Cost Control of Materials, Machines & Manpower

Cost Control of Materials

Controls of materials are playing a significant role in cost control systems. Controls for materials should be in terms of unit measurements and not in terms of cost.

One easy way in controlling materials is to draw a graph of the quantities of various materials that should have been used, which is calculated from present measurement of the quantities of work carried out. A graph like this would be drawn for major items only. Against this graph for each individual material can be draw a second graph, indicates the quantities of materials that have been delivered to the site.

When reaching agreement with the consultant on the proposed construction programme, Contractor prepares a resource schedule to estimate the material consumption during the construction. This will indicate the major resources required for implementation, quantities to be delivered per month and the time of supplying to the site. When this is submitted to the procurement section, they will take action to supply the resources as per this schedule. It must be understood that the procurement section doesn’t have the freedom to purchase materials at any price. The resource schedule will include the maximum rate payable for each material use for construction. It’s the responsibility of the Purchasing Department to procure the materials within those price limits while conforming to the specifications.

Cost Control of Machines

Many contractors are making greater use of plant with the continual rise in labour costs, both direct and indirect. The use of machinery rarely exceeds seventy percent of it is working capacity. Thus, the contractor requires an intimate knowledge of all types of plan, when each can be used most profitably and of the fullest advantage utilization of plant. A contractor sometimes has to decide whether to hire or purchase plant, and the decision will be influence by the likely future demand for the particular item of plant.

Plant hire offers a wide variety of plant types and the contractor is free from the liabilities attached to the purchase of plant, especially a contractor is short of capital. Hiring plant often ensures maximum economy with full plant utilization and is an aid to quicker building.

Cost Control of Manpower

With regard to labour costs, site staff usually have the responsibility to complete time sheets indicating the number of hours worked by each operative and the amount of bonus earned in that particular period.  Management will monitor the allocation of staff on the various contracts, and will record holidays, sickness or other reasons for absence and overtime payments, and check that staff and overheads charges are kept within the intended budget.