OPERATION Answer 5 questions by reading the case. HAMMER CONSTRUCTION: A. C GRADUATE SCHOOL OF MANAGEMENT EXPANSION PROJECT
On April 10, 2018, John Johnson, site superintendent and general project manager for the A. C Graduate School of Management (GROUP) expansion project, was in a construction meeting reviewing the schedule for the rest of the project. He was particularly concerned with the amount of construction scheduled for the Fall 2018 term; he knew the building would again be full of students then and wondered if the construction would not only disrupt the classes being held but also delay the entire project, which was scheduled to be completed December 31, 2018.
The project included both new construction and a complete renovation of the existing business building at A university (A) in Location B, California. This project was unique for everyone involved because the $24-million expansion and renovation had to occur while the building was still fully functioning as a business school; faculty and staff still needed offices, and classes had to be held in the building. This caused disruptions for users and slowed the overall construction and renovation. The new construction–including six new classrooms–would be done first and had to be completed by April 27, 2018 because classes were scheduled in the new classrooms for the spring term, which ran from April 30 to July 20, 2018. This work was on schedule.
In the meeting, Ken Kenner, the project lead, had reminded Johnson that although some of the interim deadlines could be relaxed, the one that could not be delayed was the deadline tied to the completion of eight of the renovated classrooms (in addition to the six new classrooms) for the start of the Fall semester, which was September 4, 2018. Winter 2018 classes would finish tomorrow, so Hammer Construction (Hammer) would be able to start renovating those classrooms on April 12.
Kenner had some good news for Johnson: although summer term classes (August 1-30) had been scheduled in the six new classrooms, Kenner had asked to have those moved to other buildings on campus. Thus, the GROUP building would be empty of all classes from July 23–August 31, 2018, allowing Hammer to work largely unhindered in that part of the building during this time and opening up some other options for scheduling tasks.
HAMMER CONSTRUCTION LIMITED
Hammer Construction (Hammer) was founded in 1905 in Fontana, California, as a general contractor. Its strong work ethic and focus on uncompromising quality standards had resulted in a successful 113 years of Management for the company. Hammer built all types of buildings, including large factories, warehouses, banks, university buildings, shopping malls, car dealerships, large retail stores, and pharmacies. In 2004, the company completed the first industrial building in to earn LEED certification and built several more LEED-certified buildings over the years.
Johnson started working for Hammer in 1971 as a carpenter apprentice after graduating from high school. He was promoted to the position of site superintendent in 1974, leading to a long career organizing and coordinating many construction projects. Johnson’s day-to-day tasks and responsibilities were typical of a project manager even though his official title was different. Multiple visitors to the GROUP site had commented that they had never seen such a neat construction site; this response was due to Johnson’s focus on organizing all materials and cleaning the site regularly. These practices were especially useful on this project because the building was being used by the GROUP during construction.
A. C GRADUATE SCHOOL OF MANAGEMENT AT A UNIVERSITY (A)
Located in Location B. A first established the Graduation School of Administration in 1970, which was subsequently renamed the Graduate School of Management in 1982. In 1994, the A. C Family Foundation donated $5 million to the school, which was renamed the A. C Graduate School of Management.
In April 2018, the GROUP had 106 faculty members, approximately 30 part-time instructors, 40 staff, approximately 3,000 undergraduate students, and over 550 graduate students. The large number of students in co-op programs (1,400 undergraduate and 280 graduate) meant that classes ran year-round; many students worked at their co-op placements during the fall or winter and thus needed to take classes in the spring and summer.
A. C GRADUATE SCHOOL OF MANAGEMENT (GROUP) EXPANSION AND RENOVATION
The GROUP had recently experienced unprecedented growth; the number of students had increased by an average of 4.4 percent per year, and by 2013, the faculty had over 3,300 students. The number of faculty members had more than doubled, from 45 in 2001 to 95 in 2010, with corresponding increases in support staff, teaching assistants, and part-time instructors. No construction was undertaken nor was additional space added during that period.
However, in 2015, design for the building expansion and renovation commenced. The existing 50,000 square feet of space would be completely updated and renovated, including the flooring, walls, ceilings, and lighting for all offices and all other spaces. New technology would be included for the nine classrooms, and 29,000 square feet of new space was to be added. Due to the building’s location on campus, the 29,000 square feet could not be added to one end of the building, so additions were designed to be attached to both the east and west ends of the existing building. The budget for the expansion and renovation was approximately $22 million, and during the design stage, A added approximately $2-million worth of deferred maintenance items (i.e., necessary but not urgent upgrades and improvements to the existing building).
The existing building consisted of three floors: denoted level 200 (the ground floor), level 300, and level
400. The east and west additions were designed to match this and to be completed in 2018.
Construction began in September 2016, starting with the new construction on the west and east ends. The west end featured a large two-story glass atrium, the computer lab, interview rooms, and 20 faculty offices. The east end housed six new classrooms and large washrooms. When the new offices in the west end were completed in February 2018, staff and faculty from the south half of the 300 level moved into those new offices, freeing up the south 300 level for Hammer to start renovations there. The renovation portion was quite challenging to schedule because faculty, staff, and student groups, as well as the graduate lab and lounge, would have to move in stages as the work was completed; some would move into the completed section in order to vacate another section of the building, thereby enabling further renovations.
Johnson coordinated all daily and weekly activities including all the sub-trades, material deliveries, Hammer’s own workers, A’s Facilities Management department, and the GROUP when power needed to be shut down, when access needed to be restricted to a portion of the building, or for other matters.
Johnson continually reviewed and adjusted the schedule based on many things, including sub-trade availability, unexpected developments, and scheduling requests from A or the GROUP.
Johnson worked closely with Richard Richardson, the Hammer project manager (Richardson was on the site about once a week, doing many tasks remotely such as connecting with suppliers, the architect, etc.), and Lisa Liu, the Hammer project coordinator. A had also assigned a project manager, Diana Diaz, to the project. Her job included ensuring A’s needs were met by Hammer, managing the overall budget, ordering furniture, and planning the moves. As a professor of Operations Management, Kenner was asked to take on the role of project lead. Kenner had taught Project Management for many years and had worked in the construction industry; also, he enjoyed scheduling and had published many papers on scheduling. His tasks included representing the GROUP’s interests to A’s Facilities Management department, Hammer, and the architect (Lift Architects); relaying complaints and comments from GROUP members to Diaz and Johnson; and helping to coordinate all aspects of the project that involved GROUP people, including the overall schedule, moves, furniture, and partial building closures.
The fact that the GROUP continued to operate during construction necessitated a great deal of extra planning and scheduling. Early in the project when the new construction was underway, one challenge was keeping students away from construction areas. At times, a working area would have less activity, and despite warning signs at these areas, students would sometimes walk right in, seemingly oblivious to the potential danger. Whenever possible, Johnson would close the gates in the fence, but this was not always possible.
During both the new construction and renovation portions of the project, sub-trades had to be carefully scheduled so as not to disturb the business school. At times, some work had to be done in a section of the building that was occupied. For instance, in order to get power to the new construction, wiring had to be run through the existing building. For these types of tasks and for particularly noisy work, night and weekend shifts were often scheduled.
Johnson decided to work on a revised schedule that would start April 12, 2018, when all the new portions of the construction were almost complete. The atrium and six new classrooms were scheduled to be turned over to A by April 27. Those classrooms had courses scheduled for the Spring 2018 semester, and Johnson knew that the 12 days he had left to finish the rooms would be sufficient. The nine existing classrooms were to be turned over to Hammer later that week (on April 12), when the winter semester ended. Eight of those rooms needed to be completely renovated by August 31, with technology installed and furniture moved in, before the Fall 2018 semester; the ninth needed to be finished on December 31, 2018, in time for the Winter 2019 semester. Johnson knew that renovations to an existing building often resulted in unexpected issues when walls and ceilings were removed. As such, he always planned for some buffer or contingency time in the schedule.
Johnson was most concerned about the hallways–much of the work there was scheduled for the fall, but he knew it would not be efficient to have a great deal of work remaining during the fall term (Kenner had pointed out that during class turnover times, 1,200+ students could be in the hallways). Some of the rough-in work had already been started in the hallway ceilings, and as Johnson pondered the situation,
he realized that it would be much better to attempt to finish the hallways by August 31—blocking off portions of the hallway during the spring and summer would be less disruptive than in the fall. He wondered if the various subcontractors had enough resources (i.e., workers) to do both the classrooms and the hallways in this time frame. In addition, the 200-level offices (24 offices), the graduate lab, and the graduate lounge were to be finished for a September 7 move-in date. However, he knew that if he allowed enough leeway in his time estimates, the subcontractors would probably be able to complete their portions on time if he pushed them and made sure they had the information and materials they needed on time.
The work in each of the main hallways on the 200, 300, and 400 levels was virtually identical, but because the 300 level required a bit more work and was also more important for access around the building, the subcontractors decided to do it first, followed by the 200 level, and then the 400 level. For each level, the work started with rough-in for lighting, data, and other electrical needs, done by Bolt Electric Company (Bolt). At the same time, Haven Life & Safety (Haven) roughed in the sprinkler system, and Gear Mechanical (Gear) roughed in the HVAC (heating, ventilation, and air conditioning) and other mechanical systems. This work took 28 days for each level. The three subcontractors worked at the same time on each level, and then moved to the next level. Fortunately, they had already started the 300 level and as of April 12 had only about five days left there.
Next, Plaster Drywall would drywall the ceilings. These were complex ceilings with many corners, different heights, and a “slot” for lights down the middle; as such it would take 33 days to finish the drywall, taping, and mudding for each level. Following this, Prime Painting would paint the walls and ceilings (three days per level). Then, Bolt, Haven, and Gear would finish the electrical and mechanical work (two days per level), followed by Mosaic Tile Center installing the flooring (12 days per level). Last, Chisel Woodworking would install the benches and display cabinets (two days per level), and then Hammer would clean the space (one day per level). As each contractor finished on a level, they would move to the next level, but only if the preceding contractor was finished on that level. (This could be denoted in a project plan using the “laddering” technique.) In the case where the preceding contractor was not yet finished, other work could be done on the classrooms and offices, and sometimes the contractors could leave the university to work on other jobs while they waited. A few other tasks and contractors were involved, but this explanation captured the majority of the work and the coordination required.
Johnson was not sure if all the work could be done before classes started in the fall, but he knew that, at a minimum, all the work up to and including the hallway flooring on all three levels would need to be done by August 31 in order to facilitate student traffic flow in September.
The eight classrooms had a similar sequencing plan as the hallways, where a subcontractor would work in one classroom and then move to the next while the contractor that followed would start in the first classroom. However, in this case, Johnson knew the one main bottleneck was the electrical and mechanical rough-in. A large amount of work had to be done in each room, including running power to the many lights in the five different lighting zones and to all student desks—including cutting channels in the concrete floors—and getting power and data to the fixed instructor podium, the two projector locations, the ceiling- mounted document camera, the two screens at the front, and the audiovisual (AV) rack in the corner of the room. In addition, all of the HVAC systems and sprinkler system heads had to be replaced and new fire alarm systems installed.
As such, Haven, Bolt, and Gear required a great deal of time in each classroom. All other contractors required less time and would thus have some time in between their work in each classroom—time they used to work in the hallways and offices. Accordingly, although laddering could be used to plan this portion, Johnson instead simplified his overall plan in order to focus on the rough-in work. The first job in each classroom was demolition, which took three days per classroom and was done by Anvil Demolition. Following this, the electrical and mechanical rough-in started; this work took 12 days per classroom. Since this was the bottleneck, Johnson skipped most tasks in his plan and built the overall plan as follows: first, he put in the demolition for the first classroom; he then put the rough-in work by Haven, Bolt, and Gear in the overall plan as one task for all eight classrooms (eight rooms x 12 days); and after this, he put in the rest of the tasks only for the eighth classroom. He knew that the rest of the tasks for each classroom would get done because they required less time, and he did not put them in the schedule–with the exception of the eighth classroom. In this way, he reached a reasonable estimate of the finish time for all the classrooms. Although this schedule did not have enough detail for the eventual implementation, it was enough for planning purposes on April 10.
The tasks that would be done in each classroom, but only input into the schedule for the eighth classroom—these were the “rest” of the tasks—were as follows. After the rough-in, Plaster Drywall needed eight days per room to drywall the ceilings, after which Prime Painting could finish the painting in three days total for the 8 classrooms. Then, Vinyl Flooring would install the flooring (one day’s work in total using a simple but resilient roll-on epoxy flooring); after this, Chisel Woodworking would install the desks, baseboards, and chair rails (two days total). Next, Bolt, Gear, and Haven would finish the electrical and mechanical work (including the power outlets in the student desks), which would take three days total. After this, Hammer would carry out a number of tasks, including installing whiteboards (44 whiteboards for the eight classrooms), acoustic panels, doors, and hardware (two days total). Then, Charm AV would take three days to install the AV rack, podium, projectors, document camera and speakers, as well as the wiring for all 8 classrooms.
After the completion of the above, a few tasks had to be done for all eight classrooms. The chairs would be delivered and placed in the classrooms (431 student chairs for eight rooms) by the chair supplier (Chaise Furniture) who needed two days for all rooms. Finally, Hammer would clean all the classrooms (two days total).
As with any building project, a number of approvals were necessary to obtain from municipal authorities before the building could be turned over to and used by the customer. Johnson wondered if he could get all the permits for the eight classrooms, the three main hallways, and the 200-level offices at the same time, towards the end of August. Three or four different types of inspections were required, but they all came down to two main permits: the fire alarm verification (including fire safety inspection) done by the Location B Fire Department, and the occupancy permit done by the City of Location B Building Department. The fire alarm verification could be done long before all the work was completed; Johnson only had to wait until the electrical and mechanical finishing was done in all of the areas. The necessary work for this verification would take four days for the inspectors to complete. The occupancy permit inspection would take one day and could be done following the fire alarm verification, the millwork, and the installation of classroom podiums. After this, Hammer would officially turn over the spaces to the GROUP.
Offices and Other Spaces
In parallel with the work above, Hammer was also renovating the office areas and creating other spaces such as the graduate computer lab, graduate lounge, faculty research lab, thesis student study area, washrooms, the GROUP welcome center, and employer interview rooms, among others. All offices and other spaces were to be completely renovated or refreshed, including new ceilings, lighting (all light- emitting diode [LED]), flooring, painting, and furniture. In terms of the detailed work and sequencing, much of the work in these areas was similar to that described above except that these areas required more furniture, less millwork, and less AV work. Hammer was able to plan the schedule for these areas without the requirement of a hard due date such as that for the classroom completion. However, once planned, the overall schedule for these areas became firm and could not be adjusted; before any office area could be renovated, the occupants needed to move out–but they had nowhere to move until the previous area was completed. In addition, once a move date was set, Hammer had to meet that date because the moves themselves required a great deal of planning, including booking the mover for that specific date.
As mentioned above, Hammer had started working on the south 300 level in February. As of April 12, 2018, Hammer needed only 10 more days to finish the section, including the dean’s suite, photocopier room, student club office, and approximately 21 offices. Occupancy inspections and furniture installation were included in this 10-day time period. Upon completion, occupants would move out of the north 300 level into the south 300 level on April 26, so that the north 300 level could be renovated. Diaz and Kenner coordinated all the moves.
To summarize the main tasks for each move: furniture had to be moved in (furniture delivery and movers had to be scheduled six weeks in advance), occupants needed to have their boxes packed and labelled, computers and phones had to be moved and hooked up, the building directory had to be updated in the school systems, and a number of other tasks had to be completed. To add to the complexity, some staff and faculty had to share an office temporarily during construction. In most cases, two individuals’ books and belongings would not fit into one office, so some boxes had to be moved to storage until the final offices were ready. These boxes had to be labelled differently from the boxes being moved directly into offices. None of these things were on Johnson’s schedule other than knowing the move dates; Diaz coordinated the tasks related to the moves.
Starting April 27, Hammer would need only six weeks to renovate the north side of the 300 level because it was probably the simplest of all the areas, with approximately 11 offices and a kitchenette. Occupants would move out of the 200 level into the north 300 level on June 8, 2018.
The entire 200 level, including 24 offices, the graduate student spaces, copy room, kitchenette, washrooms, and faculty research lab, was to be renovated over the summer. Renovations to this area required 64 days, after which occupants would move from the north 400 level to the 200 level on September 7, 2018. Johnson planned to get the occupancy permit for the 200-level offices at the same time as the classrooms and hallways. Major costs were incurred for the GROUP construction and renovation over spring, summer, and fall 2018 (see Exhibit 1).
Work on the north 400 level involved renovations to 24 offices and was expected to take 39 days. Occupants would move from the south 400 level to the north 400 level on approximately November 2, 2018. Following this, eight weeks were allocated to work on the south 400 level, which included 19 offices, a faculty lounge, a copy room, and a large information technology (IT) office and work area for the four GROUP IT support staff.
The term “substantial performance” denoted official completion time in the construction industry, which was when users had full use of the building, and approximately 98 percent of the cost for the work had been incurred. The goal for substantial performance for the GROUP was December 31, 2018.
After substantial performance, Hammer planned to spend another month or so in the building finishing and fixing deficiencies and minor unfinished aspects–as was typical in any construction project. This would involve minimal work, with likely only one or two workers in the building.
Diaz and Kenner planned a major move for January 2019. With all the shuffling around during the renovations, many faculty and staff had ended up in a temporary office that was not their final office. Kenner’s schedule facilitated getting about 50 people in their final office by this point, but another 80 would need to move (in stages) during January. However, this was not Johnson’s concern and was not included in his time line.
Johnson had recently become aware of some issues. For instance, the dean’s office had a glass wall that overlooked the atrium and was partially frosted for privacy. Although the glass was already installed, unanticipated adjustments to the wall due to conditions in the existing building meant that fewer panes had been needed, and as a result much more of the wall was frosted than had been anticipated. The dean was unhappy about this and asked for the special glass to be reordered. It was unclear how this situation would be addressed, since no one was specifically responsible for it.
In addition, Johnson was concerned that the landscaping plans were not progressing quickly enough. He wanted to work on and finish a large portion of the landscaping by mid- to late fall 2018, but at this point, Lift Architects, the GROUP, and A’s Facilities Management had not yet even agreed on what was going to be done. This issue was turning into a long back-and-forth process, after which the work still needed to be tendered and a subcontractor chosen–and the work then had to be scheduled and coordinated around the other construction activities.
As he reflected on these and other matters, Johnson turned back to the decision at hand. He knew there was no flexibility around the classrooms and 200-level offices; they had to be completed by August 31 and September 6, respectively. But he wondered if the hallways could also be ready for the required inspections by the end of August. This timeline, if achieved, would enhance working conditions for GROUP faculty and staff during the busy fall term, improve the classroom experience for students and instructors (due to lack of disruption in the fall), improve circulation through the building as students went to and from classes, and improve the chances that the remaining work could be finished by December 31. He realized he first needed an accurate potential project schedule before deciding whether to put a big push on getting the hallways completed before the end of August.
EXHIBIT 1: A. C GRADUATE SCHOOL OF MANAGEMENT CONSTRUCTION–APPROXIMATE COSTS (SELECTED–ALL COSTS NOT LISTED)
Cost Source (Subcontractors, Material, etc.)
Bolt Electric Company
Haven Life & Safety
Mosaic Tile Center
Hammer Construction: labor rate (average hourly burdened* rate per worker)
Whiteboard (approximate average cost of one whiteboard)
Classroom chair (cost of one chair, price reflects a 63-percent quantity discount)
Note: The costs shown are for all work done from April 12, 2018, until December 31, 2018 on the hallways, classrooms, and offices.
*Burdened rate is the cost of all labor including overhead associated with those workers.
1. Identify the stakeholders who have an interest in this project. Describe their interests and how they differ from the other stakeholders?
2. Describe why this project is more complex from a scheduling perspective than most other projects. What are the key scheduling challenges for the last nine months of the project?
3. In addition to the substantial performance milestone, there are a number of interim due dates. Which of these are most important and why?
4. Analyze the tasks for the project, including durations and precedence relationships (i.e. laddering). What is the duration for the remaining construction and expected due dates? Which due dates are in jeopardy of being late? What are some ideas for crashing the project?
5. How would you advise Johnson to ensure the project meets all the interim due dates and the substantial performance date?