leatty shanghai

Leatty Shanghai – An example of poor project management in construction

MINISTRY OF EDUCATION AND TRAINING

UNIVERSITY OF PEDAGOGY OF HO CHI MINH CITY

DEPARTMENT OF ENGLISH

SUBJECT OF READING BE6

LEATTY SHANGHAIAN EXAMPLE OF POOR PROJECT MANAGEMENT

IN CONSTRUCTION

SUPERVISOR: Mr. Vu Quoc Anh Truong Son

CLASS : 3TMA

MEMBERS : Dang Phi Hai

Le Vuong Nhat Nghi

Nguyen Chau Phu

Nguyen Thi Hong Tham

Nguyen Minh Thu

Dao Anh Tuan

Nguyen Do Hoang Tu

Nguyen Huynh Tuong Vi

HCMUP May, 2014

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ADVISOR’S COMMENTS

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LEATTY SHANGHAIAn example of poor project management in construction

While a business is a continuous and long-term operation, a project, on the

other hand, is a temporary and short-term venture aiming at a specific product or

service. In order to make a project successful, a complete process consisting of

planning, executing, monitoring, and evaluating is needed. We call it “the project

management” – the driving force behind any venture to keep everything under

control. Effective project management can push a project forward to reach its

objectives. On the contrary, poor project management will slow down productivity,

hold back creativity, or even kill a project entirely. Let’s take Leatty’s construction

project in Shanghai as an example.

Leatty, who is a major property developer involved in several projects in

China, has embraced its latest project in terms of the construction of new generation

buildings in Shanghai. This project is designed to include a three-phase housing

development, as well as a shopping and

leisure center. The team is multinational, with

the developer coming from Canada, the

architects from Germany and the

multinational team of structural engineers and

contractors from Shanghai. The completion of

the first phase was due 12 months after the

start date. Although this project is claimed to

be using the most cutting-edge technologies in

the world, it has been facing a lot of delays in its construction site owing to many

factors. The squad is now nine months into the work and conservative estimates

suggest that the project is already 16 percent over budget and two months behind

schedule. A new project manager has been called to rescue the troubled project to

come up with some effective solutions to put it back on track.

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The construction site using the latest technologies in the world


First of all, the factors causing postponements are derived from the inside of

the project. In the formative stage of development, the architects decided to

redesign the plan and changed the project schedule. It took over three weeks for the

architects’ revised plan to reach the contractor. These design changes also delayed

the delivery of structural steel because the foundations could not be ready on time.

Furthermore, the price of steel has increased because “demand exceeds supply” in

the steel market. Along with storage issue, this resulted in suspense in steel delivery

and cost exceeding. This is not the way that matches the planning process with the

executing stage effectively. Moreover, government road building work caused many

difficulties for the large construction

materials to enter the building place. This

held up the start of the excavation since

larger equipment could not reach the site

until late December while the start date

was November 1st in the schedule.

Another delay was caused by the building

contractor who was responsible for the

foundation work, but it turned out that he was unable to comply with the new start

date. In the economic crisis, the contractors fared ill with financial issues. In

addition, they had to execute the unfinished projects, so the shortage of manpower

and equipment was another reason for delays. Last but not least, the weather

conditions were harsh and it was a huge obstacle to work around the clock under the

heat wave of summer months in China which could be up to 35oC. These serious

matters have fetched out that the old project manager was not such a good visionary

leader that can put everything under control.

Besides, there were problems with relationships between the client and the

various contractors and consultants. In specific, Germany and Chinese people, who

always focused on preserving a very high quality, preferred to work with paper-

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Leatty Shanghai project in China


based system rather than Internet-based one. In fact, the telecommunication system

was not helping but causing duplicating and missing work. No face-to-face

information exchange and different time zones also made it more difficult to

exchange information and solve matters. Not to mention that there is no common

goal among the team members, together with the unrealistic and aggressive

schedules which took part in creating misunderstanding and friction. There is no

denying that poor communication among the multinational crew has led to the

postponement of this project.

To tackle this critical problem, some realistic solutions have been drawn out.

It is suggested that the project manager should initiate a training course to help the

team be more familiar with the internet-

based application in order to improve the

information exchange among the

workforce; hence, the project is likely to

be smoother and more productive. In

addition, the meeting time is a matter of

concern to the multinational team, so

teleconferences will be held at 8:00 in

Toronto, 14:00 in Berlin and 20:00 in Shanghai. There should also be a quarterly

face-to-face meeting with a few representatives of each party. They should

encourage the engineers with their recent achievement and create a team-building

program to let everyone get to know each other, which will be good for the squad’s

morale. Moreover, the information exchange with the government has to be

enhanced to decrease risks of suspense at the point of road works.

Obviously, there is a tight link between project management and budget.

Instead of relying on a single supplier, it is advisable that the project manager

should consult more subcontractors or suppliers to increase competition and keep

costs as low as possible, and renegotiate contracts with the main suppliers for Leatty

which may include fees for delays as well. Besides, it is suggested that

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The differences in time zones make it hard to conduct teleconferences.


the project crew should be established to give regular updates about Leatty and

provide a forecast for some risks of postponements to avoid costs. Dividing the

working hours into smaller shifts or building a climate dome to avoid heat is not a

bad idea to keep the work on track within the budget.

On the whole, Leatty’s construction project in Shanghai is a typical example

of a poor project management. The project was delayed due to a lot of factors,

especially the poor communication among the multinational team. Correspondingly,

some internet training courses need setting up and the meeting time has to be

changed in order to exchange information much more easily among the crew. In

terms of the second and the third phase of the construction project, the new project

squad will place great emphasis on the matters that caused delays to the

construction of the building. This seems to become an essential element

contributing to the success of Leatty Shanghai. In addition, the manager should find

some standby suppliers in case of the rapid rise in material costs. It can be clearly

seen that these changes may occur quickly, and are likely to take unpredictable

forms and appear in unforeseen ways. This is an important issue which needs to be

taken into careful consideration in managing projects. Otherwise, the company will

take the bull by the horns and struggle in finding the path to success.

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leatty shanghai

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