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Project Management for Construction: Labour, Material and Equipment Utilisation

Simply put, Project Management for construction is the art of directing and coordinating human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives of scope, cost, time, quality and participating objective.

What does CPM encompasses

CPM encompasses a set of defined objectives which may be accomplished by implementing a series of operations. The functions of CPM generally include:

1. Specifying the project objectives and plans including delineation of the scope, budgeting, scheduling, setting performance requirements and selecting project participants.

2. Maximising efficient resource utilisation through procurement of labour, materials and equipment according to the prescribed schedule and plan.

3. Implementing various operations through proper coordination and control of planning, design, estimating, contracting and construction in the entire process.

4. Developing effective communications and mechanisms for resolving conflicts among the various participants.

Particularly, good Project Management in construction rigorously pursues the effective utilisation of labour, material and equipment. This is because the three factors highly impact the construction project. In fact, improvement of labour productivity is a major and continual concern of those who are responsible for cost control of constructed facilities. Material handling (which includes procurement, inventory, shop fabrication and field servicing) requires special attention too for cost reduction. The effective utilisation of equipment is equally important for the construction project. Organisations which do not have good CPM in place are often forced out of the mainstream construction activities.

Importance of effective labour utilisation

Often, productivity in the construction industry is broadly defined as output per labour hour. Further, labour constitutes a large part of the construction cost. Hence, as a part of good CPM, it is very important to utilise the labour effectively.

Importance of effective material utilisation

Material management is also an important element in CPM and control. It is because materials represent a major expense in construction, so minimising procurement or purchase costs also assume major importance in CPM. In fact, poor materials management can result in large and unavoidable costs during construction.

Importance of effective construction equipment utilisation

Construction equipment also often affect the required amount of time and effort needed to complete a task and in turn, the job-site productivity of a project. It is therefore important for Construction Project Managers to be adequately familiar with the characteristics of the major types of equipment most commonly used in construction. The construction equipment also have a profound effect on the cost and productivity of construction activities as well as the methods used for construction itself. Thus, in order to increase job-site productivity, it is always beneficial to select equipment with proper characteristics and a size most suitable for the work conditions at a construction site. CPM focusses on this aspect too.

In a nutshell

The above mentioned three factors should be effectively coordinated by the Construction Project Managers to achieve an efficient construction process. This coordination may require involvement of both strategic decisions and tactical management in the field. Without coordination among these necessary inputs, the construction process will become inefficient or stop altogether. Hence, it can be easily concluded that effective CPM necessarily involves effective utilisation of labour, material and equipment as all of the three are responsible in making a construction project successful. As responsible organisation, you also need to employ CPM to get effective results.

Demand for Construction Equipment Increasing with Development

Few reasons for the same were a slow down in the infrastructure industry and various government policies that with restricting the growth of the industry.

The Modi government in the past 2 years has made signifiant changes in its policy and spending across sectors. The focus has shifted to developing infrastructure for bot residential and commercial purposes. Projects that were previously stuck in government offices have been restarted to kick start development of infrastructure in the country.

Keeping the recent policy and budget announcements in mind, the ICEMA (Indian Construction Equipment Management Association) has predicted that the construction equipment industry in India will grow almost double in size to US $5 Billion from the current US $2.8 Billion. The government has finally passed, approved and restarted projects worth 4 lakh crores adding to fuel to the fire of growth.

Infrastructure is one of the key drivers for the bull run of India’s economy. The government has finally realised it and has substantially increased spending on infrastructure to create a suitable environment for various industries and rural development. Out of the INR 31 Trillion required to be spent on infrastructure in India over a period of the next 5 years, 70% of it is required for power, roads and urban infrastructure segment.

Various projects like development of ports require development of infrastructure of amenities on the ports and of roads connecting the ports to various parts of the country. Similarly power is another sector that requires a growth in infrastructure to ensure a uniform power supply across the country. Keeping the urgent need for infrastructure in mind, the projects are put on steroids for timely completion to create it.

Roads are another major sector that has received major funding and approvals for development. Construction of industrial corridors for easier movement of goods across the nation require a substantial investment of man and machine over an extended period of time there by giving the construction equipment industry the much needed boost.

The over all growth and development of a nation’s economy eventually depends on the strength of its infrastructure. Given the state of things in India, the sector is in for a huge run of upward growth of infrastructure across various fields be it power, roads, railways, industrial corridors and zones, farming, irrigation etc. Growth of these individual sectors is highly dependent on the growth of favourable infrastructure and the growth of infrastructure is fundamentally dependent on the construction equipment industry, barring which the whole plan for growth fails at the very foundation.

So yes, keeping in mind that construction equipment are a fundamental necessity for development of infrastructure, it is safe to say that the demand for construction equipment is increasing and will keep on increasing with development.

Road Construction Machine Productivity

While multiple factors come into play when looking into productivity of road construction machines, one of the most important and at times overlooked factors is the maintenance of the machines. The machine causes problems more often due to its lack of maintenance and less due to genuine problems.

Here are some simple but effective things to keep in mind when looking into maintenance of the machines to increase their productivity.

1. Read the machine manufacturer’s specifications, instructions and maintenance tips to make the most of the machine.

2. Make sure you use correct grade clean fuels and oil as per the machine’s requirements.

3. Check oil levels, tease points and hydraulic fluid levels regularly.

4. Have maintenance contracts in place with a professional company that has a good track record working with the machines in your fleet.

5. The machines should only be handled by operators licensed to operate and maintain the machinery.

6. The pre checks should be done on the machines every morning to keep an eye out for possible problems and issues with the machine.

7. Similarly the machines should be checked for possible damage after a working day. Incase of signs of damage, the repairs should be do not promptly by an expert equipped to handle such situations.

8.Checking for unusual sounds and vibrations on a regular basis can help detect and solve problems in the bud.

9. Periodic maintenance is key in keeping the machines working at its optimal capacity.

10. Water, coolant, hydraulic fluid, gauges, fuel, exhaust, greasing on lubricated points, physical damage to the machine and its parts etc should be checked every 8 hours as a part of preventive maintenance measures.

11. 8, 60, 125, 250, 500, 1000 and 2000 hours are the intervals when the machines should be checked for continued maintenance of various parts of the machines to keep it working at optimal levels.

12. It usually helps to have all the machines in the road construction fleet to be manufactured by the same maker for ease of maintenance.

13. As part of maintenance procedures, the machines should be cleaned properly after use and stored in clean dry places with adequate protection form climate factors.

14. Adequate safety procedures should be followed when transporting the machines between various job sites and they should be checked before and after loading the machines for transport.

15. Maintenance and repair records should be maintained to keep track of the wear and tear of the machine.

16. Incase of part replacements make sure that original, good quality compatible parts are used. Using bad replacements might save money in the short term but will lead to losses in the longer run.

In conclusion periodic maintenance is a must and should be treated with its due importance to have the machines working at its full capacity to make sure you get the deserved returns for investing in the machines.

Growing the Construction Equipment Industry in India

While the last decade saw healthy growth in the ECE industry, the past few years have proven to be difficult with the industry being in a slump due to the slow down in the economy. However industry insiders believe that the long term prospects for the industry are good with an uptrend of CAGR growth of 20-25% over the next few years to come.

India is in dire need of a strong infrastructure to boost the economy and overall development of the country. Here is a brief overview of the infrastructure projects that will support the growth of the construction equipment in India.

  • Roads: The government has ambitious plans for developing the road network across the country. With stalled projects starting again, new tenders being awarded and having a couple of projects in the pipeline for construction of National highways, industrial corridors, state highways and rural roads will provide a huge boost to the ECE industry in India. 97000 crore is the budget allocated to the development of roads across the country in the 2016 Union Budget. Th increased spending will prove to be a steroid to the growth of the industry.
  • Airports: 160 airports across the country are be revived at a cost of 50-100 crore each, in addition to 10 non functional air strips with the Airport Authority of India (AAI). The revival of these airports will not just boost the connectivity across the country but also help revive the ECE industry from the slump and increase liquidity and cashflow in the market.
  • Smart Cities: 100smart cities are to be developed across the nation in addition to rejuvenation of 500 more cities. The budget allocated for construction of these cities is a total 0f 980 million INR. One can only imagine the boost that such spending on infrastructure will provide the ECE industry.
  • Railway: 400 A and A1 category stations have been identified for redevelopment and 1.21 lakh crores is the budget allocated to developing the railway infrastructure across India in the 2016 union budget.
  • Port development: US $ 10 billion is the budget allocated to development of new and existing ports across India. The existing ports are likely to be revamped and new one are set to have state of the art facilities in addition to transport corridors.
  • Solar Power projects: 21 new solar parks are to be commissioned in addition to the infrastructure that is to be built around the solar parks. and the transmission. Additionally transmission infrastructure also needs to be created for distribution of the electricity generated.

These are only some of the major projects that will jump start the growth of the ECE industry and keep it on a growing trajectory in the years to come. These projects will not only grow the industry in terms of size but also mandate growth terms of the quality and technology of the ECE being manufactured.

Boosting About Of Ece In India

Limited customer education with regards to its benefits, lack of rental, leasing and used equipment market, lack of government support, lack of execution discipline, lack of skilled manpower, lack of original replacement parts, tighter monetary policy for equipment financing, poor up time of construction equipment are amongst many of the factors restricting the much required growth in the use of ECE.

Lets take a look at what initiatives the government and private players can take to boost the use of ECE in India.

Government Initiatives

  • Incentivise: The government can incentivise the bidders for having good track records in terms of timely completion of projects and safety. Additionally penalties should be awarded for time line delays in completion of projects. It will drive the contractors to make higher use of ECE’s.
  • Support equipment renting and leasing: Equipment leasing should be classified as either a good or a service instead of both to do away with double taxation. It will make the option of leasing equipment much more attractive to the contractors. Equipment rental regulations need to be brought on par with global standards to ensure that authorised rental players have a better proportion and the unauthorised players competing solely on pace are weeded out. India has the lowest rental penetration amongst all the developing nations at 7-8%.
  • Taxation and registration: National registration of ECE should be mandated and the taxation should be standardised across the country. That way using ECE will become more attractive an option due to huge savings on RTO costs and easier movement of machines.
  • Finance options: Policies need to be up in place to make it easier for NBFC’s to make timely collection of payments, move against defaulters and receive tax compensation for bad debts. It will help improve the financing eco system and access to equipment financing.
  • Safety norms: Safety rules and guidelines on par with developed nations should be put in place and compliance should be made mandatory. Stringent norms will push for increased use of ECE.
  • Skill development: The government in collaboration with construction, material handling and earthmoving equipment manufacturers should develop a council and curriculum for skill development required by the evolving industry.

OEM Initiatives

  • Communicating with end users: The OEM’s need to be more proactive in communicating to the end user benefits, improvements and the proper way of using their machines in a timely manner.
  • Ease of finance: OEM’s can play an active role in making finance easy available and easer by getting into tie ups with finance institutions, starting their own finale arms and setting up dealerships with financing options. The easier it is to finance the equipment, the more use of ECE will increase.
  • Collaboration with component suppliers: OEM’s can explore risk sharing contracts with component suppliers to improve component quality and suppliers with capacity planning.

Be it construction equipment, material handling or earth moving heavy equipment manufacturers, they will need to take initiatives and proactively work with the government to boost the use of ECE in India and make the most of the growth space available.

Construction Equipment Sales in India

This would imply a US$16 billion-$21 billion market, up from today’s $3 billion,” states Indian Construction Equipment Manufacturers’ Association (ICEMA). The numbers are quite encouraging and call for the study of factors that would lead to such huge sales of CE in India.

Market overview of CE segment in India

To give a snapshot, the CE sector is one of the most important sectors of the economy which forms around 7-8 per cent of the GDP. Hence, the segment acts as a key driver for various infrastructure developments. Further, to create growth opportunities for various other industries in the economy, the sales of CE is bound to go up.

Reasons for increased sales in future

There are various reasons which would lead to increased CE sales in India

  • Infrastructure spending is expected to grow from 7.2 per cent of GDP in 2012 to 9 per cent by 2017. This is likely to increase the sales of equipment.
  • Growth in transportation sector is also expected to increase the demand and sales of CE.
  • Several initiatives of the government such as 98 Smart City Project and development of urban infrastructure including metro rail projects, port development, industrial corridor and dedicated freight corridor is likely to boost the CE demand and sales.
  • India will also see huge increase in mining operations in future and these mining operations will lead to a notable demand and sales.
  • In future, growth in population will also definitely lead to increase in demand for residential and commercial real estate projects, thereby, providing the opportunity for CE market growth.
  • Increased use of equipment in traditional applications such as digging and soil loading so as to increase the speed will also propel the growth of the segment.
  • Expansions, agreements, contracts, joint ventures and partnerships in the sector will also lead to growth in sales. Alliance across the industry will help the Indian manufactures to gain a larger share not only in the domestic but global market.
  • More financing of equipment will also lead to their wider use by encouraging users to opt for these machines.

In a nutshell

If experts are to be believed, then the next few years can be the right time for the CE manufacturers to launch new products and increase their sales not only in the domestic but international markets. With the increased emphasis on indigenisation, the manufacturers can fulfil the domestic requirements with tailored and cost-effective options and positively impact their sales. Thus, overall, the construction equipment sales are bound to rise.

Earth Moving Equipment Manufacturers

on equipment segment in India are mining activities and construction industry. Within these industries also, the key demand drivers are road construction, urban infrastructure, irrigation and real estate.

Earth moving equipment segment

It mainly comprises excavators (compact excavator, dredging, dragline excavator, front shovel and others), loaders (skip loader and wheel loader), backhoe loaders, construction tractors and others (grader, scraper, track loader and material handler etc). Out of all, backhoe loaders which are most commonly used to move large amounts of earth or to dig foundations and landscape areas, account for 65 per cent of the earth moving equipment segment.

Key market players

While this demand for earth moving equipment is collectively catered by about 250 domestic (small, medium and large) manufacturers, yet the top ten players rule the market. The key earth moving equipment manufacturers in India include

  • Bharat Earth Movers Ltd (BEML)
  • JCB India Ltd
  • Tata Hitachi Construction Machinery
  • Komatsu India Pvt Ltd
  • Action construction Equipment Ltd (ACE)
  • Mahindra Construction Equipment
  • Hyundai Construction Equipment India Pvt Ltd
  • Escorts Construction Equipment Ltd
  • Caterpillar India Pvt Ltd
  • L&T Komatsu Ltd

Opportunities for earth moving equipment manufacturers

The Indian earth moving equipment industry is poised for excellent growth in the coming years, based on India’s overall manufacturing sector and infrastructure growth. To leverage this opportunity, some of the key measures that should be taken by the earth moving equipment manufacturers include

  • Focus on development of individual and pooled capabilities to develop global competitiveness across the sector.
  • Indulgence in collaborative endeavours to provide integrated services and to promote the industry’s interests.
  • Working with the government to promote technology development.

Challenges faced by this heavy equipment manufacturers

While there are opportunities in future, there are challenges too…

  • There are various occasions when various project bottlenecks like project approval delays or other regulatory issues put barriers on the construction equipment sale.
  • Many times, there are delays related to forest and environment clearance and due to this also, the infrastructure projects are hampered, thus, affecting the equipment demand.
  • Manufacturers also have to face issues like timely availability of raw materials.
  • Last but not the least, end-users are also becoming demanding and want world-class technology for better fuel efficiency, higher productivity and profitability, thus, it is also posing as a challenge for the earth moving equipment manufacturers.

Shining future ahead

Despite the challenges, the earth moving equipment industry in India is poised for exciting trends and times ahead. In fact, the earth moving and material handling equipment segment is projected to grow at the CAGR of 8.42 per cent from 2015 to 2020. Further, with the increased FDI inflows, joint ventures, infrastructural investments, government initiatives and policies, the earth moving equipment manufacturers in the country have all the reasons to rejoice.

Need of Advanced Machines for Road Building Sector

Isn’t it?

As per the market analysts, the value of total roads and bridges infrastructure in India will grow at a CAGR of 17.4 per cent over FY12-17. Further, it is believed that factors such as National Highway expansion program of 4-lane to 6-lane by NHAI, State Highways development programs, rural roads development programs etc., will open new arenas for the road construction machinery market. Thus, obviously the road construction machinery manufactures in India need to gear up well to cater to this growing demand.

Types of road construction equipment

The following are some commonly used road construction equipment:

  • Forklift trucks: They are powerful equipment with an attached prolonged platform that can be lowered to pick an object on or below the ground and raised to move the object.
  • Wheel loaders: They are like tractors used to move a pile of material from the ground and load it onto a dump truck or into an open pit.
  • Crawler excavators: Also known as diggers, they are used for excavating earth and rock and loading them onto dump trucks.
  • Backhoe loaders: They have a front bucket that allows them to work as a wheel loader and an excavator-style digging mechanism at the back.

While these machines cater to most of the demand from road building sector, yet there is demand for upgradation and demand for new ones.

Need for advanced machines

With the country ambitiously planning to lay increasing number of new roads and retouch the old ones to match the projected economic growth, new doors of opportunity have opened for road construction machinery manufacturers. However, the questions that gains ground here is that is the nation equipped technologically to take up so many road projects?

Well, market analysts sound positive in response to this question and claim that India is already manufacturing a variety of road construction equipment (indigenous as well as in collaboration with global manufacturers). However, they feel that there is still the need to invest in advanced machines to build world-class roads. And yes they are right! Indian road construction equipment manufacturers need to adopt new technologies so as to give better results in terms of accuracy, quality and cost of construction.

Strategies that can be undertaken

  • It is often seen that in order to curtail the prices of the road construction equipment, Indian manufacturers take an easy approach towards safety and quality parameters. Hence, for future, they will have to understand that better quality equipment gives extra output from the same equipment than those without such features.
  • With growing awareness, customers are demanding world-class technology, thus, road construction machinery manufacturers need to come up with innovative solutions to meet customer expectations.
  • Last but not the least, Indian companies need to form joint ventures with the global manufacturers and give the right technology to Indian customers.

Overall, road construction machinery manufacturers in India need to gear up well with advanced machines to meet the growing demand of the road building sector.

Projects Boosting Construction Equipment Sales in India

. Smart cities, coal block auction, transmission project awards, ports, air ports and infrastructure development to name a few of the governments key projects that are set to create a huge surge in the construction equipment sales in India. These projects will not just create a huge demand for the equipment, but also for trained man power there by creating thousands of job opportunities if not more. Here is a look at some of the projects and what they are all about.

PM Modi has announced 100 smart cities under his Make in India initiative to absorb the constant influx of people migrating to cities on a daily basis. By year 2050 around 70% on India’s population will be living in cities and the announcement of these smart cities is in line with the vision. Smart cities are a good way to urbanize the infrastructure across the county since India is in dire need of it given its large migrating population adding to the pressure on the existing urban infrastructure.

Port projects worth US $ 10 billion have been identified for being awarded for developing existing and new ports across the country. This initiative likely to see the existing ports being revamped to state of the art facilities to make them more efficient while a number of new ports will be developed to have excellent services that are best in its class. The initiative will also lead to development of better infrastructure connectivity and logistics facilities across the country. Transport corridors will be created for ease of business.

This year’s domestic union budget is pushing greater domestic travel and development of unused air strips into domestic airports. Revival of 10 such air ports are proposed in the fiscal year 2016-17. 20,000 crore is the amount to be spent over the next 5 years. 18,000 of which is dedicated to aerodrome airport systems, 126 crore for IT up gradation, 865 crore for airport systems, airport navigation services to cost more than 55o crore while ground safety and security to cost 515 crore.

Transmission projects worth 30,000-50,000 are announced and are to be awarded for the 21 new proposed solar parks. Infrastructure and amenities to be built around solar parks to reduce the risk of land acquisition and the right of way. Large solar plants with capacities of more than 50MW are a way to reduce the cost of solar energy.

All these projects are likely to set off the boom in the infrastructure industry and create a huge demand for construction equipments across the industry. The boom will also help propel forward the rental market in addition to the used equipment market in India. The cherry on top is the tough competition leading to global players coming up with superior products at good prices to meet the increasing demand of the evolved consumer.

Make in India: Testing for Global Standards

Having all the big players in the same testing bed is leading to tough competition as the consumers gets more and more demanding in both cost and quality. Survival in the Indian market depends on being able to provide the latest cutting edge technology at good prices.

India is slowly and surely emerging as the biggest market for building construction equipment’s across the world. Most global OEMs are already present in the Indian market. India now has a completely developed ecology for manufacturing. India has end to end solutions right from design to after sales services, spare part supply and everything in between.

Customers have evolved and are demanding automation for remote monitoring the machines, speeding up work cycle time and MRO analytics to ensure optimum equipment lifecycle management. GPS monitoring is demanded to ensure minimum downtime for the machine. Building construction equipment’s manufacturers are providing remote monitoring features for ease of access via GPS and better handling the machine. The machines come with smart controls to make operating them easier and more comfortable for the operators.

Owners are opting for total cost of ownership meaning they are willing to pay the price for good quality products and aftermarket services. The bottom line is customers asking for easy maintenance and minimum downtown to keep their projects on track and speed them up. Most OEMs are providing distinguished service and machines to stay ahead of the competition.

Technology driven smart machines are now becoming the standard in the Indian markets. Features like remove device access, more efficient engines, cabin air conditioning, and automatic controls for better maneuvering etc are gaining popularity with consumers. IoT is taking the lime light and the human interaction is being reduced as the focus shifts towards machine to machine communication and data dependency. Eco friendly is the new trend taking over the industry. Customers are demanding eco-friendly engines that consume lesser fuel and have low noise emissions and vibrations.

Global majors offer machines with cutting edge features like robust fuel saving engines, low noise low vibration, grade control systems to increase construction efficiency, real time feedback to improve job quality and auto pilot etc to name a few. This is just a glimpse of what is to come.

India is already setting global bench marks. It is noted that products doing well in India tend to do well in emerging international markets like Asia, Latin America and Africa due to similarities in cost/quality equation. The new generation of machines are likely to spawn in India establishing it as the technological leader and hub for manufacturing with its expertise in end to end solutions including research and development and after-market services.