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Construction
A complete analysis of the main problems, challenges and trends that this industry will face.
which we mean by construction industry?
The industry today
With the help of the pandemic, the construction industry has suffered a heavy shock that brought consequences in all companies that integrate the sector. As in most areas, changes are constant and the ability to adapt becomes a virtue that will make a difference.
Within the industrial sector that composes the construction, we find companies that specialize in different areas, such as developers, builders, civil engineering studies or architecture studies, to name a few. Most of the organizations that make up this category, face problems and challenges that once overcome, favor growth.
While we know that each company is a world and that the problems are different for each one, from our experience, we were able to recognize common turning points that are shared in most.
In each new construction project there are two issues that need to be closely related and coordinated so that initial planning is not affected: the procurement process and the construction manager.
Main problems of the construction industry
Below we will mention some of the problems that we were able to identify, in different companies of the construction industry, and to which we recommend paying attention so as not to have to face worse consequences.
Poor project management in construction results from not having a defined and specific work methodology that guides the actions to be developed. The lack of coordination between all the areas that make up the project causes a slowdown in the deadlines stipulated since the planning, which implies a certain gap between all actions that must work in an orderly manner and this brings negative consequences on profitability, directly.
Problems in coordinating the different activities and areas of a construction industry company, especially between purchases and the construction manager of a project, will lead to waste of resources and time of execution of the work. The lack of planning in the purchasing sector directly affects the processes that involve the development of the work itself, as it will trigger shortages for materials or even extra expenses for last-minute purchases, which could have been avoided by buying in large quantities.
When project times are not met, either due to coordination errors or problems in the initial planning of the project, cash flow gap arises.
Problems of income and outflow of economic assets is a serious inconvenience, since without the payment of investors, who are counted for the development of the project, money is not obtained to pay suppliers who must guarantee the material to build.
The lack of organization in the cash flow processes results in the project stages not being met according to previously stipulated deadlines and, as most companies charge investors once progress is certified, such income cannot be earned, which again leads to arrears. It can trigger a chain of payments delays and deliveries of project advances and become a major debt if the company goes out to look for capital injections that were not planned, in order to move forward.
As a result of the project’s failure to move forward, other problems are triggered: the waste of resources; unproductive labour; profitability problems by delaying a project longer than was stipulated; and also the dissatisfaction of customers, by not having the project in the agreed time.
Problems due to the lack of coordination between management and who builds the work, the project manager, are the ones we find the most in this industry.
If the construction manager does not have the necessary materials to build, there are many extra costs that were not foreseen: last minute purchases must be made, which are always more expensive; must be coordinated again to the crew on the site so that they go when materials are available, for example. Another problem that can happen if these areas are not coordinated is that time-sensitive materials are on site when they are not needed. This generates waste of them because they can be lost, broken or spoiled. In addition, there is an extra responsibility for the construction manager who does not really have to assume, to check that these materials do not suffer problems.
Lack of coordination can lead to storage problems, lack of storage space, logistics and delivery problems, missing or surplus stock problems (that if you talk about time-sensitive materials, it will be even more serious because it will generate extra expenses, having to buy them more than once). All these problems are again related to a breach of the stipulated deadlines and affect the profitability of the project.
That the process that involves the purchase of materials according to the initial computation of them, is not followed, also brings problems of supply in the works. What again triggers low productivity, affects profitability, waste of resources and non-compliance with deadlines.
Related to the problem of coordination between areas we must mention the problems that arise due to the lack of communication between them. Lack of coordination is often directly related to not maintaining smooth communication.
When the interdepartmental communication process is not correctly defined, no collaborative work identity is generated between the areas. On the other hand, the information silos that are generated cause the loss of valuable information that will affect the other processes and the development of the project. For example, if the construction manager had to coordinate with management a certain amount of materials for a specific day, and the tool to do so is not used correctly, or does not work, that information does not reach its destination, so administration does not learn the needs of the work and more problems are generated again. That’s one example among many, but poor communication affects all areas of the company.
Interdepartmental work: marketing and sales
The acceleration of digitization that began a few years ago and exacerbated the pandemic, brought many tools that facilitate the arrival of customers but, not being taken advantage of, opportunities for conversion are lost.
Not overcoming the challenge of incorporating digitization into the traditional sales process leads to loss of potential customers. It is recognized in the traditional way as the most efficient but it is not taken into account that it takes much more time and resources and that, moreover, today the public is managed with new channels of communication in which if it is not present opportunities can be lost.
The failure to adapt to the new communication channels provided by marketing tools and related to digitization greatly reduces the number of potential customers who know the company, the projects and eventually the purchase is made.
On the other hand, in relation to the coordination of areas and interdepartmental communication, if marketing and sales are not related, useless efforts are made to get customers. Marketing develops strategies that the sales department does not use; sales receives leads that are not significant and ultimately, resources are invested in actions to attract customers that are not profitable.
Our analysis
Any new work to be developed implies having predictability and coordination between the available economic capital, the specialized workforce for its execution and the materials necessary to carry it out. In the first instance, before defining the design of the project, it is important that the corresponding feasibility studies are carried out, to avoid starting with the design of the project before its approval. Once the approvals are in order, it is possible to start designing the project with complete confidence that it will be possible to do so. Usually companies to develop a project must also take into account the necessary capital investors and the deadlines in which those investors must be present. It is important in this step, to know the types of clients that will finance the project and from that, determine to whom the project will be offered at each moment of its development. From Drew we identified three types of clients that are usually present in the development process: capital investors, investors for rent and clients looking to acquire their own home. Depending on the stages of the project and each client, it is that it can be offered as it advances.
On the other hand, it is important to carry out the computation of materials at the beginning of the project, also called purchase offer, that allows.
How do we help since Drew?
The main mission of our company is to provide the necessary tools to help solve the organizational needs that our clients present. In most construction companies, solutions focus on redefining organizational processes, in combination with project management and intertwine with the use of technology. To a lesser extent we find companies that need to solve only one of these edges, separately: the structure of their processes or the correct implementation of technology.
In addition to these problems, construction companies can face challenges related to the economic context of the country where they are developed, or related to all external companies with which they must coordinate efforts to complete a project, so we recognize the great effort involved in managing them.
When a construction company comes to Drew with a certain need, from our company we propose to generate primary instances of approach to it, through meetings that allow us to know the organization and its ways of working. From these meetings, we generate a diagnosis with the main problems or needs that we identify and after that, once we validate all the information collected with the company, we present a project of work together, with objectives and goals that will allow us to recognize the improvement process.
After validating the improvement process, we move on to its implementation through actions to restructure, or formalize, processes that are deficient, combined with actions to make the most of the digital tool that the company uses or chooses to start using (if the implementation of a new software is decided). It is important to stress that the use of a technological tool according to the needs of the organization is essential for management to work properly. From Drew, we recognize the challenge of being a company that must adapt to technology and this is why we become strategic allies of our customers, offering them the most comprehensive tools so that this challenge can be overcome and become a competitive advantage that drives growth.
From Drew we know that both forms of management are combinable, performing a correct matrix, which intersects the processes that go through each project that must be carried out. In this way you can visualize the tasks to be performed by each collaborator, you can see the specific development times and coordinate the structural processes of the works with each particular project that the company is carrying out, which is beneficial for companies managing two or more projects at once.
If necessary, we provide training so that the implementation of the changes can take place in the best way and that the resistance to change is the least impactful possible.
At Drew we do not sell packaged solutions but we adapt to each customer, being the connection between the world of business and technology, since we are certain that no company is equal to another.
Work methodology
Specially designed to add value.
Every company is unique and your company is no exception. In our first meetings we must discover what factors affect the competitiveness of your company, its business model, the way its employees work, as well as the situations that could be threatening the business continuity. At this stage we seek to understand if there is an opportunity to provide genuine value to your company, understanding it as the fundamental factor to build a long-term relationship.
It is time to determine the scope of our work together. At this stage we delve into the distance that currently separates your company from where it wants to go. What is preventing it?. We understand that the more information we get, the more real and comprehensive our report will be.
This is why we will ask all the necessary questions, and even question those answers, the aim is to bring value to your company.
In the final stage we collect all the information obtained so far to determine how do we get your company to where it wants to be? We developed a project on all the actions that are necessary to achieve this objective, from the improvement of processes to the implementation of technological tools that improve management.
We seek to bring genuine value to businesses to improve the way people work by returning to your scalable enterprise.
It’s time to start the project. Our operations team will take control at this stage, so that through weekly meetings we can achieve the change you need in your company. Together we will work to take your business to the next level.
Schedule a meeting with our team
It has no cost. We want to help you andtu empresa.
Elyon case
This is the success story of Grupo Elyon, a developer builder who worked with Drew to optimize their business process.
Fabian Itquin, responsible for marketing, tells us how was the transition process in which Elyon Group was and how the help provided by Drew allows them to advance an important step in their growth without neglecting business customers.
Know all our success stories
Process-based organizational structure: Fermag
Improved customer service process | Laboratorios Turner
Implementing a digital tool: Kensal Arquitectura & Ingeniería
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