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Project management

Delays are more likely to happen in almost all interior projects due to the miscommunication between contractors, subcontractors, property owners or any other reasons. In many cases, construction projects are delayed because of inaccurate estimates of time and project cost that were initially presented to the clients or project owners. Delays and cost overrun are the most common problems causing delay in the construction industry.

There is a straightforward process to project management but the underlying rule is risk management. If you can identify all areas that are subject to risk (i.e. other assumptions and other decisions) and then plan to control, monitor and deal with those situations you will be well on your way to the basics of good project management.

This white paper focuses on the need of project management while discussing in detail the two commonly occurring problems, time and cost overruns.`

Time overrun

The deviations between the actual time taken during the construction phase and the estimated time is known as time overrun and it is one of the two most predominant factors affecting the successful completion of an overall project. Normally the construction project is of a unique and complex nature, due to that there are many uncertainties in the entire project. The following listed reasons are commonly known to delay an interior project’s completion.

Reasons in the pre-execution phase :

Site handover One of the most common delays of a project getting delayed is the site handover not happening on time. This usually happens if the previous occupants take longer to vacate, due diligence and other documentation takes longer than expected or if the scheduled payments are not done on time.

Delay in statutory approvals There are a lot of approvals required before the work can actually start. Municipal permissions, fire permissions and building facility management permissions are the most basic statutory approvals required in metro cities. The documentation needs to be complete and done way before time to avoid this delay

Dependencies on other projects A lot of interior projects are dependent on the completion of certain critical amenities and services. Starting the fit out work without these being active will lead to a complete workspace/house but one that cannot be occupied. Make sure any such dependency is looked at before taking over the site

Delay in decision making With every possible innovation in the design process, there are still a bunch of designs that remain open throughout the project. A delay in any critical one of these can lead to a subsequent delay in the tasks dependent on it. For example, if the tile selection is delayed, partition work gets delayed which in turn delays the completion of the electrical and painting work

Ineffective procurement planning Having every single material in place for the first few days is very critical. If the labour reaches the site but the material has not, time gets wasted and this delays the project. The start of the project is the most critical part of the project as it sets the tone for the rest of the project

Ineffective labour planning Just like materials, having labour in place for the initial work is also very critical. Imagine having all the material in place but no labour to execute the work.

Reasons in the execution and closing phase :

Changes in the design There is a possibility of the design changing even after all the elements are closed and an official sign-off is done. These changes are usually due to the involvement of a new person or a new piece of information. If the change is regarding an element that neither the work nor the procurement has begun of, there won’t be any time overrun; or else time will be invested in scrapping the done work and redoing it

Mistakes and Errors in design Errors in the design can even be recognised post the project kickoff. Incomplete drawings, missed out elements and unchecked layouts can lead to design rework which leads to crucial project execution time getting delayed.

Mistakes during construction Incorrect and incomplete documentation or communication between several parties can lead to the intended design and the executed work being different from each other. Elevations, shop drawings and technical layouts along with timely documented minutes of meetings correctly shared with all stakeholders can ensure this is avoided.

Contractual disputes The pro of having an agreement/contract in place is it helps the two parties resolve any dispute that might arise during the course of the project. However, if the contract is referred to, this leads to a lot of back and forth leading to a time delay in the project.

Labour productivity When a project is rolled out, a gantt chart is made to ensure proper time management and timely completion of the same. The time allocation for every task is done keeping a certain standard of labour productivity. Hence any deviation from the standard can lead to the project timelines being pushed.

Delay in progress payment by client The payment schedule is usually drafted after the execution gantt chart is prepared. Material ordering as well as payments to the labourers is done as per this schedule. Any delay in payment from the considered dates directly delays the project by those many days.

Poor financial control on site If the money comes on time from the client, the project can still have a time overrun if the following activities are not conducted as per the schedule. If a non scheduled payment is made due to any reason, this might create a domino effect and delay all the scheduled payments and hence the overall project.

Cash flow and financial difficulties faced by contractors Even if the client pays on time and every payment is done in the planned order, there is still a chance of the contractor/vendor mismanaging his/her fund flow. This creates a domino effect of time delay in the entire supply chain. Having a well drafted agreement with the contractor and slab based payments are hence necessary.

Shortages of materials If there is a sudden shortage of a particular material or item, an alternative can definitely be arranged. However, if a readily available alternative does not exist, this will lead to time being spent on searching for the same. If the item is due for its execution, this will lead to a time overrun.

Late delivery of materials and equipment In metro cities, traffic is unavoidable. Traffic almost on a daily basis leads to delayed deliveries. However, if this delay is beyond a couple of days, alternate and last minute purchases need to be made. Analysing the possible delays based on past experiences, type of order and reviews, the most unpredictable items can be ordered first.

Cost overrun

The deviations between the actual cost incurred during construction phase and the budgeted cost is known as cost overrun and it is one of the most predominant factors affecting the successful completion of an overall project. Cost overrun is more common in projects where time is of utmost importance. The following are common reasons why cost overrun takes place in an interior design project.

Reasons in the pre-execution phase :

Scope creep Scope creep is the most common cost overrun that projects face in the pre-execution phase. In the hurry to win a project, contractors and vendors often skip on including work in their scope and certain things remain in nobody’s scope. These grey items, when explored, lead to increase in the project cost.

Incomplete design at the time of tender Open designs not only lead to possible time overruns but also uncertainty in the project budget and hence a possibility of cost overrun. Imagine considering a certain budget for a bed and then exceeding it by more than twice because you liked something else later

Mistakes and Errors in design A common reason for cost overrun is oversight of items or inappropriate assessment of elements by the designer. Not taking accurate measurements of the site, miscalculation of beams, not checking the ceiling height are some of the common design errors.

Reasons in the execution and closing phase :

Changes in the design Changes in the design in the execution stage not only leads to a time delay but also a cost overrun. If the change is regarding an element that neither the work nor the procurement has begun, there won’t be any cost overrun; or else there will be a cost of redoing it.

Mistakes and Errors in design Design errors like incorrect calculation of material required, incomplete drawings, incorrect consideration of materials to be used and missed out elements are the most common. If not avoided early one, these can prove to be a costly burden to the project.

Mistakes during construction Just like design errors, errors during the construction are also common and mostly occur due to human negligence. These too not only have a time impact but also a cost impact onto the project.

Escalation in labour costs The cost of labour is as unpredictable as the sensex. There is no direct way to predict when this cost will rise. Hence ensuring your labour contracts are signed beforehand is the only way to avoid this cost overrun in the middle of a project.

Unavailability of skilled labour If a particular skilled labourer disappears in the middle or start of his/her designated work, an immediate replacement is the only way to prevent a time delay from taking place. However, an immediate replacement will come at a disproportionate cost due to the urgency created. Having a backup team for the critical parts of the projects is not just a good to have but a must have.

Labour productivity Most labourers charge a daily wage. Irrespective of the work done, they charge based on the time spent; rather the days spent. Hence if the work is not done as per planned, the project timeline increases leading to increase in labour cost and an overall cost overrun.

Incremental financial costs Increasing borrowing rates, foreign exchange fluctuation and unaccounted payments are the most common financial costs that people tend to overlook and skip planning in advance for. These cost escalations are rare and usually tend to impact large scale projects.

Location and connectivity of the site The site is on the 20th floor of a building and the service lift is not working. The site is a low lying area and the tempo has been waiting since morning for the water to clear. The site is at the end of a narrow lane and cars cannot enter the lane. The above are examples of situations when the location and connectivity of a site can lead to a cost overrun. Having a contingency plan in place is very important.

Material price escalation beyond projection Just like labour, the price of materials and items also increases without a prior notice. This usually leads to the budget overshooting. Keeping a cost escalation buffer, especially in large scale projects apart from signing cost agreements with vendors is the only feasible solution.

Shortages of materials Just like labour, there is a chance that there is an unpredictable shortage of a certain material in the market. Every required material is not ordered in the beginning and this problem hits without a warning. Having multiple vendors and choosing basic items is the way to prevent this cost overrun. In case there is a custom made/rare item that needs to be procured, make sure it is done at the very beginning.

Late delivery of materials and equipment Traffic, rains, and other unpredictable reasons often lead to this kind of a cost overrun as materials need to be purchased at a premium. Preempting this basis the purchase history, past experience with a particular vendor and vendor reviews needs to be done.

Project management is the application of processes, methods, skills, knowledge and experience to achieve specific project objectives according to the project acceptance criteria within agreed parameters. Project management has final deliverables that are constrained to a finite timescale and budget.

We naturally tend to think that design takes precedent but if the costs, time frames and quality are not given attention then all the time and effort put into the design may be spoiled by factors that could have been controlled.

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