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. 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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