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Integrated cost and schedule control in the Korean construction industry based on a modified work-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 project, 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 other industrialized countries. Most important is the fact that almost all the construction projects in Korea are controlled in accordance 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). This is because most of the construction projects in Korea are generally contracted at a fixed price. This being the case, once the contract is awarded, the clients are no longer concerned with the cost of the project. This current construction practice based on the BBS rather than on the WBS has brought forth a limitation in terms of the use of the existing EV model in the domestic market. In this study, the EV model, which is suitable for the domestic market, is demonstrated. An integrated model of the WBS and CBS is then developed based on the modified work-packaging model. Finally, the developed 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 fournit ` une mesure quantitative de lhoraire et de linformation sur les couts, permet devaluer le progres des travaux en identi fiant les depassements potentiels des delais et des couts dun projet, ce qui peut etre utile pour controler les projets. En Coree, lindustrie de la construction ne met pas ce concept en pratique parce quil est mal compris et que les pratiques de ` construction en Coree different de celles des autres pays industrialises. Le facteur le plus important est quen Coree la plu part des projets de construction sont controles selon une structure de repartition du budget ( BBS ), qui est moins detail lee quune structure de repartition des couts ( CBS ), alors quaux Etats-Unis les projets sont geres par le controle des horaires selon une structure de repartition du travail ( WBS ). Cela est du au fait quen Coree la plupart des projets de ` construction 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 lutilisation du modele de valeur acquise existant dans le marche interieur. Cette etude explique le modele de valeur ` acquise, 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 de gestion des projets afin de verifier sil 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
Received 15 February 2007. Revision accepted 6 June 2007. Published on the NRC Research Press Web site at cjce.nrc.ca on 13 March 2008. S. Kim and C. Park. GS Engineering and Construction Corporation, 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, Hongik University, Chungnam 339-701, Korea. Written discussion of this article is welcomed and will be received by the Editor until 31 July 2008.
1Corresponding

author (e-mail: sangyoub@konkuk.ac.kr).

The development of computers and of information technology has brought forth many benefits for the construction industry, helping it meet increasingly complex challenges (Paulson 1995). It has systematized control at the project level, such as in engineering design, project estimating, scheduling, cost control, and integrated project management, which has led to significantly improved productivity. In the Korean construction industry, however, its applications in the areas of schedule and cost management are still very limited, thus requiring further research to explore its applications that enable efficient control in these areas (Kim et al. 2002; Son et al. 2005). In this study, a modified earned value (EV) model for integrated cost and schedule control that is suitable for the Korean construction industry, where
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the spending is expected to account for US$107.8 billion in 2005, is presented (Global Insight 2003).

Earned value management system

The EV model was developed as part of the costschedule control systems criteria (C/SCSC). The US Department of Defense (DOD) has applied it in its projects since 1967 to measure the outcomes associated with the high risk in rising costs (Singh 1991; Niemann 1991). The earned value management system (EVMS) is a simplified concept pertaining to the act of fitting the diverse baselines of C/SCSC, which have been rewritten to make them suited to private practice (Fleming and Koppelman 2000). However, despite the fact that the interdependency between schedule and cost is obvious, one can hardly find project control systems that integrate the cost and schedule control functions (Hendrickson and Au 1989). Rather, these functions remain separate, operate independently of each other, and use two different control structures: the work breakdown structure (WBS) and the cost breakdown structure (CBS). The difficulty in integrating the two functions lies in the level of detail each function uses as opposed to the level of detail required. The cost control function, represented by the CBS, is performed at a breakdown level that is less detailed than that of the schedule control function, represented by the WBS. This difference in the level of detail used by each function creates a fundamental difference in the ways in which cost and schedule data are maintained. Each act of collecting data becomes independent of the other and is maintained separately. Earned value management system applications in Korea The concept of EVMS has become more important because the primary objective in the construction process is to complete the project on time and within the budget while meeting the established quality requirements and other specifications (Rasdorf and Abudayyeh 1991). Following the establishment of the International Performance Measurement Council (IPMC) in 1993, EVMS has gained the support of a number of countries (Baek et al. 2000). In Korea, the concept of EVMS has been applied only in a few special projects. For example, Korea Electric Power Corporation used EVMS from blueprint to completion in the construction of its Yeonggwang nuclear power plants 3 and 4, its thermoelectric power plant, and its combined heat and power plant in 1986. Few large construction corporations have applied EVMS in the implementation of their projects, however, as there is no systematic approach towards the development of a cost and schedule integration system based on EVMS in the field (Kim and Kim 2000). The Korean Congress passed a law in July 2000 that mandates Korean companies to use EVMS when their project cost is estimated to be over US$45 million (MOCT 2000). There are still problems, however, in the implementation of EVMS mainly because the concept of the integration of cost and schedule is new for most construction companies in Korea, as EVMS is poorly understood, and because the construction practices in Korea are different from those in other industrialized countries. In contrast to construction companies in the USA, which control the whole construction project through schedule control on the basis of the WBS, Korean companies can-

not easily apply these EV models and concept because the construction projects in Korea are controlled based on the budget, 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 Korea are generally contracted at a fixed price, once the contract is awarded, the client is no longer concerned with the cost of the project. Furthermore, the contractor does not report the actual cost (AC) to the client. This practice makes EVMS less attractive to clients. As a consequence, the contractor must take responsibility for both the schedule and the cost. Therefore, many contractors have borne all the responsibility for the completion of their projects and have had to set aside EVMS (Baek et al. 2000). This study introduces the modified EV model that integrates the WBS and the CBS based on the modified workpackaging model from the contractors perspective, which is suitable for the domestic market. Finally, the developed model is integrated into the project management system (PMS) to verify the utility and propriety of the model.

Literature review
Researchers have been trying to find a better and more integrated approach to the measurement of cost and schedule by developing data representation models that facilitate integration of the two. Prior studies are examined herein to explore possible integration models for the Korean construction industry. Teicholzs model The study conducted by Teicholz (1987) recognized the differences between the levels of detail of the CBS and the WBS and proposed a mapping mechanism between a given cost account and one or more activities (tasks) related to that account. This mapping mechanism works based on the concept of percent allocation, where a CBS cost account has specific percentages identifying the amount of a given resource (such as labor hours and material quantities) that should be allocated to a given task in the WBS. The study by Rasdorf and Abudayyeh (1991) observed that the two different viewpoints cannot be combined because of the discordance in cost and schedule. However, because the concept of percent allocation as applied in this model offers a way to address real problems, it can be used effectively in cases where abnormal values or elements arise, except for values that normally result from the process of integrating cost and schedule information. Hendricksons model Hendrickson and Au (1989) proposed an integration concept using work elements. The model was adapted from a three-dimensional work element definition proposed by Neil (1983). A work element is a control account defined by a matrix of work packages from the WBS and of cost accounts from the CBS. In this model, the work element provides a link between the WBS and the CBS, where a cost account may be related to one or more activities and where an activity may be related to one or more cost accounts, using the work element as a common denominator to achieve the desired integration. One problem with Hendricksons
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model, though, is that since the WBS and the CBS still maintain distinct structures, it is difficult to find a common denominator between them. Besides the possible breakdown of work and cost accounts included in the WBS and the CBS, the diverse information about the site would make it difficult to determine the relationship between work and cost. Object-oriented programming model Using an object-oriented programming (OOP) approach, Kim (1989) developed a computer data model for improving construction project planning and control. The model integrates not only construction cost and schedule control data but also design data, based on the development of a new element: the basic construction operation required by a design object (BOD). Defined as the lowest-level construction task needed to build a specific design object, the BOD can provide a linking mechanism between a design object and its corresponding construction operation control functions, such as the WBS and the CBS. It was also observed that the relationship between cost and schedule is linked only through the BOD, and information about cost and schedule are designed to be linked through graphic entities. However, as cost and schedule information must be directly related before the total cost can be calculated from the schedule information, there is a need for a method of linking the cost and schedule directly, not through graphic entities, as the relationship cannot be precisely determined through the BOD. Rasdorf and Abudayyeh (1991) pointed out the problems of collecting data and of maintaining the two construction control viewpoints of WBS and CBS as they are. They criticized this model because of the difficulty of collecting information when using it, and because of the fact that it has two viewpoints of construction control. In construction management practice, however, cost-oriented and scheduleoriented management must be divided or combined depending on the case at hand. Work-packaging model The work-packaging model (Abudayyeh and Rasdorf 1991), developed by the National Aeronautics and Space Administration (NASA) and the U.S. DOD for design-build projects in the aerospace and defense industries, achieved the desired integration of cost and schedule. Previous studies attempted to create a single information channel while keeping the cost and schedule control viewpoints separate; however, the work-packaging model emphasizes the presentation of an integrated viewpoint of project data by adding cost data to the WBS and substituting the WBS for the CBS. Under special circumstances, this model can integrate and process the control elements of these two viewpoints into one element. In certain situations, it offers the advantage of project control from a single viewpoint, but in actual construction projects, management must keep track of the details of both cost and schedule. Furthermore, management decisions must reflect both viewpoints as both cost and schedule must be managed in terms of both viewpoints. Model applied for this study The four models mentioned above apply the integration approach of cost and schedule, and many experiments have been done to clarify the concept of EV by applying these

models. As each of these four models have their own advantages and disadvantages, it is very important to choose which of these to apply and to use in building an EV model that is suitable for the domestic market. It is difficult to apply the model by Kim (1989) in a real situation because a constructor can use the model only when an architect creates a three-dimensional entity of the BOD. The models of Teicholz (1987) and Hendrickson and Au (1989) maintain two viewpoints rather than one, which they are able to do because they contain common denominators: the percent allocation and the work element matrix. However, Teicholzs and Hendrickson and Aus integration models were established at a low level and, as such, the domestic market, which mainly controls construction projects based on the CBS, hardly applies these models as the CBS must be broken down into detail levels and must relate the data it gathers to the WBS, which would cause a drop in efficiency. Therefore, in this study, the work-packaging model was considered the basis of the EV model that had been built to reflect the domestic market. The original work-packaging model approaches construction control based on the WBS from one viewpoint, with integrated information on quantity and cost; however, the CBS was selected as the standard of the work-packaging model because most of the construction projects in Korea are controlled through the BBS. The assessment proposed by Abudayyeh and Rasdorf (1991) is reinterpreted in this study by resolving its technical limitations with the development of computer technology. As a solution to the absence of automation systems that can collect and save a tremendous amount of data, which was a barrier to the successful implementation of the workpackaging model, has been found and established, current information systems have been made advanced enough to process such data, systems are now able to offer a graphic user interface that would enable tremendous amounts of data to be processed easily, and the successful implementation of the work-packaging model has been made possible.

Schedule and cost management application in Korea

Schedule management Korean construction companies have separate management systems for schedule and cost. Most construction companies, however, do not have a specialized division for schedule management, and the task force (TF) team establishes a project management baseline (PMB) based on the activities of 1000 various operations. Afterwards, based on the PMB, the monthly schedule, two-week schedule, weekly schedule, and daily schedule are determined based on the progress of the project. The problem with schedule management is that schedules are not made for construction progress management. Most schedules are influenced only by the construction duration and the precedence-and-successor relationship and have no cost information on manpower, materials, and equipment. As such, most schedules are used only for exhibition purposes or as reports on the origins of orders. There is almost no actual function of schedule management, and no systematic approach or smooth schedule information feedback system has been established because
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cost is the main force that drives construction management in Korea. Cost management Construction cost is determined via a series of steps. In the estimation stage, the estimated cost is tendered and the successful contract is awarded with a proposed price. The actual cost is determined based on the actual unit price and quantity. A project is managed based on the actual cost. As most construction companies use cost as a standard in calculating the rate of progress of a project, cost management has become very important in the Korean construction industry. Therefore, cost management at the construction site is linked to the cost management system at the main office, and is managed by personnel at the main office. There are, however, two major problems with the cost management system that these construction companies are employing. First, because the initial estimated cost, contract price, and actual cost do not follow any kind of standard, there is no consistency in management. Second, as the cost management systems are prepared according to the standard of the accounting department, there is a discrepancy between the construction sequence and the CBS. Budget breakdown structure Similar to the CBS, the BBS, organized by work item, such as material costs, labor costs, equipment costs, and outsourcing costs, is used to express the breakdown structure concretely, including quantity and unit price. Because these costs in the BBS are classified as work items, the construction sequence and work space (i.e., building, floor, and room) are not directly linked to cost. To link schedule management to cost management, the information from the schedule about work space and construction sequence should be unified as a work item and then linked with the cost information. Another way is to separate the cost information containing work space from the construction sequence and then to link it to the schedule information. Level of detail The problem with the use of the aforementioned method of schedule information to integrate cost and schedule by work item is that construction sequence is not taken into account and schedule management is disabled, making EVMS usage unlikely. This is why the EVMS model in this study uses the method that utilizes the work-packaging model to integrate schedule and cost. The problem with this method is its level of detail, as indicated by Rasdorf and Abudayyeh (1991). If the level of detail is the activity level, integrating this with the construction information will increase the internal division of labor, which in turn will increase the workload in the integration. Opposite to this, if one unifies at the major task level, the appropriate information is not captured. Therefore, the level of detail is one of the important factors in integration. The task that is considered most important in building the EV model is the integration of schedule and cost information. Much interest has been focused on the integration itself, and very little interest has been shown in the details of account control that influence the efficiency of control during the integration of information. Most of the established EV models have tried to integrate detailed infor-

mation on the lower levels, where it takes much time and effort to collect and process data. Therefore, control efficiency drops when the number of control accounts is increased. As a result, the persons in charge of running the EV model in the field experience many difficulties.

Development of integrated model

Concept of schedule and cost integration model The model for integrated schedule and cost that was considered for this study is based on the work-packaging model proposed by Rasdorf and Abudayyeh (1991), which adds the CBS to the WBS and substitutes the WBS for the CBS, thus combining the project control viewpoints. In Korea, however, where construction is controlled on the basis of the budget, it is difficult to apply the work-packaging model to the original model as it is. Therefore, the modified BBS, which adds the activity representing the work unit of schedule management to the original BBS, was combined with the WBS to formulate the modified work package based on the CBS, as shown in Fig. 1. In this figure, a flowchart of schedule and cost and an integrated breakdown of the schedule and cost structure are also shown. Schedule management is presented as activities that have physical space, including the resources (labor, equipment, material, etc.), whereas in the BBS, the quantities calculated in floors or groups in the estimation stage are summed up as budget items, which are then built into the modified BBS, including activities, the basic elements of schedule management. When the activities used in the schedule management are added to the BBS, they become the link connecting schedule with cost, even for the establishment of schedule planning for the data originally used. As such, schedule and cost can be controlled by the activities, the control standard in the field. The integrated breakdown structure model, which integrates schedules and costs by reflecting the activities on the CBS, is shown in Fig. 2. In the integrated breakdown structure model, the BBS is composed of subdivision 1, subdivision 2, the intermediate-level WBS, and the standard activity. After the budget is prepared, the activity is divided into work group 1 and work group 2. In Fig. 2, subdivision 1 pertains to the construction areas; subdivision 2 signifies the small groups of buildings; work group 1 stands for apartment houses and facilities; and work group 2 represents the floors and elements. In this integrated breakdown structure, the activity is divided into budget activity and unit activity. The budget activity, the concept of the WBS, is used when preparing the budget and when the unit activity is expressed in the schedule combined with the element. The unit activity is the unit that intends to control the field, which is separate from the budget activity. For example, consider the unit activity of concrete construction. In the description, only the kind of work to be done is described, and its description is not as detailed as that of the work element. However, if the detailed group 1st floor 103 apartment is marked, the unit activity, the definite control unit of concrete construction on the 1st floor, 103 apartment, will be made. Changes in the budget breakdown structure The following is a detailed examination of the budget that was made by task, subtask, activity, and standard budget item
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Kim et al. Fig. 1. Concept of schedule and cost link. EV, earned value; WBS, work breakdown structure.

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

instead of the task and budget item, according to the integrated breakdown structure. Figure 3 shows a case in which the BBS has been modified, resulting in a new BBS. In the conventional BBS, the budget item Ultrasonic Test is under the task piping work, but in the modified BBS, the subtask process piping and the activity N.D.E. were added, and the relevant items were connected to N.D.E. By preparing the new BBS by task, subtask, activity, and relevant budget item, the difficulty of accomplishing the duplicated work was addressed. For schedule management, new activities should be made, as well as new items suitable to the activities input. Furthermore, as the WBS was integrated on the basis of the CBS,

the dual standard became unitary, making construction control from a single viewpoint possible. In calculating the progress rate, this integrated viewpoint makes measurement from the same viewpoint possible; as such, a measurement can lead to the capture of the progress rates of schedule and cost at the same time. Activity standardization Due to the specialization, diversity, and complexity of construction, the control style of the project manager or the site conditions may cause a deviation in the activities, even in the same construction project. In Korea, schedule control has not yet been established because the concepts of WBS
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and activities have not yet been clearly defined and because the current practice puts an emphasis only on the analysis of the existing schedules and discussions with the persons in charge prior to any attempt to standardize the activities. These standardized activities, as shown in Table 1, are those that appear on schedules as the basic units of schedule and cost measurement. As the detailed levels of control accounts greatly influence the efficiency of control, the quantities on the control accounts are important factors in any operation. Therefore, the activities must be standardized to make it possible to keep them up: the activities of the baseline schedule are arranged to be less than 1000, and the required period for each activity must be made not to exceed 30 d. Formulation of planned value through standard activities From the standard activities built into the integrated breakdown structure, the necessary activities are selected to form a set of budget activities for a project. After the budget is prepared in an activity unit, it is linked to the work element, which is then assigned to the lower level control in the field for the creation of unit activities. When a quantity of budget activities is distributed to the work elements, the quantity of unit activities is generated. When the budget activities are distributed, the data used to calculate the quantity during the estimation stage will be referred to and inputted into the system. These created unit activities are imported into the schedule software (compatible with Primavera P3, Microsoft Office Project, Primavera SureTrak 2.0, Neuron Datas Nexpert, and Dain C&Cs EasyPEM), and

each of the imported activities has information about its own quantity and cost. Linking the periods and work procedures of the activities by using the schedule software will produce 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 daily reporting The worksheet concept used in various countries is introduced to input the data concerning works into the computer system, so that when a field supervisor inputs not only the work status but also the schedule and the progress rate through the computerized daily report, the field manager can link the schedule and the EV through the daily report (Fig. 5). Unit activity in the PMS is created to transmit the data of the unit activity to the schedule software, and then the schedule is prepared. After the unit activity is inputted into the system, the baseline schedule and the PV of the project are decided. Subsequent to inputting the progress rate and the application period (beginning date and ending date) based on the unit activity linking the schedule and the cost, the results are transferred to the schedule software, updated, and input into the schedule in the PMS, and then the EV is automatically calculated. Since the PMS is connected to the account system and the subcontract price of the subcontractor is linked to the budget item, the budget items concerning materials can be recognized through the control of the input and output of the materials. Therefore, if the
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Kim et al. Table 1. Example of standardized activities in construction. Task Temporary work Subtask Scaffolding work Other temporary work Foundation and earth work Earth work Activity Scaffolding Scaffold demolition Leveling Laying-out Excavation Back filling Consolidation Grounding work Pile work Permanent drainage work Rock anchor Form work Reinforcing bar work Concrete work Shop drawing Manufacturing Anchor bolt installation Steel assembly Deck plate Fire resistive covering Brick work Block work ALC work Unit m2 m2 m2 m2 m3 m3 m3 m3 Each m t m2 t m3 t t Each t m2 m2 SH SH m2

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Reinforced concrete work

Steel work

Grounding work Pile work Permanent drainage work Rock anchor Form work Reinforcing bar work Concrete work Steel work

Masonry work

Deck plate Fire resistive covering Brick work Block work ALC work

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

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

the daily report can be input into the system (Fig. 6). After the daily report is prepared on the basis of the unit activities of the baseline schedule, the PMS and the schedule software can be linked to progress management. When the work quantity of the day is confirmed and the accumulated progress rate is input, the beginning and ending dates of the work automatically appear. When resources like persons and equipment on the basis of the unit activity are input, they can be managed and the data for the productivity of the activity can be measured. The calculation of the schedule and cost progress rate can be accomplished from a consistent viewpoint, and from inputting the work information into the daily report the advantages of knowing the exact progress rate of schedule and cost can be achieved automatically. Reporting The baseline schedule and the PV of a project on the unit activities linked with the budget are prepared before construction begins, and then the progress rate based on the unit activities in the construction is input to calculate the values of AC and EV automatically. These calculated values are ultimately reported as an S-curve schedule (Fig. 7). This S-curve schedule defines the information in the schedule and the cost in total detail, and helps to monitor the physical performance and progress rate constantly, which is compared with the baseline schedule. The S-curve schedule possibly recognizes the relationships among EV, AC, and PV through a bar chart so that each work items period and time frame, as well as the weight status of EV to PV, can be clearly recognized. Moreover, the important events of projects can be recognized through their milestones.
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progress rate is inputted into the daily report, AC can be calculated 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

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Fig. 6. Example of a daily report.

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Fig. 7. Example of reporting.

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Benefit of integrated model implementation

Earned value to planned value management Construction management in the field is largely divided into schedule management and cost management. Schedule management compares the percentage of construction completion with the construction plan, whereas cost control compares AC with the budget. Managers in developed countries spend most of their time on site control, whereas those in Korea focus on controlling the budget and the physical AC, emphasizing cost over schedule. Through the EV system, field supervisors can develop more systematic and exact schedule plans by using schedule software. Through this standard, the PV and EV can be analyzed precisely and can be recognized in detail. This will enable the officers in the headquarters and the field managers to build a management system that can analyze the risks in schedule and cost, and to prepare the solutions for these. Communication activation Through the operation of the EV system, clear data processing is established and reliable construction information is provided in real time. As a result, the flow of information can be managed punctually. Therefore, upper management can set up a system that will enable them to make prompt and precise decisions through accurate evaluation of the project. Database of construction data In Korean construction companies, construction data sets are not systematically built. As such, proper data collection is not always available. There have been many cases in which data was not accumulated and transmitted to a system but to individuals instead. If the EV system were adopted, field data would not be missed and could be saved in the system in their original form. Moreover, in the near future, accumulated data will be used to build the productivity database and the precise information needed to enhance competitiveness towards bids. Through this, the preparation of the budget and schedule in the early stage of the drafting of construction plans can be supported. Productivity enhancement of construction management tasks The schedule linked to the budget items based on 500 activities can be prepared through the EV system in 10 d. If done manually, the preparation would take about two months, and there would be a 2 d delay in the monthly updates. The accumulated data from previous projects were applied to similar projects, and the results of such an application show that the preparation time was shortened. Furthermore, the preparation of more precise and reliable budget and schedule data improved construction management task efficiency. Cost savings through proper material supply In the Korean construction industry, due to the absence of the concept of inventory management, when inventories come in, they are debited and credited at the same time to increase sales. As a result, the companies tend to order greater amounts of materials and supplies, as the plans for

the materials are so insufficient that the precise amounts cannot be determined. Therefore, there are many cases in which certain materials are left over, thus causing losses for the company. The main factors in effective material management are the computation and ordering of the required materials in precise quantities, their supply to the field on time, and the control of the construction until completion at a minimum loss. When an exact schedule plan is established and accomplished using the EV system, the material cost can be reduced as the monthly quantity of the materials required to connect with the material system can be precisely calculated and an automatic order can be made. Quantified benefit As mentioned above, the implementation of the integrated model is expected to result in improved project control. This has been validated by the variation observed in the major indicators in a number of projects between 2002 and 2004, before and after the system implementation (GS Engineering and Construction Corporation 2004). The results of the comparison show that the productivity improvement per person increased from US$1.15 million to US$1.27 million (10%), and that the time spent for the initial project planning, including budgeting and master scheduling, decreased from 6 to 3 months. The deviation in the schedule as planned and as performed decreased from 15% to 8%, and the cost also decreased from 8% to 5%.

Conclusion
The development of computers and information technology has removed the technical barriers to the establishment of automated systems that can collect and save a tremendous amount of data. It achieved the systematization of the control of a project in the construction industry and significantly improved productivity. A modified EV model for integrated cost and schedule control that is suitable for the Korean construction industry, which has very limited applications in the areas of schedule and cost management, was presented in this study. The model was developed based on the work-packaging model from a prior study and was modified based on the BBS. The integrated control of schedule and cost can provide efficient tools for controlling a projects risks by forecasting the whole cost when the project progress is at 15%20% complete (Fleming and Koppelman 2000). As such, the EV system used in this model is expected to demonstrate the following five benefits:
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the transformation of EV to PV management makes it possible to create a more systematic and precise schedule, and more effective project control can be accomplished as project participants, both at the headquarters and in the field, can monitor PV and EV exactly and can analyze them in real time information can be exchanged efficiently between the project participants in the field and at the headquarters, as well as among the personnel in the field through the database of the construction data, the productivity database can be built and the precise information can be used to enhance competitiveness among the ten#

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235 Kim, J. 1989. An object-oriented database management system approach to improve construction project planning and control. Ph.D. thesis, University of Illinois, Urbana, Ill. Kim, S., and Kim, J. 2000. A study of the best performance index for estimate at completion forecasting model on the earned value management system. Korean Journal of Construction Engineering and Management, 1: 101107. Kim, W., Kim, O., Choi, Y., and Lee, H. 2002. Development of cost and schedule integration model for construction project based on common denominator and common category. Journal of Architectural Institute of Korea, 18: 99106. MOCT. 2000. Act: The effective plan of the public construction industry. Ministry of Construction and Transportation, Seoul, Korea. Neil, J.M. 1983. A system for integrated project control. In Proceedings of the Current Practice in Cost Estimating and Cost Control. American Society for Civil Engineers (ASCE), Austin, Tex. pp. 138146. Niemann, W.J. 1991. Improving the usefulness of the cost/schedule controls system criteria. In Proceedings of the Project Management Institute Seminar/Symposium, Dallas, Tex., 28 September 2 October 1991. Project Management Institute (PMI), Newtown Square, Pa. Paulson, B.C., Jr. 1995. Computers and constructionMidcareer reflections. Journal of Construction Engineering and Management, 121(2): 197200. doi:10.1061/(ASCE)0733-9364(1995) 121:2(197). Rasdorf, W.J., and Abudayyeh, O.Y. 1991. Cost- and schedule-control integration: issues and needs. Journal of Construction Engineering and Management, 117(3): 486502. doi:10.1061/(ASCE) 0733-9364(1991)117:3(486). Singh, A. 1991. Knowledge bases for C/SCSC. Cost Engineering, 33(6): 3949. Son, B., Lee, D., and Lee, H. 2005. Selecting and verifying appropriate performance indices to forecast estimate at completion. Journal of Architectural Institute of Korea, 21: 103110. Teicholz, M. 1987. Current needs for cost control system. In Proceedings of Project controls: Needs and solutions. Edited by C.W. Ibbs and D.B. Ashley. American Society for Civil Engineers (ASCE), Austin, Tex. pp. 4757.

ders of bids, where the preparation of the budget and the schedule in the early construction plan can be supported this system develops higher productivity than can be developed by any manual approach, and it offers time efficiency and accurate and credible data for similar projects the proper supply of materials through a precise schedule will result in cost savings.

Considering the special circumstances of the Korean construction industry, the EV system applied in this model is expected to demonstrate solutions for more efficient construction management and can serve as one aspect of an integrated control system in the construction industry.

Acknowledgement
The research was supported by the GS Engineering and Construction Corporation, Korea. The authors extend their gratitude to GS Engineering and Construction Corporation.

References
Abudayyeh, O.Y., and Rasdorf, W.J. 1991. Design of construction industry information management systems. Journal of Construction Engineering and Management, ASCE, 117(4): 698715. doi:10.1061/(ASCE)0733-9364(1991)117:4(698). Baek, S., Kim, K., Lee, Y.S., and Lee, Y. 2000. An integrated cost and schedule control process model using earned value management system. Korean Journal of Construction Engineering and Management, 1: 8997. Fleming, Q.W., and Koppelman, J.M. 2000. Earned value project management. Project Management Institute, Newtown Square, Pa. Global Insight. 2003. The top 15 nations in construction spending. Global Insight, Waltham, Mass. GS Engineering and Construction Corporation. 2004. Productivity improvement by Project Management System. Technical Report. Project Management System Team, Seoul, Korea. Hendrickson, C., and Au, T. 1989. Project management for construction: Fundamental concepts for owners, engineers, architects, and builders. Prentice-Hall, Englewood Cliffs, N.J.

2008 NRC Canada