Korean WBS

Integrated cost and schedule control in theKorean construction industry based on a modifiedwork-packaging model

Sangchul Kim, Chanjeong Park, Sangyoub Lee, and Jaeho Son

Abstract: As a project control technique concept that provides a quantitative measure of schedule and cost information,the earned value (EV) model can evaluate work progress by identifying the potential delay and the cost overruns in a proj-ect, which is useful for controlling projects. The construction industry in Korea does not put this concept into practice,however, because it is poorly understood and because the construction practices in Korea are different from those in otherindustrialized countries. Most important is the fact that almost all the construction projects in Korea are controlled in ac-cordance with the budget breakdown structure (BBS), which is less detailed than the cost breakdown structure (CBS),while those in the USA are managed through schedule control on the basis of the work breakdown structure (WBS). Thisis because most of the construction projects in Korea are generally contracted at a fixed price. This being the case, oncethe contract is awarded, the clients are no longer concerned with the cost of the project. This current construction practicebased on the BBS rather than on the WBS has brought forth a limitation in terms of the use of the existing EV model inthe domestic market. In this study, the EV model, which is suitable for the domestic market, is demonstrated. An inte-grated model of the WBS and CBS is then developed based on the modified work-packaging model. Finally, the devel-oped model is integrated into the project management system (PMS) to verify its suitability and efficiency.

Key words: earned value, work breakdown, budget breakdown, cost breakdown, Korea construction.

Resume : La valeur acquise (« EV – earned value »), en tant que concept de technique de controle des projets qui fournitune mesure quantitative de l’horaire et de l’information sur les couts, permet d’evaluer le progres des travaux en identi-fiant les depassements potentiels des delais et des couts d’un projet, ce qui peut etre utile pour controler les projets. EnCoree, l’industrie de la construction ne met pas ce concept en pratique parce qu’il est mal compris et que les pratiques deconstruction en Coree different de celles des autres pays industrialises. Le facteur le plus important est qu’en Coree la plu-part des projets de construction sont controles selon une structure de repartition du budget (« BBS »), qui est moins detail-lee qu’une structure de repartition des couts (« CBS »), alors qu’aux Etats-Unis les projets sont geres par le controle deshoraires selon une structure de repartition du travail (« WBS »). Cela est du au fait qu’en Coree la plupart des projets deconstruction sont generalement accordes a un prix fixe. Dans ce cas, une fois le contrat accorde, les clients ne sont plus in-quietes par le cout du projet. Cette pratique de construction actuelle basee sur le « BBS » plutot que sur le « WBS » a li-mite l’utilisation du modele de valeur acquise existant dans le marche interieur. Cette etude explique le modele de valeuracquise, lequel est adequat pour le marche interieur. Un modele integre de la « WBS » et de la « CBS » est ensuite deve-loppe en se basant sur le modele modifie de blocs de taches. Finalement, le modele developpe est integre au systeme degestion des projets afin de verifier s’il est adequat et efficace.

Mots-cles : valeur acquise, repartition des travaux, repartition du budget, repartition des couts, construction en Coree.

[Traduit par la Redaction]

Introduction

The development of computers and of information tech-nology has brought forth many benefits for the constructionindustry, helping it meet increasingly complex challenges(Paulson 1995). It has systematized control at the projectlevel, such as in engineering design, project estimating,scheduling, cost control, and integrated project management,which has led to significantly improved productivity. In theKorean construction industry, however, its applications inthe areas of schedule and cost management are still verylimited, thus requiring further research to explore its appli-cations that enable efficient control in these areas (Kim etal. 2002; Son et al. 2005). In this study, a modified earnedvalue (EV) model for integrated cost and schedule controlthat is suitable for the Korean construction industry, where

Received 15 February 2007. Revision accepted 6 June 2007.Published on the NRC Research Press Web site at cjce.nrc.ca on13 March 2008.

S. Kim and C. Park. GS Engineering and ConstructionCorporation, Seoul, Korea.S. Lee.1 Department of Real Estate Studies, Konkuk University,HwaYang 1-Dong, Seoul 143-701, Korea.J. Son. Department of Architectural Engineering, HongikUniversity, Chungnam 339-701, Korea.

Written discussion of this article is welcomed and will bereceived by the Editor until 31 July 2008.

1Corresponding author (e-mail: [email protected]).

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the spending is expected to account for US$107.8 billion in2005, is presented (Global Insight 2003).

Earned value management systemThe EV model was developed as part of the cost–schedule

control systems criteria (C/SCSC). The US Department ofDefense (DOD) has applied it in its projects since 1967 tomeasure the outcomes associated with the high risk in risingcosts (Singh 1991; Niemann 1991). The earned value man-agement system (EVMS) is a simplified concept pertainingto the act of fitting the diverse baselines of C/SCSC, whichhave been rewritten to make them suited to private practice(Fleming and Koppelman 2000). However, despite the factthat the interdependency between schedule and cost is ob-vious, one can hardly find project control systems that inte-grate the cost and schedule control functions (Hendricksonand Au 1989). Rather, these functions remain separate, oper-ate independently of each other, and use two different con-trol structures: the work breakdown structure (WBS) and thecost breakdown structure (CBS). The difficulty in integrat-ing the two functions lies in the level of detail each functionuses as opposed to the level of detail required. The cost con-trol function, represented by the CBS, is performed at abreakdown level that is less detailed than that of the sched-ule control function, represented by the WBS. This differ-ence in the level of detail used by each function creates afundamental difference in the ways in which cost and sched-ule data are maintained. Each act of collecting data becomesindependent of the other and is maintained separately.

Earned value management system applications in KoreaThe concept of EVMS has become more important be-

cause the primary objective in the construction process is tocomplete the project on time and within the budget whilemeeting the established quality requirements and other spec-ifications (Rasdorf and Abudayyeh 1991). Following the es-tablishment of the International Performance MeasurementCouncil (IPMC) in 1993, EVMS has gained the support ofa number of countries (Baek et al. 2000). In Korea, the con-cept of EVMS has been applied only in a few special proj-ects. For example, Korea Electric Power Corporation usedEVMS from blueprint to completion in the construction ofits Yeonggwang nuclear power plants 3 and 4, its thermo-electric power plant, and its combined heat and power plantin 1986. Few large construction corporations have appliedEVMS in the implementation of their projects, however, asthere is no systematic approach towards the development ofa cost and schedule integration system based on EVMS inthe field (Kim and Kim 2000). The Korean Congress passeda law in July 2000 that mandates Korean companies to useEVMS when their project cost is estimated to be overUS$45 million (MOCT 2000). There are still problems,however, in the implementation of EVMS mainly becausethe concept of the integration of cost and schedule is newfor most construction companies in Korea, as EVMS ispoorly understood, and because the construction practices inKorea are different from those in other industrialized coun-tries. In contrast to construction companies in the USA,which control the whole construction project through sched-ule control on the basis of the WBS, Korean companies can-

not easily apply these EV models and concept because theconstruction projects in Korea are controlled based on thebudget, in accordance with the budget breakdown system(BBS), which is less detailed than the CBS (Kim et al.2002). Besides, as most of the construction projects in Koreaare generally contracted at a fixed price, once the contract isawarded, the client is no longer concerned with the cost ofthe project. Furthermore, the contractor does not report theactual cost (AC) to the client. This practice makes EVMSless attractive to clients. As a consequence, the contractormust take responsibility for both the schedule and the cost.Therefore, many contractors have borne all the responsibilityfor the completion of their projects and have had to set asideEVMS (Baek et al. 2000).

This study introduces the modified EV model that inte-grates the WBS and the CBS based on the modified work-packaging model from the contractor’s perspective, which issuitable for the domestic market. Finally, the developed mo-del is integrated into the project management system (PMS)to verify the utility and propriety of the model.

Literature reviewResearchers have been trying to find a better and more in-

tegrated approach to the measurement of cost and scheduleby developing data representation models that facilitateintegration of the two. Prior studies are examined herein toexplore possible integration models for the Korean construc-tion industry.

Teicholz’s modelThe study conducted by Teicholz (1987) recognized the

differences between the levels of detail of the CBS and theWBS and proposed a mapping mechanism between a givencost account and one or more activities (tasks) related to thataccount. This mapping mechanism works based on the con-cept of percent allocation, where a CBS cost account hasspecific percentages identifying the amount of a given re-source (such as labor hours and material quantities) thatshould be allocated to a given task in the WBS. The studyby Rasdorf and Abudayyeh (1991) observed that the twodifferent viewpoints cannot be combined because of the dis-cordance in cost and schedule. However, because the con-cept of percent allocation as applied in this model offers away to address real problems, it can be used effectively incases where abnormal values or elements arise, except forvalues that normally result from the process of integratingcost and schedule information.

Hendrickson’s modelHendrickson and Au (1989) proposed an integration con-

cept using work elements. The model was adapted from athree-dimensional work element definition proposed by Neil(1983). A work element is a control account defined by amatrix of work packages from the WBS and of cost ac-counts from the CBS. In this model, the work element pro-vides a link between the WBS and the CBS, where a costaccount may be related to one or more activities and wherean activity may be related to one or more cost accounts, us-ing the work element as a common denominator to achievethe desired integration. One problem with Hendrickson’s

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model, though, is that since the WBS and the CBS still main-tain distinct structures, it is difficult to find a common de-nominator between them. Besides the possible breakdown ofwork and cost accounts included in the WBS and the CBS,the diverse information about the site would make it difficultto determine the relationship between work and cost.

Object-oriented programming modelUsing an object-oriented programming (OOP) approach,

Kim (1989) developed a computer data model for improvingconstruction project planning and control. The model inte-grates not only construction cost and schedule control databut also design data, based on the development of a newelement: the basic construction operation required by a de-sign object (BOD). Defined as the lowest-level constructiontask needed to build a specific design object, the BOD canprovide a linking mechanism between a design object andits corresponding construction operation control functions,such as the WBS and the CBS. It was also observed thatthe relationship between cost and schedule is linked onlythrough the BOD, and information about cost and scheduleare designed to be linked through graphic entities. However,as cost and schedule information must be directly related be-fore the total cost can be calculated from the schedule infor-mation, there is a need for a method of linking the cost andschedule directly, not through graphic entities, as the rela-tionship cannot be precisely determined through the BOD.Rasdorf and Abudayyeh (1991) pointed out the problems ofcollecting data and of maintaining the two construction con-trol viewpoints of WBS and CBS as they are. Theycriticized this model because of the difficulty of collectinginformation when using it, and because of the fact that ithas two viewpoints of construction control. In constructionmanagement practice, however, cost-oriented and schedule-oriented management must be divided or combined depend-ing on the case at hand.

Work-packaging modelThe work-packaging model (Abudayyeh and Rasdorf

1991), developed by the National Aeronautics and SpaceAdministration (NASA) and the U.S. DOD for design-buildprojects in the aerospace and defense industries, achievedthe desired integration of cost and schedule. Previous studiesattempted to create a single information channel while keep-ing the cost and schedule control viewpoints separate; how-ever, the work-packaging model emphasizes the presentationof an integrated viewpoint of project data by adding costdata to the WBS and substituting the WBS for the CBS.Under special circumstances, this model can integrate andprocess the control elements of these two viewpoints intoone element. In certain situations, it offers the advantage ofproject control from a single viewpoint, but in actual con-struction projects, management must keep track of the de-tails of both cost and schedule. Furthermore, managementdecisions must reflect both viewpoints as both cost andschedule must be managed in terms of both viewpoints.

Model applied for this studyThe four models mentioned above apply the integration

approach of cost and schedule, and many experiments havebeen done to clarify the concept of EV by applying these

models. As each of these four models have their own advan-tages and disadvantages, it is very important to choosewhich of these to apply and to use in building an EV modelthat is suitable for the domestic market. It is difficult to ap-ply the model by Kim (1989) in a real situation because aconstructor can use the model only when an architect createsa three-dimensional entity of the BOD. The models of Tei-cholz (1987) and Hendrickson and Au (1989) maintain twoviewpoints rather than one, which they are able to do be-cause they contain common denominators: the percent allo-cation and the work element matrix. However, Teicholz’sand Hendrickson and Au’s integration models were estab-lished at a low level and, as such, the domestic market,which mainly controls construction projects based on theCBS, hardly applies these models as the CBS must be bro-ken down into detail levels and must relate the data it gath-ers to the WBS, which would cause a drop in efficiency.Therefore, in this study, the work-packaging model was con-sidered the basis of the EV model that had been built to re-flect the domestic market. The original work-packagingmodel approaches construction control based on the WBSfrom one viewpoint, with integrated information on quantityand cost; however, the CBS was selected as the standard ofthe work-packaging model because most of the constructionprojects in Korea are controlled through the BBS. Theassessment proposed by Abudayyeh and Rasdorf (1991) isreinterpreted in this study by resolving its technical limi-tations with the development of computer technology. As asolution to the absence of automation systems that cancollect and save a tremendous amount of data, which wasa barrier to the successful implementation of the work-packaging model, has been found and established, currentinformation systems have been made advanced enough toprocess such data, systems are now able to offer a graphicuser interface that would enable tremendous amounts ofdata to be processed easily, and the successful implementa-tion of the work-packaging model has been made possible.

Schedule and cost management applicationin Korea

Schedule managementKorean construction companies have separate manage-

ment systems for schedule and cost. Most construction com-panies, however, do not have a specialized division forschedule management, and the task force (TF) team estab-lishes a project management baseline (PMB) based on theactivities of 1000 various operations. Afterwards, based onthe PMB, the monthly schedule, two-week schedule, weeklyschedule, and daily schedule are determined based on theprogress of the project. The problem with schedule manage-ment is that schedules are not made for construction prog-ress management. Most schedules are influenced only bythe construction duration and the precedence-and-successorrelationship and have no cost information on manpower, ma-terials, and equipment. As such, most schedules are usedonly for exhibition purposes or as reports on the origins oforders. There is almost no actual function of schedule man-agement, and no systematic approach or smooth schedule in-formation feedback system has been established because

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cost is the main force that drives construction managementin Korea.

Cost managementConstruction cost is determined via a series of steps. In

the estimation stage, the estimated cost is tendered and thesuccessful contract is awarded with a proposed price. Theactual cost is determined based on the actual unit price andquantity. A project is managed based on the actual cost. Asmost construction companies use cost as a standard in calcu-lating the rate of progress of a project, cost management hasbecome very important in the Korean construction industry.Therefore, cost management at the construction site is linkedto the cost management system at the main office, and ismanaged by personnel at the main office. There are, how-ever, two major problems with the cost management systemthat these construction companies are employing. First, be-cause the initial estimated cost, contract price, and actualcost do not follow any kind of standard, there is no con-sistency in management. Second, as the cost managementsystems are prepared according to the standard of the ac-counting department, there is a discrepancy between theconstruction sequence and the CBS.

Budget breakdown structureSimilar to the CBS, the BBS, organized by work item,

such as material costs, labor costs, equipment costs, and out-sourcing costs, is used to express the breakdown structureconcretely, including quantity and unit price. Because thesecosts in the BBS are classified as work items, the construc-tion sequence and work space (i.e., building, floor, androom) are not directly linked to cost. To link schedule man-agement to cost management, the information from theschedule about work space and construction sequence shouldbe unified as a work item and then linked with the cost in-formation. Another way is to separate the cost informationcontaining work space from the construction sequence andthen to link it to the schedule information.

Level of detailThe problem with the use of the aforementioned method

of schedule information to integrate cost and schedule bywork item is that construction sequence is not taken into ac-count and schedule management is disabled, making EVMSusage unlikely. This is why the EVMS model in this studyuses the method that utilizes the work-packaging model tointegrate schedule and cost. The problem with this methodis its level of detail, as indicated by Rasdorf and Abudayyeh(1991). If the level of detail is the activity level, integratingthis with the construction information will increase the inter-nal division of labor, which in turn will increase the work-load in the integration. Opposite to this, if one unifies at themajor task level, the appropriate information is not captured.Therefore, the level of detail is one of the important factorsin integration. The task that is considered most important inbuilding the EV model is the integration of schedule andcost information. Much interest has been focused on the in-tegration itself, and very little interest has been shown in thedetails of account control that influence the efficiency ofcontrol during the integration of information. Most of the es-tablished EV models have tried to integrate detailed infor-

mation on the lower levels, where it takes much time andeffort to collect and process data. Therefore, control effi-ciency drops when the number of control accounts is in-creased. As a result, the persons in charge of running theEV model in the field experience many difficulties.

Development of integrated model

Concept of schedule and cost integration modelThe model for integrated schedule and cost that was con-

sidered for this study is based on the work-packaging modelproposed by Rasdorf and Abudayyeh (1991), which adds theCBS to the WBS and substitutes the WBS for the CBS, thuscombining the project control viewpoints. In Korea, how-ever, where construction is controlled on the basis of thebudget, it is difficult to apply the work-packaging model tothe original model as it is. Therefore, the modified BBS,which adds the activity representing the work unit of sched-ule management to the original BBS, was combined with theWBS to formulate the modified work package based on theCBS, as shown in Fig. 1. In this figure, a flowchart of sched-ule and cost and an integrated breakdown of the scheduleand cost structure are also shown. Schedule management ispresented as activities that have physical space, includingthe resources (labor, equipment, material, etc.), whereas inthe BBS, the quantities calculated in floors or groups in theestimation stage are summed up as budget items, which arethen built into the modified BBS, including activities, the ba-sic elements of schedule management. When the activitiesused in the schedule management are added to the BBS,they become the link connecting schedule with cost, evenfor the establishment of schedule planning for the data origi-nally used. As such, schedule and cost can be controlled bythe activities, the control standard in the field. The integratedbreakdown structure model, which integrates schedules andcosts by reflecting the activities on the CBS, is shown inFig. 2. In the integrated breakdown structure model, theBBS is composed of subdivision 1, subdivision 2, theintermediate-level WBS, and the standard activity. After thebudget is prepared, the activity is divided into work group 1and work group 2. In Fig. 2, subdivision 1 pertains to theconstruction areas; subdivision 2 signifies the small groupsof buildings; work group 1 stands for ‘‘apartment houses’’and facilities; and work group 2 represents the floors andelements. In this integrated breakdown structure, the activityis divided into budget activity and unit activity. The budgetactivity, the concept of the WBS, is used when preparing thebudget and when the unit activity is expressed in the sched-ule combined with the element. The unit activity is the unitthat intends to control the field, which is separate from thebudget activity. For example, consider the unit activity of‘‘concrete construction.’’ In the description, only the kind ofwork to be done is described, and its description is not as de-tailed as that of the work element. However, if the detailedgroup ‘‘1st floor 103 apartment’’ is marked, the unit activity,the definite control unit of ‘‘concrete construction on the 1stfloor, 103 apartment,’’ will be made.

Changes in the budget breakdown structureThe following is a detailed examination of the budget that

was made by task, subtask, activity, and standard budget item

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instead of the task and budget item, according to the inte-grated breakdown structure. Figure 3 shows a case inwhich the BBS has been modified, resulting in a newBBS. In the conventional BBS, the budget item ‘‘Ultra-sonic Test’’ is under the task ‘‘piping work,’’ but in themodified BBS, the subtask ‘‘process piping’’ and the activity‘‘N.D.E.’’ were added, and the relevant items were connec-ted to ‘‘N.D.E.’’ By preparing the new BBS by task, sub-task, activity, and relevant budget item, the difficulty ofaccomplishing the duplicated work was addressed. Forschedule management, new activities should be made, aswell as new items suitable to the activities input. Further-more, as the WBS was integrated on the basis of the CBS,

the dual standard became unitary, making construction con-trol from a single viewpoint possible. In calculating theprogress rate, this integrated viewpoint makes measurementfrom the same viewpoint possible; as such, a measurementcan lead to the capture of the progress rates of scheduleand cost at the same time.

Activity standardizationDue to the specialization, diversity, and complexity of

construction, the control style of the project manager or thesite conditions may cause a deviation in the activities, evenin the same construction project. In Korea, schedule controlhas not yet been established because the concepts of WBS

Fig. 1. Concept of schedule and cost link. EV, earned value; WBS, work breakdown structure.

Fig. 2. Integrated breakdown structure model. Apt., apartment; park, parking; BBS, budget breakdown stucture; WBS, work breakdownstructure.

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and activities have not yet been clearly defined and becausethe current practice puts an emphasis only on the analysis ofthe existing schedules and discussions with the persons incharge prior to any attempt to standardize the activities.These standardized activities, as shown in Table 1, are thosethat appear on schedules as the basic units of schedule andcost measurement. As the detailed levels of control accountsgreatly influence the efficiency of control, the quantities onthe control accounts are important factors in any operation.Therefore, the activities must be standardized to make itpossible to keep them up: the activities of the baselineschedule are arranged to be less than 1000, and the requiredperiod for each activity must be made not to exceed 30 d.

Formulation of planned value through standard activitiesFrom the standard activities built into the integrated

breakdown structure, the necessary activities are selected toform a set of budget activities for a project. After the budgetis prepared in an activity unit, it is linked to the work ele-ment, which is then assigned to the lower level control inthe field for the creation of unit activities. When a quantityof budget activities is distributed to the work elements, thequantity of unit activities is generated. When the budgetactivities are distributed, the data used to calculate the quan-tity during the estimation stage will be referred to and input-ted into the system. These created unit activities areimported into the schedule software (compatible with Prima-vera P3, Microsoft Office Project, Primavera SureTrak 2.0,Neuron Data’s Nexpert, and Dain C&C’s EasyPEM), and

each of the imported activities has information about its ownquantity and cost. Linking the periods and work proceduresof the activities by using the schedule software will pro-duce the baseline schedule and also the planned valued(PV) of the project. This flow is shown in Fig. 4.

Creating earned value and actual cost through dailyreporting

The worksheet concept used in various countries is intro-duced to input the data concerning works into the computersystem, so that when a field supervisor inputs not only thework status but also the schedule and the progress ratethrough the computerized daily report, the field managercan link the schedule and the EV through the daily report(Fig. 5). ‘‘Unit activity in the PMS’’ is created to transmitthe data of the unit activity to the schedule software, andthen the schedule is prepared. After the unit activity is in-putted into the system, the baseline schedule and the PV ofthe project are decided. Subsequent to inputting the progressrate and the application period (beginning date and endingdate) based on the unit activity linking the schedule and thecost, the results are transferred to the schedule software, up-dated, and input into the schedule in the PMS, and then theEV is automatically calculated. Since the PMS is connectedto the account system and the subcontract price of the sub-contractor is linked to the budget item, the budget itemsconcerning materials can be recognized through the controlof the input and output of the materials. Therefore, if the

Fig. 3. Example of modified budget breakdown structure.

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progress rate is inputted into the daily report, AC can be cal-culated in real time.

On the daily report screen, when the insert key is pressed,a pop-up window for the WBS appears, and when the‘‘WBS operated today’’ button is pressed, the work items of

the daily report can be input into the system (Fig. 6). Afterthe daily report is prepared on the basis of the unit activitiesof the baseline schedule, the PMS and the schedule softwarecan be linked to progress management. When the workquantity of the day is confirmed and the accumulated prog-ress rate is input, the beginning and ending dates of thework automatically appear. When resources like personsand equipment on the basis of the unit activity are input,they can be managed and the data for the productivity ofthe activity can be measured. The calculation of the sched-ule and cost progress rate can be accomplished from a con-sistent viewpoint, and from inputting the work informationinto the daily report the advantages of knowing the exactprogress rate of schedule and cost can be achieved auto-matically.

ReportingThe baseline schedule and the PV of a project on the unit

activities linked with the budget are prepared before con-struction begins, and then the progress rate based on theunit activities in the construction is input to calculate thevalues of AC and EV automatically. These calculated valuesare ultimately reported as an S-curve schedule (Fig. 7). ThisS-curve schedule defines the information in the schedule andthe cost in total detail, and helps to monitor the physicalperformance and progress rate constantly, which is com-pared with the baseline schedule. The S-curve schedule pos-sibly recognizes the relationships among EV, AC, and PVthrough a bar chart so that each work item’s period andtime frame, as well as the weight status of EV to PV, canbe clearly recognized. Moreover, the important events ofprojects can be recognized through their milestones.

Table 1. Example of standardized activities in construction.

Task Subtask Activity UnitTemporary work Scaffolding work Scaffolding m2

Scaffold demolition m2

Other temporary work Leveling m2

Laying-out m2

Foundation and earth work Earth work Excavation m3

Back filling m3

Consolidation m3

Grounding work Grounding work m3

Pile work Pile work EachPermanent drainage work Permanent drainage work mRock anchor Rock anchor t

Reinforced concrete work Form work Form work m2

Reinforcing bar work Reinforcing bar work tConcrete work Concrete work m3

Steel work Steel work Shop drawing tManufacturing tAnchor bolt installation EachSteel assembly t

Deck plate Deck plate m2

Fire resistive covering Fire resistive covering m2

Masonry work Brick work Brick work SHBlock work Block work SHALC work ALC work m2

Note: SH, sheet; ALC, autoclaved lightweight concrete.

Fig. 4. Concept of the link between budget activity and unit activ-ity. WBS, work breakdown structure; S/W, software; P3, PrimaveraP3; MS Project, Microsoft Office Project 2000; Suretrack, Prima-vera Suretrack 2.0; Nexpert, Neuron Data Nexpert Object 4.5;EasyPEM, Dain C&C’s EasyPEM Master.

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Fig. 5. Schedule control process related to the daily report. WBS, work breakdown structure.

Fig. 6. Example of a daily report.

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Benefit of integrated model implementation

Earned value to planned value managementConstruction management in the field is largely divided

into schedule management and cost management. Schedulemanagement compares the percentage of construction com-pletion with the construction plan, whereas cost controlcompares AC with the budget. Managers in developed coun-tries spend most of their time on site control, whereas thosein Korea focus on controlling the budget and the physicalAC, emphasizing cost over schedule. Through the EV sys-tem, field supervisors can develop more systematic and ex-act schedule plans by using schedule software. Through thisstandard, the PV and EV can be analyzed precisely and canbe recognized in detail. This will enable the officers in theheadquarters and the field managers to build a managementsystem that can analyze the risks in schedule and cost, andto prepare the solutions for these.

Communication activationThrough the operation of the EV system, clear data proc-

essing is established and reliable construction information isprovided in real time. As a result, the flow of informationcan be managed punctually. Therefore, upper managementcan set up a system that will enable them to make promptand precise decisions through accurate evaluation of theproject.

Database of construction dataIn Korean construction companies, construction data sets

are not systematically built. As such, proper data collectionis not always available. There have been many cases inwhich data was not accumulated and transmitted to a systembut to individuals instead. If the EV system were adopted,field data would not be missed and could be saved in thesystem in their original form. Moreover, in the near future,accumulated data will be used to build the productivity data-base and the precise information needed to enhance compet-itiveness towards bids. Through this, the preparation of thebudget and schedule in the early stage of the drafting ofconstruction plans can be supported.

Productivity enhancement of construction managementtasks

The schedule linked to the budget items based on 500activities can be prepared through the EV system in 10 d. Ifdone manually, the preparation would take about twomonths, and there would be a 2 d delay in the monthly up-dates. The accumulated data from previous projects were ap-plied to similar projects, and the results of such anapplication show that the preparation time was shortened.Furthermore, the preparation of more precise and reliablebudget and schedule data improved construction manage-ment task efficiency.

Cost savings through proper material supplyIn the Korean construction industry, due to the absence of

the concept of inventory management, when inventoriescome in, they are debited and credited at the same time toincrease sales. As a result, the companies tend to ordergreater amounts of materials and supplies, as the plans for

the materials are so insufficient that the precise amountscannot be determined. Therefore, there are many cases inwhich certain materials are left over, thus causing losses forthe company. The main factors in effective material man-agement are the computation and ordering of the requiredmaterials in precise quantities, their supply to the field ontime, and the control of the construction until completion ata minimum loss. When an exact schedule plan is establishedand accomplished using the EV system, the material costcan be reduced as the monthly quantity of the materials re-quired to connect with the material system can be preciselycalculated and an automatic order can be made.

Quantified benefitAs mentioned above, the implementation of the integrated

model is expected to result in improved project control. Thishas been validated by the variation observed in the major in-dicators in a number of projects between 2002 and 2004, be-fore and after the system implementation (GS Engineeringand Construction Corporation 2004). The results of the com-parison show that the productivity improvement per personincreased from US$1.15 million to US$1.27 million (10%),and that the time spent for the initial project planning, in-cluding budgeting and master scheduling, decreased from 6to 3 months. The deviation in the schedule as planned andas performed decreased from 15% to 8%, and the cost alsodecreased from 8% to 5%.

ConclusionThe development of computers and information technol-

ogy has removed the technical barriers to the establishmentof automated systems that can collect and save a tremendousamount of data. It achieved the systematization of the con-trol of a project in the construction industry and signifi-cantly improved productivity. A modified EV model forintegrated cost and schedule control that is suitable for theKorean construction industry, which has very limited appli-cations in the areas of schedule and cost management, waspresented in this study. The model was developed based onthe work-packaging model from a prior study and was modi-fied based on the BBS. The integrated control of scheduleand cost can provide efficient tools for controlling a proj-ect’s risks by forecasting the whole cost when the projectprogress is at 15%–20% complete (Fleming and Koppelman2000). As such, the EV system used in this model is ex-pected to demonstrate the following five benefits:

. the transformation of EV to PV management makes itpossible to create a more systematic and precise schedule,and more effective project control can be accomplished asproject participants, both at the headquarters and in thefield, can monitor PV and EV exactly and can analyzethem in real time

. information can be exchanged efficiently between the pro-ject participants in the field and at the headquarters, aswell as among the personnel in the field

. through the database of the construction data, the produc-tivity database can be built and the precise informationcan be used to enhance competitiveness among the ten-

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ders of bids, where the preparation of the budget and theschedule in the early construction plan can be supported

. this system develops higher productivity than can bedeveloped by any manual approach, and it offers timeefficiency and accurate and credible data for similar pro-jects

. the proper supply of materials through a precise schedulewill result in cost savings.

Considering the special circumstances of the Korean con-struction industry, the EV system applied in this model isexpected to demonstrate solutions for more efficient con-struction management and can serve as one aspect of anintegrated control system in the construction industry.

AcknowledgementThe research was supported by the GS Engineering and

Construction Corporation, Korea. The authors extend theirgratitude to GS Engineering and Construction Corporation.

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