Lean manufacturing is the process of cutting back on certain materials or speeding up certain processes to lower the overall cost of manufacturing. There can be key benefits to this approach to manufacturing, but it's important to move forward with a balanced view of lowering costs without compromising quality. This blog looks at that concept, but it also delves into other information related to the manufacturing and industrial fields. Ultimately, this blog is designed to help manufacturing professionals as well as B2B clients who purchase products or outsource processes to this field. If you have questions, I hope that you find the answers you need here.
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Turnkey contracts are one option that people who would like to construct manufacturing facilities can consider. This type of contract has several advantages and disadvantages that one must consider in order to make an informed decision regarding the best way to execute the construction project. This article discusses some of those pros and cons.
The Pros
Less management work.
Turnkey contracts reduce the burden of managing or supervising projects for building owners. This is because the contract places the responsibility for the entire project upon the firm or individual who was awarded the contract. You can therefore simply wait to receive the keys to a usable building at the end of the agreed project timeline.
Reduced project timelines.
The contractor selected to execute a turnkey construction project is responsible for designing and executing the construction work. Consequently, the contractor can start procuring sub-contractors and suppliers of materials as the designs are being finalised. This early procurement of materials and subcontractors makes it possible for the project to be completed sooner because no time will be lost while the procurement process is handled.
Reduced cost overruns.
Turnkey projects also deliver cost savings to you because you are only responsible for the lump sum agreed upon during contract negotiations. Any increases in costs, such as rises in the prices of materials, are covered by the contractor.
The Cons
Limited client involvement.
You will have a limited ability to participate in the various activities that are associated with your project. For instance, you may have no say in selecting the sub-contractors that will offer different services during the project. This can deny you the chance to select the service providers that you prefer.
Budgets may be higher than necessary.
Turnkey contractors may generate project budgets that are higher than necessary. This is because those budgets are presented before the designs of the project have been finalised. Secondly, turnkey contracts may have higher budgets in order to cover any unpredictable increases in budget requirements, such as price increases due to inflation. You may therefore end up paying much more to the turnkey contractor than you would have paid in another kind of contract where you have more say over the execution of the project.
Think carefully about the advantages and the disadvantages above before you opt for a turnkey contract for your construction project. Talk to several turnkey project management companies so that you can get expert advice about how suitable this type of contract may be for your particular project.
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