When it comes to construction, the phrase “time is money” can be applied quite literally.
Between the costs in time and budget, missing scheduled milestones can rapidly add thousands of dollars to a project. One study, conducted by FMI Corporation and PlanGrid, set out to identify the source of construction errors and rework. They found that construction companies waste over $177 billion per year due to conflict management, searching for project data, correcting mistakes, and rework.[i]
Data obtained via PlanGrid/FMI Study
Sources of Construction Waste
Correcting construction errors, also called rework, adds significantly to project costs and can lead to schedule overruns. Rework can consist of anything from swapping out materials to having to entirely reconstruct part of a project.[ii] The study concluded that the two largest causes of rework conducted by companies were inaccurate data and miscommunication. This inaccurate data and miscommunication often leads to design or construction changes and errors in construction or construction management. Consequently, increases in labor and material costs often result. According to the study, rework alone is predicted to cost the U.S. construction industry over $31 billion in 2018.
These types of errors in construction and construction management are commonplace in the industry, and the FMI study found communication issues to be the leading cause. Poor communication can lead to discrepancies in construction methods and misplacement of project documentation, which can themselves lead to costly rework. Between rework, looking for project data, and conflict resolution, an average of 14 hours per week are wasted. As communication plays such a key role in preventing much of this unnecessary waste, hiring a project manager can combat costly miscommunications.
Lack of communication can cause major headaches in the construction industry.[iii]
A project manager can track project documents, assist in conflict management, and facilitate communication between the many parties involved in any construction project. Another key component in minimizing waste? Up front assessment of project plans by an experienced construction professional. Hiring an experienced construction professional prior to the start of a project to identify any potential red flags decreases the chances of costly mid-project changes. Having this expert centralize progress monitoring and quality assurance can greatly assist in keeping project budgets and timelines on track.
Understanding where most rework issues arise allows all parties involved in a project to proactively avoid rework costs, even during the preconstruction process. To minimize errors and additional costs, work with a Construction Loan Monitoring (CLM) project manager from the project start. With an experienced CLM professional to conduct an up-front cost and plan review, provide ongoing monitoring during the construction phase, and closeout the project, you have a greater chance of minimizing additional costs.
EBI Consulting Can Help
EBI’s CLM team has provided Construction Plan and Cost Reports (CPCRs) to diverse clients, providing helpful insight prior to project kickoff and ensuring the practicality of construction documents, milestones, and schedules. Additionally, our construction professionals regularly conduct monthly Construction Monitoring Reports (CMRs) to track construction materials, monitor code compliance, and provide detail on project status, including draw reports, if applicable. Our knowledgeable professionals collaborate with all parties involved to find the most mutually beneficial solutions to any issues that arise.
For more on EBI’s Construction Loan Monitoring services, visit our webpage or read our white paper.