Construction Informer

Like so many things in our increasingly complex world the way we do business is really in a state of flux. Much of this is because we have used the same old systems for so long they no longer mesh with the real world.

Take for example the way many construction businesses manage their day-to-day operations. Clinging to paper, scabbing together disparate software, or insisting on everyone coming into the office to punch-in, are examples of behaviors that might have seen better days.

There is a fundamental change happening today across the business spectrum, and especially within construction. The processes that led the industry to turn in consistently low performance numbers are being scrutinized very closely. Astute managers are asking tough questions that will uncover inefficiencies and lead to new, updated processes that are more efficient. But it won’t be stopping there. In the not-to-distant-future construction will be managed in a fluid way, with processes morphing on demand to adapt to changing conditions.

In many ways this will require redundant systems to come to life. When the plumbing sub doesn’t show the replacement will be on the job an hour later. When a major piece of highway equipment breaks the on-site maintenance crew will make the repair and work will resume the same day.

Years ago management in many companies was shaken up by “efficiency experts” who watched processes and made a one-time adjustment to “fix” the problems. Today, processes, aided by technology, are learning to adjust themselves, on the fly. Those who are “holding back” on adopting the technology will likely have a difficult time keeping up.

Fuel Cost Ripples Turn Into Waves: Besides affecting costs for construction companies the higher fuel costs are beginning to affect whether or not projects get built. In Orlando several large airport construction projects have been derailed. There was supposed to be new ticketing areas installed this year as part of a $1 billion capital improvement plan but since the airlines have drastically scaled back their operations the airport is taking a wait-and-see attitude regarding when, or if, to begin construction. Similar events are playing out in places like Ohio, Las Vegas and  Oakland, CA.

Other infrastructure work is going on hold also. Texas announced potential delays in highway projects since people are driving less and therefore paying less gasoline taxes – a major funding source for highway projects.

Home Buyers Re-Think Priorities: As Los Angeles reports a 15 percent increase in the number of public transportation riders people are also changing other behaviors in the face of the higher fuel costs. More home buyers are thinking twice about buying in the burbs and others are looking for work close to home. The effect on the market is that there are pockets of properties that are largely unaffected by the decline in home prices. LA’s Westside neighborhoods are one example where places like Santa Monica and Brentwood have survived the double-digit depreciation seen in other neighborhoods.

Sitting On The Cranes: Here is something I’m not sure I’d try, especially in light of the recent problems with cranes staying upright. A group of Algerian nationals are staging sit-ins on construction cranes at six different sites in Brussels. They want the right to live and work in Belgium. Apparently they are frustrated with the delays in processing their applications to stay in the country. The unions are warning this protest could hold up work. Hmmmm, that may be stating the obvious.

The old Construction Informer is now pointing here and other than it disappearing completely for a couple of days things seem to have went okay. The same is not true for the comments. I will be working on moving those in the upcoming weeks…or at least figuring out if it’s possible without buckets of blood, sweat and tears.

In most cases permalinks from the old site will forward seamlessly here since I used the same naming convention. So if you’ve linked to any post at the old site your links should still work. You might want to check that though and report those to me that don’t. Just forward the permalink and I’ll check it out. Eventually when I retire the old site though they will stop working. If you have some you’d like to insulate from that then you will have to change your links by replacing "blog.sunworldventures" with "constructioninformer."

I used to periodically post the downloads that I had incorporated into the blog in aggregate form but now they are all on their own page. The link is also at the top of each page.

Thanks for reading!

We were on schedule. Things were humming along nicely and the work was coming in at quality. There hadn’t been any accidents. I had a few minutes every afternoon to analyze the schedule and make fine tuning adjustments based upon new information from subs and their availability. On top of that rosy picture, I wasn’t waking up at 3 a.m. to make notes in my Palm Pilot (I know, I know, there is newer technology, but I’m used to this).

Then, the owners said they wanted to accelerate the schedule. It had something to do with investors. I fired up MS Project, loaded the current building schedule and started adjusting things. About 20 minutes into this mind-numbing exercise everything came to a screeching halt when I came across the window schedule. The manufacturer was 400 miles away and already running behind. It didn’t matter if I could get everything else moved up since it would all come to a standstill once we needed windows. I got on the phone and after a few hours actually received a call back. No, they were maxed out and couldn’t deliver earlier. The discussion entered the realm of additional money, but still no go.

Just for kicks I finished out the exercise in adjusting the schedule only to find that even if the window issue could be solved I could only cut 5 days off the estimated completion given the current workforce. The owners were looking for 15 days and didn’t want to spend more money to hire additional shifts or otherwise fund increased production.

In a poll that is referred to in an article at Projects@Work the third most frequent reason cited for project failure is “unrealistic schedule.” The sad thing is that owners and others often operate under the mistaken perception that accelerating the schedule can save money. What often isn’t considered is that even if you can pull it off there are other factors that can end up costing additional money that wouldn’t have under the old schedule.

Suppose as part of the change the drywallers have to add a second shift and under labor law or agreements that shift gets a premium beyond regular pay. Five days saved just turned into two-days behind from a dollar perspective. It is always a good exercise to see how much you can tweek the schedule. When it is running according to plan you get the thrill of feeling like you have just improved on a fine Swiss watch. But you also have to learn to be content when the schedule is about as perfect as it can get…especially in an imperfect world.

Using a short-form contract to extend the work of subcontractors who are already working on a project can be a quick way to deal with surprises that surface, especially during remodeling jobs. Change orders are sometimes problematic since the surprises are often well beyond the scope of the original contract and may enter into areas that weren’t even in the original contract. If major parts of contracts need to be redrawn these short-forms can keep things moving while that process is happening. The subs are already screened, insured and up-to-speed on site conditions and because there is already a working relationship established short-form contracts have a good chance of succeeding.

One important point is to make sure these contracts are very specific. This short-form-plumbing-contract-example1, taken from a large renovation project, shows the details right from the beginning. If you notice item number one tells not only what piping is to be removed but also the rationale for the removal – “so new hot and cold supply piping can be routed to the new kitchen sink and washing machine areas.” It also tells the total number. Item number 5 specifies connection points and distances. Item number 7 enumerates which units are affected, where new connections are to be made, and even specifies integral work that will be done by others. Item 11 leaves little to the imagination as to what should be included.

One tricky thing about these has to do with payment. Is the payment outside of the regular contract, or included as an addendum? These kinds of things need to be decided as the contract is being drawn up, but they are certainly manageable since you would only use these for small amounts with limits set ahead of time, but typically under $10,000.