Construction Industry

By, Adwait sawant Kedar lele

Objectives of the study

To understand the organization structure or hierarchy of the company. To understand the working of the various departments. To enable us to gain an insight into the corporate world. To understand the various responsibilities and duties carried out by each department.

The study is aimed at understanding how an organisation

partically works in the real situation.

Introduction
A process that consists of the buildings or assembling of infrastructure. Involves project manager construction manager, design engineer, and projectarchitect. Refers To clearing,dredging,excavating, and grading of land andother activity associated with buildings,structures, or other types of realproperty such as bridges, dams, roadsetc.

What is a construction industry ?

In the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large scale construction is a feat of human multitasking Normally, the job is managed by a project manager, and supervised by a construction manager, design engineer, construction engineer or project architect. For the successful execution of a project, effective planning is essential. Those involved with the design and execution of the infrastructure in question must consider the environmental impact of the job, the successful scheduling, budgeting, construction site safety, availability of building materials, logistics, inconvenience to the public caused by construction delays and bidding etc.

History
Stone Age construction. Ancient construction. Medieval construction. Construction in the modern age

History
The first buildings were huts and shelters, constructed by hand

or with simple tools.

In the 19th century, steam-powered machinery appeared, and later diesel- and electric powered vehicles such as cranes, excavators and bulldozers. Modern-day Construction involves creating awesome

structures that can show the beauty and creativity of the human
intellect.

Key players in India

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Larsen &Toubro Ltd . Punj Lloyd Group . Lanco Infratech Limited . Unity infra project . IVRCL Infrastructures & Projects Ltd . Simplex Infrastructures Ltd . GMR Group . Gammon India . Hindustan Construction Company (HCC) . Jaiprakash Associates Ltd

Types of construction industries

1. 2. 3. 4. 5. 6. 7. Residential . Educational . Retail . SEZ (special economic zone) . Industries . Hospitality . Healthcare .

TATA HOUSING GROUP

Mission statement: Our Mission is to delight our customers by providing quality life spaces through continuous innovations. Vission statement : Our Vision is to achieve a turnover of Rs.4500 Crores by FY 2015. Milestone to achieve turnover of Rs.1400 Crore.

RELIANCE INFRASTRUCTURE Mission statement : To attain global test practices and become a world-class utility. To create world-class assets and infrastructure to provide the platform for faster, consistent growth for India to become a major world economic power.

To achieve excellence in service, quality, reliability, safety and customer

care. To earn the trust and confidence of all customers and stakeholders,

exceeding their expectations and make the company a respected household

name. To consistently achieve high growth with the highest levels of productivity.

To be a technology driven, efficient and financially sound organization.

Functional departments
1. 2. 3. 4. 5. Finance. Marketing . Operation . Administration . Human resource .(only in big infra company.)

HUMAN RESOURCES DEPT

In construction industry there are two types of companies LARGE scale & SMALL scale. A large scale industries are industry where the capital investment is vary high & huge amount of people are required to do various jobs. Examples: GVK infra, Unity infra project etc. So this company always have HR department in company while small company basically include a local builders in cities or small contractors in cities, so for such firms you will not find HR department separate, the senior manager or admin staff only look the HR issues for small firms.

Key functions of HR
Human resource management serves these key functions:
Recruitment & Selection

Training and Development [People or Organization] Performance Evaluation and Management Promotions Redundancy

Industrial and Employee Relations

Record keeping of all personal data.

MASTER CREATION
Data management of an employee:
Joining forms Induction letter Offer letter Benefit records

HRIS Human Resource Information System Personal Details:

Contacts number Residential address

Statutory requirement forms:

Provident funds (PF) Gratuity

HIRING ACTION

What criteria should be used for new hires? Should the firm promote from within?

Sources for Hiring employee:

Advertisement in news paper. Website Contract labours. Campus interviews.

TIME MANAGEMENT
To manage In & out time of an employee. Systems used for time management: Punch cards Biometric instruments Leave cards

PROMOTION/ CHANGE IN PAY

Performance Appraisal by the organization An employee: application Forms is submitted

RESIGNATION/SEPARATION
Various methods an organization uses: Pay notice Eg : 3 months in GVK Infra. Terminate Voluntary Retirement Scheme (VRS) 15 days honorarium per year

PAYROLL PROCESS
Various elements in Payroll Processing: Leave without pay Deductions Provident Funds 12% - 24%

FINANCE DEPARTMENT

KINDS OF BUDGETS
Sales budget Expense budget Advertising budget Turnover budget Product-wise budget Capital budget Cash budget

PRELIMINARY BUDGETING DECISIONS

Who develops the budget(s)?

What is the budgeting time frame?

How often are budget plans?

What level of detail is used?

Hoe flexible are budgets?

In construction company the small scale firm not publish any kind of
annual report .Because there is no investment of customer in companies business. The small scale company make their balance sheets & other

financial statement &they just approved it from the ca to pay correct

amount of tax & to keep documentation of business. While large scale industries prepares the various financial documents like

income statement, balance sheet ,cash flow fund flow

statement,depreceasion account etc. Because the investors investment in company & also these all record send to upper management to take various decision by analyzing business process.

Balance sheet of GvK infra

MARKETING DEPARTMENT

MARKETING DEPARTMENT

4Ps OF MARKETING:
"Marketing" is the promotion of products, especially advertising and branding. The components of marketing mix are: Product Price Promotion Place

ADVERTISING
Hordings. Newspaper. Tv advertisement.

BRAND AMBASSADOR:
A brand ambassador is a celebrity (or an attractive or interesting person) used to help advertise a product or services. These is mainly for residential complex.

Examples of various advertisement

 In infrastructure company builds roads ,airport , industrial plants etc. they do not do advertisement . The get business by filling up various tenders comes from gov. authorites.

Marketing strategy
Product strategy : It is totally depend on product. In construction industry the product strategy means what type of product you will give to customers. Example : 2 BHK flat, 3BHK flat, facilities in the flat , facilities in township like park ,swimming pool etc. Pricing strategy : It includes at price you are going to sell the product. In construction company it is depend on type of product ,location , quality, facilities etc. Segmentation : It means to whom you are going to sell the product. The segmentation is an vary important for business. Example : Township for economic class , township for premium class etc.

What is Purchasing ?
Purchasing is defined as procurement of materials required for

manufacturing goods in an undertaking and to ensure continuous operation

of manufacturing plant.

Types of Purchasing
Centralized Purchasing Decentralized Purchasing

Objectives of Purchasing
To avail the materials, suppliers and equipments at the minimum possible

costs
To ensure the continuous flow of production To increase the asset turnover

To develop an alternative source of supply

To establish and maintain the good relations with the suppliers To achieve maximum integration with other department of the company

To train and develop the personnel

Efficient record keeping and management reporting

TYPES OF PURCHASES
Raw Materials

Semi-Finished Products and Components

Finished products Maintenance , Repair and Operating items Production Support Items Services Capital Equipment

Methods of Purchasing
Blanket Orders

Check Requests
Petty Cash Purchasing Credit Card Purchase Requisitions And Orders

Methods of Purchasing
1. Bulk Purchasing

2.
3. 4. 5.

Hand to Mouth Purchasing

Speculative Purchasing Blanket Purchasing Reciprocate Purchasing

Bulk Purchasing
Under this type of purchasing large quantity of purchase for the future. Such a method is followed when it is felt that material will be regular through out the year. Discounts & concessions are enjoyed when the bulk purchase is made. The transportation cost is very much reduce in this type of purchasing. Thus we can say that bulk purchasing is an economical purchasing. On the other hand it involve more investment of capital possibility of over stocking & high cost storage of less due to damages.

Hand to Mouth Purchasing

This type of purchasing is also known as purchasing by ZERO stock buying. It

means that no purchase is made until a need arise and buying only the quantity
which necessary to meet the current need. This method applies principally to emergency requirements or to the goods used to infrequently that they should not be carried into stock.

Whenever the material is bought under this method there will be zero stock for
that type of materials. The main advantage of this purchasing is that there is no blockage of capital in the material, no carrying cost, no wastages and no fear of obsoleteness. But the basic disadvantage of this type of purchasing is always fear of stoppage of production due to shortage of material & sometimes during the period of shortage materials are purchased at high cost.

Speculative Purchasing
Some time manufactures prefer to buy the material in more quantity as

compared to required in production. The purpose is to resell the surplus

material at a high price to earn the profit. Such type of purchasing is done when the prices are very low and there is expectations that in future the

price of that vary material will definitely rise.

It has only single advantage of having the possibility of huge speculative profit but disadvantages include blockage of large amount of capital,

requirement of large storage space and risk of obsolesces etc.

Blanket Purchasing
In this type of purchasing the items of same group order in one category.

Reciprocate Purchasing
In this type of purchasing sell to others and buy from them that is called

reciprocate purchasing.

Purchasing Procedure
RECOGNITION OF THE NEED

THE SELECTION OF THE SUPPLIER

PLACING THE ORDER FOLLOW-UP OF THE ORDER RECEIVING AND INSPECTION OF THE MATERIALS PAYMENT OF THE INVOICE MAINTENANCE OF THE RECORDS MAINTENANCE OF VENDOR RELATIONS

Purchasing cycle
1. Receipt and analysis of the purchase requisition

2. Selection of potential sources of supply

3. Issuance of requests for quotations 4. Receipt and analysis of quotations 5. Selection of the right source 6. Determination of the right price 7. Issuance of the purchase order 8. follow up to ensure scheduled delivery 9. Analysis of receiving reports 10. Analysis and approval of vendors invoice for payment.

Format of purchase order in construction company :

INVENTORY CONTROL OR MANAGEMENT

Inventory generally refers to the materials in stock

It is a planned approach which determines

What to order when to order how much to order how much to stock

Reasons for Keeping Inventories

To stabilise production To take advantage of price discounts To meet the demand during the replenishment period

To prevent loss of orders (sales)

To keep pace with changing market conditions

LOGISTICS DEPARTMENT

LOGISTICS DEPARTMENT

RESPONSIBILITIES:
Procuring the stock of all the products . Receives the goods from the warehouse. Dispatches the goods to the respective department. DefLogistics is a part of supply chain management which deals with the In warding and out warding of goods as well as non salable items.

PROCEDURE FOR RECEPTION OF GOODS FROM DC

1. Check for seal condition and number as mentioned in the gate pass, delivery note. 2. 3. 4. Check the number of cartons. Inform the particular department regarding the reception of goods. Check the items in front of that particular departments team member in stock transfer number wise. 5. Find out any discrepancy [shortage/damage/expiry) and inform it to supply site. 6. There will be a inward register in which we enter all the details of in warding ,the entry will also be done in the system. 7. Then the department member will move the stocks to the floor.

RECEPTION OF GOODS FROM THE VENDOR

If the goods are from vendor we will check for TAX INVOICE and PURCHASE ORDER Submission of goods in logistics. Prepare [GRN] goods receive note Department collect their respective goods from logistics

SWOT on Construction Industry

Strengths
Employment and training opportunities in the field of construction. Private sector housing boom and commercial building demands Construction of the multi building projects on the feasible locations in the country. Good structured national network facilities the boom of construction industry. Low cost well educatedand skilled labour forces is now available across the country. Sufficient availability of raw material and natural resouces in the country . Real estate development is on high and it is attractring the focus of the industry towards construction.

Weakness
Chances of natural disadvantage are there. Distance between construction projects reduces business effciency. Training itself has become a challenge Changing skills requirements and an ageing workforce may accentuate the skill gap. Improve in long-term career prospects is highly required to encourage staff retention and new entrants. External allocation of large contracts becomes difficult. Lack of clearly define processes and procedures for construction and its management. Huge amount of money need to be invested in this industry.

Opportunities
Continuous private sector housing boom will create more construction Developing supply chain through involvement in large projects is likely to enhance the chances in construction Renewable energy projects will offer opportunities to develop skills and capacity in new markets. More flexible training delivery techniques are now available. Financial supports like loan and insurance and growth in income of people is in support of construction industry. Remote areas in the country are easily accessible and plenty of land is available in the country. Historical cultural heritages like the TAZ MAHAL encourage and provide acreative platform for the industry.

Threats
Long term market instability and uncertainty may damage the opportunities and prevent the expansion of training and development facilities. Current economic situation may have an adverse impact on construction industry. Political and security conditions in the region and Late legislative Enforcement measures are always threats to any industry in India. Infrastructure safety is a challenging task in construction industry. Lack of political willingness and support on promoting new strategies. Natural abnormal casualties such as earth quake and floods are uncertain and can prevent the construction boom. Inefficient accessibility in planning and concerning the infrastructure and signs.

Problems construction industry is facing

Our construction industry suffers from capacity constraints, lack of trained manpower and managerial skills with performance much below international level. The industry is starved of finance. Small and medium contractors do not have the wherewithal toupgrade their capability, both hard and soft, to undertake highvalue time bound projects. Quality, safety, environment and social aspects are also not being addressed appropriately. Though there are islands of excellence in a sea ofmediocrity, our companies must become globalplayers by modernising, intensive training of theirmanpower, enhancing their turnover and change ofmindset

How can we overcome the problems ?

A positive image of the construction industry as a career choice. Adequate training facilities to cope with increasing demands for Modern Apprenticeships. A workforce that is suitably skilled and qualified. The transfer of skills from other sectors, such as agriculture, fishing, aquaculture and forestry, to the construction industry. Local employers able to effectively compete for the large scale construction contracts

Conclusion
Technocrats associated with the Indian construction industry need to employ innovative technologies and skilled project handling strategies to overcome these challenges. The outstanding performance under demanding situations in thepast will stand in good stead and give confidence to the Indian construction industry to bring about an overall development in the infrastructure of the nation. The gains of large investments in the mega-projects eventually will feedback to the construction industry itself in the form of better economy and improved work conditions.

Thank you