Research On Cost Control Of KZ Company’s EPC Projects

In recent years,as the fast development of the e-commerce economy,the consumers’ demand for logistics has been continuously upgraded,and the express delivery has grown rapidly.The huge express market prospect has spawned the emergence of many enterprises of express-sorting equipment manufacture and installation.Meanwhile,the competition among enterprises in the sorting-equipment industry has become more intense.If sorting-equipment integration enterprises want to be invincible in the industry,they must strengthen and upgrade their own technology and management level.Project cost is the key index of profits control for such integrated enterprises.Therefore,it has become an important measure that how to conduct more reasonable cost control to improve the profitability of the company.KZ company starts sorting-equipment manufacturing earlier than others inside the industry,although the Company’s revenue has increased yearly,many deficiencies exist during the cost control of EPC(the abbreviation of Engineering Procurement Construction)projects.It is urgent to promote the level of project cost control by relevant optimization measures.According to relevant theories of cost management,this paper researches KZ company’s EPC projects.Firstly this paper explores the procedure and status of cost control on EPC projects.Secondly,this paper analyzes the existing problems and causes during cost control of EPC projects.Through analysis,we can find that there are many problems existing in the design stage,procurement stage and construction stage during cost control of EPC projects,such as high design cost expense,high cost expense of purchasing transaction,the deviation between project cost control and schedule control etc.As a result,the actual cost of KZ’s projects often exceeds the budgeted cost,and the project losses occur frequently,which seriously affects the company’s management benefits.Thirdly according to the existing problems,based on the corresponding theories,this paper puts forward specific optimization methods for the cost control of KZ company’s EPC projects,which includes introducing Quota design method in the design stage,TCO method in the procurement stage as well as earned value method in the construction stage,improving the cost management system,and then puts forward relevant implementation guarantee measures,in order to obtain a good optimization effect.Lastly,taking KZ Company’s SF Transit Depot project as an empirical case,this paper especially analyzes the application effect of the earned value method in cost control during project construction,in order to provide reference at aspects of project cost control for sorting-equipment enterprises under EPC general contracting mode.