Lecture 22

[Music] [Music] Hello and welcome once again to the course Principles of Construction Management under the MOOCs initiative of the Government of India. We are on Lecture 22 22 and today we will talk about Resource Management in Construction Projects. Projects This is the module of our course and under planning and scheduling we discussed many things and today our discussion will be on resource management in construction projects. So, we have seen that in any project there are many activities and each activity It has a defined purpose, it has a defined specification, it has a defined, possibly predetermined start and end time. The start time, the finish time, which we derive from our critical path through network analysis, is predetermined, but as the project progresses, It progresses, changes sometimes, consumes resources. We have assumed that every activity in ours will consume resources, except the dummy activity, so we have defined the activity in this manner. It is done in such a way that there will be consumption of resources, then it comes to the question of what are resources, what type of resources are we talking about in construction projects, the first thing is the material, raw material, all types of raw material are used in our construction projects. Machinery and its associated parts, workers, labor force, man power and yes, money, all these are included in it, for purchasing machinery, for purchasing material and for its use and also for manpower, when we plan a project. So we saw how we can schedule activities. This was our discussion on scheduling. Whereas we saw that activity A can happen from this time to this time. Activity B should happen from this time to this time. This is the kind of difference we made. Seen very clearly in our network analysis, today we will connect this thing with resource management, so now let us consider in some more depth the various aspects of resources and their management. So when it comes to material management or inventory control, management is When it comes to this, it should be kept in mind that materials form a huge part of the cost of any project. Although the projects can be of many types, from the civil engineering point of view, the most commonly used materials in the construction industry can be These are cement, gravel, gravel admixture, by mixing which we make concrete, water, steel, which is used in the form of rebar or structural steel, vitamin or bitumen, which is mainly used in the construction of roads, it is used to some extent in building construction. And then comes the matter of machinery, cranes, dozers, vibrators, all the small equipment etc. Then comes the matter of consumption, such as oil, lubricants, diesel pipes, we use many things, whether it is concrete, PVC or other items like wood, tiles, sanitary fittings, plumbing. Fittings, electrical fittings, etc., this is a list that is exhaustive, that is, all the things are included in it. This is only a matter of civil engineer when we talk about a project like metro. Apart from all this, the rail i.e. track and rolling stock connected to it, signaling wires, electricity. Supply Sub Stations All these are also integral parts of the project in the form of material or machinery. So when it comes to Inventory Management what is its objective? Its objective is to ensure that the material is delivered in the right quantity at the scheduled time. Be available for the project in the right quality at the right price at the right time from the right source. All the details given in this slide indicate that we can purchase any material in advance but do we need it? Whether we should purchase the material in advance or we should wait till the time when the material arrives and then we should buy it, but then we should keep in mind that often the material will not be available to you in the market immediately, for this we have to We must know that in what quantity do we need any material in any activity, how much cement do we need, how much steel do we need, what quality cement do we need, what quality steel do we need, what do we need in our admixture, in electrical wires, in plumbing fittings etc. Now here's another point I want to draw your attention to is that although construction projects are often executed in the field there are many items that we come out with as a finished product like plumbing fittings, taps etc. There are pipes, there are electrical fittings, all these are factory made products, there is cement, that too is a factory made product, but gravel and gravel come in that class where it is a natural resource, it is a natural material and with a minimal processing. They are brought to the factory or ready mix concrete plant and then the concrete is brought to us at the site. Right price for placing. Since the cost of raw material is a very important part of the entire project, it is essential that we get the right price for placing. Buy your raw material at cost. The price of raw material varies. This becomes more important when we see that our projects run for many months or sometimes for many years, so the cost of steel in those months or those years. Price is the price of cement. Its price will not remain constant. We have discussed this earlier also and perhaps we will discuss it again at the time of contract as to how we can handle this price variation in the contracts. If we talk about right time, then you must have understood that the material should be available when required. As far as the right source is concerned, it should always be kept in mind that any material can be available to us from many places. But in terms of quality, quantity and price, often companies conduct a survey and identify some sources and say that from there we will take the material. It also has to be kept in mind that sometimes the client is the one for whom we are doing a project. If you are building a bridge or a road, the client also decides that you can get this material from these or only these sources, then inventory management should be done keeping all these things in mind. That is, accurate material management ensures that uninterrupted supply of material remains at the site. There is less wastage of material and storage costs are also reduced. When it comes to storage cost, it should be understood that if we purchase any item If we keep tax then we need a warehouse to store it. We have to pay rent for the warehouse, so an ideal situation would be that we do not need a warehouse. Whenever we need the material, we can directly buy it. Come and install it on the site but it is not possible. We have to keep some material in the warehouse but reducing that cost is one of the objectives of inventory management. Also the material kept for a long time also gets spoiled. It is not very wise to buy a lot of material in advance. Keep in mind that the same material may be required in many activities. For example, we use cement in concrete. If needed, we add mortar. Which we use in brick work, we use it in brick work itself, when we plaster, we need cement in that too and if we are doing pre- stressing, then we need cement in grout, etc., so at many places the same raw material is used. The material used is cement. When we do planning and here we see the time, it may be that here we may use some concrete, here we may use some mortar, here we may use some paste, here we may use grout. If there is concrete along with grout, then considering the quantities developed in the activities, we have to estimate how much cement is needed and when it is needed and that work is done by an engineer and that engineer fulfills his requirements in the store or who is doing the inventory control. Tells it and on the basis of that, inventory management or procurement of cement is done in stores, then it is a matter of that method where the same material is being used at many places but it is also that the materials are interchangeable. One material cannot be used in place of another material. If we need cement there we will need only cement. There are different types of cement in cement too. There are OPC, PPC and some other types of special cement also. So where we need OPC, sometimes we can use PPC, sometimes we can use other cement, but sometimes we cannot, then we have to judge this as per engineering and the project is This engineering judgment is very important in running it smoothly. The goods kept in the warehouse reduce the money that can be used in other activities, that is, if we purchase 100 tons of cement and put it in the warehouse, then this is the time spent in purchasing 100 tons of cement. We have invested the money and it has become dead inventory in a way, that is, we cannot use that money anywhere else in that project. This means that the money that can be invested in other activities is reduced. Tax is done on the goods kept in the warehouse, so although it has value, it is 100 tons of cement, the cost involved in it is fine with us, but if that 100 tons of cement is not being used and is just kept there, then it is dead inventory. We should avoid this. We should avoid this. Goods kept for a long time can get spoiled. Cement is a very accurate example of that. If cement is kept in the warehouse for a long time, it gets spoiled. Yes, it is also true that it can happen. The idea is that we should somehow use the cement which has become old in a place where the structural application is not as good as the cement we need in concrete, that is, the quality of cement we need in concrete is needed in structural concrete where the structure Where the structure is being built, it is expected that it will be M35 concrete or A3 concrete, in that we cannot compromise on the quality in any way, but if we have to use plain concrete in the leveling course, then perhaps we can use that cement. Instead of reading about such things, it is better that we take only that much cement which is expected to be consumed in a certain period. So let us once again understand the various aspects of material management. Planning based on availability, this is our objective in material management. Or inventory control is also associated with it, as well as purchasing and transportation, where will we buy the material and how will we bring it to the site, how will we bring it, how much will it cost, etc. as well as inspection and quality. When will that material be inspected, how will it be done and what will be its quality? When it comes to the quality of the material, we have just discussed that all our raw materials are factory products in which we had given the example of electrical taps. There can be wires, electrical switches etc. It has to be kept in mind that how much percentage will be useful i.e. if we have taken Hajj switches from one source, will we really be able to use these thousands of switches if we can make them but if we have checked their quality? If the quality has not been paid attention to, i.e. the quality has not been paid attention to where it is being manufactured, then it is possible that after purchasing 1000 switches, we may get only 800 or 850 switches for our use, then this will not only increase our wastage, i.e. We may have to throw away 150 switches or 200 switches and at the same time we will have a problem that if we need 800 or 900 or 1000 switches at our site then how many switches should we order, for this we will have to go to each manufacturer. Be it A or B, he will have to go there and inspect those materials and every company does this very carefully. It is a matter of keeping it in storage or warehouse. We discussed this, Inventory Control, we discussed this and its use. For issue process i.e. the goods kept in the warehouse are issued for use at the site i.e. the decision of go down remains in the hands of the store. The store purchases and procures any material as per the activities happening at the site and Keeps it here and then as per the site's engineer or site's requirement or his requirements, he issues the material for this activity, then how much material came here, how much was issued for which activity, this process is also very simple. Computerization is important in the management of inventory, which involves coding of every item. I would like to draw your attention that if you open the bonnet of your car and look at the engine, you will see all kinds of nuts, bolts, piping and all kinds of small items. If the car manufacturer is engaged in making that engine, it is just a product. Car is a product. To make that product, all kinds of small items are included in it. Give a code to each item and that code. Doing this process with the help of computers on the basis of inventory i.e. procuring it and issuing it is also a very important part of inventory management. Now it comes to inventory control which is critical. It is also certain that if in any project or any other Also, if there are thousands of components or thousands of parts in the production, then it is not necessary to keep equal criticality for every part, then in material management or inventory control, inventory should be determined keeping in mind both this criticality and the frequency of usage. Maybe if it is a cheap item, we can control it in one way. If it is a very expensive item, we might have to control it in another way. Will cost be the only parameter on the basis of which we will control the inventory? It is not so. Because the frequency of usage is also important, it may be a cheap part but it is needed at many places, it may be an expensive part, it may be needed only at two places, how expensive it is due to inflation, etc. So we will discuss this in the next few slides, then it is critical. Continuing the discussion, identifying the criticality of an item is an important part of material management. We should determine among all the items that yes, this item is more critical. How do we do this with these items? For this, determine this criticality. One method to do is ABC Analysis. This ABC analysis is done on the basis of cost of goods and is also helpful in controlling the order of goods on the basis of their category. In this it is considered that Class A goods are that Those which contribute 70% to the total cost, Class B items are those which contribute 20% or 20 percent to the total cost and Class C items are those which contribute 10% to the total cost. So far as Class A As far as goods falling in Class A are concerned, they need to be closely monitored and accurate estimation is required. An accurate estate of quantities is very essential in Class A goods as they contribute 70 per cent of the total cost as far as Class B is less critical and a moderate level of control can be maintained and in case of items falling in Class C, there is an option to place orders in bulk to reduce the ordering cost. The level of control may be low to medium and the procedure for purchasing these items may be different depending on the ABC i.e. the power or competent authority to purchase Class A items may be little. A senior officer may have the power or authority to purchase items falling in Class B. The power or authority to purchase items falling in Class B may be given to an officer working at a post slightly below him. The power to purchase items falling in Class C may be given to him at a lower level only. If possible, let's see an example of classification of goods according to ABC analysis. Here we are given some data. It is about eight goods from A to H, where the average annual consumption is given here in numbers Y and Their average price per unit is given here in the form. It has to be determined that out of these eight goods from A to H, which one is Class A, which one is Class B and which one is Class C i.e. which goods contribute to the total Which items are at 70% of the cost, which are at 20% and which items are contributing only 10% of the cost. We have to do very simple mathematics that we have to find a total average annual cost which is the number given in this column and the number given in this column. We multiply 5000 by 50 and we get 250000. So if we calculate the total average annual price from A to H, we will arrive at the values ​​given here. Then comes the ranking of them. We will give the number one ranking to that item which has the highest average annual price, here it is 6 lakhs, after that it comes 2 lakhs, then it comes 180000 etc. After completing this process, we can give the ranking here. And then we rearrange them on the basis of ranking and see that 6 lakhs have gone up, then 180000 87500 etc. The total cost is 12 56500. Now let us see what is 6 lakhs of 12 56500. Percentage is when we calculate the percentage i.e. the ratio of total annual cost then the ratio of item C in the total annual cost we will see is 47.5 and similarly we find the ratio of all the items that the ratio of C is 47.5 and the ratio of A is 47.5 The ratio of 19.8 b is 14.3 b etc. So now if we look at it in proportion to the annual cost of one qmi, we will see that here it is 47.5 and if we add y to it, it will come to 6764. If we add y 14 to this, then it will be 81.6 a. etc. Ultimately here we have to come to 100. What is the meaning of this? So in this we are seeing that the two objects C and A, when combined together, the contribution of about 6764 is being made from these two objects only, on the basis of this we If we reach this table, because at 70 we had a line of Class A, then these objects which are C and A, these will be considered as our Class A objects. If we add 20 in front of 70, then we reach 90, so if we go till 90. So B and D will be added to it, both of them are classified as FHE and G. If we look at these four together, then this total cost is around 10%, hence in this example we will classify C and A as class A, B and D can be classified as class B and other items can be classified as class C. So let's move ahead and it's time for homework. I told you long ago that in this course two types of homework will be given, one whose solution will be given to you. Will be given and one for which there will be no solution, this is the type of assignment for which we will not give you any solution and we are asking you that suppose a contractor is building a colony and he has to build many houses. You have to build a community center, you have to build a shopping center, you have to build a water tank, etc. Make a list of the things that will be required to build that colony. If you are on a railway platform, try to do this exercise. I told you earlier also that you should lift the bonnet of your car and look at your engine and list all the things that have been used there and at the same time you should also leave aside the engine and all the other parts of the car. Look at the parts, seats, steering gear, tires, rims, axles. When you make a list of all the things used in the trunk, you will realize how important an important part inventory control can be in productivity, cost control and quality. Then let us move ahead with material i.e. raw material management. Let us move on to Machine Management or Equipment Management. When it comes to equipment management, it should be kept in mind that mechanization and use of heavy equipment has become an important part in modern construction projects. Selection of appropriate equipment or machines is essential for the entire project. Impact on productivity and total cost plays an important role in the selection of equipment. What is meant here is that the type of equipment we select impacts the productivity and total cost of that project. It is certain that the price of equipment has its place in the selection of equipment, but on the basis of that selection, it also has a very significant impact on the cost of the project and its productivity. It should always be kept in mind that when any equipment or machine is required. And for how much time, the way we discussed in scheduling that on access of time, we will do activity A here, activity B here and maybe from here till here we do activity C, so in these A, B and C While discussing the required resources, this was scheduling of activities based on time. Now we discussed what kind of material will be required in A, B and C. Providing that material on time. For A here, for C here. Providing the material on time from A to A and for A is a part of material management or inventory control, but along with the material, the equipment required in A, B and C also has to be provided. Make sure that whatever equipment is required for A, B and C is available on time. The type of equipment is required. This comes under equipment management. Many equipment are used in construction work. Many machines are used, some of which are listed here. It is given that various types of equipment are used in all these activities ranging from excavation to compact drilling, lifting erection concrete, clam shell, drag line, back hop, shovel, sheep food roller, various types of drills, various types of cranes, batching. Plant mixer, transit mixer, pump, vibrator, etc. If we want to see it in the form of a table, then we have given an example here. This is a back ho or a derrick crane which can be used everywhere. The homework here is that this type of Who makes the equipment? Here I have told you that Timberland Equipment Limited is a manufacturer of this type of dairy crane. The thing is also that I have not given you the cost or price of each equipment. And as a homework left for you, try to make a comprehensive list of equipment or machines used in construction works and complete the table as suggested and also understand the productivity and efficiency of these equipment or machines. When we talk about productivity and capacity, we are talking about like there is a crane, the crane can be of all capacities, 10 ton, 20 ton, 50 ton, 100 ton, so now the question is, what capacity crane do we need, what capacity crane do we need in our We have to keep in mind how much our productivity increases and how much it decreases. We have already left it for you in the form of an assignment to do self-study on all these things. It is said that selection of suitable accurate equipment is important to increase the productivity of a work place or site. Excavation is an activity in which the following things should be kept in mind whether the scale of work is a small excavation or a very large one. Earth movement has to be done, how much time is available, what are the local conditions, be it weather or soil conditions or water table, all these things have to be kept in mind, availability of equipment, what equipment is available there if the site is remote. If there is, then it is possible that there may not be all types of equipment available, there may be only a few equipments with which you will have to do the work, there will be cost of taking the equipment to the site, availability of necessary equipment, there are frequent break downs in the machines, if some repairs are required then What is the availability of Kalpa Ujas in that repair? Where is the dumping area? Where do we have to remove the earth we are extracting, how far do we have to take it, etc. Keeping all these things in mind, which equipment or machine should we use for digging? We have to decide what we will use. Now it comes to how the equipment will reach the site for use. We can buy them or rent them for a short period or lease them for a long period. We have to decide. One has to decide which of these options to choose. The first thing to consider is when the equipment should be purchased. If the equipment is essential to the core functions of the company i.e. it is likely to be used over a long period of time and in multiple projects, an equipment becomes an asset of the company. By purchasing an equipment, we are not dependent on anyone else for the use of that equipment. It has to be kept in mind that as a philosophy, as a thinking, what is the company asset? Whether we want to build or not? For example, should we buy a car or not? If taxi service or taxi is easily available then buy a car or go by taxi all the time when required. This type of thinking governs the company that the company is an asset. You can also consider for yourself whether to build or not. There is a lot of literature available and you can read it. What should be kept in mind while buying the equipment? One is the technology, the technology on which it is based and the ease of installing and running the equipment. Do we have to give special training to our operators for any problem that may arise? Post-warranty repair and its cost, Availability of facilities for repair and time taken, Operating cost, Required spare parts, keeping all these things in mind, we select the equipment. Selection should be made when the equipment should be rented. If we want to test the equipment by running it before purchasing it, whether we should buy this equipment or not. It is also possible that we may want to test the equipment once by running it and give it to our operators once. Give a chance to see if you try it, if you like it, then we will buy that equipment in future and use it as our equipment. If the need is only for a short period, then we do not need to buy that equipment, we can rent it. But we can take it only if it is needed in a special project. This is also a part of short term requirement. If our equipment is not available for some reason, we have the equipment but for some reason it is in repair or at that site. If not, then we will have to rent the equipment for a short period. As far as taking the equipment on lease is concerned, lack of sufficient resources to buy it can be a reason. In this case, there is a need for the equipment but due to lack of resources, we cannot sell it. We cannot buy it so we have to lease it. One thing that should be understood very clearly regarding equipment is that any equipment is very expensive. It is not the kind of equipment which is mass produced or The consumer base is very large, this type of equipment is manufactured very rarely and sometimes it is made only on order, that is, it is very expensive, hence it is not possible for every company to buy it, hence many companies use it on lease. Today we have discussed material management and equipment management. In a way, management of parts used in equipment will be considered a part of inventory management. With this discussion, our today's lecture ends here. But a list of some useful books is given which will help you in understanding the material in this course. Thanks Jai Hind [ Music] [ Music] Namaskar [Music] B