Managing Construction Projects an Information Processing Approach Managing Construction Projects an Information Processing Approach Second Edition

Total Page:16

File Type:pdf, Size:1020Kb

Managing Construction Projects an Information Processing Approach Managing Construction Projects an Information Processing Approach Second Edition www.ebook3000.com Managing Construction Projects An Information Processing Approach www.ebook3000.com Managing Construction Projects An Information Processing Approach Second Edition Graham M. Winch Professor of Project Management Centre for Research in the Management of Projects Manchester Business School The University of Manchester A John Wiley & Sons, Ltd., Publication This edition fi rst published 2010 © 2010 Blackwell Publishing Ltd and 2002 Blackwell Science Ltd Blackwell Publishing was acquired by John Wiley & Sons in February 2007. Blackwell’s publishing programme has been merged with Wiley’s global Scientifi c, Technical, and Medical business to form Wiley-Blackwell. Registered offi ce John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom Editorial offi ce 2121 State Avenue, Ames, Iowa 50014-8300, USA For details of our global editorial offi ces, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at www.wiley.com/wiley-blackwell. The right of the author to be identifi ed as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Designations used by companies to distinguish their products are often claimed as trademarks. All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners. The publisher is not associated with any product or vendor mentioned in this book. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold on the understanding that the publisher is not engaged in rendering professional services. If professional advice or other expert assistance is required, the services of a competent professional should be sought. Library of Congress Cataloging-in-Publication Data Winch, Graham. Managing construction projects : an information processing approach / Graham M. Winch. — 2nd ed. p. cm. Includes bibliographical references and index. ISBN 978-1-4051-8457-1 (pbk. : alk. paper) 1. Building—Superintendence. 2. Building—Planning. 3. Communication of technical information. I. Title. TH438.W56 2010 690.068--dc22 2009016226 A catalogue record for this book is available from the British Library. Set in 10.5/12 pts Bembo by Macmillan Publishing Solutions Printed in Singapore 1 2010 www.ebook3000.com DEDICATION This book is dedicated to the memory of Geoffrey Roy Winch, engineer extraordinary, 1922–1999, and to the love of Sandra Schmidt It is a massive review of the art and science of the management of projects, which has the great virtue of being a good read wherever it is touched. It spills the dirt on things that went wrong, elucidates the history so that you can understand the industry’s current stance, draws on other countries’ expe- rience and explains the latest management processes. Throughout it is liber- ally sprinkled with anecdotes and case histories which amply illustrate the do’s and don’ts for practitioners wishing to deliver projects on time with expected quality and price. It is a valuable book for students and practitioners alike. John D. Findlay Director Stent This is a valuable source for practitioners and students. It covers the A–Z of project management in a confi dent contemporary manner and provides a powerful and much needed conceptual perspective in place of a purely pre- scriptive approach. The engaging presentation introduces a range of challenges to establishing thinking about project management, often by making compari- sons between practices in the UK and those of other countries. Peter Lansley Professor of Construction Management University of Reading vi www.ebook3000.com Contents Preface to 1st Edition xiii Preface to 2nd Edition xvii Part I Introduction 1 1 The Management of Construction Projects 3 1.1 Introduction 3 1.2 Projects as the creation of new value 5 1.3 The project as an information processing system 6 1.4 Project management and the management of projects 8 1.5 Projects and resource bases 8 1.6 The fi ve generic project processes 10 1.7 Critiques of the fi rst edition 10 1.8 A theoretical perspective on managing construction projects 13 1.9 A practical contribution to managing construction projects 14 1.10 The plan of the book 14 1.11 Summary 15 Case 1 The Channel Fixed Link 15 2 The Context of Construction Project Management 20 2.1 Introduction 20 2.2 The industry recipe for construction 21 2.3 National business systems in construction 24 2.4 The regulatory context 26 2.5 The construction cycle 31 2.6 The development of concession contracting 33 2.7 Summary 34 Case 2 The UK Construction Business System 35 Further reading 48 Part II Defi ning the Project Mission 49 3 Deciding What the Client Wants 53 3.1 Introduction 53 vii viii Contents 3.2 From artefact to asset: facilities as new value 53 3.3 Understanding spatial quality and business processes 56 3.4 Indoor environmental quality and business processes 57 3.5 Symbolic quality: beyond peer review 58 3.6 Justifying the investment 61 3.7 Strategic misrepresentation in investment appraisal 64 3.8 Defi ning the project mission: a conceptual framework for product integrity 66 3.9 Summary 68 Case 3 Defi ning the Mission at the University of York 69 Further reading 73 4 Managing Stakeholders 74 4.1 Introduction 74 4.2 Which are the project stakeholders? 74 4.3 Mapping stakeholders 77 4.4 The regulatory context 79 4.5 Managing consent 82 4.6 Ethics in project mission defi nition 84 4.7 The role of visualisation 85 4.8 Summary 86 Case 4 The Rebuilding of Beirut Central District 88 Further reading 92 Part III Mobilising the Resource Base 93 5 Forming the Project Coalition 99 5.1 Introduction 99 5.2 The principal/agent problem in construction 99 5.3 Procuring construction services 101 5.4 The formation of project coalitions 109 5.5 Selecting resource bases 115 5.6 Forming more effective project coalitions 117 5.7 The development of e-procurement 123 5.8 Probity in procurement 124 5.9 Summary 127 Case 5 Partnering Between Marks & Spencer and Bovis 127 Further reading 131 6 Motivating the Project Coalition 132 6.1 Introduction 132 6.2 The problem of moral hazard in construction projects 133 6.3 The problem of switching costs 134 www.ebook3000.com Contents ix 6.4 Managing the problem of moral hazard 136 6.5 Contractual uncertainty and risk allocation 137 6.6 Governing the contract and the role of third parties 143 6.7 The dynamic of adversarial relations 146 6.8 Alliancing 147 6.9 Summary 151 Case 6 NHS ProCure 21 151 Further reading 154 7 Managing the Dynamics of the Supply Chain 155 7.1 Introduction 155 7.2 Horizontal and vertical governance 156 7.3 Internal resource mobilisation 157 7.4 Shirking 161 7.5 The role of sequential spot contracting in construction employment 162 7.6 Managing the supply chain 165 7.7 Managing consortia and joint ventures 167 7.8 The dynamics of supply chains 169 7.9 Clustering the supply chain 170 7.10 Summary 172 Case 7 Building Down Barriers 172 Further reading 177 Part IV Riding the Project Life Cycle 179 8 Minimising Client Surprise 193 8.1 Introduction 193 8.2 Projecting a perfect future 194 8.3 Strategies for imagining the future: options thinking 196 8.4 Moving from phase to phase: gating the process 202 8.5 The gap analysis approach 203 8.6 What do we mean by project success? 207 8.7 The nature of information fl ows in problem solving 209 8.8 Process representation 211 8.9 Knowledge management and learning from projects 213 8.10 Summary 217 Case 8 Riding the Life Cycle on the Glaxo Project 218 Further reading 225 9 Defi ning Problems and Generating Solutions 227 9.1 Introduction 227 9.2 Tame and wicked problems in the project process 228 x Contents 9.3 Solving the briefi ng problem 229 9.4 Client organisation for briefi ng and design 234 9.5 Solving the design problem 236 9.6 The cult of wickedness 239 9.7 The management of design 240 9.8 Summary 248 Case 9 Designing the Sheffi eld Arena 249 Further reading 255 10 Managing the Budget 256 10.1 Introduction 256 10.2 Levels of accuracy in project budgets 257 10.3 Developing a budgetary system 260 10.4 Using the PBS to control the budget 262 10.5 Value engineering and cost management 263 10.6 Constructability 264 10.7 Controlling the budget 266 10.8 Earned value analysis 269 10.9 Mitigating optimism bias 271 10.10 Budget overruns and escalating commitments 273 10.11 Summary 276 Case 10 The Centuria Project Budget 279 Further reading 283 11 Managing the Schedule 284 11.1 Introduction 284 11.2 Critical path method 285 11.3 Resourcing the project 290 11.4 The limitations of the critical path method 292 11.5 New approaches to project scheduling 294 11.6 The dynamics of the project schedule 304 11.7 Summary 305 Case 11 Centuria Project Schedule 306 Further reading 315 12 Managing Conformance 316 12.1 Introduction 316 12.2 The principles of quality management systems 317 12.3 Inspection 322 12.4 Quality control 323 12.5 Quality assurance 326 12.6 Integrated management
Recommended publications
  • Rail Accident Report
    Rail Accident Report Fire on HGV shuttle in the Channel Tunnel 21 August 2006 Report 37/2007 October 2007 This investigation was carried out in accordance with: l the Railway Safety Directive 2004/49/EC; l the Railways and Transport Safety Act 2003; and l the Railways (Accident Investigation and Reporting) Regulations 2005. © Crown copyright 2007 You may re-use this document/publication (not including departmental or agency logos) free of charge in any format or medium. You must re-use it accurately and not in a misleading context. The material must be acknowledged as Crown copyright and you must give the title of the source publication. Where we have identified any third party copyright material you will need to obtain permission from the copyright holders concerned. This document/publication is also available at www.raib.gov.uk. Any enquiries about this publication should be sent to: RAIB Email: [email protected] The Wharf Telephone: 01332 253300 Stores Road Fax: 01332 253301 Derby UK Website: www.raib.gov.uk DE21 4BA This report is published by the Rail Accident Investigation Branch, Department for Transport. Rail Accident Investigation Branch 3 Report 37/2007 www.raib.gov.uk October 2007 Fire on HGV shuttle in the Channel Tunnel 21 August 2006 Contents Introduction 6 Summary of the report 7 Key facts about the incident 7 Key findings 7 Recommendations 9 The Incident 10 Summary of the incident 10 The parties involved 10 Location 10 Train and rail equipment 11 Events preceding the incident 11 Events during the incident 12 Consequences
    [Show full text]
  • The Channel Tunnel (United Kingdom – France)
    Draft for Consultation The Channel Tunnel (United Kingdom – France) Source: Ramboll Location The English Channel between Folkestone (England) and Coquelles (France) Sector Water crossing, fixed link, rail and road Procuring Authorities Government of the United Kingdom, Government of the Republic of France Project Company Getlink Group (previously Eurotunnel) Contract Obligations Design, Build, Finance, Maintain, Operate, Transfer (DBFMOT) Start of Operations 1994 Financial Closure Year 1987 (syndication of the Project Finance Facility) Capital Value GBP 9.5 billion (USD 11.8 billion – 1994 value) Contract Period (years) 99 Key Facts No governmental subsidies, 100% Project Finance 1/12 Draft for Consultation Project highlights The Channel Tunnel is a circa 50 kilometre (km)-long rail tunnel linking Folkestone, Kent, in England, with Coquelles, Pas-de-Calais, near Calais in northern France, beneath the English Channel at the Strait of Dover. It is the only fixed link between the island of Great Britain and the European mainland. It allows the city of London to be directly connected by train to Paris, Lille, Brussels, Amsterdam and Cologne – thanks to the Eurostar and Thalys train lines. The Channel Tunnel was officially opened in 1994. Train operation consists of shuttle trains conveying cars and coaches and other trains conveying heavy goods vehicles between the two terminals. Other trains using Getlink infrastructure are operated by the respective owners. Getlink, previously Groupe Eurotunnel (until 2017)1, is a public company which manages and operates the Channel Tunnel, including the Eurotunnel Shuttle vehicle services, and earns revenue on other trains through the tunnel (DB Schenker freight and Eurostar passenger trains).
    [Show full text]
  • The Channel Tunnel Rail Link: Opportunities and Problems for Regional Economic Development
    THE CHANNEL TUNNEL RAIL LINK: OPPORTUNITIES AND PROBLEMS FOR REGIONAL ECONOMIC DEVELOPMENT, David Matthew Smith Thesis Submitted to the University of Plymouth in Partial Fulfilment of the Requirements for the Degree of Doctor of Philosophy Department of Geographical Sciences University of Plymouth December 1992 THE CHANNEL TUNNEL RAIL LINK: OPPORTUNITIES AND PROBLEMS FOR REGIONAL ECONOMIC DEVELOPMENT. David Matthew Smith ABSTRACT The regional economic impact of the Channel Tunnel has engendered much public and private sector interest. Previous studies examining the regional implications of the Tunnel have argued that related development pressures will be largely confined to South East England, further widening the "North-South" divide. Economic Potential Analysis was earlier employed by Clark el. al. (1969) and Keeble et. al. (1982a) to model the geographical impact of the Tunnel on the relative accessibility of the UK regions. The conclusions drawn from these studies support the proposition that the South East would gain at the expense of the more peripheral regions. However, the important implications of a rail-only Tunnel have yet to be modelled. The results of the present study show that opportunities created by the Tunnel could be spread more evenly than had previously been predicted. However, following a review of the legislative and policy environment of the Tunnel and related infrastructure, it is argued that as a result of British Government inaction the more peripheral UK regions are likely to be unable to maximise any potential benefits created. Nonetheless, the overall regional economic impact of the Tunnel will depend ultimately on the reactions of the business community (Pieda 1989a&b).
    [Show full text]
  • The Channel Tunnel
    Source: Getlink Group The Channel Tunnel Procuring authorities Government of the United Kingdom, Government of the Republic of France Project company Getlink Group (previously Eurotunnel) Contract obligations Design, build, finance, maintain, operate, transfer (DBFMOT) Start of operations 1994 Financial closure year 1987 (syndication of the Project Finance Facility) Capital value Location GBP9.5 billion (USD11.8 billion – 1994 value) The English Channel between Folkestone (England) and Coquelles (France) Contract period (years) 99 Sector Water crossing, fixed link, rail and road Key facts No governmental subsidies, 100% Project Finance 8 | GLOBAL INFRASTRUCTURE HUB CASE STUDY: THE CHANNEL TUNNEL Project highlights The Channel Tunnel is a roughly 50 km rail tunnel countries initially for a period of 55 years, then linking Folkestone, Kent, in England, with Coquelles, extended to 99 years until 2086. Getlink’s head Pas-de-Calais, near Calais in northern France. The office is located in Paris. tunnel extends beneath the English Channel at the Originally estimated at GBP 4.8 billion in 1985 Strait of Dover. It is the only fixed link between the (about USD6.2 billion, 1985 prices), the Channel island of Great Britain and the European mainland. Tunnel’s total cost was much higher than It allows the city of London to be directly connected expected, reaching GBP9.5 billion by the end of by train to Paris, Lille, Brussels, Amsterdam and its construction (about USD14.5 billion in 1994).2 Cologne – thanks to the Eurostar and Thalys Project costs were vastly underestimated and an train lines. overrun of 80% was incurred.3 This was due to The Channel Tunnel was officially opened in 1994.
    [Show full text]
  • Tunnel Vision? Completing the European Rail Market
    HOUSE OF LORDS European Union Committee 24th Report of Session 2010–12 Tunnel vision? Completing the European rail market Ordered to be printed 29 November 2011 and published 8 December 2011 Published by the Authority of the House of Lords London : The Stationery Office Limited £price HL Paper 229 The European Union Committee The Committee considers EU documents in advance of decisions being taken on them in Brussels, in order to influence the Government’s position and to hold them to account. The Government are required to deposit EU documents in Parliament, and to produce within two weeks an Explanatory Memorandum setting out the implications for the UK. The Committee examines these documents, and ‘holds under scrutiny’ any about which it has concerns, entering into correspondence with the relevant Minister until satisfied. Letters must be answered within two weeks. Under the ‘scrutiny reserve resolution’, the Government may not agree in the EU Council of Ministers to any proposal still held under scrutiny; reasons must be given for any breach. The Committee also conducts inquiries and makes reports. The Government are required to respond in writing to a report’s recommendations within two months of publication. If the report is for debate, then there is a debate in the House of Lords, which a Minister attends and responds to. The Committee has seven Sub-Committees which are: Economic and Financial Affairs and International Trade (Sub-Committee A) Internal Market, Energy and Transport (Sub-Committee B) Foreign Affairs, Defence and Development
    [Show full text]
  • Project Investment and Project Financing
    Project Investment and Project Financing A study on Business Case and Financing Models Simiao Wang Project Management Submission date: July 2012 Supervisor: Bjørn Andersen, IPK Co-supervisor: Agnar Johansen, SINTEF Norwegian University of Science and Technology Department of Production and Quality Engineering Master Thesis in Project Management Norwegian University of Science and Technology Trondheim, Norway 2012 Master of Science in Project Management Written by Simiao Wang Responsible supervisor at NTNU: Professor Bjørn Andersen Co-supervisor at SINTEF: Agnar Johansen Abstract The importance of the front-end decision-making phase in projects is being increasingly recognized. Project front-end phase management is believed important. Even few studies focus on this area; many themes in project front-end phase are discussed extensively. The dissertation has two aims: the first aim is to integrate the current studies in project front-end phase, link and organize the different themes altogether in a systematical approach and present the output as a whole in the form of business case. Business case, which is a process that orderly covers most themes in project front-end study, is integrated and presented to guide the project sponsors for their decision making process on whether to finance a project or not. The second aim is to look at the next immediate step after business case which is financing the project. Project financing is a special financing method which is seen as a well-establish tool that helps project sponsors initiate a project when they lack of money in the outset of the project. However, project financing can lead to big problems.
    [Show full text]
  • TRANSPORT HDS:TRANSPORT HDS 12/12/07 13:49 Page 1
    TRANSPORT COVER HDS:TRANSPORT COVER HDS 12/12/07 16:02 Page 1 After years of high taxation and underinvestment in transport we face gridlock on our roads and deadlock in transport policy. While the case for road pricing is clear and has been made for a long time, the public is wary of anything that could turn out to be yet another stealth tax. Towards better transport Towards The solution we propose and investigate is to improve our infrastructure now and to repay the costs using road pricing revenues collected in the future. This way, the infrastructure can be built without delay and the funding gap met using private Towards better finance. Not only would our infrastructure be improved but we would have adopted the most efficient means of managing road space for the future. transport This report explores the experience of PFI in transport. It then moves on to detail the institutional and fiscal frameworks Funding new infrastructure governing the sector. It finds that while our current systems of with future road pricing revenue governance and taxation are broadly compatible with road Hartwich and Briar Lipson, edited by Oliver Marc Wellings Richard pricing and the concomitant deployment of private finance, certain frameworks look more likely to promote efficient long- term investment in transport infrastructure than others. Until transport policy takes a different direction, Britain’s transport network will continue to deteriorate while our roads become even more congested. This report shows that there is a way to get Britain moving again.
    [Show full text]
  • The Official History of Britain and the Channel Tunnel
    THE OFFICIAL HISTORY OF BRITAIN AND THE CHANNEL TUNNEL This authoritative volume presents the first official history of the British Government’s evolving relationship with the Channel Tunnel project from the early nineteenth century to 2005. The building of the Channel Tunnel has been one of Europe’s major projects and a testimony to British-French and public-private sector collaboration. However, Eurotunnel’s current financial crisis provides a sobering backcloth for an examination of the British Government’s long-term flirtation with the project, and in particular, the earlier Tunnel project in the 1960s and early 1970s, which was abandoned in 1975. Commissioned by the Cabinet Office and using hitherto untapped British Government records, this book presents an in-depth analysis of the successful project of 1986–94. It provides a vivid portrayal of the complexities of quadripartite decision-making (in two countries, with both public and private sectors), revealing new insights into the role of the British and French Governments in the process. Written by Terry Gourvish, Britain’s leading transport historian, this book will be essential reading for general readers and specialists with an interest in business history, international relations, public policy and project management. WHITEHALL HISTORIES: GOVERNMENT OFFICIAL HISTORY SERIES ISSN: 1474–8398 The Government Official History series began in 1919 with wartime histories, and the peacetime series was inaugurated in 1966 by Harold Wilson. The aim of the series is to produce major histories in their own right, compiled by historians eminent in the field, who are afforded free access to all relevant material in the official archives.
    [Show full text]