Monday 19 June 2023

Challenges and Solutions in Improving Project Management in the Construction Industry


Project Management

Compared with international engineering project management, the overall level of project management is far from that, and there is still a big gap between it and international standards. For example, compared with domestic construction enterprises, foreign construction enterprises generally have strong engineering contracting capabilities, strong capital, advanced technology and reasonable mechanisms; USA's project management methods have not been well applied, that is, investment control, schedule control, quality control, contract management methods and dynamic control principles have not been fully applied.

At this stage in USA, whether it is the owner or the construction market, all parties involved can not fully adapt to the use of project management mode, so a variety of project management methods have been formed. For example, for a single construction project, the investor sets up its own team and hires personnel to carry out project management; Some owners leave the project entirely to a project management company; A small number of owners choose several professional companies to form a project management team and other project management models. 


These project management methods have shortcomings, cannot adapt to the development of market economy, do not meet the requirements of international practices, and therefore are difficult to compete with international construction enterprises.

First, the analysis of the reasons for the problems in project management

(1) The target positioning of the enterprise and the project is confused

Due to the constraints of the project manager department, the project is aimed at reducing costs, and the company, as the headquarters of the group company, aims to maximize value. However, at present, some project managers are inconsistent with the company's target positioning, and only aim at the interests of the department. 

When there is a conflict between the project and the interests of the enterprise, the project always wants to retain more profits, and tries to become a micro-enterprise and become an "enterprise" in the enterprise; Project personnel should be responsible for their own profits and losses, but they borrow costs to transfer corporate profits, which actually becomes a win-win or loss-over-loss; The project manager department is not authorized to operate and create more profits for the enterprise, but decentralizes management and tries to compete with the group center.

(2) The project cost accounting is not scientific, and the concept of cost control system is not strong

The cost requirements of the project should be "volume and price separation, cost segmentation, comparison control, and correct review". 



However, at present, there is no standardized and scientific division basis and principle for the cost accounting of projects, and the cost accounting of projects is often the budget fixed cost and experience estimation cost. At the same time, although the vast majority of construction enterprises have a deep understanding of the significance of cost control and have their own set of methods, the system control concept of full participation, comprehensive and whole-process control is not strong, and it is still in the stage of plugging loopholes, that is, there are loopholes such as equipment procurement and engineering subcontracting.

(3) The project contract management is not standardized

The irregularity of project contract management is mainly manifested in two aspects: First, the awareness of contract management is weak. Many construction enterprises do not have a contract management department, lack a feasible and effective contract management system and specific operating procedures, and cannot effectively supervise the whole process of contract from signing to performance. 


Second, the contract management system is not perfect. Some enterprises lack a rigorous contract management system, and the whole process of contract review, signing, performance, modification, suspension or termination, rescission and contract supervision and assessment has not been systematic, standardized and scientific.

(4) The project manager lacks talents, and the project team lacks cohesion and combat effectiveness

At present, the age of first-level project managers of construction enterprises is generally aging, and the reserve resources of second- and third-level project managers are small, and follow-up forces need to be replenished. Some project managers lack basic knowledge of project management, have weak technical awareness, legal awareness, quality awareness, and safety awareness, and regard being able to speak well as a unique skill. Some project managers have weak team awareness, excessive desire for power, serious personal heroism, and engaging in "independent kingdoms", which seriously dampens the enthusiasm and creativity of employees.

(5) The innovation awareness of the project department is weak

Some project departments have a poor sense of innovation, and to a certain extent, there is a tendency to emphasize scale, seize speed, blindly lay out stalls, and underestimate efficiency, often emphasizing technological improvement and technological innovation, attaching importance to the introduction and updating of technical equipment in the introduction of technology, and underestimating the digestion and absorption of soft technology and independent innovation. 


Since in the initial stage of project management, the project department still has many administrative colors under the planned economy system, such as cross-project management, resulting in the occurrence of events that lead to unclear profit and loss status of individual projects, which also requires the project department to innovate. 


Some construction enterprises have outdated systems, and to varying degrees there are problems such as unclear property rights structure, rigid organizational structure, and effective incentives that have not yet been established, which will cause the outdated thinking of the project department of construction enterprises and seriously hinder the development of construction enterprises.

2. Measures to improve and improve the project management of construction enterprises

(1) Strengthen cost accounting and cost control of project management

First of all, adhere to the business strategy of "supporting price by cost and winning the market with price", establish the concept of market cost, and scientifically and accurately predict the target cost of the project on the basis of the price in the construction contract on the basis of careful analysis of the "Engineering Contract". 


The second is to comprehensively implement responsibility cost management and establish the cost concept of all employees, such as controlling business trips, streamlining meetings, strictly controlling travel expenses and hospitality expenses, and strictly controlling various budgetary expenditures and extrabudgetary expenditures. 


The third is to strengthen the management of materials, materials and equipment, implement open bidding or competitive procurement for major materials, implement centralized procurement of bulk materials, and establish qualified suppliers for sporadic materials. The fourth is to attach importance to the control of funds, and establish and improve the internal control mechanism of project fund management. 


The fifth is to establish a regular cost analysis system. Before starting construction, the budget cost and the profit and loss factors of winning the bid should be prepared first, the management focus should be clarified, and corresponding countermeasures should be formulated; During the construction process, the cost of the unit project and the budget cost are compared and analyzed on a quarterly or monthly basis, so that the loss factor is always in a controllable state; After the completion of the unit project, the profit and loss analysis should be carried out through the final account to summarize the lessons learned.

(2) Strengthen contract management and strengthen contract awareness

The management of the contract shall be uniformly owned by the construction company, and the project department shall not sign the "Construction Project Construction Contract" and the construction machinery and equipment purchase contract on its own. 


The external subcontract must be submitted to the construction company for approval, the project department signs the contract and strictly performs the contract, and the company regularly inspects and supervises the performance and modification of the external subcontract; Clearance contracts, material procurement contracts, machine and equipment leasing contracts, agreements, etc. are signed and implemented by the project department. 


The company monitors, strengthens the sense of contract, establishes an internal simulated market mechanism, and while strengthening the cooperation and alliance between various professional branches (subsidiaries) within the company, the general contracting unit and the subcontracting unit must sign an internal engineering subcontract to clarify the responsibilities, rights and obligations of both parties, bind their respective behaviors in the form of contracts, and strictly perform the contract.

(3) Improve the level of project managers and establish a high-quality project management team

(1) Strengthen project management knowledge training and popularize project management knowledge.

Establish and improve the regular training system for project managers, and strengthen the follow-up education and training of project managers; Establish and improve the regular training system for key positions and special types of workers, strictly implement the training and hold certificates to work, and put an end to the phenomenon of unlicensed work; Pay attention to improving the qualifications of project managers in practical exercises, and continuously improve the comprehensive quality level of project management personnel.

(2) Fair competition, merit-based recruitment, and good use of project managers

When selecting project managers, under the framework of relevant laws and regulations such as national engineering project management and practice qualification system, enterprises adhere to the principle of "openness, merit selection and democracy", and select those talents with good thinking, correct style, technical understanding and management as project managers through self-recommendation, recruitment, assessment and other forms, only in this way can truly qualified talents be appointed to the position of project manager.

(3) Improve the incentive and constraint mechanism, trust, support and support the project manager.

In the whole process of project operation, as an enterprise leader, you should fully trust and support the project manager, so that "doubtful people do not need to be used, and people are not doubtful"; The project manager should be fully delegated to the project manager in accordance with the project management operation mechanism, and fully coordinated and supported in the external environment; At the same time, it is necessary to master the incentive mechanism, fulfill the promise of rewards and punishments in a timely manner, and motivate the project manager to concentrate on project management from the perspective of benefits.

(4) The construction project manager department should reasonably set up departments and allocate personnel

The construction project manager department should set up departments and allocate personnel according to dynamic optimization, so that a person with multiple skills can move to a leadership position. The management personnel of the project department should be reasonably combined and effectively flowed between projects according to the different characteristics of the project and the requirements of different stages, implement a mechanism combining dispatch and employment, and reasonably combine according to the size of the project and the personality, specialties, management skills and other factors of the management personnel.


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