Efficient Costing & Cost Efficiency

 

Understanding both the terms will definitely help you to gain advantage on overall production, pricing and attaining desired results out of them. Cost in terms of production, research, retail and accounting is the monetary value put up for a specific purpose and up to which extent your efforts are used well for an intended task is its efficiency. So, basically we can assume cost efficiency as the level to which we have met our own expectations.

Managing both the aspects

Now when we talk about efficient costing, it refers to the installation of a costing system which includes product to be cost, selecting the cost rates, inventory conversion and allocation of costs per equivalent unit. With most of the organizations in energy sector focusing on cost savings end up in low balance sheets and low income which eventually results in low credibility from consumer’s point of view. Moreover, the competitors take advantage of this in the market place. In order to provide you with a clear vision of cost and attaining its efficiency, you must consider the major cost for your industry and then find out the actual cost drivers which tend to raise costs. Figure out the inefficiencies like wastage of time, resource, raw material and other things and plan your strategy depending upon those factors.

Focusing the On-field scenario

Our recent industry cost survey highlights the divide between operators and suppliers. However, the differences are not always what might be expected. In certain areas, operators expect further reductions in price, and their expected reductions are beyond what the service companies are willing, or able, to offer. These savings depend upon the operators accepting new ways of working although often discussed, this has rarely been implemented in a sustainable way. Costing of oil and gas projects present great opportunities for the Quantity Surveying consultants as is the case in advanced countries where cost engineers perform this role.

Apart from cost estimate and cost plan, cost control and management is a critical competence of the quantity Surveyor, to ensure that the integrity of planned project cost are sustained within the continuum of project delivery amidst several construction risks that tends to steer projects towards cost overrun.

Cost Efficiency is systematic

Efficient costing starts with a perfect pre-project planning which will impact your operational readiness and in terms of resources, materials/logistics, plant and equipment. On the other hand, proper mapping and identifying the gaps in project planning and reporting systems, developing and implementing a short-term planning process will help you to attain maximum cost efficiency. Each and every aspect at every stage has to be planned and monitored well, it is then when you start laying a robust foundation for achieving the best result. 

We aim to help our clients on their target operating model and provide best of our support to come up with practical solutions which can reduce costs, increase productivity and gain maximum output by implementing our innovative derivatives for perfect cost effective solutions.