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Looking for Innovative ways to
Manage Projects During the
Global Financial Crisis
Dr. Abdulaziz A Bubshait
Dean, College of Environmental Design
Chairman, Department of Construction Engineering &
Management (A)
King Fahd University of Petroleum & Minerals
Dhahran, Saudi Arabia
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Presentation outlines
• Definitions
• Financial Status & the Present
Conditions
• Innovative Ways to Manage Projects
• VICTORY Model
• Closing Remarks
2
Values of Capital Projects
in Arabian Gulf countries 2008-2013
Company/Country/Region
Value of Capital Projects
Kingdom of Saudi Arabia
$675 Billion
Rest of Gulf Region
$2.225 Trillion
Total Value of Capital
Projects
$2.9 Trillion
October 20, 2008
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?
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Changes
What is the effect of Global financial crisis on
construction industry?
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Economical Impacts
Jan 2005- Dec 2008
Oil prices:
$40-$ 147-$60
Many Mega Projects
High development rate
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Economical Impacts
Jan 2005- Dec 2008
World Economical Recession
Reduction of 58% in the value of Dollars
Inflation rate 10.4% (April 2008 SA), 13.8% Qatar
Inflation control Recession control
High cost of Construction Materials (prices 250% up)
Scarcity of Engineers/Skilled Labor  Glut of workers
Escalation of lands Prices (200-300%)decline in
prices
What is the Effect of Rapid Changes
on construction Industry
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October, 2008
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•
•
•
•
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Where are we heading to?
Projects cancellation?
Projects Delay?
Difficulties in Project Financing?
Cost/Budget overrun?
Quality?
Bankrupts/ Projects failure?
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Integration
Time
Scope
Cost
Project
Management
Quality
Risk
Human
Resource
Procurement
Communications
Innovative Methods to manage
Projects
1.
2.
3.
4.
Effective utilization of Technologies
Contract Types/Risk Allocation
Quality Improvement
Victory Model
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Effective Utilization of Technology:
e-project Management
.
.
.
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Doha International Airport, Qatar
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Tools for Improvement
Project Management’s Value Practices
1.
2.
3.
4.
5.
6.
7.
Project Definition Rating Index (PDRI)
Schedule Optimization
Scope Control + Change Management
Constructability
Lessons Learned
Value Engineering
Benchmarking
22
CII Benchmarking System
When To Use Best Practices
Optimum Time
For Best Practices
HIGH
HIGH
DBSP
Proposal
Design
Procurement
Construction
Start-Up
LOW
LOW
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PROJECT PROGRESS
Min
Min
Types of Contracts
Lump Sum
Bill of Quantities
Owner's Flexibility
Owner’s Control
Lump Sum + Variation
Schedule of Rates
Cost + Fixed Fee
Max
Max
Cost + % Fee
Min
Max
Firm
Client‘s Risk
Contractor's Incentive to Perform
Client’s Project Definition
Max
Min
Changeable
Project Schedule Duration vs.
Type of Contract
Contract Type
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Engineering
Required
4
to Start
Construction
3
2
Construction
Start of
Construction
Project
Completion
1
Project Duration
1. Cost Reimbursable w / %Fee
2. Cost Reimbursable w / Fixed Fee
3. Cost Reimbursable w / Incentive
4. Guaranteed Maximum Price
5/23/2017
5. Lump-Sum Fixed Price
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“Continual Improvement”
Continual improvement is a permanent
objective of the organization.
Example of Innovative Project Management
• ُ
System:
CDPM
Project Management
+
Total Quality Management
=
Customer Driven Project Management
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CDPM Requires a T Q M
Environment
•
•
•
•
•
•
•
openness,
honesty,
trust,
communication,
involvement,
Ownerships
innovation
•
•
•
•
•
•
pride of workmanship
accomplishment
individuality
Creativity
strategic thinking, and
personal commitment to be
the "best.“
It must include the entire organization and be
shared by everyone in the organization.
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VICTORY
Environment focused on total customer satisfaction
Vision and the leadership to make it happen.
Involvement of everyone and everything.
Continuous improvement system.
Training and education.
Ownership.
Rewards and recognition.
Years of support and commitment.
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VICTORY
VICTORY
VICTORY
VICTORY
In Closing
CHANGE IS IMMINENT
• ENGINEER IT
• PREPARE FOR IT
• RESPOND TO IT
OTHERWISE
BE PREPARED TO
PAY FOR
IT