Understanding Costs and Identifying Value in Mass Timber Construction: Calculating the 'Total Cost of Project' (TCP)

Sep 15, 2026

Uploaded by Eliana

The paper clarifies the distinction between “costs” and “value” in Mass Timber Construction (MTC) by introducing a Total Cost of Project (TCP) approach. It quantifies the benefits of MTC technologies, including Cross Laminated Timber (CLT) and GluLam beams and columns, and offsets these quantified benefits against material costs used in conventional cost-versus-cost estimation. A worked example evaluates TCP for a mid-rise apartment complex in Australia, demonstrating productivity gains and reduced on-site duration and associated risk and time costs versus traditional concrete construction.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages5

Reading Time13 min

AccessFree to download

Economic Review

Understanding costs and identifying value in mass timber construction

Total cost of project (TCP) method

Stakeholder value quantification

Worked example: mid-rise apartment complex in Australia

Definitions of cost and value in MTC

Mass Timber Construction [Journal | www.masstimberconstructionjournal.com](Journal | www.masstimberconstructionjournal.com) Volume. 1. Copyright © 2018 Economic Review Understanding Costs and Identifying Value in Mass Timber Construction: Calculating the ‘Total Cost of Project’(TCP) Paul D. Kremer1 & Laurence Ritchie2 With any new technology introduced to market there is often an education process for industry stakeholders to understand the benefits. The present paper sought to explain the difference between ‘costs’ and ‘value’ in Mass Timber Construction (MTC). Specifically, the paper focuses on what has been termed the Total Cost of Project (TCP), in which the value (benefits) of using MTC technologies—such as Cross Laminated Timber (CLT) and Glue Laminated (GluLam) beams and columns—is quantified and offset against material costs in a pure cost-versus-cost calculation commonly used in traditional construction estimation/quotation. The quantification of ‘value’, as defined by various stakeholders along the supply chain, is seen as an opportunity to demonstrate the holistic advantage of MTC. The present paper provides a worked example looking at the cost and value of using MTC for the builder, as stakeholder, TCP of a mid-rise apartment complex in Australia. The analysis identifies a productivity gain, resulting in a 30% reduction in duration on site, ultimately resulting in reduced risk exposure and time related costs compared with traditional concrete construction. Keywords: Cost versus value, Mass timber construction, Cross laminated timber, Quantity surveying, Productivity Mass Timber Construction (MTC) is a new construction material and methodology that involves the production of timber elements within a manufacturing centre, which are then shipped to a construction site and assembled (Kremer & Symmons, 2015) . One such technology within the suite of MTC‘disruptive technologies’ is Cross Laminated Timber (CLT) . CLTis a timber based technology in which timber boards are gluebonded in layers in alternating directions and pressed to forma solid rectangular billet. From these billets, panels are cut and penetrations are made with millimeter accuracy using a Computer Numerical Cutting (CNC) machine. Once completed, the panels are sequenced for installation and shipped to the construction site for assembly. CLT falls under an umbrella of technologies within the ‘prebuilt’ or ‘preconstruction’ market, whereby construction industry stakeholders attempt to use controlled offsite manufacturing environments to achieve improved on-site productivity gains (Forsythe and Carrick, 2013) . Like any new technology introduced to market, there is often an education process required to be undertaken by various stakeholders within the industry to understand the benefits and the potential impacts of the technology on industry. The introduction of MTC into the global construction market is no different. Indeed, one of the advantages of MTC over more traditional forms of construction is the unique way in which the‘value’ is quantified in order to derive a benefit for those adopting the technology. The value of MTC can be defined even further to Contact 1Dr Paul Kremer University of Melbourne Building B, Grattan St, Carlton [drpaulkremer1@gmail.com](drpaulkremer1@gmail.com) 2 Laurence Ritchie Woodsolutions 10-16 Queen St, Melbourne [laurence.ritchie@woodsolutions.com.au](laurence.ritchie@woodsolutions.com.au) Mass Timber Construction Journal Received 2th of August 2018, Accepted 28th September 2018 DOI: Not Assigned relate to the exact position a stakeholder occupies along the supply chain. Unfortunately, some forms of ‘value’ are difficult to quantify and require additional calculation to realise completely. The aim of this paper is to educate industry stakeholders through a ‘costs versus value’analysis of MTC. However, before we deepdive into the topic, let’s settle and agree on some terminology, which sha

FAQs

What productivity outcome does the analysis find compared with traditional concrete?

The analysis identifies a productivity gain that leads to a 30% reduction in on-site duration. This reduces exposure to risk and time-related costs relative to traditional concrete construction.

Sep 15, 2026

Uploaded by Eliana