Smooth successful process Pricing Pressure

Pricing a job correctly from day one is key to a smooth and successful process for both our crew and clients. We worked closely with the Tasman Aluminium team to develop the building to a certain price point and turn a two-storey warehouse office design into a single level design (without compromising on quality). The best part? This job was delivered on budget with almost zero variation in cost.

 

 

 

 

The quality of his workmanship, with no shortcuts and extreme attention to detail, meant NZCCL was the obvious choice for our new factory build
Phil Coughlan, Managing Director, Tasman Aluminium LTD

What we do about it Reasons why Projects Fail

For commercial investors, a successful project is a construction completed on time and within budget. You'll be happy and we walk away happy with our margin. Everybody wins. 

 

What happens when a project fails? Going over budget and schedule delays eats into both our profit margins. 

 

What are the mechanics behind project cost overruns and project schedule delays and how you can avoid them?

 

Inadequate Planning and Inaccurate estimates

Poor planning leads to poor execution. Success is likely when time and effort are put into planning out the project. This starts with setting out mutual expectations. Next will be reviewing and understanding the plans, specifications and scope of work.
 
Planning goes beyond creating a construction schedule. Extra items include:
  • Conducting a risk assessment and management strategy
  • Developing site-specific safety plans
  • Establishing contingency plans
  • Site logistics and lining up the delivery of materials and equipment
 
The plan and schedule are living documents. As work on the project progresses they will be adjusted.
 
Inaccurate estimating is the most obvious culprit. You’re asking for a $10-million project with a $7-million budget — you’re pretty likely screwed to come in on budget and on schedule. Unfortunately, optimistic estimates or those done in a hurry are a common occurrence in our sector.
 
Estimations that rely on 'gut-feel' without documenting and qualifying numbers are prone to snags. We don't deny the existence of gut-feel. 'Gut-feel' is another term for 'experience'. Our 'gut-feel' qualifier is formed on the open communication and transparency around quantifying where those 'gut-feel' numbers come from. Your project numbers are forever transparent for your knowledge. 

 

Failure to Communicate

Real-time 'currency of information' is crucial to delivering a successful construction project. Or let's call it good old fashioned honest communication. When real-time communication breaks down, it can lead to delays, accidents, costly rework, and you the client being unhappy.
 
No one wants to wait until the end of the month to find out what happened weeks ago.
 
Accurate, up-to-date information about what’s going on in the project is real-time communication. It is about 'control'. Firstly, control is covered by the old-school approach of being physically present on the build site. An even bigger control factor boils down to project tracking.
 
When we track all your projects labour, equipment, materials, subcontractors, suppliers, etc., we’re able to provide real-time reports on everything that’s happening on your project. You’re empowered through a wealth of information, which is the ultimate key to ‘control.’

  

Scope Creep & Change Orders

Technically speaking, project changes are arguably the biggest contributor to projects going over budget and blowing schedule deadlines. Factors that lead to scope creep include poorly defined initial scope, incomplete plans and specifications, poor communication, mismanagement of change orders and changing of minds.
 
Does this say you can't change your mind? No, of course not. We still want you to receive exactly what you're after.
 
We know if we're communicating we can track the changes. We're not convinced changes are the root cause of cost overruns. When we approach a project anticipating change will occur throughout the project — we trust our good mechanisms and methods to track and account for the change. Changes then aren’t really the root of the problem and should not result in a project cost overrun.
 
Changes occurring are our reality. Changes will alter the original budget and schedule, however, because we have appropriate tracking and change-management processes in place, changes shouldn’t result in a project cost overrun. Changes will just shift the size and duration of the project.

 

Productivity Issues and Delays

Agreed-upon project progress milestones and sign-off are absolutely vital to being able to control costs. This is partly covered early on during the planning and negotiation phases when we define what it means to be finished.

 
For us to seamlessly close-out a phase, level, task and the project as a whole enables you to stop wasting money and squandering your valuable time. We do regular forecasts to get a financial and schedule picture of how far along the project is, and communicate this to you for you to determine whether you’re ready to achieve closure on any phase of the project. This all sounds great in theory, although, if we don’t do it, that’s where the insidious overruns creep gradually and dangerously into your projects.
 

Ignoring the Past

Looking back on a completed project (or even a partially completed project) to examine where things went well and where things didn’t go so well is an indispensable part of running consistently successful, profitable projects. Otherwise, we’re doomed to repeat the same mistakes over and over. 

 
A project retrospective is about examining the numbers and using that information to feed future projects. First, however, we need to actually have those numbers — the metrics, the reports — and it does mean we need to have executed accurate project tracking and maintained high-value management during the execution phases of the project.
 
Insufficient historical information plagues many commercial construction companies trying to run profitable projects. Sadly, it’s often the case that little data is collected during a project. So little is known about what happened. All that’s typically available to many project managers is the summary totals. This is only marginally helpful, as it’s missing so many crucial details that help us get better at our job. Equally tragic is if the information is tracked, yet stored in a series of unconnected spreadsheets, then the reporting and metrics one can achieve are terse, vague and time-consuming to obtain. Our centralised system of data collection streamlines our process — the benefits for which are passed directly on to you. The result — your to budget and on time.
 
 
 
 
 

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