Infrastructure Project Management Case Study – Melchester Exhibition Center

Discussions

The City of Melchester, having a population of three million people, will be turning 2000 years old in a few years’ time. Since then, the CIty has grown in stature to become the second most important city in the UK in economic terms, and a globally renowned cultural city. The city will also celebrate its 150th year since being awarded city status in 1875 in three years’ time. The city of Melchester is the third most visited city in the UK after Londong and the city of Edinburgh. To celebrate its birth and being awarded city status, and acknowledge its continuous growth to become an important educational, cultural, and economic city, the city’s local government agreed to invest in a major infrastructure project to celebrate these milestones. The major infrastructure project is the construction of a covered, multipurpose exhibition space that can hold 20,000 people at a location that requires regeneration within the city. The exhibition center would not only improve the status of the city and help regenerate a region of the city, but also create thousands of jobs. The budget for the project is £ 750 million and the planned date of opening is June 1st 2015, with the UK national Lottery providing 50%, the UK government 45%, and 5% (equivalent to £ 37.5m) to be raised by local businesses. While the design has been approved, the project has run into a number of unexpected headwinds, just three years before its planned opening.

Projects, especially complex ones as the Melchester exhibition arena, face a number of challenges and risks that can adversely affect their execution, and even result in failure from a p[roject management perspective. There are three issues to deal with and make an informed decision; the initial budget was under budgeted for by £ 50 million as the new budget requires £ 800 million). There is an opportunity for re-designing the roof, given cheaper and stronger materials have been invented; this will increase the capacity of the arena. There is also a decision on whether to open the arena on June 1st 2025, december 1st 2025, or another date. As a new project manager, the assignment brief requires exploring options in lieu of the raised issues and challenges, using project management approaches, and decision-making techniques and skills. The case study is evaluated and solved using the Problem SOlving (CPS) – 8-steps methodology, the Knowledge management technique Polanyi), the Pugh matrix, and decision-tree analysis as the tools and techniques for solving the problem.

Problem Statement

Application of Analytical Tools

The three main problems relating to the project are the following;

Budgeting and financing- the project has been under-budgeted, and means an additional £ 50 million must be raised to cover the shortfall. According to Bergerud (2012), under Budgeting is a common problem in major infrastructure projects, and a major contributor to project cost-overruns and failed/ unsatisfactory project delivery.

Scope management- The initial roof design has options for making changes; new materials that are both stronger and cheaper have been found, meaning the roof design could be changed without affecting the overall budget by much, and improve functionality as the arena capacity can be increased by 20% (more revenues), and enable roof retracting/ opening during summer months, enhancing the experiences of visitors.

Schedule- The initial opening date is June 1st 2025; however, with a changed roof design, the arena can be opened on December 1st 2025, 6 months later, but there is also the alternative of setting another date.

In sum, the challenges relate to the triple constraints in project management, namely, cost, scope, and time (Westland, 2022). Based on this, the success of a project is affected by its scope, cost, and time duration; any changes in any of the constraints affect the others, for instance, changing the scope affects the time and costs. The triple constraints can be balanced through balancing them, and while it affects project success (Westland, 2022), they don’t solely determine the success of the project, because there are three more aspects to project success that include risk, quality, and benefit.

CPS Technique

The CPS is a technique in which creativity is used to generate new/ novel ideas and approaches to solving problems. It entails the separation of convergent and divergent thinking styles so the mind is focused on creation during the initial stage, and evaluation during the subsequent stage. The CPS is based on an eight step process that includes;

Problem definition-
Problem clarification
Definition of Goals
Problem root cause identification
Action plan development
Action plan execution
Results evaluation
Continuous improvement

This approach is used for each of the three identified problems relating to the project as illustrated below;

Applying the CPS Eight Step Method	Problem 1: Under Budgeting
Definition of the Problem	The project had been budgeted at £ 750 million; an additional £ 50 million is required
Clarification of problem	Budgeting is a complex process for complex projects and under-budgeting will have serious ramifications on project completion and quality
Goal definition	The goal is to raise the required additional required £ 50 million in the most cost-effective manner so the project has an adequate budget
Root cause identification of problem	The project is under budgeted when the budgeting method is not rigorous and effective enough, such as using the wrong budgeting approach. For instance, historical costs can be used, but without factoring in issues like inflation and external factors that inevitably make costs of materials to be higher at present or in the future than they were previously. Another under-budgeting cause is making too many assumptions, such as assuming resource prices, while ignoring overhead costs. Another under budgeting cause is failure to use project management principles, including the PMBOK 12 knowledge areas where managing project budget is a major pillar (Tang, Panchal and Bradshaw, 2018). One common aspect in this respect is failing to use tools such as developing work breakdown structures that are not used to assign costs to smaller work packages or failing to plan effectively for tasks.
Development of an action plan	The action plan is to source for the extra £ 50 million form the most cost-effective source. Option 1: To obtain from the local business community to increase their contribution to 87.5 million), which would mean doubling their contribution to about 11% from the current 5%. Option 2: To have a trade-off in which the the roof design is changed to use cheaper but stronger materials; the cost savings from the cheaper roof materials the roof would take up 25% of the total costs, cheaper materials can reduce this to 18 to 20% of total arena costs, if an 18% value is achieved, it means there will be savings of £ 52.5 million, that offsets the £ 50 million additional required. Option 3: Asking all contributors to increase their contribution 2.5% percent each to cover the 6.7% additional required amounts £ 50 million ).
Execution of the action plan	This requires doing an analysis, and the tools of Pugh matrix and knowledge management are applied to arrive at the best decision. This is shown in table 1;
Evaluation of results	Based on an evaluation of the results using the Pugh decision-matrix, the factors to consider for each of the three alternative funding options are ease of getting the extra funds, associated costs of getting funds, time factor to obtain funds, and ability to fully meet the shortfall from the options. The factors are rated from low (score 1 or 2) or very low to high or very high (score 2 or 5) depending on weighting (from 1 to 5). Each option is also given a weight between 1 to 5. Using the Pugh matrix, the total scores are 85 for raising extra funds from the business community, 49 from roof redesign, and 45 from increasing contributions for all financiers. The obvious choice is to raise from the business community.
Continuous improvement	Continuous improvements can be made by raising extra funding from the business community and using redesigned roof to achieve further cost savings and use extra funds for additional resources such as labor, so that tasks can be compressed and the initial planned completion (opening date) is achieved, enhancing the success of the project.

		Option 1	Option 2	Option 3
		Raise from business community	Roof redesign	Ask government, lottery, business owners to each increase their contribution
Factors	Rating	5	4	3
Ease of obtaining funds	5	Easier to raise from business community (Very high rating) > 4 x 5 =20	Not very easy to do redesign, but possible (high rating)> 4 x 4 =16	Not easy for government and lottery to increase contribution (Medium rating) > 3 x 3 =9
Associated cost	3	Low cost obtaining funds (Very high rating) > 3 X 5 =15	Possibly medium to high cost (high rating) > 2 x 4 = 8	Possibly high cost (high rating) > 2 x 3 = 6
Likely time duration	5	Can be obtained quickly (high rating) > 4 x 5 =20	Can take longer to realize (medium rating) > 3 x 5 =15	Can take longer to realize (medium rating) > 3 x 5 =15
Ability to meet shortfall fully	5	Likely to fully meet shortfall (very high rating)> 5 x 5 = 25	May not meet shortfall fully due to other costs (such as labour- low to medium rating) > 2 x 5 =10	May meet shortfall fully (medium rating) > 3 x 5 =15
Total score (SUM)		80	49	45

Applying the CPS Eight Step Method	Problem 2: Roof redesign
Definition of the Problem	Due to technology, new cheaper materials are available, there is a decision to make on whether to stick to original design or redesign the roof
Clarification of problem	If the roof is redesigned, the benefits include reduced costs, retractable roof that can be opened in summer, and increased capacity, but additional works will cost a 6 month delay
Goal definition	To get the best possible outcome with regard to roof; cheaper but better materials, higher arena capacity by 20% (means increased revenues), better visitor experiences as roof can be opened in summer, but ensure the additional time period does not adversely affect project success
Root cause identification of problem	The design had relied on older/ conventional materials, and with new cheaper but better materials, there is a dilemma on whether to change scope.
Development of an action plan	Evaluation of possible scenarios; Option 1: Stick with the original design but lose out on cheaper materials (reduced costs), better experiences (openable roof in summer), and higher revenues (increased capacity), but complete project on time (June 1st 2025) Option 2: Redesign roof, get benefits of higher capacity, cheaper materials, and greater experiences, but increase duration by six months to open on December 1st 2025 Option 3: Redesign roof, and use extra resources to ensure completion by original scheduled date of June 1st 2025 (likely increase in cost).
Execution of the action plan	The Pugh matrix for decisions and the and knowledge management techniques are used to evaluate the three options as shown in Table 2
Evaluation of results	The analysis shows the option of not changing roof design but completing on time has a cumulative score of 32, redesigning roof and completing later than June 1st 2025 has a score of 75, while roof redesign and completing by June 1st 2025 or before December has a score of 85. The third option, therefore, is chosen
Continuous improvement	With option 3, the benefits of roof redesign are obtained, with additional savings from the cheaper stronger roof materials used to compress tasks so the project is completed on time (Ballesteros-Pérez, Elamrousy and González-Cruz, 2019). This is done by applying PMBOK 12 knowledge areas and tools such as Six Sigma and utilizing slack-time to make schedule improvements so an extra half year is not added to the project (Tang, Panchal and Bradshaw, 2018).

		Option 1	Option 2	Option 3
		Stick with initial roof design	Redesign roof and use new cheaper materials	Redesign roof and use cheaper materials, and additional resources
Factors	Rating	4	5	5
Benefit from increased capacity meaning higher revenues	1-5	No extra capacity benefits and increased revenues (Very low rating) > 1 x 4 = 4	Benefit from extra capacity (by 20%) (very high rating)> 5 x 5 =25	Benefit from extra capacity (by 20%) (very high rating)> 5 x 5 =25
Cost savings	1-5	No cost savings from using cheaper materials (Very low rating) > 1 X 4 = 4	benefit from cost savings (high rating) > 4 x 5 = 20	benefit from cost savings (high rating) > 4 x 5 = 20
Extra 6-month duration to complete works	1-5	project to be completed on time (Very high rating) > 5 x 4 =20	Project to incur additional 6 months to complete (Low rating) > 2 x 5 =10	Incur additional costs to complete on June 1st 2025 without delay (High rating) >4 x 5 =20
Stronger materials, therefore, better quality	1-5	No benefits from stronger materials and so higher quality (very low rating)> 1 x 4 = 4	Quality benefits from stronger materials (Very high rating) > 5 x 5 =25	Quality benefits from stronger materials (Very high rating) > 5 x 5 =25
Greater experiences (summer opening), roof can be opened during summer	1-5	No chance of improved experiences for visitors (very low rating) > 1 x 4 = 4	Greater experiences from retractable roof (high rating) > 4 x 5 =20	Greater experiences from retractable roof (high rating) > 4 x 5 =20
Total score (SUM)		32	75	85

Applying the CPS Eight Step Method	Problem 3: Changed completion date
Definition of the Problem	COmplete by June 1st 2025, or December 1st 2025, or have an alternative date in between
Clarification of problem	Not making any design changes will enable time;ly completion by June 1st 2025; making changes can make completion be on December 1st 2025, or design changes with compression can result in a third date for completion.
Goal definition	To have a clearly defined completion date that ensures no associated costs (extra duration)
Root cause identification of problem	Uncertainty and lack of effective planning and schedule control along with scope and cost control
Development of an action plan	Option 1: Ensure completion by June 1st 2025 Option 2: Complete by december 1st 2025 Option 3: Have an alternative date likely between June and December
Execution of the action plan	Employ the Pugh matrix and knowledge management techniques as Table 3 shows.
Evaluation of results	Completion by June 1st 2025 has the highest score of 60, and so is desired; completion by December 1st 2025 has a score of 28, and completion at a later date has a score of 30
Continuous improvement

		Option 1	Option 2	Option 3
		Complete by June 1st 2025	Complete by December 1st 2025	Complete at another alternate date
Factors	Rating	5	4	3
Making no changes to design	1-5	No benefits from redesign, but timely completion (rating medium)> 3 x 5 =15	No benefits from redesign, late completion (rating very low)> 1 x 4 =4	Have alternate date with no design changes (very low rating) > 3 x 1 = 3
Make changes to roof design	1-5	Benefit from redesign benefits but extra six months (later completion, possibly extra costs)- high rating > 4 x 5 =20	Benefit from redesign benefits but extra six months (later completion, possibly extra costs)- Medium rating > 3 x 4 =12	Have alternate date with design change benefits (high rating) > 3 x 4 = 12
make changes to roof design, compress tasks	1-5	Project completed in time with redesign benefits, cost savings transferred to extra resources to compress and complete on time (very high rating) > 5 x 5 =25	Project completed late but with redesign benefits, including highest quality and cost savings (medium rating) > 3 x 4 = 12	Project completed at different date but with redesign benefits (medium rating) > 3 x 5 = 15
Total score (SUM)		60	28	30

This is a tool for decision-support that takes into consideration outcomes, costs, utility, and chance. This is applied in deciding on what course of action (decisions to make) as Fig 1 shows;

Through the decision tree analysis, the chosen decisions are sourcing extra funds from the local business community, redesign the roof, and complete the project by June 1st 2025.

Conclusions

A decision evaluation is done in lieu of constructing an arena for the city of Mlchester to celebrate the city’s founding 2000 years ago and its 150th anniversary since being awarded city status. Despite earlier plans, there are issues that require a decision; change roof design due to new cheaper materials; this has benefits of higher capacity, reduced construction costs, and better experiences for users as the roof can open in summer. The other issue is raising an additional 50 million given initial plan was under budget, and completing the project by June 1st 2025 through an opening ceremony or later in december 1st 2025 due to roofing change designs, or a third alternative date. Using theCPS 8-step process, the knowledge management principles, and the Pugh decision-matrix, along with a decision tree analysis, all factors and options are considered. For roof design changes, retaining status quo scores 32, making changes scores 75, and redesign with extra resources scores 85 from Pugh matrix. For funds source, from business community scores 80, cost-offset from new roof design score 49, and getting more money from government, lottery, and business community scores 45 from the Pugh matrix. Completing by June 1st scores 60, by December 1st scores 28, and any other date scores 30. Using the decision tree analysis, and combining with findings from the Pugh matrix, the chosen decision is to obtain funds from the local business community, make the roof design changes and complete the project by June 1st 2025, using savings from cheaper roof materials to compress tasks and fund additional resources, such as labour, and ensure timely completion.

References

Ballesteros-Pérez, P., Elamrousy, K. and González-Cruz, M., 2019. Non-linear time-cost trade-off models of activity crashing: Application to construction scheduling and project compression with fast-tracking. Automation in Construction, 97, pp.229-240.

Bergerud, C., 2012. The top 10 challenges to effective cost controls. [online] Pmi.org. Available at: <https://www.pmi.org/learning/library/top-ten-challenges-effective-cost-controls-6049> [Accessed 22 March 2022].

Tang, C., Panchal, J. and Bradshaw, A., 2018. Project Management Knowledge Areas and Their Relevance to Today’s Project Managers. Journal of Economic & Management Perspectives, 12(1), pp.545-549.

Westland, J., 2022. The Triple Constraint in Project Management: Time, Scope & Cost. [online] Project manager bog. Available at: <https://www.projectmanager.com/blog/triple-constraint-project-management-time-scope-cost> [Accessed 22 March 2022].

Turn in your highest-quality paper
Get a qualified writer to help you with

“ Infrastructure Project Management Case Study – Melchester Exhibition Center ”

Get high-quality paper

NEW! AI matching with writer