Increasing the Operational Efficiency in Construction Business

Increasing the Operational Efficiency in Construction Business

Operational efficiency—to generate maximum profit by incurring minimum cost seems a real business conundrum for construction companies.

Consider any operational input. People may be in this case. Whether you hire, train, or retain, there is a huge cost associated with each aspect of this operational input. But not hiring talented professionals, not providing them enough training, and not rewarding their performance is equally expensive—not just expensive but could pose an existential threat to your construction business in the long run.

Besides, many times construction companies engage in mindless cost-cutting programs to reduce the burden on operations. Data from PwC also suggest that less than 30% of cost-cutting programs achieve their goals and less than a fifth of these are able to achieve sustainable efficiency for a period of 3 years. In the face of this reality, what would be an ideal strategy to increase operational efficiency for construction companies.

Here are the top 5 ways construction companies can enhance their project management capabilities to enhance operational efficiency.

Increase Transparency to Effectively Manage Regulations

Managing regulations in the construction industry is extremely difficult as if the industry has been stuck in a time-warp. They are old from inside but wrapped in the layers of reforms. The approvals are slow and there is a lot of informality in the way things are managed. The regulations limit the capabilities of teams, operations, and overall business, but obviously, they must be followed. In such a scenario, how can construction companies focus on increasing operational efficiency?

One way to counter the problems related to compliance and regulations is to increase transparency. The industry needs to use digital tools in the processes to let the teams quickly act on the regulations. With transparency, they could see where they need a new approach to complete a task and in what process, they might go with the old habits to keep the systems up and running.

Read Also: “What are the major benefits of hiring an accounting consultant in Dubai city?

Meet Schedule and Cost Targets

The correct estimation includes both planning and management and forecasting capabilities. What ruins an estimation process is higher expectations, uncertainties, and lack of attention to external and internal factors.

If you see things as it is, you might not be able to forecast accurately, which could lead you to fall behind schedule and cost targets. You should never fix a schedule and cost targets by using the optimal performance of your resources. For example, if you have 5 field workers for 20 jobs and you have not considered any timeout for any employee then it might affect your planning. This overall affects operational efficiency.

Using construction management software that lets you consider multiple scenarios to plan and determine schedule and target is an excellent way to ensure balance in operations. This way you could assign resources to a task properly, without having to worry about falling behind schedule.

Develop Robust Contractual Framework 

Lease, rent, and contract are the reality of a construction business. In order to manage your operations efficiently, you need to have a strong contractual framework in place. This framework must be accessible by your teams 24X7. Most construction companies that have paper-based operations lack a tightly knitted framework with real-time accessibility of data to the teams.

Managing a robust contractual framework not only helps you to view and track your relationships with vendors and extended workforces like contractual laborers and others but gives insight into business requirements. When the framework is accessible to the key members of the team, it could bring together everyone on a common platform to plan and manage operational activities more effectively.

Tracking and Monitoring

Delay in construction projects is a common occurrence. There are so many internal and external dependencies in a construction project that delay becomes an unavoidable phenomenon of a construction project. However, some delays are surprising to project managers, which hurt the business most; because they were not prepared to handle the consequences of the delay.

Project managers need to enhance their functional capabilities to track and monitor every activity and its consequences to avoid any surprises that might need taking support from a digital tool like field service management software. Whether you are managing your project on a spreadsheet or a digital tool, make sure that the system is designed to give you quick insight into routine activities.

Collaboration and Communication between Stakeholders

A construction project has many stakeholders, each critical to the success of the project. The struggle to include every stakeholder in the communication process and at the same time; prevent information leakage or ensure that only the right person has the right information is difficult to overcome. This in the long run hurts the operational efficiency as the flow of information gets disrupted with the lack of proper communication channels.

Most project managers face confusion with who to keep in the loop and whom to avoid. Usually, a construction software solution comes with role-based permissions to manage effective communication between teams. The solution removes the barriers from the communication channels and ensures timely and instant communication among the team members.

The Final Words

It is certainly not easy to manage a construction project, considering the innumerable dependencies, which could disrupt the operations. The best way to combat the disruption is to gain capabilities to avoid any surprises and ensure continuity and consistency.


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