Finally, thanks to the staff of the project for helping me in many ways to make this thematic paper complete. As a result, several problems have arisen in Project X which had been identified in this thematic paper. In the process of bidding, the project owner will have a different strategy depending on the scope of the project.
The purpose of this case study is to help audiences understand what are the key factors that cause the delay and loss of work in the construction business. The project manager in the construction business is responsible for the overall delivery of the company owner's physical improvement and development within the constraints of cost, schedule, quality and safety requirements. The most important part of the project managers or the company owner is to analyze and make aware the risks in the future, and then eliminate those risks.
The Definition of Related Terms
Project Management
Risk Management
A risk factor or event that can be characterized by the consequences it will have if it occurs and the likelihood that it will occur. Consequence as the outcome of an event that affects the objectives and probability is the chance of something happening. All these definitions it can be assumed that every project management needs risk management for eliminating and controlling the risks that may arise during the project.
Therefore, the company can prepare for the second plan in case the company cannot avoid the risk.
Cost Management
Thailand University Journal (Nakwichien T. ,2012)
Type of delay in construction work
The construction site will consist of various levels of labor depending on the ability of work. The project manager must take responsibility for calculating the manpower requirements for the scale of work. In the event that the project is a large volume, the client will hire a construction consultant to control and monitor the contractor.
If the project is too big, the company may not have enough people to work. If the scope of work is large, the company owner may have to invest a large amount of money in the initial period before collecting the installation fee from the customer. A construction company needs a lot of short-term assets for the liquidity of the company so that the materials can be purchased and labor can be hired.
A construction site may have enough material, but the lack of work potential then the machine became useless. However, the issue of lack of machinery at the site can create a difficult job for workers that directly affects the timeline of projects. The project manager should plan the machine usage instructions to save the cost and control the cost.
The price calculated in the beginning can be lower or higher all the time due to the changes of each type of material. Most of the construction methods are related to each other which is difficult to skip one part and start the other parts.
Primary Data Collection Method
Observation
However, from the start of the project to the date of information collection, the project was delayed by 28 days.
Interview (On-The-Job-Interview)
The company had to find new subcontractors in a short time to cover this issue. Sometimes the new subcontractor is more expensive and causes the calculation inaccuracy in the first period. However, the company's option at this time is very limited, because the company has already signed a contract that includes the cost of renting machines, the cost of renting workers' property and the contract with other subcontractors.
The difference from an inaccurate cost calculation from the bidding process or changes in the project can result in unnecessary waste of time and money. In the first period of the project, it is more difficult because the worker has to work without a roof on wet ground. The company has to rent additional equipment and machinery, which is extremely expensive, so that the workers can support the work.
Unfinished or revised construction drawings will also delay the work because the company has to wait for confirmation from the architect. On this construction site, the company does not have enough qualified labor and operating plan. Many construction companies decide to reduce their costs by using low-quality materials, which affects the reputation of the company and the project owner.
Many times it is an excusable delay due to the unclear or unfinished. The C corporation will also plan each project to have a 5 percent reserve cost in the event that the actual work is over the details of the bid.
Secondary Data Source
FINDINGS ANALYSIS
Potential of Project Manager (Project Management and 5M Method (Man, Materials, Machine, and Management))
The project manager must be able to identify the main activities of the project, determine the duration or timeline, sub-activity, budget or critical path for monitoring the project in each activity. After determining dependencies, the project manager will classify each activity and schedule into a critical section and work breakdown structure. Identifying dependencies will help the project manager to accumulate tasks and see the relationship between tasks and the timeline.
Identification of dependency, critical part and work breakdown structure are tools that will help the project manager to set up strategy in the project. In the construction industry, the project manager should be educated in the field of engineering or architecture, because several works need specific knowledge from the expert who can solve the problem or understand. The critical path and work breakdown structure are useful methods to help the project manager have a clear vision of the overall project.
In Project X, the lack of potential of the project manager is the cause of the absence of workers during two months of work. The project manager cannot estimate the required manpower, so the company faced a labor shortage in the first month. During the second month of construction, the project manager hires a lot of people to push the work on schedule, but it turns out that the company's surplus of the required manpower due to the work zone does not allow people to work.
According to the table above, the project manager must manage the traffic inside the site carefully. The project manager's poor management or plan not only created a loss in profit, but it counts as a loss in overuse of material.
Cost Management (Financial Liquidity)
According to Figure 4.1, the estimate for the material cost in a project is about 64 percent and the human or labor cost is about 25 percent of the total cost. However, there would be a gap between the actual cost of the material and the estimated cost of the material because the company must pre-order the raw material to be stored to ensure that all materials and equipment will be prepared for the tasks. However, the company should have a raw material tracking process to prevent excess and shortage of materials.
The material tracking process could be difficult for a small business, as all materials are received and stored at the construction site, which can be taken from the workers at any time should they go wrong during the construction work. In addition, the most important part of cost control is the company's financial liquidity. Risk management will help the project manager avoid problems that will arise in the future.
This factor counts as a risk that should be closely monitored and noted in advance because it happens often. All the mentioned factors are the reason for the delay and loss in the construction industry. It could start with ineffective management through the conflict between people inside the construction site, possibly affecting the delay or loss.
In this case, the loss that occurred during the project directly affects the financial condition of the company. The company lost part of the profit it should have earned due to ineffective project planning and project monitoring.
CONCLUSION
Conclusion
Lack of ability to monitor the project schedule because the project manager does not know which part of the construction should start first and follow which task. The project manager does not have a clear work breakdown structure for this project to identify the scope of work. These factors would lead the company to some issues as the company could not plan the timeline to order the raw materials.
These factors would also affect machine management because the project manager lacks knowledge and traffic management on the construction site. All these mentioned factors affected the cost management of the company as the company had to rush the material supplier for the delivery of materials. In other words, the company had to pay an additional fee for logistics costs and overtime for the machine to run due to lack of management issues.
According to the interview, the company is 28 days behind schedule, 200,000 baht as an extra payment for overtime use of the machine, 50,000 baht as an extra payment for rushing the order, and 700,000 THB as an extra payment for more white collar worker for hire to support and drive the construction work. However, the company can avoid these costs if the project manager has knowledge of the use of the project management tool, is able to track the process of work and monitor the progress of the project. Nevertheless, the project manager does not need to understand every detail in all those criteria, but must be able to see an overall picture and understand project structure well.
The next morning one group came to work but the other group did not show up and resigned from the project. The lack of skilled workers often occurs because the company hires subcontractors without interviewing the workers in person. The project manager must therefore manage all the risks that may happen in order to prepare and avoid problems.
In the event that the company is not good in management, it will cause more than a cost in terms of financial, but it can cause a bad reputation for the company.
