Construction is one of the most profitable industries in the world. Almost every country will invest heavily in the sector as it plays a significant role in economic growth. Despite this, construction is also one of the most expensive industries to operate in, making it challenging to find stability. Construction companies are always searching for ways to reduce costs and improve their bottom line to ensure they reach it, no matter how many projects it takes.
There are many ways to reduce costs in construction. Some methods are simple and only require a change in technique or equipment, while others may be more complex and require changes to the entire project management process. Regardless of the method used, all cost-reduction strategies should aim to achieve the following objectives:
- Reduce the time needed to complete the project
- Use fewer resources
- Improve quality
- Increase safety
With those things in mind, construction companies must find ways to work smarter, not more complicated. Reducing costs in construction comes down to improving efficiency and eliminating waste. The following are some tips on how to do just that.
Take Advantage of Technology
Technology has a huge role to play when it comes to reducing costs in construction. Not only does it allow for improved communication and organization, but it can also help with tasks such as design, fabrication, and even project management. When looking for ways to reduce costs, construction companies should consider implementing technology in the following areas:
Construction companies can use technology in the design phase of a project to improve accuracy and reduce waste. They can use CAD software to create models of tasks that can be shared with team members and clients, allowing for greater collaboration and fewer mistakes. 3D printing can also create models of projects that can be used for review or approval, helping to speed up the design process.
Construction firms can also use technology in the fabrication phase of a project. They can use CNC routers to create custom parts quickly and efficiently, which can save time and money. Laser cutters can make precise cuts quickly and easily, reducing manual labor. And 3D printers can create prototypes and finished products quickly and cheaply.
Construction companies can also use technology in the project management phase of a project. Construction management software can help keep track of deadlines, tasks, and resources. GPS systems can help track equipment and workers on site. And they can use video conferencing to communicate with team members who are not on site.
Technology can apply in various ways. It is just a matter of how companies want to use it in their system.
Implement a Lean Construction Philosophy
Lean construction is a philosophy that focuses on reducing waste and increasing efficiency. It is based on lean manufacturing principles, which Toyota developed in the 1950s. Poor construction applies these principles to the construction industry to reduce waste, improve quality, and increase productivity.
There are many ways to implement lean construction, but some standard methods include:
- Value Stream Mapping: This process involves mapping out the steps involved in a project from start to finish. The goal is to identify areas where waste can be reduced or eliminated.
- 5S: This system uses five steps (sort, set in order, shine, standardize, sustain) to organize and improve workflows.
- Kaizen: This is a Japanese word that means “improvement.” Kaizen is about continuous improvement and small changes that add to significant results.
Lean construction can apply in any construction project, from residential to commercial to industrial. It is a philosophy that any company can adopt to improve its efficiency and bottom line.
Avoid In-House Equipment Purchases
One of the biggest mistakes construction companies make is buying their equipment. This can be a huge mistake for two reasons:
You miss out on economies of scale. You only get a small discount off the list price when you purchase equipment. But when you rent equipment, you benefit from the economies of scale that the rental company has achieved.
You tie up capital. When you purchase equipment, you are tying up capital that could be used elsewhere in your business. Using that money to invest in people or processes that will improve your bottom line is better.
Renting equipment is a much better option for construction companies. Not only do you benefit from economies of scale, but you also free up capital that can be used to grow your business. Fortunately, you can find companies specializing in heavy equipment rental in the Philippines by searching online. They have established ventures that offer competitive quality equipment, ensuring reduced construction companies’ costs.
There are many ways to reduce costs in construction. But the best way to do it is to focus on efficiency and waste reduction. Adopting a lean philosophy and renting equipment can save money and improve your bottom line.