Construction

Construction is a key sector of the national economy as it is a base requirement and a prerequisite to national infrastructure. The industry is engaged in the preparation of land and construction, alteration, and the repair of buildings, structures, and other real property.

While the construction industry's direct contributions to development are significant, it also stimulates a sizeable amount of economic growth through backward and forward linkages. Construction's requirements for goods and services from other industries are considerable; the development of the construction industry therefore stimulates these ancillary industries, thus encouraging further economic growth. In developing countries the construction of physical facilities make up more than one half of the gross domestic investment and tends to be concentrated on basic infrastructure in agriculture, mining, transportation, communication, and utilities. Infrastructural services make some contribution to GDP, but they also stimulate the development of other industries which, in turn, contribute more directly to economic growth.In the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large scale construction is a feat of human multitasking. Normally, the job is managed by a project manager, and supervised by a construction manager, design engineer, construction engineer or project architect.

For the successful execution of a project, effective planning is essential. Involved with the design and execution of the infrastructure in question must consider the environmental impact of the job, the successful scheduling, budgeting, construction site safety, availability of building materials, logistics, inconvenience to the public caused by construction delays and bidding, etc.

 

 

 

GCC Construction Industry Overview

The GCC Construction industry grew considerably by over 11% in 2012, mainly due to significant rise in Saudi Arabia, increasing to a whopping 17%. Oman stood second and reported a growth of 13%, while Qatar and UAE reported growth of 12% and 9% respectively. Saudi Arabia is enjoying a huge demand and growing market, with projects arising all over the Kingdom as part of the expansion plan commissioned by the King. Qatar has FIFA 2022, which requires the building of substantial infrastructure which includes a new airport, railway, road network, stadiums, housing etc.  Kuwait and Oman are also growing given their ambitious National Vision while the UAE has been driving the development of its various industries and promoting itself as a hot tourist destination.

Despite the surge in construction demand , the below issues have been bottlenecks to finalizing and delivering projects on time:

1)    Profits in the industry are lower than last year with a drop of 4% of net income.

2)    Many delays are being declared on critical projects which can harm the reputation of not just the contractor but the nation as a whole.  For example, Qatar Airways has sued the new Airport Authority for major delays in finalizing the new airport.

3)    We also have issues with external resources and imports being out of control.

4)    Budget overspends are common.

5)    Labour is a bottleneck.

6)    Man Made Chaos resulting in the above issues, which has created customer dissatisfaction and a lack of trust in delivery.

7)    Cash flow throughout the project is out of control, resulting in payment delays to suppliers, which then will cause further dissatisfaction therefore resulting in more chaos and delays.

 

We should not blame this on the individuals, leader or the companies but on the system of tools!

Overall though GCC companies have witnessed and will continue to witness higher construction demand in 2013 and the following years compared to 2011 or 2012, which are clearly visible from the projects being declared by all GCC Countries.

 

Critical Chain Project Management

At CGR MENA these critical projects and the industry as a whole should use Critical Chain Project Management to ensure the successful completion of numerous types of construction projects simultaneously.  By using CCPM, companies can ensure that their projects are completed on time, and on budget thereby saving the construction companies resources, which will enable them to complete more projects at the same time while ensuring customers and national projects needs are satisfied. 

Critical Chain can be used in a situation of several parallel projects (for example, in the case of a subcontractor working on several sites). This means that a subcontractor supporting more than one project or project leg can see the relative priorities through the ratio of Critical Chain completed to project buffer consumption and act accordingly.

In the GCC at large companies still use Critical Path Schedule (CPS), which is not the most efficient tool to ensure that projects are delivered on time, with minimum resources and uncertainty.  The decrease in margins and the major delays are proof that CPS alone does not optimize the project delivery.

 

Questions for You:

1. Did You Know you should schedule your construction project by average task durations?

2. Do you use the Drum Buffer Rope production Algorithm? 

3. Do you create safety time for tasks or do you Protect overall project completion with project buffer?

4. Do you communicate and emphasize project progress rather than task progress?

5. Is replenishment, any feeding processes, or external constraints slowing down or delaying your end client receipts?

7. Are you using T-put metrics through-out your system? 

8. Do you resolve resource contentions explicitly i.e. labour or do you delay projects complaining about these contentions?

9. Do you simulate the construction project through logic and ensure no one is multi tasking?

10. Did you know that your PM should be managing uncertainty by monitoring impacts of events on buffer time consumption through Critical Chain Theory of Constraints and Deming's TPK tools, these can optimize your Construction Project?

 

 

 

CGR MENA APPROACH

We start by reviewing and defining your local organization, your units of measurement and conversion factors with T-put accounting. We will introduce the concept of the Construction Project Critical Chain via CGR Systems,  and examine its structure and functional relationships. We will look at your system holistically and drill down to specific processes such as the resource contention and subcontractor processes or other sources of project delays or under optimized process reducing profit, and delaying time to completion.

We will then review or create your internal deployment flow charts to ensure the processes have embedded Critical Chain process management with statistical monitoring controls, we will review your supply chain process, JIT, major areas of demand, pricing fundamentals, drivers of demand and future trends.  Finally, we will train your management and give you our tools.

 

All of the above will transform your system thereby achieving outstanding results:

Projects delivered 20% - 40% earlier than proposed deadline 

Cash savings of 10 - 30%

 

Our proven track record speaks for itself as any investment with our CGR Systems within the Construction Industry will YIELD A RETURN BETWEEN 40x and 200x investment in the first year.

 

Contact Us