Dimensions

Information as a Competitive Advantage: Job-Site Technologies Empower Contractors

A Paperless Construction Office?

A Good Time to Raise Productivity

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DIMENSIONS - A REPORT FOR THE CONSTRUCTION INDUSTRY

Information as a Competitive Advantage: Job-Site Technologies Empower Contractors

Virtually every construction back-office activity — from bidding and financing to scheduling, invoicing, paying subs and ordering materials — relies on information gathered at job sites. The more timely and exact the data is, the better a contractor can manage its business toward a profitable outcome.

However, while construction office systems have been computerized for years, manual methods have long prevailed in the field. Until recently most contractors collected and stored job data by hand — whether with pencil and paper or Excel spreadsheets. Either way, as the information made its way from the trailer to the office, its accuracy and timeliness were often compromised, rendering it much less useful.

But things are changing. More contractors are finding they can leverage new job-site technologies to gain a crucial advantage over rivals that lag behind. A contractor that can precisely measure productivity and costs day-by-day, and then integrate that data quickly with accounting functions, obtains leading indicators about the job's profitability — and an opportunity to make changes in time to make a difference.

Here are some of the most useful technologies available today.

Capturing Field Data
In a conventional paper-based process, most job-site activities — hours worked, time spent on a job, work in progress, expenses and so on — are recorded once at the site, and then again at the corporate office. Depending on the back-office technologies in use, they might require yet another entry into financial systems.

Such a process causes delays, inaccuracies and duplication of effort. Lost data is even more costly, if field employees fail to record billable activities and their duration.

Today's digital time- and cost-recording systems, however, prompt employees to record activity as it occurs. Systems capture data with a single entry and integrate easily with billing, HR, reporting and project management applications.

Most of these systems run on standard Windows platforms and transmit data automatically, via an Internet connection, to the company's back-end systems.

The information is more accurate and current and, by analyzing it, contractors can make better decisions, faster. Project managers can manage timelines more precisely, while purchasing officers can take advantage of changes in materials prices. The job's profitability becomes more transparent, providing the company greater agility in both customer service and strategic decision-making.

Managing Equipment and Vehicles
Equipment breakdowns, or even just a dispatching error, can throw a project off schedule. An employee's joyride in a company truck can be far more expensive if it turns out badly, say by dumping critical supplies or colliding with another vehicle.

Fleet management software, when combined with a global positioning system (GPS), permits a company to track its fleet in close detail. Such software can head off breakdowns by monitoring mileage, hours in use, fuel consumption, repairs and compliance with preventive maintenance schedules.

GPS also enables more efficient dispatching, saving time and fuel. And real-time location tracking can also turn up a foreman's trips to the golf course — or to the scrap dealer to sell his employer's copper tubing.

Stand-alone fleet management systems are inexpensive and easy to install, but most require manual data entry and re-keying. Integrated solutions cost more initially and require more training, but they mesh easily with existing systems, automate the tracking process, minimize data-entry mistakes and deliver more detailed and useful reports.

Tracking Supplies and Tools
When construction materials grow legs and walk away, or just get misplaced, the cost can be steep. Every contractor tries to keep track, but the process is notoriously prone to error.

Radio frequency identification (RFID) technology tracks supplies automatically, without relying on human accuracy. An RFID microchip is a tiny transmitter embedded in a tag durable enough to withstand the construction environment. Like a barcode, it communicates its information wirelessly. But unlike a barcode, an RFID tag requires no manual scanning or line of sight, and it can transmit over much longer distances.

An RFID reader at a warehouse, tool room or site gate can track tools, supplies and equipment and associate them with the employee who uses them, reducing losses from carelessness and theft. The technology makes inventory more transparent, streamlines check-in and check-out and — by matching movements to job orders — facilitates cost allocation. It also generates data the contractor can use to plan for maintenance and future jobs.

When RFID is integrated with GPS, it tracks and reports on supplies through the entire construction cycle.

Cement and asphalt suppliers are using RFID to track pickups, deliveries and the time involved at each end. Both commodities have a short shelf life, and this automated, detailed information allows a supplier to improve both its customer service and its own efficiencies.

In the right circumstances, RFID technology can deliver ROI within a year or less, but the initial outlay can be substantial, and training is required. Radio waves are subject to interference. And these tiny components, if not managed properly, can expose larger computer systems to viruses and other malware.

Cameras, Mobility, Integration
Cameras are showing up more frequently on construction sites. One kind is the stationary all-seeing eye, which not only deters theft but also lets management track a job's progress without being physically present.

The other kind is hand-held, and the newest of these can transmit images of the job-site without a computer, to managers, engineers and architects directly.

Another welcome development for contractors, especially those working in vast open spaces, is the growing affordability of “air cards.” Equipped with one, a laptop has no need of a cable, dial-up or wireless hot-spot connection as it links to the Internet through cellular towers and networks. The most remote locations are still out of range, but that “last frontier” is rapidly disappearing.

And all these technologies are now being designed to integrate with the other systems a contractor already has in place. Little by little, we're finding ways to overcome the old problem of one hand — the accounting office — not knowing what the other hand — the field crew — is doing. The project manager's information is what permits accounting to answer the key questions: Should we pay this sub? Do our costs to date align with work in place? What's the cost to completion? When should we recognize revenue?

If you'd like to explore which of the new technologies can contribute to your company's profitability, our firm would be glad to help you.

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A Paperless Construction Office?

It's a fact: The construction industry runs on paper. Blueprints, CAD drawings, budgets, schedules, purchase orders, invoices, change orders, payrolls and punch lists — all of which must be quickly and easily accessible.

Plus, most of these documents must be archived for years to protect the contractor from legal issues. As a company grows, its offices practically stagger under the heavy load of paper.

Computer technology hasn't reduced the need for paper; by placing what amounts to a printing press near every desk, it's increased it. But new online tools offer opportunities to level the paper mountain and sharply reduce the personnel hours that go into maintaining it. These streamlined systems let employees easily find, view and transmit documents from their computers.

Online organization can reduce costs, avoid lost documents, improve efficiency and ultimately raise a contractor's bottom line.

Payables and Receivables
In a business where revenue recognition is driven by costs, recording invoices quickly is critical. But most contractors today rely on a process made cumbersome by the physical separation of the accounting office from the project manager. Paper invoices can easily get lost or sit under a pile on a desk in the PM's trailer.

By moving to an electronic platform, contractors speed the process, safeguard documents and quickly spot bottlenecks. A PM alerted by a built-in email notification can view an invoice, add comments to it, code it by job and activity, approve or disapprove payment and advance the document automatically.

Electronic billings are also becoming more popular, as some government and other contracts require them. Whatever burden this poses to contractors is usually offset by a shorter receivables cycle.

Managing Bids, Managing Subs
Accurate bids are more important as competition intensifies. Electronic estimating and bidding systems confer an advantage over companies that manually process, copy and deliver their documents.

Online bidding systems can also help manage subcontractors. New software makes it easier for subs to participate in the estimating stage, and easier for GCs to target bid invitations according to a sub's past performance, skill sets, bid history and compliance with EEOC and other regulations. Meanwhile, the ready availability of online plan files and high-resolution images helps subs develop more accurate bids.

Safety Inspections
The first line against accidents is adequate safety inspections, which most contractors perform with pencil and paper. The system is open to delays and errors, and it's easy to let a necessary follow-up — Has the sub fixed the third-floor railing? — fall through the cracks, with consequences both tragic and expensive.

A new generation of tablet PCs transfers the inspection process online. The devices are better suited than larger computers to the rigors of a job site. They run dedicated software, draw on long-lasting batteries and display information clearly even in bright sunlight.

Many programs prompt responses, creating a consistent and repeatable routine that speeds up inspections and makes it hard to overlook details. And most can pull up OSHA rules on demand.

When an inspection is complete, the handheld device can synchronize automatically with home-office systems over the Web. The link works both ways, tracking violations and alerting inspectors to follow up with subcontractors. The centralized system lets a GC manage multiple subs on a single platform, and preserves a record that makes safety audits easier and protects the contractor against complaints or lawsuits.

Cost-Effective
The technology isn't new and it isn't overly expensive. High-volume scanners are available for less than $1,000; machines capable of scanning extra-wide plans cost less than $2,500. Software prices vary depending on ease of use, automatic backup routines, Web hosting and other features.

As this technology becomes integrated with construction and project-management software, it helps contractors organize their records, their accumulated knowledge and their businesses more effectively than ever.

Finally, when disputes arise, the party with better documentation usually wins. Winning one such dispute can easily pay for an entire electronic document management system.

Could your company take advantage of paperless technologies? Our firm can help you find out.

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A Good Time to Raise Productivity

It's hard to focus on productivity when your backlog is drying up. Yet, many contractors admit they pay little attention to the subject in good times either. They think, “ The work's coming in, so why change?”

A poor economy — with its exaggerated competition — is a good reason to find production efficiencies, though. Contractors that do will submit stronger bids, win more trust from lenders and be more attractive to surety underwriters.

In order to improve efficiencies, a company must first capture accurate information about its output — volume of concrete placed, for example, or length of pipe laid, over a given time — and then deliver it to first line supervisors every week. It's the crews that are making the money, and supervisors need to know continuously how their crews are doing. Just giving supervisors a fax machine at home can produce better daily productivity information, with which to make on-site adjustments the next day.

Facing a slim backlog and uncertain employment prospects, project work often slows. Lessons learned from measurement and feedback can improve both labor productivity and work processes.

Can you standardize more tasks? Instead of placing concrete by the bucket, does pumping make sense? Can you prefabricate pieces on the ground and lift bigger sections into place? Can you do more work off-site, in a weather-proof environment, and bring assemblies to the job site for installation?

Branching off into new territory, either in craft or geography, is tempting. But more contractors will find success by taking familiar tasks and doing them better. The competitive edge they gain by making those adjustments will help them ride out the recession.

Our firm can help you get a better handle on productivity.

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