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By Mylan Vu
May 6, 2018
The construction industry in Australia runs on tight margins, so if any cost overruns occur over the course of a project, they are acutely felt. Making sure you’re meeting, or preferably beating, project margins while staying innovative can be a tough balancing act.
Cost overruns can be due to a number of factors, including inefficient operations, equipment failure, last-minute changes and rework. All too often, large-scale construction projects make headlines for all the wrong reasons, as is the case of the constant delays and setbacks of the George Street Light Rail.
But new solutions are available to make costs more predictable, increase efficiencies, and improve margins along the way.
Digital Project Management
In a recent interview with INTHEBLACK, Wayne Reaburn FCPA, director of finance and administration at the Melbourne Metro Rail Authority, gives some insight into his strategies for success. The Metro Tunnel project is an AU$11 billion project to develop twin 9km railway tunnels with five new underground stations by 2026, Ia truly unprecedented investment for the region.
Reaburn outlines that a crucial element in their strategy has been to use cloud-based project management software, which enables important information to be shared across teams in real time.
“It’s an anywhere, anytime system access for our people. It offers internal-external collaboration spaces and in-house capability to optimise value for money,” he comments.
As in the case of the MMRA, construction companies are more and more frequently embracing project management software to ensure everyone is working on the latest information. Going digital and mobile means all critical documents are stored in one secure location, where all changes are documented and available for viewing at all times, no matter where you are.
According to The Construction Industry Institute, rework can account for between 2 per cent and 20 per cent of a project’s contract amount. Much of this rework is caused by errors or miscalculations in the planning phase or mistakes not noticed until construction is already underway. Cloud-based software helps avoid wasting time and resources on fixing already completed work.
Previously, defects were recorded manually, and for instance, waited in a notepad in someone’s pocket. Working from a unified data system, however, means vital information can be shared across the team in real time and given a due date to be addressed. Progress can be tracked digitally and followed up on, enabling defects to be fixed faster and thus avoiding unnecessary delays and repercussions.
Slightly earlier in the adoption cycle is the use of the telematics in construction. It can be used to monitor and manage fleet maintenance. And it is catching hold fast.
Telematics is typically used as a method of monitoring vehicles through advanced sensor technology, including a GPS system combined with on-board diagnostics. It can map and record where a vehicle or equipment is, at what speed it is travelling, and give the information on the performance.
Companies are recognising the opportunities on offer: improvements to productivity, cost efficiencies, and customer service. According to the Telematics Benchmark Report conducted by Teletrac Navman, 81 per cent of businesses are already using telematics, and equipment tracking is the most common use case, followed by tracking the speed and driver hours.
The study shows that over half of all organisations using telematics have seen a decrease in fuel costs, with some seeing up to 40 per cent reduction. In addition, almost a third have experienced fewer accidents thanks to telematics.
Equipment maintenance is a major issue for construction projects, as a sudden failure of vital equipment can grind progress to a halt. Using telematics, companies can spot signs of fatigue or failure and ensure the issue is flagged as soon as it occurs. This allows managers to know in advance when a piece of equipment might fail, and therefore, they are able to plan ahead. The GPS sensors can also assist with tracking equipment and reduce the risk of theft by increasing the chances of locating the stolen equipment.
Increasingly, key decision makers in the industry are recognising that by embracing digital and mobile technology, construction projects have a better chance of being completed on time and within budget. Rooting out inefficiencies can save costs, boost bottom lines, and free up time for future projects.
If you liked this article, here are a few eBooks you may enjoy:
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