ESTIMATORS, SCHEDULERS, AND COST ENGINEERS THEIR FUTURE ROLES IN PROJECT CONTROL

INTRODUCTION

As the economics of developing nations move further into the post-industrial era, the human element of the "Work Force - Year 2000" plays an even more important role in their progress and the competitiveness of the United States. To continue to make a productive contribution to the cost effectiveness of the economy, the amount of education and knowledge needed by the U.S. employee will be greater. The U.S. Department of Labor predicts that for the first time in history, the majority of the all new jobs will require post secondary education.

If the U.S. economy is to grow rapidly and the American companies are to reassert their world leadership, the educational standards in the nation's schools must be raised dramatically.

Before any projection can be made as to the future roles of the estimator, scheduler, and cost.engineer, the industry in which they perform their duties should be analyzed to determine the perceptions of the industry about the contribution project controls makes in the construction process. Many experienced and concerned constructors have contributed to this analysis and their assistance is greatly appreciated.

CONSTRUCTION INDUSTRY FINDINGS ON PROJECT CONTROL

Organization.

The organizational structure of the company defines an orderly communication network. The most efficient structure appears to be a strong matrix organization with maximum authority being given to the project manager and less control being assumed by the administrative manager. Companies are finding that a "Task Force" organization with the project team being geographically located in the same area has been very effective. Success of the task force depends on the amount of responsibility and accountability each team member is assigned and ultimately assumes. This organization gives the project manager the greatest amount of authority, facilitates timely communication and builds team unity.

The additional of an "Engineering Planner" to the engineering group assigned to the team to act as a liaison between team departments has potential for success. Engineers are more receptive to project controls because the planner is one of them.

Progress Measurement

Engineering progress has always been difficult to measure in that significant conceptual engineering precedes calculations and drawings. Most engineering progress is now mgasured by count of deliverable end items. Better control has been achieved by adding progressing of procurement activities, modeling and cost/schedule activities to project control. Studies have shown that drawings and specifications constitutes about 55% of the engineering work and procurement activities makes up about 25% of the engineering effort. Constructors have developed effective procurement measuring systems tied to the work package structure.

Schedules

Schedules contribute to a good definition of the scope of work in the engineering, procurement and construction phases of the project. The schedule gives something to measure progress against. Effective scheduling control occurs when the project team uses a hierarchy of schedule from level 1 to level 4, short interval schedules and three week rolling schedules.

 Project Control System

Project control systems typically used in the industry are designed as reporting tool for management. The importance of timely information to the project team has been largely overlooked. Many upper management people feel that field management does not need to know job statistics. Japanese firms have taken a different approach. They consistently push quality data down to the production level to educate the work force, while American firms normally aggregate information upwards in the organization.

Project team members need data on a daily basis so that an accurate plan of action can be made and problem ares can be dealt with while in the formative stage. A project control system that helps is better accepted.

Project control systems need to standardized on all projects within a company. The tendency still prevails in the industry to permit the project manager to organize the project to his system and desires.

Project control systems are designed for large projects. The systems must be designed to handle small projects efficiently.

CONSTRUCTION INDUSTRY INSTITUTE RESEARCH

Aerospace Industry Versus Construction Industry

A Construction Industry Institute (CII) research project investigated the "New Frontiers" of project control in a study designed to uncover new and experimental concepts of project control being used by CII member companies, aerospace firms and computer companies. Because of the confidentiality of all three industries, the researchers encountered many barriers to learning what is in the future. In spite of the resistance, the following concepts were identified.

Innovative Concepts in Project Control

1. Researchers found that Computer Aided Design and Drafting (CADD) is having a significant spin-off effect on project control applications. Procurement management systems, material management systems, computerized estimating systems and design project control systems are being developed and tested in many companies.

2. CADD has the potential to adapt, to other project systems through the use of object -oriented databases. A Line Item Status System (LISS) is an example of an interactive database system used to track and status released work products. The ability of CADD to capture quantities of materials allows CADD to become an integral part of the control system in design as well as in construction. If a project had an estimated 50000 cubic yards of concrete and the engineer had designed 25000 cubic yards, the design of that activity would be 50% complete. The potential for integrating a quality-based control system with CADD is evident.

Software and Hardware Vendors

1. The current movement by the vendors is toward integrating small computers into overall project management systems. The user friendly nature of small machines has contributed to this movement. Small computers are becoming adept at interfacing with the large main frames. This networking supports the team approach and improves communication flow by allowing many people to access a common data base. Computer vendors emphasize the hardware and software aspects and integration; however, they do not consider the organizational or human aspects of the construction industry.

Construction Industry Institute Members The researchers found no evidence of an organizational effort to advance the state of practice in either owner or constructor companies. What effort that was being done was on small projects at the project level. No-corporate programs to improve project management techniques were identified. Most innovations appeared to be driven by an attempt to adapt to the changing nature of the industry rather than an attempt to take advantage of new technology.

MAJOR NEEDS AND TRENDS IN PROJECT CONTROL

1. There is a need for less number crunching and more number analyzing. It was found that more time is spent on gathering and processing data than on analyzing data. Too much time is spent on measuring deliverable end items that constitute, only 60 to 70 percent of the total project work. Project control needs to measure the other 30 to 40 percent of the work. The need to build better histories is evident.

2. There is too much emphasis on the project control system and not enough on the people using the system. People are the key to a successful project. The system should be designed to provide information to the design engineers, estimators, procurement, construction, etc. - not only to upper management.

Cross training of the project team members in all disciplines on the team has advantages. As each team member cycles through project controls, they learn of the value of the system and better adapt it to their daily activities.

3. Communication is a key factor in the effectiveness of project control. It provides a frame work to develop a project plan and establish control by assigning responsibilities to the right individuals at the right time.

4. Include a measure of quality control in the project control process. Most systems use only time and cost performance; however, cost , schedule, and quality are also goals of the project. A quality performance index would indicate both the frequency and severity of design errors and omissions and would support the idea of quality at production levels. To accomplish the measurement of quality a measure of quality or severity of nonconformance is needed along with reasonable goals for quality. It is recognized that institution hurdles and resistance to change must be over come to implement this concept of quality control. The industry has not given much definition to this concept, but it is appealing.

OWNER AND CONSTRUCTOR VIEWS ON PROJECT CONTROLS.

To determine the future roles of the estimators, schedulers and cost engineers, the industry must turn to the current views of users of construction and to the constructors. The CII study revealed the following views which need to be studied for future research, training and implementation. This list is also a summary of some of the major points of the previous discussion.

Organization

PRESENT STATE OF THE ART IN CII COST/SCHEDULE TASK FORCE COMPANIES

The CII Cost/Schedule task force consists of 16 member whose corporate job titles include Manager of Estimating, Manager of Project Controls, Manager of Planning and Scheduling and Director of Construction Management. At a December 1988 meeting of the CII Cost/ Schedule task force the members were asked the following questions.

1. What kind of person will be needed in the future in project controls?

2. What roles will the estimators, schedulers and cost engineers fill or play in the future?

The members of the task force recognized the increased competition coming from the Japanese construction companies and. thought that any discussion of the future should look at what the competition is doing to be successful. The Japanese are goal oriented, they plan in detail, at the end of the day they plan for the next day, and they involve the foreman in the planning. Quality control is critical to their philosophy. The task force members concluded that the Japanese are taking our concepts and using them. The American companies know about the concepts but are not using them.

Bobby McMakin stated that in foreign countries a initial entry person is expected to work at the first line supervisor position before being brought into project controls. One of the problems in our industry is that the college graduates all want to be managers. They are not content to do initial entry work. Therefore, future project control people must be more flexible and better trained.

Richard Mayes suggested that future project control people will have to be more high

technology literate. The use of computers is an absolute requirement. His company is not looking for the one dimension specialist, but for the multi-talented professional.

When Jodie Caldwell assumed the position of Manager of Project Controls at Gilbert Commonwealth, everyone was a specialist and the estimating and scheduling functions were very centralized. All new hires into project controls are cross trained in all aspects of project controls so that they can interrelate to the needs and roles of the other team members. This training takes about 18 to 24 months to complete.

Dow Chemical was using the cross training approach for all new hires according to Stan Nethery. They had marginal success because his division did, not get a fair share of the good trainees. After training the people moved to a new area of Dow or left the company.

A serious problem exists in the industry according to Jerry Davis and Tom Wilson. The industry perceives estimators, planners and schedulers as second class citizens. Jerry's biggest disappointment in his career as an estimator was not being accepted as part of the team. He was never asked to attend meetings and never part of the inter circle. Shell Oil Company is moving in the direction of replacing employee estimators with contract estimators. Tom Wilson has seen similar trends at ALCOA as the estimating department continues to shrink in size.

Rust Engineering ,has placed the cost engineer in the field where they feel he is most effective. The cost engineer is part of the PM team and works closely with the project manager. The project is subdivided in to accounts and the team is responsible for the accounts. The cost engineer provides the PM with detailed reports. and the rest of the team gets summary reports for their accounts. Only about one third of the task force companies have their cost engineers in the field.

General comments of the task force members were recorded as listed below.

THE ESTIMATOR

The estimator is one of the key players in a project control system and one individual who will experience a major impact on his role from the changes currently taking place in the industry. As researchers study the changing role of the estimator, they need to simultaneously study the other players on the team. However, before we start writing a new job description of the team, it is important to review the definition of an estimator and keep a perspective of the central role of the estimator in the process. The following is abstracted from a description of "The Estimator" as published in the Journal of the American Society of Professional Estimators.

"The estimator must be able to visualize what is not apparent, and for this he requires imagination. He must be able to think in abstract terms. He translates graphic and verbal information into probable costs in the light of experience. This is not a direct and mechanical process; it is creative and demands a high level of concentration and mental effort. Estimating requires common sense and an ability to work for a goal that is not always achieved."

Attempts have been made in the past to model the estimating process and construction costs. These models used the techniques such as multiple linear regression analysis and other statistical methods to predict constructor costs. Such models failed in their development because they did not take into account the skill of the estimator. The present attitude is that the estimating process is a combination of data, technique, calculation, analysis and judgement. It is a combination of the mechanical process coupled with aspects of professional judgement. Because the judgement factor is very subjective and the judgement process is not well understood, it will be difficult to transfer the judgement to an expert system or other computer system.

The use of the computer has been a tremendous facilitator in the estimating process. It has removed much of the drudgery work and allowed the estimator time to do thorough estimate reviews.

Where is the threat to the estimator and other player son the team? There is no doubt that expert systems will impact the profession. Can it be used to benefit the project control profession rather than replace it? Some proponents feel that expert systems will provide the client with the estimating expertise needed to conduct business. Others believe that computers will have difficulty duplicating the creativity of the estimator.

The estimator has already responded to the changes brought on by the contractual arrangements and cost engineering systems. The profession has seen estimating departments getting smaller and in many cases, disappearing. But the individual estimator will be around for the foreseeable future. To do this, the estimator must be more creative and flexible. They will need to be experts in detailed analysis and forecasting of resources. They must be knowledgeable and prepared to provide input at all phases of the project. They will need to understand the money aspects of their company. In short, estimators must gain the skills to be fully functioning middle managers in the construction industry.

CONCLUSION

Cost effectiveness in the construction industry calls for the purposeful and intelligent application of conventional wisdom, for using good new ideas whatever their source and for developing and applying basic new ways of thinking about construction. The cost effectiveness can be controlled and major savings achieved If top management gives it the same attention and direction applied to production, marketing and other mainstream functions.

Future construction cost effectiveness depends on the people, their training, upgrading, supervision, motivation, involvement, commitment, the proper use of their skills and the practices and conditions that control the performance of their job. The future roles of the estimator, scheduler, and cost engineer depend on the direction the construction industry takes in these changing times. Unfortunately, the industry has not clearly defined it's goals and objectives for the next decade and continues to be a reactive industry. Therefore, the roles of the team players will continue to determined by reaction to outside forces on the industry.

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