Leatty Shanghai: A construction project
Background:
There is a building boom in residential, commercial and institutional buildings all over China. The country is currently using 54% of the world’s production of concrete and 36% of its supply of steel. Predictions suggest that this building boom will continue for at least the next 20 years.
Leatty, a major property developer, has already been involved in several projects in China. The company’s latest project, in Shanghai, aims to create a new generation of buildings based on low energy consumption, comfort and environmental protection using the most advanced technologies in the world. The project includes a three-phase housing development, as well s a shopping and leisure centre. The team is multinational, with the developer based in Canada, the architects in Germany and the multinational team of structural engineers and contractors in Shanghai.
The completion of the first phase was due 12 months after the start date. The team are now nine months into the work, and conservative estimates suggest that the project is 16% over budget and two months behind schedule. A new project manager has been called in to rescue the troubled project. Construction Phase One Milestones Demotion and site-preparation start date Building-excavation start date Foundations completion Underground parking complete Phase 1 external steel structure complete Dates Nov 1 Dec 15 Feb 9 Mar 6 June 26 Report
Read this report about the delays in the project. What types of strategy might the new project manager employ to solve these problems?
Delays to the Construction Phase: Summary of Findings
The building phase of the project is suffering from multiple delays. Redesign
Initial work was delayed by design reviews on the part of the developer. The architect’s redesigned plans took over three weeks to reach the contractor. Construction finally got underway on 21 January. These late design changes also delayed delivery of structural steel for the project. Road works
Further delays were caused by the lack of access to the site. Government road building work meant that larger equipment could not reach the site until late December, and this held up the start of the site excavation. Building contractors
One sub-contractor responsible for the foundation work was unable to comply with the new start
date. Two main issues arose: they were having financial difficulties, and there was slippage on another project they were involved with, which meant they did not have the manpower or equipment necessary to start the work. Suppliers
Because the foundations were not going to be ready on schedule, the building contactors postponed steel delivery. Indeed, on-time delivery of the steel would have caused a storage problem. Since the demand for structural steel in China far outstrips the supply at the moment, the knock-on effect has been an increase in the cost of steel and delays in delivery, which has also added to the project costs. Weather conditions
Building work was planned on a 24-hour schedule. However, there was a heat wave for part of the summer months, which hampered effort to work around the clock. UTC-time Toronto Mon 12.00 Mon 15.00 Berlin Mon 18.00 Mon 21.00 Shanghai Tues 0.00 Tues 3.00
Listening: There are also problems with relationships between the client and the various contractors and consultants and morale is rock bottom. The new project manager has held a number of confidential one-to-one meetings with the client and the other project team members. The developers The architects
The building contractor The structural engineers
Task 1:
Work in pairs. You are the project manager and the project sponsor. Hold a meeting to discuss the problems and devise a strategy to rescue the project.
1. What can be done to improve the information exchange and co-ordination of tasks? 2. What needs to be done to improve communication, team morale and working practices?
3. How can you create a safe atmosphere in the project so that team members will talk openly
about problems and tasks?
4. What lessons can be learnt from the first phase of the project which should be applied to the
second and third phase?
Task 2:
Present a short assessment report of your main findings and a list of action items for the sponsor, team members and other project stakeholders. Include the following information: Background of project Reasons for this review Key findings
Recommendations Immediate action plans
