Retail column: Project organization [Part Two]

In Part One of the Project Organization column, which ran in the May-June issue, I began to address some of the driving forces that get a retail DC construction project going and keep it running smoothly and efficiently. Now it’s time to issue a few words of warning about problems that can derail these initiatives.

Design and cautions

Be cautious of value engineering. The US Institute for Defense Analyses says value engineering “is a technique directed toward analyzing the functions of an item or process to determine ‘best value,’ or the best relationship between worth and cost.”

We have experienced some significant cost expenditures due to deficiencies created by the value engineering approach that were only noted after the turnover to operations. This was because the process was approached as a cost-cutting exercise rather than as a long-term cost-benefit analysis. Additionally, do not start value engineering late in the design phase. Value engineering can be introduced successfully at the start of a project, netting considerable savings; however, benefits decline rapidly after the detailed design phase of a construction project.

Energy-saving technologies should be assessed early in the design process. Emerging technologies need to be assessed, as more equipment manufacturers are incorporating intelligent monitoring and control functionalities into designs. IT infrastructure must be considered at the same time.

A flexible design allows for different scenarios of growth or reduction in demand. Consider modular systems, which allow for an easier adjustment to meet demand requirements. Building in flexibility is critical because after a certain point, the costs of retrofits become disproportionately high.

Quality assurance in design and construction have always been a challenge. Create a role in the project delivery organization that is solely accountable for the quality of product and process on the construction site.

The construction manager’s role

More than just a job title, this role has been integral to success in several new builds we have been involved with. The construction manager should be on board early in the design process to help ensure the design is constructible and affordable.

Concurrent to the design process, the construction manager should develop the quality plan. (Praxiom Research Group Ltd defines a quality plan as “a document that is used to specify the procedures and resources that will be needed to carry out a project, perform a process, realize a product, or manage a contract. Quality plans also specify who will do what and when.”)

For those who haven’t worked on a project with a construction manager before, here’s how The Princeton Review defines the role:

“Coordinating one aspect of construction is a difficult task. But coordinating the entire process, from initial planning and foundation work, through the final coat of paint in the last room, takes someone with the managerial skills of Lee Iacocca, the force of will of General Patton, and the patience of Job. Being a construction manager demands organization, attention to detail, an ability to see the ‘big picture,’ and an understanding of all facets of the construction process, usually acquired through experience. A construction manager is the intermediary between his clients and his workers, between the architect and his subcontractors, and between the project and any regulatory personnel.”

Final thoughts

We recommend you apply an integrated approach that establishes target and performance objectives and strategies early on in the design process. Ensure the interdependencies and interrelationships of all building systems are understood, evaluated and appropriately applied. For some organizations, this way of working together may require a significant paradigm shift. It involves innovation and efficiency and the application of agile project management techniques. Most organizations do not retain the full-time resources required to successfully take on a large distribution centre build. Organizations do, however, have business expertise, which is needed to plan, organize and execute the project.

As with any business project, the key is knowing exactly what you want to do and establish your plan for getting there: Establish the goal. Constantly articulate what the facility will look like, including the operating features; project your operational timelines including the opening day and the true the first day of operation. Seek out the experienced, dedicated and committed talent to help with the project. It will be well worth it in the long run.

Edward Stevens is the pseudonym of a Canadian retail supply chain professional with over 30 years of experience in the industry. This is his last column for MM&D. Links to his full series are below.

Program vision: Taking the first steps towards designing a retail DC

So you think you need a new DC: Asking questions clarifies the decision-making process

Understanding design criteria: Pick the right materials handling equipment and create the best possible retail distribution system possible

Building design [Part One]:Wrapping the building around the materials handling solutions

Building design [Part Two]: Wrapping the building around the materials handling solutions

Project organization [Part One]:Keep the ego and silos out of the process