Process-Based Cost Modeling to Support Lean Project Delivery

Hung V. Nguyen1, Iris D. Tommelein2 & Glenn Ballard3

1Ph.D. Student, Civil and Envir. Engrg. Department, 407 McLaughlin Hall, Univ. of California, Berkeley, CA 94720-1712, USA, hung-nguyen@berkeley.edu
2Director, Project Production Systems Laboratory http://p2sl.berkeley.edu/ and Professor, Civil and Environmental Engineering Department, 215-A McLaughlin Hall, University of California, Berkeley, CA 94720-1712, Phone +1 510/643-8678, FAX +1 510/643-8919, tommelein@ce.berkeley.edu
3Research Director, Project Production Systems Laboratory and Adj. Associate Professor, Civil and Envir. Engrg. Department, 215 McLaughlin Hall, Univ. of California, Berkeley, CA 94720-1712, ballard@ce.berkeley.edu

Abstract

Using traditional cost models, with inputs of historical cost data and elemental quantities from product design, it is possible to point out which design alternative appears to produce more saving than the others. However, with the consideration of the cost implications of logistics and construction processes in different design alternatives, this saving may be less than anticipated or even negative. Following cost advice as outputs of traditional cost models, designers may decide to choose an alternative that is more costly to build. The application of set-based design, production system design, and target costing in Lean Project Delivery System (LPDS) raises a need for a cost model which facilitates trade-off analysis between multiple alternatives of product and process design. Meanwhile, traditional cost models are incapable of supporting product and process design integration in LPDS. This paper describes a research initiative at Project Production Systems Laboratory (P2SL) on investigating how process-based cost models support product and process design integration in LPDS.

Keywords

cost modeling, lean project delivery system, target costing, production system design

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Reference

Nguyen, H.V. , Tommelein, I.D. & Ballard, G. 2008, 'Process-Based Cost Modeling to Support Lean Project Delivery' In:, Tzortzopoulos, P. & Kagioglou, M., 16th Annual Conference of the International Group for Lean Construction. Manchester, UK, 16-18 Jul 2008. pp 577-588

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