Project size range for the past year -$800000 tenant finish to $9 million medical office building.The company’s has had increased profits after Ernie joined. The business expanded from doing just office buildings to medical, retail facilities and food distribution. The company has adapted the design-build delivery method as well which has contributed to its increased profits. (Stevens, 2012)
Business Process & AnalysisReliability of specialty contractors or subcontractors is highly regarded in to finish a project within budget, with good craftsmanship in a timely manner. Usually, work goes on smoothly but there are occasional projects that face bad circumstances. Larry and Ernie have to participate in order to get the job to a better state than it started with.
After quantity takeoff and pricing are completed with the given plans, Larry and Ernie carefully go through overhead application, profit numbers, general condition costs and all subcontractor bids. The field superintendent has a separate meeting with the project manager just before mobilization because by the time the bid is awarded it is uncertain which manager will be done with previous work.
During the construction phase, Larry monitors the field and helps the superintendent manage problems or delays caused by permits, submittals, and subcontractor insurance paperwork. He has good response and results because of his long term relationships with related construction personnel.
Ernie manages office work having formal monthly meetings with project managers and with other Related personnel to identify and deal with potential or ongoing problems. (Stevens, 2012)
Joyce is the CFO of the company. Her work ethic is highly process oriented, conservative and timely. However, the office staff is not happy with her methods because of all the paperwork involved. Once the invoices are, she wants them to be approved on the field and compared with the purchase order and delivery ticket. This is a very good method that is employed as she demonstrates through her results. However, her method should be modified to have less paperwork.
Use of the computer is limited to the project managers and office staff and they have been given desktops as well. The field superintendents are not much adept in using computers.
RecommendationsUtilizing accounting software and methods will reduce the error in balancing and could be accurately tracked. Also, implementing a paperless tracking system could save a lot of time and significantly decrease the paperwork and the complaining involved with it. This will go hand in hand with Larry and Ernie trying to expand into the Green building industry.
If a more paperless system is implemented, a workshop can be conducted for the superintendents to provide them with relevant computer skills. Laptops could be provided for PMs so they can do their work regardless of where they are and more questions could be answered at convenience through creating an email culture in the company.
The stress and problems that George and Ernie are facing could be alleviated if the project managers can handle the projects better. Of course, this comes with much experience with jobs, however, if Larry and Ernie could take some time and talk with the PMs and mentor them on common problems or ones they have experienced during a job, the PMs would know what Ernie & Larry will do on a similar situation and will be more confident in making the correct decisions.
Based on their problems, Ernie & Larry can hire third parties as necessary to provide professional advice as well. This increased communication with the project managers could help to strengthen their bond with the company because other competing companies are paying higher bonuses for their PMs. This method will prove to be successful because the PMs are hard-working and care for the quality of their work.
Promoting Mike to be the VP of project management will take some of the stress out of Ernie and Larry in executing some of the aforementioned tasks. His “verbal skills and client relationship talent” would definitely aid in leading office activities and the PMs. However, caution should be taken given his track record of lower profits at closeouts than estimated. Monthly or weekly meetings will still be necessary to see if the company is going in the correct direction.
According to Wu and Low the role for project managers in the green building industry is important. They state that the PMs already in the green building sector exercise excellence more through practice. Wu and Low bring out the importance of process as well. (2010) Since George Construction Company is just planning to enter the industry Larry & Ernie will have to focus more on the proper process.
The two critical components for continued success for a construction company are people and process. Therefore, involving the project managers in their venture into green building construction will create a sense of higher responsibility and value to the company and will serve the triple purpose of getting more successful in this endeavor with everyone’s effort; retention of PMs despite comparatively lower bonuses; having less stress on Ernie & Larry. (Collins, 2001)
Collins, James C. (2001). Good to Great: Why Some Companies Make the Leap- and Others Don’t. . New York: HarperBusiness. Stevens, Matt. (2012). The Construction MBA (S. M. Smith Ed.). New York: McGrawHill. Wu, P., & Low, S. (2010). Project Management and Green Buildings: Lessons from the Rating Systems. Journal of Professional Issues in Engineering Education and Practice, 136(2), 64-70. doi: doi:10.1061/(ASCE)EI.1943-5541.0000006