You have just received that telephone call stating that you have been awarded a contract from a recently submitted bid. After you recover from that all too familiar anxiety of reassuring yourself that all bases have been covered in the estimate, this feeling is quickly replaced by the angst of that seemingly insurmountable task of setting the project execution wheels in motion.
All too often in today’s construction world, contractors must be prepared to “hit the ground running” in order to kick start a successful project. This rapid transition from estimate to project places a high demand on having produced a detailed and accurate project estimate. Utilizing an estimating software tool that allows you to promptly break down your estimate into manageable portions can definitely provide numerous opportunities to improve the “bottom line”. In this article, we will examine material procurement and organization to establish how some suggested cost saving opportunities might be realized.
One of the first tasks you will need to undertake is to procure the major equipment items and fixtures required for the project. You need to initiate this process in a timely manner to ensure that you can meet your required on-site delivery dates without exposing yourself to any additional costs. In addition, you can also confirm that the delivery dates will effectively dovetail into your project schedule; this coordination effort can often save repetitive handling, protection, and storage of equipment or fixtures that arrive on site too far ahead of the scheduled installation date.
Provided that your major equipment and fixture takeoffs are properly assigned to the correct breakdowns in your estimating software program, you should have the ability to produce a report that will provide you with the necessary details of which area, system, or floor a particular item will be installed in. Having this knowledge will enable you to better plan your on-site material handling and allow you to time deliveries to your advantage; it will also provide you with a better understanding of when these items will be installed in the various physical areas. Combining all of this knowledge might enable you to optimize the usage of other services available on the site such as a crane or an elevator, thus providing the potential to further reduce your overall material handling costs.
The most likely next task on the list will be to purchase the bulk material items required for the project. Of course, the specialized and/or time sensitive material requirements should be the first to be ordered; and in some cases might need to be ordered simultaneous with equipment and fixtures depending on the delivery timelines. Provided that you have diligently performed your takeoff according to how the project will be built, the resultant data from your estimating software should provide you the road map you will need to follow to effectively receive and handle all of these materials.
Once again, producing a report that has sorted the data into manageable portions will provide you with the precise timing of how these materials will fit into your schedule. From this intelligence, you can then optimize how and when the materials might be distributed to the various physical areas of the project. Cost savings might also be realized by working with your suppliers and purchasing your materials up front, but timing deliveries in stages that better suit your schedule and material handling requirements.
Another cost saving suggestion for material organization is often referred to as “bagging and tagging”. To employ this method of material management, the contractor works very closely with their suppliers and vendors and provides them with a separate bill of materials for each individual task requiring this degree of detail. Each individual bill of materials should be easily generated from an efficient estimating software tool, and even exported into Microsoft Excel. Once the raw data is in Excel, you can apply the necessary filters to pinpoint your specific material lists. The supplier will then furnish these materials to the site in an agreed-upon packaging method, appropriately labeled to the corresponding task. Your site supervision will then simply need to assign the work to their selected crew members, along with the instructions of where the crew will pick up their required material package. Taking this one step further, your site supervisor may even have the material packages placed in the applicable work areas ahead of time, allowing the crew to simply get right to work.
Although not all suppliers and vendors will offer you the required levels of cooperation to realize the full extent of these cost saving measures, it is certainly an option worth investigating. As competition increases in the construction industry, margins have become tighter than ever. This leaves little room for error in your project execution, and increased room for creativity. Thinking both “inside and outside the box” will help you to remain profitable for the long term.
