Strategic Construction Project Planning and Programming Criteria
Strategic construction project planning and programming all the activities carried out helps to shape the programming of its capital projects. This planning is mainly dependent on the demand that is obtained from the market and the constraints in the resources.
The programming process of a construction project initiates steps to fix those activities that are of higher priority. These also leads to fix to time-related to the same, to complete the overall objective and target of the organization within the time constraints.
When a construction project is started after this decision of strategic planning and programming, the timely completion of the project is possible. This ensures the market pressure early so that no later concerns arises.
The influence of market pressure, on the facility initiation, is a concern in many types of construction activities. This problem is an obvious concern for industrial construction. We need to realize the fact that, under certain situations, the product demand life is short.
To survive, the company have to strike the demand first, before anyone does. Otherwise, the demand turns to no demand for the same service, within a limited period of time. Now the industrial trend has changed to a shorter construction project life cycle. These are more prominent for those industries, which have intensive technologies.
Benefits of Strategic Construction Project Planning
Some of the owners take a planning and feasibility study about the objective and idea they have before actually explains the scope of construction projects. This helps to gain more time.
An improper project scope always results in additional cost, which is regarded as a loss. This is because of change of scope when the construction starts. But if the owner gains profits, even after taking more time and investing more money in the facility, than what was planned, will be considered as a success.
This possibility is rare to occur, and following the same won’t always bring profit. Such a method has found to bring a lot of uncertainties in the construction projects. This does bring a final conclusion to the argument that, the decrease in construction cost and time, bring more profit. But certain nuclear power plant construction was abandoned before construction, which is a result of improper planning as well as poor feasibility studies.
The Role of Facility Owner in Strategic Construction Project Planning and Programming
The facility owner or the owner has a greater influence on the cost tagged for the construction project. This is clear because the decision that is put forward at the initial stages are the ones that influence all those decisions that are put forward at the later stages of the project. This is explained in figure 1.
The operating costs of the project are moved forward by the design and the decisions taken in the construction. This is why an owner really has to seek the expertise of the professionals, to ensure proper and best planning as well as a feasibility study for the project under consideration.
Many owners do not have the ability to undergo construction management by their own or to have in-house engineering relating to their project. This is hence essential for them to meet a consultant or professional outside, to help them satisfy their needs and requests.
Fig.1: The Graph representing the ability of factors that influence the construction cost throughout the course of project time
The graph above shows the influence that is present at the earlier stages of the feasibility study of the project. This is factors that affect the ultimate construction cost and the decrease of opportunity with the course of the project.
Priorities in Strategic Construction Project Planning
How do we set priorities in a project? An easy understanding on the same is explained well through an example.
Consider a project, which is the expansion of a department store. This was planned to do by acquiring a land of 20 acres extra in the southeast of a metropolitan area, that was suburbs for middle-income families.
The idea was shared with an engineering firm, based on whom it was decided to bring up a shopping center on the new plot and to make the department store as the flagship along with a large number of storefronts.
2,000 acres area was acquired by the owner in the northwest outskirts of the metropolitan city, instead of southeast, after one year.The owner approached the engineer, and he was engaged in the shopping center project again, for 20 acres out of 2,000acres.
Now it is noted that the engineer was kept unaware while he acquired the land. The engineer had prepared the plan for the center in the southeast area as demanded.
Later the owner informed the engineer that the project has to be redrawn for the northwest area as soon as possible and told he is ready to compromise with the cost saving. The owner immediately implemented the construction of the shopping center, when the new plan was ready. This took another three years to see the shopping center finally built.
The reason behind this change of idea by the owner is because of the fact he realized that the northwest area will be soon converted into residential apartments area for upper-middle-income families, that would facilitate a higher market for the northwest shopping center. So the land Buyers will feel the land more attractive and relevant. This helped the owner to bring cash flow for three years for the construction of the shopping center.
Here the owner had an idea about the cost estimate of the northwest shopping center, from the initially drawn estimate of the southwest shopping center. This didn’t make him go for a detailed estimate of the northwest center and bring a delay in the decision. He didn’t want to wait for the more refined cost in the new estimate. For him, the completion of the project within the fixed time was more important than reducing the construction cost.