WRITTEN REFLECTION ICP814
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AZZRI FAZRIL ROSMAN 2020916259
My
name is Azzri Fazril Rosman currently working as a Quantity Surveyor in Public Work Department (JKR) at Kuala Lumpur for almost 1 years. I also had experience in Public Sector for 3 years in ‘Consultant Quantity Surveyor firm’ after graduating from Bachelor in Quantity Surveying (Hons) on 2016. Besides working life, I am also a full time Master student of Integrated Construction Project Management (ICPM) in UiTM Shah Alam Selangor. This book as a requirement under ICP814 will discussed regarding the concept and practical regarding three (3) elements under project managements that is Benchmarking, Risk Management and Value Management and discussion will relate based on my experience in the industry. Azzri Fazril Rosman 2020916259 2
CONTENTS Benchmarking Introduction to BM, Type of BM, Advantages of BM, Unique issue regarding BM, Issue BM, Process of BM, Pitfall of BM
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Risk Management Introduction to RM, Who to perform RM, When to perform RM, Project RM, Discussion on Project Risk Management, Type of RM, Importance of RM, RM in Malaysian Construction Industry
Value Management
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Introduction to VM, Advantages of VM, Critical Success of VM, VM in Malaysia Construction Industry, Government Action regarding VM, VM Intervention, Barrier VM, VM & procurement 3 3
In
ABSTRACT
this e-books. I will discuss regarding three important elements under Project Management that is Benchmarking, Risk Management and Value Management. This three elements come out with their own advantages in the Construction Industry. However, still there are barriers for implementing this concept among the industry player. Besides, the implementation of this concepts in this industry also comparison between my personal understanding on the concepts will be discuss comparing to the theoretical what had been written on paper and what had been applied on the industry.
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1 Benchmarking Benchmarking
B
“ enchmarking is a possible catalyst for aiding the performance of the industry and improving its competitive edge in the global market. Benchmarking aims at comparing the performance of firms relative to each other, allowing these firms to recognize their weaknesses and strengths compared to the industry. It aids in the identification of industry leaders who exhibit superior performance as a result of using best industry practices.” ~ Mohammad et al. (n.d.)
Introduction to Benchmarking Benchmarking is one of tools that had been applied in many industries with notable success as mentioned by Abednego (2014) Various researcher had explained the concept of benchmarking but based on my understanding, benchmarking is a tools that have been used by certain companies or organization in comparing their company between company, competitor, for a continuous development. I am really agree if it is to be said that benchmarking already been used in many management either officially or unofficially in the practice. Type of Benchmarking Some of the researcher like Abednego (2014) had grouped benchmarking in two categories that is Internal benchmarking and External benchmarking. Internal benchmarking is the comparison the performance between department, unit internally and the external benchmarking identifies the competitor products or performance with our own product. There are also other two (2) types on benchmarking that had been categorized by researchers. They are Generic benchmarking that focus on best work and Functional benchmarking that will be done if the non-competitor had success certain area. Usually a company or management will use more than 1 type of benchmarking in their management as each type of benchmarking comes out with their own advantages and limitations.
“Benchmark your performance against your best competitors. Thinks how you can beat them next time” ~ Brian Tracy 5
Benchmarking Advantages of Benchmarking Benchmarking had been used widely between companies and organization. This is maybe to the advantages that had been offered by this tools. CIB (1999) had mentioned several advantages of Benchmarking that includes (1) Provides better understanding of customers’ needs and their competitor’s activities, (2) More customer’s satisfaction, (3) Reduction in waste, quality problems and rework, (4) Faster awareness of important innovations and guides on how to apply to achieve profitability, (5) Provides strong reputation with their market and, (6) Increased profits and turnover. Looking at the advantages that had been offered through benchmarking, I can be said that the benchmarking process is very important for any organization or company to increase their performance by setting the benchmark to be achieve by them
government bodies that include (1) comparison between units with similar organization, (2) comparison between agencies that provide similar services, (3) comparison between agencies providing dissimilar services, (4) comparison between different sectors and; (5) comparison with international counterparts. However, based on my search there are no specific studies regarding the effectiveness and performance of implementation Benchmarking in this country. I think government should be the benchmark in promoting the right way to practice this benchmarking to be adapt as systematic procedure in the other private company or organization.
“Benchmarking demonstrates the new technique of resolving problems against the current technique, where this new technique is undertaken to show how it performs as it has been used by others beforehand” ~ (Syuhaida & Aminah, 2009).
Benchmarking in Malaysia In Malaysia, Barizah (2011) had mentioned that benchmarking policy had been introduced in this country on 1999 in the public organization. There are five types of benchmarking that had been conducted by..
Unique Benchmark Issue Some interesting issue that I read regarding the benchmark is when a company did not have direct competitions. In Malaysia, we can see the energy provider that is Tenaga National Berhad (TNB) monopolize the industry. Barizah (2011) said that for a company that have no competitor, they practice this concept by either against itself over certain period of time to identify the personal best or maybe their performance against other countries. 6
Benchmarking Benchmarking issue Jagadeesh in his research had highlight several issue in benchmarking that include (1) cost aspect of benchmarking that need to be establish for the decision before benchmarking exercise start, (2) Duration for the benchmarking exercise to understand the time frame, (3) Human resources in benchmarking activities need to form for ensure better teamwork in implementation and (4) selecting benchmarking partner. It is an interesting issue that had been highlighted by the researcher for the stakeholder of any company/ management that need to been raise this issue before implementing this concept.
Operation and service. However, I see the process of benchmarking that had been highlighted by Freytag & Hollensen (2001) that had divide the process into stages. They said that common benchmarking procedure involve seven stages that is (1) Deciding what functions of the business to benchmark by evaluating the KSFs (key success factors), (2) Evaluate the importance of each subject area (KSF), (3) Identify against whom to benchmark (determine benchmarking partners), (4) Gather the benchmarking information, (5) Compare ``best-in-class'' with the firm's own performance (identify performance gaps), (6) Implications of benchmarkingresults, bench learning: how can the firm's skills/ processes be improved by learning from the ``best-in-class‘’? and the last one is (7) Benchaction: implementation of the changes. This process are very systematic and I think it is important for the related party to make a detail guideline regarding the benchmarking process for the use in the related industry.
Pitfall of Benchmarking
Benchmarking process There are many benchmarking process that had been mentioned and highlight in many studies. My point of view is, It is important for the related party to make a proper guideline for benchmarking for a reference and guideline for the company to apply and tailored based on suitability of the company
Based on the studies by Freytag & Hollensen (2001) also had highlighted that although the benchmark are very effective but still there are limitation on the benchmark. The some of the limitation are focusing on number, losing focus on customer and employees/ difficult to obtain successful competitor, emulating competitors, difficult in benchmark service, lacking proper implementation, on-going process and exposed weakness. Here I think the reasons why many companies did not implement this benchmarking. 7
Risk 2 Management Risk Management
Who should perform Risk Management? There are many golden rules to apply the Risk Management in all project. For me, in order to perform risk management all the stakeholders need to play their role in ensuring to manage and control the risk management. All the stakeholder including project manager, project owner, consultant, contractors, and Superintending Officer. This is important because each of the parties have their own responsibility towards the project success. Usually the responsibility comes out with risk that need that each party need to hold.
When to perform Risk Management?
“Risk Management is a proactive decision-making process which involves accepting a known-risk and/or taking steps to mitigate the impact and like hood of the occurrence of risk, to minimize the threats and maximize the opportunities” (Loosemore et al., 2006) There are many definition of risk management by the researchers. However, what I can said is risk management as process and procedures undertaken in order to effectively manage negative event that rise and minimize anything that may harm the project. Generally this risk management involve (1) Identify, (2) analyze, (3) Action, (4) Monitor, and (5) Control.
In EPSA website for government officer mentioned that, Risk Management should be traced throughout all phases in project life cycle. Risk could include aspect of the project organization environment that may contribute to the project risk such as poor project management practice, lack of integrated management systems and multiple project handling. Based on my experience for risk management in public sector referring to the project life cycle that is Conceptualization phase, Planning phase, Executive phase and Product phase, the public project regarding the Risk Management approach start during the second phase that is product phase.
“If you don't invest in risk management, it doesn't matter what business you're in, it's a risky business” ~Gary Chon 8
Risk Management Project Risk Management It is quite similar for the Project Risk management that had been learned theoretically and what had been practice in public sector project. EPSA website mentioned that five steps under project risk management are risk identification, risk assessment, risk response, risk monitoring and risk review i) Risk Identification Risk identification is the best practice to combine more than one method prior to the project kick off. It involves Checklist, brainstorming, experience, issue log record, behavioral models, and diagramming technique as highlighted in the EPSA website. ii) Risk Assessment In EPSA website, Risk Assessment is the second step where here, all the identified risk will be assessed by prioritizing risk subsequent further analysis or action by combining their probability of occurrence and impact. iii) Risk Response At this stage, Mohammad Adam et al. (2019) mentioned that the risk response include Risk Avoidance, Risk Transfer, Risk reduction, and Risk Retention.
“All of life is the management of risk, not its elimination� ~Walter Riston
iv) Risk Monitoring/ Control Risk Monitoring is a process after the risk had been identifies, estimated, evaluate and responded to, as mentioned by Kang et. al (2015). They mentioned that this steps concludes the risk management process and Mohammad Adam et al. (2019) highlight that this monitoring is important to v) Risk review This step involves investigation of the current situation periodically. Here all the activities will be review, in detect any new, risk that have arisen.
Project Risk Management discussion On a Quantity Surveyor side that handle Hospital and Klinik Kesihatan at JKR, I can see the process of risk management in every stages as the risk for this type of building are extremely high and unpredictable. Implementation of Risk Management in public project involve many workshop that involve all the related stakeholder and the risk are identified in every stage of the project life cycle. From that all the risk that had been identified, will be analysis regarding the cause of risk, treating the risk to control and monitor the risk. At the end of the workshop they will produce the Risk Management Plan for the documentation towards the purpose construction planned. 9
Risk Management Importance of risk management The importance of risk management implementation explained by Goh & Hamzah (2013) that it will give higher level of awareness on the consequences of risk, focus on more structured approach, more effective centralized control, and better transfer of risk information. I think the risk management concept including its advantages is very understood between all the parties. However the implementation of risk management in proper steps are still low. A study must been made to study this topic based on my simple research on the online journal, discussion regarding the barrier of implementation of proper and systematic risk management procedure.
Type of risk Kang et al. (2015) had grouped the typical risk in the construction project that include financial risk, technical risk, operation risk, time risk, environmental risk and political risk. It is quite familiar with what I had been faced in the industry. The most common risk that I had faced are price fluctuation, estimate error, delay in the project, changes in design, material wastage, transportation risk, Overrun project contract and cost variation. This type of risk must be identify on the Risk Identification stage under Risk Management before. All of this risk as explained by Kang et al. (2015) will be brainstorm, workshop, interview, questionnaire surveys, feedbacks from similar projects, specialist and previous experience during the mentioned stage.
Risk Management in Malaysian Construction Industry In Malaysia Construction Industry Risk Management did not applied in a systematic as under theory of risk management. Mohammad Adam et al. (2019) mentioned that in this industry, the risk management had been applied in either systematic and unsystematic procedures. For example the discussion regarding the risk management purely on site meeting/ technical meeting and SWOT Analysis to analysis the strength, weakness, opportunities and threads. But in government project, there will be proper workshop that will discuss on the risk management. For me, a proper and systematic risk management should be conduct regarding the risk management. This is due to although this risk management had been applied in this industry for number of years but the due to the risk concept that is uncertain and unpredictable, systematic risk management need to be conduct as the continuously occur in the every stage of project cycle. Risk Management Discussion I understand that risk management process is very complicated and sometime increase work that need to done. However, due to the advantages of the risk management itself, it is important for the Client to include the risk management in each of the project due to the fact that risk will happened on each project and the effort towards minimize the risk need to be done in proper way by following the project model of the government project.
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Value 3 Management Introduction to VM
Advantages of VM Various research had discussed the advantages of implementation of VM. Based on the study of VM, it can see that VM provide benefit including creating the clear focus on project objective, effective design, discussion on project issue, constraint, and risk, clear ideas about project brief, remove unnecessary cost, alternative choice, method construction, and obtain the maximum efficiency ratio. This advantages that had been provided by the VM had be the reasons why government had implemented the concept in order to reduce the issue that happened in the industry. So based on my understanding and the proof of many of the government project that had successfully implement VM, it can be said that it is important for the players in the industry to implement the VM in their development.
V
“ alue Management (VM) are service that maximize the functional value of a project by managing its development from concept to use through the audit decision against a value systems determined by the client (Aini et al., 2012)� Value Management is defined in various definition by the researcher, but the concept can be explained as (1) reducing cost but maintain the function and quality, (2) increasing either the function or quality but maintain the cost, (3) reducing the cost and at the same time increase function and quality and (4) the last one is increasing the cost but at the same time improve function and quality at higher proportion.
Critical Success Factor of VM It was highlighted that some of VM factors like the agreement to participate all parties, support by senior management, experience facilitator, appropriate team skill mix, leadership and goal settings, understanding on VM approach, data collection, training and commitment are the critical factors that contribute to the success of VM. It can be said that all of this factors are adopted by the researcher from the numbers of success value management implementation project. So for incoming VM project, this success factors need to adopted in the project to ensure to proposed project will be success and achieve the objective. 11
Value Management VM In Industry
Malaysian
Construction
Aside to the advantages that this values provide; however I keep wondering why this Value Management implementation are not widely used in this country although it was introduced in Malaysia 25 years ago on 1986. It seems the application of this concept are still in infant stage and the awareness among the stakeholder are still low. This awareness among them are important as it will be an essential tools in providing better value. For me, government have to do something better to encourage the industry player to implement the Value Management in Construction Industry.
“ Value = (Function + Quality)
Cost “ sectors in implementing the VM concept in their development. However, for a better future it is .. important for the Government to keep improving their plan in ensuring the implementation of VM in Malaysia always increase from years to years.
VM Intervention
Government Action Besides the implementation of VM by the Government 25 years ago, In EPSA website also show that government initiative did not stop on that time only. Starting from RMK10, UPE under Malaysia Government had start to implementing the Value Management as a management tools in government project. All the project above RM50 millions are required to implement the Value Management concept in aiming for a value for money project. It is very interesting effort from my view that had been done by Malaysia government to ensure the public project under JKR will be a role model towards the other projects under private
VM study will involve three aspect on different phases. This is stated in the Panduan Pelaksanaan Pengurusan Nilai dalam program/ projek kerajaan. What is interesting in this process is there are complete step in the Value Management Procedure starting from the Value Assessment (VA), Value Engineering (VE) and Value Review (VR). VA will be conduct during the strategic brief and project brief while for VE will be conduct during the conceit design stage, tender stage or construction stage and the last one is VR will be conduct during the use stage. Each of the stages of study already provided with Pre-Lab process, Lab process and Post Lab process. This guideline that provide detail for the works on each of the stages of study is very useful for the parties to use this guideline for the implementation of VM in their developments 12
Value Management VM common source
“We make a living by what we get. We make a life by what we give� ~ Winston Churchill
Barrier Implementation VM There are some barrier in implementing the value management in the project in the construction industry as mentioned in EPSA website. This barrier are include low demand from the client side due to additional fees for VM purpose, lack of times due to longer time for VM workshop, interruption of normal work schedule, knowledge and practice, and mentality and perception. In my opinion, there are a big possibility this barrier due to the lack of understanding of the concept of Value Management itself. This is because some of them did not see the positive side of the implementing this VM. Besides that, there maybe perception from the client side that hard to change from the normal procedures. Due to this barriers, I strongly suggest government play their role in educate the industry player regarding the nature of the VM itself.
Another interesting points that I got when reading journal are the common sources of VM knowledge. This is from the Aini et al. (2012) that conclude in their research regarding the common sources for VM knowledge. The highest are from VM seminar/ talks, followed by university, VM Workshop, and last one is VM training course. This result is actually important for the government in order to educate the industry player regarding the variety of sources. For example, government can improve in term of contents of the seminar/ talk and also ensure the VM workshop are knowledgeable for the industry player. This will ensure the content of the overall programme are beneficial and can give knowledge and understanding of the VM itself. VM and procurement Value Management and procurement are relate to each other where such arrangement of procurement are not really favor in the VM studies. For example in Conventional procurement, there are separation between pre contract and post contract where the Contractor are not awarded yet during the pre contract stages. It is importance to involve main contractor during the VM stage from the early beginning for VM in term of buildability as contractors are more familiar on the site purpose. However, in Malaysia based on my understanding, I can say that many conventional project already implement VM. The existence of the contractor is not mandatory at the beginning although it can be an advantages if the contractor are awarded earlier and join the VM workshop as per Design and Build procurement.
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REFERENCES Abednego, O., Sylvester, M., & Walter, O. (2014). Development of a Benchmarking Model for Construction Projects in Kenya. International Journal Of Soft Computing And Engineering (IJSCE), 4(5), 31-37. Retrieved 25 July 2020 CIB
(1999), Managing Construction Industry Development in Developing Countries: Report on the First Meeting of the CIB Task Group 29. Arusha, Tanzania, 21-23
Freytag, Per & Hollensen, Svend. (2001). The process of benchmarking, bench learning and bench action. The TQM Magazine. 13. 25-34. Goh, C. S., & Abdul-Rahman, H. (2013). The identification and management of major risks in the Malaysian Construction Industry. Journal of Construction in Developing Countries, 18(1), 19. Jaapar, A., Maznan, N., & Zawawi, M. (2012). Implementation of Value Management in Public Projects. Procedia - Social and Behavioural Sciences, 68, 77-86. Kang, B. G., Fazlie, M. A., Goh, B. H., Song, M. K., & Zhang, C. (2015). Current Practice of Risk Management in the Malaysia Construction Industry–The Process and Tools/Techniques. International Journal of Structural and Civil Engineering Research,
Loosemore, M., Raftery, J., Reilly, C. and Higgon, D. (2006). Risk Management in Projects. 2nd Ed. Oxon, UK: Taylor and Francis
Mohammad Adam, B., Redzuan, Z., Muhammad Fikri, B., & Haron, N. (2019). A review of application of risk management in Malaysia construction industry. IOP Conference Series: Earth and Environmental Science, 357 Mohammad S., E., Minchin Jr., R., & William, O. Benchmarking Construction Firm Performance. Retrieved 25 July 2020 Nur Barizah, A., Zakiah, S., & Muslim Har, S. (2020). Enhancing Malaysian Public Sector Transparency and Accountability: Lessons and Issues. European Journal of Economics, Finance and Administrative Sciences, (31). Retrieved 25 July 2020 Syuhaida, I. and Aminah, Md. Y. (2007). Developing the Deliberative Key Performance Indicators (KPIs) in Assessing the Performance of Public Infrastructure Provision via Private Finance Initiative (PFI) in Malaysia. Proceedings of MICRA 2007 6th Conference and Annual Meeting. August 28-29, 2007. E-Pembelajaran | E-Pembelajaran. Epsa.gov.my. (2020). Retrieved 30 July 2020, from https://www.epsa.gov.my/. Zuhaili, M., & Shen, G. (2012). Value Management in Malaysia: Past, Present and Future (pp. 105-110). Hong Kong; The Hong Kong Polytechnic University. Retrieved 25
July 2020
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“
EVERYTIME I FEEL LIKE GIVING UP I IMAGINE THEIR SMILE ON MY SUCCESS
Author
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ICP814 This e-book is a submission for the ICP814. Semester 1 for Integrated Construction Project Management UiTM Shah Alam.
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