Value Management & Life Cycle Costing

Value Management & Life Cycle Costing

The life cycle costing evaluates lowest cost of ownership of a projects life span. Also determines the cost of project from design to completion. This analysis not only calculates capital cost but maintenance and operation cost also.

Value management deals with requirements of a client for the project. It helps to identify the alternatives to increase the achievement of goals and efficiency at lowest cost possible. Value management helps to reduce the risk of delays, failure, cost and increases quality and performance to ensure safety and reliability.

Data collection using questionnaire is more reliable than interviews, interviews are more inclined to bias involves personal opinions knowingly or unknowingly in the data collection. Which is difficult to deduct from the research.

Life cycle cost technique

Life cycle costing is mainly used to calculate the future cost of project. It correlates initial cost with expected future costs such as maintenance, alteration and operation. LCC provides economic comparison for present and future. LCC evaluates how much it will cost to achieve future benefit in the life span of project. Therefore it is needed to calculate the maintenance and operation cost of the project for client’s investment. Life cost of a project has to be determined at the conceptual stages of the project to calculate the maintenance and running cost. There must be balance to ensure the cost such as energy usage, disposal, and so on are also taken in to account. Clients these days are more concerned about future value of their money, LCC helps to evaluate the value of money.

Value management

The term Value engineering is also used for value management. After World War II manufacturing industry faced materials and component shortage so value management was developed. This is the process to acquire services, designs, and facilities at lowest cost to provide durability and quality. VM is a problem solving management system. VM helps from beginning to completion. It balances between quality, safety, cost, and reliability. VM can be introduces at any stage in construction project, more useful if used from the beginning.

Value management / engineering removes unnecessary cost in construction project and helps to increase better quality and performance at lower price. Workshops and seminars are held for value management where client, suppliers, contractors, and other stakeholder participate for investigations and suggestions. Value management can be categorized in different phase mainly evaluation and development phase.

1- The evaluation phase:

This phase is also called investigation phase, evaluation phase is important strategic process primary activities of this phase are modifying, elimination, pruning, and combining ideas. Mostly availability, cost and technology are evaluated on merits, constraints, easiness, safety, coordination and effect on schedules.

 

2- The Development phase:

This phase depends on result of evaluation phase. Where all participants agree to recommendation made and milestones are also identified. Which is to prepare for alternative design and cost so that feasible proposal can be drafted and presented to client.

In sum, performing both Value Management analysis and Life Cycle Costing can be extremely beneficial for construction projects.

 

 

Labor Productivity Assessment

Labor Productivity Assessment

Evaluation of productivity is important for any construction project in order to determine the project status and to have complete picture, there should be some mechanism. Productivity assessment is key for quality, cost and on time completion of construction project. When assessing productivity, it is better to break it down in to manageable parts as teams. Size of team depends on the project size. It is important that every site assessment is different from the other.

Work sampling method

This method has been used in the U.S construction industry from 1980’s. Work sampling method is statistical technique to determine the amount of time spent on tasks such as assembling parts, machines set up and so on. Work sampling is different from other techniques as this allows quick analysis, task and performance competencies, recognition, and job enhancement.

In this method, for accuracy, sampling is done at random times and observations are made for extended period of time. There should more than one worker and several weeks are needed. When taking work sample,  the work routine should not be repetitive.

Productivity data collection

Data is collected in smaller chunks for accuracy. Information technology can help collection and assessment of data for continuous productivity improvement as regular collection of data is important for accuracy and using IT tools like RFID (Radio Frequency Identification) calculating time becomes easy.

Weekly productivity depends on amount of work done and working time. Common work sample mainly depends on sample taken at different time, there can’t be any repetition in sample, keeping in mind time consumed in the whole process. Productivity sample can be calculated as the quotient of work force volume divide by the actual time consumed on task. Avoid unnecessary activity which is not helping in productivity, this narrows down to question like

  • How did he do the work?
  • Does he contribute to productivity?
  • Did he followed design or plan?
  • Did he change work area?
  • Did he transport tools or material?
  • Did he stop his work for personal reasons?

Assessing and improving labor productivity assessment improves productivity and reduces cost, help attaining goals such as

  • Improves construction productivity
  • Reduced overall cost
  • Decreases overtime expenses
  • Helps increasing profit
  • Attracts reliable and productive workers.
Importance of design and detailed drawing

Importance of design and detailed drawing

When starting a project it’s evident that everyone does a little research and planning, seems like a good idea at first. When it gets confusing that becomes more costly and waste of money. When everything is not preplanned then workers will have to ask every turn by turn direction, which will take longer than expected.

In ancient days people built their homes and workplace themselves. Only those people build better who has experience from previous mistakes. This gives us ideology that everyone should contribute in design process which ultimately leads to grand scheme of planning.

When professionals are involved like architect and interior designers many projects becomes easy in terms of usage and organization that’s how it boils down. Having professional architects and designers on board pre-construction design and planning is a process which can minimize unseen mishaps, cost and delays. Experienced team can perform trustworthy in any situation.

Design process can be divided in 3 categories: –

1- Schematic: preliminary diagrams of what is to be developed.

2- Design: detailed diagrams of each floor, having door and windows and elevation.

3- Construction layouts: design of most accurate drawing of walls, columns, material to be used and so on. Basically blueprints.

This is the part of project when most important decisions are made. What and how to development, cost estimation and adjustments of need and want. A little more time and money will save time and money in terms of potential mistakes, delays and incorrect schedules which leads conflicts.

Sometimes proceeding in hurry causes nothing, but delays like unexpected discovery, approval or permissions, delayed supplies, lack of resources, and so on. This eventually results in extensive change and compromises with dream project not to mention increased cost.

Budget is important factor that could affect the design process. When making estimate for the budget, obtain material price and calculate possible change as expected according to project timeline. Design modification guarantees that there will be no surprises in the project construction. Anything missed in design process will be much difficult to alter later on as construction process is a step by step.

 

How To Optimizing Resource Scheduling 2

How To Optimizing Resource Scheduling

Resource driven scheduling works with resources. It manages resource in way that resources are available up to the completion of project. Resource driven scheduling is widely used around the globe, with much capabilities construction industry still suffer from key limitations such as

  • Inefficient resource utilization and fluctuation in construction projects.
  • Reduced optimization of schedule acceleration strategies like duration, cost and productivity.
  • Incorrect measurement of uncertainties in project schedules in effective way for large scale projects.

Resource Scheduling

Managing resources to achieve maximum efficiency of time and cost in order to schedule and allocate available resources. Widely utilized network scheduling techniques create unintended high resource demand and undesirable resource fluctuations in construction projects.    

  • Hiring and releasing workers can be a headache, inefficient and wastage of time.
  • Paperwork cost and unemployment compensation because of frequent hiring and releasing of workers.
  • Workers need time to settle according to new conditions, which can affect performance and time consuming.
  • Fired workers may not available on next recall as they can find new job.
  • Interruption occurs and performance decrease as workers are hired and released.
  • Resource fluctuation affects overall productivity and cost in construction.

 

Resource utilization in multiple shifts

 

Multiple shift in construction project is not new usually occurs when project is delayed due to some reason like permit issues, accidents, lack of resources and reconstruction. Making 2 or 3 shifts of 8 hours can really has some advantages such as

  • Increases production rate up to double or triple.
  • Saving cost as night shifts cost less than overtime.
  • Decrease congestion of a lot of workers coincide in terms of dependent of parallel working schedule.

Having these advantages, there are still some limits as they have negative impact on productivity, safety, and cost. Additional cost occurs on account of night time lighting, safety and quality control. Workers also face problem such higher accidents, health disorders, and social life interference.

 

Cost effective and efficient resource utilization

Network scheduling techniques sometimes produce unreasonable and expensive schedules, which creates fluctuation in resources and causes additional construction cost as idle cost (resources on hold for further use), release and rehire cost, and mobilization cost (paperwork and training of newly hired worker).

In order to minimize cost of resource fluctuation, shifting early start of selected construction activities can help reduce the cost. Shifting project schedule in a way so that resources cannot be released or rehired, which eliminates resource idle cost, release and rehired cost.

 

PENTAX Image

Construction material testing

Purchasing new house comes with some questions about design and construction quality. There are a lot of innovations in construction business these days, but it’s not uncommon to find people complaining about quality of their newly acquired house.

 

Violation of building code is the reason for structural and safety malfunctions, which compromises quality of the project. That creates a potential danger for people who are going live. Normally most of the defects are easily visible, but Lay man wouldn’t be able to find structural problems and material issues

 

Here are few things which you can check by yourself.

 

PAPERWORK

Usually every construction contractor promises quality construction, but few of them provide the detailed documentation, it is important that you check bookings, purchases, annexes, schedule of amenities, specification related to windows, fittings, doors, and flooring. Correct documentation creates pressure for contractor to deliver what he promised.

 

STANDARDS

When purchasing new home some unscheduled visits will help understand the quality of work and construction.

 

SOIL INVESTIGATION

Understanding soil is important because whole structure is going to be standing on the ground. Stability depends on the soil. You will find difference in soil samples as much you visit different places. Differences such as particle size and sand characteristics for aeration and drainage. US Occupational Safety and Health Administration (OSHA) defines following soil classifications

 

  • Stable Rock

 

  • Type A – cohesive, plastic soils with unconfined compressive strength greater than 1.5 ton/sf

 

  • Type B – cohesive soils with unconfined compressive strength between 0.5 and 1.5 ton/sf

 

  • Type C – granular or cohesive soils with unconfined compressive strength less than 0.5 ton/sf

 

STRUCTURAL DESIGN

Structural design is the most important component of construction like wireframe in computer graphics. Structure should be checked to withstand earthquakes of specific magnitude. Usually five or six years old building can easily withstand earthquake around 4.0 and some remarkable building are designed to withstand earthquake of 9.0. Mostly depends on weight distribution on the ground and quality of steel. Ignoring this part will be much costly in terms of adjustments and reconstruction.
CONCRETE MIX

Structure’s load defines the strength of concrete required. Contractor monitors closely concrete mix, composition varies on different stages. It’s not possible for you to check concrete mix on every stage, so you can appoint a supervisor or ask for certificate from laboratory.
ALTERATIONS & FITINGS

Check for alternation made as they are promised such as quality of electrical wiring, bathroom fittings, and so on.

FINAL VISIT
Spend some time on the site, small details are usually missed in a brief visit. Ask questions, it clarifies things on time and provide chance for rectification. Know about construction, you