by John Biggs
Construction companies often operate on thin margins in the first place, so any cost overruns over the course of a project are acutely felt. These overruns can be due to a number of factors, including inefficient operation, equipment failure, last-minute changes and rework. But technology seems to have an answer for many of the challenges plaguing the industry.
Impact of Rework
According to The Construction Industry Institute, rework can account for between 2% to 20% of a project’s contract amount. Most of it is caused by errors or miscalculations during the planning phase, or mistakes not noticed until construction is already underway, forcing companies to devote precious time and resources to undoing and fixing work already completed.
Stored in the cloud and accessible to every project stakeholder, all critical documents are kept in one secure place, and all changes are documented and available for viewing at all times.
Data Catalyzes Freedom
One way companies are addressing this is with a unified data environment. Stored in the cloud and accessible to every project stakeholder, all critical documents are kept in one secure place, and all changes are documented and available for viewing at all times. Freed from the burden of a paper-based planning process, managers and workers alike can always have the current information in front of them and be sure their work will be as free from errors as possible, with the plans having been repeatedly vetted and approved by supervisors and managers from the unified data system.
Sudden failure of construction equipment can result in a mad scramble on the ground to replace or repair the defective machinery, effectively grinding progress to a halt. Advanced sensor technology, like telematics, can continually monitor equipment for signs of fatigue or failure and automatically send data back to managers. This gives companies the opportunity to know in advance if a piece of equipment is headed for the repair shop, and allows them to make the switch or repair before the project starts. GPS enabled sensors can track the exact location of a piece of equipment, reducing the possibility of theft and increasing the chances of finding equipment that gets stolen from a job site, which is another major contributor to dinging a company’s bottom line.
Replacing What’s Necessary
Digitally keeping better track of job-related costs like labor, equipment utilization and daily production data is a great way companies can improve efficiency and cut down on costs. By replacing paper-based timesheets, materials tracking and equipment utilization with a mobile solution, of which there are dozens to choose from, supervisors can spend less time crunching numbers and easily pass relevant information into a company’s enterprise system digitally, where payroll staff or managers can change or approve it. According to For Construction Pros, digitizing this process can eliminate excess payroll costs of up to $1,200 per worker, per year.
“At $35 per hour (fully burdened), saving 10 minutes per day per person adds up fast,” Lloyd Kuehn, CFO for Scott Contracting, told For Construction Pros.
As for productivity tracking, Kuehn said, “It’s a great advantage for us to be able to track production as it occurs. This way, we know early in the project if we will meet our production and profit objectives.”
Productivity is Possible
The pinch of unforeseen problems eating into slender profit margins isn’t just felt stateside. According to Construction Leadership Council Co-Chair Andrew Wolstenholme in an interview with Construction News, the slow adoption of productivity enhancing technology industry-wide costs the UK approximately $21 billion annually.
Through adopting digital technologies and new construction techniques, significant improvements in productivity are possible, which will increase profit margins.
“The key to increasing margins within the sector is to improve productivity and to eliminate waste. Through adopting digital technologies and new construction techniques, significant improvements in productivity are possible, which will increase profit margins,” Wolstenholme told Construction News.
Implementing technology into a construction operation doesn’t have to be a cost-prohibitive undertaking. By embracing digital and mobile technology, real cost savings can be realized almost instantly, boosting firms’ bottom lines and freeing up time for the next project. The projected cost savings in rooting out inefficiencies over time can be massive, and an intelligently planned technology implementation will likely pay for itself after just a few jobs.
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John Biggs
John Biggs is an entrepreneur, consultant and writer. Biggs spent 15 years as an editor for Gizmodo, CrunchGear, and TechCrunch. His work has appeared in Men’s Health, Wired, and the New York Times.
