2010 December :: The Construction Management Pro

Generation Y: The Challenge for the Nation’s Economy

December 10, 2010

I recently read an article stating that Generation Y is the “Next Challenge for Cities.” What is interesting is the statistics included in the article. John K. McIlwain states that Gen Y (those between their late teens to their early 30′s) are forming households at a rate of 400,000 per year; just a quarter of what it was prior to the recession (i.e. 1.6 million). In addition, this cohort is facing an unemployment rate of nearly 30% and carrying an average debt load of $23,000 per person. Click here to read the article

Household formation is what drives housing absorption. If we are not forming new households, there will be no demand for the housing industry to produce new housing, let alone liquidate the shadow industry of foreclosed property. Without a vibrant housing sector, there will not be construction jobs and consumer durable sales will also lag. Isn’t that what we are seeing? That is why I say this is the challenge for the Nation’s economy.

John McIlwain recommend that we “Keep in mind that this is also the next generation of the workforce. Gen-Yers are the entry-level employees needed to keep businesses growing, innovating, and producing. Will they be able to afford to live near jobs now or in the future? Without savings for a down payment and with parents needing to rebuild retirement accounts, when will they be able to afford to buy a home? With wages falling, will they be able to afford market rents? This is an issue facing every community that wants its economy to grow in the years ahead.” I would add, not just every community but our nation as a whole.

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Managing Resource Allocation Across Multiple Projects

December 4, 2010

One of the biggest problems small contractors have is managing multiple projects at the same time. It is rare to have all the resources you need on every project. Continual changes, complexity of projects, demands from clients and cash flow requirements mean we are constantly forced to do more with less.

Project Management methodologies can be used as a better way to manage multiple projects. If we use program management for the company as a whole, we can deliver more benefits to our clients than if each project were managed in a standalone manner.

Through program management, it is easier to optimize resources and productivity and resolve conflicts between projects that affect our ability to deliver client satisfaction.  This is especially necessary since resource allocation is a key priority to delivering projects on time, on budget and profitably.

The role of the manager is more challenging than that of the project super. Serving as a program manager, you have a far larger scope and must deal with more diverse stakeholders. The stakeholders are not only your clients; you’re your employees, subcontractors, vendors and financiers. You also must expect and embrace change and use change to your advantage. Your goal is to make sure your project teams complete the assigned work and meet their objectives, but a major issue is how to best leverage resources use across all your projects.

Resource Plan
One approach you can use is to develop a resource plan. This is different from a staffing management plan, as you are looking at all resources—people, tools, facilities, materials and finances.

It has been said that anything worth doing is worth measuring. Therefore, you must track and adapt the use of your company’s resources and monitor resource allocation. This means you need up-to-date information on resource availability to see if one project has underallocated and can be better used on another project. And you may have key trade personnel who are required on several projects. Too often this is done on the fly with no planning or foresight. While it may (or may not) work, it is inefficient and results in lost productivity and increase in overall cost to the company.

Tool Ideas
A tool that is helpful is a Program Management Information System (PMIS). Wow. What is that and can you really think a small contractor will use one? Remember, we are using the tools and techniques of Project Management. This is just a fancy way of saying that you need to develop a SYSTEM that focuses on resource productivity to enable you to quickly identify any resource conflicts that may occur in advance, since projects require different resources at different times. This system collects status and performance needs across all projects to assist you in identifying early any resource issues and evaluate their effect on productivity.

Developing such a system and maintaining it is easier said than done. You don’t want to have so much information that it takes too much time to collect and analyze it. If you do, it will never be used. You want to easily locate the information you need to assist you in leveraging company resources.

The object is to show when a resource may be overused or underused at various time periods to help you determine whether you can adjust your resource plan. Your PMIS can help you decide whether some activities on your program can be delayed until an overcommitted resource can be reassigned to work on another project. If your PMIS is using software, strive to understand how it handles resource allocation so you know the logic that is being used and the process to shift the timing of your program’s activities.

Resource management is a demanding and challenging task but totally essential to achieve your company’s goals and objectives and to make sure deliverables are completed as planned.  You must be proactive and work diligently to manage resource allocation and identify and resolve any conflicts as early as possible.

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