Framework for Pre-cost Estimation Process Improvements
Boman, Alec (2024)
2024
All rights reserved. This publication is copyrighted. You may download, display and print it for Your own personal use. Commercial use is prohibited.
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024051010793
https://urn.fi/URN:NBN:fi:amk-2024051010793
Tiivistelmä
Given the recent global and regional disruptions in supply chains, the need for a more dynamic pre-cost estimation process became urgent for the case company. Material costs have been subject to significant fluctuations, making older pre-cost estimates inaccurate. The existing process in the case company was not dynamic enough to adapt to these rapidly changing situations. This thesis aims to address this issue by developing a more dynamic pre-cost estimation process for the case company, enabling the incorporation of cost forecasting and rapid changes into pre-cost estimates.
The thesis uses an applied research design with qualitative research methods. It consists of four stages. The first stage was the current state analysis, conducted through interviews, workshops, and observations. In this stage, the current strengths and weaknesses of the process were identified and categorised into topics. The topics were process and working methods, pre-cost forecasting, and data management. The pre-cost forecasting and the data management included the most crucial weaknesses. Therefore, those were chosen as the topics for the literature research. The literature research includes finding the best practices to improve or eliminate the weaknesses of the selected topics, and it was summarised into a conceptual framework, which was used as the basis for the next stage. The next stage included co-creating the initial frameworks for the pre-cost forecasting and data management improvements and creating the new, improved process flowcharts. In the final stage, these frameworks and process flowcharts were reviewed, improved, and verified in a workshop with the local business unit management team.
The outcome of this thesis is the pre-cost estimation process on a framework level. The final frameworks provide the case company with comprehensive directions on making the process more dynamic and the pre-cost estimates more accurate. This is expected to decrease negative cost slippage and provide more accurate offers based on forecasted costs.
The thesis uses an applied research design with qualitative research methods. It consists of four stages. The first stage was the current state analysis, conducted through interviews, workshops, and observations. In this stage, the current strengths and weaknesses of the process were identified and categorised into topics. The topics were process and working methods, pre-cost forecasting, and data management. The pre-cost forecasting and the data management included the most crucial weaknesses. Therefore, those were chosen as the topics for the literature research. The literature research includes finding the best practices to improve or eliminate the weaknesses of the selected topics, and it was summarised into a conceptual framework, which was used as the basis for the next stage. The next stage included co-creating the initial frameworks for the pre-cost forecasting and data management improvements and creating the new, improved process flowcharts. In the final stage, these frameworks and process flowcharts were reviewed, improved, and verified in a workshop with the local business unit management team.
The outcome of this thesis is the pre-cost estimation process on a framework level. The final frameworks provide the case company with comprehensive directions on making the process more dynamic and the pre-cost estimates more accurate. This is expected to decrease negative cost slippage and provide more accurate offers based on forecasted costs.