Commercial Management of Project - Example

Commercial management of project Name: Institution: Date: Assumptions Increased labor As a result of the preparations that may need to be done on the by the company it may require the management to increase the number of workers so as to ensure that the job is done faster and more effectively. Research For the company to be more effective in the project it will need to ensure that it has all the valuable information about the project which will increase its chances of success. Therefore gathering this information may require some experiments to be done and some materials may be needed together with some professional services all of which will cost the company. Travelling and accommodation costs In the process of making the deal I may need to spend some money to entertain the potential client while I go over important information about the project with him. This may be in the form of travelling accommodation and even in some cases there may costs from having lunch with the customer and dinner. Architect fee The architect’s fee should also be highlighted in the project account at the end of the financial year since the architect sent the invoice in June and money had to be allocated to ensure that his fee is covered. Salaries and wages In the process of project planning and research we are going to require a lot of man power to help with the project and this people will need to be paid. Therefore their salaries and wages should be reflected in the project accounts at the end of the financial year so as to show how the money got spent. Improving the drainage This is going to be a cost that will have to be reflected on the project accounts however as we can see that the total amount estimated for the cost was amounting to 350000 dollars but the company paid to do the job did 120000 dollars’ worth of work therefore in the year ending 30 June the amount to be reflected on the project accounts will be 120000 dollars. Materials This are the items to be used in the project. In order to carry out this project some tools and materials are going to be needed for by the company to complete it successfully and since this items are going to be bought the company will have to indicate their costs in the final project accounts of the company. Labor is among the most important things that are going to be required in the project therefore to ensure that the job is carried out in the amount of time that has been estimated the company needs to hire employees to do the job and finish it before the deadline. Labor consists of the project manager, project team, the engineer and the construction workers. This are the people who will work to ensure that the project is a success and it is effectively done. However, labor costs money and due to this it causes there to be an effect in the cash flow of the company. Since labor is costs are like debt to the company therefore the company has to ensure that the monthly salaries and wages have been covered before they can be able to make any other had decisions which require their finances[Jen79]. The materials and other cost will also affect the cash flow negatively since the company is going to spend money with the aim of gaining the necessary tools that are required to ensure that the projects is finished. The accounting method that the company will use to determine the costs of inventory directly affects the cash flow. However some of the materials maybe considered as assets and they may lead to the increase of the company’s capital and resources. This includes the materials like the machines that are going to be purchased to carry out some of the activities that are going to ensure the project is successfully completed[Dev90]. Improving on the drainage is viewed as a liability to the company and hence it will affect the company’s cash flow negatively. This is due to the fact that while the company will be trying to improve on the drainage it will need to use money in order to ensure that the drainage is up to standard. This will subsequently lead to the company spending its money leading to a negative effect on the cash flow of the firm. The improvement of this drainage will need to be done by another firm that specializes in this area of expertise therefore resort life development project company will need to spend money to hire these companies to help them with the drainage issue. This is why it has a negative effect on the cash flow since the firm is losing money. The Architect fee is also going to affect the cash flow negatively since the firm will have to part with a lot of money to ensure that the architects are properly chartered for and they are present to ensure that the project is done. The architect fee is listed under salaries and wages and this too affects the firm’s cash flow negatively since it is money that the firm is giving out. The architects are paid a significant amount of money to do their job and it depends on the project that they are doing some of them they may charge more than the others. The fee they charge therefore can be seen to have a negative effect on the cash flow of the firm since the firm is losing money. One of the work packages that I will require the sub-contractors for would be the substructure and the underground drainage. Substructures mean the work below underside of screed or where there is no screed. This includes the under siding of the lowest floor including the damp-proof membrane with the relevant foundations required. This is important as the substructure transfers the weight of the building to the ground and isolates it horizontally from the ground[Tho10]. There is also the work package on the superstructure which includes the frame, the upper floors, roof, external walls, windows, doors, internal walls, hatches and other openings. A broader definition would simply be all the work above the ground level which can also be termed as very ambiguous. Therefore to ensure that the superstructure is done to the required standard we would have to hire sub-contractors for that job. Another work package that would need the help of sub-contractors would be the cladding of the building. Cladding can be described as the visible or external finish of a building like the roofs and the external walls. It is a process of pre-fabricating the panels that are attached to the structural frame of the building. The systems to be used in this process are normally purchased of the shelf. This is another important and major area that we would require to hire sub-contractors who will help in doing the job. The best comprehensive strategy to be used by the company would be to use the supplier optimization strategy. This is whereby the company will choose an optimum mixture of sub-contractors who may be able to provide the best prices and terms for their services. This will therefore mean that the less able sub-contractors who may have trouble providing quality services at the terms and the price required are going to be done away with. Therefore the company will be left with able sub-contractors who are able to meet the terms that the firm has set in place[Bri04]. In order to identify the most suitable contractors to do the job there are some requirements that one needs to look at in order to ensure that he or she has selected the right sub-contractors for the job. This means people who can deliver at the specified time and at the specified terms. Some of the criteria to use for this are first and foremost before you hire a sub-contractor he or she should be licensed, bonded and insured. A good sub-contractor should be licensed in the state where they are operating and should be insured in order to cover the liability. The risk of an uninsured sub-contractor is the fact that he or she might leave you to pay the bill after he or she has damaged your property[Kiv08]. Another criteria to use would be to ensure that the contractor has a good safety record. This is done by carrying research on them and even going ahead to check with the organizations that keep track of the contractors. If the contractor has a lot of injury cases while on the job then it would not be wise to trust them with your own safety. The other criterion that is very important is the fact that the sub-contractor should meet the provision of in-house engineering and interior design. This is because if this is not the case then you might end up dealing with two or more companies that are working on the same project there increasing the cost of the project when it would have been possible to save by finding a sub-contractor that is conversant with everything. The final criteria that I would look at is whether or not the sub-contractors offer an extended service agreement. This is due to the fact that if for some reason one does not have the service agreement then it would mean that he or she is going to be paying for the maintenance and servicing from the beginning to the end. This agreement is also important since it acts as a sense of security since it will show that the sub-contractor has faith the work they do. Key performance indicators assist the firm to define and to measure the progress they are making towards their goals and objectives. Once we have analyzed our mission we will need to have a measure of progress towards these goals hence the key performance indicators will act like measurement tools. In this case there needs to be some key performance indicators so that we can be able to measure the performance of the sub-contractors who are going to be hired. The first one is the service quality. In this case we shall look at the quality of service that the sub-contractor offers and we shall try to find out whether the services are of a good or poor quality. Looking at the type of quality will ensure that we are able to analyze the performance of the sub-contractors fully[Par15]. Another key performance indicator that would be important to add would be utilizing the material scrap. This is because we will minimize the cost while at the same time reducing the waste. This metric for measuring and controlling material scrap is very suitable in performance measures for the sub-contractors. A product defect rate metric will also be established to minimize the costs and reduce waste while at the same time controlling the product defects. This means that the buildings will be analyzed for any defects which is also a good way to keep tabs on the sub- contractor’s performance. It will also help alleviate the product defects which result in wasted costs for the personnel and the equipment and it also leads to wastage of time. We can also establish another metric known as the shear strength metric whereby the structure is tested for its weakness by adding some loads to it and trying to ensure that the building is strong enough and that it cannot collapse when it is subjected to harsh environments. The strength of the building can also be determine by inspecting the foundation of the building and trying to see whether there are any defaults in the building which can cause problems in the future which can be very dangerous to the people residing in the building. The main lessons that I have learnt from the millennium stadium project is the importance of having a good project management plan that will be used in the project at hand. This is because in the project planning the management plan is designed to help in ensuring that some problems have been dealt with. Some of the problems that are solved are problems of lack of stockholder engagement. The lack of communication between the management staff and the subordinate staff which is a very dangerous thing that can affect the performance of a firm. Another one is the lack of clear roles and responsibilities between the workers and the management. I also learnt that it is very important for there to be detailed planning of the project activities by breaking them down into the components and sub-components to produce a product or service that is of a high quality and at the right amount of time. I learnt that it is also important to ensure that you use metrics to keep tabs on the performance of the workers in the firm. This metrics enable you to rule out those workers that are not going to be able to deliver what you want and try to make sure that you choose workers that are going to deliver the right quality and quantity of work with the required terms and at the right time. It is also very important to try and ensure that you evaluate the types of contractors that you hire to do the job for you and I learnt the main things I should look for when hiring a contractor for a project that I have. These attributes and qualifications are important to ensure that nothing goes wrong in the project and that everything is completed in time. I also learnt the importance of ensuring that the company has recorded all the costs that have been allocated to the project which is very important in ensuring that the progress of the company has been documented and ensuring that the firm’s funds have been properly utilized in the project. Therefore in my company I would like to enforce the culture of ensuring that the workers are followed up and they are properly analyzed to ensure that the work they have has been properly done. The suitable local conditions for ensuring that there is a suitable tendering process would be to wait for a project to be completely analyzed and measured to ensure that the materials and the workers are ready for the project[Bac96]. Since when hiring the sub-contractors the prime contractors takes a lot into consideration it is therefore fair that during the process of completing the project the prime contractor should try as much as possible to ensure that the client visibility to the sub-contractors is maximum. This means that within the course of completing the project the prime contractor should give full coverage of the information of the sub-contractors to the client so that they can be able to be conversant with the people who are working on their project. This means that the appropriate time is to immediately provide the clients with the information on the sub-contractors since they may also have some input on the matter[Sau04]. The most suitable conditions for a contract that I would want to work on would be a contract whereby the weather conditions are a place where the soil is good for the foundation of the building. The foundation is the strongest part of the building therefore it determines how strong the building will be and if the foundation is not strong enough then the building will not be up to standard. Therefore the main issue that we should look at before we build a building is whether or not the drainage is okay. A good drainage ensures that the foundation is going to be strong since there is not going to be any water disturbances ensuring that a strong foundation has been established. Therefore I would check on the soil type to ensure what type of foundation is suitable to be built on that soil. I would also ensure that the rocks present in the site are stripped back and levelled off so that it can be possible to build from. Rocks may be impervious therefore it becomes necessary for the top soil to have a good drainage capacity. This are some of the important conditions that I would take into consideration first before I begin the project. There are different methods of contracting which include; the sealed bidding this is where there is a bid of a project that has clear, complete and accurate terms and conditions that are placed on the project so that those contractors that thin they can deliver can bid for the project and the one that comes up with the best proposal wins the project. In other cases when the contract needs or requires a high technical product or service then the best method of contracting would be to have a contract negotiation whereby I would request what I need and I would accept proposals from the sub-contractors after which I would consider some of them and invite the sub-contractors for further negotiations concerning the project. From here then I can choose the person that will be most suitable to complete the project at the required time and at the required rate. This shows that in order to be able to have a good contract with the sub-contractors that will be successful one needs to carefully consider who he or she is giving the responsibility of carrying out the contract. In this case I would ensure that I give the contract to the right person so that the project becomes a success and it moves on smoothly. Bibliography Jen79: , (Jensen, 1979), Dev90: , (Devereux & Schiantarelli, 1990), Tho10: , (Thomas & Tang, 2010), Bri04: , (Briscoe, et al., 2004), Kiv08: , (Kivrak, et al., 2008), Par15: , (Parmenter, 2015), Bac96: , (Baccarini, 1996), Sau04: , (Saunders & Wynn, 2004), Read More