The term resource is used in many fields
and contexts. Most companies have human resources departments, which match the
need for employees with the appropriate supply by hiring and laying off
workers. The term financial resources is commonly used to indicate available
monetary sources. In project management, we use the term resources to indicate
three main categories: labor (human), materials, and equipment. Ultimately,
everything is translated into a monetary quantity that may be—for the
accounting department—a part of the financial resources.
THE THREE CATEGORIES OF RESOURCES
All expenses, in any construction project,
can be classified under one of the three categories just mentioned.
Labor can be further classified into the
following two subcategories:
1. Salaried staff: These individuals
include the project manager, superintendent, project engineer, secretary, and
any other person who is tied to the project but not tied to one particular
activity or work package. Salaried persons usually get paid a fixed salary for
the 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 used for the construction process but
is not permanently installed in the project. Examples of construction
equipment1 are bulldozers, backhoes, cranes, power generators, forklifts,
mechanical trowels, heaters, and blowers. Inexpensive personal tools are
usually treated differently (either as a lump sum for all tools or as the
laborer’s personal property). Examples of construction materials are formwork
materials and scaffolding.
2. Installed equipment and materials: This
type of equipment and materials stays permanently in the project after completion.
Examples of installed equipment are heat pumps, emergency generators (in
hospitals, industrial projects, and some other projects), 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, bathroom
accessories, plumbing pipes and fittings, and electrical wires. Elevators and
escalators may 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 a subcontractor 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 the required amount and timing.
Resource allocation is also called resource loading. RESOURCE LEVELING
What Is Resource Leveling?
Resource leveling is minimizing the
fluctuations in day-to-day resource use throughout the project. It is usually
done by shifting noncritical activities within their available float. It
attempts 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 the project, depending on the work
being performed that day (i.e., activities requiring that resource) and the
resource demand for each activity. This fluctuation (say, 10 carpenters for the
first two weeks, 6 for the week after, 18 for 4th and 5th week, 12 for week 6,
and so on) is not practical or economical.
Leveling may also be necessary for an
expensive piece of equipment (which may cost money not only in rental expenses
but also in the cost of mobilization, setup, maintenance, and demobilization).
Say, for example, two activities require a tower crane at the same time. If you
can delay the start of the second activity till the first has finished, you
will redirect your resource (the tower crane) to the second activity. By doing
this, you will have reduced the maximum demand of tower cranes at any time to
only 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 improve work efficiency and minimize cost
during the life of the project. This concept applies to
resources 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 pull new resources) and other
activities finish (they release their resources). Likewise, the resource
requirement of some activities changes during their duration.
In general, materials do not need to be
leveled. For instance, it is common practice to place 100 CY (cubic yards) of
concrete in one day, place no concrete for one week, then place more concrete
the week after, and so on. Project managers mainly have to arrange small
deliveries in an economical way. Materials must be managed using a completely
different concept, as discussed at the end of this chapter.
Multiproject Resource Leveling
Some resources may be shared among
projects. The question is which resources and how much of them. For small
projects in a relatively close vicinity, for example, some staff (project
manager, safety manager, quality manager, secretary, etc.) and equip- ment may
be shared. Project managers must make decisions when the situation looks like a
borderline case: for instance, would it be more efficient to have someone travel
between two jobs or to hire another person even though the person will not be
occupied 100% of the time? The same argument holds for equipment. In general,
convenience and simple economics are mostly the driving criteria. However,
other issues may be considered, such as the short- and long-term need; future
market expectations; staff morale, fatigue, and satisfaction; relationships
with vendors and subcontractors; and so forth.
Staff members who do not have to be present
at the job site every day may be spread out, either by dividing the day between
two or more jobs or by assigning certain entire days to different jobs. Certain
high-paid staff, such as safety officers, schedulers, and project control
people, who need to spend only one day every week or every two weeks at the job
site, may even fly hundreds of miles between jobs. With the advancement of
telecommunications tools (phones, internet, video conferencing, etc.) many
functions can now be performed from a remote location.
Assigning Budgets in Computer Scheduling
Programs
Without 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, two methods are
available for assigning budgets to activities (this subject is discussed
further in chapter 10):
1. Assigning a lump-sum amount without
telling the scheduling program how was the number derived or which resources
used. You may still need to supply a cost account code in some software packages,
which helps track the cost.
2. Assigning a number of units of certain
resources (e.g., one foreman, one equipment operator, two laborers, one
bulldozer, and one hydraulic excavator) to the activity. The program 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. You can do this, too, with
the first method, but you will see only dollar amounts without any breakdown
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 for one or more activities, the
scheduling program will reflect the impact of the change at the entire project
level.
5. You may be able to use a ‘‘resource
calendar.’’ This type of calendar is defined for a specific crew. For example,
if a plumbing crew is available for work on a project Wednesday through
Saturday only, the program will automatically schedule work only during these
days in the activities with this crew assigned to.
6. Resource-driven schedules are possible.
Under certain conditions, you can allow your resources to control the duration
of an activity. For example, if a resource-driven activity requires four
painters for 10 days, the program uses a total of 40 man-days, or 320
man-hours, for its basis. Depending on the painters’ availability and logic,
the scheduling program may assign a fluctuating number of painters to the
activity to finish the job in the most efficient way (from a resource
management perspective). The result may be an increase or a decrease in the
duration, with the same bottom-line 320 man-hours. 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 a certain date, then increase.
Suppose that a union contract calls for a carpenter’s pay rate 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
to take 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 $2.50 1⁄4 $320, for a new budget of
$3,392. You have to be careful in such cases as to whether to allow the
resource dictionary to drive the budget or to treat the budget as a fixed
amount. Leveling Resources in a Project Resource leveling is a mathematically
complex process. The resource-leveling method is called the minimum moment
algorithm, as it was discussed by Robert B. Harris (1978) in his classic
textbook, Precedence and Arrow Networking Techniques for Construction.
Fortunately, computer programs eliminated the difficult part of this process.
