Project Cost Control in Industry 4.0

Project Cost Control in Industry 4.0

Gülay Tamer (Istanbul Gelisim University, Turkey) and Binnur Gurul (Istanbul Gelisim University, Turkey)
DOI: 10.4018/978-1-5225-7865-9.ch004

Abstract

During this fourth industrial revolution, the fundamental purpose of industrial transformations is to carry competitive edge of the companies to an upper level by increasing efficiency and effectiveness of sources and decreasing the operational costs. Therefore, the companies need to invest in the right project in the right time in order to provide a competitive edge against their competitors and to gain a desired level of profit. The aim of the project cost analysis is, in the simplest terms, to calculate optimal project costs and to consider if there is any difference between the planned budget and the optimal cost; and in case of a difference, to take necessary actions. The purpose of this chapter is, as a result of principles and conceptual framework of Industry 4.0, to describe how adaptive robotics, artificial intelligence, big data, augmented reality, additive manufacturing, internet of things, cloud computing and cyber security technologies, which are building blocks of Industry 4.0, changed the project cost analysis.
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Introduction

The transformation taking place today, which is also called fourth industrial revolution, is a result of combination of numerous physical and digital technologies. Regardless of the triggering technological means, the fundamental purpose of industrial transformations is to carry competitive edge of the companies to an upper level by increasing efficiency and effectiveness of sources and decreasing the operational costs. The difference of this transformation that we are living in is not just to ensure the change in basic business processes, but also to offer to the business world the new service-based business models and projects by developing the smart and connected product concept. Therefore, during this fourth industrial revolution where technology develops rapidly and is used commonly, the companies need to invest in the right project in the right time in order to provide a competitive edge against their competitors and to gain a desired level of profit. For accurate investments to be made by the companies, to carry out project cost analyses, where feasibility studies are at the forefront, and to create project plans are very critical in making correct decisions. Particularly, availability of different options (for example, choice between alternative business locations, alternative suppliers, alternative project proposals, etc.) makes the cost element a significant mean for decision making in the project management. Therefore, cost control is critical in the project management for an accurate business investment decision and selection. Cost control in the project management results in million-dollar, even billion-dollar investments to be made in most profitable way.

The wonder of Industry 4.0 was first said in 2011 in Germany as a proposition for the improvement of another idea of German monetary strategy in light of innovative methodologies (Mosconi, 2015). The idea has propelled the fourth innovative unrest, which depends on the ideas and advancements that incorporate digital physical frameworks, the Internet of things (IoT), and the Internet of administrations (IoS; Lasi, Fettke, Kemper, Feld, and Hoffmann 2014; Ning and Liu, 2015), in light of never-ending correspondence by means of Internet that permits a consistent association and trade of data not just between people (C2C) and human and machine (C2M) yet in addition between the machines themselves (M2M; Cooper and James, 2009). This communicational association impacts the foundation of information administration 4.0 (KM 4.0; Dominici, Roblek, Abbate, and Tani, 2016). On the off chance that the pattern of the social client relationship administration (CRM) coordinates established CRM and online life to offer some incentive included for associations and clients (Marolt, Pucihar, and Zimmermann, 2015; Roblek, Pejić Bach, Meško, and Bertoncelj, 2013; Rodriguez and Trainor, 2016), As the cutting edge for client relationship administration, Social CRM is picking up force. Conventional CRM procedure centers around administration answers for channels, for example, corporate Web locales, call focuses, and physical areas. With Social CRM, these methodologies currently consider the elements of the network based condition that characterizes online life – a domain in which control of the relationship has moved to the client, who has the ability to impact others in his or her informal community. (Heller Baird, and Parasnis, 2011) By all methods, at the organization level, the effect of this transformation on generation procedures won't just be restricted to mechanical and infrastructural angles. This change procedure will advance the improvement of new expert figures, new authoritative structures and the development of another style of administration. With computerized forms, enormous streams of correspondences and extensive measures of information to be handled, the tasks in Industry 4.0 will require administrative figures with various abilities and mentalities contrasted with the past. In any case, innovative advancement will even now be centered around people—their sanity, instincts and feelings. Hence, venture directors ought to end up the heroes of Industry 4.0 in controlling, spurring and enhancing change.

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