Navigating rising construction costs with technology

Construction material costs have increased 7.4 percent over the last year according to the Associated General Contractors of America. From the labor shortage to the tariffs on steel and aluminum, the construction industry has spent much of 2018 struggling to adjust and remain profitable. But it’s harder than simply reconfiguring the budget. One of the biggest financial challenges construction firms face has to do with uncertainty. 

Many projects are won with a fixed price, but months could pass before that project breaks ground. Thus, these fixed prices open a certain risk window for firms. With upward pressure on the market, the material prices when a project is won could look drastically different when it kicks off. Luckily, construction firms don’t have to face the battle against material prices alone – by turning to technology, they can unlock a critical asset. 

Uncovering Inefficiencies

No job site is perfect. Each has its own degree of inefficiency ranging from employee productivity to materials management. More material is often bought than is needed to account for some being stolen or lost. But in today’s digital age, instead of wasting time searching for misplaced materials, firms can tag assets with RFID (radio-frequency identification) so you know when it is received and where it is placed.

Additionally, software tracking applications will monitor the amount of a material that is used and can be connected to a purchasing system. When the amount of remaining material falls to a certain level, it will be re-ordered automatically so the project can continue without risk of running out, causing delays. 

Improving Productivity 

To help combat rising material costs construction managers need to focus on another significant force affecting their budget – employee productivity. If left unchecked, costs associated with inefficiency and wasted time can be as detrimental as material prices. For example, almost 50% of the average worker’s time is wasted finding, waiting for and traveling to equipment on the jobsite – technology can change this. Supervisors should actively analyze the productive time on-site (time spent working vs. looking for materials, waiting time, time spent on manual entry, etc.) and once they pinpoint the biggest drains on productivity, they can implement the proper tools to address them.   

By using telematics and apps for a single-view of all the data on a jobsite (equipment location, fuel usage and workers’ time), managers can get a more accurate picture of jobsite efficiency and use that to better plan their projects. Time tracking apps may not impact rising steel and aluminum prices, but they can address the equipment and the people and make sure they’re operating as efficiently as possible. 

Construction firms have no say when it comes to the price of materials, but they can leverage technology to address the equipment and the people, ensuring productivity remains at a high. Though the industry has historically been slow to adopt new technologies, the desire to move forward is there – it’s just a matter of when. 

To learn more about how construction technology and materials tracking software can optimize productivity, be sure to explore Asset Tracking and Utilization.