The ABC Curve Method - Focus on what matters

RESOURCE: Understanding ABC Curve - PDF file

Understanding the ABC Curve in Cost Engineering for Shed Projects

1. Introduction to Cost Engineering 0:00

• Welcome to the Cost Engineering session.

• Focus on practical applications for businesses, engineers, and estimators in shed design and quoting.

2. Overview of Shedmate and Project Example 0:15

• Introduction to Shedmate as a tool for extracting project information.

• Example of a real shed project designed for a customer in Australia.

3. Components of the Shed Project 0:43

• Description of various components included in the shed project:

  • Roller doors

  • Sliding panels

  • Windows

  • Concreting

  • Erection and council fees.

4. Itemized Pricing in Shedmate 1:23

• Explanation of itemized pricing calculations in Shedmate.

• Importance of understanding individual item contributions to total shed price.

5. Exporting Data to Excel 2:04

• Exporting itemized pricing data to Excel for further analysis.

• Creating additional columns for accumulated value and percentage calculations.

6. Analyzing Shed Pricing Data 3:24

• Focus on key pricing components:

  • Erection costs (21% of total)

  • Concrete costs (additional 20-30%).

• Importance of identifying significant cost contributors.

7. Introduction to the ABC Curve 4:41

• Explanation of the ABC curve concept:

  • A items: 80% of total price (critical components).

  • B items: 15% of total price (moderate impact).

  • C items: 5% of total price (low impact).

8. Importance of Focusing on A and B Items 5:34

• Emphasis on prioritizing A and B items for pricing strategies.

• Common pitfalls of focusing on low-impact C items.

9. Strategic Pricing Management 7:34

• ABC curve as a strategic tool for cost management.

• Focus on negotiating better prices for A items to improve profitability.

10. Detailed Breakdown of A, B, and C Items 9:06

• A items: Critical components (e.g., erection, concrete).

• B items: Moderate components (e.g., brackets, ventilation).

• C items: Low-impact components (e.g., screws, small plates).

11. Simplifying Pricing for Startups 10:49

• Recommendations for startups to simplify pricing strategies.

• Avoiding complex formulas for low-impact items.

12. Conclusion and Next Steps 13:14

• Recap of the ABC curve and its importance in pricing.

• Encouragement to focus on impactful components for better pricing outcomes.