Rethinking site overheads in a Swedish contex

Abstract

Contractors need to use resources efficiently to avoid unnecessary costs as the construction market is highly competitive with low profit margins. Allmänna kostnader (AK) is a term used in Sweden by the Skanska construction company. Internationally it may be known as site overheads but there are several different definitions both in the literature and within Skanska. Skanska Gothenburg, Housing Department 1 believe that their AK have been increasing to unacceptable levels compared with competitors. Therefore, they aim to reduce these costs but were unsure where to start. Despite an official definition for AK existing within Skanska, employees define it very differently. This has resulted in managers categorizing resources differently from project to project, making them difficult to compare, which meant that it was hard to find efficiency improvements. The purpose of this thesis was to take the first steps to solving this problem by defining AK, categorizing resources and analyzing the current AK situation by collaborating with Skanska Gothenburg, Housing Department 1.

In the literature study the current climate of the Swedish construction industry was investigated, and an understanding was gained for what types of costs are included in the term AK. This was complemented by examining waste theory and costing methods. The empirical study focused on semi-structured interviews and a questionnaire with Skanska employees. These findings were compared and discussed, whilst using an abductive research method with systematic combining. A less ambiguous definition for AK was developed in accordance with RICS (2018) which was the cost of running the construction site, rather than any particular activity or zone. Costs were categorized in a honeycomb model, which presented a structured approach for allocating resource costs. Recent trends show that Skanska operate with more staff than competitors, which is one of the largest AK categories and work methods should be improved to lower overall costs. Activity-based costing and digital aids such as EquipmentLoop may allow employees to more accurately predict and improve the understanding of costs. This thesis has only scratched the surface of the topic. Therefore, suggestions for future research are presented to investigate potential cost savings.