PROJECT PLANNING AND LABOR HOUR, COST CALCULATION IN INDUSTRIAL FACILITIES
Industry sector has been following major contract projects which are succesfully signed by construction companies in recent years. Those companies are working on construction projects such as refinery, natural gas, airport, highway, factory, bridge, port etc. for mechanical, civil an electrical jobs with their valuable employees. So, how is a period going on? They keep working with employees, workers, team leaders, foremans, supervisors and engineers at site side and accountants, technical office employees, purchasing teams at office side. Planning this period is a hard kind of job.
Before starting a project, needed materials are being calculated in accordance to metrics such as their quantities, kilograms, quantities etc. so as to commission or to finalize the project.. In the second step, the procurement period of identified materials are being planned according to the project budget and related quality control standards. At this period of time, especially the budget and the quality control parameters are some of important factors for the selection of materials. The lifetime of the plant, its amortization, the replacement of parts during the maintenance period as a revision on those materials. are some of important factors that factors can minimize the budget.
Now the project is ready! In the third step of period, human capital is being calculated those people will implement the project in the way of the budget. In this step, it is important to answer some certain questions. A number of employees needed in project, a man-hour calculation of employees, the peak point of the project based on employees, employees who will be kept in the process after the project complition and, project rules related to the applicability of health, safety and enivroment (HSE) procedures are some of issues that need to be solved at this stage in accordance to procurement of project materials to the site area. So how is the manhour and the cost are being calculated?
Shall we start to work on a cable pulling period in the electrical installation process? Suppose that you are going to get a cable pulling job with the estimation of 25 employees based on dimensions of the cables for pulling. The rate will be 0.25 for 25 employees x 10 hours / 1000 meters a day. If you had doubled the number of staff, your cable meter would have been doubled. Under this condition the rate would be 50 employees x 10 hours / 2000 meters. The rate will again be 0.25. In this respect, rates are calculated for all cables in the list to be pulled and multiplied by the total quantities. The result shows how many man-hours you have done in total.
- Cable Type Total Rate Manhour Calculation tips
- 3 x 1,5 mm² 14020 meters 0,250 3505 250 manhours-1000 meters
- 12 x 1,5 mm² 16630 meters 0,500 8315 250 manhours -500 meters
- 4 x 185 mm² 360 meters 0,625 225 250 manhours-400 meters
TOTAL: 31010 meters // 12045 //
The manhour now is calculated. Now, how will pricing be? At this stage, you calculate the direct and in-direct personnel cost of your company. Since the cost of a Project Manager, a Site Manager, Site Engineers, HSE experts, quality experts, office employees will also be earned through the installed items at site, costs of these employees should be added to costs of foremen, team leaders, employees and workers. An accommodation, a food, a transportation, a dressing of employees and salary expenses are being calculated for all of people. After that, the cost of man hour is being calculated. For example, let's assume that $ 100 per day on 10 hours of an employee and the total cost $ 2800 per month. It is equal to $ 10 per hour in a day. Under these conditions, the cost of the above work is determined as 120.450 USD. In this period, issues such as winter conditions, competitors in bid period, your field experiences are thoroughly examined so as to calculate the cost of work is specified and then unit prices are being recorded to the table by you. Let’s keep working on the above example. The cable quantity is being multiplied by unit prices and the total price is being calculated.
- Cable type Total Rate Manhour Unit Price Total price
- 3 x 1,5 mm² 14020 meters 0,250 3505 4 USD 56080 USD
- 12 x 1,5 mm² 16630 meters 0,500 8315 5 USD 83150 USD
- 4 x 185 mm² 360 meters 0,625 225 7 USD 2520 USD
TOTAL: 31010 meters // 12045 // 141.750 USD
After all calculations, we can estimate that our profit margin is 17.6% at 141.750 USD / 120.450 USD. Now you can pay bonuses to your employees.
A manhour and a cost for a kind of a period in industrial facilities are roughly calculated above. Site experience is a very important factor in this period. If we keep continue working with above example of the electrical cable pulling, after the completion of mechanical and civil construction periods in estimated schedule, a scaffolding, a Crane organization etc. in the cable pulling installation area will be very importont so as to take an action in time. It is an important factor to save time and directly connected to money. Losing time can increase your cost. It is also an another important factor that the correct and competent personnel should be ready at the scheduled time in the site.
Now you can use calculations related with industrial project planning, manhour and cost calculation above for other materials for your product range. A budget, a time, a man-hour, a cost, an experience, external factors will always be as important parameters of these kind of periods.
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