Concepedia

TLDR

The reported figures, based only on direct costs, highlight the areas that most significantly impact total project costs. The paper proposes a method that allows firms to use historical records to pinpoint deviation costs and target cost‑reduction opportunities. Data on direct rework, repair, and replacement costs were collected from nine fast‑track industrial construction projects after completion, and a procedure was developed to analyze these deviations. Deviations accounted for an average of 12.4 % of total project costs, with design deviations comprising 78 % of deviation incidents, 79 % of deviation costs, and 9.5 % of overall project cost, while construction deviations represented 16 % of incidents, 17 % of costs, and 2.5 % of total cost.

Abstract

Quality deviation data are collected from nine fast‐track industrial construction projects. The data are collected after the construction phase of the projects and identify the direct costs associated with rework (including redesign), repair, and replacement. Analyses of the data indicate that deviations on the projects accounted for an average of 12.4% of the total project costs. Furthermore, design deviations average 78% of the total number of deviations, 79% of the total deviation costs, and 9.5% of the total project cost. Construction deviations average 16% of the total number of deviations, 17% of the total deviation costs, and 2.5% of the total project cost. These values are conservative because they consider only direct costs, but they are indications of the areas that cause the greatest impact on total project costs. By applying the procedures presented in this paper to its historical records, a company can identify not only its deviation costs, but also the most likely areas on which to focus to reduce these costs on future projects.

References

YearCitations

Page 1