In this work we have shown the concept of logistic support in management in building production and in building of objects, which is realised in Enterprise resource Planning – ERP system ERPINSG, developed in Informatic firm Informatic engineering – ININ in Slavonski Brod, and in cooperation with scientists of catedra for informatics of Faculty of Mechanical Engineering and users from building firms.manufacturing logistic, management, ERP systems, ERPINSG

Niko Majdandzic

Tadija Lovric

Vido Peric

English

Research Papers in Economics

MANAGEMENT OF BUILDING PROJECTS 155
MANAGEMENT OF BUILDING PROJECTS
PhD. prof. Niko Majdand`i}
Faculty of Mechanical Engineering
University of Josip Juraj Strossmayer in Osijek, Slavonski Brod
Tadija Lovri}
Informatic engineering-ININ, Slavonski Brod
Mr.sc. Vido Peri}
Vibrobeton d.d., Vinkovci
Summary
In this work we have shown the concept of logistic support in management 
in building production and in building of objects, which is realised in Enterprise 
resource Planning – ERP system ERPINSG, developed in Informatic ﬁ  rm Informatic 
engineering – ININ in Slavonski Brod, and in cooperation with scientists of catedra 
for informatics of  Faculty of Mechanical Engineering and users from building 
ﬁ  rms.
Key words: manufacturing logistic, management, ERP systems, ERPINSG
Introduction
European  society  for  logistic  deﬁ  nes  logistic  [1]  like  “organising,  planing, 
management and ﬂ  uctation of business, starting with development and procuration 
to production and distribution towards ﬁ  nal customers order for purchase, in that 
way that all conditions of market are satisﬁ  ed with minimal costs”.
Informatization of company represents one of main development assignments 
with purpouse of achievement competition of product or service in price, delivery 
term  and  quality.  Implementation  of  ERP  system  as  highest  level  of  business, 
technical and production integration, with informations and planing, and monitoring 
of the work, affects on rising of total technological and organization level of the 
company. In that way introduction of controlling is possible, as preparation function 
for successful work of company management. ERP systems are integrating in their 
work models of modern logistic support to production and dealings (SWOT analysis, 
methods  of  evaluation  and  trends  in  controlling,  MRP,  MRPII,  JIT,  SIGMA6, 
methods of planning and dating, methods of multi criterion optimisation), allowing to 
management receiving of alternative for options in taking certain business action.
Beside trying for development of uviversal ERP systems [2] the practise has 
shown existing of certain demands and needs which follows from technology of work Niko Majdand`i} • Tadija Lovri} • Vido Peri} 156
in every company apropos conﬁ  guration of  preparational, business and productional 
processes in every arm of industry.
There are two ways of development of ERP systems in manufacturing companies 
in different arms of industry:
•   Projecting and development ERP systems in manufacturing companies in different 
arms of industry [3] so it exists (example with ﬁ  rm of Informatic engineering 
   ININ)  ERPINSM  for  metal working  industry,  ERPINSD  for  wood working 
industry, ERPINSP for nutrition and process industry and ERPINSG for building 
manufacturing and construction of objects.
•   Adaptation of ﬁ  nished universal ERP system to special demands in every arm of 
industry
Special demands which are posting in building industry and construction of 
objects are:
•   Demands for making calculation towards prescription for ﬁ  nished products with 
addition of indirectly costs which are arranged by certain keys, and also dinamic 
elaboration of calculation during prepaire for projecting of objects and parts of 
object
•   Needs for following of objects as the place of costs (direct and indirect) and as 
a carrier of costs and also organisation units whitch participate in realization of 
objects and costs by that organisation units
•   Making plan of objects building with need of ﬁ  ne terminning of special critical 
capaticies, possibility of rebalance of the plan towards to present condition of 
realization and evaluation of expected costs and building deadlines.
1. Content of Erpinsg system
On  the  picture  1  there  are  shown  subsystems  of  ERPINSG  system  whitch 
satisﬁ  eds mentioned demands and needs of building industry.MANAGEMENT OF BUILDING PROJECTS 157
(translation follows)
Integration and realised ﬂ  exibility by intergration of ERPINS system is contained 
in next:
￿   Intergration of all functions and businesses in company (business, engineering, 
technical and production) from making of calcullation, through preparement of 
realisation, planning and monitoring of works, control of  normative and costs 
consumprion to making of situation and distribution of means by participants 
and monitoring of payment and transmission of object,
￿   Input of data in every function in business chain is made once and it is beeing 
integrated in all functions in needed moment,
￿   Integration of  the construction site and sub contractors with company who carries 
the building with monitoring of planned and realised results on construction of 
objects by all participants,
￿   Besides of integration of modules in subsystem, it is realised high integration 
between subsystems: during launching it is possible to check the stage and 
replacement  materials,  costs  of  working  orders  are  transfered  directly  in 
accountancy, in deﬁ  ning of the price for product or services we take average or 
by method of  FIFO with deﬁ  ned price of the material or price from possibilities 
of potential suppliers etc.
￿   In the same way it is also realised integration with construction sites, bank chains, 
buyers and suppliers; by using of their codes or bar code, direct exchange of 
data and electronic documents is possible,
￿   Prototype of document making for input on the computer screen provides fast and 
ﬂ  exibile document making of material trafﬁ  c (by contest, shape and name), work 
orders and following documentation withouth need for extra programming.
￿   Possibility of calcullation and bill of quantities making by normative work and 
materials business or with direct input of normatives by businesses (activities) 
or by input of the price by work unit,
￿   Proper planning system of making of the projects and building of the objects 
with checking of main capacity avilability and with possibility of making of 
term plan of all other works by needs of main plan, and by Just In Time – JIT 
Japaneese productional philosophy,
￿   Making of various plans of building objects,
￿   Possibility of plan and construction costs monitoring and also calcullation of 
expectable dead lines and costs by current efﬁ  ciency of works according to 
plan,
￿   High level of  business, technical and productional integration of data with 
collective overview for management needs,Niko Majdand`i} • Tadija Lovri} • Vido Peri} 158
￿   Subsystem  of  maintance  whitch  supports  work  of  existing  strategies  of 
maintaining: preventive, collective and planed, monitoring of  vehicle ﬂ  eet,
￿   Monitoring of employees presence, dispensation of  tools and materials with 
hand terminals and bar code,
￿   Monitoring of  work efﬁ  ciency on construction site by using of  bar code or RF 
chips,
￿   Claim on certain modules whitch is controlled by password,
￿   Usage of  actual shapes of business comunicating (telebanking, Internet, SMS),
￿   Managing of documentation (binary contents: memos, pictures, drawings...),
￿   Integrated report of mistakes/new requests,
￿   Relation data base ORACLE.
Picture 1 Subsystems and module of ERPINSG system
Containing following subsystems:MANAGEMENT OF BUILDING PROJECTS 159
•   Collective data base (BAza ZAjedničkih Podataka) – BAZAP (contains collective 
data : organisation structure and hierarchy, partners and contact persons data, 
employees data, lists of rates of exchange, collective working calendar or working 
calendar by construction sites, dictionary of data and collective clasiﬁ  cation codes, 
measure units)
•   Sales  and  comercial  (PROdaja  i  KomercijalA)  –  PROKA  (contains  data  and 
programs for work of functions for sale, calculation and opening of work orders, 
and also provides: getting bill of quantities of object and servicesa, opening and 
following orders from customers, getting of the plan and efﬁ  ciency of work orders 
and dailiy assigments, making of yearly plan and following of it`s realisation, 
following of accomplishment by organization units, objects, construction sites and 
sub contractors, following of  tendered, contracted and retrospectived calculation 
as also incurred costs, automatic billing towards bill of lading or construction 
book.
•   Normatives  of  work  and  material  (NORMAtivi  rada  i  materijala)  –  NORMA 
(contains basic data of standard works, normatives of works and normatives of 
materials by each business, operations by each business, possibiliy of withdraw of 
the price of the material from the material accounting, possibilities or conditions of 
suppliers or by direct input, the prescription of material by products and variations 
of  prescription,  technology  of  making  of  the  products  and  work  in  process, 
technology for calculation)
•   Aquisition and stock of matarial and extra parts (NAbava i ZALihe materijala i 
rezervnih dijelova) – NAZAL (contains data about stage of basic, accessory and 
spent material, state of work in process and products on the construction site, choice 
of optimal supplier, background for preforming of inventory process, possibility of 
organizing high regular stok and also enterance and exit of material and products 
by using RF terminal and marking with bar code)
•   Launching  of  work  orders  (LANsiranje  RAdnih  naloga)  –  LANRA  (contains 
possibility  of  interactive  creating  of  work  orders  for  starting  of  production, 
assemblage of production, services of maintaining and transport, businesses in sub 
contracting, following of scheduled and realised costs by work orders, checking of 
needed material by prescription for scheduled quantities on work order, reserving 
of materials by work orders, possibility of using alternative materials, automatic 
making  of  production technological  documentation:  technological  maps, 
capitulations for deliverance of ﬁ  nished products and work in proces, deliverance 
for needs for materials towards prescription)
•   Managing  of  building  objects  (UPRavljanje  izgradnjom  OBjekta)  –  UPROB 
(contains possibilities of making scale of charges on three levels: making of list of Niko Majdand`i} • Tadija Lovri} • Vido Peri} 160
activities without planning of activities, making of scale of charges by schedule of 
activities, making of scale of charges by term  of schedule of all sub contractors 
and by basic schedule, following of direction of scheduling, corrections in scale of 
charges, report of additional works and excess works by scale of charges)
•   Monitroting  of  construction  site  (PRAćenje  Gradilišta)  –  PRAG  (gives  the 
possibility  of  monitoring  of  changes  on  construction  sites:  time,  employees, 
progress of the works, work of capacity, employees and mechanization, report of 
efﬁ  ciencyis made on the list of works or activity of  schedule by direct input or 
by input a bar code, also by automatic created construction book and after that the 
situations for collection and bill are occurring)
•   Insurance  of  quality  (OSiguranje  KValitetE)  –  OSKVE  (contains  data  about 
deviation of quality, costs of bad quality, certiﬁ  cates of materials and products, 
complaints of customers, complaints of suppliers, results of trial and ﬁ  nishing 
tests, calibration of measuring devices and instruments)
•   Maintaining of capacity and mechanization (ODržavanje KAPaciteta i mehanizacije) 
–  ODKAP  (gives  the  possibility  of  scheduling  and  monitoring  of  work  for 
preventive  and  planned  maintaining,  monitoring  of  correctional  maintaining, 
following of scheduled and realised costs of maintaining, accounting of reliability 
and availability of the equipment, ﬁ  nding of weak spots, deﬁ  ning of necessary 
spare parts)
•   Accountancy information subsystem (Računovodstveni INformacijski podSustav) 
– RINIS (represents integrated support to accountancy and ﬁ  nance businesses in 
company with modules: Diary of accounting, main book, closing of  item, internet 
banking, transfer and automatic accounting of exit bills – IFA, book of UFA, IFA 
with automatic printing of  credit transfer, calculation of taxes, calculation of   
payments, long term property, minute inventory, good materially, accountancy with 
automatic transfer of  currency from stock, cash desk, credit transfer, calculation of   
interest, working accountancy, automatic account of situation)
•   Management and controling (MEnadžment i KONtroling) – MEKON (contains 
selected review and reports about stage of making business and production: balance 
sheet, plan of intake and outtake, stage of staff by structure, stage of stocks, total 
and reserved by work orders, cover of arranged businesses with material, panned 
and realised production, planned and spent hours of work, stage of realization by 
work orders, stage of arrears and debts for certain period, review of arranged and 
businesses in contracting, costs of deviation from quality, expences of maintaining, 
graphic display of doihg business and stage on stock.)MANAGEMENT OF BUILDING PROJECTS 161
2. Managing of object building
Object building is conected with all the activities nu preparation, production and 
setting of objects on construction sites. The report of working time expense, capacity 
and mechanization is done in production drive and in construction sites. On picture 2 
it is shown work schema of managing system in building of objects.
Picture 2 Schema of managing system in building of objects
Managing is beeing done in following steps:
•   Preparation and input or choice from standard works of activities in building of 
new object
•   Input of work and material normatives if there are no standard works
• Making a bill of quantities and his corrections
• Input basic data about objects and construction site
•   Making a plan of building of object, plan of sub contractors, plan of mechanization, 
plan of needed materials, plan of tools, ferries and equipment, showing plan with 
gantt chart, curve of  progress, plan by all involved, plan for certain period of 
time
•   Report of  efﬁ  ciency (by bar code or input of percent of efﬁ  ciency, or efﬁ  ciency in 
measure unit by activities or directly from efﬁ  ciency in construction book)Niko Majdand`i} • Tadija Lovri} • Vido Peri} 162
•   Automatic making of construction book, construction diary (by report of the work 
on object), situation collection, ﬁ  nal accounting and bills
•   Monitoring of realization by quantities of the work and value (arranged realised), 
billing and charging, and ﬁ  nal accounting with showing added and excess works
•   Monitoring of realisation and costs (direct and indirect) of organization units which 
are involved in making of object
•   Making of plan rebalance with prognosis of new deadlines and costs on realisation 
of  theobject.
Making of plan and plan rebalance is managed with original program system by 
algorithm, which is developed on Faculty of Mechanical Engineering in Slavonski 
Brod [5].
On picture 3 it is shown the part of the plan by organization units.
Picture 3 Part of the plan on construction of the halls SF by departmentsMANAGEMENT OF BUILDING PROJECTS 163
Special problem for monitoring of costs by objects and productional organisation 
units represents unsolved ways of  indirect costs distribution.
3. Model of indirect costs distribution by objects
In most of the companies (by the research on project of MZOŠ 152001) we 
monitor and distribute only direct costs by objects and organisation units. In this 
costs are entering work costs (through calculations of salary and monitoring of 
the employees work and productional capacity by objects apropos in organisation 
units) and costs of material (through delivery note with average price from material 
accounting or by method of FIFO).
However, meaningfull costs remains excluded (costs of electric energy, gas, 
wather,  costs  of  sub contractor  services)  as  also  special  indirect  costs  (costs  of 
management, preparation, support and administrative activities etc.). Special part 
represents services between themselves (maintaining of equipment, transport) whitch 
represents internal realization for organisation units of support activities and cost for 
object and organisation units of the production.
In subsystem of management anf controlling of MEKON is developed in module 
of controlling a model of  key construction for distribution of this indirect costs by 
organisation units and objects and in a module of management, model of reports and 
lists of  incur direct and distributed indirect costs ba organisation units and objects.
On picture 4 it is shown an example for input of key for distribution of costs in 
module of controlling. Selection of keys and deﬁ  ning the part of the percent is matter 
of each company and as example of costs distribution of electric energy, we take 
installed strenght of work time waster in current month regarding on total installed 
energy, and costs of management are shared by the key of  reached realisation and 
by the number of the employees in current month.Niko Majdand`i} • Tadija Lovri} • Vido Peri} 164
Picture 4 Deﬁ  ning of the keys for distribution of indirect costs
In purpuose of easier comparation, we made a groups for monitoring of costs 
whitch can be seen on picture 6.MANAGEMENT OF BUILDING PROJECTS 165
Picture 5 The groups of  costs for comparation
On picture 6 we have shown total results for chosen object. On accomplished 
direct costs, there are added and distributed indirect costs. In the same way we have 
shown calcullated (by component and prescription) and realised costs of material.Niko Majdand`i} • Tadija Lovri} • Vido Peri} 166
Picture 6 Total costs by objects
4. Summary
For competitive building production and building of objects it is neccessary 
to improve the level of olanning, making bill of quantities, planning of production 
and building of objects, and also monitoring of realisation and realised costs. In 
monitoring of costs it is neccessary to distribute also indirect costs and by carriers of 
cost and by the place of cost. In work it is shown realised project of informatization 
in one building company in whitch solved logistic management of production and 
costs.
Literature:
[1]   Bartoševa, V., Bielikova, A. (2005.)»Utilization of logistic in business optimisation 
«, Mašinstvo,9:37 46.
[2]  www.sap.com o2.07.2005.
[3]  Majdandžić,N.(2004.)  Izgradnja  informacijskih  sustava  proizvodnih  poduzeća. 
Sveučilište u Osijeku, Strojarski fakultet Slavonski Brod.
[4] www.erpins.com 04.07.2005.
[5]   Majdandžić,N. , Lujić,R., Matičević,G, Šimunović,G., Majdandžić,I. (2001.)  
Upravljanje proizvodnjom. Sveučilište u Osijeku, Strojarski fakultet Slavonski Brod. 

Management Of Building Projects

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Management Of Building Projects

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