Improvement of Organizational Structure for Power Plant Project Management of PetroVietnam

Electric energy is crucial for the development of Vietnam. From 2006-2010, the actual consumption of electric energy is the same with the actual generated net electric energy of about 13.7% per year to gain 85.4 billion KWh in 2010 only. There are many different power sources such as thermal power, hydropower, nuclear power etc. But in Vietnam, country's electricity is mainly produced from thermal power and hydro-power. However, in Vietnam's power system nowadays, the rate and capacity of hydro-power is being decreased if compared to the capacity and other electrical power sources.

The PetroVietnam (PVN) is implementing the accelerated development program. As a leading economic Group in Vietnamese energy sector including search, exploration and exploitation of oil and gas, power generation, PVN is assigned as the big investor of many important projects, including projects on thermal power plants. PVN is also one of the leading biggest Vietnamese State-Owned companies with the aim of looking for investment partners who are reliable and have enough financial capacity and modern technology to develop and build the power plants quickly in order to meet the electricity demand growth in Vietnam.

With this big task, PetroVietnam now is in “hot development” status. PVN has invested & built the first power plant since 2005 with only one Management Board (MB). Now, PVN is managing five thermal power plant projects at the same time. Besides, the objective of MBs is usually changed very fast, but organization structure for all MBs is still same with the first MB in the beginning. Therefore, PVN’s management for power projects still has some outstanding issues which are the weakness in organizational structure for project management. LE ANH THONG made a case study which objectives were to:

1. Deeply understand the existing organizational structure of PVN power plant project to analyze the strength and weakness, advantages & disadvantages of the existing system

2. propose recommendation for improvement

Conclusion

The objectives of Petrovietnam Power Plant Projects (PVN’s PPP) are usually changed very fast, but PVN still has kept the beginning type of organizational structure which is “Functional Structure” from 2004 up to now. Although this structure have some minor advantages, this structure is not suitable with the growth of PVN’s PPP which has caused some weakness and disadvantages in PVN’s PPP management so far. With four individual Management Boards, they have not achieved perfect result, and in case there are complicated tasks such as different features, sizes, location and many changes which are usually very fast and extreme in PVN power plant projects, it is very difficult to control the scope, contingency funds, and overall project value. It is also very difficult to monitor or audit the project’s progress, stakeholder’s commitment, results achieved and the leading indicators of failure, and so on.

Recommendation

Therefore, with the study and analyses of this Case Study Report, the Proposed Improvement is given in which the essential issue of this Proposed Improvement is the recommendation to apply the Matrix Structure for One General Management Board instead of the Functional Structure for Four existing Individual PVN’s project management organizational board. Consequently, the advantages of the Proposed PVN’s project management organization will be almost same the advantages from the Matrix Structure.

The most important advantages of the Proposed Improvement are efficient use  of  resources of the whole Proposed General Management Board where specialized  individuals can be shared and transferred from one it’s Branch to other Branches or among all PVN’s projects. Therefore, the project management cost is minimized; the total quantity management staff shall be decreased, but the professional grade is easily increased, etc. These are the most useful and most efficient in this proposal.

With the detailed analysis and proposal, the strength and advantages of the proposed improvement are very clear and prevailed to compare with its disadvantages. Besides, there has the proposed solution to solve for these disadvantages. Therefore, it should be considered as preliminary study to apply in the PVN’s thermal power project management with the additional study needed.

However, the Proposed Improvement will not be enough to improve everything for PVN’s project management. It is necessary with best effort to apply some more other solution in order to gain actually significant improvement and overcome other outstanding weakness of PVN’s project management.

Abstract

 Electric Power is an essential energy for people’s daily life and one of the major factors in labor productivity growth. It helps to develop the economy of the countries in the world, especially for the developing countries like Vietnam. Consequently, it’s very important to know how to manage power plant projects effectively and successfully. 

PetroVietnam (PVN) who is the biggest Economic Group of Vietnamese State-Owned Groups has been assigned by Government to invest & build some power plants. So it is necessary for PVN to improve their power plant project management. With the scope of my report, I will mention about the improvement for organizational structure of PVN’s thermal power plant project management and my Management Board.

The Objecctive of my Report is the Proposal to improve Organizational Structure of PVN’s PPP to manage PetroVietnam Power Plant Projects (PVN’s PPP), and solve their weakness/disadvantages & gain better effectiveness and success

The reason to find the above Objective are the objectives of PVN’s PPP are usually changed very fast, but PVN still has kept the beginning type of organizational structure from 2004 up to now, and some weakness/disadvantages were found in PVN’s PPP management so far.

Therefore, the case chosen for my report which is the organizational structure of PVN’s PPP.

By the analyses based on theory of organizational structure for project management colland my experience during a long time work in PVN’s PPP, my recommendation of the Proposal in my Report is the application of the Matrix Structure for One General Management Board instead of the Functional Structure used by many PVN’s individual Management Boards that expected to gain the above Objective to PVN’s PPP management

The Delay Factors in EPC Contracts in Vietnam

Many construction projects in Vietnam have experiencing delay which becomes a big problem for each project because of lack of solution. In the construction stage of any project, anticipating many factors that may cause delays is one of the important works of the project manager. Therefore, project managers should give solutions for them before the construction starts. However, sometimes it is not important for each project because both owners and consultants do not care about this. That is why many construction projects are delayed.  There are a lot of reasons that causing delays, including force majeure and human acts. We could not solve these problems absolutely.

Tran Van Trung made a research, which is a general view about delay problems in construction projects such as problems happened during the foundation work, escalation in cost of material, equipment import management for construction, to find out the reasons and solutions for each case. The purpose of his report was to find out the main factors causing delay and affecting other aspects in Thermal Power plants in Vietnam at all stages of projects. These factors were analyzed in different ways of parties such as the Laws, Authorities, the Owners, the Contractors, Consultants, and Sub-contractors. From that, factors which are mainly effective to prevent and control delays in Thermal Power plants can be seen.

The objectives of his study were to:

1. identify major delays in Thermal Power Plants in Vietnam.

2. identify the major cause (reasons) of delays in Thermal Power Plants in Vietnam.

3. recommend strategies for improving project delivery based on the finding from the study.

Conclusion

Delay in the construction industry is a serious problem in general and in all the coal-fired Thermal Power plant in Vietnam in particular. The project investigated in this study exhibits a delay like in all power plants in Vietnam. Therefore, the results of the research provide a framework for project managers who can better understand the dynamics of project management and taking efforts to reduce incidences of delay time.

By administering and analyzing factors affecting the project, this research had identified problems related to delays during construction phase. From these results, once again, it is noted that most causes of delay of the project related to Consultant company of owner who set up F/S and surveyed site conditions before and Fishner Company as A/E of owner. Furthermore, subcontractor as PM caused delay in the highest impact, the quality of its equipment was not reliable and the quantity was not asynchronous in delivery.

In the case of this study, so as to find out the causes, impacts and solutions when facing delay problems, the research had analyzed twelve major factors that cause delay in construction stage. Although these problems may be unprejudiced reasons or subjective reasons, they were also originated by carelessness in the implementation, management or supervision. Then, this research had deeply analyzed other factors that also affect schedule for each case. Therefore, for each delay case, the overall view and solutions for preventing or reducing delays in future projects have seen.

In summary, this research summarized some reasons behind the delays caused to project, and proposed some recommendations which might enable the main contractor organization to develop in the competitiveness to achieve one of the major goals in power plants, on time completion, after that, we can prevent these causes in next projects.

Abstract

In construction industry, a project is known to be successful when it meets three fundamental criteria such as finishing on time within the budget, the prescribed quality requirements such as satisfying customer’s demand and adapt safety in operation stage. Unfortunately, all of Thermal Power Plants built in Viet Nam had problems of project management leading to their delay. Investigating these problems has become project manager’s indispensable demand.

In general, the problems involved with project delays are solvable. In making effort to solve these problems, the critical factors influencing negatively on construction duration need to be discovered. Hence, it is very important to establish a systematical approach that will be used as a tool for the investigation.  

This report will assess and analyze twelve factors causing the delay problems in Uong Bi Thermal Power Plant was executed in the North of Viet Nam. The qualitative method basically is based on the principle of assessing the risk level of factors impacting negatively on the progress of the project, and it is conducted to fulfill the objective of the study.

Finally, some solutions dealing with project delay problems in construction executing stages are proposed. 

A Feasibility Study of a Curtain Wall Testing Company in Hanoi

As there is no current wall test is being conducted in Vietnam, there is a need for the establishment of a quality testing company. Some considerations include:

i) whether such a company is feasible and profitable,

ii) how to process this kind of testing company technically and economically,

iii) whether the demand is high, and what are the architectural demands and trends?

NGUYEN DUY DUC THU made a case study which objectives were to:

1. develop technical and economic feasibility study of Curtain wall testing company

   - To identify demand (volume and market trend) and the needed supply of curtain wall testing company in Vietnam

  - To identify technical requirements of curtain wall testing in Vietnam which includes testing specifications, labs and equipment engineering knowledge competency and quality control.

2. develop business plans and marketing plans.

Conclusion

1. Technical FS

·         Quality control requirement:

The establishment of a testing company will match the quality control requirements as well as improve and complete the quality system in designing, manufacturing, constructing and erection of curtain wall. Besides, it helps research and develop the standards for curtain wall testing in Vietnam.

·         Technology applies:

The technology, method and procedures for curtain wall testing are possible.

It is more favorable for the company to cooperate with another foreign company in terms of technology and program training.

·         Human resource:

There would be no obstacles in terms of human resources since Vietnamese human resources can meet the requirement and technical staff will be trained to efficiently operate and manage the system by the foreign partner.

·         Equipment: The equipment and software can be imported, which is supported by the foreign testing company.

2. Business & Marketing FS

·         Market analysis:

The market demand for curtain wall testing is very promising thanks to the robust development of high-rise building and quality control requirement in the next five years.

·         Finance model:

The company is estimated to get positive profit from the second year of operation.

·         Competitor analysis:

The company enjoys the great advantage of being the pioneer in the business in Vietnam. Although there are some foreign testing companies in the international market, the new company still has its strengths and opportunities.

·         Market entry strategy:

The company adopts the joint venture strategy to overcome the shortage of experience and technology.

·         Law & regulation:

       Administration and licensing procedures are conformed to the authority regulations

Abstract

Nowadays, there are many high rise building had been built in over Vietnam, especially in Hanoi. The building was using for many find of propose such as office building, commercial building, hotels… and others. But they had a common that is using the curtain wall for elevation.

But there’s very difficult in order to testing and qualify this kind of material.

The thesis is focus on feasibility study of curtain wall testing company, under the perspective of technical requirement, business plan and marketing plan. 

Project Organizational Structure roles and Responsibility

The economic crisis started with the collapse of the banking and property sector in the United States in 2008. With various governmental stimulus package in the past months, the economy has slowly picked up its pace. Published data showed a stronger Quarter II in several countries (including China, Turkey, Brazil and Japan) but worries about future growth have increased. Most of these relate to the public debt in Euro Zone crisis and the possibility of a double-dip recession. All the macro-economic factors have indeed a strong correlation to the Vietnam economy as Vietnam mainly exports its goods to the major economy like the United States and Europe.  Therefore, crises happen elsewhere will have negative impact on the Vietnam domestic economy and real estate industry in Vietnam is no exception.

Even though the real estate industry in Vietnam has shown some sign of recovering, it has not been that strong across the various types of real estate products such as office, retail, apartment, service apartment, villas and townhouse.

Latest research from Savills Research and Consultancy also showed that in Vietnam, there is over supply and competition is intense right now. The highly competitive property market is creating two important effects that real estate developer must pay attention to, namely high tenant mobility and a flight to quality. As for apartment for sale in Vietnam, though there is rising demand with estimated approximately 50,000 –80,000 dwellings required per year, the buyers in this market is mainly young population with limited saving. As people tend to be more cautious in personal spending, they will be more selective in choosing an appropriate real estate property for purchasing, renting or purely investing.

The competition among different developers to develop the best housings with the lowest price has brought about the urgent need for organizations to evaluate their own organizational structure and management style. Having an appropriate framework and good organization management structure, the organization will enjoy many benefits. The immediate profit will be that the streamlined organizational structure will be more cost effective due to the appropriate use of resources. Next, good organization structure and management provides an extremely useful tool in controlling every stage of the project and prevent many possible risks.  In the recent times, many projects fail due to lack of good organization management and hence the lack of control.

If a project is well organized, it will bring about high satisfaction for customers, which will in turn generate greater revenue and higher return on investment for the developer. Good organization management structure will safeguard the firm’s long-term survival as well. Though some economists have viewed that the recession is over, other strategists still worry about the possibility of a double dip recession. Having a good organization management will help the firm stand strong in terms of crises. Though profits might be affected negatively by the external factors, if the organizations have good internal systems, they can still manage the firm well and keep the cost used at the minimum level to ensure the firm will survive in hard times.

The above compelling reasons are the key rationales to study in depth the subject of organization management.

TRAN DUC QUANG made a case study which objectives was to study the application of Project Organizational Structure Roles and Responsibility in a construction project from Appraisal, Feasibility Decision to completing -handing over phase. 

Conclusion 

The report attempted to explore and study in depth the key concepts of organizational management and appreciate the various organizational structures, which are relevant to the real estate and construction industry.

Given the very complicated nature of construction whereby each constructions project is unique and may involve many stakeholders, the real estate developer needs to consider both vertical and horizontal ways of structuring its organization and project. That is why matrix structure is proven to be very useful. Furthermore, in different stages of the project life cycle, the tasks required are different and hence the need for different structure during different phases of the project. Knowing when to employ which structure is important, as organization structure is a tool for managers to carry out the strategies set forth.

Having the appropriate organizational structure is essential for the real estate developer, as having an appropriate framework and good organization management structure, the organization will enjoy many benefits such as appropriate use of resources and prevention of many possible risks.  The tool will also help to close up the gap in project governance as good structure will allow constant interaction in between different levels. A well-run project will generate both financial benefits and high satisfaction to the stakeholders involved. It will help the firm stand strong in terms of crises and thus safeguard firm’s long-term survival.

Recommendations

The whole rational of organizational management is to facilitate the application of knowledge, skills, tools and techniques to project activities to meet project requirements in terms of Scope, Cost, Time, Quality, Participant satisfaction. In organizational management, the important steps include:

1.       Choosing the right people

2.      Setting up the right organization

3.      Using the right system

The concept of how to choose the right people for the task and how to set up the right organization has been discussed extensively and expressed in detail at previous sections. There are many organization structures and each one of them discussed above has its own application, advantages and drawbacks. Selecting the appropriate structure for an organization will therefore be dependent on the task, the size of the firm, the subordinates, the managers and the environment.  Managers, in choosing the right organizing structure, need to study its vision, mission and its strategic intent and then strive to pick strategies and structures that are congruent. In choosing the right people for the team, managers need to define of what kinds of skills required, what kinds of individuals required in what timeframes and then select the right people.

As discussed in Literature Review and the Case Study of the Hotel, implementing the best organization management system involves a few stages, starting from finding out the right strategies, to matching the project life cycle stages to the correct type of structure. The case study of Marriott Hotel is a very good example that other real estate developers can study and replicate.

Organizational management aspect of project management includes Human Resource Planning, Acquire Project Team, Develop Project Team and Manage Project Team. Therefore, choosing the right people and organization structure alone is not enough. Managers need to be aware of many other factors that can be the crucial success factors in running the organization such as managing culture issues and facilitating good communication channel. Organizational management also includes active management of the employees in the organization. Making sure employees are well motivated is crucial for organizational management. Below are some the examples of how to manage the employees that firm can adopt:

Providing Constant feedback to employees

1.       Progress Reports: Reports providing feedback to the project team about performance against the project plan.

2.      External Feedback: The project team must periodically measure itself against the performance expectations of those outside the project.

3.      Project Performance Appraisal:  Performance appraisal objectives include re-clarification of roles and responsibilities,  development of team member’s training plans and establishment of specific goals for future time periods.

4.      Performance Reviews: Meeting are held to access project status or progress.

Provide various trainings to employees

Other things that a project management team can do are to send employees for courses to increase his skills sets. The courses that a company can consider are:

1.       Management: Successful conflict management results in greater productivity and positive working relationships.

2.      Cultural Management:  With cultural management skills, employees will be more confident in dealing with people from various backgrounds, especially for the large-scale joint venture project.

3.      Trend Analysis: Forecasting project results over time to determine if performance is improving or deteriorating.

Finally, managing an organization is an ongoing process, and managers need to be actively engaged in running their own company. Once the situation changes, managers need to be nimble in adapting to the changing environment by changing the organization structure.

Abstract

This report focuses on various aspects of the main theme - Organization Management, which is a crucial factor for the success for real estate project.

Year 2007 was a booming year for real estate in Vietnam. Many housing development projects were successful built. However, as the financial turmoil started since 2008, the real estate industry globally has encountered one of the worst hit in the recent history. Competition for developing new housing projects with high quality yet low cost in order to win customer base is intense. In order to survive in this tough environment and emerge as winner, there is an urge for real estate developers to re-look in to building up their organizational structure in order to carry out smoothly the projects in accordance with customer’s expectation and international standards. In general, the success or failure of the real estate development project is dependent upon the quality of the employees, the clarity of the operation, the availability of the resources and most importantly, the appropriateness of the structure and the management system adopted.

This study, which refers to different theories and standards, has studied in depth the concept of organization management. The project indentifies the key concepts of various types of organization and its relation with the construction phases. It spells out the core governance tasks in the area of strategy, structure and organizational culture and suggests the best strategy that a real estate developer should adopt in order to cope with the increasing pressure of the internal and external environment. It further elaborates how to exercise authority and allocate power within an organization.

Finally, the real life case study of building the Five Star Marriott Hotel in Nha Trang City, a complex project that involves various team and parties, will demonstrate the key concepts and application of these concepts. 

AIT signs an agreement with Korea Research Council

On 12 December 2013, AIT just signs an agreement with Korea Research Council.

For detail, please see the news:
http://www.ait.asia/news-and-events/2013/news/ait-signs-agreement-with-korea-research-council-of-fundamental-science-and-technology/view

Regards
Hadikusumo

Merry Christmas and Happy New Year

Integrated Project Management Assessment for Development Property Project at Capital Fund In Vietnam

the content has been moved to
http://www.masterprojectmanagement.org/integrated-project-management-assessment-for-development-property-project-at-capital-fund-in-vietnam/

we are migrating to
http://www.masterprojectmanagement.org