Cost Management
Cost management in Japan is a general term meaning cost control as a type of construction management (CM) or project management (PM) in development projects. Cost management in Japan is a generic term that refers to cost management as a type of construction management in development projects. It broadly refers to cost management throughout the life cycle of a building, from the project conception and planning stages to planning, design, procurement, construction, maintenance, repair, renewal, and demolition.
Although cost management practices in construction projects vary widely from project to project, the basis of cost management is to set an appropriate target budget based on the client’s requirements and to manage the final cost to stay within the budget by implementing cost control consistently throughout the project.
Traditionally, cost management in Japan has been implemented by the client, designer, and contractor. In recent years, however, as construction management has become more widespread and transparency and accountability for costs have become more important, management companies and cost consulting companies specializing in PM and CM services have begun to offer cost management services on behalf of the client, completely independent of the designers and builders. The number of projects in which management companies and cost consulting companies specializing in PM and CM services are providing cost management services on behalf of clients from a standpoint completely independent of designers and constructors is rapidly increasing.
In Japan, the following tasks can be outlined for each project stage in cost management practice.
1. Conceptual and planning stage
(1) Benchmarking survey (Analysis of construction cost data of similar projects)
(2) Setting of appropriate target budget
(3) Examination of project appropriateness and profitability (feasibility study)
2. Planning stage
(1) Calculation of approximate construction cost
(2) Preparation of cost plan
(3) Cost simulation of multiple plans
3. Design stage
(1) Calculation of construction cost by approximation/estimation
(2) Confirmation of current cost
(3) Implementation of design VE
(4) Identification of risk factors and consideration of countermeasures(e.g. cost increase, risks related to orders and contracts, etc.)
4. Procurement stage
(1) Consideration of the most appropriate ordering method and contract method
(2) Preparation of bidding documents
(3) Coordination of the contractor selection process
(4) Scrutiny and evaluation of quotes and selection of contractors
(5) Negotiation of contract conditions and prices
5. Construction phase
(1) Change construction cost management
(2) Cost monitoring
(3) Assessment of workmanship and settlement of final construction cost
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