Construction Cost Estimating – LEAN

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Construction Cost Estimating – LEAN

INTRODUCTION

This paper ” Construction Cost Estimating-LEAN” discusses the positive impacts of collaboration, a common data environment, and locally researched detailed line item construction cost data.

Actionable construction cost estimates are key to best value repair, renovation, maintenance, and new construction outcomes. Preparing and communicating detailed scopes of work that accurately reflect the requirements of all participants and stakeholders, and executing associated work on-time and on-budget, are equally impossible to consistently achieve without the application of an appropriate collaborative workflows and proper tools.

CURRENT STATUS

Due to a combination of factors, most real property owners don’t achieve optimum or even “commonly acceptable” levels of repair, renovation, or new new construction cost visibility or transparency. Public and private sector real property owners, from largest to smallest, are wasting hundreds of millions of dollars due to one or several of the following factors:

1. Lack of owner leadership or domain expertise. (Owners need to be capable of assessing internal organizational readiness for collaboration, invest in detailed project definition, select best value partners, and continually invest in and support collaborative behaviors, processes, and systems. )

2. Failure to adapt to readily available, proven and robust cost estimating practices.

3. Loss of cost estimating expertise at a detailed line item level. (Only detailed line item construction cost estimate provide actionable cost information at levels required for efficient project delivery.)

4. Use of “national average cost data with or without third-party or commercially available “localization factors.: (National average construction cost data , with or without localization factors is not representative of local conditions, requirements, or cost variables.)

5. Limited ability (whether due to competency or commercial restrictions) to customize existing or commercial cost data to reflect current conditions.

6. Weak, or nonexistent linkages between detailed unit price line item and systems level, square foot level, or building level cost models .

7. Perceived high costs associated with procuring and maintaining actionable detailed unit price line item cost data.

CURRENT OPPORTUNITIES

Significant measurable improvements in cost visibility and cost control are currently available to any real property owner or facilities management staff with appropriate leadership and competency.

construction cost estimating - LEAN
Construction Cost Estimating – LEAN and Collaborative Construction

Specifically organization specific, locally researched cost databases are now readily available. These actionable and verifiable construction cost repositories are unique to each organizations use requirements. As they are locally researched by location (i.e. site, city, region), there is no dependence upon or risk with respect to national cost averaging and/or location factors. Significantly improved financial and work scope visibility is provided. For example, each line item includes (where appropriate), a full description in plain English. Details for associated labor (including trade, crew, and productivity), materials, and equipment. A unit of measure is included with each line time such as “each”, “linear foot”, “square foot”, “cubic yard”, etc. , to simplify estimate and bid/proposal preparation and subsequent owner review. Furthermore, owner specified labor rates and defined line items can easily be created and updated.

As a result of the current availability of locally researched detailed line time construction cost data, associated implementation of LEAN construction planning, procurement, and project delivery methods, and enabling collaborative technologies, major cost savings and overall gains in efficiency, financial transparency, and productivity are now possible.

Construction Cost Estimating

Future linkages between detailed, actionable locally researched construction cost data with system level and building level cost models are also now a capability.

via … Four BT, LLC (4BT) is the AEC industry’s innovative integrated project delivery, construction cost data, and SAAS technology provider.  We help guide organizations to achieve accelerated improvement of their facilities repair, renovation, and construction outcomes through the development of a culture centered upon delivering customer value, supported by proven LEAN processes, actionable data, enabling cloud technology, and ongoing training. www.4bt.us