How to reduce admin costs in construction
Budget overspend and time overruns in construction are often due to unaccounted scope changes, inaccurate project estimates and avoidable design errors. However, whilst these factors are most commonly to blame, poor asset tracking can be equally destructive to site productivity and is the root cause of most administrative issues. Costly administrative errors can ruin a project as easily as a last-minute scope change, therefore inadequate admin management processes should not be ignored.
In this blog, we'll look at the challenges presented by poor administrative processes, the impact they could have on your business if left unmanaged, and how you can minimise and/or completely remove them through asset tracking.
This blog is one in a series developed to share knowledge so you can get even more out of your tools and staff. Read the other articles here.
Probably the biggest challenge when it comes to administration is the use of physical paperwork, especially when it isn't managed properly. Traditionally, paperwork is the main method of communicating project changes, safety and compliance information, inventory levels and asset location. This method heavily relies on each employee manually filling in the relevant documentation and ensuring it’s been delivered to the right people for processing. You can already see the rock that starts the avalanche rolling, can’t you?
This inevitably leads to the following challenges:
- Issues with paper asset transfer and asset requisition forms
- Not knowing where assets are and who has them
- Wasting money on hiring assets that you already have but can’t find
- Buying duplicate tools and building up excess stock
- Non-compliance of people and tools
- Fines for missing deadlines
Construction companies should have a good understanding of what their inventory looks like and what stock they’ve got on the shelves. However, if this is processed manually, it makes the job extremely tedious, time consuming or sometimes completely impossible.
Poor inventory can lead to projects missing their deadlines and going over budget. For example, if businesses run out of stock they need, it can cause operational issues and unnecessary downtime waiting for supplies to arrive. Or, they could end up buying unnecessary stock due to lack of visibility of what they already own.
Safety and compliance is an ongoing issue for the construction industry. In fact, statistics from the HSE show that the sector ranks second for the highest number of workplace injuries.
Poor administration and lack of visibility over compliance can seriously impact the safety of your jobsite. Managing employees’ training qualifications and certifications, as well as inspection and maintenance regimes is crucial to ensure nothing is missed. Otherwise, it can lead to project overruns, a damaged reputation, fines, prosecution due to non-compliance and even jail time for duty holders.
Is there a solution?
Many contractors believe that the best solution for bad administration is to simply increase the size of the administration team. However, an increase in staff doesn’t necessarily mean better results. In most cases, it can actually lead to further costs and even less collaboration.
Instead, businesses should equip staff with the right tools. Asset management software can play the role of multiple administrators, allowing you to view a project from multiple angles. With extra digital support, administrators will be able to easily communicate with each part of the organisation and have full visibility to keep operations and logistics running smoothly.
How can asset management software help reduce admin costs?
Construction companies spend approx 20 hours a month administering training certificates, work permits and safety data sheets. By using asset management software, this can be reduced by 33%, whilst automated renewal reminders can cut this time by 90%.
Implementing asset management software could significantly lower your administrative costs, streamline your services, improve customer service and allow you to scale your business quickly and easily. And because administrative staff wouldn't need to track down assets manually, their time could be spent on other, revenue-generating activities.
Asset tracking can also help minimise equipment loss and theft, thus reducing project spend. In addition, it'll allow the administrative team to effectively communicate with other departments and have better visibility over the project’s progress.
It solves paperwork related issues
Asset tracking technology, such as Hilti ON!Track, gives you easy and constant access to the system wherever you are - including on mobile devices. This eliminates the need to fill out long documents and ensures that nothing important gets lost.
Digital asset management makes staff and equipment compliance easier too. Services and certification alerts can be setup in the background, meaning administrators won't have to check spreadsheets and will be less likely to miss deadlines. Alerts can also be made visible to several people, enabling proactive management.
You can keep an eye on inventory
Asset management software allows you to run instant inventory reports, so you can avoid time-consuming manual checks and provide regular stock level updates to your clients. It also gives you full visibility of your assets, so you'll know exactly how many tools are available, who’s using them and their exact location. This avoids unnecessary downtime searching for equipment, or causing yourself cash flow implications due to overstocking items.
Another benefit of asset management software is the ability to set up alerts that notify you when you go above or below a certain stock level. You can also manage more expensive assets, such as power tools, to ensure you're utilising your tool park effectively.
It resolves compliance problems
Asset management technology also gives you full visibility over certification deadlines and inspection and maintenance due dates. Useful renewal reminders will be set-up too so you receive automatic notifications. In addition, employees will be able to access their certifications, such as site cards, on their device at any given time.
If you think your business could benefit from asset management software, download our free guide below - ‘Introducing asset management software for the construction sector’. Or, check out our own software offering - Hilti ON!Track.