Construction Professionals Management Training for Construction Professionals Overview

Navigation Overview 1/14 The overview consists of a number of slides that introduce the various features of the MERIT simulation. Navigate through the overview by using :- buttons for movement through the presentation buttons for self-paced demonstrations of topic hotspots to display further information. The mouse, and not the keyboard, should be used at all times. Demo Hotspot Quit

Introduction Overview 2/14 MERIT is an acronym for Management, Enterprise, Risk, Innovation and Teamwork. It is a computer simulation that gives participants, grouped into a team, the opportunity to experience managing their own fictional construction company, and in a safe, but realistic and challenging environment. It is particularly designed for either :- Undergraduates studying on an appropriate engineering degree programme, such as Civil Engineering or Construction Management. Professionals already working in the construction industry. Participants are exposed to aspects of construction management with which they are possibly either unfamiliar or unpractised, and by allowing them to investigate the interlocking nature of the decisions they make regarding the different areas of company management, a more holistic perspective of the whole construction process is engendered. Benefits Quit

Key Features Overview 3/14 The MERIT simulation introduces many of the key concepts and problems faced in the Construction Industry today, such as :- The importance of forming a company strategy The need for effective teamwork and communication skills Ways of measuring company performance Controlling the company's finances, and looking after shareholder interests Managing the company’s overheads The importance of Marketing, and the need for accuracy in estimating Different procurement methods, including traditional lump sum and design & build Building relationships with clients, and using external consultants Managing the construction of a project to completion, and managing risk Personal management, and picking the right people for the job The learning aspects of MERIT are enhanced in a number of ways :- An interactive tutorial, in the form of a slideshow, guides the user through the simulation A detailed set of company reports are available in different formats Feedback is given each round about company performance in each business area from an external consultant Overall company performance is measured by key performance indicators and company performance statistics that are available at all times Quit

Objectives Overview 4/14 Participants form a management team of up to 6 directors, and are given the task of taking over and running a construction company that has been operating for at least one simulated year, and has :- Financially People Work Assets in the form of :- Cash in the bank Capital Base (plant, equipment etc) Investments in other concerns Shareholders to consider Overhead staff involved in key company activities not based on site :- Marketing Estimating Head Office QHSE Measurement Site Operatives and Project Managers progressing on-going jobs Existing relationships with a number of Clients A number of jobs in progress A number of jobs at the procurement stage that can either be :- Costed Bid for Quit

The stages of MERIT Overview 5/14 Starting from the historical position of one year’s trading, a company must be managed through two timeframes :- Phase 1: The early years The management team, operating as a board of directors, runs the company for a number of periods, where each period represents one trading quarter, in a simulated construction market. At this stage they will be competing for jobs with a computer-simulated company, and the market is updated regularly to reflect changing conditions. Phase 2: The final years (optional) Many other teams may be taking part in the Early Years, and the top 6 teams at the end of the Early Years are invited to compete in the final years, for a further number of periods. During this stage they will be competing in an even more competitive environment, for both jobs and people against the other Final Years’ teams and the computer-simulated company. The stages of MERIT Quit

Making Decisions Overview 6/14 A team is normally given a week to enter the decisions for each round (one period, or 3 simulated months), although this can be varied as required. Software known as the Team Module is used to enter the decisions into an access database, which is sent to the Game Controller for processing, normally by e-mail. As well as the decision entry, the Team Module has a number of other functions :- Obtaining information that enables effective decisions to be made. This can be in the form of :- Reports Interactive information Company and Financial Information relating to the environment in which the company is operating e.g., tax and interest rates Measuring company performance by :- Examining the Performance Review compiled each period by an external consultant Determining the progress of the Company against a set of key performance indicators, including operating profit and share price Examining company performance statistics The Decision Process System Requirements Quit

The Key Decisions Overview 7/14 The key decisions that have to be made each period relate to :- The company’s finances, including the company’s cash account, capital base (plant, assets etc), investments and share price. The company’s overhead departments, which are Marketing, Estimating, Qhse, Head Office and Measurement. Procuring work, which involves pricing the jobs for which the company has pre-qualified, and having done so, finalising and submitting bids in order to secure the work. Progressing each contract awarded by managing the labour force and site staff, and allocating a project manager to the site. The simulation is designed to demonstrate the interdependence of these decisions, and the interlocking nature of the variables that determine the success or failure of the company. Quit

Company and Financial Information Overview 8/14 As well as their own decisions, a number of other factors affect a company’s performance. These are referred to as Company and financial information, and define the environment in which the company is operating. Most remain fixed, but some can vary each period, such as the interest and tax rates. Quit

Determining company strategy Overview 9/14 The decisions made each period need to be based upon a sound company strategy which reflects :- The objectives of the Company How the objectives are to be achieved In order to decide upon the objectives, and what can be realistically achieved, there needs to be a detailed analysis of :- The environment in which the company is operating The strengths and weaknesses of the business as it stands The likely competition in the future The areas that need to be considered in the company’s strategy include :- What level of growth the company should aim for What to do with any cash reserves What staffing levels are required for the company’s overhead departments Which market sectors the company wishes to target What level of margin to aim for during tendering What type of labour to employ to progress jobs Determining company strategy Quit

Measuring the Company’s progress Overview 10/14 A number of key performance indicators are used to measure the progress of a company :- Turnover Gross Profit to Turnover ratio Operating Profit to Turnover ratio Company Value Capital Employed Contract Completion Rate Forward Workload Forward Margin Share Price Client Satisfaction The indicators are all weighted at the start of the early years to reflect their variability, and initially sum to 1000. As each period passes so the indicators rise and fall, with the total giving an overall indication of the company’s progress. Quit

Teamwork Overview 11/14 The MERIT simulation has been designed to encourage the separation of team member responsibilities into different managerial functions to foster better teamworking, and the success or failure of the company may well depend upon the effective interaction between the different factions. For example, a typical scenario for the structure of a team might be :- Managing Director Financial Manager Overhead Manager Procurement Manager Construction Manager Responsible fpr :- Managing the company’s assets Looking after the interests of the shareholders Responsibility for :- staffing the Overhead Departments Seeking out new work that the company can prequalify for Responsible for tendering for jobs by :- costing jobs prequalified for bidding for jobs that have been costed Managing jobs awarded by:- Allocating project managers to oversee the work Allocating labour and site support to progress them Quit

The Website Overview 12/14 The website, (http://meritgame.com) is the focal point for information relating to any MERIT Competition, and whilst the competition is running it will display, amongst other things :- A list of competing teams and associated details The very latest MERIT Leaderboard, as illustrated below Quit

Trialling the Simulation Overview 14/14 As well as the challenging 'fun' side of taking part in a MERIT Competition, it is primarily a serious training vehicle, enabling participants to gain an understanding of the complexities of running a modern construction company, and the inter-relationship between the various functions of the business. For participants to manage their fictional company as productively as possible, they need to spend time learning how to use the simulation. The powerpoint Tutorial is a detailed guide to using the simulation, but it is still no substitute for practice. With this in mind, all competing teams are normally given time to 'trial' the software. During the trial phase, a team can make decisions for one round as often as they like, although normally 2 or 3 attempts should suffice. The decisions will be processed and returned, and should enable the team to gain an understanding of the concepts and pitfalls involved in running their company prior to the start of the ‘live’ Competition. Quit

Demo: The stages of MERIT Glossary The historical phase normally lasts 4 periods, or one trading year, starting from period 1. The Company has already been operating for a number of trading quarters, known as the historical phase, before you take over the its management. Each trading quarter, or 3 months, is referred to as a period. If you are involved in the MERIT competition for both Phases 1 and 2, you will normally be managing your company for 14 periods, or 3 and half trading years. You take control of the Company at the beginning of period 5. You then manage the company through a number of periods, normally 8 (two trading years). This is known as Phase 1, the early years. If your company is one of the most successful during Phase 1, you may be invited to take part in the Phase 2, the final years. You then have to manage the company through a further number of periods, normally 6, in direct competition with the other top companies from the early years. Start of History 1 2 3 4 Historical Year Period Start of Phase 1 5 6 ……………………. 12 Phase 1: The Early Years Start of Phase 2 13 14 18 ……………………. Phase 2: The Final Years The Demo is now complete Keep Clicking Anywhere on the screen to advance the demo Quit

Demo: The Decision Process Glossary The interaction between the Game Controller and the team continues for the Early Years, which normally lasts for 8 rounds, or two simulated years. This demonstration shows the interaction that occurs between a team and the Game Controller. It is assumed that the Team Module has already been installed on at least one PC. For the purposes of this demo the team has the unique team number of 1. The History has been completed for the company being managed by Team 1, and the team is currently at the start of period 5. Team 1 Game Controller The Game Controller e-mails the team to inform them that the company database for period 5 is available in the online store. It is labelled merit2013_t1p5.dat where :- merit2013 is the game identifier t1 represents team 1 p1 represents period 5 Having entered their decisions for the period 5, the team must now press the submit button to send the database merit2013_t1p5.dat back to the Game Controller. The Game Controller will now process the decisions for period 5. When the decisions have been processed the period will be updated to period 6, and the new company database, merit2013_t1p6.dat, will be available in the on-line store, and the process continues. Key Point Each company database supersedes the previous one, and contains all historical information. The Team Module is used to enter the company’s decisions for period 5. They would normally have a week to do this, although this may vary depending upon time constraints. The database merit2013_t1p5.dat should be downloaded either through the MERIT Team module or via the MERIT website The Demo is now complete Keep Clicking Anywhere on the screen to advance the demo Quit

Demo: Company Strategy Glossary It’s the beginning of period 5, and the Company’s strategy needs to be established for the next year. In order to decide upon its objectives the company needs to review the environment in which it is operating, its strengths and weaknesses and the likely competition. This is possible by referring to :- Reports that are available On-line information Having analysed the available information the Company decides upon the following objectives and principal policies for achieving them. In the next year the Company will attempt to achieve the objectives established in the strategy by entering decisions that reflect the policies it wishes to adopt. However, it may be that the objectives are unattainable for any number of reasons :- The Company’s future market forecasts are inaccurate, and the anticipated growth areas will not materialise, reducing the expected value of work that the company can pre-qualify for Increased competition will force margins to be reduced to secure work Jobs will be lost to competitors with better client relations Project managers employed to oversee contracts will not perform as expected because the personnel department did not assess their abilities correctly Hence it is necessary for the state of the Company to be reviewed continuously in order to determine if the objectives are being met, and it may be necessary for the company strategy to be revised before the next year is completed. Objectives To be achieved by Steady growth, with at least a doubling of turnover in the next year. Prequalifying for more work through an increased market presence Procuring more work through the tendering process Improve the value of the company. Increasing the company’s operating profit Making better use of the company’s assets Manage company overheads efficiently to help achieve profitable growth. Identifying overhead requirements, such as ensuring that the Head Office, QHSE and Meaurement departments can cope with the company’s turnover. Raise the company share price Maintaining a healthy dividend Improving future profitability Increasing the company’s value Build on and improve relationships with all clients Submitting competitive bids, and managing contracts well The Demo is now complete Keep Clicking Anywhere on the screen to advance the demo Quit

Benefits The main benefits of using the MERIT simulation are :- Glossary The main benefits of using the MERIT simulation are :- It develops a greater understanding of the problems and decisions that are involved in running a modern construction company Its practical and competitive nature enhances the learning environment It improves team-working, communication and IT skills It develops analytical and problem-solving techniques It enables performance to be benchmarked against other competing teams Quit

System Requirements Glossary To be able to take part in a MERIT Competition, at least one member of the team will require :- A computer running on the Windows operating system (XP or above) A pentium processor, or equivalent Access to a printer An e-mail address for sending and receiving information Access to the Web to view the information about a game The MERIT software is a single-user version for loading on individual PCs. Quit