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