1. Completing Jobs Early ENGINUITY TUTORIAL Copyright Virtual Management Simulations

2. Completing Jobs Early Trying to complete a job early has a number of benefits to the company, including :-  The client may pay a bonus for early completion (see below).  The company’s own labour that was being used on the completed job can be used on other sites, preventing the need to take on new recruits, or having to use subcontractors.  The company’s capital assets (plant, buildings etc) being used on the job can be diverted elsewhere.  Cash flows are improved. Early completion of a job means completing at least one period before the end of the planned duration e.g., if the planned duration is 4 periods, it must be completed in 3 periods or less to obtain the client bonus. The bonus paid by the client varies depending upon the job size.

3. Completing Jobs Early To complete a job early the Construction Manager needs to refer to the sector-based overmanning limits in the Industry information. For example, consider a Building & Commercial job that has a planned duration of 4 periods, and that can be overmanned by up to 35% each period. If the Construction Manager follows the overmanning guidelines, and the labour allocated to site is fully effective, with no delays, the completion schedule should be as follows. <----------- Labour Allocation -------  Period Planned Overmanning Actual Cumulative 1 52 35 % 70 70 2 62 35 % 83 153 3 62 54 207 4 31 --- 207 The job should complete a period early, securing a bonus from the client. Key Point(s) Overmanning above the effective labour limits results in ineffective labour that does not contribute to the progress of the job, but incurs labour costs.

4. Completing Jobs Early But what happens if the Construction Manager attempts to complete the job early, overmanning in some periods, but is still not able to complete the job early ? This may occur for a number of reasons :-  Delays to the job, caused by random events, reduce the effectiveness of the labour on site.  An overall ‘own’ labour shortage, and a reluctance to use subcontractors, may mean the job is not overmanned enough.  A poor choice of project manager reduces the productivity of the labour on site. In this scenario, the job would enter its final planned period out of step with the completion schedule. In all probability it would still be ahead of schedule, because it has been overmanned, but the Construction Manager must be very careful about setting the labour level, since the planned level cannot be relied upon. We will now examine how the Construction Manager sets the correct labour level to complete the job as efficiently as possible.

5. Completing Jobs Early Navigate to "Main menu/Making decisions/Job progression decisions/Display job details” Using the previous 4-period Building & Commercial contract as an example, the job was indeed overmanned in its first three periods, and was well ahead of schedule, and on course to complete a period early. However, job delays in the job’s third, and anticipated final period, resulted in the effective labour being reduced from 52 to 47.4 men, and the job was 99.3% complete at the end of the period, and just failed to complete. Key Point(s) The Construction Manager should have allocated more labour during the third period, and anticipated final period, to compensate for potential delays, and the job may then have completed. The topic of handling job delays is discussed in the Key Points section.

6. Completing Jobs Early Navigate to "Main menu/Making decisions/Job progression decisions/Display job details” The Construction Manager needs to allocate less than the planned level of 31 men in the job’s final period to enable the job to complete at the end of its final period. If the full 31 men are allocated, the job will complete well before the end of the period, and additional labour costs will be incurred until the period end. Since there is only 0.7% of the job left to complete, the labour level required is 0.7% of the total labour (207), or 1.45 operatives, which is rounded up to 2 men, well short of the planned level of 31. Key Point(s) The strategy adopted above will work well unless other factors once more affect the effectiveness of the labour allocated, such as delays caused by random events, which is discussed in the Key Points section.

7. Completing Jobs Early If the planned level of 31 men had been allocated, the job would have completed very early in the period, as shown in the Management consultant's report. This would have resulted in :-  An increase in costs as labour was retained until the end of period, incurring 165,656 additional labour costs, and a significant amount of unnecessary site administration costs  Inefficient use of labour that could have been used elsewhere

8. Completing Jobs Early It is unlikely that any job will be progressed exactly in line with the planned progress, even if that is the intention. There are numerous reasons for this, including :-  Job delays  Changes in anticipated productivity levels due to the expertise of the project manager on the site  A job may have been overmanned to try and complete it early, making the planned progress figures redundant Bearing this in mind, if a job is likely to complete in the current period, great care has to be taken in setting the correct level of labour to ensure that the job finishes as near to the end of the period as possible. If a job finishes too early in the period :-  The workforce is retained until the end of the period, incurring unnecessary additional costs  Excess labour is being used on the site that could have been utilised elsewhere In the anticipated final period of a job, you can ignore the planned labour level, and concentrate instead on the % of the job left to complete.