(Unit: 1 Trillion KRW = US$1 Billion)

Week 2

Introduction to Project Management

457.657 Civil and Environmental Project Management Department of Civil and Environmental Engineering

Seoul National University

Prof. Seokho Chi shchi@snu.ac.kr

건설환경공학부 35동 304호

What is a Project?

• “A temporary endeavor undertaken to create a unique product, service, or result.”

– Temporary means that every project has a defined beginning and a defined end.

– Projects involve doing something which has not been done before and which is, therefore, unique.

• Examples?

– Developing a new product or service

– Effecting a change in the structure, staffing, or style of an organization

– Developing or acquiring a new or modified information system – Constructing a building or infrastructure

– Implementing a new business process or procedure

What is a Project?

• A project is

– Decided by people, materials, and equipment

– Characterized by phases, multiple participants from different organizations, scheduling, cost constraints and creativity.

– Very dynamic in nature and involves considerable

coordination and communication.

What is Project Management?

Why is PM important?

What should we do for successful PM?

What is Project Management?

• “A process that helps project teams coordinate their

efforts so they may create the right product (or service, process, or plan) at the right time, for the right

customer, within the resource limits established by the organization”

• “The art and science of coordinating people,

equipment, materials, money, and schedules to

complete a specified project on time and within

approved cost.”

What is Project Management?

• “The application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project.”

– Meeting or exceeding stakeholder needs and expectations invariably involves balancing competing demands among:

• Scope, time, cost, and quality

• Stakeholders with differing needs and expectations

• Identified requirements (needs) and unidentified requirements (expectations)

• Communication and Leadership!

World’s 5 Mega Construction Projects

Construction Industry

• Not a new industry

• Continuously evolving

Type Residential Building Infrastructure Industrial

Nature of Construction Industry

• Large ^(CERIC

⁾

7.5% of the total employment in Korea

(about 2,000,000 people)

Nature of Construction Industry

Issues in Korean Construction Industry

• Domestic Construction Market in Korea

Domestic SOC Investment Plan

Size of the Korean Construction Industry

(From Construction Association of Korea)

(Unit: 1 Trillion KRW = US$1 Billion) 99.4 

107.3 

127.9 

120.1 

118.7 

103.2 

110.7 

101.5 

91.3 

0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0

2005 2006 2007 2008 2009 2010 2011 2012 2013

Size of Korean Construction Industry

Civil Architecture TOTAL

Year TOTAL CIVIL ARCHI.

Growth Growth Growth Residential Others

2012 101.5 ‐8.3 35.7 ‐8.1 65.8 ‐8.4 34.3 31.5

2013 91.3 ‐10.0 29.9 ‐16.2 61.4 ‐6.7 29.3 31.2

(Unit: 1 Trillion KRW = US$1 Billion)

15

Moving to International Market

 Domestic  International

WHY?

Position of Korean Firms

*2009년 한국전력공사 컨소시움UAE원전사업: 200억 달러 (BCG, 2017)

EARNING SHOCK!

M/S: 1.8%

M/S: 30.8%

17

Position of Korean Firms

18

- Investment to the diverse markets through the project lifecycle: planning to O&M - M&A with project financing firms since 2000  Investment to PPP

- Open to new renewable energy markets

■ Hochtief AG - Germany

- FROM transportation, city development, networks, energy TO project financing, road operation, parking business

- Short-term income from mega-project construction VS Long-term income from PPP

■ Vinci SA - France

- M&A with local firms, suppliers, and material vendors

- M&A with asset management, infrastructure operations for reaching better O&M

■ Strabag SE - Austria

- M&A only focused on construction and new project development investment - BIM and other IT solution investment for zero defect quality managment

■ Skanska - Sweden

19

Future of International Markets

 Good Picture of Future International Markets

(BCG, 2017)

Need for the Change

 Prepare for the Future

o No more traditional approaches, now move to the innovation

 New project development, PM total services, High-return design, etc.

o Proactive change and risk management

 Skills for strategic PM and global-level education of people

o Data management platform for prediction and preparedness

 Knowledge management, data-oriented decision making

and project management

Issues in Korean Construction Industry

• Construction Safety

2,493

2,114

609 621

0 500 1,000 1,500 2,000 2,500 3,000

2005 2006 2007 2008 2009 2010 2011

사망자수

년도

연도별 사망재해 분포: 전체산업 vs 건설업 (2005‐2011)

전체 사망자수 건설업

(한국산업안전공단, 2011)

2011 Total Rate to Industry

Injuries in Construction 22,782 Workers 25%

Fatality 621 30%

Fatality / 10,000 Workers 2.0 U.S., Japan 1.0

Issues in Korean Construction Industry

• Productivity

Productivity Index (1964-1998)

(Constant $ of contracts / workhours of hourly workers) sources: US Bureau of Labor Statistics, US Dept. of Commerce

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

160.00%

180.00%

200.00%

1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998

Year

Productivity Index

Construction Industry All Non-Farm Industries

Construction Industry

All Non-Farm Industries (includes construction)

*2012년 대한민국 건설업의 노동생산성을 전년도

대비20.1% 하락했으며 기준점인2008년에

비해서는 절반수준으로 하락하였음

Importance of Project Management

Planning Design Construction Operation &

Maintenance

CONSTRUCTION PROJECT

Procurement Management

Time Management Scope

Management

Cost Management HR

Management

Decision/Risk Management

Quality Management

Safety Management

(PMBOK, 2000)

PROJECT SUCCESS!

Happy Client Happy Constr. Firms

Happy Society

Residential Building Infrastructure Industrial

Social Science Oriented Engineering Oriented

Project Participants/Stakeholders

• Owners (Public, Private)

• Designers (Architect, Engineer)

• Constructors (General, Sub)

Project Participants - Owner

• Role

– Initiates a project, finances it, contracts it out and benefits from its outputs

– Owner’s Organization ..

for the Construction Project

• Capital Projects Officer

- Owner or upper-management-level individuals

- Makes ultimate decisions, authorizes major changes, and oversees the construction phase periodically

• Financial Officer: Manages the cash flow of the project

• Owner’s Project Representative

- Owner’s project manager responsible for the project - Primary contact participating on a daily basis

• Owner’s Inspector (clerk of the works)

- Mainly observes, reports the quality of construction works

• Testing Agency

- Outside testing agency contracted by the owner - Tests materials to verify their specified standard

Project Participants – Designer (A/E)

• Role

– Develops the owner’s concept on paper and construction documents

– Architect: Lead designer administrating construction as the owner’s agent – Engineer: Designs structural, mechanical, electrical, and plumbing systems

– ..

Architect’s Organization

•Principal-in-Charge: Owner or upper-management-level person - Makes ultimate decisions and handles major issues

•Project Manager: Primary contact

- Responsible for the project, organizes the project team

•Project Architect

- Designs the project and produces construction documents

•Contract (construction) Administrator

- Processes shop drawings, payments, RFI, change orders

- Observes construction and have meetings with the contractor

•Sub-consultants

- Engineering firms: Civil, environmental, structural, mechanical, or electrical

- Interior design firms

•Specialty coordinators

- Inspectors and engineers hired by sub-consultants

- Provides services on the jobsite during the construction phase

*Shop Drawings: Drawings explaining item fabrication and installation produced by  contractors, suppliers, manufacturers, etc. (e.g., 50m = 5 x 10m‐rebar)

*RFI: Information request from CM to A/E to clarify any parts of construction documents

Project Participants - Contractor

• Role

– Provides the labor, material, equipment, and expertise to complete the project

– ..

•Office-In-Charge: Owner or upper-management-level - Makes ultimate decisions and handles major issues

•Project Manager: Primary contact

- Responsible for the project, organizes the project team

•Superintendent

- Responsible for the project’s physical construction (labor, material , equipment, safety, subcontractor, etc.) - Primary contact participating on a daily basis

•Project Engineer

- Performs paperwork activities to keep the project going and on track for the project manager

(subcontract agreements, material submittals, shop drawings, payment requests, change orders, RFI)

•Field Engineer

- Lowest tier on the management side of the contractor’s employee

- Issues RFI to clarify the construction documents, order materials, review shop drawings and submittals, etc.

- Assists the superintendent

Contractor’s Organization

Project Lifecycle

Typical Project Objectives

• Project performance (scope and reliability):

Time-Cost-Quality

Cost-Influence Diagram

“Influence” reflects a company’s ability to affect the outcome of a project.

Owner Owner, PM Contractor Client

Explain?

Week 2

Project Objective Setting

457.657 Civil and Environmental Project Management Department of Civil and Environmental Engineering

Seoul National University

Prof. Seokho Chi shchi@snu.ac.kr

건설환경공학부 35동 304호

Construction Industry Teams

• Construction is a people intensive industry.

• A project team exists for most construction projects.

• Multiple and overlapping teams are common.

• Effective teams are more likely with a proactive team building process.

• Successful project outcomes are more likely when effective teams are in place.

• Costs associated with team building are very low when compared

to the benefits.

Construction Team Participants

• Project advocates (owner representatives)

– Project manager – Contracting officer

– Owner/client representative

• Project delivery team

– Project manager – Contracting officer

– Owner/client representative – A/E designer

– Specialty consultant

– Construction contractor – Construction manager

• Make-up of team varies on type and size of project,

owner’s staffing, etc.

Team Leader Skills & Alignment

• Team leader skills

– Leadership and decision-making – Facilitation

– Coordination of tasks – Communication

– PM knowledge

• Alignment

– Everyone moves

to the same direction!

Why is Alignment Difficult to Achieve?

Teamwork Success Factor

• Starts with sponsor defining goals, objectives, priorities, etc.

• Proactive: process starts at project beginning and last for entire project.

• Focus on common goals and priorities

• PM is team leader.

• Effective team building process

• Objective-setting modifies behavior in three ways

– Focuses attention: “should be doing”

– Regulates energy expenditure: “don’t waste time”

– “Hard” goals increase persistence: “push yourself hard”

Objective Setting

Agreement

• Formation Phase:

Form a single set of project objectives.

• Communication Phase: Disseminate

directly or indirectly the developed objectives.

• Integration Phase:

Project objectives to form an integrated

project strategy. Recognition

Communication

Negotiation

Project Management Objectives

Project Integration  Management Develop Project  Management Plan Project Scope 

Management

‐ Collect requirements

‐ Define scope

‐ Create WBS

Project Time Management

‐ Define activities

‐ Sequence activities

‐ Estimate activity resources

‐ Estimate activity durations

‐ Develop schedule

Project Cost  Management

‐ Estimate costs

‐ Determine budget

Project Quality  Management

‐ Plan quality and control

Project Human Resource  Management (Team Members)

‐ Develop HR plan (role, skill, resp.)

‐ Develop project team Project Communication

Management (All)

‐ Identify stakeholders

‐ Plan communication

Project Procurement  Management

‐ Plan procurements Project Risk Management

‐ Plan risk management

‐ Identify risk

‐ Perform qualitative risk  analysis

‐ Perform quantitative risk  analysis

‐ Plan risk responses

Checklist

• Is the objective:

– Specific and identifiable?

– Oriented toward single-ended results?

– Set against deadlines?

– Attainable?

– Responsive to organizational needs?

– Controllable?

– Assignable to responsible parties?

Project Management Objectives

Project  Characteristics

Project  Management

Objectives

Detailed PM Objectives

Goal Stretch

Goal

How to Conduct or 

Behave?

Construction  after working  hour (5pm‐6am)

Time  management

No delay on  intermediate  milestones and  all system startup

Meet all dates Ahead of  schedule for 2 

weeks

Use Primavera, Fast tracking, 

Team/Public  communication 

channels Construction in 

the downtown  area

Procurement  management

Less storage time  and cost for 

material  management

Meet material  cost and  expenses

5% saving Just in Time  processes, IT‐

based location  tracking Hurricane effects Scope 

management

Landscape, roof,  structure, etc.

Sea oats, water‐

proof, con’t, etc.

Other state‐of‐

the‐art tech.

Collaborative  Objective setting Quality 

management

No rework < 6% of direct  work hours

< 4% of direct  work hours

QA/QC, BIM,  Team  coordination,  documentation 

protocols

10‐story Court Renovation Project in New Orleans

Project Management Objectives

Project  Characteristics

Project  Management

Objectives

Detailed PM Objectives

Goal Stretch

Goal

How to Conduct or 

Behave?

Public safety is  always first!

Risk (Safety) management

Less accident RIR : 3.0 LWCIR : 2.0

RIR : 1.0 LWCIR : 1.0

TBM, W2W, site  monitoring Public project 

budget saving

Cost  management

Meet project  total cost

Meet project  budget

10% saving PDCA + all other PM

Increase  contingency 

return

$6 million  remaining

$7.5 million  remaining

More budget and  time for PPP,  enhance risk  management

10‐story Court Renovation Project in New Orleans

*RIR (Recordable Incident Rate): Number of Claim / Number of Workers *1,000 (accidents per 1,000 workers)

*LWCIR (Lost Workday Case Incident Rate): Number of lost workday cases * 200,000 / total hours worked  (accidents per hours)

Contingency: downside risk estimates that make allowance for the unknown risks associated with a project. Typically,  contingencies refer to costs, and are amounts that are held in reserve to deal with unforeseen circumstances.

Retainage: a portion of the agreed upon contract price deliberately withheld until the work is substantially complete to  assure that contractor or subcontractor will satisfy its obligations and complete a construction project

Project Process-Related Objectives

• How to conduct or behave?

– Team behavior/code of conduct – Project procedures

– Roles and responsibility definition – Communication channels

– Documentation protocols – Dispute resolution

– IT technology solutions – Team meetings

– ……….

Alignment Checking

• The Alignment Thermometer 1: Strongly Disagree

5: Strongly Agree

Alignment Checking

• Step 1

Alignment Checking

• Step 2

Alignment Checking

• Step 3

Week 2

Group Assignment Exercise

457.657 Civil and Environmental Project Management Department of Civil and Environmental Engineering

Seoul National University

Prof. Seokho Chi shchi@snu.ac.kr

건설환경공학부 35동 304호

Group Assignment Exercise

• Form a group of 2-3 students

• Select a team name and logo

• Agree to team assignments

– Group leader – Facilitator

– Recorder

– Others

Lotte World Tower Construction

• Project Overview

– 지상 123층, 높이 555m(대한민국 최고, 아시아 3위, 세계 6위) – 공사비 3조 8000억 원, 공사인원 약 78만 명

– 투입된 콘크리트 양 19만 5천 m3(일반 콘크리트의 3배 강도 + 최소 3시간 이상 버티는 고내화), 철골 및 철근 각 4만 톤 – 타워무게 75만 톤 = 성인남자 1000만 명

– 지하 38m 깊이까지 터파기, 화강암 암반층 30m 길이 직경 1m 파일 108개 설치

– 좌우길이 72m, 두께 6.5m 매트기초(5300대 레미콘 32시간 8만 톤 고강도 콘크리트 연속 타설  두바이 부르즈 칼리파보다 1.8배 두껍고 콘크리트도 2.5배 많음)

– 8개의 메가칼럼: 비행기 충돌 실험에도 원형 유지

– 진도 9의 지진 및 초속 80미터 강풍에 견디는 내진, 내풍 설계 – 국내최초 64톤 급 타워크레인 2대 사용

– 초고압 콘크리트 압송

– 위성측량(스위스 라이카), 커튼월 외벽(일본 릭실, 미국

CDC), 풍동설계(캐나다 RWDI), 초고층 설계(미국 KPF,

레라), 터파기설계(영국 에이럽)

Lotte World Tower Construction

• Project Delivery Team

• Other Stakeholders

Project  Characteristics

Project  Management

Objectives

Detailed PM Objectives

Goal Stretch

Goal

How to Conduct or 

Behave?

Group Assignment Exercise

• Project Delivery Team (울릉도 방조제 건설프로젝트)

Group Assignment Exercise

• Project Delivery Team (울릉도 방조제 건설프로젝트)

Pohang Regional Maritime Affairs and Port Office

Joint Venture Design-Build Sekwang

Engineering Consultants

Hyundai-Amco New millennium

Construction

Miraedosi Construction WeBON Construction Subcontractors

POSCO E&C

Odyssey Int.

Group Assignment Exercise

• Other Stakeholders (울릉도 방조제 건설프로젝트)