1 The importance of cost control
Construction is a complex, high-cost, high-risk project involving many disciplines, departments and stakeholders. Therefore, cost control is crucial in construction projects. Cost control of construction projects is one of the important aspects of construction project management. Cost control refers to the goal of saving costs as much as possible under the premise of ensuring the quality of the project by managing various resources and controlling the occurrence of various expenses in the process of implementation of construction projects. Cost control in construction projects is of great significance to ensure the quality, progress and safety of the project.
1.1 Improve project efficiency and ensure project quality
Cost control is also of great help to improve the construction efficiency of construction projects. On the one hand, cost control can help enterprises make full use of resources, avoid waste, and improve construction efficiency; On the other hand, cost control can also prompt enterprises to continuously optimize the management mode and explore new construction methods and technologies, so as to improve construction efficiency.
The cost control of construction projects plays an important role in ensuring the quality of the project. The quality of construction projects depends not only on technology and management in the construction process, but also on cost control. If the cost control is not in place, resulting in the cost overrun of the project, it may force the enterprise to reduce the quality of materials, reduce the links of the construction process, shorten the construction period, etc., which will have an impact on the quality of the project. Therefore, doing a good job in cost control can ensure the full investment of the required expenses in the project, improve the technical level and process quality in the construction process, and ensure the stability of the project quality.
1.2 Optimize the cost structure and improve the return on investment
The main goal of cost control is to save costs as much as possible on the premise of ensuring the quality of the project. Through cost control, the cost of each link in the construction project can be supervised and managed, and the cost structure can be effectively optimized, unnecessary costs can be reduced, and waste of resources can be reduced. So as to improve the economic benefits of the enterprise, to provide reliable economic support for the long-term development of the enterprise.
Cost control can also improve ROI. If a project goes over budget, the ROI may drop. With cost control, this can be avoided and the ROI can be increased.
1.3 Standardize project management and promote the scientific and standardized project management
Cost control is a comprehensive work, which requires multi-faceted coordination, including finance, materials, procurement, contracts, etc. Cost control in construction projects requires a sound management system and process, and requires all departments to work in accordance with the process and requirements to standardize management, optimize resource allocation, and achieve the purpose of cost control. This will help construction engineering enterprises to improve their management level, standardize their operations, achieve efficient management, and further improve their competitiveness.
Cost control can also promote the scientific and standardized project management. Cost control requires the use of a range of tools and techniques, such as budgeting, schedule control, change management, supply chain management, and more. By using these tools and techniques, project management can become more scientific and standardized, thereby improving management efficiency and effectiveness.
1.4 Reduce project risks and increase project competitiveness
Cost control can reduce the risk of the project. There are many risk factors in construction projects, such as material price fluctuations, construction delays, design changes, etc. If cost control is inadequate, these risk factors can lead to project overbudgets and delays. Through cost control, these risks can be identified and resolved in a timely manner, thereby reducing the risk of the project.
Cost control can also increase the competitiveness of the project. In the highly competitive market environment, the cost control ability of a project is one of the important criteria to measure the success of a project. Through good cost control, the cost of the project can be reduced, the quality and efficiency of the project can be improved, so as to increase the competitiveness of the project.
1.5 Establish a good corporate image and brand status
In construction projects, cost control can not only help enterprises reduce costs and improve efficiency, but also establish corporate image and brand status. By controlling costs, enterprises can improve the competitiveness of their projects, provide more competitive prices and higher quality, and thus win the trust and reputation of customers. At the same time, cost control can enable enterprises to better manage and utilize resources, improve the production efficiency and economic benefits of enterprises, and further improve the brand status and image of enterprises. Due to the increasingly fierce market competition, it is very important to establish an excellent brand image for the long-term development of enterprises, so cost control in construction projects has also become one of the important means for enterprises to establish brand image and improve competitiveness.
2. Difficulties in cost control
2.1 Increased scale and complexity of construction
As the scale and complexity of construction increases, so does the difficulty of cost control. Construction projects usually involve multiple phases, such as the design phase, the construction phase, and the acceptance phase, each of which requires cost control. Especially in large and complex construction projects, which involve many disciplines and subcontracted works, a large amount of data analysis and prediction is required, which increases the difficulty of cost control. At the same time, construction projects often involve multiple disciplines, multiple departments, and multiple suppliers, which can add complexity to cost control.
2.2 There is uncertainty in the cost budget
The price of building materials is affected by various factors such as market supply and demand, macroeconomic policies, etc., and there are fluctuations. Therefore, material price fluctuations are an important issue in the cost control of construction projects. At the same time, material procurement is also a challenging issue, which requires reasonable supply chain management and procurement strategies to ensure the quality and price control of materials. The supply chain of construction projects often involves multiple suppliers and contractors, and the complexity of the supply chain can make it difficult to control costs. Supply chain management requires establishing good supplier relationships and processes, and following up on supplier deliveries and quality in a timely manner.
The cost budget for construction works is usually formulated before the start of the project, but various changes and uncertainties may occur during the implementation of the project, such as changes in the market environment, fluctuations in material prices, design changes, etc., which may affect the cost budget.
2.3 Design changes and construction delays increase the difficulty of change management
In construction projects, changes are unavoidable, but they can have an impact on cost control. These issues can have a detrimental impact on cost control. For example, design changes can lead to duplication of investment and wasted materials, which can increase costs. At the same time, change management is often difficult, and it is necessary to establish a good change management mechanism and process to ensure that changes can be approved and controlled in a timely manner.
In addition, construction projects often involve multiple progress nodes and critical paths, each of which needs to be scheduled. The challenge of schedule control is that the schedule needs to be carefully analyzed and planned, and the schedule changes should be followed in a timely manner to ensure that the project can be completed according to the plan. However, construction delays are a common problem in construction projects, and construction delays can lead to problems such as increased labor costs and higher material prices.
2.4 The technical means need to be improved urgently, and the quality of management personnel needs to be improved
Cost control of construction projects usually requires the use of a variety of technical means, such as cost estimation software, schedule management tools, supply chain management, financial analysis tools, etc. However, some enterprises may not have enough technical means to support cost control, which will affect the cost control effect of the project.
Cost control requires professional knowledge and skills, and experienced personnel are required to carry out cost control. In some enterprises, there is a lack of professional cost control talents, resulting in insufficient specialization and standardization of cost management. This can have a detrimental effect on cost control.
Cost management in construction projects is an effective means of cost control, which can help project managers find problems in cost control in time and take corresponding measures to adjust. This paper puts forward some suggestions and countermeasures to help project managers better use cost management to control costs.
3. Countermeasures and suggestions for cost control
3.1 Formulate a scientific and reasonable budget
Before the project begins, develop a detailed budget plan that includes all expected costs and expenditures, a detailed list of expenses, and an estimated amount of each expense. Budget planning can help determine the cost constraints of a project and ensure that the project is completed within budget. At the same time, according to the budget plan, formulate reasonable cost targets and budget implementation plans, and constantly revise and update them during the project implementation process to ensure the accuracy and timeliness of the budget. Make it a constraint for the entire project.
3.2 Use cost management to identify and evaluate cost risks
Using the methods and tools of cost management, cost estimation and analysis for different expense items, such as labor costs, material costs, equipment costs, etc., can identify and evaluate the risk factors that may lead to cost increases. These risks can include delays, quality issues, design changes, and supply chain disruptions. Identifying these risk factors in a timely manner and taking effective measures to control and avoid them can help reduce the cost of risk.
3.3 Manage progress control and establish a change management mechanism
Progress control and management requires the establishment of a detailed schedule and the continuous follow-up and monitoring of the implementation of the schedule. Through schedule control and management, the project can be guaranteed to proceed as planned and unnecessary costs can be reduced.
Change management is an important aspect of controlling the cost of construction works. The change management mechanism should include the approval process of the change, the impact analysis of the change, and the cost control measures of the change. Cost management methods and tools allow you to control the change management process, including approving and executing changes. Adopting a rigorous change management process can standardize the occurrence of changes and reduce the impact of changes on project costs.
3.4 Scientifically control the supply chain of materials and track costs in real time
The supply chain management mechanism should include supplier evaluation, supplier cooperation agreement and supplier management process. Using cost management methods and tools, you can manage the supply chain of materials, including material procurement, inventory management, and delivery tracking. Establish stable relationships and maintain contact with suppliers to ensure timely delivery, reasonable prices and good quality, and effectively control the cost impact of the supply chain.
Using cost management software and systems, you can track costs in real time, including project progress, personnel salaries, material procurement, and changes, which can help find the problem of cost increase in time, so as to take timely measures to control costs and prevent over-budgeting.
3.5 Periodic review and evaluation, management of construction period and human resources
Leverage the cost management data analytics capabilities of cost management to regularly review and evaluate cost control plans for construction projects to determine if changes or adjustments are needed. This helps to identify the risk of increased costs in a timely manner and take corrective measures.
Proper management of schedules and human resources can reduce costs and wasted time. Plan and monitor the progress of the project to ensure that the project is completed on time. Ensure that there are sufficient human resources and that training and upskilling are carried out to improve efficiency and quality.
It is recommended to establish a cost control ledger. The cost control ledger can help the project manager understand the cost of the project and find and solve the problems of cost control in time.
4 Concluding remarks
To sum up, the suggestions and countermeasures for cost control in construction projects need to be comprehensively considered from many aspects and a variety of measures should be taken. By fully formulating cost estimation plans, adopting risk analysis tools, implementing risk control and avoidance measures, tracking and monitoring costs in real time, and regularly evaluating the effectiveness of risk management, it is possible to effectively control costs and improve the success rate and economic benefits of projects. Therefore, it is recommended to strengthen cost management in the implementation of construction projects to achieve all-round and multi-angle cost control and management. At the same time, it is also necessary to strengthen the ability of the project management team, establish a teamwork mechanism, improve the professional quality and business ability of the team members, and ensure that the problems in cost management can be quickly responded to and effectively solved in the implementation of the project. In addition, in the implementation of construction projects, it is also necessary to follow the principle of compliance, comply with relevant laws and regulations and construction project quality standards, and ensure the quality and safety of the project. Only by comprehensively considering all factors and realizing scientific and standardized cost management can we ensure the smooth progress of construction projects and maximize economic benefits.
Since January 2023 of "Construction Worker", Bu Songzhen