Owners of businesses that are in or adjacent to the construction industry would be wise to take a closer look at the months ahead and the potential tumult they could involve if building starts to slow down as some are predicting. The combination of a global pandemic and a looming recession (that is in full effect in much of the world) means that now you have to be even more conscious of cost-effectiveness than ever. Here, we’re going to look at how to control those costs, stay lean, and be able to make it back into the green.
By Team Savant
Image: Ivan Bandura
Ensuring Operational Efficiency Through Communication
One of the big driving factors of cost-effective project management in any construction site is making sure that everyone’s time is being used as effectively and productively as possible. This is what is known as operational efficiency. One of the primary factors in ensuring this is effective planning and communication. Ensuring that members of the team know their role, are ready to act, and are consistently provided with the information that they need is crucial. From engineers to contractors to managers to the workers, you have to make sure that they can all be kept in the loop to make sure that avoidable operational errors don’t keep piling up, leading to mistakes that waste time and money.
Make Use Of Effective Scheduling
Proper communication goes right down to ensuring that your team members know exactly what they should be doing at any given time of the day or week. Work with your team to find out which starting times are going to work best and use a workflow planner to make sure that you’re not inadvertently creating bottlenecks. One of the biggest wastes of time and money is to have a professional builder standing around, getting paid to wait for their colleague to finish a part of the project so they can get on with their own. Take the time to eliminate bottlenecks and you will see the cost-effectiveness of every project soaring as a result.
Ensure Accurate Cost Estimation
Image: EJ Yao
A crucial part of any construction project, especially in the planning phases is, of course, the cost estimation. The better you are able to estimate the costs of the project, then the better you are able to follow the budget and not have to eat a portion of the costs as you might if things even up going over budget. Right now, it’s important to be able to better retain your clients, so making use of construction estimation software can help you ensure your cost estimations are correct, so you don’t turn off any clients with some unwelcome surprises.
It’s Worth Tracking Productivity
When it comes to issues of low operational efficiency, the culprit behind wasted time is most likely to be the systems you have in place that don’t allow for effective communication and scheduling. However, if you have good systems in place, then you might want to take a closer look at the productivity of individual workers, as well. This can mean using key performance indicators to track the productivity of each worker to see where the outliers are. When you find those outliers, it’s important to work with them to discover if there are any factors slowing them down. Either you can eliminate those factors or you can accept that these low productivity workers are in the wrong position and consider moving them.
Finding Potential Sources Of Loss
If you want to make sure that the costs of your project don’t start rising too quickly, then one of the biggest problems that you need to take the time to avoid is that of reworks. Reworks are going to happen if there are any operational errors, setting the project back, so not only are costs going to increase because the project takes longer to complete, but there’s also the cost of the rework itself to consider. Identify the risks and uncertainties that are most likely to lead to reworks as early in the project as you can. In doing so, you can take the time to find the solutions that would prevent those reworks from having to be essential in the first place.
Be More Flexible With Your People
Image: Scott Blake
If you have a great team, then naturally you want to keep hold of them as best as possible. Securing them with a stable paycheck is the best way to do that. However, when it comes to building a team for a future project, it’s important to acknowledge that you might have to resize that team flexibly to your financial situation. As such, you may want to rely more on contractors. Not only can construction labour hire help you keep your business more flexible. It can also improve your ability to find and implement skilled labour on an as-you-need-it basis. Recruiters and labour boards can help you find the workers with the skills most relevant to your projects, bypassing the traditional methods of advertising in the papers and general news boards.
Reconsider Buying The Equipment
The question of where and how you get your equipment is much the same as the question of where and how you get your people. Aside from being able to access it more readily and cost-effectively if you hire it rather than buy it, you may also want to consider the long-term costs. Buying equipment is expensive not only because of the asking price but also because you have to pay to maintain it in the long-term. For the machinery that you’re going to use most often, it is undeniable that the cost might be worth it. However, for machines that you only have an intermittent need for, you could be paying more money to keep in working order while very rarely needing to actually use it.
Be Sure To Secure Your Site
One major source of loss that we might not like to think about too often is the very real risk of theft from the worksite. Theft can come from both outside and within the team. Furthermore, it can target anything from the machinery used to prepare the site to the equipment used to protect your employees to the building materials. There is all manner of things you can do to protect the assets on site, such as locking materials in sizeable, secure containers and planting GPS trackers on any vehicles. You may also want to consider working with security contractors to see what your biggest risks are, working with them to safeguard the most vulnerable aspects of the business.
Follow The Lean Principles
If you don’t already know what the lean principles are, then it’s time to brush up. While traditionally used for manufacturing, lean principles of identifying and minimizes loss are widely applicable in construction, as well. Basically, they are a set of rules that can help you implement processes that cut down on waste of all manner of resources, including time, labour, materials, and equipment. Covering the lean principles would take up an entire extra post, so take the time to research and learn them yourself. Once you understand the sources of loss most likely to affect your business and implement lean processes to reduce them, you might be surprised by how much you can improve site efficiency across the board.
Skip The Surveyor
The services that a surveyor can provide is undeniably important to the construction service. However, you simply might not have to rely on a surveyor to make use of those skills. For a lot of projects, you might instead be able to make use of remote site plan services. What these services do is make use of satellite imagery and other widely available data to help you make a site plan. You may still want to arrange some sort of visit to the site to make sure that the plans match the reality of the scene when you land there. However, where applicable, remote site plan services can help you save a lot of money otherwise spent hiring an expert.
Source Parts And Materials Directly
Your subcontractors can be an excellent source of not just labour, but construction expertise. However, you should be careful as to how much control you let them have when it comes to the purse strings. For instance, when it comes to parts and materials, it may be wiser to not let them buy them themselves. You can ask them for advice on who they would go to and what they would use. However, letting them buy it them themselves increases the risk that they might spend it unnecessarily. Furthermore, you also have to pay them for the labour of doing your shopping for you, which is a cost you don’t need to contend with.
If you’re able to continue sourcing work then, by all means, don’t feel that you can pull the purse strings too much. However, be prepared and be flexible to movements in the market that could signal the drying of your revenue streams.