In the operations problems subtopics on various aspects of the activities is considered. The technical/Contracts department, headed by a contracts manager, was the docket responsible with project estimations, preparation claims and procurement of the material. During the surveying of the project, the quantity surveyor gave the management the estimated cost of bidding on the price of bidding of the project. There resulted a costing error due to the time constraints in meeting of the bid submission details. During material procurement, as stated prior to 2009, the construction materials and supplies were normally ordered by the head office from time to time and the suppliers would deliver the materials to the site.
This prompted problem due to the fact that, the purchases happen not are initiated from the field, leading to occasions when the materials would either is under-purchased or over-purchased or under-purchased. Even when the overlying seems to have been managed, there arose other problems when the head office issued purchasing orders. A requisition form having the signature of the project manager or the purchasing order would not be issued. This basically shows how the company is experiencing difficulties in transferring of operations .
In the case of subcontractors, labor and equipments, the following problem ensured. When Trevabina was doing some construction, they only used a low percentage of the projects using their own labor and equipment. Before the year 2011, the company was no using formal evaluation or any bidding system to award the subcontracts. The awarding of the subcontracts was done at the discretion of the financial controller and general manager which shows lack of professionalism involed.
Problems from the financial issues
Some of the other problems emanated from the financial issues. Many of projects managed by the company had been tendered in 2008 and 2009 and were supposed to be completed by 2011. They happen not to have been completed due to manpower and working capital shortages which attributed to poor cash flow, hence the projects taking a while longer to begin. Also, there some problems the future cost of materials as, the adjustment of the cost escalation over a certain period of time was incapable to adjust the cost due to government indices. Another problem was with the bonding and credit facilities. The company was required to take out performance bond, but had lesser money to a point the bank, however, this organization had to recourse against Kamal, who place his personal assets behind the bond.
Recommendation for future actions in regards to operational options.
The technical department seems to have limited directors. In this sense, all of the project managers are holders of diplomas and they have not undergone any internal course. They only seem to use the knowledge used while acquiring the diplomas. This only thing that this business entity would want to do in order to ascertain and project good tidings for the future is to have internal seminars that will open the scope of thinking of the project managers .
The contracting department should also understand that cost estimation is not just simply a technical activity, but need managerial judgements more so on the uncertainties of the future- cost escalations for both the labour and materials. Other factors that need to be considered are unfavourable weather, political influence and inefficient subcontractor performance, and that the higher the bidding pricing the better the outcomes.
Material Procurement departments on the other hand, need to adhere to integrity and its roots. Honesty and accountability in the business count so much on the ability of a customer to trust an individual goes way further as far delivery is concerned. And in no time should the rules be broken. In the Subcontractors, Labor, and Equipment department, accountability of the working individuals should be adhered to if at all the company is heading somewhere. Clearing of ghost workers should be among the priority list of to do. Ghost workers cost the company money that could be tallied as profit and be used else in the organization.
Recommendation for future actions in regards to the financial bit
In handling the Cost Overruns, according to the balance sheet as at 31st December, the company seems not to be fairing on well. The company needs a proper cash flow planning for the projects to be catered for. In the case of financial accounting and control aspect, prompt tabling of the rising cost variation adjustments. Accountability and lack of appropriate skills is required to curb the cases of carelessness or a deliberate action. Reports on the status of the projects will count so much for this company’s success. Lastly, in relation to bonding and credit facilities the current status of the company needs to be averted to give it a good image in the crediting facilities. The balance sheet should reflect some good amount on the debit side .
Bibliography
D.G. Proverbs, G. D. H. a. H. Y. C., 2000. CONSTRUCTION INDUSTRY PROBLEMS: THE VIEWS OF UK CONSTRUCTION DIRECTORS. [Online] Available at: http://www.arcom.ac.uk/-docs/proceedings/ar2000-073-081_Proverbs_Holt_and_Cheok.pdf[Accessed 4 March 2014].
Mishra, S., 2012. Business Operations Performance Challenges – Five Barriers to Operational Excellence. [Online] Available at: http://blogbysuchitra.wordpress.com/2012/05/20/business-operations-performance-challenges-five-barriers-to-operational-excellence/[Accessed 4 March 2014].
Nigel Slack, S. C. &. R. J., 2010. Operations management : The challenges of operation. 4th ed. Hallow, Essex: Pearson Education, Inc.
