Many construction companies are stuck in an endless pattern of responding to emergencies and scrambling to keep projects profitable. It’s time to end the cycle.
If you want to escape the repetition of facing an unexpected project event, enacting a construction resource management plan in response and hoping you can keep a project profitable, you aren’t alone. The rise of digital technologies in business has left many companies realizing they can use data to shift from reactive operational models. The construction industry may be behind some other sectors, but it isn’t too late to adapt.
Shifting from a responsive project resource management practice into proactive resource planning can empower firms to maximize their assets and get more value from projects. To start, you need to cement the distinction between the two into your mind:
Resource management vs. resource planning
We could go through a bunch of analogies and metaphors to tell you why management is different than planning, but let’s keep it simple. Here’s a hypothetical scenario similar to what builders face all the time, and how the situation varies in each setup.
Here’s the scenario: You have a team working on a multi-unit dwelling project that begins with the demolition of an old building. From there, the plan is to analyze the site post-demolition, create the foundation for the new structure and construct the property. Demolition goes smoothly. With the previous home out of the way, you are able to do a deeper site survey and find that the foundation will need stronger reinforcement than you initially anticipated. You find out you can tweak the plans to use a reinforced material in strategic locations to make the change with minimal disruption, but you have a limited supply of that material on hand.
How to respond with resource management:
In a traditional operational model, a construction firm would respond to this problem by analyzing what’s available relative to what is needed. There may be assets available at another site, after all. Your site manager notifies the project lead, who then contacts other sites to see if they have an excess supply available to borrow from.
From there, you’re looking at multiple projects from the top-down, trying to identify which timelines can be tweaked and which supplies can be repurposed to solve this problem. You now have to scramble to project-adjusted timelines, see how long it will take vendors to ship replacement inventory, recalculate project costs and adjust revenue expectations. All of this is further complicated if you don’t have the budget space to deal with the cost overage.
Sure, you could just order new supply and put your multi-unit residential development on hold, but if you do that while you have available supply unused at another site, you’re wasting time. A good resource management strategy can optimize what’s available at a given time, but it comes with a great deal of overhead and relies heavily on coordination across teams. The potential pitfalls are plentiful.
How to get ahead with resource forecasting:
In this same scenario, an organization engaging in forecasting will have analyzed past projects and anticipated potential supply or financial shortfalls in advance. Your team may know that a project involving demolition and rebuild can introduce complications, but until you dig into historic data trends, you can’t really project the precise cost and material bills that can come with those complications. Furthermore, the business will have visibility into company-wide resource availability at the project’s outset.
An organization that is proactive about resource forecasting won’t necessarily anticipate every contingency, but they will have created flexibility in the budget, project schedule, and materials strategy to accommodate for reasonable unexpected issues. In this scenario, this could play out in having extra reinforced beams in place from the start, knowing that unused materials can be passed on to a future project anyway, for example. If the capital isn’t immediately available, creative scheduling and project management could help to sidestep the issue.
Embracing a proactive approach
Resource planning is often overly complicated for construction firms because organizations can’t easily see what they have available at a given time and report on historic data trends. Modern enterprise resource planning solutions are changing this by combining user-friendly visualizations with intuitive dashboards so site, project, and business leaders can easily get the information they need to make decisions based on the entire organization’s resource plan.
When these organizational resource planning tools are combined with collaborative project management systems that extend to the field, all stakeholders are left with the ability to generate and access the information they need to get ahead of resource challenges. Shifting from managing emergencies to getting ahead of problems before they arise.