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Collaborators
Dr. Makarand Hastak, Associate Professor, Division of Construction Management, School of Civil Engineering, Purdue Univeristy
Project Team:
- Charles Burns, Mustang
- Brent Derrick, U.S. Dept. of State
- Gideon Graza, Amgen, Inc.
- Gary Green, Eastman Chemical Company
- Ron Havelka, Parsons EPC
- Richard Helper, Kvaerner Songer
- Peter Lynch, Fluor Corporation
- Chris Miles, Intel Corporation
- James Miller, Aker Kvaerner, Chair
- John Wharton, Lockwood Greene
Funding
Construction Industry Institute (CII), Austin, Texas
http://www.construction-institute.org/
Abstract
Problem to be addressed
A recent report from McKinsey’s Global Institute , a research arm of McKinsey & Company, states “The trend towards price as the focus of entry will fundamentally challenge the business model for most traditional businesses in North America.”
According to the report a basic structural change is now taking place in the US industry, a change largely camouflaged by the recent economic downturn. Nowhere is this change more evident than the retail industry. A consumer “shift to value” has dramatically changed the fortunes of retailers such as Target, and Wal-Mart, while sending the more traditional retailers to bankruptcy.
This new business paradigm has renewed the focus on the part of Owners to achieve a lean cost structure. This demands a close examination of existing practices and development of new guidelines and “best practices” that can be deployed during project development and delivery, focusing exclusively on how to singularly cost-optimize a project.
Anticipated value added and Principal beneficiaries
A process, guidelines, best practices, and metrics will be developed to assist the project team in development of a tool kit for use by the industry to evaluate and execute projects that are cost-driven. In defining the cost-schedule trade-offs, a tool will be developed that would model all of the variables in a capital project execution plan that influence the cost versus schedule decision.
The principal beneficiaries of this study will be owners and contractors in the industrial, building and infrastructure sectors, including both private and public organizations that conduct operations within North America.
  
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