In this blog post, we will introduce methods for efficiently managing construction projects and reducing costs, focusing on process management and cost management.
Construction consists of four major areas: design, structure, construction, and environment. Each field is responsible for designing buildings aesthetically, reviewing the safety of buildings, conducting construction efficiently, and installing necessary facilities in buildings. When these four fields work in harmony, a well-balanced building can be constructed. Meanwhile, the client (owner) who commissions the construction of a building must continuously monitor whether satisfactory results are being achieved in each field. To this end, a field has recently gained prominence in construction projects: construction management (CM). CM involves a group of experts with excellent knowledge and skills in the construction field acting on behalf of clients with limited construction experience to systematically and professionally manage all stages of a construction project, from design to construction, maintenance, and repair.
Construction management integrates business management theories and techniques into the construction field to manage construction projects. As a result, construction management is recognized for its value not only in industrial settings but also academically, leading to a significant increase in global research on the subject. This field is expected to grow further in scale due to its alignment with the industrial need for efficient construction. In this article, we will explore two key topics within construction management: schedule management and cost management.
Process management is the process of planning and operating basic construction resources (materials, equipment, manpower, costs, and construction methods) in the most efficient manner to achieve maximum management effectiveness. Construction projects are carried out based on contracts obtained through bidding, and the primary goal of process management is to reduce the construction period specified in the contract while efficiently managing costs and quality.
Construction project management is managed through a process of repeating three stages—basic planning (Plan), scheduling (Schedule), and progress control (Control)—in a feedback loop. In basic planning, tasks are classified, their order is determined, and a construction schedule is created. Based on the construction schedule established in basic planning, the overall construction period is estimated in scheduling, and the construction period is adjusted using construction project management theory.
Finally, progress management compares the actual construction with the planned process and revises or changes the process chart. Process management focuses on the construction period and is therefore expressed through a process chart. Process charts are drawn in the form of network diagrams, which were developed for various purposes in various fields.
Tools such as Gantt charts, which visually represent work periods clearly; CPM (Critical Path Method), which emphasizes the relationships between tasks to be performed in construction; and PERT (Program Evaluation and Review Technique), which probabilistically analyzes and displays the time required for task completion, are used for construction scheduling. Such process schedules are selected and used according to the characteristics and requirements of each construction project, enabling systematic management of the construction progress.
One of the important aspects of process management is risk management. It is necessary to identify various risks that may arise during construction in advance and prepare countermeasures. For example, plans must be established to prepare for unexpected situations such as weather, material supply issues, or labor shortages to ensure that construction proceeds without delays. When risk management is effectively carried out, construction schedules can be adhered to, costs can be reduced, and construction quality can be maintained.
Cost management involves successfully achieving cost targets and efficiently managing and controlling expenses within the given budget and schedule. In construction, cost refers to the expenses incurred for resources such as materials, labor, and equipment required to execute a project. Therefore, since the business objective of all companies is to pursue profit, cost management is a very important management element directly related to the achievement of a construction company’s business objectives. Cost management is carried out through the processes of cost estimation (predicting required costs), cost planning (planning cost reduction), cost control (controlling expenditures according to the plan), and cost accounting (organizing income and expenditures and comparing them with the plan).
Cost management goes beyond simply adhering to a budget; it serves as a strategic element for project success. Effective cost management reduces budgets, optimizes resources, and improves overall project performance. To achieve this, thorough cost analysis and planning are necessary from the initial stages of a construction project. For example, budgets must be set by considering variables such as fluctuations in material prices or increases in labor costs, and corresponding measures must be prepared. In addition, continuous monitoring and adjustments are necessary to minimize unnecessary expenses that may arise during construction.
As mentioned earlier, all construction projects are carried out through bidding contracts. High competitiveness and high-quality data are essential for winning bids. In this industry context, good cost management not only leads to increased profits for the company but also helps accumulate cost-related data that can be used for cost estimation in similar projects in the future.
The more data available, the better the service provided, so effective cost management enhances a construction company’s service quality and, in turn, boosts its competitiveness in bidding contracts. Cost management also contributes to enhancing project transparency. By accurately recording and reporting all cost expenditures, trust can be built with the client. This serves as a standard for ongoing management and evaluation even after the project is completed. Transparent cost management also plays a crucial role in preventing legal disputes and enhancing the company’s reputation. If the client effectively utilizes construction management, it can achieve not only shorter construction periods, quality exceeding standards, and cost savings but also smooth communication and professional, objective decision-making in construction sites where various stakeholders are involved.
In construction sites where projects have been stalled due to power struggles between clients and contractors, construction management will play a central role in reshaping the landscape. Construction managers collaborate with experts across disciplines to achieve optimal results, thereby increasing the likelihood of project success.
Do you want to play a key role in future construction projects? If so, you should keep a close eye on the evolving field of construction management. By gaining experience and expertise in this field, you will develop the ability to understand and efficiently manage the overall flow of construction projects. This will enable you to contribute to the creation of better buildings and a better society.
