Managing Cost, Quality, and Speed in Construction: Cost

Jul 31, 2020 | Construction

When it comes to construction, the top three concerns on the mind of every building owner and developer are cost, quality, and speed. 

Everyone wants their project to be of the highest quality at the lowest cost, and for it to be done in as little time as possible. It is why we have built Peak Development Partners on the promise of delivering your finished product “on time, on budget, or better.” 

There is an old adage: “Good, fast, cheap… pick two.” We find this to be an oversimplification, but there is some truth to it. Very often on a project, cost, quality, and speed do compete with one another, based on your priorities. 

This graphic illustrates the competing nature of cost, quality, and speed:

As you move towards any one tip of the triangle, you are logically moving away from the other two. So, If you decide to focus more on shortening your schedule (speed), you will often have to sacrifice quality, and will almost certainly increase your overall cost. If your aim is to reduce cost, quality tends to suffer, and it will likely take you longer to finish. 

Managing cost, quality, and speed is a balancing act that every owner and developer has to contend with. We have found that the solution always comes down to a simple consideration: what are the goals of the ownership and development team?

A clear understanding of those goals is crucial to minimizing how much you will have to sacrifice certain points of the cost, quality, speed triangle in favor of others. 

This week, we will focus on how owners and developers that are most concerned with lowering costs can mitigate the effect on quality and speed.

Cost/Budget

What does it mean to be “on budget?”

It varies from project to project. Different projects have different budget considerations. And it is important to understand the project’s unique considerations as they relate to the owner/developer’s overall goals.

Have a clear discussion about budget early on with your ownership/development team. Say you’re working on an apartment complex. Ask, “are these units going to be rented to low-income tenants, or are these going to be luxury apartments?”

And, do yourself, the project, and everyone on board a favor, and discuss at that time how the speed and quality goals relate to cost as well. 

For example, if you are working on a student housing project, you know that the building must be done by the time students return in late summer/early fall. So now, time is a factor. 

Hard time constraints like this force you to adjust your schedule which, in turn, impacts cost as well. If you plan for things like double shifts, working premium hours, etc., while you’re putting together your project budget, you can minimize this effect on the overall cost of your build.

Again, maximizing each point of the cost, quality, speed triangle goes back to the effectiveness of our Do-It-Together approach to construction, and its four main tenets:

  1. Build your team early
  2. Leverage your team’s talents
  3. Protect your time
  4. Manage your project proactively

Build your team early and leverage their acumen, so that you can manage your project proactively and protect your time. 

Do that, and we can almost guarantee you will open on time, on budget, or better. 

This is the first in a three-part series of posts. Stay tuned in the coming weeks as we spotlight the other two points of the triangle: quality and speed.

About the author

Lee Crewson

Lee Crewson

Founder & President

Lee has made commercial construction management his life’s work, focusing on building places where people live like multi-family, hospitality, student housing, and senior living for successful developers. He’s also committed to the values of this country and has over twenty five years of service in both the active and reserve forces as a Commissioned Officer in the US military. Lee embraces the power of a committed team that collaborates early and often and is happy to guide any developer who shares the same philosophy for success. Reach him anytime at LeeC@TeamPeak.com.

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