Continuous Cost Improvement in Construction: Theory and Practice aims to provide students and practitioners with an all-inclusive understanding of strategies for adopting continuous improvement in construction cost management. This book addresses continuous improvement practices from the perspective of cost management and applies case study examples to question the readers' perspective of continuous cost improvement strategies in the project lifecycle. Continuous cost improvement practices in managing the cost of minor, major, and mega projects are all connected with decision-making tools for devising strategies for choosing the approaches for mitigating the effect of cost overruns in construction projects. Continuous cost improvement should be taught as part of modern methods and processes of construction in further and higher education institutions. This book will be key reading for all advanced undergraduate and postgraduate courses in Construction Project Management, Building and Quantity Surveying. Professionals in all aspects of the AEC industry will also gain greatly from engaging with the key concepts of continuous cost improvement throughout this book.
Author(s): Temitope Omotayo, Udayangani Kulatunga, Bankole Awuzie
Publisher: Routledge
Year: 2022
Language: English
Pages: 266
City: London
Cover
Endorsements
Half Title
Title Page
Copyright Page
Contents
List of figures
List of tables
Foreword
Preface
Acknowledgements
SECTION A: BACKGROUND
1. Continuous Improvement and the Construction Industry
1.1. Introduction
1.1.1. Defining continuous improvement
1.1.2. Deming’s cycle
1.1.3. Nine principles of continuous improvement
1.1.4. Creating a value stream mapping
1.1.5. The merits and demerits of continuous improvement
1.1.6. Evidence of continuous improvement in the construction industry
1.1.7. Continuous improvement and construction cost management
References
2. Construction Cost Management Systems, Methods, and Techniques
Part I
2.1. Introduction: Construction cost management
2.1.1. Construction cost estimation
2.2. Differences between construction cost, price, and value
2.2.1. Cost
2.2.2. Price
2.2.3. Value
2.3. Pre-contract cost planning
2.4. Factors influencing construction estimation
Part II
2.5. Construction cost management system
2.5.1. Traditional cost management system (TCMS)
2.5.2. Value management system (VMS)
2.5.3. Earned value management system
2.5.4. 5D Building information modelling management (BIM)
2.5.5. Benchmarking system
2.5.6. Expert systems
2.6. Summary
References
3. Construction Cost Management Methods
3.1. Introduction: Construction cost management methods
3.2. Cost estimation and material taking-off
3.3. Value planning
3.4. Value engineering
3.5. Value analysis
3.6. Whole life cycle costing
3.7. Life cycle costing
3.8. Activity-based costing
3.9. Earned value analysis
3.10. Target value design and costing
3.11. Kaizen costing
3.12. Summary
References
4. Construction Cost Management Techniques
4.1. Introduction: Construction cost management techniques
4.2. Interim valuation
4.3. Cash flow forecasting
4.4. Monitoring labour, material, equipment, and overheads
4.5. Cost-benefit ratio
4.6. Incremental milestone
4.7. Identifying cost overruns
4.8. Managing variations
4.9. Site meetings and post-project reviews
4.10. Historical cost data and profit and loss summary
4.11. Plan-do-check-act (PDCA) cost reduction principle
4.12. Post-contract cost control
References
5. Modern Methods of Cost Control
5.1. Modern methods of construction and cost control
5.2. The cost of prefabricated construction
5.3. Cost of 3D-printed buildings
5.4. Artificial intelligence in construction cost control
5.4.1. Predicting behaviour of construction professionals towards construction cost control
5.5. Blockchain technology and construction cost control
5.6. Mobile construction project management and construction cost control
5.6.1. Videoconferencing in construction cost control
5.7. Big data analytics and construction cost
5.8. Cloud-based database and construction cost control
5.9. Conclusion: Continuous cost improvement and construction new trends
References
SECTION B: STRATEGIES
6. Overhead Cost Reduction and Maintenance through Continuous Improvement
6.1. Introduction: The hidden costs of construction and continuous improvement
6.2. Continuous improvement of construction company’s overhead cost
6.3. Continuous improvement of construction project overhead cost
6.3.1. Site conditions
6.3.2. Construction design economics
6.3.3. Construction planning and procurement arrangements
6.3.4. Additional costs
6.3.5. Economic conditions
6.3.6. Design
6.4. Basis of calculating overhead costs in construction
6.5. Conclusion: Strategies for overhead cost maintenance and reduction
References
7. Global Construction Organisational Cultures and Continuous Improvement
7.1. Introduction: Construction organisational culture
7.2. Influence of organisational culture on change in the construction industry
7.3. Asian construction organisational cultures
7.3.1. China
7.3.2. India
7.3.3. Saudi Arabia
7.4. African construction organisational cultures
7.4.1. Nigeria
7.4.2. South Africa
7.4.3. Egypt
7.5. Australian construction organisational cultures
7.5.1. Australia
7.5.2. New Zealand
7.6. European construction organisational cultures
7.6.1. The United Kingdom
7.6.2. Germany
7.6.3. France
7.7. North American construction organisational cultures
7.7.1. The United States of America
7.7.2. Canada
7.8. South American construction organisational cultures
7.8.1. Brazil
7.8.2. Chile
7.8.3. Argentina
7.9. Awareness and acceptance of continuous improvement in the organisational culture
7.9.1. Clan culture and continuous improvement
7.9.2. Hierarchy culture and continuous improvement
7.9.3. Market culture and continuous improvement
7.9.4. Adhocracy and continuous improvement
7.10. Summary
References
8. Continuous Improvement and Cost Overrun in Construction Projects
8.1. Introduction: Classification of construction projects
8.2. Continuous improvement in basic projects
8.2.1. Factors impacting on the cost performance of basic construction projects
8.3. Complex construction projects
8.3.1. Factors impacting on the cost performance of complex projects
8.4. Continuous improvement on large and unique construction projects
8.4.1. Factors impacting on the cost performance of large and unique projects
8.5. Continuous improvement on megaprojects
8.5.1. Factors impacting on the cost performance of mega projects
8.6. Categories of stakeholders in construction projects
8.7. Summary: Project scales and continuous improvement
References
9. Latent Continuous Cost Improvement Strategies in the Construction Industry
9.1. Introduction
9.2. Continuous cost improvement strategies for the basic construction of a basic construction project in Nigeria
9.2.1. Market research
9.2.2. Making use of local materials
9.2.3. Engagement with suppliers and subcontractors
9.3. Continuous cost improvement strategies of a complex construction project in Sri Lanka
9.3.1. Personal heuristics
9.3.2. Brainstorming
9.3.3. Value engineering
9.3.4. Post-project reviews
9.4. Continuous cost improvement strategies for unique construction projects in Italy
9.4.1. Circular economy in construction
9.4.2. Material life cycle costing
9.4.3. Constructability assessment
9.5. Continuous cost improvement strategies for megaproject in the UK
9.5.1. Material selection and specifications
9.5.2. Cost-benefit analysis
9.6. Summary
References
SECTION C: CASES
10. Cases on Overhead Cost Reduction and Maintenance through Continuous Improvement
10.1. Introduction
10.2. Case 1: Site conditions
10.3. Case 2: Construction design economics
10.4. Case 3: Construction planning and procurement arrangements
10.5. Case 4: Additional costs
10.6. Case 5: Economic condition
10.7. Case 6: Design
10.8. Summary
11. Cases on Continuous Cost Improvement Attributes for Monitoring Construction Projects – PART I
11.1. Introduction
11.2. Case 1: Variation management
11.3. Case 2: Plant hire cost
11.4. Case 3: Labour cost
11.5. Case 4: Administrative charges
11.6. Case 5: Monitoring construction material cost
11.7. Case 6: All forms of risks
11.8. Case 7: Financial risk
11.9. Case 8: Drawing reviews
11.10. Case 9: Meeting the cost benchmark of individual construction elements
11.11. Case 10: Taking immediate corrective action
11.12. Case 11: Managing subcontractor and suppliers’ cost
11.13. Case 12: Outcome of weekly/monthly site meetings
11.14. Summary
References
12. Cases on Continuous Cost Improvement Attributes in the Construction Industry – PART II
12.1. Introduction
12.2. Case 13: Price fluctuation
12.3. Case 14: Changes in laws and regulations
12.4. Case 15: Compliance with laws
12.5. Case 16: Constructability or buildability check
12.6. Case 17: Design economics norms check
12.7. Case 18: Cost norms check
12.8. Case 19: Wastage check
12.9. Case 20: Alternative technology check
12.10. Case 21: Facility management issues
12.11. Case 22: Long-term maintenance agreement drafts
12.12. Case 23: Electric power and water consumption check
12.13. Case 24: Production continuity
12.14. Summary
13. Cases on Openness to Continuous Cost Improvement in Construction Organisations
13.1. Introduction
13.2. Case study on openness to new ideas in construction organisations
13.3. Case study on encouragement of continuous cost improvement
13.4. Case study on clan culture and continuous cost improvement
13.5. Case study on hierarchy culture and continuous cost improvement
13.6. Case study on market culture and continuous cost improvement
13.7. Case study on adhocracy culture and continuous cost improvement
13.8. Summary
14. Cases on Continuous Cost Improvement in Procurement Strategies
14.1. Introduction
14.2. Cases on sequential traditional procurement
14.3. Cases on accelerated traditional procurement
14.4. Cases on direct design and build
14.5. Cases on competitive design and build
14.6. Cases on novated design and build
14.7. Cases on develop and construct
14.8. Cases on design and manage
14.9. Cases on management contracting
14.10. Cases on construction management
14.11. Cases on public-private partnerships
14.12. Cases on partnerships, alliancing, and consortia
14.13. Summary
References
15. Contractual Payment Arrangements and Continuous Improvement
15.1. Introduction
15.2. Cases on lump-sum contracts
15.3. Cases on fixed-price contracts
15.4. Cases on remeasurement contract
15.5. Cases on cost-reimbursable contracts (prime cost contracts or cost-plus contracts)
15.6. Cases on guaranteed maximum price
15.7. Cases on unit pricing contracts
15.8. Cases on target cost contracts
15.9. Summary
References
SECTION D: DECISION TOOLS
16. Decision Tools for Continuous Cost Improvement – Part I
16.1. Introduction
16.2. Affinity diagrams
16.3. Interrelationship diagraphs (IDs)
16.4. Tree diagrams
16.5. Process decision program charts (PDPCs)
16.6. Matrix diagrams
16.7. Prioritisation matrices
16.8. Summary
References
17. Decision Tools for Continuous Cost Improvement – Part II
17.1. Introduction
17.2. Activity network diagrams (ANDs)
17.3. Cause and effect
17.4. The 5S diagram
17.5. Business process modelling and notation (BPMN)
17.6. Icam DEFinition Function Zero (IDEF0) for improving post-cost controlling activities
17.7. Capability maturity model for continuous cost improvement
17.8. Plan-do-check-act (PDCA) model
17.9. Concluding remarks
References
Index
