Cost normalization for global capital projects benchmarking

Jiukun Dai, Stephen Mulva, Sung Joon Suk, Youngcheol Kang

Research output: Chapter in Book/Report/Conference proceedingConference contribution

6 Citations (Scopus)

Abstract

Globally, many large pharmaceutical and biotechnology companies invest significant amounts of money to build manufacturing and laboratory facilities. One common concern amongst these companies is whether or not these facilities are efficient in their design and their use of human and financial resources. The Construction Industry Institute (CII) has worked with 12 of these pharmaceutical and biotechnology companies over the past seven years to benchmark the performance of their capital projects. In order to benchmark absolute cost performance (e.g., dollars per square foot), the projects' costs need to be normalized to account for location, time and currency. However, no single cost index is available to meet this need of normalizing global facilities. As a result, CII and the companies developed a procedure using established cost indices to reliably compare the cost performance of capital projects from different companies. This paper also discusses the issues and challenges of normalizing the costs associated with pharmaceutical and biotechnology capital projects. This paper contributes to a better understanding of cost normalization amongst global capital projects.

Original languageEnglish
Title of host publicationConstruction Research Congress 2012
Subtitle of host publicationConstruction Challenges in a Flat World, Proceedings of the 2012 Construction Research Congress
Pages2400-2409
Number of pages10
DOIs
Publication statusPublished - 2012
EventConstruction Research Congress 2012: Construction Challenges in a Flat World - West Lafayette, IN, United States
Duration: 2012 May 212012 May 23

Publication series

NameConstruction Research Congress 2012: Construction Challenges in a Flat World, Proceedings of the 2012 Construction Research Congress

Other

OtherConstruction Research Congress 2012: Construction Challenges in a Flat World
CountryUnited States
CityWest Lafayette, IN
Period12/5/2112/5/23

All Science Journal Classification (ASJC) codes

  • Civil and Structural Engineering
  • Building and Construction

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