5 ways to increase profit margins by improving productivity in your construction project

construction profit

The contractors surrounding it is very hard these days. They are pressed to limits to develop a new method that would benefit them with a competitive advantage in the market and increase the profit margins. The section which is most optimal for providing these elements in the construction work it is the productivity on the site.

Factors that affect productivity

Productivity on a construction site can be viewed from several perspectives:

  • Projects are finished in fastest time
  • Decrease in project costs
  • The contractor is able to offer increased value for the offer given
  • The project is more profitable

Recent studies show that there is high unproductivity, estimated around 50% from the workers during their time on the construction project. But mostly in this studies, this results are not derived from their laziness rather than, the time they spent in waiting is taking around 1/3 of the whole construction project. Besides this there are other factors affecting the productivity in a construction site:

  • Low level of planned material management
  • Accidents
  • Do all over again the poorly done work
  • Completing client punch lists

Five methods to increase productivity

Here we offer you 5 methods how to increase productivity in your construction site in order to increase the profit margins:

Coordinate effectively

The most important thing that construction company should always do is complete analysis of every single phase of the construction process in order to understand which are the points where productivity can be improved. They should start by measuring key factors and setting benchmarks. But all the analysis can be worth nothing if you do not have the right person to delegate the tasks. He needs to

find a way how to motivate the workers, check if everything is going on according to the plan, ensure that the construction site would be completed in previously estimated time frame.

Track and measure progress

Essential of every implementing plan is to track and measure your progress. As we mentioned earlier you have to have a person who will take care of your construction site to be done on time. For that goal to be achieved, you should check daily what was done by the workers and complete weekly or monthly reports about it. These reports would enable you to measure the progress more accurately so there would be increased productivity through cost savings, improved quality work and more satisfied workers.

Improve efficiency by training your crew

An important element to improving productivity is increasing efficiency on the project by training your crew. Construction companies should always be ready to train their crew in order to deliver a higher quality of work. How to operate the new equipment is one of the skills that could immediately deliver results in productivity. Mastering skills through training is measurable benefit since the workers could better understand the new techniques that will deliver greater profits and cut the costs that will ultimately bring higher wages for them.

Implementation of new technology

Implementing new technology in the project or in the whole company is one of the core forces that would surly increase the productivity and raise the profit margins. New technologies like scheduling software and more efficient equipment can immediately show their ROI in productivity. Recent studies show that construction sector spends less for R&D than any other industry in USA.

Companies should more careful in implementing new technology because there have been a high number of attempts to introduce new technology and equipment overnight, that resulted in confused workers and decreasing productivity. That is why the training that companies provide in how to use the new technology not only to be focused on the part “how” rather than how the company and the workers would benefit from

One step ahead planning

The biggest problem in construction site is “waiting” that is result of bad planning. Sometimes weather will affect your work or similar factor that are beyond your possibility for control, but your crew ability is always in your hands and is up to you to plan their tasks in order to finish the job in time with the highest quality. That is why one step ahead planning is so important. Predicting the forces or factor that could affect the job or in other words productivity of the project must be taken into account previously so when they would arrive you will be prepared how to treat them in use them to improve the productivity.

Are you struggling with the productivity of your employees and teams in general? Or maybe you are actively looking for a solution for part of the segments mentioned above? If you liked this points above you will definitely like this related article on how to finish your project on time and within budget. See how the Dutch construction industry use tech solutions to increase productivity. More advice can be found in our free ebook, The Circle of Productivity

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