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Project Management Techniques and Procedures: A comparison of construction contracting and aircraft manufacture

M B BATES and J L STURGES Leeds Metropolitan University UK B HUTCHINSON Ballast Wiltshier Plc UK

Abstract
Over recent years there has been a substantial growth in the number of industries employing project management methods (Chaffey, 1997), construction being one of the recognised first users of these techniques. Following the Latham (1994) and Egan (1998) reports in the UK, there appears to be a consensus that the construction industry could benefit by an examination of certain sectors of manufacturing industry, with a view to developing improved methods of working. It was therefore decided to undertake a comparison of Project Management techniques in the construction contracting and aircraft manufacturing industries. The aircraft industry was chosen because of certain similarities with construction, such as the size and complexity of some of its large projects, and because it is an industry perceived to be at the cutting edge of technology. This paper considers the reasons for differences between the two industries from both an evolutionary and environmental perspective. Initial findings would tend to endorse Egans recommendations. Suggestions are made for best practices in managing projects that could be embraced by the construction industry in the move towards improved efficiency, both nationally and globally. Keywords: industry comparison; construction; aircraft manufacture; project management; tools and techniques.

INTRODUCTION
The Industries
It is pertinent to open with some observations about the two industries considered in this paper. One of them, construction, is one of the oldest industries in existence. The other, aircraft manufacture, is one of the youngest. Impressive buildings were being constructed two thousand years ago, whereas the first powered flight took place less than 100 years ago. The Wright brothers first flight was shorter than the wingspan of a Boeing 747, but within six or seven decades, the industry was designing and building rocket-powered craft to fly at speeds up to Mach 10 and altitudes of 35 miles. So we are comparing a technologically mature industry (construction) with a younger one where rapid technological progress (aircraft manufacture) has taken place. Projects are carried out within quite different environments; in construction, work is completed in the often chaotic conditions of a building site, whereas in aviation the work will be done within the more regulated environment of a modern factory.

On the other hand, there are significant similarities. Both industries are now very large, and they both routinely tackle very large projects. Both require liaison with a multitude of suppliers of goods and services and the co-ordination of activities on more than one site. A large building can easily cost 100 million; this price is of the same order as the price of a modern Jumbo Jet airliner. In construction, a large project would be the erection of a building such as Canary Wharf or the Greenwich Dome in the UK. In the aircraft industry, a large project would be the design and tooling up for a new airliner or military aircraft. In construction, the project managers final involvement might include the hand-over of the facilities to the client. In aviation, his responsibilities might end when the designs and tooling are taken over by the production engineers.

Project Management
Project management is increasingly being adopted by all sectors of industry because of the importance of delivering projects that meet predetermined objectives. It is now being seen as the most effective way of implementing changes in business, whatever their nature, whether marketing, manufacturing, the setting up of new services, and so on. Whilst the use of projects has been taken up by many business sectors over the last few decades it is interesting to note that its beginnings are generally regarded as being in the construction and engineering industries (Chaffey, 1997). The UK Government, via the Egan Report (1998) has pointed out that over recent years, some sectors of the economy, particularly manufacturing, have made significant improvements in their productivity and ability to deliver high quality products at the right price to meet client's requirements. This is less apparent in the construction industry, which John Prescott, the Deputy Prime Minister, perceived as being stuck in some sort of time warp, unaffected by the great developments and forward march of other industries (Construction Industry Board, 1999). The Egan Report makes specific reference to construction improving the project process. This study is concerned with the various project management techniques and procedures applied in industry today. It contrasts the use of project management methods in the aircraft building industry, a member of the manufacturing sector, with those in the construction industry and considers whether the different technological and commercial constraints in aviation have resulted in significant differences in the way project management (PM) is utilised. More importantly, it considers whether there are any lessons to be learnt by the construction industry? Our findings would indicate that, despite evolutionary (and other) differences between the two industries, there are some PM methods used in aviation that are viable for adoption by, and could lead to enhanced performance of, the UK construction industry.

THE STUDY
Research Approach
The comparison was undertaken using a generic model of project management procedures, distilled from relevant literature. It was felt that this would provide a non-threatening platform from which to gather information and provide a framework for a comparative assessment of the application of project management tools and techniques. Project management techniques and procedures differ from one project to the next, dependant upon the projects nature, complexity and cost. There was therefore a need to identify comparable projects in each of the industries. Initially, unstructured interviews were used to get a feel for the scale of aviation projects in the UK. The authors, being more closely involved with the construction industry, were more familiar with typical projects in this sector. Subsequently, detailed information was gathered using structured interviews based on a generic model of project management (discussed below). Participants, from both sectors, were selected on the basis of position and reputation within their sector. The intention was that the management of these projects undertaken by the respondents represented typical projects employing typical techniques and methods.

The Generic Model


In producing a generic model it was important to identify standard project management techniques and procedures. These procedures were established from various project management standards and textbooks. In particular, reference was made to the Association for Project Managements (formerly known as the Association of Project Managers) Body Of Knowledge (APM, 1993) and the British Standards, BS6046 (1991) and BS6079 (1996). It is well accepted that the overall project sequence can be broken down into stages which, together, constitute what is known as the project life cycle (see Healy, 1997). The project life cycle assists in the management of the sequence of tasks needed to complete the project and also in the identification of the work and when it is to be done. This process is often presented as a four-step model. Two examples are Objectives, Plan, Implement and Control (OPIC) and Plan, Do, Check, Act (PDCA) (Healy, 1997). The framework applied to this study was a six-step/stage model, the four-step model being modified to provide more detail. Briefly, control was contained within implementation, objectives and planning was expanded into preparations and scheduling and project evaluation was added as a discrete step. This modification was prompted by key areas from the 'body of knowledge' (APM, 1993). The overall six-stage model is shown in Figure 1.

Figure 1: Six stage generic m odel


1. Project Appraisal/start point 2. Pre-Start/Preparations for planning 3. Building/Producing Y our Plan

6. Project Evaluation & Control

5. Implementation

4. Scheduling

The generic model developed for this study was not an exhaustive collection of the tools and techniques of project management, but included those techniques that were considered most appropriate. Furthermore, following on from their previous work examining the use of CAPM in the UK construction industry (Sturges et al, 1997), the authors were interested in an inter-industry comparison of hard PM methods. The tools, techniques and procedures (including the hard methods) relevant to each stage of the project model formed the basis of the structured interview. Results of Structured Interviews The analysis is broken down into the six stages shown described. The limitations of this paper mean that only the significant differences or similarities have been highlighted. The points are summarised in Table 1 and subsequently discussed.

Table 1: Summary of Similarities and Differences in Project Management Techniques


Stage 1 Technique Project/Work definition Aircraft Manufacture Analysis of contract documents (detailed information already exists from previous projects) Project team depends on type of work to be carried out Input from all project team and data from previous projects Detailed WBS and OBS carried out Involvement from project team, and specific data from previous assemblies. Construction Analysis of contract documents and study of proposed site Project team depends on type of work to be carried out and by the availability of team members Input from project team and involvement from subcontractor No WBS or OBS carried out. Logistic plans carried out Involvement from project team, suppliers and subcontractors. Experience on previous similar projects. Includes contingency for external site environment. Logic established using experience and knowledge from previous similar projects.. Limited use of network analysis Strategic charts with main activities and milestones, no precedence. Used to plan, report progress and for presentation Tender enquiry process. External resources No resource levelling because resourcing is primarily external Method statements and risk assessments carried out. Predicted resource requirement for project in form of subcontractor procurement schedule Supplier and design management in form of material and information schedules S curve (receipts profile) and expenditure profiles carried out Baselining rarely carried out and contract programme is rarely revised Project control system in place for reporting and control Carried out manually. Monitoring progress, progress assessment and forecasting. Subcontractor meetings used as essential control technique for action planning. No EVA. Based on variance only. Performance reports on subcontractors and suppliers carried out and database updated.

Select/assemble appropriate team members Identify project tasks Work breakdown structures/develop detail Identify durations/procurement periods/milestones

Identify the project logic and produce networks Bar charts/CAPM

Resource allocation Resource levelling/calculating plan Risk/contingency plan

Specific data from previous assemblies. Network analysis carried out. Detailed charts with precedence. Used to plan, report progress and as a control technique Implemented using CAPM. Internal resources or repeat external Implemented with CAPM

Resource plan/schedule

Identification, assessment, mitigation, contingency and control procedures all carried out Predicted resource requirements for project in form of resource plan

Procurement plan/schedule Financial plan 5 Baseline project Establishing reporting procedures Monitoring and tracking

Problem solving/action planning Project performance/EVA Post mortem procedures/project review

Supplier management for procurement of materials Expenditure profiles, sales plan and cash flow profiles all carried out. Configuration freeze serves as the baseline for all operations Project control system in place for monitoring, review, report and control. Undertaken using CAPM. Monitor progress, assess remaining work and forecast performance Undertaken using CAPM what if scenarios. Change management. Earned value analysis undertaken. Post mortem procedures carried out. Lessons learnt recorded and fed into other projects

Stage 1 - Project appraisal/start point


The understanding of the needs and purpose of the project are identified differently between the two industries. Here there is a substantial difference between the project environments. Construction contracting companies traditionally analyse detailed information within the contract documents and carry out comprehensive studies of site conditions to ascertain what factors may exist to influence the project which others are not obliged to bring to their notice. This is always a significant risk area in construction projects. By contrast, aviation often requires only generalised information to drive projects (for example,, the design of a wing to lift a certain load to specific drag criteria) as detailed information already exists within internal systems.

Stage 2 - Pre-start/preparations for planning


When establishing a project team within aviation, it is determined at the outset whether there is the capability to complete the project, the team is dependent largely on the type of work to be carried out and the methods and skills to be used. Although in construction the structure of the team depends on the type of contract, by comparison the team selection is often driven by the availability of the team members, recruitment options occasionally being considered if some shortages are apparent.

Stage 3 - Building/producing your plan


In aviation, identifying the project tasks is carried out by all the project team and is developed from experience and from lessons learnt from previous projects. Substantial detail is included in the plan. By contrast, construction projects tend to use substantial subcontracted elements and therefore often have plans, detailed solely by planners with little assistance from other members of the project team, with little detail of these packages. Interestingly, in previous work by the authors (Sturges et al., 1997), certain subcontractors from the building services sector were frustrated by poor planning in the construction industry. In one situation, the services contractor was well-versed in using PM techniques, and could see clear opportunities for improving the planning of work on the contract job. However, the site manager resented and refused the offer of help with scheduling the work. Aircraft manufacturers produce detailed work breakdown structures to allow their projects to be scheduled and resourced more effectively at work package level. Organisational breakdown structures are also used to allocate work packages. By contrast, construction contractors appeared to break down the project in the manner in which it was to be tackled, emphasising the logistics and the influence of the site upon the process. Not surprisingly, both sectors rely substantially on experience when assessing durations for elements in the project schedule. The development of the plan in construction is more the identification of the activities and their juxtaposition with respect to time. Very rarely did the authors come across the employment of robust logic and task interdependencies leading to a detailed network and critical path analysis. Construction managers appeared to rely on judgement rather than techniques to establish critical interdependencies. By contrast, in aircraft manufacture, the use of networks was more apparent. Furthermore, these techniques and charts were used during the development to assess what if scenarios in considering alternative options.

Stage 4 - Scheduling
Bar charts featured heavily in both sectors as a means of illustrating progress and monitoring activities. Construction bar charts were activity based whilst aviation were event based. This tallies with the findings of Graham (1999) who noted that in aviation the event is used to determine when assemblies must come together, whereas in construction the majority of assembly is on site and the focus is on the activity.

Aviation appeared to place greater emphasis on the automation of resource allocation and levelling than construction. Computers were seen to play a big part on aviation projects. In construction, the computer systems in place appeared to be used more as a presentation tool. The approach to risk and financial planning appeared to be very similar between the two project areas. However, in terms of procurement, aviation appreciated that purchasing and supplier management is a vital element to the success or failure of a project. This is an area the construction industry is currently addressing. Both sectors appreciated that sound financial planning is essential to ensure the continued health of a project.

Stage 5 - Implementation
The reporting procedures within the aircraft industry appeared to be standardised and automated using CAPM, involving a systemised reporting arrangement. By contrast, construction used different reporting methods and forms did not appear to be standardised. Progress measuring in aviation appeared more objective given the existence of more measurable milestones and the greater experience gained through repetition. Accurate measuring in construction is harder to achieve and statements tended to be subjective. Construction frequently relied upon managers judgement to assess progress. Whilst the aircraft manufacturing industry has projects with very exacting performance standards, unexpected or out of sequence work appeared to be an expensive reworking exercise. By contrast, changes in construction are commonplace and flexibility is expected. Clients changing specification during a project appears to be the norm. This operating culture in the UK, whilst appearing flexible and customer focused, can ultimately lead to problems when contrasted with the construction industry in other countries. Project performance assessment using Earned Value Analysis (EVA) to give an integrated view of time and cost performance (in addition to forecasting trends) is employed in aviation, but was not found in construction. Its importance in aircraft manufacture was well articulated in a recent article (Anon, 1999). Effective use of EVA requires detailed breakdown of projects using a work breakdown structure, currently not seen in construction, as pointed out above.

Stage 6 - Project evaluation


Aviation carries out projects which have a formalised post-mortem feedback. This enables them to contrast project specific data with those of previous projects. Interestingly, respondents in aviation felt that there was substantial room for improvement with their post-mortem procedures. In contrast, constructions postmortem systems were rather limited in project-specific data and generally were not given a high priority. This concurs with the criticism levelled against the UK construction industry by Egan (1998) for its poor performance in undertaking effective post-mortems on completion of projects to allow reflection and consideration of best practice.

DISCUSSION
Many of the differences observed were undoubtedly due to the differing environments in which projects are carried out. In aviation, projects are nearly always carried through in the controlled conditions of a modern factory. In contrast, construction projects are undertaken in the rather chaotic conditions of a construction site. They are completed under physical conditions set by the client, and can be subject to variation while in progress. In aviation, project teams will probably work on many projects, and so team members will be quite well known to each other. In construction, teams are set up for each project, and then disbanded upon completion. Team members will usually not be known to each other. Many of the design team, suppliers and subcontractors will not previously have worked with each other and their relationship would be purely contractual. The aviation projects in comparison were larger and of longer duration. The design team

appeared to be formed between internal functions and repeat external suppliers, operating closer as a single cohesive entity, becoming more formal over a period of time. One major area of uncertainty in construction projects stems from the site conditions. Since adverse site conditions are discovered very early in site operations, projects can be subject to early delay, but such delays are frequently not allowed for in schedules. This can generate much (needless) time pressure later in the project. The two industries have evolved differently, and one major area of difference is the way the various involved professions have developed. This has had an impact on communication mechanisms within each sector. Two hundred or more years ago, the mason was both designer and manager on a building site. Today, we have architects, quantity surveyors, engineers and construction managers; all these professions have well-documented inter-professional boundaries. Whilst there are departmental divides within aviation, the gaps between the different functions are less pronounced and concurrent engineering is facilitated by way of matrix organisations. One of the criticisms of construction made in the Egan Report is that there is too much of a divide between the design and construct functions. Certainly, in many cases, when the main construction contractor is engaged, a lot of the design work will have been carried out. The sub-contractors who will carry out much of the detail construction usually make no input to the design process. In the aircraft industry, the production engineers will make an input to the design process, to ensure that solutions are optimal from the manufacturing point of view. In construction, the second author has experience of design changes being faxed to site as construction was in progress. However, as previously mentioned, there are definite similarities between the two industries, and the differing evolutions and project environments do not account for all of the variances seen. In aviation, there appears to be more use of the hard tools and techniques of project management, such as: Network analysis Work Breakdown Structures Computer-Aided Project Management methods Formal Project Methodologies Performance measures such as Earned Value Analysis. Do these techniques have little or no place in the management of construction projects? With the current pressure on the UK industry, it is suggested that this is not the case. Many leading edge organisations employ these techniques as well as aviation. So why are they not seen in construction? Network analysis was quite popular in construction some years ago but it lost favour in the 1970s. The current use of CAPM is increasing, both in terms of the number of firms and the extent to which it is being used (Sturges et al, 1997). The current fashion for partnering and supply chain management, in conjunction with the increased customer focus and the desire to maintain competitive advantage, may be a useful catalyst in this process. Clients are demanding to be kept better informed of progress; suppliers and subcontractors would also prefer to be kept better informed of supply dates or start dates. The decreasing contract periods that we are currently witnessing are making increasing demands for improved co-ordination of the site-based processes. In the UK one is starting to hear of subcontractors having to supply programmes for the subcontract work. As computer literacy grows within the industry, smaller subcontracting firms are now producing their own CAPM-generated programmes. It would not be difficult to integrate these into the main contractors programme. This increased information might stimulate the use of Work Breakdown Structures to organise the information and in turn, with some cost data attached, lead to the extraction of Earned Value Analysis and time and cost performance predictions. An additional indirect benefit of further use of these hard IT methods is that they lead to improvements in knowledge management processes within an organisation, less information being carried around in peoples heads. Another significant area with potential for adoption is that of improved customer focus. Considering its history in comparison to construction, the aircraft manufacturing industry has obviously been very innovative,

open to new ideas and working practices, and has made impressive progress. It is in continuous contact with its customers - the military and the airlines - they feed back to it their future requirements. The airlines share their thinking on their services and how they would like to improve load factors, carry more passengers, fly further, etc and the military will require similar performance improvement criteria to be met. This means that there is usually an innovative element in aviation projects, and the acceptance of this constant drive for improvement has become part of the industrys modus operandi. Aviation is constantly and actively seeking greater efficiency and improved methods of working. Construction has tended to be more conservative, and has lagged behind in its adoption of new methods of working. This is only part of the picture; the aviation industry has undergone a huge rationalisation process, driven by the recognition that innovation carries a high price. Product value increases, and the necessary capital investment in technology and infrastructure creates pressure for firms to merge to survive. While there are just two major manufacturers of large passenger aircraft in the Western world, the UK construction industry consists of over 160,000 companies, most of which are very small. Perhaps this arrangement does little to foster innovation and continual improvement of service to customers.

CONCLUSIONS
The way in which two different industries, construction and aviation, undertake projects has been considered. Project similarities have been discussed along with the differing environments and historical development. Improved performance of the UK construction industry, as advocated by Egan, could be brought about by adoption of the following practices observed in aircraft manufacturing projects: greater use of hard techniques such as CAPM improved management of the supply chain greater interdisciplinary communication improvements in customer focus.

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