Did you know that over 98% of mega-construction projects are affected by cost overruns? Yes, of these projects, 40% are never completed on time. For this reason, construction managers need to understand how to optimize resources such as material and labor.
Construction optimization is optimizing resources such as materials, labor, and equipment to ensure that a construction project is completed on time and within budget. Optimization mainly revolves around three main components. The first is cost, the second is the schedule, and the last is quality.
Cost optimization is done to reduce construction costs and increase profitability. The schedule is optimized for efficiency and accuracy. An inaccurate schedule will be subjected to numerous change orders, which are usually costly. Also, inaccurate schedules might cause erroneous costs, which can stall the project. Task scheduling is one of the easiest ways to stay ahead of the game in business.
How to optimize construction resources
Project managers need to use technology to optimize construction resources such as labor.
Platforms such as ALICE are suitable for resource management in construction because they use artificial intelligence to optimize labor and equipment. It uses algorithms to develop strategies to minimize idle time and increase construction efficiency.
One way to optimize labor is to ensure they are employed on time. Numerous projects have been delayed because construction companies could not identify qualified labor on time. Managers can also optimize labor by reducing overtime and providing commute allowance.
In addition, project managers need to provide proper equipment and communication technology to streamline operations.
The best way to optimize resources such as equipment is to use technology. Tracking technology will notify you if equipment such as trucks is being misused. Project managers should create a maintenance schedule to ensure it does not fail in the field.
Lastly, materials can be optimized by using technology. Modern technology can accurately estimate how much material, such as cement, is required for a specific task.
How to optimize construction costs
The main goal is to have a profitable construction project. One primary way to do this is to improve on the design blueprints. According to an extensive literature review, design changes can increase construction costs by up to 40%.
Therefore, the architect must work with other stakeholders to develop a cost-saving design. To eliminate the need for design changes, the project manager must use modern technology to improve communication between stakeholders.
Another strategy that managers can use to reduce construction costs is reducing complexity and the scope of work. Scope of work is a list of construction activities that contractors and subcontractors are expected to complete for the project to be successful. The more the scope of work, the more the construction costs.
The scope of work is best reduced during the design stage. For example, the contractor can install two big elevators instead of four small ones to reduce costs.
Another way that contractors can reduce construction costs is by using technology. Project managers can use technology to streamline communication which reduces errors. In addition, project managers can use construction software to ensure the project is on schedule and labor is utilized efficiently.
Importance of optimization in construction
One advantage of optimization is that the construction project is completed within budget. This is beneficial to both the contractor and the project owner. When projects are completed on time, the contractor gets a positive rating, increasing their reputation in the industry.
In addition, when a project is completed within budget, the contractor protects the company from legal lawsuits. Other advantages of construction optimization are:
It reduces construction delays
Optimization in construction helps reduce construction delays. Several factors, such as labor shortages and poor communication with suppliers, can cause construction delays. Optimization helps construction companies to plan their workforce and ensure labor is available on time.
There are many ways optimization can be done. One of them is for the construction company to work with labor outsourcing companies to ensure labor is available on time. Similarly, project managers need to use technology to streamline the ordering process. This way, the material will always be available on time.
Managers can further optimize labor by using artificial intelligence to track and identify lazy employees. Artificial intelligence can optimize the workload to prevent over or under-exploitation of workers. Contractors can also use data-tracking technology to track productivity.
Optimization increases efficiency
Efficient construction projects eliminate delays and reduce construction costs. In addition, efficiency helps streamline operations, reducing the risk of costly reworks. One way to increase efficiency is to digitize the entire construction process.
Contractors should use technology to share documents and files throughout the construction stage. In addition, technology should be used to pass instructions from contractors to subcontractors. A good platform should be able to track the progress rate so subcontractors can know whether they are behind schedule or not.
It reduces equipment cost
Another resource that affects the cost of construction is equipment. Project managers must efficiently allocate equipment such as cranes, machinery, and trucks to reduce costs. Also, equipment needs to be monitored to avoid misuse by subcontractors.
Before a construction project starts, contractors need to do a cost-benefit analysis to know whether buying the equipment is more economical than renting it. If a piece of equipment will be used for a short time, it makes sense to rent than to buy it.
Optimization reduces risk
It is impossible to reduce risks in a construction project. The bigger the project, the riskier it is. This is because there are thousands of moving parts that need to work together at the same time. One way to reduce these risks is to optimize the construction project.
Some risks that managers can eliminate by optimizing the construction process include design errors, over-budgeting, legal risks, and unrealistic work schedules.
In conclusion, every project manager needs to optimize their construction process to benefit from reduced costs and efficiency. Optimization ensures that construction projects are completed on time by optimizing the work schedule.
Construction projects involve thousands of moving parts. Therefore, project managers must adopt optimization technology to ensure that all construction elements are included.