What are the cost management strategies for engineering projects?

The cost management of engineering projects runs through the entire project management process, from the project bidding work, to the preparation and construction stage, to the construction stage, and finally the project completion stage. Every stage and link is It involves scientific management of costs, so it is a dynamic process. This requires the project leadership to pay sufficient attention to cost management and organize financial managers to carry out cost management, thereby saving costs, improving the economic benefits of the project, and promoting the healthy and sustainable development of the enterprise.

1. Problems existing in the current cost management of engineering projects

(1) First of all, from the perspective of awareness of cost management

The engineering project lacks the awareness of all employees Cost awareness, the cost management of engineering projects should be closely related to every department of the entire project. However, some departments believe that cost management is the work of the planning department, so many departments have little awareness of cost management. For example, the project manager focuses on the construction of the project, does not pay enough attention to the consumption of materials and man-hours, and has no awareness of cost control. However, project managers are often unable to increase their enthusiasm for cost management because of the complexity and tedious cost management work. The lack of management of materials and materials may lead to the loss, theft, and waste of materials and materials. The information exchange between various departments of the project is not smooth enough, resulting in the inability to effectively carry out cost management work.

(2) In advance management, cost forecasting is not in place

In cost management, the total cost of the entire project must be considered. Cost prediction involves the length of the construction period, Factors such as the consumption of materials and equipment, the consumption of man-hours, transportation, and energy supply may cause actual costs to change due to changes in the market during the construction stage. However, financial personnel do not have a clear understanding of the market when analyzing and forecasting costs. Prices, resources and other information are fully investigated and analyzed, so large errors may occur. Therefore, in actual work, some engineering projects will have inaccurate predictions of the market prices of materials, equipment, and labor, which will cause the actual costs to deviate from the forecasts. The engineering projects will not be able to obtain maximum economic benefits.

(3) Cost control is not in place during the construction process

There is a lack of attention to process control, which may lead to quality costs. On the one hand, due to the lack of control over the construction process, some projects The manager has a weak awareness of cost control, does not use materials reasonably during the execution process, and fails to control the quality of the project, resulting in rework, shutdown and other problems, thereby increasing costs. On the other hand, some engineering projects pursue high quality too much and invest too much in materials and materials beyond prediction. Although the final project quality reaches the required indicators, it will also produce excess quality, increase the cost, and fail to obtain the best economic benefits. . Lack of on-the-job tracking of costs is likely to cause waste of costs, bring unnecessary waste to engineering projects, and may even expose engineering project construction companies to financial risks.

(4) There are problems with cost control during the completion acceptance stage

When the project is coming to an end, most of the construction work has been completed, and at this time, many construction workers and Managers' awareness of cost management gradually fades, and the use and storage of turnover materials, sporadic materials, and small tools are not as strict as in the middle and early stages, which may lead to waste of costs.

(5) Lack of a perfect cost management system

A perfect management system is an important factor for enterprises to obtain economic benefits, and the cost management system is part of it. In reality, some projects The project leadership has not organized and established a cost management system that combines rights, responsibilities and interests. The general manager, project manager, business department heads and other department heads all have their own rights and responsibilities. However, due to the lack of system, when When a problem occurs in a project or a risk occurs, the person responsible for it may not be found, which ultimately causes the project to bear huge losses, while the person who is really responsible goes unpunished.

In addition, there is a lack of effective incentive mechanism. If those personnel who provide scientific solutions for the project and effectively save costs are not rewarded, then it will not be able to improve their enthusiasm for work and is not conducive to the formulation of scientific cost solutions.

2. Principles that should be adhered to in project cost management

(1) Minimum life cycle principle

Under the premise of ensuring project quality, the cost of the project should be reduced Reduce it to the minimum, analyze the factors that can reduce costs, and then reasonably control this in actual work.

(2) Principles of comprehensive cost management

Comprehensive cost management includes cost planning, cost decision-making, cost control, cost accounting, cost analysis and assessment, involving The entire process of engineering project design and development, engineering construction, and project final accounts. And it requires the participation of all employees, which involves every department and personnel of the project to achieve comprehensive control and overall improve economic benefits.

(3) Cost Responsibility Principle

It is necessary to have a cost management system that combines rights, responsibilities, and interests, and combines the rights, responsibilities, and interests of project managers, business departments, operating departments, and other departments. Combined, they can enjoy a certain amount of power while assuming responsibilities, conduct performance appraisals on work conditions, and link them to bonuses and wages to promote the improvement of work efficiency.

3. Countermeasures for project cost management

(1) Increase publicity and enhance the cost management awareness of all employees

Construction enterprises should increase Promote the awareness of cost management so that all employees should have the awareness of cost saving and quality improvement. For example, large slogans can be used to publicize, so that personnel at the construction site will keep safety awareness, cost awareness, and quality awareness in mind. Employees can also be organized to educate so that they can establish an awareness of economic benefits, so that they can better work in the workplace. While ensuring quality and safety, we can save costs and achieve savings for all employees, thereby reducing the cost of the entire project and improving economic benefits.

(2) Pay attention to the design of the project construction organization and make advance cost predictions

Make reasonable plans for the allocation of construction materials, machinery and equipment, and personnel, and formulate plans suitable for the project. The construction plan of the project ensures the safety of the construction and the quality of the project. On this basis, we conduct repeated investigations, studies and analyzes on the prices of materials, labor, machinery and equipment at the project construction site, and carry out reasonable control in accordance with the relevant target cost indicators issued by the enterprise. Make reasonable predictions on costs, indirect costs, etc., and then predict the total cost of the entire project.

(3) Strengthen in-process control of the construction process

First, control labor costs, streamline the organization, minimize the number of non-construction personnel, and reasonably arrange construction work Time, allocate construction tasks to avoid idle personnel and waste of labor costs. Arrange working hours and workers according to construction tasks, make statistics on the number of workers and working hours, and distribute bonuses reasonably. The second is to strengthen the management of material costs. For the procurement of materials, it is necessary to fully investigate and compare market prices to understand the required consumption quotas, and make a prior plan for the demand for materials and the required costs to avoid excessive stocking. Backlog and damage of materials. After construction begins, the supervision of materials must be strengthened to prevent unnecessary waste. There must be strict procedures for receiving materials, and materials must not be used at will. Materials and supplies must be inventoried regularly. If material prices change during the construction process, such as price increases, the relevant original vouchers should be kept and relevant records should be kept, and then the owner's signature and approval should be obtained. The third is to strengthen the control over the cost of mechanical equipment. Due to the particularity of mechanical equipment, the scheduling problem of mechanical equipment must be reasonably handled, and the scheduling cost of equipment must be reduced as much as possible while ensuring the smooth implementation of the project. Operators are required to perform regular maintenance and upkeep on the equipment, and the consumption of oil must be controlled within a reasonable range to avoid equipment damage due to lack of maintenance of the equipment and control the cost of oil.

(4) Improve the cost management responsibility system, strengthen the cost assessment work

Improve the cost management responsibility system, strengthen the performance assessment, and conduct effective ex-post evaluation, in order to Evaluate the completion status and work efficiency of engineering projects to provide reference for future work. Compare and analyze the actual cost indicators of the project with the planned and predicted cost indicators, and then conduct assessments based on the work completion status and responsibilities of each department in the project, and then adopt rewards and punishments. In addition, an effective cost management information system must be established, because cost management is a comprehensive and full-process work. From the beginning of project planning to completion and settlement, the entire process requires the processing and transmission of a large amount of data. Therefore, using Modern information technology has established a scientific cost management information system, which can promote the circulation of information, enable the entire process of cost management to be effectively managed, improve the efficiency of cost management, and thereby realize the full range of cost management.

IV. Summary

For enterprises constructing engineering projects, in order to pursue maximum economic benefits while ensuring quality and safety, they must do a good job in cost management. In work, on the one hand, we must have the awareness of cost management, on the other hand, we must start with cost reduction factors, and on the other hand, we must have complete system support and constraints, so as to minimize the cost of the project and obtain the maximum economic benefits. Promote the healthy and stable development of engineering project units.

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