As a construction project manager, your primary goal is to run the project smoothly from start to finish – all while minimizing possible site problems, risks, and delays. However, if you have been in the construction industry for a while now, with years of experience up in your sleeve, you must know that no two projects are the same. In every project, tons of factors may determine how it progresses and how it affects the outcome – from design, technical, economic, management constraints to social, legal, and time constraints. There is no way to determine and predict how the project will go accurately. This scenario is why most construction project managers aim to create an optimized, efficient, and cost-effective operational process management based on learnings from previous projects.
Thus, when we talk about construction inefficiencies, the blame should not be solely the contractor’s responsibility. The owner, supplier, or third parties could also be held accountable for these process wastes. Understanding the construction’s inefficiencies and devising ways to boost its operational efficiency is one way to make sure that a project is delivered most efficiently in terms of scope, budget, and time – while making sure that it maintains its standard quality.
In this article, let’s dive in on what a project’s operational efficiency is, why it is essential in the construction business, and how to boost your efficiency to ensure the successful outcome of your project.
What is a Project’s Operational Efficiency?
Operational efficiency is the ratio of the expected profit versus the cost of operations. In construction, it is defined by how a company can deliver a project in the most cost-effective way possible while still maintaining a high standard for quality. One way to accomplish this is by reducing and minimizing all possible causes of operational wastes. Examples of such wastes are material defects, workforce unproductivity, and complicated workflows – to name a few.
However, the aim to boost a project’s operational efficiency in construction is more than just creating and implementing a strict and effective cost management scheme. Instead, it would be best if you delved into how your current operating processes are progressing by reviewing your workflows and analyzing your project system. The project manager must review and check the source of these inefficiencies and devise plans and strategies to eliminate these.
Why Should You Prioritize Your Project’s Operational Efficiency?
So why is operational efficiency important when running a business? Boosting your project’s operational efficiency is a great way to help your construction business be more sustainable in the long run. You may think that your operations are already at their peak and already running smoothly, but they may still reach greater heights by utilizing their possible potential.
In today’s world, a portion of the construction projects worldwide often falls short of their expectations, either due to scope, time, or budget constraints. These result in the contractor’s time, money, and effort being wasted and can significantly affect the client, suppliers, subcontractors, and other stakeholders invested in the project.
What Factors Are Causing Operational Inefficiencies?
Now that we have defined operational efficiency and why it is crucial when managing construction projects, we’ll tackle the potential factors causing the inefficiencies. Keep in mind that many factors may affect your efficiency, but we have listed down the eight most common causes in construction in this section.
1. Poor Construction Project Management
Poor construction project management results in severe consequences in the worst-case scenario imaginable. It can result to project cost overruns, multiple planning and scheduling delays, site unproductivity, and the company’s bad reputation. These can also result in failing to meet clients’ expectations and, in turn, a lack of clients for construction projects. In short, the worst-case scenario for this is the business’s failure.
2. Site Conditions and Site Access
Site conditions refer to the physical condition of the project site and the environment, including the workstation layouts, weather and equipment, and inventory storage. These can significantly affect a project’s efficiency as these can result in interruptions during site works. For example, delays may occur if the site is prone to inclement weather, especially if the project is at the point where the scope is primarily for outdoor activities.
On the other hand, site access refers to the entrance and exit points of the project site, as well as the drop-off points, parking areas, and access to public and private transportation. Often, if a site is difficult to access, the team might find it challenging to ingress and egress any materials or equipment needed.
3. Complicated Workflow Processes
If the workflow process and activity sequences are not planned thoroughly, it may result in idle time for material, equipment, and labor. Some activities can not proceed if the primary tasks are not yet completed – resulting in worker unproductivity, wasted equipment rental fees, and possible material wastage.
4. Inadequate Task Management System
Assigning tasks to your construction crew is probably one of the most challenging responsibilities of a construction manager. The right amount of workforce is allocated per activity to ensure its completion within the set timeline. The task must also be assigned to workers with the right set of skills and capabilities and prevent them from being overloaded with the work.
5. Labor Shortage and Unproductivity
With the increasing shortage of labor workforce in the United States, most companies have no choice but to hire unsuited candidates for the jobs, often resulting in activity delays and low-quality workmanship, which affects the entire project timeline.
6. Lack of Organized Document Control System
Improper documentation management leads to miscommunication between the project team members and mismanagement of the project itself. There might be essential specifications or change orders overlooked due to missing documents, resulting in substandard quality or a redo of a specific task. Stakeholders need to be up-to-date when it comes to the project status to make decisions and act accordingly. Lack of documents may result in everyone being confused and knowing different things.
7. Low-Quality Workmanship
Low-quality workmanship results in multiple construction defects, a hassle, especially if you have to revise the works. These results in substandard quality and fail to exceed the client’s expectations. Sometimes, the contractor’s payment is held unless the concerns are rectified, so these often entail additional operational costs.
8. Material Defects and Equipment Breakdown
Material defects and equipment breakdown is costly in terms of time and cost. It takes time to replace materials, especially if the required specifications are unavailable and subject to lead times. Equipment is also costly in terms of rental fees and will result in work stoppage if a particular task cannot proceed without it.
How To Effectively Boost Your Project’s Operational Efficiency?
Increased operational efficiency aims to create a system process that is optimized and sustainable in the long run by getting rid of wastage and other complications. This section has listed down five ways to boost your operational efficiency and ensure your project’s smooth-sailing progress.
1. Centralize Your Project Data
Construction projects contain a massive amount of data, and these data are stored into multiple file types, formats and may even vary per person handling the task. Centralizing all relevant and essential information about your project accessible to everyone is a great way to increase efficiency and make timely and well-informed decisions.
2. Communicate More
You have probably heard this tip about a million times now, but we cannot stress enough how important communication is in managing construction projects. Constant communication enables each team member to have a clear idea of their responsibilities, and regular check-ins with the construction crew can provide valuable insights on the project progress.
3. Improve Workflow Process Management
Workflow processes include both on-site construction activities and the office and administrative part of every business operation. Reducing the redundant steps and realigning the flows for these processes to improve the workflow can significantly increase the efficiency of the procedures.
4. Adopt A Construction Scheduling, Cloud-Based Software
In today’s digital innovations, construction scheduling software was created with the aim of increasing operational efficiency in construction. With the use of this software, the repetitive and time-consuming task is reduced, miscommunications are prevented, and documents and data storage are adequately controlled.
5. Take Your Time in Refining Your Business Processes
Increasing your efficiency is not something that can happen overnight. It takes a lot of time, effort, and experience to create an optimized and customizable process based on your company’s capabilities and team’s standards and skills. There is always room for improvement through each new learning for every new project that you take on.
The goal of boosting your project’s operational efficiency in construction is to maximize profit and minimize costs without compromising the client’s required quality and satisfaction. Project managers should go beyond strict cost management and instead focus on creating an optimized standard process to reduce unnecessary and redundant steps and eliminate wastage. How the company operates can be reflected in the expectation and satisfaction of the clients. By ensuring that the methods are as seamless as possible, we can guarantee the business’s sustainability and overall fulfillment, and success in the long run.