Effective means of dynamic cost control for engineering projects
I. Preamble
The core of engineering project management is cost management, which is the source of economic benefits to the enterprise, and the cost management of engineering projects, which typically consists of five main components, namely, prediction, control, accounting, analysis and evaluation of logs, while cost control is the top of the five components, and only effective control over project costs during the construction process will ultimately achieve a good effect on project costs. Cost control for engineering projects means the direction, supervision, reconciliation and limitation of human resources, material resources and cost expenditures consumed in the development of project costs in order to achieve the cost objective of the project, the timely control and correction of impending and already occurring deviations, and the containment of costs within the prescribed limits, i. E. The dynamic control of implementation costs。
Ii. Methodologies for cost control and their shortcomings
The general cost-control approach consists mainly of institutional controls, quota controls and contract controls。
1. System control is primarily the implementation of the various liability systems for sound projects, the implementation rules for project cost management, the implementation rules for material access management, the audit rules for project settlement, the rules for the rental of machinery and swing materials, etc., and is a prerequisite and guarantee for the implementation of cost dynamics control by enterprises. While the rules and regulations governing various cost controls are in place, the lack of discipline in project implementation and the prevalence of many projects, particularly small and medium-sized and private enterprises, with little or no emphasis on management, are some of the remaining shortcomings in the area of construction。
2. Contract control consists mainly of good contracting and job responsibility contracts between the project manager's department and members of the company's management, the company's intelligence department and the management team of the project department. To clarify the responsibilities and competencies of the two parties, as well as the rules governing the conduct of examinations and awards, and to resolve the issue of the relationship between the two parties between supervision and supervision, guidance and guidance, coordination and coordination, and services and services, with a view to achieving benefit sharing and risk sharing。
3. Quota control is the planning, accounting, and control of the enterprise's human, material and machine consumption targets according to its own enterprise quotas. Quotas and cost indicators that the enterprise should prepare include, inter alia, construction quotas (including labour, materials, machinery usage), other direct fees, on-site funding quotas, working capital maintenance quotas and other quotas. In these three controls, the quota control method is central and directly relates to the outcome of the actual benefits of the project。
Based on statistical surveys, the basic approach now adopted by most construction industry enterprises for cost control is to prepare cost plans on the basis of the construction chart budget before construction starts; to control costs on the basis of empirical estimates during the implementation of the project; and to summarize the data completed after completion of the project. This is reflected in planned control data in the form of plan statements, statistical statements, and planned and accounting control data for the completion of project costs. The collection cycle of these data is typically one month, when the difference between the planned and control values of the costs incurred in the execution of the project cannot be reflected in a timely manner due to the length of the cycle; the significance of cost dynamic control is lost; the preparation of sub-cost plan values by most enterprises is not based on their own enterprise quotas, but is based on a number of percentage points that are based on budget quotas, so that the production of cost control indicators has been distorted from the outset and dynamic control of the costs incurred in the implementation process becomes empty; moreover, the preparation of planned and statistical cost statements is done by project budgeters, cost adjusters, accountants, etc., while the actual construction managers are involved too little, and there is little detailed logbook on the volume of work completed and the consumption of engineering resources on a daily basis, resulting in a serious loss of information on the cost of work in the statements。
In summary, these shortcomings in cost dynamic control are rooted in the lack of awareness among project managers of the enterprise quotas, the fact that cost controls are superficial, the depth of control is inadequate, the control cycle is too long, the lack of awareness of operating the enterprise quotas in project management and the inability to accurately demonstrate the productivity levels of the enterprise in the form of quotas, so the key issue for the cost dynamic control of the project is the preparation of enterprise quotas that belong to the enterprise itself. Iii. Preparation of enterprise quotas
The preparation of the enterprise quotas was completed in the following steps:
1. Determination of the division of the business quota chapter. Appropriate increases or decreases may be made by reference to the local budget quota sections, taking into account the construction processes, construction machinery, means of construction that are common to the enterprise. Principle of division: it is important to adapt to the actual circumstances of the enterprise and to serve the dynamic control of project costs。
2. Methodology for setting enterprise quotas. The usual methods of quota production are statistical analysis, empirical estimation, comparative analogy and calculation. The first is a study of relevant national, sectoral and local quotas to map the principles, methods, content and level of quotas for enterprises; the second is to compare the relevant national, industry and local labour and budget quotas, to determine the extent of the difference between the levels, and then to conduct a statistical analysis based on the cost data of the work done by the enterprise in previous years, and to determine the level of consumption of the individual sub-sections of the enterprise's quota; and the third is to validate the reasonableness and scientificity of the quota levels by means of a preliminary framework and content of the firm's quota, through repeated consultations and pilot operations, and to compile them in a timely manner, gradually developing the flat system and improving the flat content. 3. Identification of indicators of work, materials and machine consumption
(1) standards for manual consumption are established. These include both conventional standards and new technologies, new techniques and new processes. These include physical measurements of project engineering sites, reference to final project accounting information, the collection of consumption indicator data related to various types of work, and the necessary mathematical processing, and the creation of mathematical models of key consumption indicators for use in cost dynamic control, as conditions permit。
(2) criteria for material consumption are established. The consumption of conventional materials is measured on the basis of actual consumption and the loss factor is determined; for materials using new processes and elements of new materials, the levels of other specialized construction teams can be investigated as a standard, with gains and losses to be accounted for and the standards adjusted。
(3) standards for the consumption of mechanical shifts are established. First, a distinction should be made between own or leased machinery. To determine the mechanical approach to be followed during construction, the enterprise is required to determine the threshold based on its own historical information, which can be adjusted in practice on a case-by-case basis。
(4) determination of other costs. The costs of the construction organization and technical measures can be determined by determining the threshold by reference to the completed historical information, and by determining the calculation factors for work of different sizes, using a combined macro-plan indicator control and post-completion accounting model. The management fees of the department of project services are determined on the basis of the consumption of personnel salaries, insurance, office and hospitality. Other related taxes are calculated at local rates。
Development of a dynamic cost control information system
Dynamic cost management is an innovative cost management system that enables an enterprise to maintain the comparative advantage of the cost of doing business versus the cost of risk, with a relatively higher strategic position, in a changing competitive environment, through rapid cost information transfer and cost decision-making mechanisms to achieve its stated business objectives and to manage future business objectives. The establishment of this system requires the support of computer network systems。
1. Establishment of a project department and enterprise local area network office system. The network age has greatly contributed to the progress of today's societies, which have become a tool for economic development. In the case of construction work, it is important to move away from its crude management model towards precision management, and the creation of an office automation network system is an essential means and means of improving project management and achieving benefits。
2. To achieve the sharing of the budget outline software with the enterprise quota bank. Currently, the various budget outline and bid proposals are computerized, and the enterprise can use these budget outline software to share the enterprise's flat pool with the budget outline software, while establishing the enterprise's own system of instant prices for manual, material and machinery, allowing project departments to carry out costing of work completed on the same day at any time, to compute against planned costs, to correct problems in a timely manner, to identify problems in a timely manner, to resolve problems in a timely manner and to make cost control truly dynamic。
3. Establishment of web construction logs. The daily construction logs recorded by the project construction manager, in addition to recording the completion of the work schedule, quality security hazards and accidents, inspection and acceptance, should accurately record the actual work performed on a daily basis and the corresponding consumption of resources and be posted on the enterprise local area network for use by cost-accounting staff to address the shortcomings of the construction manager's lack of involvement in cost control so that the actual engineering data collected are not distorted。
4. Full-time network data maintenance staff and full-time enterprise quota revision staff. Dynamic cost control lies in its timeliness and can only be achieved if the data information required for cost control is collected in a timely manner, updated in a timely manner, revised in a timely manner, and increased or reduced in a timely manner. It is therefore essential that dedicated network data maintenance staff and enterprise quotas be revised and that those staff members understand the relevant technical knowledge。
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