Impact Of Variations On Project Performance

Impact Of Variations On Project Performance Given a well-structured schedule of works, the maximum project performance could be achieved if the work progress flows smoothly within the time frame and within the budget. However, it is rare that a project performs according as scheduled due to several reasons such as market conditions changes and Variations on the design drawings or contract. Therefore, the occurrence of Variations has negative impact on project performance. Thomas et al (2002:144) believe that variability generally impedes project performance. Ibbs (1997:308) concluded that Variations have tremendous effect on the project performance as the negatively affect the productivity and cost. Arain Pheng (2005:285) argued that Variations are unwanted but inevitable reality of any construction project. Hanna et al (2002:57) indicated that projects impacted by Variations causes the contractor to achieve lower productivity level than planned. There are 16 effects identified from the literature review, as shown in Figure 1 is discussed bellow. Delay in payment: Delay in payment occurred frequently due to Variations in construction projects (CII, 1990a). Variations may slow down the project progress, leading to delays in achieving the targeted dateline during construction (CII, 1995). Eventually, this may affect payment to the contractors. These delay may causes severe problems until it end up in delays in payment to the subcontractors; this is because the Contractors may not be able to pay the Sub-Contractors unless they get paid by the Employer first. Quality degradation: If occurrence of Variations is frequent, they may affect the quality of works. According to CII (1995), the quality of work was usually poor because of frequent variations because Contractors tended to compensate for the losses by doing short cut works. Productivity degradation: Interruption, delays and redirection of work that are associated with Variations have a negative impact on labour productivity. These in turn can be translated into labour cost or monetary value (Ibbs, 1997b). Hester et al. (1991) argued that the productivity of workers was expected to be greatly affected in cases where they were required to work overtime for prolonged periods to compensate for schedule delays. Thomas and Napolitan (1995) concluded that Variations normally led to disruptions and these disruptions were responsible for labour productivity degradation. The most significant types of disruptions were due to the lack of materials and information as well as the work out of sequence. Lack of material was reported as the most serious disruption, because labours could not continue their works and end up idling while waiting for the materials to be available. Hence, to manage Variations, one needed to manage these disruptions. However, the disruptive e ffects could not be avoided in many instances. Rework and demolition: Rework and demolition are frequent occurrences due to Variations in construction projects (Clough and Sears, 1994). Variations which are imposed when construction is underway or even completed, usually lead to reworks and delays in project completion (CII, 1990a). Rework and demolition are potential effects of Variations in construction, depending on the timing of the occurrence of the Variations. These effects are to be expected due to Variations during the construction phase. This is because the Variations during the design phase do not require any rework or demolition on construction sites. Logistics delays: Logistics delays may occur due to Variations requiring new materials and equipment (Fisk, 1997). Hester et al. (1991) observed that logistics delays were significant effects of Variations in construction projects. Logistics delays were experienced in construction projects where Variations in the construction phase required new materials, tools and equipments. Tarnish firms reputation: Variations are referred to as a major source of construction claims and disputes (Fisk, 1997; Kumaraswamy et al., 1998). The claims and disputes may affect the firms reputation negatively, due to unable to solve sever Variation cases. Variations also increase the possibility of professional disputes. Conventionally, Variations present problems to all the parties involved in the construction process. Poor safety conditions: Variations may affect the safety conditions in construction projects (OBrien, 1998) as changes in construction methods, materials and equipment may require, therefore additional safety measures are needed during carrying out the construction phase. Poor professional relations: A construction project is not a mere brick and mortar brought together. Rather, it creates professional relationships between parties to the contract. Each project successfully completed constitutes an added experience to participants and their reputation builds up. But disputes may arise between parties to the contract owing the occurrence of Variations. Misunderstanding may arise when the Contractor is not satisfied with the judgment of the consultant in terms of a fair valuation of a Variation. Bower (2000:264) argued that parties to a contract have been left to argue over the cost, time effects and due compensation of a Variations. Since the Contractors are pessimist of the outcome of the negotiations, they usually allow higher value than the real cost incurred. Bower (2000:264) opined that this causes the contention between parties as the Contractor continually push the client to settle the claim for additional costs while invariably feeling that the reimbursement has been insufficient. As a consequence, this can be very damaging to relationship between all parties representatives (Bower 2000:264). Charoenngam et al (2003:197) remarked that disputes between the Employer and the Contractor can occur if the Variations undertaking is not managed carefully. Harbans (2003:42) warned that unless a mutually acceptable solution is agreed by the parties, valuation of Variations would remain at the forefront of disputes and claims making their way ultimately to arbitral tribunals or the corridors of justice. Ssegawa (2002:92) revealed that more than one-third of disputes occurs pertain to how to ascertain losses arising from Variations. The excessive occurrence of Variations due to design errors or omission may undermine the professionalism of the designer. Furthermore, workers get demoralised when they demolish a portion of work that has already been done. Additional payments for contractor: Additional payments for the contractor can be a potential effect of Variations in construction projects. Variations are considered to be a common source of additional works for the Contractor (OBrien, 1998). Due to additional payments, the Contractor looks forward to Variations in the construction project because contractor benefits from the additional profit on Variations. Disputes among professionals: Like poor professional relations, disputes among professionals are also potential effects of frequent variations in construction projects. The disputes over Variations and claims are inevitable and the Variation clauses are often the source of project disputes (CII, 1986a). Clear procedures presented in the contract and fair allocation of risks can help in resolving disputes through negotiation rather than litigation (CII, 1986a). Frequent communication and strong coordination can assist in eliminating the disputes between professionals. Completion schedule delay: Various authors agree that Variations could be one of the reasons behind project time overruns or delays (Chan Yeong 1995:467, Mohamed 2001:1). It is said that a project that finished within the shortest time could, achieves some monetary savings. Unfortunately, each additional day due to occurrence of Variations on a project implies additional money. Variations issued during any various phases of construction gives negative affected to both projects completion time and cost increase (Koushki 2005:292). Hanna et al (2002:63) revealed that the more the Variations occurrence the more significant productivity losses. The productivity is the amount of output over a unit of time.

Formula One Racing :: essays research papers

Formula One Racing Formula One racing, or F1, is known to be the most prestigious type of auto racing in the world. Unfortunately, in the United States F1 racing is not nearly as popular as other motorsports such as Nascar. On a typical Sunday afternoon if one were to flip channels on the television, Nascar would most likely be airing on a major station. Furthermore, if one were to watch the race he or she would notice that the racetrack was packed with thousands upon thousands of people. A large part of the lack of popularity of F1 in America is that only one race is run in the United States. All of the other races take place in countries such as Spain, France, Italy, and Canada. With Nascar every single race is run in the United States, which is obviously a large contributing factor towards its immense popularity. Despite the fact that Nascar is the racing preference of most Americans, Formula One racing is the best and most exhilarating type of racing in the world. The action that takes place during an average 190- mile Formula One race is unsurpassed by any other motorsport. The typical racetrack consists of 2.5 miles and 12 turns. During the lapping of this track, the 900- horsepower 1400-pound cars can reach speeds in excess of 200 miles per hour. Even when cars capable of these speeds are put into the hands of world-class drivers such as Ferrari’s Michael Shumacher and McLaren’s Mika Hakkinen, mishaps are bound to occur. This is what makes this sport so exciting to watch. Crashes however, are not the only exciting events of the race. It is thrilling to watch a car out brake another in order to squeeze its way ahead, or to watch the cars bump tires in an effort to occupy the same piece of race track to be set up correctly for the turn ahead. Other points of interest are the pit stops and the strategies that the various teams use in order to make a fast pit stop. A world-class team such as Ferrari can refuel a car, change four wheels and tires, and wipe off the driver’s helmet in as little as 6.8 seconds. The technology used in the sport is another drawing point of its popularity. State- of-the-art computers are used to track the car’s every movement and to mechanically keep

Regency Plaza Case Study †Risk Management Process, Review of the Options Essay

3. Risk Management Process of the Regency Plaza Project Regency Plaza is a mixed-use multi million US dollar project carrying quite high stakes. So the risks of it should be evaluated beforehand and managed well in order to make sure that the project wouldn’t over run budget or time and end with a successful result. Here we use the â€Å"Four Stage Risk Management Process† to evaluate the risk management happened in Regency Plaza project. 3.1 Risk Identification Evaluation: how well the project was analyzed and source of the risk identified. In the below table we will take a closer look at how well the risk was identified by Kris Hodgkins. Description| Identified/Not| Constraints and Remarks| Size the layout of the floor plate| Identified| Complicated due to condominiums lying over the hotel rooms over a parking garage, which resulted in fixed column spacing and elevator core locations. | Number, mix and size of the condominium units| Identified| BRA approved maximum number of units to be built was 96, which Hodgkins chose opposing Farley, the marketing consultant’s idea of building spacious 72 units because of Hodgkins’ expected performance targets of $134.4 million gross sales and $26 million net profit out of the project.| Time Constraints| Not identified| Project was on a tight schedule as Kelly Constructions was convinced to cut off 03 month from the estimated 32 months of the project duration, with a promise of minimal changes to the original design. Eventually with the allowance of individual customization in the units, customers (i.e Millers) required drastic changes.| Manpower deficiency| Not identified| Neither RHG nor Hodgkins expect customers to require big alterations. But customers did, causing constant changes in the project design decreasing manpower and efficiency of the construction.| Extra Costs and Delays| Not identified| RHG allowed customers to modify their  units as they please as long as they pay for additional cost but customers asked for big modifications, the cost for wasted materials and extra cost for demolition and delays in construction would go upon general contractor since they got the project on fixed sum contract.| External Factors| Not identified| It is mentioned that in later phase in the project, sales were low and the local economy was weakening.| Customer Dissatisfaction/Complaints| Not identified| With the deficit manpower and budget overrun, service became slow causing several buyer complaint s.| 3.2 Risk Assessment Below is a table for assessing the above-identified risks. Risk | Likelihood to occur| Impact| Effect on the project| 1. Issues regarding size of the layout and floor plate| Certain| High| Project design is affected because of the constraints.| 2. Decisions on number, mix and units of condo to be sold| Certain| High| If 96 units of condominiums to be sold, they would need better marketing and excellent finishing touches.If 72 units to be sold, condo sales might not hit targets Hodgkins was supposed to hit.| 3. Time constraints (Project falling behind schedule)| High| High| Delayed project meant extra cost, which can frustrate the General contractor and customers| 4. Manpower deficiency| Medium| High| Deficit manpower leads to slower work completion and project falling behind schedule| 5. Extra costs and delays| Medium| High for General contractor, Medium for RHG and High for the project| As the General contractor works for Fixed Sum Contract extra costs, which exceeds budget, would go from their profit. Delays would cause customer satisfacti on and loss of sales| 6. External factors| Low| Medium| As the target market is wealthy couples, factors like Economy wouldn’t matter much so would not affect sales in a drastic manner| 7. Customer Dissatisfaction| Medium| Medium| This might lead to loss of some sales/ potential customers because Hodgkins’ marketing strategy is word of mouth and dissatisfied customers wouldn’t recommend the condos to their friends/family| 3.4 Risk Response Development As mentioned above, many of the risks were highly likely to occur. Should any of those occur, it’s ultimately project manager’s task to have a contingency plan, which Hodgkins didn’t have. She also made wrong assumptions in the planning phase of the project thinking that customers would require only minimal changes that wouldn’t obstruct construction process. As mentioned above some risks posted threat to Hodgkins marketing strategy as well but she didn’t consider the risks and eventually failed in developing Risk Response program. 3.5 Risk Response Control As a result of not having a Risk Response plan, Hodgkins could not reduce the impact or the effect those events had on the project. It is true that, she had to manage a multi-faceted project but she wasn’t able to even reduce the additional cost, which was occurring due to her planning and marketing failures, and the deadline being overrun due to various delays. 4. Review of The Options Option| Advantages| Disadvantages| Inform the Millers that it’s too late to allow changes| * No extra costs for General contractor * No construction delays * Millers are able to make the changes themselves| * Millers would be dissatisfied * Careful coordination is required * Sprinkler changes could shut down the entire floor| Push through the changes| * Minimizes the work which have to be ripped out * If the cost is acceptable Millers will be satisfied| * It’s expensive to put a unit on hold * Can take several weeks * It could in return increase the cost to a point where Millers will not be happy with the cost| Hire a small general contractor to finish the unit| * Changes required can be done * No extra cost for the general contractor * Construction would not be delayed| * Managing two general contractors * Possibility of violence and vandalism * Could be expensive * Kelly Contractors would give a very small credit for the work done and materials purchased * Arguments over the responsibility of punch list  items| Stop the work on the unit and hand it over to Millers| * Millers are in control of the cost and the work to be done * No extra cost for the general contractor| * Most banks wouldn’t accommodate lending against the unit * Can shrink the target market * Reduces RGH’s control over the project * Impact on continuing construction operations on a building which also held a luxury hotel| Move Millers to a different unit on the higher floor| * Would buy more time * No need to restructure what’s already been applied * Construction of other floors are undisrupted| * There was no identical unit available on a higher floor * Interior designer’s work will go in vain and would have to redesign * Higher floor units are pricier| All options carry advantages as well as plenty of inconveniences but the best option as our point of view would be moving Millers to a different floor Moving the Millers to a higher floor would buy more time so the cost of the changes can be assessed and approved by the Millers. As there’s no interior work done on units on the higher floors there won’t be any requirements to demolish anything or to put construction of other units/floors on hold, which would content the general contractor and also Millers can achieve the changes they want after approving the cost. There will be no wasted materials also. This option is more advantages because it would keep the general contractor content with the project. On a disadvantageous note, there’s the possibility that Millers might refuse the option as units on the higher floors are expensive and not identical with the unit they chose and also if Millers chose the unit, their interior designer might have the rework her designs which would cost Millers more. But given the good points and bad points, this option remains as the most feasible one.

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