Construction industry

The industry at present

Thanks to the pandemic, the construction industry has suffered a great impact that resulted in severe consequences for all the companies that are part of this industry. As in most sectors, changes are constant, and developing adaptation abilities is key to making a difference.

Within the industrial sector, we find companies that specialize in different areas such as developers, construction companies, civil engineering, or architecture offices, just to name a few. Most organizations in this sector go through difficulties and challenges that favor their growth once overcome.

Even though we know every company is different and their problems are unique, thanks to our experience, we were able to spot common problems for all.

In every new construction project, two things need to be closely related and organized so initial planning is not affected: the purchase process and the site manager.

We were able to detect many problems arising from the lack of coordination between management and the project manager.

If site managers don't have the necessary materials to carry out the project, unplanned expenses will be made: they will have to make last-minute purchases which are always more expensive, and workers will have to come back when all the materials are available, for example. Another problem that may arise is having time-sensitive materials on the site when they are not needed; this will generate a lot of waste because they can be lost, broken, or ruined. Moreover, site managers will be in charge of keeping those materials intact (something that's not part of their job).

Lack of coordination can bring about storage problems because the company can't store materials, and has logistics and delivery problems, stock shortages, or surplus (if we talk about time-sensitive materials, the problem is even more serious because it involves extra expenses since you have to buy them more than once). All these problems are once again related to missing deadlines and they affect the profitability of the project.

Not following the process of buying materials according to what was established at the beginning also results in supplying problems in construction projects. This causes low productivity, affects profitability, resource waste, and missed deadlines.

The acceleration of digitization that began some years ago and became more important thanks to the pandemic, brought about many tools that facilitate the attraction of customers; many times, these tools are used to their fullest and companies lose their conversion opportunities.

Not rising to the challenge of digitizing the traditional sales process causes the loss of potential customers. It is believed that the traditional process is the most efficient one but people do not realize that it uses more time and resources; moreover, today, people use new communication channels and if the company does not use them, opportunities are lost.

Not adapting to the new communication channels that marketing tools provide and are related to digitization causes a reduction in the number of possible customers that are familiar with the company as well as the number of projects and purchases made.

On the other hand, regarding the coordination of areas and interdepartmental communication, if the marketing area and the sales area do not communicate, all efforts to attract customers are useless. Marketing develops strategies that the sales area does not use; the sales area receives unimportant leads and uses resources in actions to attract worthless customers.

Our analysis

Thanks to our experience working with several companies in this sector, at Drew, we were able to detect that the previously mentioned problems derive from poor project management together with a lack of process management in this industry. The companies belonging to the construction industry work with great organizations to avoid coordination problems since they have several areas located in different places and they must work together because they all depend on each other to move forward with the projects.

Every new construction project involves predictability and coordination between the available capital, specialized workers, and the necessary materials to carry it out. First, before defining the design of the project, it's important to carry out the necessary feasibility studies to avoid starting with the design of the project before it's approved. Once it has been approved, it's possible to start to design the project with the certainty that it will be carried out. In general, companies must also take into account the necessary capital investors and the dates on which they should be present to carry out the project. It's important in this step to know the type of customer that will support the project and, from there, establish who the project will be offered to at every stage of its development. From Drew, we identify three types of customers that are generally present during the development process: capital investors, investors for rent, and customers that want to buy a place to live. The project can be offered to a customer taking into account the stage the project is in and the type of customer.

On the other hand, it's important to know how many materials you'll need at the beginning of the project (also known as a purchase offer) which allows you to know the final budget of the project. This information must be coordinated with the delivery dates of the work progress given to investors; this will allow you to calculate when you'll need to receive capital for paying the suppliers that provide the materials to move forward with the project. The ideal process of purchase and use of material, including their calculation, is what we explain in the following image:

To carry out processes orderly, there is a very useful and very important tool: communication. Having a tool to organize the information of every process that every employee knows how to use is fundamental. To coordinate actions to manage, supply, and execute the project, it's very useful that all areas use a tool that allows them to create a schedule, where project managers can state the dates on which they need sensitive material based on the initial planning but taking into account daily problems (weather problems, for example).

At Drew, we think about construction projects as a living organism that is constantly going through changes and problems but that overcomes them in the end and manages to become the project it was thought of at the beginning. This is why we highlight that the problems we previously mentioned are interrelated and sometimes arise and some others don't; moreover, they're not the only ones. They can have different impacts on each company but it's important to be able to recognize them to work on them and achieve the expected efficiency from the start.

Construction

The industry at present

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Our analysis

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