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How can managing change in construction projects improve productivity?

 

STUDENT PAPER

By Ferdinand Huc

SKEMA Business School

Lille, France

 



ABSTRACT

In construction industry, productivity as always been a challenge and change a constant. Correlation between these two elements is evidence. In term of change management, thousands of methods are used throughout the different construction companies, and these different methods achieved different results. The aim of this paper is by using tools as MADM and additive weighing technique to determine which is the most efficient method to manage change by limiting its impact on productivity. Based on the analysis, company needs a clear and precise communication which goes thru well defined and structured forms.

Key words: Change processes, Construction industry, Rework, Managing change, Overruns

INTRODUCTION

Construction is one of the largest industries worldwide. It has grown from US$7.4 trillion in 2010 to US$8.5 trillion in 2015 and with the expected growth in population, it is forecast that the volume of construction output will grow by 85%. This market is a real opportunity for contractors, but isn’t has easy as it appears.

Even with a grow in activity this big, construction industry struggle to adopt and integrate new technologies, no major transformation has been undertaken leading in a stagnation of the productivity if not a decline. Changes correlation to productivity is to blame. Study shows that approximately 40% of construction projects encounter 10% of change. When change exceed 20% then productivity never achieve expected rates opposed as when change stays below 5%, productivity is always better than expected. This correlation between productivity and change also affects planning and budget. Productivity being linked to performance; a reduction of productivity could result in a delay in the planning and then a cost overrun to overtake this delay.

Illustrations of these phenomena are numerous; the recently built Kuala Lumpur International Airport 2 exceeded its target price by more than RM 2.3 Billion and opened three years behind schedule. The reason for it was new design concepts and a non-structured information flow compromising a clear change process. It is already difficult to achieve an on time, on budget and on scope construction project on Earth, you could imagine how went the construction project of the international space station. The project was first initiated in 1984 with a cost estimation of US$8 Billion. Uncontrolled revision and changes over the years propelled the budget to twelve times the first estimate and the station in schedule to be finished in 2018.

As Heraclitus, the Greek philosopher, once said: “change is the only constant in construction projects.” Then change management becomes critical to every construction project.

STEP 1 – OBJECTIVE STATEMENT

This paper will discuss how to improve construction projects by answering to these questions:

–        How to minimize impact from change order process on productivity?

–        What must a change order form contain?

More…

To read entire Paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected]



About the Author


Ferdinand Huc

SKEMA Business School
Lille, France

 

 

Ferdinand Huc is a pupil from Toulon, in the south of France. From a navy dad, he has lived in his youth 2 years in New-Caledonia before moving to Belgium at 11 years old, where he lived 10 years attending the French Lycée of Brussels. In 2011 Ferdinand integrated after succeeding the entry exam the Navy lycée in Brest, at a boarding school, where he stayed only a year before going back to Brussels. After graduating high school in 2013 he decided to start his engineer study back in France, in Lille. He integrated a formation of the Ecole Centrale Lille named ITEEM where engineering is mixed up with business management and entrepreneurship. As a part of his study, Ferdinand spent 8 months in New-Zealand for some internships. Now in his final year of study, Ferdinand specialized himself in Production System Management on the engineering side and choose to do at the same time a MSc in project management and business development at SKEMA. Graduating in April 2018, he is now looking for new opportunities. Ferdinand can be contacted at: [email protected]