3 Project Management in Malaysia ECM566 PDF

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PROJECT MANAGEMENT INMALAYSIAUnderstand the evolvement of project management in Malaysia.Understand the effect of project management through economy.Identify the strategic faced by Malaysian construction industry.Identify the challenges faced by Malaysian construction industry.Recognize the importan...

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PROJECT MANAGEMENT IN MALAYSIA

Learning Outcome Understand the evolvement of project management in Malaysia.

Understand the effect of project management through economy.

Identify the strategic faced by Malaysian construction industry.

Identify the challenges faced by Malaysian construction industry.

Recognize the importance of project management

DEFINITION IN THE CONSTRUCTION INDUSTRY

Customer – State Governments, public and private companies. Parties involved – Main contractors, client and consultant. The finished products Within time, cost and quality required. Involves residential, commercial building and infrastructure

OVERVIEW OF THE MALAYSIAN CONSTRUCTION INDUSTRY

• Construction industry is one of the important element that contribute to Malaysian economy. • The decline in construction performance in recent years has resulted to the need of strengthening the construction foundation through the project management to face the current and future challenges. • In 2006, gross domestic products (GDP) for construction industry only account for 2.7%.

• Is the market value of all officially recognized final goods and services produced in a country within a year, or other given period of time. • GDP per capita is often considered an indicator of a country's standard of living

What is gross domestic product (GDP)? • Currency value of all final goods and services produced within a country in a given period • Total income of a nation • Measure of nation’s economic well-being • Measure of a nation’s economic growth from one period to the next • GDP only concerned with the legal market transaction and exclude other activities that can give positive or negative impacts on social welfare (eg: voluntary work or illegal work)

What’s included in GDP? • GDP = Consumption + Investment + Government spending + Net exports • GDP is equal to all of the spending by households, businesses, government, and the international sector on final goods. • It is also the dollar value of the nation’s goods and services produced in a given period within the nation’s borders.

What’s included in GDP? 1) Consumption by households (durable, non-durable & service) – Goods: groceries, clothes, iPods – Services: haircuts, oil changes 2) Investment by businesses and households – Fixed assets for production – New homes – Inventories 3) Government expenditures by local, state, and federal government – hiring of civil servants and military personnel (salaries) – Weapon for military – construction of roads and public buildings 4) Net exports – value of exports of goods and services minus the value of imports of goods and services

WHAT ARE THE COMPONENTS OF GDP?

GDP

Personal Consumption Expenditures

Investment

Government

Net Exports

(I)

(G)

(NX)

(C)

Fixed Investment

Nonresidenti al

Inventories

Residential

GDP = C + I + G + NX

Export s

Imports

What’s not included in GDP? • Intermediate goods - Component of final goods • Used goods / second-hand sales / bartered goods • Underground production- illegal business activity, unreported legal business activity • Financial transactions – stocks, loans • Transfer payments-payments from the government-education grant, welfare, volunteer work

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Intermediate goods. Component of final goods (Ford buy tyre and batteries for their car, KFC buy chiken to eventually sell to customer - Only the final goods and services purchased for final use and not for resale or further processing and manufacturing are included in GDP. Intermediate goods are goods and services that are used for further processing and manufacturing or resale, for example, the lead that will eventually go in a pencil. This process avoids double-counting and therefore exaggerating GDP. Goods produced but not sold do go into GDP in the form of inventory investment. After that, they are not included in the GDP of the year in which they are sold.

•

Second-hand sales/used goods. Expenditure on used goods is not part of GDP because these goods were part of GDP in the period in which they were produced and during which time they were new goods. Buying a house that is not new is not part of GDP. Also, bartered goods are not included in GDP.

•

The black market/underground production. Illegal drugs, illegal goods, and illegal services in the underground economy are not part of GDP. The hidden part of the economy in which people trade in illegal goods and services and try to avoid taxes and regulations cannot be correctly ascertained.

•

Financial transactions. When households buy financial assets such as bonds and stocks, they are making loans, not buying goods and services. Nothing new has been produced.

•

Transfer payments. Transfer payments are payments from the government, including education grants, Social Security payments, welfare checks, and unemployment checks. They do alter household income, but they do not reflect the economy’s production.

GDP from Construction in Malaysia

GDP From Construction in Malaysia averaged 9680.29 MYR Million from 2014 until 2016. GDP From Construction in Malaysia decreased to 12572 MYR Million in the fourth quarter of 2016 from 13062 MYR Million in the third quarter of 2016.

Decreasing factors of GDP from construction in Malaysia 1. Inflation When inflation goes up, there is a decline in the purchasing power of money. For example, if the inflation rate is 2% annually, then theoretically a RM1.00 pack of gum will cost RM1.02 in a year. 2. Currency The exchange rates (here the exchange rate is the number of local currency per foreign currency) which means that local currency is appreciating. 3. Rising of Oil Price The rising of oil price in market causing the GDP decreasing. 4. Increasing price of good The increasing of materials price for construction reducing construction product.

LO - EVOLVEMENT OF PROJECT MANAGEMENT IN MALAYSIA 1969

• Project Management Institute (PMI) was formed • The tools and techniques is made common

1981

• PMI board director authorized the PMBOK Guide • This contain guidelines of practice

1994

• PMIMY was formed - PMI Malaysia Chapter founded • To advocate and advance project management excellence and discipline in Malaysia

Current

• To focus and apply the sustainable development in the construction process

PMI is the world’s leading not-for-profit global professional organization for project management knowledge, information and professionalism

PMI MALAYSIAN CHAPTER

•

Global Not-for-profit professional organization for project management comprised of Project Managers or those involved in Management of Projects. Headquartered in Newtown Square, Philadelphia USA.

•

In Malaysia, it is located at Project Management Instititute Malaysia Chapter Business Advanced Technology Center BATC, Universiti Teknologi Malaysia City Campus, Jalan Semarak, 54100 Kuala Lumpur, Malaysia.

•

PMI sets industry standards, conducts research, and provides education, certification, and professional exchange opportunities, designed to strengthen and further establish the profession. PMI advances the careers of practitioners, while enhancing overall business and government performance.

•

WHAT PMI PROVIDES

•

Professional Standards – A Guide to the Project Management Body of Knowledge (PMBOK® Guide) - 2000 edition

•

Certification

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Research & Wisdom Center

•

Publications

•

Professional Development

•

Education & Training

•

Corporate Relationships

•

Networking and fellowship

TYPES OF PMI CERTIFICATION • Project Management Professional (PMP®) – most valuable credential that can be obtained in PM

• Certified Associated in Project Management (CAPM ™) – – Project management who has demonstrated project management fundamental and knowledge through the experiences.

OBJECTIVES OF PMI CERTIFICATION • • • •

Provides professional/personal recognition Expedites professional advancement Creates job opportunities Provides framework for standardized project management requirements • Increases employee’s value in organization • To be a truly global certification

LO-THE EFFECT OF PROJECT MANAGEMENT THROUGH ECONOMY

Increase in Quantity and Quality

Better Flexibility Effect of project management through economy in Malaysia

Improved / Increased / Enhanced Customer Satisfaction

Opportunities to Expand Services

Improved Growth and Development

LO-THE EFFECT OF PROJECT MANAGEMENT THROUGH ECONOMY Better Efficiency in Delivering Services Project management provides a “roadmap” that is easily followed and leads to project completion. Once you know where to avoid the bumps and pots holes it stands to reason that you’re going to be working smarter and not harder and longer.

Enhanced Effectiveness in Delivering Services The same strategies that allowed you to successfully complete one project will serve you many times over.

Greater Standing and Competitive Edge This is not only a good benefit of project management within the workplace but outside of it as well; word travels fast and there is nothing like superior performance to secure your place in the marketplace.

Increased Risk Assessment When all the players are lined up and your strategy is in place potential risks will jump out and slap you in the face. And that’s the way it should be. Project management provides a red flag at the right time: before you start working on project completion.

Enhanced Customer Satisfaction Whenever you get a project done on time and under budget, the client walks away happy. And a happy client is one you’ll see again. Smart project management provides the tools that enable this client/manager relationship to continue.

Ch Chaallen llenge ge gess Faced By Ma Malay lay laysisisian an CCon on onst st stru ru rucctio tionn Indu Indusstr tryy CLIENT

CONTRACTOR

DEVELOPER

PUBLIC

•Project must be concerned with the environment of the surroundings. •Lack of efficiency and effective approach in construction. •Unable to attract local to image on construction industry (dirty, difficult and dangerous) •Unable to securely manage the time and finance in construction. •Insufficient knowledge in providing an integrated solution in foreign projects. •Public view on the project •Bribery, the most difficult challenges

Ch Chaalllleenges Fa Faced ced By Mala lays ys ysia ia iann Co Const nst nstru ru rucction In Indu du dust st stry ry • Clients 1) Finance and payments problems 2) Client sophistication 3) Unrealistic contract duration • Contractors 1) Poor site management 2) Improper construction methods and planning 3) Inadequate contractor experience

Ch Chaalllleenges Fa Faced ced By Mala lays ys ysia ia iann Co Const nst nstru ru rucction In Indu du dust st stry ry • Consultant 1) Growth of local firm 2) Adopt environmental friendly operation 3) Efficiency management • Labor Workers 1) Illegal immigrant labor workers 2) Shortage workforces 3) Lack of skilled labor

The challenges in construction industry

LO-CHALLENGES IN CONSTRUCTION INDUSTRY

Inefficient and effective method of practice in construction Inability to attract and develop local workforce due to the “dirty, difficult and dangerous” image of the industry Difficulty in securing timely and adequate financing at various construction stage Inability to provide total integrated solutions in foreign projects

CHALLENGES IN CONSTRUCTION INDUSTRY

• Client sophistication • Changes of design during construction • Late payment • Time constraints and excessive overtime • Cost overruns • Inexperienced management and supervision

• Absenteeism of labour • Lack of skilled workers • Inability to develop locals workforce • Huge number of foreign workers • Safety liability • Inflation

CHALLENGES / ISSUES IN CONSTRUCTION PROJECT

1. Planning stage 2. Design stage 3. Acquisition stage 4. Construction stage 5. Completion and submission 6. Repair defect/damage 7. Administrative level contract

32

FACTORS CONTRIBUTING TO DELAYS • Land acquisition, relocation of squatters and utilities • Unsuitable sites • Lack of equipment, material & manpower • Variation orders • Delays in decision making • Problematic contractors

LO-SEVEN STRATEGIC THRUSTS WERE IDENTIFIED: 1. Integrate the construction industry value chain to enhance productivity and efficiency 2. Strengthen the construction industry’s image. 3. Strive for the highest standard of quality, occupational safety and health, and environmental practices 4. Develop human resource capabilities and capacities in the construction industry 5. Innovate through research and development and adopt new construction methods 6. Leverage on information and communication technology in the construction industry 7. Benefit from globalization including export of construction products and services.

LO-THE IMPORTANCE OF PROJECT MANAGEMENT Enhance people skills - Leadership skill / Communication skill i) Achieve the project objective ii) Motivate team members

The Importance of Project Management

Human focused - Focus to one work - less confusion – more ideas – easy to manage – project complete – achieve goal.

Flexible but structure organization - Change in decision making - Implied project-based organization structure - Maximum teamwork contribution to solve the problem.

Efficiency and effectiveness of project. - Balance 3 requirement ( cost, time, quality) - Clear start and clear end - Good planning - less mistakes – less confusion – no delays....