Bechtel Group Inc.: Project Management Practices

Case Scenario

The company selected for this scenario is Bechtel Group Inc. It is the largest construction and civil engineering company in the US, which specializes nearly every sphere of construction work ranging from infrastructure to mining and metals, oil, gas, chemicals, and nuclear engineering. It is famous for its participation in various megaprojects across the USA and abroad, having taken credit for the construction of the Hoover Dam, Jubail Industrial City, Chernobyl containment shelter, Riyadh Metro, and many others (“Company Overview”).

In this scenario, I will undertake the role of a production manager in charge of a group of 6 stonemasons. Stone masonry is an important part of the construction process, as the use of bricks and blocks is very common in the construction of walls and barriers within houses, apartment blocks, and other facilities (Walker 55). Brick is a very popular construction material in Europe in Asia, and the use of foam concrete blocks is universal across the world, as these blocks have excellent soundproof and warmth containment qualities.

Thus, stone masonry remains an integral part of any construction effort (Walker 56). At the same time, their labor is fairly monotonous and easily quantifiable, which makes the projections of labor, materials, and payments easier to make.

Identifying Resources in Achieving Organizational Objectives

As a manager (or a brigadier) of a working group in a construction company, there will be several types of strategic resources available to me that will improve my ability to achieve organizational objectives. Recognizing and understanding what resources are available to a manager is the first and most important part of resource management on any level. The resources available to me are (Hardin and McCool 36):

• Human resources – these resources are directly associated with the employees under my command. These include their quantity and labor capabilities, productivity rates and morale, as well as training, personal skills, and mental capabilities. In this scenario, my human resources are 4 stone masons and 2 general workers. The masons perform the main part of the production process, which involves building out and inner walls within houses, apartment blocks, adjacent structures, and other facilities. They all have similar levels of skill and the same mason grade. General laborers perform supportive functions such as hauling heavy equipment and materials and performing other kinds of duties that do not require a particular degree of skill.
• Financial resources – financial resources are resources available to the manager as part of the organization. They include allocated project funds as well as any other sources of income, be that shareholder values, personal resources, investments, credit loans, etc. As I am a minor brigadier in a large organization, the only resources available to me would be the resources of whatever project the company is currently engaged in.
• Physical resources – these resources cover a vast variety of physical instruments and objects that are required for achieving any organizational goals. The resources available to me, in this scenario, include instruments, construction materials, such as bricks, mortar, concrete, and other related equipment.

Using all of these resources in a timely and efficient manner, as well as passing on information when additional resources are required, is necessary for successful achievement of organizational objectives.

Annual Production and Resource Plan

Human Resources

For this scenario, let us assume that the brigade has to work on a project for an entire year, except winter, as winter is cold and severely limits the effectiveness of the laborers. Home construction tends to take a pause during winter due to this factor. In a 6-man brigade, 4 stonemasons are occupied with erecting walls and barriers, and two are manning the mortar machine, as without mortar no walls can be built (Hardin and McCool 73).

They are also tasked with fetching materials and tools when required. There is an average of 22 working days in a month, which means that, excluding winter, the brigade will have 198 working days in a year. This number does not include sick leave and holidays. In order to account for these losses, for estimation purposes, the total amount of working days has to be reduced by 7% (Harris and McCaffer, 134). Thus, the total working time of the brigade is calculated as 198 days * 0.93 = 184 days.

Physical Resources

The standard productivity ratios for a stone mason is 60 blocks per working day, which is the equivalent of 2 cubic meters (Rodrigues). Mortar expenditure for foam block masonry is 70 kilograms of mortar per cubic meter (Hardin and McCool 74). So, the average resource spending per stone mason is as follows:

• 120 foam blocks (2 cubic meters) + 140 kilograms of mortar / day.

If we multiply this notion by 4, we get 480 foam blocks (8 cubic meters) + 560 kilograms of mortar per day. If a month has 22 working days, then the total output by the brigade would be:

• (480 foam blocks (8 cubic meters) + 560 kilograms of mortar / day) * 22 days =
• 10560 foam blocks (176 cubic meters) + 12320 kilograms of mortar / month.

In order to find out the yearly resource consumption, the monthly amount needs to be multiplied by 9, and not 12, since stone masonry is typically not conducted during winter due to additional costs for labor and the necessity for specialized mortar and tools that can operate in a cold and wet environment (Hardin and McCool 82). Thus, the yearly resource consumption for 1 brigade is as follows:

• (10560 foam blocks (176 cubic meters) + 12320 kilograms of mortar / month) * 9 months = 95040 (1584 cubic meters) + 110880 kilograms of mortar.

This amount of resources is calculated assuming that every worker performs their duties at optimal efficiency. While such expectations are unrealistic to perform, the materials and resources that are to be available for the brigade are supposed to accommodate such a turn of events.

The required tools for one brigade include (Hardin and McCool 92):

• 1 mortar mixer
• 2 large shovels
• 12 masonry toolkits (4 used at once, will need to be replaced on a 3-month basis due to damage from extensive use)
• Ropes, nails, saws, and other associated items that will not be necessary on a daily basis, but might be required on occasion.

Financial Resources

Typically, all financial matters in a construction organization are handled by the supply department that oversees all of the necessary purchases to ensure that the construction process is not interrupted by material shortages. Assuming that I will be required to calculate the expenditures for my brigade, there are several positions that need to be taken into account. These positions are:

• Salaries of 4 stone masons and 2 general workers
• Costs of tools and materials

Stonemasons and general workers are typically paid by the hour. In the USA, an average stone mason is paid 20 dollars per hour, while general workers – 10 dollars per hour (Hardin and McCool 110). So, the monthly salary budget for a brigade is calculated as follows:

• 20$/hour * 8 hours * 22 + 10$/hour * 8 * 22 = 5280 dollars / month

Yearly salary budget is calculated as follows:

• 5280 dollars / month * 9 months = 47520 dollars

The following values are calculated without expectations for sick leaves or holidays, as the surplus has to accommodate the perfect scenario. At the end of the month, all extra money is returned to the company and utilized as part of the budget for the next year.

In order to create a material budget, the manager needs to calculate the costs of material used in construction, which includes mortar, foam blocks, and tools. Tools make a minor part of the budget. Material costs are calculated as follows:

• Mortar (monthly) = 12.32 tons * 110 dollars / ton = 1355 dollars (“Cement Prices).
• Mortar (yearly) = 1355 dollars / month * 9 months = 12195 dollars.
• Foam blocks (monthly) = 176 cubic meters * 130$ / cubic meter = 22880 dollars (Rodrigues).
• Foam blocks (yearly) = 22880 dollars / month * 9 = 205920 dollars.
• Tools (yearly) = circa 1000 dollars a year.

Supply Sources

In a construction company, human resources are supplied from an external labor market, while material resources are provided by a number of producers and vendors. Foreign suppliers and workers typically have the advantage of price over their domestic US counterparts. For example, Chinese-produced materials have the advantage of access to cheap production facilities, which allows the vendors to reduce prices.

However, this comes with certain risks. Shipments of large quantities of materials overseas would require large storage facilities and transportation expenses. Workers, on the other hand, are to be hired domestically, as hiring masons from other countries would pose certain problems related to language, understanding, quality standards, and travel issues. The standard procedure for requesting and receiving resources and supplies goes like this (Harris and McCaffer 198):

• The brigadier manager identifies a need for specific resources or tools.
• The brigadier manager approaches the supply manager and makes a formal request for said resources and tools, specifying the reason for the request as well as the estimated quantity of the resources.
• The supply manager verifies the request and contacts the suppliers or the warehouse in order to dispatch the requested amount of resources.
• Upon the delivery of the resources to the construction site, the supply manager signs the delivery note provided by the supplier.
• The materials and resources are then transferred to the brigade, and the brigadier manager signs the acceptance note provided by the supply manager.

The purpose of this system is to ensure that in the event of a mistake in delivery documentation, resource theft, damage, or non-delivery, the responsible parties are quickly found. This procedure is very important, especially when dealing with foreign suppliers, since, in case of documentation mistake or non-delivery, another shipment may take weeks if not months to arrive, which could potentially affect the construction process.

In order to acquire human resources, however, the manager has to work in close relation with the company’s HR managers, since the task will be delegated to them. As a brigadier, I will be required to outline the required competencies of a potential candidate for the job as well as various physic-psychological qualities, if necessary. In this scenario, should I require a stone mason, I would need to specify their skill cap.

For working with foam blocks, no unusual skills are required. General workers will not have any specific demands towards them, as they will be tasked with unskilled manual labor. However, any experience in construction work operations would be welcome, especially stone masonry-related expertise. That way, in the event of one stone mason taking sick leave, a general worker may have the potential of temporary replacing them when performing non-crucial tasks. While the mortar mixer requires 2 people for optimal efficiency, it can be realistically manned by 1 person (Hardin and McCool 92).

Contingency Arrangements

There are several types of resource contingencies associated with construction work. They are (Walker 255):

• Worker sick leave (human resource contingency).
• Worker incompetency (human resource contingency).
• Resource and material shortage (material resource contingency).
• Force majeure events (human and material resource contingency).

Worker sick leave is the most common type of contingency. People who work outdoors are much more exposed to becoming sick, especially in autumn and spring, when the weather is relatively cold, and rains are a common occurrence. While it is uncharacteristic for employees to be sick all the time, it is possible for one or two of them taking several days off in a year for sick leave. My contingency plan would account for these events, and the monthly production and resource plans would be adjusted to expect results slightly lower than optimal.

Worker incompetency is a problem often encountered when hiring foreign labor. Different countries have different standards and practices in construction. A worker hired from Mexico may be regarded as competent at home, but have no idea of US construction standards and practices. Labor is best sought after domestically. US construction workers, while demanding better pay, are typically more skillful and easier to communicate with. In addition, their employment is less likely to be associated with any legal problems (Walker 258).

Resource and material shortage are also a common occurrence in construction. Most construction sites tend to implement lean management techniques, delivering materials to the site only when they are required. This helps save storage space and not clutter the construction site with materials, which could be damaged or stolen. However, in order to avoid pauses in production, the construction site should have a small storage facility to house foam blocks and mortar in order to provide supplies in the event of a shortage.

It is reasonable to buy construction materials from abroad. Many foreign companies are orienting for the US construction market and provide materials that comply with US regulations and standards, at a lower price. Mortar and foam blocks do not require any specialized storage facilities. Therefore, warehousing expenses would be minimal, and they can be purchased in large quantities (Walker 259).

At the same time, this strategy will eliminate the chances of remaining out of stock, due to having purchased a large surplus shipment. Reasons for supply shortages could be numerous. In the majority of cases, short-term supply shortages are caused by logistic failures and delays. Trucks often get stuck in traffic jams, especially if the construction site is located deep inside a city. It is possible, however, for suppliers to neglect their contracts as well.

Force majeure events are devastating contingencies that are completely outside of a manager’s control. These contingencies include fires, floods, earthquakes, and other similar events. Some of these events can cause irreparable damage to the construction site. A manager can plan for potential force majeure events by utilizing fire safety measures, flood safety measures, and building according to high construction standards according to the engineering project, which is supposed to take these circumstances into account (Walker 260).

Recording Resource Use

Typically, when performing estimations of forecasted resource requirements versus actual resource requirements, the forecasted amount of resources tends to be larger than the actual amount of resources used. This is made with a purpose of creating a safety surplus in the event of a resource-associated contingency. In stone masonry, work is quantified in cubic meters of laid masonry. Since every block has specific measurements, it is relatively easy to calculate the volume of work performed by an individual worker or a brigade. Engineering projects utilize this method to identify the exact number of building blocks needed to build a wall or a barrier within an apartment.

Thus, the end amount of work necessary to perform is always precise. However, calculating average performance rates in order to estimate resource consumption is more difficult. To perform the calculations, we used a value of 2 cubic meters of foam blocks per mason per day. However, this number is not absolute and can be negatively affected by various factors, such as inexperience, poor working practices, bad weather, errors and discrepancies between projected and actual volumes of work, etc (Frank and McCaffer 161). Recording and monitoring actual progress, thus, is paramount.

At the end of each work shift, the brigadier manager is supposed to review and record the amount of resources used, estimate the amount of work completed, and project resource consumption for the next day. These estimations are to be taken to the supply manager, who will be supposed to prepare the necessary resources to be allocated for the next day. There are two methods of assessing resource spending.

The first method involves direct calculation of the resources being spent, which involves counting the number of blocks, mortar, and other consumables used to complete the project. The other method involves a degree of assumption, which is usually attributed to the use of tools, who have a certain life expectancy that is used in calculations and predictions (Frank and McCaffer 171). The actual realities in regards to particular tools vary and are dependent on the amount of maintenance and care, as well as an absence of work-related accidents. A working accident or a defect can significantly reduce the equipment’s service time, which makes tool service rates harder to estimate, report, and predict.

Predicting human resource exhaustion is even harder due to the fact that moral and physical resources of employees are not easily quantifiable (Frank and McCaffer 172). Typically, human resource exhaustion is reported post-factum, when an employee quits or is forced to take sick leave.

The information in regards to projected performance and resource consumption versus actual resource consumption can be used to adjust predictions for the future. That way, forecasting could be tailored to a particular construction site or a worker brigade, which would enable the project managers to provide the necessary amounts of resources without risking resource supply failures or overconsumption (Walker 49). Despite the common practice of using a safety surplus in construction, that surplus is not supposed to be too large, as it is money that the construction company could have otherwise used productively.

Works Cited

“Cement prices in the United States from 2007 to 2016 (in U.S. dollars per metric ton).” Statista, 2017.

“Company Overview of Bechtel Group, Inc.” Bloomberg. 2017. Web.

Hardin, Brad and Dave McCool. BIM and Construction Methods: Proven Tools, Methods, and Workflows. Cybex, 2015.

Harris, Frank and Ronald McCaffer. Modern Construction Management. 7th ed., Wiley-Blackwell, 2013.

Rodrigues, Juan. “What is and When to Use Autoclaved Aerated Concrete (AAC).” The Balance. 2016.

Walker, Anthony. Project Management in Construction. 6th ed., Wiley-Blackwell, 2015.