CASE STUDY

1
DELIVERING OPEN BOOK WORKING

•  
• BENEFITS
• The first element of Target Costing, cost
  transparency by all parties which will support
  Open Book working, was established. The sample
  project reviews concluded that a 10 saving of
  the costs of all projects was viable. However,
  Target Costing also requires that Client and
  Contractor agree on the best way to plan and
  execute a project so that all actual cost
  elements can be calculated and turned into a
  Target Cost which all parties accept.
• For this to occur the review concluded that these
  key areas needed addressing for improvement
• programming, both long-term and operational
• early Contractor involvement
• communications
• regional differences
• operational ownership.
• CWC CONCLUSIONS
• CWC recommend that SCC implement a four-stage
  plan

• CASE STUDY SUFFOLK HIGHWAYS PARTNERSHIP
• HEADLINE
• CWC assessed the potential for the implementation
  of Open Book Cost Management and Target Costing
  into the processes of The Suffolk Highways
  Partnership (SHP) made recommendations for the
  delivery of cashable savings.
• THE CHALLENGE
• The SHP comprises Carillion and Suffolk Highways
  Contracting (SHC), both of which act under the
  auspices of Suffolk County Council (SCC). CWC
  were asked to provide independent advice to SCC
  on whether or not Carillion and its suppliers
  appear willing to move towards the implementation
  of Target Costing to replace the Schedules of
  Rates and to review internal processes to
  identify where changes could be made to deliver
  cashable savings.
• We were also asked to identify the potential
  level of savings that might be made through the
  application of Target Costing to typical jobs and
  to review the contract to ensure that Target
  Costing can be incorporated into any extension of
  it.
•  
• THE APPROACH
• CWC adopted three primary strategies to assess
  the potential for the implementation of Target
  Costing
• Established that Carillion and its three main
  suppliers, Target, Breheny and Bagnall Morris,
  understood the principles of Target Costing and
  were prepared to accept cost transparency Open
  Book working as the first essential elements of
  it.
• Interrogated financial accounts for all the
  suppliers to test the level of overheads and
  profit they apply to their Schedules of Rates.