Problems in cost control under construction engineering management
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Material costs include expenses related to raw materials, temporary materials, and auxiliary materials used during construction, as well as rental fees for equipment or materials. These costs make up a significant portion of the total project expenses and play a crucial role in determining project success. A robust material cost management system is essential for effective cost control. However, many organizations lack a well-defined system that clearly outlines responsibilities, authority, and consequences for performance or failure. Currently, cost management in construction projects is often fragmented and not fully integrated.
2. There is insufficient attention given to time-related cost control and quality-related cost management.
Duration cost refers to the expenses incurred to complete a project within a specific timeframe, while quality cost involves the investment required to ensure the project meets all standards. Both are essential costs that every construction project must address. While accelerating the project timeline may increase costs, neglecting these aspects can lead to poor quality, which results in additional rework and repair costs. Delays or quality issues can also damage a company's reputation and increase administrative and management expenses.
3. Contract management is often disorganized and lacks proper oversight.
Effective contract management is a key aspect of construction project management and plays a vital role in cost reduction. However, many project teams have a weak understanding of contract formation, execution, rights, obligations, and breach liabilities. This leads to confusion, mismanagement, and unnecessary financial losses due to unclear terms or unmet obligations.
4. There is a lack of awareness among personnel regarding cost management, low utilization of machinery, and high operating costs.
In some cases, different departments operate independently without coordination, leading to inefficiencies. Engineers focus only on quality, while procurement staff handle materials, resulting in excessive resource use and poor cost control. Machinery is often underutilized or operated by unqualified personnel, leading to maintenance problems and even damage. Additionally, equipment is sometimes purchased or leased without proper feasibility analysis, leading to wasted investment and inability to recover costs after the project ends.