How to Minimize and Control Infrastructure Construction Costs
What can the construction industry do to minimize and control infrastructure construction costs? Check out a few suggestions below.
There's great excitement in the construction industry as Congress is attempting to pass a new bulked-up infrastructure bill. Despite the potential of having more money to spend on infrastructure, states and municipalities will continue to look to minimize costs since funding never meets all the needs. What can the construction industry do to minimize and control infrastructure construction costs? Check out a few suggestions below.
Assemble the Right Team
Starting from the conception, design, and planning stage, a complex high-value infrastructure project involves many different partners. Like any team, the way to successfully achieve the goal is by everyone being on the same page and doing their part.
Assembling the right team is a major step towards everyone operating in sync. The first step is to make sure each team member buys into the project goals and is clear about what is expected of them. Regarding the firms themselves, those that have experience with complex infrastructure projects yet are willing to consider the feedback of others tends to be good team players.
Lastly, put together the team at the beginning of the process. By doing so, the team will have time to grow together and form relationships. When firms are brought in later, there may be confusion on how and with whom to interact. The uncertainty can lead to delays and added costs.
Technology Leads to Communication
One of the most common reasons construction costs go over budget is change orders. So, working backward the question is, what can be done to avoid change orders?
Every team member, from the owner on down, needs to be on the same page. When an owner is clear about what they want/expect from the infrastructure project, the need for change orders drops dramatically.
There are multiple technology options available in every construction phase that keep the key players on the same page. For example, teams can repeatedly simulate a construction project with different scenarios to determine the cost and time impact. This enables teams across different functions and entities to better collaborate, build trust, and reduce the chance for change orders.
And it leads to a plan that everyone – from the owner on down – believes in and supports. With this type of backing, the need for change orders may be reduced or even eliminated.
Lean construction is a management system whose aim is to eliminate waste from the construction process and minimize costs. It requires deep collaboration and accountability as every team member is responsible for a timely and less costly project. Stakeholders need to commit to lean construction early on in the construction process.
One of the keys to lean construction is pull planning. An Autodesk blog post reviews the benefits of pull planning. "First, the team defines the final deadline. Then, they work backward to determine deadlines for key milestones, project phases, and handoffs. Teams can prioritize the most critical tasks and determine any dependencies between tasks. Weekly planning sessions and meetings are used to ensure the project plan stays on track."
A McKinsey report found that, unlike traditional contract structures, lean construction leads to an 8-9% productivity improvement and 6-7% cost savings.
Simulation for the Ideal Construction Schedule
Maximize the number of people and equipment on-site and get the project done as quickly as possible. After all, time is money. Chop chop! Sure, generally, the quicker an infrastructure project is completed the less it will be (let’s not get into Liquidated Damages).
But, more is not always better (in terms of costs). The team needs to answer complex questions such as:
Is it better to have two or three crews on a certain project scope?
Are two or three excavators needed on-site?
With ALICE, you can simulate your most elaborate project challenges and restrictions to ensure that all parameters are accounted for in your plan and quickly incorporate changes in your estimates. Ultimately, ALICE can determine what the most efficient labor and equipment mix is for your infrastructure project, as well as the optimal sequence for the work.
On average, ALICE, which leverages AI to resolve complex construction constraints, reduces risk while cutting costs by 11% and build time by 17%. With ALICE, you can develop the ideal schedule during preconstruction that minimizes and controls infrastructure costs.
Infrastructure construction projects are always costly endeavors. And controlling costs on the larger, more complex ones is notoriously challenging. Hence, few such products are on time and on schedule. Yet by focusing on controlling costs from project conception onward and following the suggestions, project teams can minimize costs in preconstruction and control costs from ballooning during execution.