Project Management-IMPORTANCE OF RESOURCE LEVELING TO A CONSTRUCTION PROJECT.

Based on the Reading Attachment write a short essay that addresses the following point:Describe resource leveling and explain why it is important for the scheduling of a construction Project.Explain why and how some resources need to be shared between multiple projects.Explain the methods to figure out how many of these resources should be allocated to each of the projects.Submit: 2-3 pages, Arial 12 point, double spaced, APA cover page and citation page (does not count as part of the 2-3 pages)The term resource is used in many fields and contexts. Most companies have humanresources departments, which match the need for employees with the appropriatesupply by hiring and laying off workers. The term financial resources is commonly usedto indicate available monetary sources. In project management, we use the termresources to indicate three main categories: labor (human), materials, and equipment.Ultimately, everything is translated into a monetary quantity that may be—for theaccounting department—a part of the financial resources.THE THREE CATEGORIES OF RESOURCESAll expenses, in any construction project, can be classified under one of the threecategories just mentioned.Labor can be further classified into the following two subcategories:1. Salaried staff: These individuals include the project manager, superintendent, projectengineer, secretary, and any other person who is tied to the project but not tied to oneparticular activity or work package. Salaried persons usually get paid a fixed salary forthe duration of the project or their assignment.2. Hourly workers: These individuals are hired to perform a specific task or activity.Examples include carpenters, masons, ironworkers, electricians, foremen, and so forth.They are usually paid for actual hours worked.Equipment and materials can also be further classified into two subcategories:1. Construction equipment and materials: This type of equipment and materials is usedfor the construction process but is not permanently installed in the project. Examples ofconstruction equipment1 are bulldozers, backhoes, cranes, power generators, forklifts,mechanical trowels, heaters, and blowers. Inexpensive personal tools are usuallytreated differently (either as a lump sum for all tools or as the laborer’s personalproperty). Examples of construction materials are formwork materials and scaffolding.2. Installed equipment and materials: This type of equipment and materials stayspermanently in the project after completion. Examples of installed equipment are heatpumps, emergency generators (in hospitals, industrial projects, and some otherprojects), kitchen equipment, and many specialized equipment in industrial projects.Examples of installed materials are concrete, rebar, CMUs (concrete masonry units),brick, mortar, insulation, framing wood, shingles, floor tile and carpet, bathroomaccessories, plumbing pipes and fittings, and electrical wires. Elevators and escalatorsmay be classified as either installed equipment or installed materials, but in most cases,they are installed by the same vendor and in the estimate are considered asubcontractor cost.For estimators, the equipment category includes mostly construction equipment.Installed equipment belongs in the materials category.WHAT IS RESOURCE ALLOCATION?Resource allocation is the assignment of the required resources to each activity, in therequired amount and timing. Resource allocation is also called resource loading.RESOURCE LEVELINGWhat Is Resource Leveling?Resource leveling is minimizing the fluctuations in day-to-day resource use throughoutthe project. It is usually done by shifting noncritical activities within their available float. Itattempts to make the daily use of a certain resource as uniform as possible.Why Level Resources?When the contractor adds the daily total demand for a specific resource for all activities,he or she must provide the required amount, or work will be delayed.This daily demand for a certain resource naturally fluctuates during the lifecycle of theproject, depending on the work being performed that day (i.e., activities requiring thatresource) and the resource demand for each activity. This fluctuation (say, 10carpenters for the first two weeks, 6 for the week after, 18 for 4th and 5th week, 12 forweek 6, and so on) is not practical or economical.Leveling may also be necessary for an expensive piece of equipment (which may costmoney not only in rental expenses but also in the cost of mobilization, setup,maintenance, and demobilization). Say, for example, two activities require a tower craneat the same time. If you can delay the start of the second activity till the first hasfinished, you will redirect your resource (the tower crane) to the second activity. Bydoing this, you will have reduced the maximum demand of tower cranes at any time toonly one, which will save expenses.Do All Resources Have to Be Leveled?Not all resources need to be leveled. The main idea of resource leveling is to improvework efficiency and minimize cost during the life of the project. This concept applies toresources that are hired or rented—namely, labor and (major) construction equip- ment.The need for such resources may vary significantly as some activities start (they pullnew resources) and other activities finish (they release their resources). Likewise, theresource requirement of some activities changes during their duration.In general, materials do not need to be leveled. For instance, it is common practice toplace 100 CY (cubic yards) of concrete in one day, place no concrete for one week, thenplace more concrete the week after, and so on. Project managers mainly have toarrange small deliveries in an economical way. Materials must be managed using acompletely different concept, as discussed at the end of this chapter.Multiproject Resource LevelingSome resources may be shared among projects. The question is which resources andhow much of them. For small projects in a relatively close vicinity, for example, somestaff (project manager, safety manager, quality manager, secretary, etc.) and equipment may be shared. Project managers must make decisions when the situation lookslike a borderline case: for instance, would it be more efficient to have someone travelbetween two jobs or to hire another person even though the person will not be occupied100% of the time? The same argument holds for equipment. In general, convenienceand simple economics are mostly the driving criteria. However, other issues may beconsidered, such as the short- and long-term need; future market expectations; staffmorale, fatigue, and satisfaction; relationships with vendors and subcontractors; and soforth.Staff members who do not have to be present at the job site every day may be spreadout, either by dividing the day between two or more jobs or by assigning certain entiredays to different jobs. Certain high-paid staff, such as safety officers, schedulers, andproject control people, who need to spend only one day every week or every two weeksat the job site, may even fly hundreds of miles between jobs. With the advancement oftelecommunications tools (phones, internet, video conferencing, etc.) many functionscan now be performed from a remote location.Assigning Budgets in Computer Scheduling ProgramsWithout going into accounting details, let us briefly cover budgeting in this chapter—only in the context of project control and resource leveling. In scheduling programs, twomethods are available for assigning budgets to activities (this subject is discussedfurther in chapter 10):1. Assigning a lump-sum amount without telling the scheduling program how was thenumber derived or which resources used. You may still need to supply a cost accountcode in some software packages, which helps track the cost.2. Assigning a number of units of certain resources (e.g., one foreman, one equipmentoperator, two laborers, one bulldozer, and one hydraulic excavator) to the activity. Theprogram will calculate the budget for a particular activity from the ‘‘resource dictionary’’in the project database.The second method has six advantages:1. You can level your resources only when you assign resources to the activity.2. You can produce procurement reports specifying the resources need by type,quantity, date, and cost. You can link your schedule with the accounting (and estimating)system, match your demand with supply, and trace each expense in your project. Youcan do this, too, with the first method, but you will see only dollar amounts without anybreakdown details.3. This method aids more in project control and earned value management.4. In case there is a change in the cost or availability of a resource that is being used forone or more activities, the scheduling program will reflect the impact of the change atthe entire project level.5. You may be able to use a ‘‘resource calendar.’’ This type of calendar is defined for aspecific crew. For example, if a plumbing crew is available for work on a projectWednesday through Saturday only, the program will automatically schedule work onlyduring these days in the activities with this crew assigned to.6. Resource-driven schedules are possible. Under certain conditions, you can allowyour resources to control the duration of an activity. For example, if a resource-drivenactivity requires four painters for 10 days, the program uses a total of 40 man-days, or320 man-hours, for its basis. Depending on the painters’ availability and logic, thescheduling program may assign a fluctuating number of painters to the activity to finishthe job in the most efficient way (from a resource management perspective). The resultmay be an increase or a decrease in the duration, with the same bottom-line 320 manhours. This option may also be turned off to maintain the original duration.One interesting scenario that pertains to point 4 is when resources are priced through acertain date, then increase. Suppose that a union contract calls for a carpenter’s payrate of $24 per hour through 30 June 2010. After this, it will increase to $26.50 per hour.Assume that a particular activity requires 128 carpenter man- hours and is scheduled totake place in June 2010. The total cost for the carpenters is 128 � $24 1⁄4 $3,072. Now,suppose that the activity schedule slips to July. The cost will increase by 128 � $2.501⁄4 $320, for a new budget of $3,392. You have to be careful in such cases as towhether to allow the resource dictionary to drive the budget or to treat the budget as afixed amount. Leveling Resources in a Project Resource leveling is a mathematicallycomplex process. The resource-leveling method is called the minimum momentalgorithm, as it was discussed by Robert B. Harris (1978) in his classic textbook,Precedence and Arrow Networking Techniques for Construction. Fortunately, computerprograms eliminated the difficult part of this process.