Time Is Money
Shortening any of the design and construction phases translates to savings and/or increased revenues for most Owners.
Over the years, astute design firms have learned that it is counterproductive to wash their hands of the overall project economics. Very early in every project, they help their clients look at the Total Project Cost in addition to the Construction Cost. Those that have partnered with developers or have developed project of their own know the cost of time and have learned to pay attention to any opportunities that exist which can shorten the period of time between conceptualization and occupancy. Every project has these opportunities:
Minimize pre-construction time: Most Owners do not begin a project in advance of their need for the space. This need always has some economic benefit and the sooner that benefit is realized, the better. Being efficient during the design phases and planning those phases with a view to how they impact the buyout and start of construction is easy money. Key to this is anticipating outside reviews and approvals and paving the way to eliminate these frustrating delays.
Minimize construction time: It is not unusual for the General Conditions line items of a construction budget to equal 6% of the construction cost. Most of these line items are functions of the project duration (think supervision; temporary offices; storage; temporary facilities; temporary power, etc.) This is money that has only an indirect impact upon the finished product. Eliminating float time in project scheduling; running construction activities parallel; and simply setting the project up with the expectation of larger crews can have an impact upon the project buyout and the general conditions.
Optimizing construction activities: There is always a critical path to completion in terms of schedule. These are the activities which control other activities and which ultimately determine how long the construction will take. If you take into account the general condition costs described above, plus the cost of construction period financing, plus the economic opportunity that arises from placing the facility into operation sooner, it often makes sense to spend a little more (longer work weeks, premium time) to expedite these critical activities in order to accomplish the savings. If the construction schedule is a true critical path schedule, optimizing the time/cost of the critical path is relatively easy.
The bottom line is simple: Time is indeed money.
For more information please see “The Guild Master” white paper.