The BSCOR model, as described in section 2.2.4, is an attempt at developing a structured framework, based on the SCOR model used in manufacturing, specifically for the building and construction industry. This model presents the best and possibly the only opportunity to successfully implement a structured framework that is based on SCOR in a construction project, as it is developed explicitly with construction in mind.
By accepting and accounting for the specific peculiarities that exist in construction, the BSCOR model has the potential to provide a platform from which all construction related projects can be managed, monitored and measured. However, despite the possible potential of such a model, it is yet to be fully developed and thus is not currently a possibility.
129 | P a g e
5.4 Conventional Project Management
This section serves to highlight the requirements of temporary projects while providing rationalisation concerning the accompanying recommendations. The content and recommendations of this section are based on empirical observation from industry in the form of interviews, discussions, case study results as well as evidence from literature.
As illustrated in Figure 2-7, there are 4 distinct phases in a project, pre-planning, pre-construction, construction and post-construction. Each of these phases are unique in their requirements and management challenges and as such, each will be dealt with individually.
Pre-planning phase
In this phase, the idea for a project should be scrutinised to decide whether its execution will benefit the company and whether the project can realistically be completed. It is acknowledged that planning is not the only project parameter that causes delays and budget overruns, however, planning decisions effect all project attributes and mastering planning will inevitably benefit the project (Nowak & Nowaka, 2013).
Any project requires proper planning, there needs to be a commitment to employ qualified, dedicated planners, not simply someone who has completed a three week training course in a rudimentary project management software such as Microsoft Project and claims that they are a proficient planner. Where possible, a dedicated planner needs to be appointed in projects that are deemed strategic to the client company (Company A). This will ensure that adequate planning is done prior to tender phase (Fangel, 1984).
A planner should ideally work hand-in-hand with a dedicated scheduler and should be appointed to a single project from start to finish. Although it is acknowledged that such single-project-appointment is not always feasible or practical. Once again, such an employee needs to be adequately trained and experienced in scheduling, although a lack of experienced or even qualified schedulers is an industry- wide problem in South Africa. All project teams should have a highly qualified, bona fide scheduler employed to compile and report on project schedule. Such an appointment should be made in the feasibility stage of a project.
Schedulers and projects in general, need to make use of the latest technology in order to simplify and improve their efficiencies without becoming blindly reliant on software. Software cannot solve all the problems associated with project management. Project management software should be carefully selected, taking into account the competency of its users, the requirements of the project and the capabilities and limitations of the software whilst always remembering that not all tasks can be overshadowed by software solutions.
Complete designs and meticulous planning are key to the success of any project. A resourced schedule needs to be drafted by the clients’ team during the feasibility phase. Catastrophic design errors as a
130 | P a g e result of poorly defined scope or scope changes are unacceptable and lead to large budget overruns and delays. Critical designs need to be completed or at least reviewed by the client as the ramifications of catastrophic design errors for the project are devastating.
The benefit to the client (Company A) is in the form of risk reduction and ensuring such designs are correct far outweighs the cost of the designs themselves according to evidence obtained during a progress meeting at the WLDC project during 2015. Designers’ programs should be integrated with the construction program to ensure critical designs are completed prior to actual construction activities commence. This goes hand-in-hand with the need for an improved approval process as discussed earlier, a design approval should not take 2 weeks, and rather, it should take 2 days. If the approval process is deemed to be an extended period of time, then a realistic timeframe should be allowed for in the schedule. Such processes should be based on historical data (Persson & Araldi, 2009; Makris et al., 2011) and project-specific experience and should implement a communication matrix for effective progress reporting in this regard.
Pre-construction phase
This is the phase where the budget and schedule should be determined and resources allocated to tasks, this is where it is imperative to appoint a dedicated planner and scheduler, as poor calculations at this early stage prove extremely costly later on in the project, according to an interview with the project manager of the WLDC project. A schedule needs to be reviewed and amended by as many stakeholders as possible before being finalised and compiled by a competent scheduler. All schedules that are to be used for operational, management or measurement purposes should be resource loaded.
Since a great deal of project complications arise in the delayed process of project approval, especially when the client is a large corporation as is the case with Company A, the project approval process as a whole needs to be reviewed and adapted in order to ensure that a tender from two years ago is applicable in the present. Market and economic conditions need to be evaluated both at the time of tender and at the time of project initiation as well as considering the appointed firms’ requirements and in-house dynamics such as capacity and cash flow. This should limit effects on projects similar to those experienced on the WLDC project, where an estimated R 20 million escalation and twelve month delay was as a direct result of inadequate planning of an EIA. The capacity of EPCM consultants and contractors also needs to be established before any work is awarded to a firm that is unable to provide an adequate service.
A resourced schedule should be drawn up for all projects by the abovementioned scheduler. A resourced program lends itself to scrutinising given schedules in relation to an achievable schedule, this furthermore prevents schedules from being overambitious and unrealistic and allows for the integrity of the schedule to be meticulously scrutinised. Such resourced scheduling should become an industry standard that can be used to assess tendered schedules, thus making a resourced schedule a tender requirement for both contractors and subcontractors.
131 | P a g e This process will encourage in depth planning on the part of tenderers that will in turn lead to more accurate tenders, better schedule and budget adherence and ultimately a more efficiently managed project. It is imperative that the client is aware of the schedule and as a result, should be required to sign off and approve the schedule to highlight their understanding and support of the schedule and to accept the associated risk of a particular schedule.
Construction phase
A large proportion of schedule delays and budget overruns on construction projects are as a result of scope changes, albeit due to necessary changes, material shortages or weather problems (Ciutiene & Meiliene, 2015). It is recommended that once a project is put out for tender that the scope be “frozen”, this is known as scope freeze. Scope freeze allows tendering firms to tender accurately and provides a clear outline of the exact work to be completed. Any scope changes should be signed off by the project sponsor or “client” and should be subject to a structured change management process with transparency to all project stakeholders. This certainty reduces the degree of risk that contractors are exposed to and thus results in realistic tenders.
Furthermore, in the mining sector, the red-tape associated with being granted access to a site is a major factor that needs to be considered by firms that are unfamiliar with the mining sector. Such mining-specific red-tape was acknowledged in the WLDC case study where it was documented that induction and so-called “ted-tickets” took up to two months to acquire. This is essentially lost time as the contractor has already committed to a deadline and schedule and thus needs to be considered when dealing with any scheduling activities at earlier stages of the project. Such significant time losses can be mitigated by means of on-site medicals by means of satellite facilities, allowances in contractual documentation as well as foreword planning in this regard.
The mining sector specifically, has extremely high safety standards and requires in depth medicals, safety training and protracted induction processes that are uncommon in the construction sector. As a result, companies doing work in the mining sector need to take into account the extreme cost of such requirements as well as the timeframe required for successful completion of such requirements. In order to facilitate uninterrupted material supply, contractors and consulting engineers should collaborate and develop a project commodity schedule that lists preferred suppliers and provides suppliers foresight as to the demand and technical requirements of each order. Such forward planning enables suppliers to schedule production based on actual real-time lead times. Another important conclusion of both the literature study and case study is that, particularly in a developing country like South Africa, suppliers and tenders should not be selected based solely on price but should rather be selected based on capacity, capability, reputation, price and quality. This rationale is supported by evidence presented in section 2.3.1, where the consequences of cost-based and BBBEE-based vendor selection is discussed. If a contractor insists on using a supplier that is deemed unfit by the client, the contractor should be held liable for any delays or extra costs that may arise as a direct result of that supplier.
132 | P a g e Within the South African construction environment, there has to be contingencies made for weather, strikes, approvals and scope changes by both the client and contractor. This is non-negotiable as none of these risks can be managed in terms of probability or impact analysis by means of conventional project management or supply chain management theory.
Post-construction phase
The movement and turnover of key personnel should be avoided on all projects and especially so on projects of strategic importance to the company. Key personnel should be appointed to a specific project on a start-to-finish basis in order to take advantage of the fact that such personnel have the required knowledge of the project, its intricacies and project specific challenges. Such experience along with personal relationships with suppliers, contractors and other stakeholders forms the basis for the successful management of a project. Constant changes to key management staff results in project delays (Quayle, 2006) and when possible should be avoided according to Respondent 2 of the expert review and the Project Management Institute.
Contracting models
The contracting model that is used for a project is an extremely important consideration and is directly linked to the ability of a project to adhere to a specified schedule and budget and ultimately, contributes to the success or failure of the project.
Every model has its place while certain models are preferred by particular companies simply for the sake of standardisation. Regardless of the model, contract documentation needs to be clearly communicated (Agapiou, Flanagan, Norman & Notman, 1998) by a designated document controller. This was agreed to be a viable option according to a project manager at Company A. Contractual documentation should be seen as a safety net for both the client and the contractor, security against their commitment to provide a job or service in an certain time-frame for an agreed upon fee. In the mining sector, the FIDIC (International Federation of Consulting Engineers) contract is widely accepted as being the best model and is preferred over models such as the JBCC contract (Joint Buildings Contracts Committee). The JBCC contract has a short reporting period on defects which makes it unsuitable for the mining sector as lead times are long in the mining environment due to the red-tape that is associated with all activities and the often specialised nature of construction in such environments.
It is imperative that stakeholders who base their decisions on and are directly affected by the contents of a contractual agreement receive the adequate background and training with regards to a specific contractual model. It should be noted that the SCOR model makes no explicit reference to the selection, measurement or management of contractual agreements or different contracting models.
133 | P a g e