Analysis of Construction Project Cost Management

Running head: DREAM HOME CONSTRUCTION PROJECT
Dream Home Construction Project
Name of the student:
Name of the University:

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1. Explanation of the project management processes
This project depicts construction of a dream home in Port Philip Bay which is only 5.5
Kilometer away from Melbourne Central business district. The scope of the project,
communication management plan and stakeholder engagement strategies that are to be used, also
elaborated in this paper. However, in order to achieve the best lean project management the best
lean prcatices that are to be applied by the project team is also elaborated in the paper.
PMBOK and Prince2 are the two leading construction work development methods
applied by the builders, architect and contractors. Similarly, in order to initiate and complete the
dream home construction project in Melbourne between PMBPK and Prince2 project
management methods Prince2 is selected and applied (Ahmed & Mohammed, 2018). For
constructing the dream home pre project initiation, project initiation, subsequent delivery stage
and final delivery are the development activities will be followed to direct, manage and
successfully deliver the project.
a. Finalizing client’s requirements in terms of project scope
In order to finalize the clinet’s requirements different project management processes are
used by project teams such as waterfall, Prince2, PMBOK etc. Though, for this particular project
Prince2 project management method is used. Project scope is defined as one of the most import
stage in managing and delivering any project (Bu, 2017). Infact before beginning any project its
scope and objectives needs to be clear to the project team members and all stakeholders. In other
words, project scope should be well define and also shared among all stakeholders and associate
project team members. The scope of the project is to construct a dream home considering the
concept of green building in Port Philip Bay, Melbourne. The scope of the project is to improve
the construction process by eliminating waste elements.
The construction will be identified as a successful one only if it successfully reaches the
lean project management prcatices. Lean also considers different processes related to project
goals and activities that help to improve the project and execute it successfully avoiding all
probable risks and problem situation. Efficiency and effectiveness of the project also team gets
enhanced with lean project management (Fewings & Henjewele, 2019). The owner of the project

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has estimated a budget amount of AUD$500,000 and the dream home construction contract is
given to the builder company “Energy efficient building technologies”. Therefore, the scope of
the project is to complete the construction work in the measured budget of AUD$500,000 and
time of 12 months. The project must not exceed the budget estimated at the early stage of
construction. Apart from that, it should satisfy the client’s expectation in terms of quality, time
and budget.
The project objectives will be achieved in estimated budget and timeline after finalizing
the clinet’s requirements. Apart from detail project processes the other things on which the
project team needs to focus on include communication management plan and stakeholder
engagement strategies. In the scope of the project, each development activities will be clearly
designed and how theses can be individually are also evaluated (Fleming & Koppelman, 2016).
The ultimate budget, timeline and quality of a project are evaluated in the project scope. It is
duty of the project manager and associates team members to ideate the project scope and make it
executed according to lean thing and lean project management activities.
b. Ensure communications with all relevant stakeholders are effective and efficient
In order to effectively as well as efficiently manage the communication among the
project team members open communication approach is the most suitable one applicable for
most of the projects. For managing any construction project individual knowledge areas are
needed to be managed individually. Among these knowledge areas risk, communication, quality,
resource, cost and budget are very crucial areas to be considered and managed as well by the
associates (Hussain et al., 2018). For long term success of any project communication is a
fundamental area needs focus and attention of the project supervisor and contractors as well.
The process helps to create and share ideas, facts and views related to the project.
Effective communication is important to direct the dream home construction project towards the
expected objectives, aim and goals. A construction project manager can be highly qualified but
will never identified as a good leader if lags good communication skills. In other all ability of a
project manager will become obsolete if he is he found dies not posses good communication
skills. Not only the project supervisor but also all other project team associate need to have good
communication skills (Jegan & Kothai, 2017). A project manager must communicate his
directions efficiently to their subordinated to get all the work done properly.

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Different types of communication process such as upward, downward, horizontal, open
communication etc are there used by project contractors to direct, conduct and complete any
project on time within accurate deadline. Among these approaches for the dream home
construction project open communication is the best suited one (Ma & Cai, 2018). The role of a
sender communicator is to generate the message and convey it to the rest of the associate team
member. In other words, sender is the person who initiates the process of communication.
Communication is a continuous process needs to be used by project manager, contractors, sub
contractor and other team members.
A good and effective communication process includes three main elements in terms of
sender, message and receiver. In other types of communication approaches the messages are
generally encoded and do not become clear to the receiver unless decoded clearly. However, for
the dream home construction project open communication is the most applicable one. This
process gives an independent communication platform to the project team members including
project manager, contractor, sub contractor, architect and civil engineer etc (Stransky & Matejka,
2019). In this process idea, creativity and unique concepts of each individual is considered as
important source. In order to complete the communication successfully the communication plan
which is developed by the project supervisor and other associates is elaborated in the below
section.
Purpose of
communication
Stakeholders
involved
When Channel of
communication
Frequency
Meeting to conduct
discussion on project
objectives, aims and goals.
Project
supervisor and
project team
members
At the project
beginning
phase
Face to face
meeting, emails
weekly
To conduct discussion on
budget and its distributed
for various related
resources
Finance
manager project
supervisor and
project team
members
At the project
initiation stage
Face to
face meeting and
email
Weekly
The purpose of the Contractor and During the Face to Monthly

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meeting is to let sub
contractors know that for
building which specific
element of the dream
home they are contracted
sub contractors project
initiation and
throughout the
project
planning phase
as well.
face meeting and
email
To make discussion on the
building prototype, its
exterior design and
interior design outline as
well
Civil engineer
architect and
project manager
Project
planning phase
Face to
face meeting and
email
Monthly
In this meeting the project
sponsor and project
manager will discuss on
what exact budget they
need and how it has to be
distributed to avoid
overrunning budget
related issues.
Project
supervisor,
resource
manager and
sponsors
Project
planning and
execution
stage
Face to
face meeting and
email
Weekly
c. Managing subcontractors and vendors successfully
In order to manage the subcontractors and vendors effectively different strategies are
available. Based on the project structure, its nature and features the most vendor and
subcontractors management strategies are needed to be selected and applied. The builder
company “Energy efficient building technologies” is contracted to the dream home construction
project. The budget estimated for the project is higher than any other common home building
projects (Zou et al., 2019). Due to this reason the project holds multiple numbers of vendors.
Managing multiple numbers of vendors for any project is very difficult. The same attention is
required for managing the associate project subcontractors. For this project the subcontractors
are assigned to build different building elements.

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In order to manage the vendors the different essential strategies to be used to achieve the
lean project management are as follows:
Proper communication: Vendors for the project play essential roles. In order to manage
all the project related vendors the project supervisor need to make sure that all associates are
using open communication and sharing useful information among the team associates. Proper
communication will help the managers to avoid all possible risks that may interrupt the dream
home constriction project’s progress (Sunder, 2016). Effective communication between the
project team members and project supervisor is very important. For this project the processes of
communication that are used include conversation through email and face to face meeting.
Roles and responbilities assigning matrix: Based on previous experiences and review
rating given by other customers the roles and responbilities of vendors are needed to be divided
(Mesa, Molenaar & Alarcón, 2019). It is duty of the project team members play the assigned
roles and responbilities on given time and budget.
Performance report: The performances of the vendors are needed to be served properly
on given time and budget. Before assigning any vendor to the dream home building project
individual’s performance has to be checked based on budget and timeframe.
Issue and risk management plan: In order to manage the vendors accurately, project
owner and supervisor need to develop an accurate risk management log considering
identification of risk, assessment, risk prioritization and possible risk management (Sohi et al.,
2016). A proper risk management plan will help the vendors realize the project activities their
responbilities as well.
There are some strategies must be considered for managing the project subcontractors are
as follows:
 Developing contracts after negotiation and considering project safety compliances
 Delivery of the project related information ahead the standard project schedule
developed
 Signing and acknowledging receipt of the document
 Development of accurate communication channel while making conversation over

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 Use of accurate construction project elated software manage the project activities
2. Explaining implementation of lean best practices to achieve lean project
management
In order to implement best lean prcatices for achieving lean project management in terms
of scope management, communication improvement, vendors and subcontractor management are
elaborated in detail in the below section.
Lean project management can be achieved for task 1. a)
These days globally construction industry is generating $350 Million of revenues by
producing approximately 8.5% of residents and it has projected an annual growth of 3% in the
coming next 6 to 7 years. The contract is given to this builder because they are not only focused
on the construction but also to create an eco friendly environment for the people who are going
to live in the dream house (Ansah, Sorooshian & Mustafa, 2016). The green building concept is
considered in this project to avoid pollution and environment related issues. It offers huge or
widespread benefits to the stakeholders which includes the building occupants along with the
society associates.
It includes superior fresh quality air, abundant natural light accesses as well as noise
control features. The other major considerations those are taken in to considerations include lots
of technical design, development efficiency along with water, resources, environment efficiency.
The concept of lean project management will not become achievable unless it eliminates
probable waste by improving the development process (Amran, Saraswati & Harahap, 2019).
The other technical features those are required to be considered by the project development team
to execute the dream home in Melbourne include high efficiency heating equipments, rainwater
utilization system, high efficiency light fixture, light motion detection sensors, automated
ventilation control system, rooftop planting and insulation as well.
Scope management is not only important for this project but also essential for other
project to meet expected objectives and preliminary goal sets developed. Managing scope of the
project and make it complete in the budget of AUD$500,000 and time of 12 months some stages
those are important to follow include- formation of project plan before final approval, appointing

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project executive manager to control the construction work, design and appointing expert project
management team, preparation of project brief, defining business case and project outlines.
In order to achieve lean project management for the dream home construction project the
different lean management principle that the supervisor need to consider include value, value
stream, flow, pull and perfection. In the process of lean project management vales is the mist
essential component (Oakland & Marosszeky, 2017). Therefore, before developing the final
scope of the project the supervisor need to define what will bring highest value to the dream
home owners. It will help the construction team understanding the customer demand.
Not only this but also it will help to improve the construction process by eliminating all
potential waste elements. After that the supervisor must create a roadmap followed by which the
project team can achieve the project objectives. Proper risk management plan needs to be
developed to make the process smooth and error free. The pull strategy is needed to ensure that
the project team will not delay to execute the project (Demirkesen & Ozorhon, 2017). However,
perfection is the other essential thing important to improve the dream home construction quality.
Lean project management can be achieved for task 1. b)
In order to achieve lean project management while developing and executing an effective
communication plan between the project supervisor, contractors and other stakeholders the
project team need to decentralize the project plan developed at the earlier stage (Nicholas &
Steyn, 2017). There are few steps the dream home construction project contractors,
subcontractors and other stakeholders need to consider are proper listening, repeat,
documentation, repetition of preferred modes, timely meeting and addition of needful values.
Listen: Instead of only hearing the project stakeholders they need to listen to them
properly to understand the project requirements and expected goals.
Repeat: The stakeholders need to repeat what they have understood
Documentation: The content of the meeting and emails must be documented approved
accurately (Li & Wen, 2019).
Respect preferred modes: In order to improve the process of communication better the
team need to collaborate, social sites to their process of conversation.

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Timely response: The project team members are needed to give response on the
conversation timely to avoid communication gaps related risks.
Addition of value: It is responsibility of the project team associates to add respective
values to it.
Lean project management can be achieved for task 1. c)
In order to achieve lean project management to manage vendors and subcontractors the
essential stages those are to be considered include:
Keep the project team members informed: It is responsibility of the project manager to
keep all the project team associates informed about the project elements and other relative
requirements (Ansah et al., 2016).
Spend visibility and making collaboration: The project manager should collaborate, the
project development activities and also must spend visibility through analysis and understanding
third party spending. It will help the team eliminating possible wastes by improving the entire
process of dream home construction.

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