Cpm

• The budget has become a "sore spot" and a factor of disintegration among the personnel
• The budget serves as a means of bringing understanding of the common goals of all who belong to the organization and all who serve it
• The budget is the long term responsibility of management to use investment that will yield the largest possible profit
• Fixed Cost


  Constant in total amount for a given period. For example: salaries of major executives, capital tax, depreciation, etc., remain fixed regardless of the volume of construction activities
• Static Budget


  Depends upon the ability to predict income with at least a reasonable degree of accuracy. A fixed sum of money is allocated for expenditures with a fixed budget of operations for a specified period
• Preparing purchase orders


  Description of materials, quantities required, time and place of delivery, unit price, amount
• Pre-planning for construction

  Includes funds for supplies, salaries, wages, storage fees, transportation, and other services. Known as working capital
• Variable Budget


  Recognizes the unreliability of income prediction and makes provisions in advance for variations in construction expenditures in accordance with variation in income. Constructed in anticipation of variable income, it provides advance for orderly change in the volume of construction and expenditures
• A budget properly planned and operated may have a constructive influence on the personnel of an organization
• Types of budget

  1. Static or fixed budget

  2. Variable or flexible budget
• The idea in each department is to propose as large an allotment of expenditures as possible so that when all budgets are assembled and reduction is necessary, each department feels discriminated against
• Profit motive is a predominant factor in a competitive construction business as it justifies the survival of the company
• A budget is a means toward an end, not an end within itself. It was made to serve a purpose, establish goals, and lead to precision and confidence among employees
• Money is a universal lubricant that keeps a business enterprise dynamic. Without sufficient financing, a business cannot get started. And without adequate budgeting
• The purchasing clerk must have experience in identifying materials and supplies in general demand for construction work
• Preliminaries in Organizing a Construction Job

  1. Project undergoes stages including planning, execution of major activities, and project phase out

  2. Project construction life cycle requires various requirements such as finding the site, drawing plans, getting owner approval, and securing building permits
• Construction Pre-Planning


  1. The target dates for buying materials should be worked back from the starting date

  2. Time and progress charts are kept up to date for comparison between actual progress and scheduled program

  3. Progress reports are forwarded to the engineer or architect showing particulars of the work done
• Profit motive is essential for a business to thrive
• Financial and Budgeting

  1. Money is a universal lubricant that keeps a business enterprise dynamic

  2. Without sufficient financing, a business cannot get started

  3. Without adequate budgeting, a business once started cannot reach its full potential

  4. The business must have sufficient capital structure to sustain its growth

  5. It also needs a sound profit plan or budget to support and control its day-to-day operations

  6. A healthy construction company is one which has sufficient resources and the capability of controlling its cash flow
• Construction business requires sufficient funds to cover its operations, maintain equipment, purchase materials and supplies, and pay for transportation
• Planning and Scheduling with Gantt Chart


  1. The Gantt chart is a tool used for planning and scheduling simple projects

  2. The project manager identifies major activities, makes estimates for each activity, and determines the sequence

  3. The chart indicates planned progress, actual progress, activities ahead of schedule, and activities delaying the project
• A budget must lead to a profitable profile
• Project construction life cycle requirements

  • The site must be found and boundaries relocated
  • Plan must be drawn
  • Plan must be approved by the owner
  • Building permit must be secured
• Planning is a collection of procedures where companies make plans ahead to achieve objectives
• SEO

  1. Planning

  2. Execution of major activities

  3. Project phase out
• The project manager's mission is to plan, coordinate, control, and accomplish
• Construction pre-planning

  1. Managerial competence is a function of a manager's character, knowledge, and experience

  2. Studying management techniques allows exploration and development of managerial skills without trial and error learning

  3. Preparing a graph and plotting the anticipated date of delivery of all major equipment at the site

  4. Analyzing the optimum time for each construction activity

  5. Predicting the latest possible starting date for any activity by working backward from the expected completion date
• Planning is a philosophy


  Looking ahead is a way of thinking, a concern about the future effects of today's action. Planning involves a state of mind that recognizes the need for orderliness and the value of direction
• Planning is a process


  Goals and objectives are the most obvious consequence of the planning process. A loose objective of survival is not adequate
• Planning is done for the owners of the company to achieve profit and for the employees to create or maintain jobs
• Project Manager


  • The central figure in a project is the project manager. He bears the ultimate responsibility for the success or failure of the project. His role in the construction is one of an organizer, a person who is capable of working through others to accomplish the objectives of the project
• Planning


  Planning is a collection of procedures. All companies make plans ahead to some extent and apply their own methods of doing so. In small company, one person may do it all, but larger companies have standard procedures for formulating and carrying out plans
• The job of a project manager can be both difficult and rewarding. The reward comes from being associated with a successful project, personal satisfaction, and the challenge of the job
• Planning Functions Dimensions

  • Planning is a philosophy
  • Planning is integration
  • Planning is a process
  • Planning is a collection of procedures
• Planning is integration


  Both long and short-range plans provide a unified structure to give purpose to the organizational units involved. Broader plans consider the client, the supplier, and other peripheral contacts of the company