Cost management in Buildings

COST
MANAGEMENT
IN BUILDINGS
Ar Jit Kumar Gupta
PIT Khunimajra
jit.kumar1944@gmail.com
.

BUILDINGS –
-- in relation to human
development,
resources, local and
global contexts

BUILDINGS- ROLE AND IMPORTANCE
 Buildings-- integral part of human history, growth and
development since inception
 Buildings -- would continue to define future journey of human
growth
 Buildings-- make manmade environment-
 Buildings-- vital for human growth
 Buildings –are living organism
 Buildings -- structures cater to all human activities
 Buildings- full of dualities and contradictions
 Buildings -- largest consumers of energy
 Buildings - largest consumers of resources
 Buildings – largest generators of waste
 Buildings- largest polluter of environment /ecology
 Buildings --- responsible for largest carbon footprints
 Buildings -- responsible for global warming
 Buildings -- major determinant of global sustainability


BUILDINGS AS CONSUMERS OF RESOURCES
•Built environment has significant impact on environment and
consumption of resources:
16% of world’s fresh water withdrawal.
25% of wood harvested.
30% of consumption of raw material.
50% of global energy consumption.
35% of world's CO2 emission
40% of Municipal solid waste.
50% of Ozone depleting CFC’s still in use.
30% of the residents having sick building syndrome
• 70% of global warming outcome of ;
•--built environment
•-- transportation
•Majority of existing buildings --- low concern for energy conservation.

COST CONTROL IN BUILDING DESIGN/CONSTRUCTION.
 All Clients interested in--
 -- obtaining fully functional facilities completed---
 -- within time, cost, quality / scope by Builder constructing;
 -- within estimated time
 -- budget,
 -- right standards
 -- quality
 -- as per approved plan
 Cost Management —a process where;
 -- construction cost of the project is managed
 --through best methods and techniques involving design,
construction technologies, materials, manpower/resourc
environment e / waste management,
 --so that available resources are put to optimum use
 -- when carrying out activities of project.
 --One of the aims of cost control is
 -- to construct at cheapest possible cost
 -- without compromising with the quality

CHANGING CONSTRUCTION PERCEPTIONS

BUILDINGS –
-- in the context of
Cost

COST MANAGEMENT
 Globally Projects suffer from;
 cost overruns
 time overruns
 -- stemming from
 -- poor cost control during design
 -- project implementation stages.
 -- Commonly used cost control techniques include;
 -- Good design
 -- Professional Management
 -- well defined schedules
 -- Good budget,
 -- Regular inspection,
 -- Professional meetings,
 -- Precise reports,
 --Well maintained records,
 -- Effective monitoring
 --Objective evaluations.

COST CONTROL IN BUILDING DESIGN/CONSTRUCTION.
 Terms budget and cost plan are synonymous.
 --A development budget ;
 determine total costs &
 --returns expected from the project..
 Purpose of cost control plan is
 -- to allocate budget to main elements of project
 ----to provide a basis for cost control.
 objective of cost control is
 -- to manage delivery of project within approved
budget

COST MANAGEMENT
 During execution of project; Managers expected to be—
 -- well equipped to execute project,
 -- ensuring quality of work,
 -- within estimated cost limits.
 -- knowing procedures for project control
 -- keeping Time
 Cost control achieved by Selecting;
 -- Right man for right job,
 -- Right equipment
 --right tools for right work
 -- right quality of materials--- in right quantity,
 -- from right source, -- at right price -- delivered at right time.


COST MANAGEMENT
Difficulty in controlling project costs;;
 -- delays by clients to release money,
 -- delay to make a decision,
 -- lack of materials and equipment,
 -- bad weather,
 -- overlapping of activities,
 -- unclear and incomplete drawings,
 --making good defective works,
 -- failure to control productivity of resources.
 -- theft and vandalism
 --- interference by clients,
 --high labour turnover,
 -- insufficient knowledge on cost control techniques. --rather lack of
knowledge of techniques,
 --poor management of cost control methodology,
 -- poor site organisation and
 --inadequate supervision.

COST MANAGEMENT
 1 Project Resources and Controls
 -- Men,
 -- materials,
 -- machinery
 -- money
 -- critical resource/input for project
 -Project success depends upon their performance
 For controlling costs –
 --clients should do everything possible
 -- to avoid unnecessary delays
 --to avoid cost escalation.

BUILDINGS –Cost
Effective Options

OPTIONS FOR MAKING BUILDINGS COST-
EFFECTIVE
Adopting Sustainable Development Goals
Looking at Life Cycle cost-- instead of initial
Cost
Adopting Good Building Design
 Designing Green Buildings
Effective and Professional Project Management
 Effective Material Management
Effective Plant Management
Effective Labour Management
Adopting State of art building Technologies

Effective Options-
Promoting
Sustainable
Development Goals

COST EFFECTIVE BUILDINGS- SDGS
 Making building cost–effective by;
 Designing sustainable / resilient buildings;
 Promoting Net Zero energy buildings
 Incentivizing Green Rated Buildings
 Ensuring use of local materials
 Using materials in the original form
 Promoting Local /state of art Technologies
 Promoting Research and Development in Construction sector
 Making construction sector- more professional, effective and
efficient
 Skilling the construction sector
 Promoting industry- academia interaction

SDG 11- MAKE CITIES AND HUMAN SETTLEMENTS INCLUSIVE
,SAFE, RESILIENT AND SUSTAINABLE

Effective Options-
Lower Life Cycle
Cost

LIFE CYCLE COSTS
Operating Cost 89%
Maintenance/
Consumables 1%
Initial Cost
10%

LIFE CYCLE ASSESSMENT
 Life cycle assessment -Best option to make buildings cost
effective by;
 -- helping avoid a narrow outlook
 -- evaluating environmental, social /economic concerns
 -- Making assessment of full range of impacts
 ---associating cradle-to-grave stages of a process:
 -- including impact of energy and Resources
 --Makes assessment of :
 --operational/ maintenance over entire life span
 --Impact on global warming potential,
 -- resource use, air /water pollution and waste.
 shifting away from a --prescriptive approach,
 -- toward the scientific evaluation of actual performance—--
Best way to evaluate -- cost effectiveness of buildings

Effective Options-
Green Buildings

GREEN BUILDINGS
 Green building though considered expensive in initial cost-
 - saves much more money
 -- Makes Building cost-effective -- against ordinary buildings ---houses,
office buildings, schools, factories etc because they save;
 -- energy,
 -- water ,
 -- have lower maintenance/operational cost
 ---money spent on its creation ensures return at least 10 times.
 Study by Californian Sustainable Building Task Force--in 2003.
-- Even 20% of higher investment into green building
-- makes -- 10 times more saving.
 -- Green Building makes a business sense
 -- It provides win-win situation for owner, user, client
 Green building can be expensive as much as a conventional building.

DESIGNING GREEN BUILDINGS
Optimum design solution is one that effectively emulates all
natural systems and conditions of pre-developed site-after
development is complete.
•Adopting integrated approach to building design for
reducing energy in buildings involve :
Site planning-
 planning with nature
 making use of site potential --location, shape, size,
orientation, accessibility, vegetation, surroundings,
topography, physical barriers, bye-laws, zoning, electric lines
, future development, soil, wind direction, services, land use
, view etc
Evolving minimum energy consumption building envelop
design.
Promoting higher order of building efficiency.
Integration of renewable energy sources to generate
energy on site.
Selection of ecologically sustainable/ low energy
materials.
Using eco- friendly construction technologies.
Effective water and waste management.
Innovative options used for Lighting, heating, cooling,
air- conditioning and ventilation.

Effective Options–
Building Design

DESIGNING-- COST EFFECTIVE BUILDINGS
 Building Design -- most powerful tool to achieve cost- effectiveness –
 Buildings need to be designed by adopting integrated approach to
building design which include;
 Optimizing the macro climate- climatic zone
 Optimizing the local climate
 Optimizing the Orientation-
 Optimizing the Solar movement-- to maximizes use of free solar
energy for heating /lighting- Generating electricity
 Optimizing Wind direction-air flow
 Optimizing site planning--- planning with nature, making best use of
site climate/ site potential/ climate, orientation, landscaping
 Optimizing space planning in building-
 Optimizing Design of Building envelop- Height, openings, projections,
shading devices -- with minimum energy implication
 Designing buildings which facilitates the use of cost-effective materials
and cost effective technologies

PROMOTING ECONOMY THROUGH GOOD DESIGN
 Good Architectural design based on following principles—
 Buildings to be the product of site- driven by its shape, size,
dimensions, physical features, surroundings, accessibility,
location, neighborhood, views , architects vision etc
 Doing a detailed analysis of the site through a SWOT
 Making best use of the strength of the site
 Overcoming through design all the prevailing weaknesses
 Respecting site and the existing physical features
 Avoiding tempering with the site through minimizing
disturbance
 Avoiding cutting the existing trees, flora and fauna- making them
integral part of designing of building
 Minimising cutting and filling of the site
 Making best use of materials available on the site
 In case of rebuilding- using maximum demolished material in the
new building
 In the contoured site- try to plan along the contours and not
across the contours- to avoid cutting and filling

 Good Architectural design based on following principles—
 Define clearly the goals/agenda of building right in the beginning.
 Building performance must be monitored even after the building is
made operational.
 Design a compact building with minimum footprints
 Workout the building details right in the beginning
 Involve all the professionals right in the beginning for designing and
detailing
 Avoid changes during construction
 Design buildings based on specified norms and standards to avoid
their over/under-designing
 Adopt a shape which leads to minimum length and area of walls
 Building must achieve high space efficiency-- carpet area x100/gross
area--- with minimum area under walls, circulation and amenities
 Evolving design having-- low wall area/floor area ratio
 Evolving design on optimum structural grid
 Planning room sizes based on the available product sizes of flooring-
to avoid wastage

REDUCING CONSTRUCTION COST- DESIGN
 Design with least amount of wastage & negative spaces.
 Stick to right angles and simple room shapes to minimize
complexity of construction.
 Where design is form based- avoid negative spaces or spaces having acute
angles
 Build multi- storied construction- foundation and roofing
costs per square foot are high.
 Don't increase slab heights
 Design Lean- Decrease self -load of building
 Don't design for additional floors if not required
 Use same flooring in all rooms/ toilets, --to reduces
wastage.
 Plan Electrical/Plumbing- services carefully- .
 Don't compromise on quality--reduce requirements to fit
your budget
 Look at the life-cycle cost rather than initial cost to achieve
real cost effectiveness- Initial cost only 10%, operational
cost- 90%

ECONOMY THROUGH GOOD DESIGN
 Promote Sharing--Adopt a system of building common walls between
adjoining houses to economise on space, materials, time / structure
 For multi-storeyed buildings--- repeat floor plans one above other –
with no change in structural componenets
 Keep/club your spaces that need plumbing --close together or above
each other to minimize cost
 Design all public health services near to supply / drainage network to
reduce length of pipes and cost
 Design Green Buildings – saves lot of water and electric energy- makes
building cost- effective over entire life cycle
 Provide standard sized doors with limited variations- minimise sizes of
doors provided
 Minimise number of doors
 All finishing/fittings- floor, windows, glass, paneling etc designed
based on standard size products available in market- to minimise
wastage etc-- Build to match standard material dimensions.
 Using pre-caste /pre-fabricated products to the extent possible- doors/
windows cupboards etc
 Avoid fancy/false/decorative structures in building

ECONOMY THROUGH GOOD DESIGN
 Make your rooms versatile to optimise space utilisation—
 -- example - do you really need a living room --same space can serve
many uses. A guest room can be an expensive luxury
 Design spaces based on living and non-living areas- with living areas
placed in the best possible orientataion
 Avoid corridors to extent possible- Corridors can be dead space-- only
used for moving between adjacent spaces
 -Avoid single loaded corridors- to optimize space
 Where unavoidable- provide optimum width of the corridors
 Think long term-- as cost of ownership spans may be many years. Some
extra insulation and passive heating / cooling may be beneficial over the
length of your home ownership. .
 Select your window placement well-- they are costly - in first cost and in
energy loss---select standard window sizing.
 Keep bathrooms to a minimum, --- most expensive room per square foot in
home.
 Try to design multi use bathrooms--- with private enclosures for shower,
toilet and sink-- have 3 people using one bathroom at same time.
 Keep indoor quality of spaces high
 Make optimum use of courtyards in narrow sites and in the hot climate
 Make courtyard spaces multi-functional

 Building envelop needs to be designed with care
 Avoid unnecessary projections and balconies- make buildings
expensive and consume large amount of space.
 Openings- windows and doors need to be placed carefully- looking
objectively the requirement of sunlight, air and ventilation.
 Sizes and placement of the windows need careful study- they are
expensive
 Shading devices have to be carefully worked out and can be largely
avoided based on careful study of the orientation and the site.
 Make best use of the vegetation and trees to shade and make
buildings cool
 Avoid multi-layering of projections to protect openings
 Make best use of arches instead of Concrete lintels to reduce cost
 Use of Jallis to cover large/small openings can help in achieving dual
purpose of providing light and ventilation besides avoiding large glass
windows
 Avoid cladding of external walls and allow the natural materials to
define the building envelop

 Minimizing area under walls to make buildings lightweight
and to increase carpet area.-- using pre-cast concrete
blocks, reducing width of walls-7 1/2 “ instead of 9” walls/
pre-cast concrete blocks
 Use innovative technologies-- Rat-Trap brick walls to
reduce quantity of material used
 Evolving design on optimum structural grid
 Use new cost- effective materials ---aerated cement
concrete blocks to reduce the width of walls, weight of wall,
number/ size of joints, use of cement etc
 Use local & contemporary materials
 Use materials in the natural form- avoid using additional
layers on natural material
 Use materials having minimum maintenance cost
 Use UPVC or Aluminium Windows instead of teak wood,
same goes for doors, use flush doors instead

 Minimise provision of dead/storage spaces in the usable
areas- make use of negative spaces- making multiple uses
of space under the stairs etc
 Adopting Solar Passive Building Design makes building
cost- effective over entire life-span
 Limiting the scope of building--Build What You Need
 Makes building effective, efficient and cost-effective.
 Adopting the approach-- less is more-- will always make
buildings more compact and efficient
 Adopting the principle in designing-Simple is beautiful -
will always make buildings cost- effective
 Designing lean and smart makes a building cost-effective

SITE PLANNING-IMPACT OF BUILDINGS- MINIMIZING
BUILDING FOOTPRINTS

Effective Options–
Material,
Plant, Labour, Time

COST MANAGEMENT --- MATERIALS
 -- Major problems at site --- -- large amount of materials wastage
 --during procurement storage, utilisation.
 -- Wastage during procurement
 -- --buying materials of wrong specifications,
 --buying more than actual requirements ,
 --untimely buying of short-life materials,
 --improper / unnecessary handling of materials, -- wastage in transportation.
 Wastage during storage occur due to ;
 --damages /breakage during handling,
 --deterioration due to incorrect storage,
 --incorrect maintenance -- short-shelf life
 --loss due to fire, thefts/vandalism,/ exposure to extreme climatic conditions.
 -- lack of pre-work preparation /coordination,
 -- improper accounting -- poor storekeeping,
 -- negligent /careless attitude of supervisor,
 -- deterioration due to long storage at place of work,
 -- over-issues from central stores -- failures to return unused surplus materials to stores.
 --wastages during utilisation- wrong construction practices
 . Most problems relating to material wastage revolve around—
 requisitioning /ordering/ receipt /checking of deliveries from suppliers/ offloading and
handling, storing / issuing,/distributing /use of materials.

COST MANAGEMENT- PLANT
 In construction some tasks
 -- labour intensive,
 -- equipment, intensive
 -- combination of both.
 -- Actual work done /associated labour accounted by supervisor
 -- equipment /productivity control undertaken to--
 determine employment time/output achieved/its productivity at
site
 Purpose of control
 -- to minimize wastage in utilisation
 -- overall project cost is not affected
 -- industrialising construction would reduce—
 -- cost of construction by about 30%.

COST MANAGEMENT- LABOUR
 . Labour productivity achieved at site provides a measure of ;
 --labourer’s efficiency
 --effectiveness
 -- level of site organisation.
 -- shows total time for which labourer was employed at work,
 -- time he was productive
 --time he remained unproductive
 -- Craftsmen use 40% of available time on productive activities,
 -- about 33% of the time on non-value adding activities --idle
waiting/unnecessary travelling,
 --late starting,-- early quitting, --unscheduled breaks,
 -- delays to receive materials/ work instructions.
 -- cost of labour -- of 30 to 40% of project costs.
 -- labour a significant factor in cost of buildings
 -- cost control process involves;
 -- accounting of actual productivity
 -- comparing with standard,
 -- analysing causes for variations
 -- taking remedial measures for improvement.
 -- Need for close supervision and good working relationship.

COST MANAGEMENT- TIME-COST RELATIONSHIP
Relationship between time/ cost
 -- very important aspect in
 -- control of costs on site
 -- as variation in time has implication on cost.
 -- Important to report/ record
 -- all works involving materials, plant , labour on sites.
 -- This enables contractor to know;
 -- costs / expenses of resources used on site and
 -- compare with initial cost budget.
 -- Various report/ techniques used include
 --; daily or weekly/ monthly recording,
 -- schedule control,
 -- site daily diary report
 -- project budget.

COST MANAGEMENT---MATERIALS
Material wastage reduced by ensuring that Materials delivered ;
-- as required to cut site storage time,
-- those specified,
-- issuing right amount of material with reasonable allowance
 -- materials stored do not deteriorate.
 --Employing a reliable store keeper
 -- able to maintain well kept booking system
 -- use of weigh bridges
 -- spot checks for materials deliveries
 -- Safeguarding against Theft /pilfering of materials -- by,
issuing of items by store men and
 keeping records of all the materials on site
 --employing full-time security guards.
 --Sites fitted with alarm systems installed around key materials
 -- ensuring that whole site lit up at night.

COST MANAGEMENT---PLANT/MACHINERY
 Use of machines at building sites insignificant
 Mechanising construction - 30% cost- reduce
 Contractors encouraged to use of machine
 -- advantages of speeding up construction work,
 -- saving labour,
 -- producing better quality works
 -- promote economy
 -- able to do what cannot be done manually
 --. Once brought to sites--, machines used optimally
 -- redundant time lead to high cost.

COST MANAGEMENT---LABOUR
 Project cost control achieved by;
 -- improving labour productivity on site,
 -- recording labourers’ work progress,
 -- daily work evaluation,
 --recruitment labour with right skills
 -- substituting labourers with equipment,
 - having schedules /proper control
 --creating procedure / records in place.
 -- Creating good working environment
 -Motivation / proper communication
 --Regular inspections
 -- Early detection of variances
 --Using good quality plan,
 --Efficient, effective , vigilant processes
 - Mechanism to ensure its successful accomplishment.

BUILDINGS –Cost–
Making
Construction
Sector Efficient

COST MANAGEMENT-- CONSTRUCTION SECTOR
 Construction sector makes large contribution to economy with
linkages to several other sectors of economy.
 India projected to become world’s third largest construction market by
2025
 Construction sector -- key driver for Building Economy.
 Construction Industry in India highly fragmented.
 Needs to be made globally competitive/productive/cost-
effective/efficient / sustainable.
 Need for study /analysis of the prevailing gaps in international and
national standards-- regarding construction practices and
technologies
 Align national standards for design, construction, maintenance
and operation with global standards,
 Bring down cost of construction besides maintaining high
standards of quality
 Need to transform construction industry to make it sustainable--- from
focussing on traditional concerns of "cost, time and quality", to include
“construction products and materials”,
 --- to reduce natural resource consumption and minimize waste on site

SKILLING CONSTRUCTION INDUSTRY
 Despite employing one- sixth of total workforce / involving huge money /consuming largest
proportion of resources, construction industry remains highly unskilled.
 Major maladies in construction-- lack of skill.
 Making construction industry more efficient,/productive / innovative,
 -- quality / skilled manpower is deployed.
 --Cental/ state governments – to take initiative of creating skilled manpower by;
 -- promoting dedicated institutions,
 -- collaboration with stakeholders.
 Building dedicated training Centres
 ITI’s / polytechnics-- Start vocational courses related to construction industry.
 Funds available under National Urban Livelihood Mission --used for creating large skilled
workforce---to overcoming
 -- problems of unemployment /poverty besides
 - making building industry more innovative / efficient .
 -- Engineering colleges /institutions imparting higher education--leveraged to create new
construction technologies /building materials from waste--to make industry more cost-effective
/ resource efficient.
 Continued training of in-service professionals engaged in the construction sector made
mandatory
 For skilling construction industry,-- only skilled manpower shall be employed for certain tasks
in the construction projects.
 -- Initially, limited to larger projects but
 --gradually it must be made mandatory for all projects.
 -- PWD Codes -- reviewed periodically to make them inclusive /supportive of innovations in
construction industry.

ADOPTING BEST CONSTRUCTION PRACTICES
 For construction sector to be effective/ efficient, it must ensure ;
 -- structural integrity / stability of buildings
 -- functionality & safety of both users and occupiers.
 -- To ensure quality construction --Singapore defined mechanism of checks / balances to check quality of building
during designing , construction / maintenance
 -- which not only provides best construction practices but also ensures continued adherence to process
 . -- mechanism outcome of learning-- from collapse of Hotel New World, Singapore in March 1986
 -- Enquiry conducted about collapse of hotel building revealed that;
 -- structure was grossly under-designed-- quality of construction was very poor.
 -- building was poorly maintained-- plenty of warning signs indicated a possible collapse during 13 years of
existence of building .
 -- In 1989, Singapore passed a legislation, which mandated;
 -- all construction projects to undergo mandatory checks at design/ construction/ completion
 stages
 -- Seek certified design reviews prior to commencement of construction;
 --- Appoint independent construction supervision during construction and
 ---periodic structural inspections of buildings, after completion of construction
 .-- buildings designed by duly qualified professionals.
 -- building design reviewed by Senior professional engineer, before building is constructed.
 -- Design Review Certification helps in providing structural integrity, building stability /user and occupier safety costs
about 0.15% of total construction cost.
 -- Mandatory Testing during construction through professionally certified Engineers-- costing not more than 1% of
overall cost of construction
 Certification of buildings based on highest standard subsequent rectification work becomes minimal.
 Periodic help in making buildings more cost- effective over its entire life span
 System ensures construction of buildings carried out in a most professional manner / building of appropriate quality

BUILDINGS –Cost–
Conclusion

COST MANAGEMENT--CONCLUSION
 Cost remains causality due to;
 - Poor Architectural Design
 -- Adopting time consuming Construction methodologies
 -Lack of knowledge of management techniques
 -- laxity in supervision.
 -- Lack of awareness of workers of performance targets
 -- lack of communication between supervisors / workers.
 -- Inefficient use of project resources
 -- High dependency on manual labour
 -- Poor quality of labour
 --Best option- controlling cost at design stage.
 --During implementation– Putting in place procedures of cost
control of resources
 -Promoting High degree of professional constructionmanagement
 -- detecting variance / formulating corrective measures
 -- skill up-gradation of contractors – through refresher courses in
construction project management etc

Cost management in Buildings

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