Analysis of Industry Pressures Predicts Shift to Lean Construction Is a Key

“As the global market continues to be pressured from new events including recessions, increased supply chain complexity brought by geopolitical conflicts, material price increases and labor shortages, a new layer of uncertainty is making its way throughout the industry.

“Thankfully, there is huge potential for those looking to adapt and become more resilient.” This analysis of key market data and three predictions on how to navigate the turbulent market dynamic by IFS, a 5,000 employee construction software integrator are reported in a recent issue of ME Construction News

  • Prediction 1: 20% of companies will execute plans within the next four years to have more robust, timely and accurate financial control and governance processes and systems.
    • The current mix of disparate processes and systems with poor or no integration are compounding the reliance on an excessive use of Excel spreadsheets to produce financial project control information. Running project and financials on Excel has been proven to hinder performance and prevent companies from meeting their key objective of delivering projects on time, on budget and at high standard.

  • Prediction 2: 30% of companies will change their construction processes to an industrialized construction model by 2025. This includes:
    • Standardization and platforms – assemblies of parts/components are being gathered together off-site
    • Design for manufacturing and site assembly (DfMA)
    • Digital Design (BIM becomes critical)
    • Taking a more ‘work package structure’
  • Prediction 3: 25% of companies will move to simplify and standardize their project processes with a single operational platform.

As part of this third Prediction, the two main authors of the IFS analysis write,

We have established there is increased urgency for companies to improve business performance. For construction and engineering companies this starts with improving project performance, meaning project margins, reduction in financial risk, driving up productivity, quality and sustainability, while at the same time reduce the total asset lifecycle cost.

Embedded in this performance goal is the need to deliver projects using standard repeatable processes and achieve predictable, repeatable results.

To achieve this there is an increasing recognition that the business processes and systems that support these processes need to be challenged, reviewed and improved to shift to a lean construction model.

Financial pressures and disruptions will be “heightened by labor costs and shortages brought on by an aging workforce that is retiring and behind and ever widening skills gap, currently estimated to exceed a million workers by 2025.”

IFS summarizes their findings in this: “Resilience is what has kept the industry moving and it is what will evolve companies into industry leaders with a more lean, profitable and technological operating model that will not only weather the uncertain times ahead but provide a more reliable platform for success.”

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