Research On Cost Management Of Construction Projects Based On Value Chain Cost Management

The construction industry is a highly competitive industry in China. As anon-emerging industry, the construction industry needs better management for raisingcompetitiveness and product quality, or increasing company profits. But China still has along way to go compared with other developed countries in this respect, and now it is stilldifficult to apply cost control to every stage of production in China. Therefore, at themoment, it is impossible to achieve this goal.This dissertation uses the above argument as a starting point to study problems assuch and tries to apply cost management, so as to bring down costs for the company,which is the essence of the problem. This dissertation then tries to identify problems of thecompany by studying capital, and come up with relevant cost control methods, so as torealize better cost management and make it possible for the company to find opportunitiesto control and lower costs in every stage of the production process. As project costsaccount for a substantial part for a construction company, it is necessary to bring in costcontrol methods to control costs. They must also be applied at the actual construction andoperational level, for the company to have reasonable expectations and make sounddecisions, and also to achieve higher research value in the process of cost management.At the same time, each situation should be treated on a case-by-case basis.Companies should come up with control strategies that are suited for their own situations.First of all, the transaction costs on the external value chain of the company should beanalyzed, and measures of transaction cost management should be proposed based on theactual situation of the company, improving its core competitiveness. Then operational costmethods should be applied to specific projects for project cost management, andsub-projects that can help increase value should be identified through the analysis of thedrives of costs, providing basis for decision-making of project cost management.This dissertation provides basis for decision-making of cost management of eachsub-project. All in all, value chain cost management in construction companies is of greatresearch value. It is believed that it will be effective for companies to control costs.