to identify subjective impacts; and cooperative environment among relevant agencies to achieve sustainable development. Monitoring of assessed impacts enhance cross-check of assessed impacts and improvement of assessments. Phrased-stages between feasibility study and road project require the compatible guideline in practice.

People or residents are vital to define what impacts are; proper public participation can enhance precision of assessment. It is recommended thus further study is how public participation is designed for consistency with this guideline.

Due to SIA regarding many stakeholders who have different orientations, cooperative environment can assist effectiveness of assessment. Stakeholders’ meetings to identify and evaluated social impacts that should be arranged.

Summary of SIA documentation cannot ensure that assessed impacts are exact and precise. Level or magnitude of impact assessment is examined whether these impacts are correct or not. This guideline can be modified or corrected by the new findings; it will more complete. The further study should specify assessment guideline for particular road types.

Phased-stages between feasibility study and road project require different SIA guideline to assess social impacts as early. This guideline is able to assess impacts after alignment selection; that means social impacts are exist from selected alignment. These impacts are assessed for mitigation; preventive assessment is limited. Thus further study should consider preventive assessment guideline; and the active guideline should match with these phased-stages.

Her thesis abstract is copied and posted.

ABSTRACT

The goal of this study is to develop social impact assessment (SIA) for road projects in Thailand. Road projects, excluding rural roads, are mandated to conduct environmental impact assessment (EIA) under Environmental Act, 1992. Environment term is expanded to integrate human living with physical natural resources; thus current EIA evaluate project’s effects in terms of land use and quality of life. Public participation is a part of EIA according to Law for articulating project’s information to affected residents. Guideline development method uses data management and data mapping by reviewing secondary data between the EIA feasibility studies of the road projects from relevant jurisdictions and the developed SIA guidelines from other countries. The new SIA guideline is developed by extending social impacts in EIA to assess indirect and cumulative impacts. It is validated by experts from these jurisdictions. It is consisted of the checklist of SIA guideline and body of SIA guideline; to estimate anticipated impacts and evaluate detail of social impacts respectively. It can assess both positive and negative impacts of new and existing road projects. It can evaluate impacts for alternative selection and since design stage of road project to operation. Monitoring and iterative assessment processes are recommended for further study.

Cash Flow Planning Application for Construction Projects

Construction industry is experiencing a proportionally greater number of distressed firms than in other industries. Primary causes are inadequate cash resources and the failure to convince creditors and lenders of the temporary nature of such shortage. Apparently, cash flow management is becoming an essential tool for managing, controlling and monitoring construction projects so as to ensure uninterrupted cash flows through the course of project implementation.

Although project cash flow has been studied in several countries in the past, most researches primarily emphasized on developing the cash flow ideal curve and mathematical formula by using past project data to forecast or predict cash flow trends during the tendering stage of construction project. Singh and Lakanathan (1992 cited in Navon, 1996) stated that cash is the most important of the construction company’s resource, because more construction companies fail due to lack of liquidity for supporting their day-to-day activities than because of inadequate management of other resources. Cash flow management is a complex and important problem faced by companies of different sizes usually requiring distinct approaches and proper tools according to the nature and complexity of the operations. Inadequate cash resource and failure to convince creditor and lender are the main reasons why the construction industry usually experiences a proportionally grate number than other industries (Barboza and Pimentel, 2001).

Therefore, the cash flow planning becomes an essential in management of construction project as to ensure uninterrupted cash flow through the course of project implementation. Previous researches of project cash flow were mostly conducted to derive a universally accepted cash flow forecasting model which can be applied to every type of construction projects.

In addition, most of the contractors require the project cash flow plan for preparing the periodic budgets and for monitoring and controlling their project. Therefore, the suitable tools for developing the project cash flow plan should provide timely, accurate and uncomplicated use. In order to efficiently plan and accurately forecast the project cash flow which can be tracked against the project schedule, a proper cash flow planning tool should be integrated with the project cash flow plan and the project schedule.

Mr. Nakorn Nakwarin made a study which main objective was to develop a cash flow planning application prototype for integrating project schedule information and cash flow plan of construction projects. The developed application can be used to assist contractors in reducing the inconvenience in project cash flow planning, monitoring the project financial status and planning proper corrective actions.

In order to achieve the main objective, two sub-objectives were also needed to accomplish as follows:
1. To identify the factors affecting the project cash flow during the construction stage
2. To develop cash flow planning system, which can be used to plan the cash flow and forecast the financial status of a construction project

Conclusion

1. Identification of Factors affecting Project Cash Flow during Construction Stage
The following are a list of key factors affecting project cash flow during construction stage:

Influence Factors in Term of Revenues
Revenue factors consist of progress payment and advanced payment. Each project has different types of work progress payments. For some projects which clients make payments according to the actual work progress, revenue to contractors would be recognized when such payments are made. However, for other projects, contractor would recognize revenue based on the payment period or payment stage. Another factor affecting the project revenue is the advanced payment. Advanced payment is the amount of deposit required from contractors prior to project commencement. Different types of project progress payment and advanced payment are based on the contract details of each project.

Influence Factors in Term of Costs
This research has classified the cost factors into seven key components, including the labor cost, equipment cost, material cost, subcontractor cost, mobilization cost, overhead cost and estimation. In calculating project costs, it undoubtedly involves estimation. Such cost estimation was made by using the estimated quantity of each project resource, the resource cost data, the subcontractor cost, the mobilization cost and the project overhead cost. Estimated costs could materially misstate the actual project costs if contractors employ improper estimation approach or use outdated resource cost data, subcontractor cost data, mobilization cost and overhead cost data.

Influence Factors in Term of Time
According to the research, time variable is another important factor affecting project cash flow planning. There are altogether four sub-factors of the time variable, including the project schedule, the project calendar, the payment term and time lags. During construction phase, project schedule constantly changes. Causes of change are changes in construction techniques, construction delay, or the pushing pressure from contractors to expedite construction process. Calendar assigns working day, non-working day and holiday of each project. Whenever Project Schedule and Calendar change, they will also cause changes in the project cash flow plan. Finally, both payment term and time lags affect the cash flow project planning with respect to the payment date of both revenue and cost.

Influence Factors in Term of Contract
There are four factors related to project contracts, including the retention, the performance and payment bonds, the unbalanced bids and the tendering BOQ. The retention amount would be charged when contractor receives progress payments and would be repaid to contractors upon project completion. The performance and payment bonds are guaranteed deposits required from contractors prior to commencing the project. The unbalanced bids arise when contractors raise the price on certain bid items and reduce the price of the other in order to accumulate more proceeds at the initial stages of the construction project. The details of tendering BOQ are stated as a part of project contracts for payment to contractors.

Other factors
Other factors impacting the project cash flow planning are material-related variables and inflation rate. Material storage policy or material warehouse policy, lead time of material ordering material payment and credit term, down payments and material discount rate are examples of material-related variables affecting project cash flow planning. Inflation rate is another factor which is relevant to project cash flow planning for construction projects spanning over one year. Inflation rate is applied to calculating and planning cash flows in order to take into account the increase or decrease in the value of money over years.

2. Development of Project Cash Flow Planning Application
Project cash flow planning is a significant tool that assists construction firms in managing their project financial status. Due to the complexity and various factors involved in the project cash flow planning process, the project cash flow planning application is developed to assist contractors in performing this task. In order to develop the project cash flow planning application, several steps are involved, starting from system requirement identification, system design and development to system testing.

System Requirement Identification
System requirement identification can be divided into two sections: system requirement acquisition and system requirement analysis. In order to determine system requirements, interviews were carried out with five construction companies. The outputs of this stage include existing problems and basic requirements of project cash flow planning system. Another section is the system requirement analysis of such acquired information. The outputs of system requirement analysis are project cash flow planning framework, data flow diagram and data dictionary. These will be used as input for the system design and development phase.

System Design and Development
The system design and development phase comprises of three major tasks, namely the system architecture design, the system database design and development, and the application interface design and development. The system is designed according to the retrieved information from previous phase. The system architecture of project cash flow planning system is the output of the system architecture design stage, consisting of MS Project, MS Excel, MS Access and Project Cash Flow Planning Application. The second task is the system database design and development which consists of entity design, entity-relationship diagram design (E-R diagram) and database development, where the project cash flow planning database is the output of this stage. The last task in the system design and development phase is the application interface design and development.

System Testing
The key objective of system testing is to ensure that the developed prototype can accomplish the stated objectives. In this phase, the project cash flow planning system is tested in terms of system verification and system validation. System verification is carried out to test the overall functions and the accuracy of the system whether there is any system error. Then, system validation is carried out by demonstrating the system to contractors and noting their comments to assess whether the system meets their requirements.

His thesis abstract is copied and posted.

ABSTRACT

An essential element in a construction firm’s overall strategy is its financial plan, which should be designed to ensure an adequate provision of finance for the firm’s needs. Without sufficient funds, a company cannot safely expand as quickly as it might wish. This is due to the reason that the fund shortage problem is the most common cause of business failure, particularly the profitable and growing firms. The planning of project cash flow is a management tool used by the construction firms to improve the firms’ financial position and remove the risk of bankruptcy. Similar to other management tools, cash flow planning is a repeated process. During the initial stage, a forecast plan or target is complied. Next, when the project is progressing, the performance is measured and compared with the plan. It is often the case that there are discrepancies between the plan and actual performance; therefore, the plan has to be consequently changed in order to meet the original target or at least minimizing the discrepancy between the actual performance and the original target. Cash flow planning is a time-consuming and very complicated process because it involves lots of documentation and several procedures for calculating and checking the cash flow.

Acknowledging the inconvenience and complication of cash flow planning process, this research aims to develop a new and innovative computer tool used for project cash flow planning. The system being developed is the integration of Microsoft Project and project cash flow planning application in order to generate project cash flow plan. The benefits from this application include a reduction of time used for planning the cash flow planning, a lower error during cash flow project planning, and an increase in the construction management efficiency.

Multicriteria Decision Making For Highway Management System

Generally, infrastructure engineers and planners encounter problems when they engage in planning for operations in both long term and short term projects. In order to make a successful decision, it is the most important concern to apply efficient and effective process of how different objectives, facilities and functions are evaluated. In addition, they need to think properly how measures of value or worth are placed on the various alternatives (Li and Sinha, 2004). The main objective of a decision-making process is to maximize the benefits as well as minimize the cost. As highway management system includes various facilities, objectives and functions having different measurement scales, the benefits under different dimensions are measured into different units that make the decision-making process more complex. To diminish this complexity, all the units of benefits are needed to convert into a non-dimensional uniform unit so that decision-making action can be implemented under same platform (Li and Sinha, 2004).

At present, infrastructure maintenance and rehabilitation decision-making for both network and project level is based on current measured and future predicted facilities conditions (Madanat et al., 1997). However decision-making in highway management is a complex process due to limited budget constraint and multiple criteria of influencing factors. In Thailand, there are still some decision-making processes of highway management. It needs to evaluate the performance and effectiveness of those processes whether all objectives are fulfilled or some objectives are violated. Although, highway management system consists of several operational functions, maintenance is the most important function for highway management system where necessary infrastructures have already been constructed. In addition, highway management system includes various objectives such as service, condition, cost, safety, socioeconomic factors, energy etc. So, it is required to know the amount of their influences in decision-making. For this reason, weighting factors of all objectives should be identified so that they can be easily used in any calculation of decision-making. Moreover, objectives are influenced by some performance indicators such as ADT, lane width, shoulder width, travel speed, skid resistance for safety, IRI for condition, population for socioeconomic demand etc. Therefore, to develop the utility function, those performance indicators and their influences are required to know.

If utility function and weighting factor of each individual are identified, function would give a non-dimensional unit. After accumulating all the utility functions, it might be easy to rank them for making a decision. If a decision-making process concerns all the criteria, it would be efficient and effective for any management system. So, all countries including Thailand should have an effective multi-criteria decision-making process for highway management system.

Mr. Mohammad Mamunur Rashid, made a study which tried to develop and introduce utility functions for various objectives and their performance indicators of highway management system. In addition to this utility function, weighting factors of individual objectives in different facilities provides a non-dimensional output so that planners or decision makers can use those functions for decision-making about a suitable action in highway management system.

The main objective of his study was to develop a multi-criteria decision-making process for highway management system. The basis of decision-making is to maximize the overall benefits as well as to minimize the cost within available resources. In order to achieve the main objective in a systematic and sequential manner, secondary objectives were to : (1) overview the existing decision-making process and accumulating factors; (2) determine the facilities of highway management system and their objectives and factors which influence decision and their performance indicators as well as their weighting factors; (3) develop the utility functions of different performance indicators, objectives and facilities in highway management system; and (4) develop an overall decision-making process for the highway management system.

Conclusion

1. Overview of Existing Process
At the beginning of this study, some existing decision-making processes for the highway facilities maintenance operations were reviewed and it was found that the optimum treatment matrix of TPMS budgeting module is commonly used in Thailand for the pavement maintenance. For the other facilities such as bridge, roadside element and traffic control device, there is no specific decision-making process for the maintenance operation. According to the treatment matrix, maintenance decisions are made by using roughness index (IRI), major deterioration, minor deterioration and traffic volume (AADT). In addition to that there are several important factors such as structural capacity, noise level, cost, skid resistance etc. which are absence in this process. Therefore, it would be a better idea to have such a decision-making process that accumulates as many factors as possible.

2. Determination of Objectives, Performance Indicators and Weighting Factors
At the introductory stage of the questionnaire survey, this study deals in only the identification of objectives and their respective performance indicators that would be necessary for having a maintenance decision and planning. For all facilities, objectives are almost similar such as condition, service, safety, cost, socio-economic factors, energy etc. but those objectives have different performance indicators for different facilities.

Preliminary questionnaire survey was carried out in this study in order to achieve the goal for the identification of all the indicators. Questionnaire included some objectives and their performance indicators of four different facilities such as pavement, bridge, roadside elements and traffic control devices found from previous research and experts were allowed to select all possible necessary objectives and indicators in addition to add new factors that would be important. All the selected objectives and their indicators found from the preliminary questionnaire survey were enlisted as necessary factors and used for developing the final questionnaire.

Final questionnaire survey carried out in this study deals in two objectives such as the determination of the different weights of different objectives and performance indicators and development of utility function for every individual performance indicator. On the basis of the identified factors in the preliminary survey and having some brief interview of experts helped to develop the final questionnaire. In this study, the objective of the determination of relative weighting factors is to differentiate the influences of different objectives and their performance indicators in terms of numeric percentage value so that those can be used to make a decision.

3. Development of Utility Functions
Development of utility functions of different indicators that was the most important part of this study was finally achieved by the final questionnaire survey in two steps. Experts were asked to put relative utility values for different units of one performance indicators. Regression analysis that is one of the most reputed processes was used to have the best fitted equation accumulating the opinions of all experts for every different performance indicator.

The second step of the final questionnaire survey was carried out in the point of non-consistency. Sometimes, expert opinions were contradictory and to diminish this problem, they were asked only on that non-consistent issue. Finally, all the data were in the same trend and used for regression analysis.

4. Development of Overall Decision-making Process
Final decision for the prioritization in maintenance operation would be made accumulating all the weighting factors and utility functions of the performance indicators and objectives of respective facilities. The existing condition data and future predicted data after maintenance should be listed for every alternative. Total utility value of each alternative would be determined by the multiplication of utility values of performance indicators and their overall relative weighting factors. The summation of all multiplication provides the total utility value for each alternative. In another way, utility values found for every performance indicators of one alternative would be multiplied by the weights of the performance indicator in their respective objectives and the weights of the objectives. In this case, summation of all multiplication would provide the same value of total utility value. The main purpose of dividing the performance indicators into different objectives is to provide a breakdown structure so that the limitations can easily be identified and have some correction works effectively. Finally, accumulating all the total utility values, alternative having higher utility value should have the higher priority for the maintenance operations.

His thesis abstract is copied and posted.

ABSTRACT

An effective highway management system includes multi-dimensional features such as several numbers of facilities, operations and objectives. Therefore, the decision-making process in a highway management system is very complex interrelated with multiple dimensions. Moreover, measurement with non-commensurable units makes the process more difficult and complicated. Although having complexity in its decision-making process, it is present demand and very useful for an effective highway management system so that all objectives and dimensions can be fulfilled as closely as possible.

In general, pavements, bridges, roadside elements and traffic control devices are the facilities of highway management system that also includes various objectives such as service, condition, cost, safety, socioeconomic factors, energy etc. In addition, it includes several operations like planning, design, construction, condition evaluation, maintenance, improvement and data management. This study tries to develop a decision-making process for the maintenance operation only that would accumulate all the necessary objectives and their performance indicators in order to have an effective maintenance decision. As the measurement unit of different factors are different and it is very difficult to convert all the units into monitory terms, utility functions of various objectives and their performance indicators are developed that provide a non-dimensional output. Moreover, the influences of different factors are not equal for the maintenance operation. Therefore, weighting factors of all the objectives and their performance indicators are determined so that they can be easily used according to their influences in any decision-making. Finally, the decision-making process that accumulate all the weighting factors and utility functions would help the planners for getting an effective decision for appropriate maintenance operation of different facilities of highway management such as pavement, bridge, roadside elements and traffic control devices.

Assessing Safety Management Practices In The Bhutanese Construction Industry

The construction field is one of the most hazardous industrial fields. Construction accidents caused many human tragedies, de-motivate workers, disrupt site activities, delay project progress and adversely affect the overall cost, productivity and reputation of the construction industry (Mohamed, 1999). Constructions in developing countries have following important characteristics (Datta, undated):

- Engineering integrity and design flares in response to constrained availability of materials.
- Flexible industry in response to funding constraints.
- Labour force is willing and adaptable to difficult working conditions.

Construction industry in a developing country is also a major stakeholder of the economy. It is a source of employment at various levels of skills from manual labour to semiskilled, skilled and specialist workforce. As such, accidents which result in loss of lives and injuries can have devastating economic effect apart from the human cost of suffering an accident (Sawacha et al., 1999). The accident and fatality rate due to occupation is still high especially in developing countries, despite some progress made in tackling the traditional occupational safety and health problems (Basri, undated). It is estimated that the risk of accident in developing countries is 10-20 times higher than the industrialized countries.

Safety is considered a critical problem both in developed and developing countries (Enshassi, 1997) because safety on the job site is an important aspect of the overall safety in construction (Assaf and Jannadi, 1998). However, in most developing countries, including Bhutan, safety consideration in construction project delivery is not given a priority and employment of safety measures during construction is considered a burden (Mbuya and Lema, undated).

The construction industry in Bhutan is one of the fastest growing and largest employing industries. It is also one of the highest contributing sectors to the national GDP (about 12% at the end of 8FYP) next only to agriculture. However, the occupational safety and health in the construction industry in Bhutan is at the very basic level. It lacks in all the three fronts of Engineering, Education and Enforcement (“Three E’s of Safety”) of occupational safety and health. Safety concerns have been raised, of late, and earnest efforts are being made to promote safety and health in the Bhutanese construction industry. The industry, as such, needs information to assess the safety situation and accordingly plan and implement safe construction in Bhutan. Currently there is a genuine lack of data on safety on construction sites in Bhutan. Apparently, there are no systematic and organized studies conducted specifically on the safety aspects of the construction industry in Bhutan. Therefore, there is an urgent need to carry out studies/researches in order to assess the prevalent site safety management practices and procedures, and thereby help propose viable measures for reducing accidents and consequential damage in the Bhutanese construction industry.

Mr. Kin Dorji made a research study which assessed the existing safety management practices and perceptions in the Bhutanese construction industry. The outcome of the study established a baseline data of the safety aspects of the construction industry in Bhutan. The overall scenario of safety situations reflected in the study could also serve to facilitate the policy makers in formulating rules and regulations and safety programs appropriate to the construction industry in Bhutan.

His research are to: (1) evaluate the prevalent safety management practices and procedures in the construction industry in Bhutan; (2) identify safety problem factors in the Bhutanese construction industry and determine how the contractors and government perceive their importance; (3) develop a database on the safety management practices of the Bhutanese Contractors; and (4) propose a recommendation for the Bhutanese construction industry for improving the site safety management.

Conclusions

1. Prevalent site safety management practices and procedures in the construction industry in Bhutan.

The five key elements of a construction safety and health management system have been found to be practiced in varying degrees by the construction companies in Bhutan. Some of the major shortcomings and problems confronting the current site safety management practices in the Bhutanese construction industry have been highlighted below:
a. Policy
- Lack of safety regulations and standards
- Low priority of safety

b. Organizing
- Lack of competent manpower

c. Planning and Implementing
- Lack of safety and health training
- Lack of safety promotion

d. Measuring performances
- Lack of data on safety on construction sites

e. Reviewing performances
- Lack of documented and organized safety management system

2. Perceptions of site safety management problems in the construction industry in Bhutan.

The study has revealed that the contractors and the relevant government organizations in Bhutan generally agree on the ranking order of the factors attributable to site safety management problems in the Bhutanese construction industry based on their importance. It means that the perceptions of the site safety management problems in the Bhutanese construction industry between the contractors and the relevant government organizations are the same. They have a common understanding of the safety problems which is very crucial for successful implementation of any safety measures in the Bhutanese construction industry. With this common understanding of the safety problems, the government would be in a position to understand the gaps and priority needs in the safety management practices of the contractors and accordingly adopt measures that would be appropriate and effective to contractors.

3. Database development on the site safety management practices of the construction companies in Bhutan.

A sample database has been developed using Microsoft Access software based on the data collected for the study. As a part of this study, it is a modest contribution to the Royal government of Bhutan. The database is targeted for use by the relevant government regulatory agencies concerned with occupational health and safety administration in the Bhutanese construction industry. It is a useful utility for storing and retrieving information on the safety management practices of the construction companies in Bhutan. However, the sample database is seriously handicapped due to lack of information on safety on construction sites in Bhutan. The database system consists of the following information: i) General information of the construction companies in Bhutan; ii) Safety organizing like safety policy, provision of safety budget, safety representatives and committees, etc. iii) Safety planning and implementing like safety meetings, inspections, and trainings, etc. and iv) accident information like number and type of accidents, and their costs.

Recommendations for safe construction in Bhutan

1. Safety legislations and corresponding regulations: Health and safety legislation supported by a regulating body is non existent in Bhutan. As such, there is ever growing need for realistic safety legislative standards to enforce safety in construction. Therefore, the establishment of a safety body or institution supporting the safety legislations would go a long way in improving the safety situation in the Bhutanese construction industry.

2. Safety awareness: The level of safety awareness among the construction industry personnel is very poor in Bhutan. Improved safety awareness can be created by promoting and communicating safety to the people in the construction industry through safety and health trainings, workshops and seminars, incentive programs, and safety campaigns through public media. Such education and training needs could be addressed by introducing safety chapters in the academic engineering institutions as well as the construction training institutes and centres in the country. Special safety literatures and training materials could also be published by the concerned agencies in the government.

3. Safety incentives: Safety will not improve unless there is a demand or incentive provided to the contractors (Larchar and Sohail, 1999). So, where the main concern of a contractor is how to save money and reduce costs (Kartam et al., 2000), the initiative for improved safety must come from the client. The clients should insist on having safety measures at the construction sites by incorporating the specific terms and conditions for safety provisions in the project contract documents.

Apart from this client oriented safety improvement measures the national Insurance companies in Bhutan could also play a vital role in improving safety in construction by varying the current fixed system of insurance premium payment for the contractors as per their record of safety performances. Such a step would encourage contractors to implement safety practices at their work sites.

4· Safety records: Currently there are no official sources for any information on safety on construction sites in Bhutan. There are no accident statistics and profiles, and safety reports available on the Bhutanese construction industry. As such, there is an immediate need to have an effective accident data collection system in place. The proposed safety department under the Ministry of Labor and Human Resources in Bhutan as discussed above could collect and compile data on safety on construction sites by distributing standardized data collection forms and formats to the construction companies.

5· Safety management practices: The current safety management practices of the contractors in Bhutan need to be drastically improved in terms of documentation and its effective implementations. It has to be manifested clearly in safety manuals and procedures. Standard forms and formats have to be used for safety inspections, accident investigations, accident reporting, and safety meetings, etc. for proper recordkeeping and follow-up actions. Above all top management’s awareness and support is vital for the successful implementation of the safety management system at the work sites.

His thesis abstract is copied and posted.

ABSTRACT

The construction field is considered one of the most hazardous industrial fields wherein the construction workers are more prone to accidents resulting in loss of lives and injuries. Studies have shown that these accidents in turn can have devastating effect on the construction industry both financially and in terms of humanitarian aspects. To this effect especially in the developed regions like UK and USA there are stricter legal enforcements to regulate safety and health in construction, and also implementation of safety management systems designed to minimize or eliminate accidents at work places. On the contrary, the occupational safety and health in construction is very poor in the developing regions like Bhutan where construction industry has a major share in the national economy.

This study evaluates the prevalent safety management practices and safety regulations, identifies factors affecting them, and also develops a sample database on the safety management practices in the construction industry in Bhutan. The study has been conducted on 40 sample construction companies and 14 officials in the government regulatory organizations relevant to construction industry in Bhutan by way of questionnaire surveys, interviews and discussions. There are many problems confronting the occupational safety and health in the construction industry in Bhutan. It was observed that some of the major gaps were: i) lack of safety regulations and standards, ii) low priority of safety, iii) lack of data on safety on construction sites, iv) lack of competent manpower, v) lack of safety and health training, vi) lack of safety promotion, and vii) lack of documented and organized safety management systems. Furthermore, the study also proposes some recommendations for safe construction in Bhutan.

Owner’s Risk Management for Civil Construction Projects in Vietnam

Construction is one of the riskiest industries compared to others. Risk in construction often causes time and cost overrun. As a result, the projects were delayed or exceeded the estimated budget, behind the schedule. Moreover, risk can affect productivity, performance, quality and the budget of a project.

Nowadays, risk management is considered as one of the most important factors of decision making of every business as well as the construction industry. As construction projects are becoming more and more complex, dynamic, they are bared to more risks and uncertainties. Hence, effective risk management has become one of the key problems that deal with the industry.

Vietnam is now on its way of modernization, industrialization and trying to integrate with the world economy. Industries are faced many kinds of risks due to the continuous changes in social and economic condition. Therefore, construction industry is not only provided many opportunities, many chances but also many risks, uncertainties and threats.

In construction projects, many parties are involved such as owner, consultant, contractor, sub-contractor, and supplier etc. Each party has its own risks. There are some researches about the contractors’ risk in Vietnam’s construction industry. Consequently, it is significant to have a research about the risks that owners have to face in their financial investment in construction projects and the way they managed their risks as well as how to control construction risks smoothly because they are one of the most important parties that are involved in the projects from the beginning until completion and afterwards.

Based on the necessity for improving and escalating the owner’s risk management in construction projects mentioned in the statement of the problems, Mr. Nguyen Thanh Huy made a study intended to achieve the following objectives:

1. To determine, rank, classify risks facing owners in civil construction projects in Vietnam from the view of frequency of occurrence and degree of impact.
2. To determine the difficulties in applying risk management in civil construction projects.
3. To investigate how risk management is practiced by project owners in civil construction projects in Vietnam.
4. To give recommendations for improving risk management in practice.

General conclusions

This study focuses on the risks and risk management in the owner’s perspective in civil construction projects in Vietnam. It seems to be beneficial to owners in civil construction projects. In this research, the survey questionnaires were used to get the ideas of respondents about the listed risks in terms of frequency of occurrence and degree of impact. Moreover, a case study was conducted in two subjective chosen public entities in order to determine the level of risk management in practice by owners.

Major risk factors affected owners in civil construction projects in Vietnam

The mean values are carried out to determine and rank the risks in terms of frequency of occurrence and degree of impact. The top twenty risks in terms of frequency of occurrence and degree of impact are determined.

The top twenty risks which have high frequency of occurrence are: (1) Long procedure for approval and permits; (2) Unable to finish work on time; (3) Contractor takes jobs in several projects; (4) Design changes; (5) Corruptible government officials; (6) Late internal approval process from the owner; (7) Frequent changes in law; (8) Incomplete design scope; (9) Improper project feasibility study; (10) Increase of resettlement cost; (11) Improper project planning and budgeting; (12) Ineffectiveness and lack of supervision of consultants; (13) Inadequate or ambiguous specifications; (14) Lack of funds to proceed with work; (15) Delays in approval; (16) Inadequate tendering price; (17) Lack of knowledge and experience on construction; (18) Increase of material cost; (19) Impractical planning and scheduling; (20) Communication and coordination problems.

The top twenty risks which have high degree of impact are: (1) Inefficient and poor performance of contractors; (2) Lack of knowledge and experience on construction; (3) Long procedure for approval and permits; (4) Improper project planning and budgeting; (5) Ambiguous clauses of contract; (6) Shortage of experienced and skillful workmanship; (7) Poor design; (8) Poor quality of procured materials; (9) Unable to finish work on time; (10) Inadequate or ambiguous specifications; (11) Lack of funds to proceed with work; (12) Design changes; (13) Impractical planning and scheduling; (14) Inadequate tendering price; (15) Improper project feasibility study; (16) Ineffectiveness and lack of supervision of consultants; (17) Low quality of work; (18) Dispute with residents around site; (19) Incompetence of project team; (20) Late internal approval process from the owner.

The four risks which have high ranks in both frequency of occurrence and degree of impact are: “Long procedure for approval and permits”, “Unable to finish work on time”, “Design changes” and “Contractor takes jobs in several projects”

Moreover, factor analysis is used to test the interrelations among top twenty highly ranked risk events in terms of degree of occurrence. These risks could be grouped into five factors with most significance. They are: (1) Incompetent consultant/designer/project owner, (2) Social issues, (3) Contractor issues, (4) Approval issues, and (5) Improper feasibility study.
Hypothesis testing also pointed out that perceptions towards risk events were not dependent upon the level of experience and the size of public entities. One of the reasons explains these results: within 5-7 years until now, project management is considered one of the most important parts in project. Therefore, people are more and more interested in this. Many young engineers have the conditions to be trained their knowledge of project management as well as risk management. As a matter of fact, even without having much work experience yet, they still can have nearly the same perceptions towards risk events as those experienced ones. Moreover, even there is a difference in size of organization, but both of large and small entities are state-owned corporations and use the government budget, have the same policy about budget usage. Therefore, it is not surprising that both of them have the same awareness about risk events.

Major difficulties during risk management implementation
Risk management is relatively a new area in project management in Vietnam. Hence, the people who carry it out in projects face many difficulties. During this research, some difficulties that owners face when they apply risk management in their projects were determined. They are: (1) Lack of qualified experts, (2) Lack of historical data, (3) Poor communication among responsible people and (4) Unfamiliarity with tools and techniques. These finding difficulties seem to be important because it provide useful experiences for other companies who intend to apply risk management in their business.

The practice of risk management by owners in civil construction projects in Vietnam
By interviewing respondents in both the two public entities (large public entity and small public entity), risk management in practice by owners are investigated. There are some main points about risk management in practice in the two public entities.

- Regarding to risk management planning, there are some remarkable points to ponder. Risk management planning is considered most important and significant step in risk management. However, there is no policy, procedure, specific department or people assigned to manage risk in both public entities. Experience is considered the important factor to face risks. In the LPE, project documents, project budget, project size and project scope are most frequently used while in the SPE, project documents and project budget are most popularly used for risk management planning.

- Related to risk identification: The Risk identification in the LPE is better than in the SPE. Project management team, board of directors, contractors, consultants and external experts are involved in risk identification in LPE while in SPE, management team, board of director and consultant are involved. The approval project profiles, project budget, time schedule, project output, some government policies towards those projects, policies of lenders or law, experience from past projects, all information related to projects are inputs for risk identification in both entities. In terms of tools used, project document review, risk checklist, brainstorming are most frequently used techniques while fish-bone diagram and influence diagram are seldom employed. In general, risk identification is quite well performed.

- Risk analysis: Qualitative and quantitative risk analysis is used simultaneously by interviewees in both entities. In terms of qualitative analysis, ‘external consultations’ is the most frequently used method by both entities. Moreover, in terms of quantitative analysis, ‘interviewing’ and ‘expected monetary value’ are most frequently used tools by most interviewees. In contrast, ‘simulation’ and ‘sensitivity analysis’ are least frequently used tools. Nevertheless, there is no specific risk management software used by both entities.

- ‘Sharing based on agreement’ can be considered the most frequently used strategy by owners to allocate risks between them and contractors in risk response. In both entities, all five strategies to cope with risks are used frequently. Furthermore, ‘risk transfer’ is most frequently used and most effective strategy. While ‘risk retention’ is the least frequently used and effective strategy. Noticeably, contract management is well done in both entities.

- Risk monitoring and control, ‘Technical performance measurement’ is the most frequently used and effective procedure in the LPE and second most frequently used and effective procedure in the SPE. ‘Additional risk response planning’ is also the second most utilized tool in the LPE but it is least frequently used in the SPE. However, most respondents agreed that risk monitoring and control in their entities is not effective.

Generally, ‘risk management planning’ and ‘risk identification’ are best carried out while ‘risk analysis’ and ‘risk response’ are poorly done in SPE. But in LPE, ‘risk management planning’ and ‘risk identification’ are best carried out in their entities while other processes are poorly done. Most respondents evaluated the current risk management in their entity also in the medium level. In addition, it is noticeable that in both entities there is no formalized framework, procedure and system for risk management. Moreover, there is also no person or department assigned to manage risks. The practitioners depend on their experiences from past projects to handle risks.

Recommendation

Risk management is considered a new field applied in project management in Vietnam. Therefore, it is still not paid much attention. Based on the case study about the practice of risk management in Vietnam, risk management is poorly applied in projects. Moreover, most entities don’t have the policy, procedure or systematic risk management. Furthermore, they do not assign professionals or department for managing risks. Hence, as compared to other developing or developed countries, in Vietnam, risk management is simply carried out and doesn’t have much effect. Consequently, the author would like to suggest some recommendations in order to improve the current situation. They are as follows:

First, corporation should set up framework, policy or system for risk management. It is essential to apply risk management in every type or scale of projects in corporation.

Second, it is necessary for corporations to assign risk experts or department to take care of risk management in projects.

Third, corporation had better have periodic risk training program for its employees and purchase some software for risk management. Therefore, they can recognize the benefits of risk management and also know how to handle risk management in their projects.

Fourth, it is required to have top management commitment or support in risk management. It is better to allocate some budget or contingency for risk management.

Last but not the least, the government should set up standard, policy or framework for project management that include risk management. Relatively, the government also needs to enforce risk management as a requirement in each project (prior to approving project).

His thesis abstract is copied and posted.

Abstract

Risk and uncertainty are inherent in all construction works irrespective of size, complexity, location, or even the speed of construction. For years the construction industry has had a very poor reputation for coping with risk, with many major projects failing to meet deadlines and cost targets. Both clients and contractors have suffered as a result of this. Nevertheless, like many other developing countries, Vietnam has encountered many problems that caused negative impacts on many construction projects. One of them is the lack of systematic risk management. Consequently, an assessment of present risk management practiced in civil construction projects may be useful to those involved as well as to improve this system in the future.

This research focuses on the identification of major risk factors that owners often face in civil construction projects. A questionnaire survey involving sixty seven engineers from owner organization was designed and executed. The perceptions about the influence of experience and companies’ size levels towards risk events are tested. Moreover, the research identified major difficulties that owners often face when they apply risk management on projects. In addition, in this research, the case study about the application of risk management in practice was conducted by interviewing the respondents in two chosen public entities (one large public entity and one small public entity). The above main points are useful because they can serve as lessons learned for the companies which are going to implement or improve risk management.

The key risk factors identified are: (1) Incompetent consultant/designer/project owner, (2) Social issues, (3) Contractor issues, (4) Approval issues, and (5) Improper feasibility study. Major difficulties that owners faced with when they applied risk management in practice are: (1) Lack of qualified experts, this is the main obstacle thoroughly appearing in many main processes in risk management cycle, (2) Lack of historical data, (3) Poor communication among responsible people and (4) Unfamiliarity with tools and techniques. Hypothesis testing also pointed out that perceptions towards risk events were not dependent upon the level of experience and the size of companies. Furthermore, by conducting the case study, the application of risk management in practice was only evaluated at the medium level. Additionally, it is noticeable that in both entities there is no formalized framework, procedure and system for risk management. Moreover, there is also no person or department assigned to manage risks. The practitioners depend on their experiences from past projects to handle risks.

Testing Of Herzberg’s Motivation Theory In The Construction Industry

Among the motivation theories, Herzberg’s two-factor theory (Herzberg et al., 1959) has been popular over the past 30 years. It has been widely studied and few managers are unfamiliar with its practical factors and recommendations (Steers, et al., 1996; Robbins, 2000). Since the construction industry has many unique characteristics, e.g. cost and schedule strictness, plentiful conflicts, labor-based, on-site working and short-term employment (Nave, 1968; Schrader, 1972; Laufer and Jenkins; 1982). Mr. Rathavoot Ruthankoon made a research to discover the answers in the following problems:

Problem I: Herzberg’s two-factor theory may not be valid for construction professionals. The theory should be tested.

Problem II: Herzberg’s theory may lack methodological validity. Therefore, the theory should be tested using different research instruments in the same environment.

Problems III: Relationship between job satisfaction and performance in factor classification would strengthen the theory.

Problem IV: Herzberg’ theory can be expanded to group-based work. The conclusion of the theory on project performance may be different from those stated in the original research by Herzberg.

The four research objectives were derived to answer the four research problems above. Each objective is broken down into sub-objectives providing narrow scope under main objective.

Objective I: To test Herzberg’s motivation theory in the construction industry by replicating Herbzerg’s methodology (critical incident interview). This objective is split into four parts; interview and count factors, group factors concerning effect on job satisfaction, group factors concerning effect of different positions, and compare results with Herzberg’s original study. This process is exactly the same as in Herzberg’s study to facilitate comparison

Objective II: To test the validity of Herzberg’s methodology by using another research instrument and to compare the results with the interview result. The second objective is broken down into four parts. First, Objective 2.1 is to design questionnaire using results from the interview in Objective 1. Concept of Objective 2.2 and 2.3 are the same as Objective 1.2 and 1.3 that group factors concerning effect on job satisfaction and effect of different positions. Objective 2.4 is to compare the result between interview and questionnaire to find out the differences between the two research methods.

Objective III: To group factors in the theory using job satisfaction and performance. Effects on commitment, attendance, turnover, and absenteeism are considered in Objective 3.1. Objective 3.2 is to compare the result with grouping without consideration for performance.

Objective IV: Analyze the data on performance at the project level using a construction project as the unit of analysis. Objective 4.1 is to group factors concerning effect on project performance (time, cost, and quality). Objective 4.2 is to compare the result between factors grouping with project performance and Herzberg's original result.

Conclusion

Objective 1
The result of a replication of Herzberg’s critical incident interview on construction staff shows some differences from the result of Herzberg’s study (1959). This result shows a strong evidence that the theory does not have situational validity in the Thai construction industry. In addition, some differences were found among samples of project engineers, site engineers, senior foremen, and junior foremen. It is concluded that the theory is not stable across positions.

Objective 2
The result shows that some factors from the questionnaire did not appear the same as in the results from the interview. Lack of methodological validity of Herzberg’s theory is confirmed. In addition, some differences are found among samples of project engineers, site engineers, senior foremen, and junior foremen in the questionnaire result. This also confirms that differences in position have effect on the theory.

Objective 3
The result of the third objective shows that the effect of level of satisfaction on overall job satisfaction is not necessarily the same as its effects on performance, organizational commitment, and attendance. For example, a motivation factor that leads to increase in job satisfaction may not lead to increase in performance but may lead to increase in organizational commitment. Absenteeism and tardiness are found to have no significant relationship with any factor.

Objective 4
The effects of satisfaction level on project performance are different from the result at the individual level and also different from Herzberg's result. Motivation factors are not always the same for project performance.

Her thesis abstract is copied and posted.

ABSTRACT

Four objectives are accomplished in this dissertation. The first objective is to test Herzberg's theory using a replication of Herzberg’s methodology in the construction industry. The second objective is to test methodological validity of the theory by comparing results from the replication interview with the results from a questionnaire survey designed specially for theory testing. The third objective is to use effects of factors satisfaction on employees' performance into factors grouping process. The fourth objective is to find the relationship between factor satisfaction by project team members with project performance in terms of time, cost, and quality.

The target population of this study is engineers and foremen in construction sites in the Bangkok area. A sample of 125 site staffs from 40 construction sites participated in critical incident interviews for objective 1. Results from the interviews were used for the questionnaire design for objectives 2, 3, and 4. A sample of 344 site staffs from 42 construction sites in the Bangkok area returned valid questionnaires.

The result of a replication of Herzberg’s critical incident interview on construction professionals shows some differences from the result of Herzberg’s study (1959). This result shows strong evidence that the theory does not have situational validity in the Thai construction industry. The result of second objective shows that some factors from the questionnaire did not appear the same as in the results from the interview. In addition, some differences are found among samples of project engineers, site engineers, senior foremen, and junior foremen in the questionnaire result. The result of the third objective shows that the effect of level of satisfaction on overall job satisfaction is not necessarily the same as its effects on performance, organizational commitment, and attendance. On the fourth objective, the effects of satisfaction level on project performance are different from the result at the individual level and also different from Herzberg's result. Based on the result of this study, motivation and hygiene factors are regrouped into 4 groups namely, performance-related, technical-related, position-related, and feeling-related factors according to their characteristics.

Management in Strategic Assets for Competitiveness of Construction Organizations

Globalization presents formidable challenges to developing countries as they struggle to compete in the world market. In Thailand, after the Asian economic crisis in 1997, a few construction firms which had survived through the crisis, needed to thoroughly re-examine the opportunities for previously overlooked cost-cutting and operational improvement. A construction firm often dangles between success and failure due to the fragile makeup of its capital structure, which generally consists of high debt financing rather than the equity. This situation is a result of the limited equity capital and results in high risk, and therefore, a high cost of debt to finance the large amount of money required to facilitate construction operations. To compete successfully, the construction organization has to skillfully and cautiously evaluate the investment in assets in order to obtain the most efficient use of the total available capital. Given that construction organizations generate their main income through contracted projects, managers have put a priority on allocating resources towards construction project needs. However, this practice in resource allocation does not optimize the utilization of organization’s resources as a whole. For sustainable competitiveness of construction organizations, the budget must be allocated with comprehensive strategic considerations. The aim is to continuously cultivate resources and capabilities to cover all the organization’s vital organs. It is hoped that through this approach, the organization’s core competencies can be strengthened.

During the previous decade, the Thai Government has continuously invested in large infrastructure projects such as the Bangkok Sky Train lines, Underground Train lines, Cable-stayed Bridge, as well as the renowned Suvarnabhumi International Airport. These projects require high technological capabilities which can not be fulfilled solely by local contractors. As a result, a number of international engineering and construction firms from Europe, United States, Japan, and China entered the region to undertake these sophisticated projects. Furthermore, following the Free Trade Agreement which Thailand has with many countries, an alarming number of foreign investors invested in large capital projects. Their targets included power plants, manufacturing plants, luxurious hotels and residential projects throughout the country. Local contractors who wish to survive in this new circumstance or enter into emerging regional market need to craft effective strategies and rapidly develop the required resources and capabilities to seize opportunities.

Ms. Piyanut Vorasubin made a research which purpose was to investigate the strategic assets and their mechanism in providing sustainable competitiveness for construction firms. The following research questions are addressed in her study:
1) What are the strategic assets underlying core capabilities of Thai construction firms?

2) How should construction organizations develop strategic assets in order to achieve the sustainable competitiveness of the organization?

The main focus of her study is to provide answers to the question stated above in the following areas:
1) To identify the strategic assets underlying core capabilities of construction firms in the Thai construction industry.
2) To explore how strategic assets drive performance of Thai construction firms.
3) To propose a methodology which guides construction firms to effectively manage strategic assets for the competitiveness of their organizations.

Research Findings

Strategic Assets underlying Capabilities of Construction Firms
Factor analysis with Varimax rotation was used to identify strategic assets underlying the six capabilities of construction firm. The six strategic assets found underlying the three direct capabilities are: 1) reputation development; 2) client relations; 3) networkability; 4) bargaining power; 5) project management; and 6) construction technology. The eight strategic assets found underlying the three support capabilities are: 1) financial stability; 2) risk and investment management; 3) strategic management; 4) organizational culture; 5) human resources management; 6) information technology; 7) learning organization; and 8) development and innovation.

Mechanism of Strategic Assets in Driving Firm’s Competitiveness

Strategic management was found driving all direct strategic assets and also closely correlated with most of the support strategic assets, especially risk and investment management and learning organization. Outstanding human resources management was found to negatively impact networkability and construction technology. However, it was found strongly correlated with other support strategic assets including organizational culture, strategic management, learning organization and information technology. This indicates the indirect effect of human resources on other support strategic assets. Without a firm’s long-term direction and appropriate culture, competent staff could harm the performance of the construction firm. Construction technology, which is a fundamental direct strategic asset required for long-term competitiveness of construction firms, was driven by learning organization and development and innovation.

Most construction firms in Thailand focus on direct strategic assets with the exception of construction technology. Among the eight support strategic assets, development and innovation is rated the lowest. Strategic management is not emphasized as it should be, in fact given an 8th ranking. These three strategic assets are important to long-term success of a construction business. The lack of these three assets would make construction firm vulnerable to changes in the market environment.

An Improvement Mechanism of Strategic Asset Management

Four parts are required to attain sustainable competitiveness in construction firms. Firstly, construction firm must develop organizational motivation in order to motivate and align the firm’s human resources as well as allocate other tangible and intangible resources beyond project level towards the existence of the firm. A construction firm needs to develop strategic management together with effective risk and investment management in order to drive the organization toward its long-term goals. Secondly, a construction firm should strengthen its operational foundation to guarantee continual flow of projects matched to the firm’s construction capacity. This is so that financial stability can be achieved. Three relational assets, specifically bargaining power with suppliers and subcontractors, client relations, and networkability, drive project procurement and marketing capabilities are necessary for the construction business. Professional project management must be developed to ensure the quality of construction services delivered. The quality of previous work will accumulate and result in an excellent reputation which is the strategic asset providing competitive advantage in the construction industry. However, to sustain financial stability, effective risk and investment management in line with the firm’s strategy must be developed too.

Thirdly, management must create an encouraging working environment so synergy among the firm’s human resources necessary for long-term development of organization can occur. Three strategic assets are required to create such a working environment namely excellent human resources management, positive organization culture and efficient information technology. Construction technology which is difficult or impossible to imitate by competitors is very critical to the long-term competitive edge of a construction business.

Nonetheless, the development of the three parts previously described cannot alone give the firm a technologically leading edge. The last part necessary for sustainable competitiveness of construction firm is development of technological excellence. This requires learning organization and continuous development and innovation to be in place. Not only great effort and time but a significant amount of long-term capital is necessary for such investment. Thus, financial stability, as discussed earlier during the development of strong operational foundation, is the prerequisite to build technological excellence. Sustainable competitiveness can be secured if long-term financial stability together with continuous development of efficient construction technology is successfully developed.

Recommendation for managers in Managing Strategic Asset

The improvement mechanism for strategic assets management, recommendations are made to assist managers of Thai construction firms in securing long-term competitiveness are detailed as follows.

1) Create organization motivation
• Set up an effective firm performance evaluation system to be able to assess firm’s strengths and weaknesses.
• Establish long-range planning extending beyond 3 years by setting long-term goals and identifying firm’s target clientele
• Develop cash together with investment policy and procedure in order to achieve long-term goals including retain earnings during profitable years and upgrade quality of cash flow forecast.
• Keep utmost discipline in matching source and utilization of funding.

2) Develop strong operational foundation
• Create relationship with investors and international construction firms.
• Develop informative client and potential client database.
• Establish procedure for suppliers/subcontractors evaluation and selection in order to develop long-term contractual relationship.
• Establish systematic project cost database for all completed projects.
• Set up periodical meeting to review firm’s cost structure. •Form project team with clear authority and responsibility.

3) Create encouraging working environment
- Develop excellent business philosophy to promote good ethics, team environment, creativity, and adaptability of staffs.
- Enhance staff participation by gathering staff’s feedbacks in development of business plan and policy.
- Establish career development path and fair staff promotion policy.
- Integrate accounting information system with the project tracking system in order to provide effective decision support.

4) Develop technological excellence
• Establish periodical cross-project and cross-department meeting as formal channel to exchange knowledge and experiences for creative problem-solving.
• Develop business operation manual in order to accumulate firm’s knowledge.
• Find opportunities to send staffs to external training, seminar, and continuing education valuable to firm’s long-term goals.
• Constantly monitor best practice from construction as well as other industries.
• Find potential partner for valuable technology transfer.

Her thesis abstract is copied and posted.

ABSTRACT

This study focuses on the management of strategic assets by construction firms in order to achieve competitiveness with the following three objectives: 1) to identify the strategic assets underlying core capabilities of construction firms in the Thai construction industry; 2) to explore how strategic assets drive the performance of Thai construction firms; 3) to propose a methodology which guides the construction firms to effectively manage strategic assets for the competitiveness of their organizations.
The pre-survey consisted of four case studies and in-depth interviews with industry experts. From pre-survey results and previous literature, a preliminary list of 106 resources and competencies valuable to construction firms was developed. The questionnaire was then designed using these 106 items, categorized under six organizational capabilities: marketing, procurement, construction, financial, business management, and learning and innovation. Questionnaires assessing the level of importance given to these resources and competencies were sent to 1,027 Thai construction firms, out of which 258 sets were returned.

Using the factor analysis technique, these 106 items were reduced to 14, termed as the strategic assets. To identify how these assets drive the firms’ performances, they were classified into direct and support strategic assets. The direct strategic assets were those directly related to the firms’ products and services, including excellent reputation, exceptional client relations, strong networking, strong bargaining power, efficient construction technology, and professional project management. The eight support strategic assets, which were indirectly related to the firms’ products and services, included financial stability, effective risk and investment management, explicit strategic management, positive organization culture, efficient information technology, excellent human resources management, effective learning organization, and continuous development and innovation. Multiple regression analysis was used to explain how each support strategic asset affects each direct strategic asset.

The framework in managing these assets was developed by stressing the important role of developing explicit strategic management together with excellent human resources management and positive organization culture. These three strategic assets are the key drivers in generating and upholding effective learning organization and continuous development and innovation which are required for sustainable competitiveness of construction firms. Based on the 14 strategic assets found, recommendations were made for managers of construction firms as follow:1) create organizational motivation; 2) develop strong operational foundation; 3) create encouraging working environment; and 4) develop technological excellence.