NICMAR

NICMAR INSTITUTE OF CONSTRUCTION MANAGEMENT AND RESEARCH

SCHOOL OF DISTANCE EDUCATION

ASSIGNMENT

NICMAR/CODE OFFICE

1. Course No. : PGPM 32

2. Course title : Management Information System

3. Assignment No. : 10

4. Date of Dispatch : 07-08-2012

5. Last Date of receipt : 15-08-2012

of Assignment at CODE office

ASSIGNMENT

You are a project manager on a construction of Hydel-Power project comprising of four

main works viz. Main Dam, Weir, Electric Power Station and Tunnel. The requirement of ten

construction materials including cement, steel (six sizes), sand, aggregate etc. need to be monitored

daily. Construction, requirements, resources on site and in depot needs to be checked every day.

Design an M.I.S. for efficient working. Assume suitable data

SCOPE OF WORK

The work involves four main works i.e. Main Dam, weir, Electric power station and Tunnel.

The above work involves Supply, transportation, unloading, fabrication, erection, testing and

commissioning of balance ventilation ducts and equipments as per technical specifications.

Benefits of Hydro Power:

Energy has become a symbol of growth and instrument for development. Electric power

particularly the hydro power is a renewable, economically attractive, environment friendly, non-

polluting and environmentally benign source of energy. Moreover, the Hydro Power is submergence

free and has short gestation period. These benefits of HP have now been sufficiently recognized.

The need of the project comes from the benefits of HP and utilization of resources.

Management information system provides predefined types of information to the

management for relatively structured type of decisions.

Management Information System (M.I.S) design for Hydel-Power Project is very much limited

to a specific area as all the material and data is to be managed on the site for the given requirement.

Now the requirements for the hydel project are entirely different from general construction sites.

The height of the control room shall be higher as compared, so as to take care of the heat

generated from the electrical panels and the control of all the panels can be made on the

mezzanine level which saves the space and offers the wider view of the area underneath.

The substation part has to be made in the open area and the wiring of the towers is taken

care by the R.C.C. Trenches made under the floor.

From the reservoirs the water is brought through a tunnel for the generation of the

electricity. i.e. In itself a very technical and specific requirement for the construction of the

project.

As far as the scope of the hydel projects is concerned it is not as limited because of the fact that

our country is facing shortage of electricity. In future we shall need more of hydel projects to meet

the requisite demands of the power sector and of course to facilitate the people staying in the

remotest areas of the country. This is the reason in the recent years even World Bank has offered to

finance the hydel projects in states like Himachala Pradesh, utaranchal, Assam & jammu Kashmir.

MATERIALS MANAGEMENT ORGANISATION

Material management can thus be defined as that aspect of management Function which is

primarily concerned with the acquisition, control and use of materials needed and flow of goods and

services connected with production or construction process into and within an organization.

The modern concept of Materials Management integrates the entire range of functions which

effect the flow, conservation and utilization of all materials and brings together the activities such as

materials planning and budgeting, purchasing, inventory control, clearing and forwarding, receiving

and storekeeping, materials handling, salvaging, scrap and surplus disposal, value analysis and

materials standardization. The significance of this concept lies in the fact that efficiency of any

organization is depend upon having the : “Right Material of the Right Quality at the Right Price in

the Right Quantity at the Right Time and Place “

The management of the various materials required at site shall be organized at different levels.

Upper Level To determine the goals, objectives & plans.

Ability to deal with the ambiguities of the decisions taken.

Middle LevelDetermination of the ways to construction done in time schedule. To check

how much money has been incurred till the specific date.

Lower Level Control the activities of the workers to meet the targets.

The materials required for the hydel projects shall be managed according to the levels

mentioned above.

Here I take the example of a hydel project of 5MW capacity. Requirement for the project is asfollows:

Control Room with a covered area of 14,000sqft.

o Outer walls in brick

o Frame work of RCC Columns and Beams

o Asbestos sheets as roofing

o Concrete floor with separators

o Steel windows and doors

o Tie beams at the regular intervals to prevent Earthquake.

66KVA grid station in the open area

Office Spaces

Site Offices as temporary structures

Material Storage Areas

Water Reservoir

Accommodation for staff

Material requirement for the project:

Cement - 2200 bags approx.

Steel - 40 Tonnes approx.

Aggregate - 12,000 cft approx.

Sand - 8,500 cft approx.

Bricks - 1,80,000 no.

Stage 1 : From foundation level to plinth level Cement : 600 bags

Sand: 3500 CFT

Aggregate: 2500 cft.

Steel: 12 tones of 25mm , 20mm & 8mm

Bricks: 20,000 bricks in no.

Stage 2 : Up to lintel level Cement : 500 bags

Sand: 2500 CFT

Aggregate: 3500 cft.

Steel: 07 tones of 25mm , 20mm , 16mm & 8mm

Bricks: 50,000 bricks in no.

Stage 3 : On laying of slabs Cement: 700 bags

Sand: 3000 CFT

Aggregate: 5000 cft.

Steel: 8 tones of 25mm , 20mm ,16mm & 8mm

Bricks: 80,000 bricks in no.

Remaining quantity of the materials shall be ordered on the requirement of the

miscellaneous activities like plastering, brick soling and brick ballast, etc.

INVENTORY CONTROL MEASURES

The aim of the materials management is to make available the right type of material in

right quantity, at the right price, at the right time and at the right place. The objective is such that the

construction work should not beheld up for the want of material but the total investment on the

materials minimum. If we examine the aims and objectives very carefully the concept of Inventory

control in the material management is obvious. This can be considered as a very important function

of materials management. It is mainly concerned with laying the policies regarding how much

quantity of a material should be held in stock so that the aim of the material management of

ensuring continuity of the project with the minimum investment in materials is fulfilled.

Inventory are necessary because they provide protection against uncertainty of demand and supply.

1. They ensure smooth flow of materials through production process.

2. They ensure reasonable utilization of manpower and equipment etc.,&

3. They also provide the means to maintain good customer service.

TWO-BIN System

Inspired by the kanban replenishment method developed and made popular in Japan, this

replenishment system, adapted to hospital supplies, is based on the principle of two bins for each

product type. Each bin contains half of the quota (inventory level) for a given product. A bar code

label is affixed to the front of each bin. When the first bin is empty, user personnel or clerical staff

transfers the label to a board mounted on the wall, and supplies are used from the second bin.

Using an optical scanner and according to a pre-determined schedule, a stores employee

scans the labels on the board to capture data on the products requiring replenishment, which in turn

triggers the process to replenish the quantity contained in the bin. This activity can be eliminated

through the use of a replenishment software application that uses RFID technology. This application

is presented in the section “RFID-assisted replenishment”.

Once the person responsible for managing inventory in the department has replenished the

bin, he or she first transfers the remaining supplies in the second bin to the first bin, then places the

new supplies in the now empty second bin, returning the label to the front of the first bin. In this

way, stock rotation occurs with each replenishment.

This system simplifies the needs evaluation process. When compared with other recurring

replenishment methods, the two-bin system stands apart. It requires no inventory taking (or

verification) prior to scanning the labels. It also facilitates stock rotation management, which is

essential to prevent product expiry, and it significantly improves the control of stock levels.

EOQ:

Economic order quantity (also known as the Wilson EOQ Model or simply the EOQ Model)

is a model that defines the optimal quantity to order that minimizes total variable costs required to

order and hold inventory.

It is based on the assumptions:

1) The demand over the period of cycle (normally a year) is constant and is known in advance.

2) Consumption of the material occurs at the uniform rate.

3) The price of the material is independent of the order. Quantity discount is not allowed

4) There is no lead time in the replenishment.

We should know Ordering cost and Carrying cost

A) Ordering Cost: consists of

i) Requisitioning

ii) Order processing

iii) Order placing, and

iv) Receiving, inspection, checking etc.

B) Carrying Cost:

i) Interest on Capital invested

ii) Storage, handling and warehousing such as rent, Insurances and taxes, Lighting, andother maintenance costs

Right purchase quantity should ensure that overall cost of acquisition and possession is

minimum, while holding the optimum quantity of an item in inventory. It will have to be

appreciated that a point of minimum cost is reached at which the ordering cost will be just equal to

the carrying cost such that neither excess material is ordered nor too many orders are frequently

placed for the same material during a time period, for which demand pattern is more or less known.

It must be remembered, however, that while the former varies with the number of orders placed, the

latter is linearly and directly related to the quantity carried into the inventory.

EOQ MODEL

ROL:

The two factors that determine the appropriate order point are the procurement or delivery

time stock which is the Inventory needed during the lead time (i.e., the difference between the order

date and the receipt of the inventory ordered) and the safety stock which is the minimum level of

inventory that is held as a protection against shortages.

Reorder Point = Normal consumption during lead-time + Safety Stock.

Several factors determine how much delivery time stock and safety stock should be held. In

summary, the efficiency of a replenishment system affects how much delivery time is needed. Since

the delivery time stock is the expected inventory usage between ordering and receiving inventory,

efficient replenishment of inventory would reduce the need for delivery time stock. And the

determination of level of safety stock involves a basic trade-off between the risk of stock-out,

resulting in possible customer dissatisfaction and lost sales, and the increased costs associated with

carrying additional inventory

REORDER POINT FORMULA:

Reorder point = S x L + F ( S x Rx L)WhereS = Usage in unitsL = Lead time in daysR = Average number of units per orderF = Stock out acceptance factor

SITE STORAGE AND REPORTING

Materials to be stored are in the following way:

Steel & Cement in a room with an area of 14,000sqft.Aggregate, Sand in open courtyard

Reporting:Scheduled Reports: I would make the scheduled reports which would be issued fortnightly.

The reports would be containing the details of production, monthly cash flow etc. for further use in

planning and control processes.

Error Reports: I would make these reports to correct the invalid customer names, incorrect

totals and missing data during transaction.

Control Reports: Control reports would be maintained in the form of payroll register, a

journal, a cash register etc. giving detailed listing to describe each transaction occurring during a

specific time period.

Provision for Exception reports & Demand reports would be there.

INTEGRATED REPORTING SYSTEM

Basically an integrated reporting is the system in which can get information from all the

reports at lower level. Specific to this project reports from labour class to S.E.’s etc. would be base

for integrated reporting for the next level.

SYSTEM DEVELOPMENT: For the system development of the hydel project we shall be

following the following steps:

Separate files fordifferent applications

Integration of related files of various activities: Files shall be made in Excel programme

for the separate jobs to be done in a stipulated period and the manpower involved.

Relationship between different entities: different entity relationships are as follows

One to one

One to many

Many to many

In the management system of hydel project we shall create files showing one specific

activity is to be done by one agency e.g. the completion of superstructure shall be done by a

construction agency. This construction agency shall be assigned more than one job. Here “One

to many” type of relationship between different entities shall be helpful.

Own staff

Staff of outsideagencies

Work done byown staff

Work done byoutside staff

Billing forvarious activities

DATA PROCESSING:

Activity Agency Duration Cost

Civil work P1 2yrs 3 Months ……..Lacs

Finishing P2 6Months ……..Lacs

FLOW CHARTING:

Flow charts of the various jobs/activities shall be made on the weekly basis, checking the

commitment by the agency for that specific job. If any activity is not completed in the specified

time it will have to be overlapped in the second week assuming it to be the responsibility of the

concerned agency. After the 6th week if the same situation prevails for the delayed activity penalty

clause will be applicable as per the agreement. The employer and the outside agency shall sign this

agreement. This flowchart shall be made using the P.C. software MRPII System(Material Resource

Planning) and shall make it very easy to maintain the records of agencies hired and the jobs done by

them.

Activity 1st week 2nd week 3rd week 4th week 5th week

A1

A2

A3

COMPUTER APPLICATIONS

Data Communication, file design:

As per the data file enclosed below.

System design specifications:

The MIS specifications were designed with 40GB hard disc, 512Mb RAM, P4 & MS-Office

as software.

System analysis and design:As I have already discussed the MIS design for the hydel project with the system design

specifications already mentioned. The whole project has been divided into construction segments.

The data file for the different activities has already been attached with. As per my design all the

activities e.g. requirement of the materials, their consumption, the duration of the activities, the

manpower required has been segregated so as to avoid all confusions regarding the cost factor and

consumption of materials. I have designed the specifications for the contractors and other outside

agencies as well e.g. the time schedule of the work they will handle and the penalty clauses, if

applicable.

I have designed my specifications of the materials stage wise. This will avoid any type of

pilferage during the construction tenure of the project. To the maximum I have tried in my design

not to have excess storage of the materials as this leads to the wastage of materials like cement

(because of its setting action), steel (rusting of steel) after the handing over of the project. In totality

I conclude that my MIS design for the project is completely successful.