POSTED 21 September 2020
Covid 19 has brought about an abrupt change in market conditions, exacerbated by the continued effect of Brexit, on the development of industrial property assets. Now, more than ever cost and supply chain management are critical to development success.
Top 10 project cost considerations:
1. Consider the impact of social distancing measures, material availability and non-recoverable costs of delay.
2. Apply increased diligence in contractor and supply chain selection
3. Assess the risk of supply chain insolvencies,
4. Ensure that all project stakeholders work collaboratively to reduce the risk of supply chain failure
5. Design for future resilience – consider solutions that reflect the ability to source domestically
6. Consider pre-manufactured solutions in response to potential future pressures of labour cost, availability and working conditions
7. Set the correct price and program– carefully consider market response of reduced tender prices and unrealistic programs of works against value for money and true cost
8. Review cost plans to assess costs that do not add value
9. Engage with supply chain earlier than usual to manage program delivery
10. Assess potential delays will all stakeholders with a practical approach and ensure early communication of issues