USING THE SCHEDULE TO CONTROL YOUR PROJECTS AND YOUR LIFE

One of the major concerns with construction managers is the total control that projects seem to take over the manager’s life. It is not uncommon for project managers to find themselves consumed by a project. Many work 60 to 80 hours per week, with 65 to 70 hours the standard. These long hours, in addition to the associated pressures of meeting the project objectives, tend to take their toll on managers. This type of lifestyle, if it contin- ues over several years, threatens not only the personal health of the manager but also the manager’s relationship with his or her family. “Burnout” is a problem in the management circles of many construction companies. As stated earlier, the key is to learn to control your projects so they do not control you. You must have balance not only in your construction projects but also in your personal life, outside of the job site.

As a construction manager, you need to increase your level of professionalism to the point where you can work smart as well as hard, enabling you to have time to do other things that are important to you. Managing major construction projects has a tendency to consume every thought, action, minute, and hour. As a manager, you must become better at planning and scheduling to allow you to spend time with those you love and cherish.

It is the author’s experience, having worked and consulted with hundreds of project managers, that those who are consistently more successful on the job have a life outside the job as well. Managers have to manage their entire lives, not just projects. They cannot continue to work excessive hours on projects, going from crisis to crisis at the expense of

other people and other things life has to offer. Managers must learn that by prior planning they can create a schedule that controls and communicates the construction process in sufficient detail that everyone knows who is to be doing what, when, and where. Thus, the manager can, on occasion, be gone from the job site and still have things running efficiently and effectively in his or her absence. To repeat, managers must learn to control the

project, rather than having it control them. Proper scheduling can be a great aid in helping to

achieve this.

Reduce Total Construction Time

Any schedule is better than no schedule. It is common to hear managers state, “because projects are always changing, schedules are impossible to keep.” An excellent reply to this is, “that is why they must be scheduled!” Somehow managers must learn how to wrap their arms around a project and get control of the time element. It may be difficult, but it must be done. Through advanced planning and scheduling, the total project duration can be determined and construction time can be reduced. Overall time reductions are possible through the detailed thinking that a formal schedule requires. Planning the project, well in advance, reduces the mistakes of doing activities out of order and the rework due to inadequate advanced planning and scheduling. Some rework is always necessary because mistakes will be made, but excessive rework causes major delays and disruptions.

Reduce the Costs of Labor, Overhead, Interest on Loans, and Capital

Generally, if the project can be completed early, the overhead costs connected to that project are lower. Organizing labor in such a way that productivity is at a maximum results in cost savings as well. A well-organized project helps decrease additional costs of overtime expended on the project. Interest costs can also be decreased if the project finishes early. Most people agree that time is money. The chart shown in Figure 2.2 illustrates the effect of time on projects:

To illustrate the effects of the chart in Figure 2.2, consider this scenario: The proj- ect just started, the job trailer is on the site, the security fence up, and the layout and excavation just started. Total cost to this point amounts to only $75,000. At the current time, the interest cost of one work minute is five cents and one work hour $3.25, or $26.00 per work day. That’s with only $75,000 tied up in the project. Now notice what happens when there is $5 million into the project. The interest cost per work minute increases to $3.61, a work hour is $216.35, and a day is worth $1,731.00. That is a lot of money that someone is paying just on the interest of the construction costs. Even if the owner is wealthy enough to be working on a cash basis and that money is not being borrowed, there is still value in the money and time expended. If it could be invested at a 9 percent interest rate in a secure investment, there is still a cost based on the time the money is tied up in concrete, steel, drywall, and so on until the project becomes complete and starts to return on its own investment. The chart in Figure 2.2 is based on a five-day work week, so the daily interest is based on 1/5 the interest accrued weekly, not 1/7. The hourly rate is based on a 40-hour work week; therefore, it is 1/40 of the weekly amount.

If the project manager is crisis oriented and disorganized, causing a one-week delay on a $10 million commercial or industrial job, that accounts for a huge $17,307.69 loss.

$50,000,000 $36.06 $2,163.46 $17,308 $86,538 $375,000 $4,500,000 30,000,000 21.63 1,298.08 10,385 51,923 225,000 2,700,000 20,000,000 14.42 865.38 6,923 34,615 150,000 1,800,000 10,000,000 7.21 432.69 3,462 17,308 75,000 900,000 6,000,000 4.33 259.62 2,077 10,385 45,000 540,000 5,000,000 3.61 216.35 1,731 8,654 37,500 450,000 4,000,000 2.88 173.08 1,385 6,923 30,000 360,000 2,000,000 1.44 86.54 692 3,462 15,000 180,000 1,000,000 0.72 43.27 346 1,731 7,500 90,000 800,000 0.58 34.62 277 1,385 6,000 72,000 600,000 0.43 25.96 208 1,038 4,500 54,000 500,000 0.36 21.63 173 865 3,750 45,000 300,000 0.22 12.98 104 519 2,250 27,000 150,000 0.11 6.49 52 260 1,125 13,500 100,000 0.07 4.33 35 173 750 9,000 75,000 0.05 3.25 26 130 563 6,750 Time Is Money

Based on a 9% Annual Interest Rate

Year Amount Work Minute Work Hour Work Day Week Month

FIGURE 2.2 Interest costs per period of time

Time really is money, and it is a lot of money! The above is true in residential construction as well. It is not uncommon for a manager to be responsible for 10 to 15 homes at once for a total in excess of $10 million.

On the other hand, consider a dynamic manager who has planned, organized, directed, and controlled the project , resulting in a time saving of one week on a $10 million job. That manager just saved $17,307.69. As stated, time really is money—it is either lost or saved by the way a project is planned and scheduled. This is just the savings on the interest being charged to the project. It does not include the dollars saved as a result of a manufac- turing enterprise being put into operation earlier than anticipated, or an apartment build- ing being completed early and collecting additional months or even weeks of rent, and the list goes on and on.

Some argue that it is too costly to furnish computers and provide the training necessary to empower construction site workers, project managers, and especially superintendents to schedule the work on-site. If doing this would save one week on a $5 million project, that would generate more than enough money to provide the computer, software, and training.

This savings resulting from scheduling holds true not only for commercial and industrial or heavy highway contractors but also for residential builders. If they could save just one week on each house they build annually, consider what the savings would

amount to on homes with an average cost of only $200,000 per home. If each manager is responsible for the construction of 20 homes per year, the interest cost savings would be enormous, to say nothing of the other cost savings by completing the projects quicker. What would that do to a home builder’s reputation if the company consistently finished projects on time and underbudget?

The cost of delays can be enormous on large projects. The February 10, 1993, edition of USA Today announced that the MGM Grand hotel, being built in Las Vegas, was 45 days ahead of the projected schedule, which would increase the first year’s revenue by about $70 million. The slot machines alone were forecast to take in about “$385,000 more per day than they would spit back to gamblers.” Time really is money, and many negotiated contracts are awarded as much on the schedule as the estimate.

Provide a More Continuous Work Flow

A well-thought-out schedule will provide for a continuous work flow. Based on past experience, what is the flow of work at the beginning of a typical construction job? What is the work flow during the middle of the project? Is it different as the project approaches the completion date? Generally, the start and middle time periods of a project are more easygoing and less hurried compared to the end. In residential construction, it seems the typical house will go days during the middle phase without a truck parked in front, whereas, during the last week or two there is not a parking place within blocks because all the tradespeople are trying to get the project finished on time. The Home Builders Association’s home shows across the country are particularly fun to watch the week or two prior to the opening of the show.

Commercial and industrial construction is not much different—the crunch comes at the end. This is a sign of poor management. The well-scheduled and planned project should see uniform activity during the entire project, with no big crisis at the end. Yes, that is a little unrealistic to imagine, but in theory it should work that way.

Increase Productivity

A well-planned and well-thought-out schedule will produce an improvement in productivity, especially when the prime tradespeople are consulted in the development of the schedule and have had input into the way the project is sequenced. Tradespeople will not be working on top of each other. There will be a uniform and orderly process happening and people will know what to do, when to do it, and where to do it.

You typically wouldn’t consider building a project without a set of plans. The architectural plans tell what is being built and the schedule tells how it is going to be done. Yet, it is not uncommon for a management team to try to construct a project without a schedule.

Give Employees and Subcontractors a Goal to Work Toward

A schedule sets the goals and milestone objectives for the project and its workers. It is the plan of how the work is to be done. Without a schedule, employees and subcontractors don’t have intermediate goals to work toward or a detailed plan of when activities are to

be completed. The expectation is that everyone will work hard and the project will finish on time. It is surprising how often this happens in the construction industry, without a specific plan of construction methods or a formal schedule. But, many times the price paid is high overtime, quality problems, safety violations, and years of litigation. A well- thought-out schedule that has been prepared with input from the project’s prime stakeholders will eliminate many potential crises and create a higher level of support and teamwork. Owners sometimes poke fun at contractors with statements like, “a carefully prepared and well-thought-out project typically takes twice as long to construct as originally planned, whereas a poorly planned project will take three to four times as long.” Owners of custom homes frequently joke about how long it took to build their home with comments such as “the contractor said he would have my house completed by July; he just didn’t tell me which year.”

Improve Your Company Image—Makes You Look Professional

A formal schedule, if used for no other purpose, will pay for the time it takes to develop it because it improves the company image and sets the company apart as a professional organization.

A Case Study on How a Schedule Improved a Company’s Image:

The project was a National Basketball Association (NBA) arena and the construction company had no experience in building projects of that size or magnitude. The management team had no experience with scheduling such a project and was at a loss as to how to proceed. The plans were very preliminary and without details. The roof system was undetermined: fabric maybe, trussed maybe, open maybe—that would be determined later. The schedule was needed for a proposal in a negotiated bid. So, the project manager and superintendent did their best. They admitted to a major amount of guesswork on how the project should be constructed. They admitted they felt incompe- tent to schedule this project. This was the company’s first attempt at a critical path method (CPM) logic diagram (to be discussed in Chapter 6). They developed the logic diagram by hand, and then entered it into the computer. They located a color pen plotter and plotted the logic diagram and the overall bar chart in red, black, green, blue, and yellow on 2 × 3-foot sheets of paper. The schedules were mounted on a high- quality presentation board. To the surprise of the project manager and superintendent, the resulting schedules looked great!

The schedules were delivered to the president and the development officer of the construction firm. Everyone commented on how great the schedules looked and what a great job had been done to create them. The schedules were used in the presentation to the owners and the firm was eventually awarded the project. The owners stated, “One of the major reasons the job was awarded to this company was their impressive schedule. The schedule gave us confidence in the contractor’s ability to do the work.” The sched- ule indeed was impressive looking, but how much better it would have been if the schedule were technically accurate as well.

Chapter 2 • Why Schedule? 13

That project turned out to be very successful, in part due to the general contractor’s admission of his lack of experience with a project of this nature and, therefore, his depend- ence on the subcontractors to provide input into the final working schedule.

Owners are looking for professionals to partner with in building quality projects, on time, within budget, and in a safe work environment. The schedule has a major impact in this area. If you want to work for professionals, you need to be a professional. Managing by the seat of the pants won’t do it anymore. The competition is getting organized and so must you if you are going to compete for the best and most profitable projects.

Meet Owners’ Requirements

Owners are tired of their projects finishing late with loose controls. It is normal for current contract documents to require a detailed CPM schedule (Chapter 5 will cover CPM scheduling). The contract frequently specifies even the software to be used to develop and update the schedule. Owners are trying to force the contractors to become more professional, to do the job right, and to do it on time. Many contractors are finding this as their edge in the marketplace. They are developing a reputation of integrity, finish- ing projects on time, and meeting the owners’ requirements. These contractors are developing a realistic, workable schedule as they plan the project because they find it increases their chances to meet or exceed owners’ expectations.

Force Detailed Thinking and Planning

If used for no other purpose, a formal schedule will pay for itself for this one reason alone: As a manager develops a schedule, he or she is forced to think out the process of how the project is to be built. The management team has to mentally build the project in order to create the

schedule (Figure 2.3). As the processes are thought through in detail, many potential prob-

lems are eliminated that would not have been considered without formally scheduling the project. Some managers realize that developing the schedule was worth the time even if they had not continued to look at it during the construction process, because it forced

FIGURE 2.3 Scheduling creates critical thinking

them to think through the entire process. As a schedule is developed, the management team must think in detail about how they are going to build the project, including the equipment, people, processes, techniques, and tools needed. This detailed thinking, especially that required to create a CPM logic diagram, is of crucial importance.

Improve Communication

If a group of construction managers is asked, “What is it that frustrates you the most about your job?” the list frequently includes the following:

• architects

• owners and owners’ representatives

• subs (subcontractors, as stated by general contractors) • general contractors (as stated by the subcontractors) • suppliers

• engineers

• unskilled tradespeople • changes

• inspectors

• having the wrong materials shipped to the job site • materials always arriving late

• plans with so many errors and omissions • upper management

A careful examination of the causes of frustration shows a common thread: lack of

communication. Architects sometimes frustrate the project managers because the plans do

not clearly communicate the details needed to build the project. The project managers frustrate the architects because they do not understand the plans and specifications. The owners are frustrated by the project managers because they constantly say one thing but do another. The project managers are frustrated by the owners because they are always changing their mind and never tell them about it. Subcontractors frustrate the project managers because they never show up at the right place at the right time because the project managers never give them proper directions and sufficient notification of when to proceed. The materials don’t arrive on time because no one ordered them in time for delivery prior to the date they are to be installed. It is an enormous challenge to communi- cate all the details and changes required to construct a massive project to all the people and entities involved. One of the biggest, if not the biggest, challenge in any organization, business, or group of people is effective communication.

A formal schedule not only reflects the manager’s critical thinking but it also gives the manager the ability to communicate that thinking to everyone involved in the project. Everyone can share the same vision of how the work is to be accomplished. Everyone knows who is responsible for what, where, and when. As problems are encountered and solved, the schedule communicates to everyone how the project is going to be adjusted in order to meet the primary objectives of a quality project, finished on time, within budget, and in a safe work environment. That is the fallacy of a manager who says, “I don’t need a schedule because I have built so many projects similar to this I can do it in my sleep.” It is not a matter of his or her ability to know how to construct the project. It is a matter of being able to communicate that plan, those thoughts in the

Chapter 2 • Why Schedule? 15

Conclusion

There are many benefits to formally schedul- ing projects. Not only does a well-thought-out schedule help projects be built more efficiently but it also helps managers improve the quality of their own lives. As a manager, you must also learn to manage projects, rather than hav- ing projects manage you. You cannot continue to live and die in the crisis quadrant. It is too