How do you adapt your cost control strategies to changing market conditions and customer demands?

La estructura de costos tiene como finalidad administrar los costos de una empresa, para potenciar la toma de decisiones. Nos permite conocer los diversos tipos de costos y gastos en los que la compañía incurre y el impacto en las cuentas contables, los desglosamos en: Fijos: Son los gastos constantes que no varían con los niveles de producción. Variables: Van en proporción al volumen de producción. Directos: Atribuibles a la producción de bienes o servicios. Indirectos: tienen consecuencias sobre la producción en forma total, no se vinculan directamente con un producto, son repartidos equitativamente entre lo producido. Comprender y gestionar estos componentes es esencial para mantener y mejorar la rentabilidad de la empresa

Changing the cost structure is now possible using management tools that allow predictive assessments in order to safeguard or revitalize your business model simply by modifying the basic assumptions. This new model makes it possible to identify where it is necessary to intervene: on the staff, on which department, on which business process, and to decide in a conscious and protected way. An early management tool with both short and medium term time horizon, always updated according to a rolling forecast logic, flexible with respect to changing market conditions or customer requests.

The targeted market segment and methodology used to generate profit will make fixed cost versus variable cost analyses differ. If Company A generates revenue primarily through the resale of goods or services than most of profit optimization will revolve around logistics control such as shipping, storage, product lifecycle, and liquidity. If Company B generates revenue primarily by creating value than profit optimization will revolve around efficiency of labor, availability of raw and finished materials, and other items that could potentially reduce the overall quality or speed of production. Working in large scale construction, these opinions will better apply to Company B.

The cost drivers that more typically affect value creation are labor efficiencies, material lead time, and creative response to the variables that have surrounded these items over the past three years. The ultimate goal is not to merely finish a project but to create value as quickly as possible. This typically means optimizing the project schedule to allow the buyer to achieve revenue generation and the builder to achieve cost certainty in the smallest window possible.

El análisis de factores de costo implica la identificación, clasificación y cuantificación de los elementos que inciden en el costo total, permitiendo tomar decisiones informadas para optimizar el uso de recursos y garantizar la rentabilidad. Al descomponer el costo total del proyecto en sus componentes individuales, nos proporcionan una visión clara de los elementos que más impactan en el presupuesto. Al analizar cada factor de costo de manera individual, se pueden identificar las áreas donde existen oportunidades para optimizar recursos y reducir gastos. Con información precisa, se pueden tomar decisiones sobre la asignación de recursos, la selección de materiales y métodos constructivos, y la gestión de riesgos, entre otros aspectos

Cost reduction should start with understanding the cost of time and how spending may reduce the overall schedule. Labor efficiency can be challenging. While the desire for increased production may tempt managers to increase labor, sequencing of schedule and the amount of runway provided to labor will ultimately dictate savings generated through reduced time. Likewise, reducing labor as a cost savings measure could cost a project more if there is runway being underutilized. If a week of time costs the project $ then an increase in labor costs under that value will be a savings to the project so long as the increased labor is able to reduce the schedule by no less than the one week.

Antes de hacer un plan de acción para reducir los costos es necesario realizar una evaluación de los gastos de la empresa. Una vez que se obtienen los datos, se inicia un análisis detallado desde los más importantes (o los más representativos) hasta los gastos menos relevantes. Este análisis permitirá identificar muchos costos «escondidos» y que ciertamente están impactan en los resultados de la empresa. Conocer cada gasto es esencial para identificar las posibles soluciones. Con esta acción, será posible medir los principales gastos y los que son innecesarios, es decir los que no aportan valor a la empresa. Recuerde que es imposible administrar lo que no se puede medir.

To implement cost reduction measures, it is necessary to introduce activities focused on the optimization of business performance. By combining Continuous Improvement techniques with the best digital technologies and diagnostic dashboards, you can significantly reduce production waste in terms of quality and time.

It is important to monitor results and compare to legacy numbers when adjusting to new variables. Comparisons should be bifocaled comparing overall percentage of increase or decrease to cost and time as well as critical moments in the production schedule. Today’s market may not allow for the aggressive bell curve that was seen in the past. Looking at optimization as a percentage of the original schedule and budget will allow a holistic analysis of results. Many companies are aware of their more refined schedules and where the highest levels of production have historically been achieved. Those areas should be compared against legacy numbers adjusted for current conditions to see if they are still effective drivers.

Companies must consider how new risk moves through the partnership of entities. As loan rates increase, the risk will ultimately pass to the contractor through stricter regulations on cashflow and reduced contingencies, who will in turn pass that risk on to the subcontractor. This puts the bulk of the new risk on the partner with the least opportunity to disperse risk through secondary channels. This in turn affects the production output and path to revenue for all parties. Risk should float to the contract between the owner and the contractor so that it can be effectively dispersed downstream to the trade partners. However challenges arise, they must be navigated in a manner that maintains proportionate profitability and production rate.

This is best achieved by "Anticipate and respond to changes." It's about staying ahead, understanding market trends, and being flexible to adjust your strategies as needed. This proactive approach helps you remain competitive and meet customer needs effectively, keeping your business agile and responsive.

These comparisons should be adjudicated with more modern innovations. Managers need to be cognizant of the effect change can have on the speed of production. This can be mitigated by reducing the risk of added innovation. Companies can decide to follow innovators rather than lead the industry. This can allow a more strategic addition of innovation on smaller items. While this approach will certainly limit the risk, it also will most likely minimize gains through innovation and water down the company’s ability to drive their market segment while distinguishing themselves from their competitors. Added innovation must either increase speed or reduce the cost associated with maintaining speed to be considered a worthwhile investment.

To adapt cost control in engineering project management for energy projects, continuously analyze market trends and customer needs. Implement flexible budgeting models and agile project planning methodologies. For instance, adjust resource allocation and procurement strategies based on market fluctuations and customer requirements, ensuring cost efficiency and project success.