According to the US-based Associated Builders and Contractors – a trade association – in 2020, globally, EBIT (earnings before interest and tax) from construction activities, is on average, just 5.5% of sales. This, combined with Covid-19 constraints, have compelled contractors to be proactive in managing processes and operations that will help them increase their profitability and margins.
MECN lists ten ways of increasing efficiencies in the construction sector and optimising processes where possible.
Good Communication
Project managers must spend less time dealing with non-optimal activities and focus on improving the efficiency of construction projects. This can be done through understanding how decisions are made on-site and reviewing the decision-making process before a problem arises. However, the most critical aspect of maintaining an excellent workflow is to have an efficient communication system. Stakeholders and decision-makers are often not part of daily conversation; hence, project managers must find an opportunity to set regular interviews where they can answer questions and analyse the work.
Understanding Risk
Construction projects are open to different types of risks, such as management risks, legal risks, fiscal risks, and natural risks, as well as other risks depending on the location and type of project. Collecting as much data as possible before beginning a project makes it easier to improve the process and keeps risk away from existing and future projects. Identifying patterns and standardising work models, for instance, will make it easier to assign the right tasks at the right time. For instance, in regions that are prone to natural risks, the site can be examined beforehand to predict disasters and incorporate time schedules and tasks accordingly.
Prefabricated Buildings
With recent developments in modular buildings, prefabrication is slowly being seen as an alternative to traditional on-site construction which is more time-consuming. Prefabrication also allows project managers to take into account weather delays and conflict with other job-site works. Additionally, contractors that employ companies that have established prefab factories can focus on multiple projects at the same time as well as spend less time on traditional activities. Modularisation has the potential to affect productivity and margins for E&C firms significantly, and also save on labour costs and ensure better quality and shorter project schedules.
Emerging Technologies
Deloitte’s report on what is driving E&C firms to plan, manage, and execute projects better identify emerging digital technologies as one trend. Digital technology and real-time data enable schedulers to make better-informed decisions around scheduling labour and materials for a particular project, it stated. The report added that project monitoring is moving beyond documenting cost overruns and construction delays to include more real-time and forward-looking insights. Deloitte’s forecast noted that having state-of-the-art cost budgeting and scheduling tools and technologies, is a competitive advantage and a mode of increasing productivity and margins.
Skilled Workforce
The most important aspect of increasing productivity in the built environment is dependent on its workforce. Currently, the industry is undergoing demographic shifts and a mass influx of migrant labourers, globally. An investment in their skills, apprenticeship programmes by megaprojects, and regional training programmes must be seen as a long-term asset to the industry. Furthermore, to make sure that work sites are run more efficiently, the workforce must be trained to ensure that their skills match the industry’s needs. Training the workforce adequately also decreases the chance of injuries on a job, which, in turn, increases productivity.
Maintain and Service Equipment
Most industry tasks would be impossible without specialised pieces of machinery. Hence, one of the ways of boosting efficiency is to take better care of equipment fleets with valid agreements and management services. While buying or renting equipment, it is essential to outline a service contract that provides the utmost care across the lifespan of the equipment. Additionally, an equipment management service will further monitor the data generated from machine-installed software and provide daily feedback for better performance and operation. This will allow supervisors to focus on other important tasks rather than continuous data tracking.
Workflow Planning
Industry experts define workflows as simple to create, but an essential part of construction management. Workflows help construction businesses standardise processes and operate more efficiently. It describes what actions are to be taken on a specific task to complete it consistently, and workflows can be applied to any job that needs to be done on a construction project. For instance, in construction project management, a workflow will help in deciding the process for completing the foundation work or even how to conduct planning and scheduling. Workflows can be used during the bidding and RFI stage to the closeout stage, and even covers equipment maintenance.
Identifying Goals and Giving Due Recognition
To encourage crew members and site managers to meet and exceed expectations, project managers can set up an incentive system based on performance. Additionally, acknowledging their work and presenting it as an example for the others will motivate the workforce and boost morale. However, it is important to note that realistic goals must be set, even for fast track projects. The way to do is to leverage the data collected from previous jobs and accurately set baselines; this will ensure that crew members can finish the project at a set deadline. They will not be able to meet deadlines when unrealistic goals are set, resulting in more stress and consequently, mistakes which will decrease productivity.
Prioritise Safety
Prioritising worker-safety leads to less work-related injuries and will keep construction productivity at the highest level. For example, Expo 2020 Dubai site had anticipated approximately 40,000 construction workers during peak construction, handling more than 100 projects. Despite challenges caused by Covid-19, construction has continued at the Expo site; however, the organisers have prioritised the health, safety and well-being of its staff and workers. These include measures such as mandatory increase in frequency of cleaning and sanitation at all its facilities, special representative assigned to handle suspected Covid-19 cases, 24/7 on-call nurses and doctors, fully operational helipad as well as on-site ambulances, etc.
Supply chain and Organised Work-sites
Material delivery is an area that causes a substantial impact on the construction timeline. Contractors must be proactive in providing a comprehensive roadmap to the logistics team, as well as letting them know their work and setup areas. Effective communication from main contractors to vendor suppliers will also ensure that there are no issues with delivery schedules and that if there are delays expected it is addressed as a team. Moreover, planners must ensure that the right type and amount of materials are available in inventory for all upcoming tasks to avoid daily delays.