MANAGEMENT INFORMATION SYSTEM
FOR A GRADE-1 BUILDING CONTRACTOR
by
M. VUAYANANDHA
DEPARTMENT OF CIVIL ENGINEERING
UNIVERSITY OF MORATUWA
MORATUWA, SRI LANKA
MANAGEMENT INFORMATION SYSTEM
FOR A GRADE-1 BUILDING CONTRACTOR
by
M. VUAYANANDHA
A PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT OF
T H E REQUIREMENTS FOR T H E D E G R E E OF MASTER OF
ENGINEERING IN CONSTRUCTION M A N A G E M E N T
JULY 1995 67^7^
Supervised by Mr. JUSTIN D E SILVA
Coll.
624 "95"
69.oo3
DEPARTMENT OF CIVIL ENGINEERING
FACULTY OF ENGINEERING
UNIVERSITY OF MORATUWA
67990
ABSTRACT
This report is the outcome of a study carried out
to evaluate the Management Information Systems used
by Local Contractors, with grade I l i s t i n g ,
registered with the Institute for Construction
Training and Development (ICTAD), with the aim of
improving same to enhance their Planning and
Progress Control functions, after identifying the
probable flaws.
The Construction Industry in Sri Lanka encounters
much greater challenges today than anticipated a
decade ago, due to factors such as shortage of
resources, more stringent regulations and controls,
rapidly changing technologies, very heavy
competition and high social demands. This
necessitates a dynamic and efficient Construction
Management System through which quick and accurate
decisions could be taken by the Top Management.
Planning and Progress Control are two key functions
of any Construction Management System, which to a
great extend depend on accurate data and smooth
flow of information.
The survey carried out and interviews conducted
during this study revealed that Data Management and
Flow of Information were the two main problems
identified by the local contractors, which were
affecting their Planning and Progress Control
func t i o n s .
I
Therefore, i t was decided to carry out a case study
using a model construction organization, identify
the problems in their Management Information System
that are affecting the Planning and Progress
Control functions, obtain the current practices of
similar organizations in the industry by way of
questionnaire surveys, and, recommend remedial
measures for this organization using these data and
others collected from Literature surveys.
The major findings of this study ares-
fa) Lack of a data base.
(b) Inability to retrieve appropriate
information.
(c) Ineffective information system
(d) Lack of a division, to co-ordinate the
flow of information, and to analyze the
collected data.
(e) Poor analysis of information.
(f) Lack of appropriate and timely corrective
ac t i o n s .
(g) Very poor control on performance.
Though the above findings are specific to the model
organization, a similar study of another
organization would lead to identifying its specific
problems in the information system so that remedies
could be sought to improve their Planning and
Progress Control functions.
II
For any information system to be effective and
successful, i t should be an integrated Man/Machine
system for providing information to support the
operation, management and decision making functions
in an' Organization. It should u t i l i z e computer
hardware and software, manual procedures,
management and decision models, and a data base.
(Davies, 1974)
The flow charts proposed for the model organization
using the existing functional units are shown in
figures 1 and 2 in the next two pages. Figure 1
shows the procedures recommended for Pre-Tender
stage and figure 2 covers the Post Tender
procedures. By entrusting specific responsibilities
to the already defined divisions in this
organization, i t is passible to get the system
operating effectively and successfully, without
over stressing any one • unit, and thereby improve
the Planning a Progress Control capabilities.
Ill
PLANING f, PROGRES8 QUANTITY SURVEYING FINANCE/
DIRECTORATE , CONTROL & CONSTRUCTION ADMINISTRATION
ESTIMATING
COLLECT
TENDER
DOCUMENT8
SELECT TEAM FOR TENDER
8TUDY TENDER DOCUMENT8
8END OUT ENQUIRIES VI8IT 8ITE
OBTAIN CLARIFICATIONS
ATTEND PRE-TENDER MEETING
\/_
WORK OUT METHOD OF CONSTRUCTION OPTIOH8
CARRY OUT
8CIIEDULE FEEDBACK BASIC PRICING
3L
\1/
MEET TO DECIDE METHOD OF CONSTRUCTION/ SUB CONTRACTORS/ 6UPPLERB/ MARK UP ETC.
\ /
PREPARE PROGRAMME PRICE TENDER
V \ /
PREPARE
PREPARE CASH FLOW RESOURCE
SCHEDULES'
\ /
PREPARE 8ITE PREPARE
ORGANIZATION TENDER
SUMMARY
JUL
OBTAIN BOND8 AND GURANTEE8
EVALUATE TENDER
1 (illMMARY & MAKE
UlNAL ADJUSTMENTS
V
WRAP UP TENDER
SUBMIT TENDER
FLOW CHART FOR PRE TENDER PROCEDURES
RECORD & ANALYZE RECOMMENDED FOR THE MODEL ORGANIZATION.
TENDER RESULTS
FIGURE 1
QUANTITY SUfTVEYItlO PLANING & PROGRESS FINANCE/
DIRECTORATE » CONTROL CONSTRUCTION ADMINISTRATION
ESTIMATING
\
nECEIPT 0F LETTER
OF AWARD
V
COLLECTION OF TENDER OOCUMEHTB/
CONSTRUCTION DOCUMENTS
OBTAIN BONDS/OUnANIEEB/ INSURANCE; ESTABLISH JOB NO.
BELEOT PROJECT STAFF/ SUB COPNTTTACTORS
TAKE OVERBITE
Jl.
STUDY
COHBmUOTKJN
DOCUMENTS
OICUBB * FINALIZE METHOD OF OONBTTTUOTION
VI/
MODIFY/ PREPARE
WORKING
PROGRAMME
PREPARE RESOURCE SCHEDULES A INFORM
RELEVEN T 8ECTTONS
\/_
NEGOTIATE WITH SUPPLIERS/SUBCONTRACTORS
I
AO REE ON PROGRAMMES/ SCHEDULES
INFORM SITE OF
AGREEMENTS
REACHED
\(_
FURNISH OATA USED IN TENDER T O SITE
COMMENCE
.CONSTRUCTION
3 l
OBTAIN REGULAR FEEOBACK FROM BITE
ON RESOURCE UTILISATION/ OUTPUT/
EXTnA WORK/ VARIATIONS
V
COMPARE ACTUAL
PERFORMANCE WITH
PLANNEO PROQREE8
&
CHECK DEVIATIONS
ANALYSE AND
DETERMINE PROBABLE
CAUSES
INFORM DIRECTORATE
PROJECTS STATUS;
PROBLEMS/ REMEDIAL
ACTIONS PROPOSED
OBTAIN RUUNQ FROM DIRECTORATE
NOTIFY BITE ANO IMPLEMENT CORRECTIVE ACTIONS
FLOW CHART FOR POST TENDER PROCEDURES
RECOMMENDEO FOR THE MODEL ORGANIZATION.
FIGURE a
ACKNOWLEDGEMENT
I am e x t r e m e l y g r a t e f u l to the Management of T u d a w e Brothers
Limited for r e l e a s i n g me to follow this c o u r s e of study,
inspite of the c o n s e q u e n c e s to the Company, and g r a n t i n g me
an o p p o r t u n i t y to m a k e my c o n t r i b u t i o n , atleast in a small
way, to the C o n s t r u c t i o n Industry.
My sincere t h a n k s are also due specially to the M a n a g i n g
Director and D i r e c t o r , F i n a n c e and A d m i n i s t r a t i o n of T u d a w e
Brothers Limited for g r a n t i n g me a free access to every
information I required to m a k e this study a s u c c e s s .
This study w o u l d not h a v e been p o s s i b l e if not for the
valuable guidance and the leadership on the d i r e c t i o n s of
research p r o v i d e d b y the research s u p e r v i s o r M r . Justin De
Silva. I wish to express my sincere g r a t i t u d e to him as
well.
My c o l l e a g u e s in the industry, who w i l l i n g l y p e r m i t t e d me to
pick their b r a i n s and e x p e r i e n c e s , too cannot b e ignored at
this juncture. Every bit of information c o l l e c t e d at the
discussions and meetings held with them, has made its
contribution in f o r m u l a t i n g the p r o p o s e d i m p r o v e m e n t s . As
they did not w i s h to be identified, I take this o p p o r t u n i t y
to thank e v e r y one of them for their v a l u a b l e c o n t r i b u t i o n s .
I should also thank my colleagues working abroad, in
international C o n t r a c t i n g Firms for their c o n t r i b u t i o n s by
sending v a r i o u s formats and systems adopted by t h o s e firms,
in r e s p o n s e to my r e q u e s t s , which were h e l p f u l in d e v e l o p i n g
the formats p r o p o s e d .
Finally, my t h a n k s go to each and every m e m b e r of staff at
T u d a w e B r o t h e r s Ltd. for accommodating my i n t e r v i e w s during
their b u s y s c h e d u l e s and assisting me in every p o s s i b l e way
to s u c c e s s f u l l y c o n c l u d e my study and p r o d u c e this r e p o r t .
•r
VI
CONTENTS
PAGE NO.
Chapter 1.0 - Introduction
1.1 Importance of Data Collection and Flow of
Information 01
1.2 Background 04
1.3 Objectives 09
1.4 Methodology 10
1.5 Achievements 11
Chapter 2.0 - MIS for Planning and Progress Control
2.1 Management Information System (MIS) 14
2.2 Planning and Control 17
2.3 Questionnaire Survey 19
2.3.1 Need for a Survey of the local Construction
Industry 19
2.3.2 Development of the Questionnaire 19
2.3.3 Questionnaire Survey Procedure and Response 20
2.4 Problems identified from the Questionnaire
Survey 21
2.5 I n f e r e n c e s made f r o m t h e feedback received
for the Questionnaire 23
Chapter 3.0 - Study of t h e p r e s e n t Data Management
System and i d e n t i f i c a t i o n o f a r e a s for
improvement
3.1 Introduction to the Organization selected for
Case S t u d y 25
3.2 Operation of Divisions and identification of
problems 26
3.2.1 Tendering Department 26
3.2.1.1 Tendering Policy 26
VII
PAGE N O .
3.2.2 Planning and Progress Control Department 29
3.2.2.1 Pre Tender Planning 29
3.2.2.2 Post Tender Planning 30
3.2.2.3 Progress Control 32
3.2.3 Purchasing Department 33
3.2.4 Stores 36
Chapter 4.0 — Improvements proposed -
Pre—Construetion Phase
4.1 Proposed Improvement to Tendering Department 37
4.1.1 Proposed Tendering Policy 37
4.1.1.1 Problems in the Present System 37
4.1.1.2 Suggested selection criteria 39
4.1.2 Recording tender results 46
4.1.3 Tender Department Staff 47
4.2 Proposals for Systematic Approach to Tendering 49
4.2.1 Extracting Data, Distributing Work, and
Preparing Tenders 49
4.2.2 Planning at Tender Stage 57
4.2.2.1 Preparation of Construction Plan 59
4.2.2.2 Preparation of Resource Schedule 62
4.2.2.3 Preparation of Cashflow Forecast 64
4.2.3 Use of Computers in Estimating 67
VII I
PAGE NO.
Chapter 5.0 Improvements Proposed —
Construction Phase
5.1 Planning Division 71
5.1.1 Liaison with Construction Division 71
5.1.2 Liaison with Purchasing Division/Stores 73
5.1.3 Liaison with Plant & Equipment Division 74
5.1.4 Liaison with Finance Division 75
5.2 Progress Control Divison 76
5.2.1 Progress Report proposed on major
projects t o Management 76
5.2.2 Data Required f o r the proposed Progress
R e p o r t and methods p r o p o s e d for
c o l l e c t i o n of such data 77
5.2.2.1 Job No./Project Name 77
5.2.2.2 Duration 78
5.2.2.3 Average Mark-up 78
5.2.2.4 Physical Progress 79
5.2.2.5 Financial Progress 81
5.2.2.6 Project Cost 83
5.2.2.6.1 Proposed Improvements to the
Costing System 86
5.2.2.7 Remedial action and follow up 89
5.2.3 R e c o r d s r e c o m m e n d e d t o be m a i n t a i n e d
a t s i t e s and f e e d back c a l l e d for 89
Chapter 6.0 - Conclusions and Recommendations
6.1 Conelusion 95
6.1.1 Tender Stage 95
6.1.2 Construction Stage 96
IX
6.2 Recommendations 98
6.2.1 Tender Stage 98
6.2.2 Construction Stage 99
6.3 Suggestions for future research 102
References 105
ANNEXATIONS PAGE NO.
I] Flow Chart of Project Control System 106
2] Questionnaire forwarded to selected Grade-I Local
Contrctors 107
3] Questionnaire Survey Conclusions 115
4] Organization Structure of Tudawe Brothers Ltd. 118
5] Information on New Tender being priced 119
6] Allocation of Responsibilities - New Tender 120
7] Site Visit Report 121
8] Flow Chart for determining the cost in estimating 124
9] Data Form for Bid Bond 125
10] Tender Summary 126
I I ] Typical Bar Chart with Resources 127
12] Resource Schedule Format 128
13] Cashflow Forecast Format 129
14] Materials Schedule for Purchasing Division/
Stores 130
15] Plant & Equipment Schedule 131
16] Progress Report Format for Management 132
17] Physical Planned Progress Comparison Sheet 133
18] Cost Comparison Sheet of Projects 134
19] Plant Hire Rates 135
X
PAGE NO.
20] Plant Usage Records from sites 136
21] Construction Accessories Hire Charges 137
22] Documents maintained at sites 138
23] Work Record Sheet 139
24] Record of Work Executed 140
25] Day Works - Costing Sheet 141
26] Summary of Claims - Extra Works 142
27] Summary of Claims - Variations 143
28] Requisition Forms for Site Stores 144
29] Resource Allocation Sheet 145
30] Planned and Actual Performance
Comparision Sheet 146
31] Materials Reconciliation Format 147
XI
