PROJECT COST ENGINEERING OVERVIEW
Project cost engineering program will equip participant with the skill and knowledge to control cost in there projects. They will learn the basics of cost estimating, cost control and planning.It is recognised that improving cost engineering capabilities within industry contributes to the development of affordable products and technologies. There is growing demand at local, national and international levels to impart cost and affordability engineering knowledge to support organisations that seek high quality cost engineers.
The program is in alignment with the American Association of Cost Engineers Standard.This training course will provide participants with a thorough background in the concepts of total cost management and cost engineering. The course addresses area of Total Cost Management through planning and controlling resources, costs, profitability and risk. i.e managing cost throughout the life cycle of any enterprise, program, facility, project, product or service. The course covers the application of cost engineering and cost management principles, proven methodologies and the latest technology in support of the management process. Practical sessions will provide hands-on experience.
BENEFITS OF COST ENGINEERING TO INDIVIDUALS
Learn how to prepare professional proposals, value engineering ideas, claims or budgets
Learn methodologies and tools for effective estimating, budgeting, cost control and value engineering
Practice of standardized methods, procedures, knowledge base and checklist
Obtain knowledge on project control implementation, monitoring and evaluation tools
Learn techniques that ensures survival in a competitive market
Ability to provide a means to bridge the gap from the theory to real life Implementation.
Perform Value Analysis on your projects
Creation of fully cost and resource loaded schedules
Understanding Activity Based Costing (ABC) and Activity Based Management (ABM)
BENEFITS OF PROJECT COST ENGINEERING TO ORGANIZATIONS
Competency Building in existing employees
Competency building where existing employees is promoted
Good Management Practices
Organizations’ Strategic Objectives
Understanding relevant needs of the stakeholders and clients
Understanding opportunities to Exceed Stakeholder/ Customer Expectations
Competency by employees to exercise Technical Knowledge, Skills and Competencies
CONTENT SPECIFICATION OVERVIEW
MODULE 1 – COST
- Cost Elements
• Pricing
• Materials
• Labour
• Engineering
• Equipments, Parts, and Tools
• Economic costs
• Activity Based Cost Management
MODULE 2 – COST ESTIMATING
- Estimating
• Process product Manufacturing
• Discrete Product Manufacturing
MODULE 3 – PLANNING & SCHEDULING
- Planning
• Scheduling
MODULE 4 – P R O G R E S S & C O S T
CONTROL (EARNED
VALUE MANAGEMENT)
- Progress Measurement and
Earned Value
• Earned Value for Variable
Budgets
• Tracking Cost and schedule
performance
• Performance and Productivity
Management
MODULE 5 – PROJECT MANAGEMENT
- Project Management
• Project organization Structure
• Project Planning
• Project Labour cost control
• Leadership and Management of
Project People
• Quality Management
• Value Analysis
• Contracting for Capital Projects
• Strategic Asset Management
Module 6 Engineering Economics
• Basic Engineering Economics
• Applied Engineering Economics
MODULE 7 – STATISTICS, PROBABILITY &
RISK
- Statistics & Probability
• Basic Concepts in Descriptive
Statistics
• Risk Management
What you will learn
Day One
Introduction and course objectives
Need for cost control and cost management
The use of cost information in pricing decisions
Cost concepts
General cost classifications Product costs vs period costs
Cost behaviour – fixed, variable and mixed costs
Direct and indirect costs
Opportunity cost and sunk cost
Relevant range concept
Estimating costs and predicting cost behaviour: high-low method, regression analysis
Day Two
Job costing
Direct materials
Direct labour
Manufacturing overhead
Estimating predetermined overhead rates
Job cost sheets
Flow of costs within a job costing environment
Process costing Similarities and differences to Job Costing
Flow of costs within a process costing environment
Equivalent units of production
Preparing a production report Processes, activities, resource consumption
Cost control as part of Project control & Project management
- Definitions
- Project control processes & objectives
- Cost engineering vs project control
- Cost control vs cost management
The Project Control Cycle
- Planning and Control Cycle
- Deming Circle = Plan-Do-Check-Act
- Project Control Cycle steps
- Project Controller vs Project Managers role
- Project Life Cycle
Day Three
Cost Volume Profit (CVP) analysis
Contribution margin concept
Contribution margin ratio
Break-even analysis
Target profit calculations
Margin of safety CCC
Operating leverage and profit performance
Sales mix considerations
Variable vs. absorption costing
Income comparisons
Effect of changes in production on profit
Cost of Quality (COQ)
Budgeting, management and cost control (analysis and forecasting)
- Work Breakdown Structures
- Project Estimating & Accounts
- Baseline plan
- Cost control report
- Cost control steps
- Contingency
- Risk management
Change control principles
Summary
Day Four
Activity Based Costing (ABC)
Comparisons with traditional costing
Designing an ABC system
Mechanics of ABC
Budgeting Purpose and use of budgeting
Approaches to budgeting:incremental vs. zero-based budgeting
Preparing a budget
The master budget
Sales budget
Production budget
Direct materials budget
Direct labour budget
Manufacturing overhead budget
Cash budget
Standard costing
Definition of standard costing
Setting standards
Types of variances
Variance analysis
Target costing and reverse engineering
The Balanced Scorecard and Performance Measurement
Strategy and the Balanced Scorecard
Four firm dimensions
Costing human capital
Summary and close of course
Cases:
- Establish the Cost Baseline by recasting the estimate into a project budget
- Understanding the Control Cycle by incorporating commitments and expenditures and analysing the effects which will be reflected in the forecast
- Understand the Control Cycle by incorporating change orders & budget shifts and analysing the effects which will be reflected in the forecast