The Importance of Management, Scheduling and Communication
Author – Lachlan Winterbotham
Why is everyone standing around doing nothing? Why does everyone keep leaving to get materials? How can they turn up without the equipment to do the job?
A friend recently joined the trend in COVID-related home renovations and installed a pool in their backyard. They reasoned that if they can’t leave home or travel overseas, they may as well turn their backyard into a resort.
As a construction professional, I was interested in watching their adventure – it was an adventure – as they set out realising their dream, mainly as this was the first major construction work they had undertaken on their home. It was not going to be cheap, coming at well over $50k.
On the whole, their project went well, it was only 12 weeks late, but thanks to the fixed-price agreement, they didn’t go over budget. The same may not be true for the contractor, or at the very least, their margin which would have been eroded, as would that of every trade involved in the supply chain. But what was apparent was the massive inefficiencies involved in delivering the job, best epitomised by the conversation we had as the pool was christened over the school holidays.
As we talked, it made me look at the parallels between major project costs and program overruns and the similarities construction of a humble backyard pool. While I acknowledge constructing a major highway, resources development, renewable energy project or rail line is far more complex, the parallels between the inefficiencies on a small-scale project and a major project are evident, and so are the outcomes.
This is especially true when looking at the chaos and challenges that occur when there is a gap in project management capability which is highlighted and exacerbated when the schedule of works comes under pressure.
The Cost and Time Implications
It has been well documented that Megaprojects face cost and time overrun challenges. Bent Flyvbjerg, an expert in project management at Oxford’s business school, estimated nine out of ten go over budget.[1]
McKinsey & Company’s work with governments and private-sector infrastructure players around the world, an extensive literature review, and drawing on insights from more than 400 case examples, projects that if infrastructure owners around the world were to adopt proven best practices, they could increase the productivity of infrastructure investment to achieve savings of 40 per cent. [2]
This is supported by local data, with the Australian Constructors Association’s, Jon Davies commenting that:
“Productivity growth in the construction industry has trailed other significant industries by 25 per cent over the last 30 years
“If we could just halve the gap in productivity growth, we could be constructing an extra $15 billion of infrastructure every year for the same level of expenditure and employ an extra 15,000 people.”[3]
So, we need to be more productive. We need to realistically schedule projects to radically improve performance and transform commercial sustainability for clients, contractors, taxpayers, private investors and more. We need to manage risk and opportunity on projects realistically, apportioning the responsibility of managing risks to the most appropriate body to manage them, not just the person willing to sign up to manage it.
What can we learn from installing a pool and what we do at Lidiar Group to manage them on a major project?
The Scheduling Challenge
“It was the most frustrating thing I have ever been involved in? How can it take twice as long to build a pool as was originally quoted? I know we had some rain, but it didn’t rain solidly for 12 weeks. If it had, we would have built an ark.”
We all know that projects have the potential to overrun. But in most instances, many of the reasons for overruns come from poor scheduling, a lack of risk management and a failure to allow for contingencies in the schedule. In this instance, the pool contractor didn’t factor in enough time for the job. They were so keen on securing the contract that they over-promised and under-delivered. It wasn’t the end result that the customer was unhappy with – they love their pool – they had expectations of when they could use it, and when those expectations were not realised, they were disappointed and frustrated.
Poor Briefing and Information Sharing
How can they turn up on day one with no idea of what they are supposed to be constructing?
Again another challenge we often see on larger projects is when a contractor has not adequately briefed the team delivering the work. So when the crew turned up on day one, with seemingly little idea of what they were building – they asked the customer how big the pool was and whether it was going to be pre-cast or cast on-site – you can understand the customer’s annoyance as the lack of cohesion in the project team.
The Wrong People in the Right Place at the Wrong Time
“Why did the tiler and pool fence installer turn up on the same day?”
My friend was bemused by what seemed a logical error in the process. The pool fence contractor and the tiling contractor were on-site on the same day. The pool fence couldn’t be installed because the tiling was not complete, so the pool fence contractor wasted hours in their day coming to the site, sitting around for an hour, before going away to come back at their next available timeframe, two weeks later. A simple error in scheduling blew out the project timeframe by two weeks.
The Right People In The Wrong Place at the Right Time
“How can they go to the wrong address?”
My friend lives on a fairly common street name in one suburb. There are several other streets of the same name in the suburbs across the city. He was naturally bemused, as were the owners of the same number house on the same-named street 10km away when a crane turned up to lift a pool into their back garden.
Cue much frustration, angry calls between the pool team and the crane operator, a truck with a pre-cast pool waiting for hours while the error was rectified and for the crane to arrive in the correct location.
The Bunnings Addiction
Do they sell something special at Bunnings that the rest of us do not know about? I swear, every hour, someone on this site needs to go to Bunnings for something they don’t have with them that they clearly needed for the job!
Who knows? Maybe the tradie club does have some benefits, but the reality is that the materials and resources needed to ensure progress should be onsite when required. The number of trips for additional materials quickly added up, with on more than one occasion, the tradie visiting multiple locations to get what they needed.
Ignoring Specifications
We thought it was over!
Three weeks after the pool had been completed, the customer received a call to ask if their pool tiles had been sealed. They were unsure – they trusted that the job would be done to specification when it was done – and after several calls, it turned out it wasn’t. They queried if it should have been done and if it was in the original – now settled – bill, and it was. Cue another trip by the tiler to spend more time on-site, completing a job that could have been done weeks before.
Lack of Robust Project Management
“Why does nobody know what is going on? I just wanted an answer, not a war.”
My friend was frustrated; they couldn’t get answers from their primary contact for construction, so they went back to the salesperson, who promised them he would help throughout the process, to find out what was happening and when their pool would be finished. The salesperson escalated the query to the construction lead (also the company owner), who effectively told the customer they could shove their pool somewhere where it would be very impractical and somewhat uncomfortable to do so or get someone else to do the “effing job”.
This wasn’t an option, but it will guarantee that the customer will tell everybody they can think of not to have a costly water-filled hole built by the contractor.
The simple solution is to have clear lines of communication, a project manager capable of resolving queries and who has the information required to support the project’s development.
What Can We Learn?
The critical thing to take away from the local experience is that some major projects suffer similar issues, just on a larger scale. From our careers, we can all picture scenarios where each of the above happened. The problem is that each project we work on carries far more significant risks.
Each challenge on a more extensive program of works is exacerbated due to scale being a significant multiplier to error, over resourcing, poor scheduling, lack of clarity, poor project management and more, impacting the contractor’s profitability. Additionally, if a resources project is delayed by 12 weeks, that is potentially three months of lost revenue for the asset owner, worth potentially millions of dollars.
At Lidiar Group, we understand the challenges facing projects and project teams, many of which can be avoided if we do the opposite of what happened locally. Can we eliminate resources and cost errors? Can we minimise schedule creep and associated blow-outs? Can we avoid rework and remedial procedures? We absolutely can and have a track record of successfully doing so on projects across all territories and sectors. In our experience success is reliant upon the ability of a project manager to ensure that everything happens when it needs to happen and if circumstances change to be able to foresee the change, understand the implications and reassess the schedule. But, critically, to then be able to ensure that every stakeholder understands what is going to happen from the client to the subcontractors. Communication through risk management is critical.
Can we eliminate the issues completely? We are good, but that sort of change can only come from a whole of industry approach to improving productivity. In 2022 we are pleased to see that this is a hot topic for the sector, led by the likes of the Australian Constructors Association and Queensland Major Contractors Association, who are aiming to address the challenges and unlock the sector’s ability to construct an additional $15 billion of infrastructure every year and employ an extra 15,000 people for the same level of expenditure. Ultimately, this advanced level of coordination will translate into more for less as opposed to less for more…
[1] What you should know about megaprojects and why: An overview,” Project Management Journal, 2014, Volume 45, Number 2, pp. 6–19.
[2]https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/Operations/Our%20Insights/Infrastructure%20productivity/MGI%20Infrastructure_Executive%20summary_Jan%202013.pdf
[3] https://www.constructors.com.au/intergenerational-report-highlights-urgent-need-for-reform/