Document Detail

Title: RS112-1 - 2% Engineering -- Can It Work for You?
Publication Date: 3/1/1997
Product Type: Research Summary
Status: Supporting Product
Pages: 22
Highlights innovative practices that lead to cost effective engineering, as well as reports on 'pioneer' organizations that use non-traditional practices to lower engineering costs.
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Owners are continuously seeking new ways to improve engineering practices in the execution of capital projects, particularly to make capital projects more cost effective. Thus, when a company such as NUCOR reports that it can achieve overall business objectives at much lower engineering and capital costs, and with faster schedules than normally experienced in the construction industry, it creates a great deal of interest in how a company achieves such results.

As a response to this interest, CII established Research Team 112, Cost Effective Engineering. The objectives of the research team were to compile, assess, and report on the innovative or non-traditional practices used by NUCOR. The research team expanded this original scope by additionally studying other organizations that are perceived to be “pioneers” in innovative practices that have led to low engineering costs. This report summarizes the principal findings of the research team’s investigation.

The research identified 20 innovative or non-traditional practices that can be grouped into three categories: organizational culture, contracting strategies, and design philosophies. What makes NUCOR unique is that within its capital project delivery process, it has been able to eliminate everything that is not needed, while at the same time streamlining and optimizing what is needed and selecting those best qualified to do the job. NUCOR also has been effective in using its unique organizational culture in applying non-traditional contracting strategies and design philosophies. The 10 practices that synthesize this approach are described in this report, along with the benefits and risks that may accompany them. Some of these practices also were found in different forms within some of the other organizations investigated.