The Study Of The LP Road Construction Project Procurement Electromechanical Cost Management Based On WBS

In today’s increasingly competitive and demand exceeds supply industry background, with the reduction in highway construction mileage, in order to be an industry leader, construction companies must strive to ?expenditure reducing‘ to ensure a certain annual contract amount. During the execution of highway-electromechanical systems integration projects, it can be divided into following stages:joint design, procurement, installation and debugging, project checking and accepting.Equipment procurement is an important part,which can be a direct source of profit taking in the project. According to Company R’s data statistics,the average purchase cost of each item constitutes 70% of the total amount of the contract, and 81% of the total cost. It shows that procurement costs,which is the largest proportion of project cost, is the main factor of ?expenditure reducing‘.Procurement cost controlling has the ?leverage effect‘ on the final profit of the project. This study focuses on how to control the project’s procurement costs.This paper selects Sichuan Lipan highway-electromechanical construction project as a research object, focus on cost management and cost controlling, summarizes Company R‘s project procurement management situation and existing problems, combines with the actual needs and characteristics of the project management, uses theoretical knowledge of project cost management, particularly some knowledge like target costing, earned value management and Activity Based Classification. This paper also researches and establishes advanced methods of highway electromechanical systems integration project management. In addition, uses the case application of LP highway electromechanical systems integration projects being executed by Company R, to verify the operability and the effect of management proposed by the author, in order to achieve the aim of ?improving utilization of project funds, allocating company‘s procurement management resources reasonably, reducing procurement costs, and improving project profit.