House Under Construction
Posted in Uncategorized on 07/04/2008 10:48 pm by admin
House Under Construction
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How to create cost savings in construction?
In today’s difficult economic scenario where most activity in the construction industry has drastically diminished, it is especially relevant to look at ways and means of scaling down costs. This might go some distance in the contributing to the revival of the sector which we are all so keen do well. The foundation of cost saving be laid during the planning and design phase.
How we factor in the costs taking into account the entire life cycle of the facility to be built is critical. We must remember that construction cost forms only one part of the life cycle cost, and it will be the owner of the facility who will have to bear the costs after the construction phase. Therefore it is important to remember that any savings in costs at one stage should not be at the expense of quality, which may come back to haunt the owner at a later stage.
While it is always a good idea to compartmentalize a project, it is essential that the level of communication between the divisions is clear and effective, in order that tasks are carried out with synergy. Productivity enhancement measures such as use of new technologies and automated construction processes are also to be investigated and implemented, provided they bring down the cost and are in tandem with the project objectives. Since it is the owner or the user will live with the outcome, all efforts should be to keep the quality levels high, which include optimization and rationalization of the costing.
There are certain fundamental methods which can reduce construction costs by a substantial amount. Opting for prebuilt units is one such way. For many low and moderate income American families, buying a home has become something of a dream given the current state of the real estate market. Under the prebuilt mechanism, house are constructed off site and subsequently assembled on site, rather than being built from the ground up in the traditional style.
For example, in California, non-profit housing developers are allowed to buy tax defaulted properties. These empty lots can then be successfully utilized to construct prebuilt units at a fraction of the cost of those of conventional homes. Moreover, time taken in the build process can be shortened considerably.
An often ignored reason for the high cost of construction, particularly within house building, is the lack of government encouragement in the development of moderately priced housing. Instead of support, most governments bow to the demands of neighbourhood groups who are bent on preserving the exclusivity of their area. These groups are not keen on the development of mid rise apartment projects in their vicinity - nor would they like to have retired folks and young people in their midst. This creates exclusivity, which pushes up the price of real estate.
A very direct and emotional component of the construction cost equation is that of labour costs. One good method of reducing construction costs is to reduce the cost of labour. This being the emotive issue that it is, it has to be handled with extreme care as public backlash from laying off workers is something every company would wish to avoid. There are a number of innovative methods to reduce labour costs which are beyond the scope of this article, however these can be innovative, and negate the need for workers to take substantial pay cuts. They could for instance be made to work staggered hours so that their skills are optimally utilised. As labour costs can amount to very high percentages of the total cost of construction, any savings achieved can have major impact on overall project costs.
Cost of construction is a complex issue and it varies with the type of industry and the geographical location. However, the scope for cost rationalisation is often overlooked to the detriment of the project in question and its ultimate beneficiaries. Money saved by exercising caution and discretion is money released towards greater growth and prosperity.
About the Author
Mejia and Jones Cost Associates – Construction, Outsourced.
Based in Suffolk, Mejia & Jones Cost Associates provide a full range of Quantity Surveying services to the East of England, either on site or remotely.
We have over 10 years quantity surveying, procurement and estimating experience in both the UK and abroad, during which we have worked with both Civil Engineering and Traditional Building Contracts, covering a range of trades. We have a proud track record of delivering quality service to the construction industry, and continually seek to develop new relationships with clients.
We aim to help clients save on construction costs, increase tender success rates and resolve cost disputes, whilst simultaneously offering a professional service at competitive rates.
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