What Is Cost Optimization?
Cost optimization is a process that must be carried out throughout the construction period to ensure that the cost of the building remains within the estimated cost limits. Cost optimization can be broken down into two main areas. Cost optimization during the design phase and cost optimization by the contractor after the start of the project. In order to optimize the costs of a project, the cost record and the progress of a project must be recorded and measured. the project costs with the estimate. The main goal of optimizing the cost of a project is to get the maximum benefit within the design period and with a satisfactory quality of work.
How Can We Optimize The Cost?
Value Engineering:
Value engineering is a systematic application of recognized techniques that identify product or service functions, determine the value of those functions, and provide the functions necessary to achieve the required performance at the lowest total cost. A solution that highlights the role of the project, helps the team make the final decision, and results in an inexpensive design for the project.
Material Management
In order to control productivity and cost efficiency, material management is essential. It contributes to most of the costs on construction projects. By controlling procurement and maintenance costs, the total cost of the project can be reduced and the project completed in a fast manner. ABC (Always Better Control) is the tool to identify those materials. The economic order quantity (EOQ) is determined and then the material sensitivity is checked. The impact of the project is then checked in order to find the optimal solution. This optimizes the total cost of the project.
Cost Optimization Techniques
When planning, constructing, and maintaining technical systems, engineers must make various management and technical decisions at different stages. Therefore, the ultimate goal is to minimize the workload or maximize the expected benefits. Use various mathematical programming methods to optimize construction costs. Including non-linear programming, dynamic programming, integer programming, random programming, etc.
Cost Reduction Technique At Site
The contractor uses the schedule to monitor the progress of the work, which is related to the cost. The labour inspection is carried out and the comparison with the budget is carried out. Work progress review meetings motivate all workers and stakeholders to improve their performance. Activities or records are important in order to be able to identify deviations from established standards. Clients, consultants, and contractors use budget, schedule, and feedback tracking tools to monitor cost performance. And to check them out Work progress.
What Is Area Wise Cost Optimization?
Civil Work
- Design optimisation and Value Engineering.
- Use of correct Construction technology.
- Competitive raw material cost saving.
Finishing Work
- Sourcing directly from manufacturers.
- Alternate materials usage.
- Global material sourcing.
MEP Work
- Design, DBR, BOQ optimisation.
- Use of energy efficient equipment and process.
- Incorporate latest design process and materials.
- Global material sourcing.
Development
- Design optimisation and Value Engineering.
- Design, DBR and BOQ optimisation.
- Alternate materials usage.
