COSC 620 – Construction Company Operations
Individual Assignment #1
Name: Jayakrishnan Radhakrishnan Nair Sindhu
UIN: 624000258
1. Why are most construction companies small in size?
A. Construction is a huge, complex and high risk industry. To survive in such a competitive environment, most companies try to find their own niche markets where they can prove to be successful. Most construction projects are awarded to one of the local contractor within a certain proximity to the job location, so that their expertise on local labor, materials and market conditions can ensure the success of a project. This results in these companies executing a major part of their jobs in the region they are based out of. They remain profitable and content with
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One of the reasons for the low profit margins for construction companies is the competitive bid process for awarding jobs. Traditionally in the construction hard bid, the job is awarded to the lowest bidder. When the market competition is tough and economic conditions are stringent, construction companies have to purposefully bid really low in order to just get the job for themselves. This low bidding system eats into the profit margins that the companies could be making. Some companies who want to venture into a new market sector also intentionally bid low to make way for future opportunities even at the cost of minor losses. Another factor that affects the overall bid and in turn the profit margins of the general contractor is the markups of the material, labor and equipment expenses from the subcontractors. Subcontractors need to think about their profits as well, which comes out of the same bid amount to the owner. The only way to make higher profits is to attempt high risk jobs where the competition is minimal and the payoff is higher. Even then construction jobs are highly unpredictable, and inclement weather, unforeseen conditions, design errors or safety issues can easily increase project costs and cause schedule delays resulting in liquidated damages that ultimately comes out of the contingencies and contractor profit
Cost management plays a major role when maintaining profit margins. Management must be able to find in which areas of a business costs must be reduced and the consequences that such reductions have in the overall company. In some situations management must change the way the work is being done in order to decrease costs while in other cases changing one supplier for another might be enough, in both situations a tradeoff will occur and the consequences will impact the company as a whole.
Chet Craig is the Central Plant Manager of the Norris Company. He started as an expediter in the company's eastern plant and was quickly promoted to Production Supervisor in three years. After two years, he was promoted to Assistant to the Manager of the Eastern Plant. Five years later, Chet was transferred to the central plant as an Assistant, and after one month, was promoted to his current position.
Currently, XYZ Construction Inc. receives a majority of their contracts from the state government. The purpose of this essay is to analyze and discuss ethical and social issues, along with cultural diversity when expanding
The construction industry plays an important role in competitiveness and prosperity of the economy in terms of its significantly contributing to shelter, infrastructure and employment (Anaman and Osei-Amponsah, 2007). A number of researchers have investigated on the vital role of the construction sector to the overall economic growth. In Rhodes’ paper who stated the construction industry in the UK contributed £83.0 billion in economic output in 2012, which accounts for 6% of the total. Also, workforce jobs in the construction industry in UK were 2.03 million in 2012 and 2.12 million in 2013, account 6.4% and 6.5% in total respectively (C. Rhodes, 2013). Oladinrin indicated the significance of construction linkage with the aggregate economy in Nigeria by studying on construction output and Gross Domestic Project (Oladinrin and etc., 2012). A recent report of U.S. Bureau of Economic Analysis showed that the GDP value added of construction industry was $652,723 million in 2014, 3.7% of total GDP (http://www.bea.gov/industry/gdpbyind_data.htm). Besides, a report of U.S. Bureau of Labor Statistics stated the employment by construction industry sector take 4.7%, 3.9% and 4.5% in the year of 2002, 2012 and 2022 respectively (http://www.bls.gov/emp/ep_table_201.htm). The construction industry has been playing an influential role on domestic GDP in China (Zhou and Liu, 2007). A report of National Bureau of Statistics of China
Construction industries are classified largely which comprise of skillful employee and general workers. As opined by Cassidy (2006), these are intrinsically demanding, hazar...
I read Management: Manage teams, lead effectively and build trust in the workplace. By Derek Stanzma. This book describes how to hire a good manager and strategies to help become a successful manager. It is to instruct a manager on how to help others to become sufficient in their job and to learn how to motivate others to give their best in their job duties. Also it gives tips for how to hire a good manager. As a manager you need to not only manage others, you need to know how to effectively instruct those you manage on completing their jobs. The role of a manager is very demanding, as a manager you have a large amount of duties and it is important that you fulfill these duties in an efficient manner.
The projects in today’s world are given a lot of importance and it will continue to grow in the coming years. There are a lot of companies which do not have production, but all of them do have projects. There are a lot of books which have been published on which related to planning and managing the projects. The one of the most important one was published by the author Eli Goldratt in his book ‘Critical chain’. This book basically talks and shows how the application of theory of constraints in the field of project management. The novel is basically based on one of the MBA classes in America where a number of ideas are developed in discussions among the students and the lecturers. The lecturer is basically fighting for a tenure with the president of the university who expects a downturn in the executive MBA. The lecturer who teaches project management has a word with one the senior colleagues and project management was the right topic to teach. There were three students who were placed in the project management team of their company which manufactures electronic products. The students are enrolled in this MBA class along with other students, here they discover a new approach to project management which is known as the
Industry profitability: subpar to above average; fuel and maintenance costs, a growing senior staff division, unionisation of employees and competitive price wars are margins concerns.
The historical development of Operations Management began in the 18th century when Adam Smith recognized the economic advantages of specialization of labor. He recommended separating jobs into subtasks and assigned laborers to particular assignments in which they would turn out to be very talented, effective and economical.
The topic of my group (group 4) was “How to totally float through your project for free” and the presentation was held by Roger Goodman who works for PMI NZ and Ernst & Young supply chain management with many years of working experience in many different countries such as Saudi Arabia and China.
Accurately forecasting the cost of projects is vital to the survival of any business or organization. Cost estimators develop the cost information that business owners or managers, professional design team members, and construction contractors need to make budgetary and feasibility determinations. From an Owner's perspective the cost estimate may be used to determine the project scope or whether the project should proceed. According to the U.S. Department of Labor there were about 198,000 cost estimators in 1994. That of which 58% work in the construction industry, 17% employed in manufacturing industries, and the remaining 25% elsewhere. From this we could conclude that a great deal of cost estimation lies in the construction industry, where multi-million dollar contracts are formed after a thorough cost estimation.
Maldives Transport and Contracting Company, (MTCC) was incorporated in 1980. The company was established with the objective to contribute towards the development of infrastructure and transport service in the country. Since then MTCC has positioned itself as one of the strongest business entities in the country with a diversified range of products and services, with a work force of over 1090 employees across the country. Today the company offers a diverse range of services such as construction and project management services, logistical operations, modern transport services, engineering and docking service and a plethora of reputed product as, Yanmar and Suzuki marine engines, Hamilton propulsion system, Castrol lubricants, Sigma protective
In this submission three important concepts related to Operations Management and Business models will be explored. Areas of total quality management (TQM), six sigma, and the project triangle are important concepts for leaders to maintain and improve their operations management. In the submission relations to leadership, strategies of implementation, and biblical integration will be drawn for these three concepts.
This paper explores what it takes to be a construction manager and the responsibilities of being a construction manager and the skills that a construction manager should have. It also explores what good construction managers do to have success on their construction projects and the steps that a construction manager must follow to end a project and meet their deadlines at the same
Scott Jardine, 2007, “Managing risk in construction projects – how to achieve a successful outcome – an article”, PricewaterhouseCoopers.