> Apart from ensuring that their project is completed on time, all
> managers, whether in the office,
>
> workshop, factory, or on-site, are concerned with cost. There is
> little consolation in finishing on time,
>
> when, from a cost point of view, one wished the job had never started!
>
> Cost control has been a vital function of management since the days of
> the pyramids, but only too
>
> frequently is the term confused with mere cost reporting. The cost
> report is usually part of every
>
> manager’s monthly report to his superiors, but an account of the past
> month’s expenditure is only
>
> stating historical facts. What the manager needs is a regular and
> up-to-date monitoring system that
>
> enables him to identify the expenditure with specific operations or
> stages, determine whether the
>
> expenditure was cost-effective, plot or calculate the trend, and then
> take immediate action if the
>
> trend is unacceptable.
>
> Network analysis forms an excellent base for any cost-control system,
> since the activities can each
>
> be identified and costed, so that the percentage completion of an
> activity can also give the
>
> proportion of expenditure, if that expenditure is time related. The
> system is ideal, therefore, for
>
> construction sites, drawing offices, or factories where the basic unit
> of control is the manhour.
>
> SMAC-Manhour Control
>
> Site manhoures and cost (SMAC)* is a cost control system developed in
> 1978 specifically on a critical
>
> path network base for either manual or computerized cost and progress
> monitoring, which enables
>
> performance to be measured and trends to be evaluate, thus providing
> the project manager with an
>
> effective instrument for further action. The system, which is now
> known as earned value analysis
>
> (EVA), can be used for all operations where manhours or
>
> *SMAC is the proprietary name given to the cost-control program
> developed by Foster Wheeler.