Matt Bloor is the commercial director of construction contracting company YardLink
In 2015, a global McKinsey The study revealed that almost all construction megaprojects would typically go over budget by at least 30 percent. Now, with inflation added 23 billion pounds to annual UK construction production costs, and all sectors suffering the pinch, over budgeting must become a thing of the past.
“Contractors are beginning to understand the consequences of failed collections and plan better to avoid them”
Rising inflation means profit margins will continue to squeeze through 2023. As such, contractors are under more pressure than ever to streamline operations and deliver crucial savings. While maintaining good results.
Sounds complicated, right? When it comes to reevaluating processes to achieve cost and time efficiencies, there is no better place to start than the supply chain. Plagued by recurring delays, as well as ineffective project planning and management, the supply chain presents a wealth of opportunities for contractors to streamline operations.
Some contractors are ahead of the curve and find new ways to turn adversity into opportunity. However, for our industry to thrive, more must do the same.
Maximize the use of equipment
Rising prices have meant that many contractors have had to use equipment more efficiently. And this is a trend we’ve seen firsthand: the average hire length is down from 56 days in 2021 to 35.5 days in 2022.
These findings show that prime contractors are gaining more visibility across projects, renting equipment for the exact time they need it for, and returning products that have been sitting on site, unused, much more quickly.
The key to optimizing equipment rental is project management. Using teams to advance various parts of a project, then bring it back soon after, requires extensive planning. Some contractors are starting to build smaller project milestones to track weekly or even daily to ensure equipment usage is maximized and costs are minimized.
Reduction of failed collections
Poor communication is usually the reason for failed collections. A contractor may not have given the supplier the correct contact details, hours or address. Or, more common on large sites with multiple entrances, communication of the specific pickup location is lost in translation. Whatever the reason, failed collections are always costly as suppliers have made a wasted trip, which means an aborted charge.
However, our data shows that the number of failed collections fell by a third between October 2022 and January this year. This highlights how contractors are beginning to understand the consequences of failed collections and better plan to avoid them. New smart technology like What3words is even starting to become the norm for some, to ensure the accuracy of collection location.
For those still suffering from failed collections, communication with suppliers comes down to clarity. Being very clear about deadlines, location and contact details will pay dividends in the long run.
Adopt technology
Technology can help increase team visibility on site by keeping a digital record of everything. It’s easy to forget about it this air compressor in the corner or order another scissor lift because the size/model you need is not easily found on site, if equipment is tracked with pen and paper or a spreadsheet full of data
In addition, telematics can reduce downtime for battery- or fuel-powered equipment by letting contractors know when the equipment has been turned on. By regularly reviewing dashboards, contractors can review which machines are being used and which are not. If a team hasn’t turned on for a week, it’s time to investigate whether it’s worth paying to hire it during the current phases of the project.
All of these factors address issues that construction, as an industry, has faced for a long time. Consider this message: A more efficient supply chain is a more robust one.
