Global Logistics and Supply Chain Strategies - June 2008 - (Page 28) ing, distribution and logistics industries into the construction industry systems.” Reconciling Cost, Value One of the most difficult tasks in construction management is monitoring project finances as the job progresses. So-called cost-value reconciliation (CVR) keeps track of the costs to date on a project as well as the value that can be charged back to the client. Reconciling the cost and value simultaneously shows how the project is doing at any point in time. However, meaningful reconciliation is virtually impossible with disparate systems because of the manual work necessary to bring all the data together. “You have many systems on site and others at the head office, all counting the expenses and expected revenue,” says Cork. “It may take six weeks to compare the figures, at which time the numbers are no longer relevant. The best you could know was whether the project was making money six weeks earlier.” With integrated systems such as IFS Applications, cost and such financials as invoicing, payroll and billing use the same database. CVR is available at any point at any level of detail. For example, CFOs may want to see details of the cash flow. Project managers may want to see if the project is adhering to the budget and schedule. The CEO may only want to see a dashboard with green, amber and red lights to indicate the level of profitability. Near real-time CVR is especially important for the project-centric industries, says Cork, because projects can change so quickly. With traditional manufacturing, the cost and revenue figures are usually developed when the product first comes off the line. These calculations should not change significantly as long as the product is made and distributed in the same manner. For projects, however, critical changes happen on site every single day, which can drastically alter the CVR. “If the CVR numbers start to go down, action must be taken immediately to turn things around,” says Cork. “The sooner any unfavorable shift is known, the sooner problems can be addressed.” To access this article online, visit The Digital Edition at www.SupplyChainBrain.com. “The term ‘just in time’ isn’t used in construction, but materials should be delivered to the job site as close to when needed as possible.” right approach,” says Cork. Running such consolidation centers is not a traditional activity for general contractors, so IFS has built a certain amount of logistics capability into its construction industry applications. “General contractors are also finding themselves in the manufacturing business these days,” says Cork. “To minimize the work on crowed job sites, contractors are doing a lot of preassembly off site. To meet these expanded needs, we have pulled together all of the functionality normally seen in manufactur- Resource Link IFS Worldwide, www.ifsworld.com/us/ 28 JUNE 2008 www.SupplyChainBrain.com http://www.SupplyChainBrain.com http://www.ifsworld.com/us/ http://www.SupplyChainBrain.com
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