Cost influence- It’s all about timing

 

When the project is in its infancy there seems to be plenty of optimism around; there is time and the budget looks healthy. The team feels upbeat about progress and there is a general belief they will be able to meet deadlines and make a decent profit. If this sounds like a great position to be in, what makes it more promising is how much of an influence the team can have on project costs at this stage. What factors can the team influence-

  • Ability to optimize design to affect raw material – Early on, the design team has flexibility to evaluate several options on design and how design could specify low cost raw material by way of both labor and freight
  • Ability to optimize design for capital cost reduction- Design optimization plays a significant role with constructability options thereby leading to reduced labor cost. This becomes a key cost driver especially for projects in locations where labor costs form a high percentage of project costs
  • Ability to optimize the schedule by managing project float- The early part of the project is always the ideal phase at which time the execution team have the ability to look at options in terms of constructability, sequencing, heavy equipment usage, temporary facility sizing

You got the timing, you got it right. If you now plan to make changes when you are close to half way done, you may be too late! That’s right, its all about timing!

 

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