Cost inefficiencies in construction

Paper in proceeding, 2009

Purpose: This paper identifies cost inefficiencies in construction, thereby contributing to the current debate about unsatisfactory productivity in the industry. It suggests that by focusing on the reduction of cost inefficiencies it is possible to increase productivity. Methodological Approach: A comprehensive review of relevant literature. Results: Four key issues leading to cost inefficiencies have been identified: (1) a great deal of non-value adding activities (waste), (2) high degree of uncertainty, (3) lack of standardisation, and (4) resistance to change. The interrelatedness of these issues is discussed and an integrated model is presented for consideration. Contribution: Awareness of how to reduce cost inefficiencies is important in order to improve profit margins in construction. Identifying, discussing, understanding their interrelatedness and addressing these cost inefficiencies are necessary steps towards improvement.