METHODS TO CONTROL THE HIGH COST AND LIMITED OBTAINABILITY OF CONSTRUCTION MATERIALS?
Updated: Sep 5, 2022
The pricing and availability of construction materials supplies have not yet recovered
after Covid levels drop, two years after the pandemic's initial effects, and this
problem continues to be one of the largest obstacles for the construction sector.
Measures, what we can take to safeguard earnings and maintain project schedules.
TEXT OF THE CHAPTER:
Controlling prices and supply with more precise take-offs. or estimates.
Protecting profits with the help of updated costing databases.
Rapid delivery by placing material orders specific project oriented.
Formulate conceptual estimates to establish a reliable project baseline.
Lower the risk of owner generated sanctions due to extending timelines.
Embrace a tight cost-escalation clause in construction contracts.
Boost interactions with clients, vendors and subcontractors.
Expand your sources and create backup plans.
1. Controlling prices and supply by using more precise take-offs or
Even when costs are low and supply is normal, it is never a wise business decision
to let important construction materials go to waste. However, it can be particularly
harmful to the bottom line in an environment of high pricing and general
scarcity and can easily put strain a on even the most carefully planned construction
project deadlines. In this condition the ideal choice is on-screen digital take-off
functionality that completely interacts with estimating processes can be a crucial
component The Sq-Feet estimating platform, could be a best solution for maximum
speed and accuracy. By this method the required quantities will be more accurately
determined by avoiding human measurement and calculation errors, and unneeded
overages will be reduced.
2. Protecting profits with the help of periodically updated costing
Maintaining a constantly updated database for construction estimates is
not a realistic requirement for many construction industries. It is crucial to use a
digital estimating platform with a costing database that includes quarterly updates
and KPIs particular to a given region. One of the three database options offered by
the Sq-Feet estimating software works well. Its reliable building construction costs
data, which automatically updates on a quarterly basis, allows pre-construction
managers, architects, engineers, and contractors to manage, and control cost
estimating database with new levels of accuracy.
3.Rapid delivery by placing material orders specific project oriented:
The only one advantage of ordering large quantities of material is that it hardly
hinders your work when there is material short supply, but this has another
disadvantage too. Whatever offers or discounts you might feel you are getting at time
of purchasing material in bulk will be “equated” by the labors and other work force
required to manage and store the material in proper conditions. As it is not possible to use the full quantity at once. Same way it gets problematic to order material on
daily basis, because when any issue arises with supply chain, delivery can’t be
guaranteed, which ultimately increases the prices due to high transportation and
4. Formulate conceptual estimates to establish a reliable project baseline:
Materials that are hard to get by might significantly affect project deadlines and
predicted building costs. Because of this, it become crucial to anticipate costs and
adjust timetables in accordance with a "normalized" scenario based on previously
completed projects of a similar nature. Contextual estimating features, a crucial tool
that makes use of previous data to better plan and comprehend projects that are not
yet under way, are frequently included in programmers specifically created for the
construction sector. By combining unit costs from source estimates with fresh project
inputs, contractors may more precisely predict costs and timelines with Sq-Feet
conceptual estimating. They can also more readily make changes to material choice
5. Lower the risk of owner generated sanctions due to extending
Maximum times the unforeseen conditions like delay in material supply directly
responsible for overall project delay which ultimately not accepted by the owner and
results in penalties, so the first step in reducing the danger of completion delays and
owner-generated penalties is having a good understanding of the effects of sudden
materials shortages, which include, most significantly, higher prices and lengthen
building timelines. A crucial baseline for construction project completion is provided
by historical data gathered on digital estimating tools like Sq-Feet. This data is a
trustworthy model that can be adjusted to reflect the most recent material availability.
Further safety can be achieved by past added information that specifically address
the possibility of shortages can provide additional protection while lowering the
likelihood of legal disputes and penalties if projects are delayed.
6. Embrace a tight cost escalation clause in construction contracts:
Limitless escalation provisions, which were historically uncommon in construction
contracts, are starting to appear more frequently as building material prices continue
to change. The sudden increase or decrease (escalation), clause is an addition that
permits modifications to fees, salaries, and operating expenses in response to
changes in market prices. It transfers responsibility for rising costs, such as Labour or
material shortages, from the general contractor (GC) to the project owner, providing
crucial protection when material costs can increase suddenly.
7. Boost Interactions with clients, vendors and subcontractors:
Industry experts accept that open communication with stakeholders throughout the
earliest design phases of a construction project, especially with project owners, is the
best way to manage difficulties linked to material availability. If and when price
increases and/or shortages occur, contractors who use an efficient Customer
Relationship Management (CRM) strategy supported by industry specific CRM
applications are better able to establish and maintain strong relationships with
engineers, architects, owners, and other project decision-makers; as a result, the
likelihood of a mutually beneficial solution is significantly increased.
8. Expand your sources and create backup plans:
Being a devoted customer to your suppliers makes commercial sense at the best of
times when building supplies are affordable and costs are more or less consistent.
In the building industry of the post-pandemic age, the rules are different: companies
with varied supply chains are less impacted when materials are scarce since
diversification greatly enhances the possibility of acquiring materials from alternative
sources. Creditworthiness, a history of on-time payments, and other good business
practices can contribute to the "preferred" status contractors require when competing
for rare supplies. As competition for available resources increases, suppliers
naturally become choosier about who they support.