Assessment Of Project Planning Practices And It’s Impact On Contractors Profitability

Project and Seminar Material for Quantity Surveying QS

Assessment Of Project Planning Practices And It’s Impact On Contractors Profitability


Abstract


Planning in construction involve defining the activities, actions, time, cost, durations and performance milestone which will result into successful completion of the project. Previous researches attributed insufficient construction planning to Nigerian indigenous construction companies; this insufficiency in construction planning was found to contribute to their low productivity, profitability, time overrun and cost overrun. This study was carried out to assess construction project planning of indigenous contractors with a view to enhance their performance. The methodology of the research involve use of purposive sampling technique, sample size of 50 companies was determined using 90% confidence level from a population size of 1920 calculated with sample size table and formula.

Questionnaire was self-administered to respondents, Questionnaires were analyzed and results was presented in tables and bar charts. Findings from the research revealed that construction project planning is insufficient and requires improvement. Cost overrun, time overrun, poor scope control and reduction in profit are problems experienced by contractors. The failure of construction project planning was attributed to client unethical dealings, lack of integrity in financial dealings of client and poor communication among project members.

In order to improve planning of construction project, the research recommends contractors to perform financial and ethical check on client, employ distinct project manager to each project, employ the use of computerized systems and experience in planning construction projects. The research also recommends contractors to improve communication among project team through establishment of reliable and accessible communication channel.


Table Of Content


Preliminary Page(s)

  • Title page
  • Certification page
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of content

Chapter One

1.0 Introduction

  • 1.1 Background Of The Study
  • 1.2 Statement Of Problem
  • 1.3 Objectives Of The Study
  • 1.4 Scope And Delimitation Of The Study

Chapter Two

2.0 Literature Review

  • 2.1 The Nigerian Construction Industry
  • 2.2 Concept Of Project Planning
  • 2.3 Construction Project Planning
  • 2.4 Factors Affecting Efficiency Of Construction Project Planning
  • 2.5 Reasons For Failure Of Construction Project Planning

Chapter Three

3.0 Research Methodology

  • 3.1 Research Design
  • 3.2 Population And Sample Size
  • 3.3 Sampling Technique
  • 3.4 Methods Of Analysis Of Data

Chapter Four

4.0 Results And Discussion


Chapter Five

5.0 Conclusion And Recommendation

  • 5.1 Conclusion
  • 5.2 Recommendations
  • References

Chapter One


1.0 Introduction

1.1 Background Of The Study

Projects are used in all economic and non-economic fields as mean of organizing the activity, aiming the achievement of desired objectives. There is a direct relationship between projects, projects portfolio, programs and the organizational strategy. Projects, as the main way of creating and dealing with change (Cleland, Gareis, 2006), are used to implement strategies. Meskendahl (2010) refers to projects as the central building block used in implementing strategies, therefore business success is determined by the success of the projects.

A project is an individual or collaborative enterprise, possibly involving research or design that is carefully planned, usually by a project team, to achieve a particular aim New York Time (2009). A project is also temporary because it has a defined beginning, end time, and defined scope and resources (Cathy, 2009). A project is unique because it is not a routine operation, but a specific set of operations designed to accomplish a singular goal. Based on these characteristics, carefully it is imperative to plan to achieve targeted outcome. Thus; Project planning can be defined as a part or branch of project management, which relates to the use of schedules to plan and subsequently report progress within the project environment.

Dubois and Gadde (2002) described the construction industry as decoupled and McKinsey (2017) confirmed that it is still true. The lack of coupling is present both between the construction project and its subcontractors as well as between the project and the parent company and other projects. This hampers the possibility to have a successful coordination of resources on a portfolio level within the contractor, as resources are in many cases utilised from a common resource pool (Engwall and Jerbrant 2003).

The construction industry therefore embraces a wide range of loosely integrated organizations that collectively construct, alter and repair a wide range of different building and civil engineering projects. Individuals, organizations and government need to carry out some form of project planning for building and civil engineering project before embarking on whatever activity they are engaged to do. According to Lock (2002), the principal identifying characteristics of a project is its novelty, it’s a step unknown fraught with risk and uncertainty. No two projects are ever exactly alike and even a repeated project will differ from its predecessor in one or more commercial, administrative and physical aspect.

Construction is also characterized by time and cost intensive production processes which make it prone to project risks and failure, mainly in terms of time and cost. In practice, this means, that the performance of construction projects is usually low. In particular, construction projects are very often delayed and over budget. This is not just due to problems faced during project scheduling, but also during related processes.


1.2 Statement Of Problem

The performance of Nigerian indigenous construction companies was found by Ibrahim et al (2014) to be hindered by mismanagement, which often result into inefficient planning of construction project. Kirmani (1988) observed that this inefficiency in construction project planning has significantly hinders productivity of the industry to a level lower than that of its multinational counterparts, resulting to major percentage of the total project in Nigeria going to multinational contractors.

According to Aibinu and Jagboro (2002), another major criticism facing the Nigerian construction industry is the growing rate of delays in construction project delivery and other associated problems, which often results into dispute, arbitration, total abandonment and protracted litigation by the parties. These problems, according to Odeyinka and Yusif (1997) are associated with planning and scheduling, they are internal factors in an organization that causes delay in construction project delivery.

According to Inuwa et al (2014), Nigerian indigenous construction companies were found to be using their central administration to plan project operations instead of an identified project manager, in appropriate application of planning techniques and non-adoption of computer applications and ICT in planning of construction projects.
In a research by Oladimeji and Ojo (2012), Nigerian indigenous construction companies were found to lack the ability to efficiently and profitably deliver project due to in adequate planning and budgetary provisions among other factors. The outcome of these inefficiencies have been several report of abandoned or malfunctioned facilities, project executed at higher sums and frequent cases of collapsed structures. The recurrent nature of these traits create dissatisfaction among clients which result into award of major capital intensive project to foreign firms especially were quality and completion period are of utmost demand. .

Despite the evidence identified in previous literature that linked inefficient planning to negative project outcomes, these researches were unable to harmonize various aspects of construction planning into a single research. Each of the studies, such as Adebayo (1980) was able to identify problems associated with construction planning and concentrate on some aspects of construction planning such as planning techniques, planning technology and planning manpower. This approach has not provide the necessary solution to the problem of construction planning in Nigeria, and the result has been recurrent experience of same problems through the decades.

The study of Adebayo (1980) select few construction companies and compare the project planning techniques they adopt in planning, this only provide result relating to only planning technique in the selected organizations. But planning is influenced not only by technique but also other aspects of planning such as technology and other external factors. Hence, there is need undertake research in order to study more organizations, more variables relating to construction planning also need to be considered.

Other studies, such as Agbo (2004) and Mohammed (1988) study cost planning relating to construction project, Audu (2001) study how planning techniques affects construction project planning, while Yazid (2009) study the impact of software applications in construction project planning. Each of the researches was able to identify at least an existing problem relating to construction planning but was not able to provide the necessary understanding of the problems collectively, their causes and how to improve planning taking into consideration key variables used in planning of construction projects.

Nigerian indigenous construction companies were shown to be associated with inefficient planning which result into low productivity and growing rate of delay. They were also found to be wrongly adopting methods and procedures of planning which was shown to reduce the profitability of the companies and cause frequent cases of contract abandonment. Inefficiency in construction planning also have a negative impact on the national economy. Researches in construction were able to identify inefficiency in planning but do not provide holistic approach to understanding current methods of planning used by contractors, why those methods are inadequate and provide solution on how to improve construction planning methods.


1.3 Aim And Objectives Of The Study

The aim of this study was to assess project planning practices and its impact on contractors’ profitability. Specifically, the following objectives guided the study

  1. To identify project planning techniques and tools used by contractors in construction project delivery,
  2. Determine factors affecting project planning practices of contractors,
  3. To evaluate the impact of proper project planning on contractor’s profitability.

1.4 Research Questions

The following questions were formulated to guide the study

  1. What are the project planning techniques and tools used by contractors in construction project delivery?
  2. What are the factors that affect project planning practices of contractors?
  3. What is the impact of proper project planning on contractor’s profitability?

Chapter Five


5.0 Conclusion And Recommendation

5.1 Conclusion

  1. Contractors surveyed believe planning of construction should ensure all documents and drawings are complete, accurate and approved, clearly define the project and also have a clear definition of what client exactly want. The following were found to be attributed to the current planning process of contractors
    • Not all contractors adopts computer applications and project management software for project planning.
    • Contractors are unable to always ensure complete, accurate and approved drawings and documents in all projects.
    • Contractors are unable to appoint a single and identifiable project manager for all projects.
  2. Despite the identified advantages of planning in construction project, this study found the present planning process adopted by Nigerian indigenous contractors to be in adequate and requiring significant improvement for it to be sufficient.
  3. The major factors that cause construction planning to fail were attributed to lack of integrity in financial commitment of client, unethical dealing of client and poor communication among the project team members.
  4. Cost overrun, time overrun and reduction in contractors profit were the major problems facing Nigerian contractors, planning was found to be able to address these and other identified problems.

5.2 Recommendations

To achieve the aim of enhancing profitability and the planning process of Nigerian indigenous construction companies, the following recommendations were suggested.

  1. Construction companies should always check clients’ integrity in financial dealings, and client ethical standard prior to agreeing on any proposed plan on how to execute the project.
  2. Construction companies should always ensure all documents, drawings, specifications and permits relating to the proposed project are complete (especially for contract type that requires complete drawings), accurate and approved only by the authority that has legal power to issue such approval.
  3. An open communication forum should be established specifically for any project, the forum should be ICT compliant such as a social a network, and every member of the project (especially the client) should have access to the forum throughout the project duration.
  4. Construction companies should assign an identifiable single project manager to manage each project, contractors should further avoid using their central administration to plan the execution of construction projects.
  5. Construction project Planners for any project should involve other members of the project team in planning how the project should be carried out, the resultant plan and subsequent review made to the original plan should be communicated to all involve in the project.
  6. Construction project plans should be monitored and controlled throughout the project duration.

Assessment Of Project Planning Practices And It’s Impact On Contractors Profitability


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