Make No Mistake: Slim Margins Require Doing It Right the First Time

By FRANK MELO

Strong resilience continues to define the engineering and construction industries, which are holding firm against persistent financial pressures and ongoing economic fluctuations.

As a result, the sector must keep sharpening its focus on jobsite efficiency and ensuring that valuable materials and talent are used as effectively and wisely as possible.

And, if necessity is the mother of invention, economic uncertainty is helping to emphasize the importance for companies to remain agile and adaptable.

Rising costs and tighter deadlines can mean small mistakes compound into expensive delays. Projects and teams must perform more capably with better controls to ensure even simple tasks do not need to be repeated or corrected later. With cost overruns being unacceptable, our company strives to remain nimble through adopting and using new technology to enhance how skilled trades crews work in the field.

Keeping Overall Projects Costs Down by Avoiding Mistakes  

It’s no secret that labor and materials are expensive and increasing all the time – well more than the general rate of inflation. According to McKinsey, construction is the largest industry in the world. And it makes up about 13 percent of global GDP. But it is also one of the slowest growing with slim margins.

Even though construction revenues have been increasing (albeit at a slow rate), industry net profits are not as impressive as the wider public might think. According to Deloitte, construction earnings before interest and tax (EBIT) account for 5.5 percent of a company’s sales. This leaves little wiggle room when it comes to unexpected or additional expenses.

With economics like those, doing installations correctly the first time is essential. Cost overruns stemming from errors can’t be tolerated. Technology, strict processes, quality work and stringent inspections assure the engineering is done right the first time.

It’s estimated that reworks of faulty or incorrect builds within the rest of the industry account for nearly 30 percent of construction costs.

Industry Pressures Affect the Bottom Line 

Monetary policy decisions to lower interest rates have been helping to lower inflation, but steel and component prices have risen, also affected in some cases by tariffs. Construction companies are constantly looking at way to improve their bottom line.

Whether it’s negotiating prices with suppliers, adopting better technology or changing their methods, construction companies have been forced to prioritize efficiency and cost-saving.

Precise Yet Cost-Effective Practices Keep Costs Down 

One of the ways we’ve become a preferred and authorized builder for so many of North America’s top building system manufacturers is our lean structure and cost-efficient processes using the best technology available to deliver completed products with accurate precision and durability. Our project partners rely on their teams to get it right the first time, keeping projects on schedule and on budget while minimizing costly overruns or delays.

How do we do it? We rely on a combination of talent, technology and long-term relationships to ensure access to materials and help manage economic factors that save clients thousands on their installation. We avoid construction delays by using efficient project management practices and innovative construction techniques to minimize delays. On the jobsite, our experienced tradespeople use precise, efficient processes and intelligent technology, such as building information modeling (BIM) and digital and robotic tools, to augment how teams work on site.

Frank Melo is director at Double Black Construction.