The course of events is clear: you receive an invitation to tender, look for the right subcontractors, submit a tender and, if the client agrees, the subcontractors can start building. You will probably have already calculated a margin of error into your tender, but there are often more unforeseen costs.
Costs of failure are often the result of heightened time pressure associated with major construction projects, scarcity of materials and a shortage of qualified professionals. On top of that, the lowest price continues to be the deciding factor in many tender processes. Costs of failure therefore appear to be an almost accepted inefficiency in the construction industry: ninety per cent of construction companies are aware of the costs of failure in their businesses. However, given the scale of this, it is striking that more than a quarter of these companies indicate that reducing costs of failure is not a high priority.
That is not going to happen to you again. These tips will help you reduce the costs of failure.
Invest in communication between departments and with subcontractors
Many mistakes can be avoided through better collaboration and communication. Does the procurement department know which subcontractors the costing department has sent an invitation to tender to? Does the procurement department also know suitable subcontractors who they trust?
Listen to the knowledge of subcontractors. They often have insight into whether a plan is going to work or not in practical terms, because they are specialists in their field. Consult subcontractors to find out whether they see any pitfalls before construction starts. This will help develop an effective collaborative relationship, in which the subcontractors and general contractor can trust each other. Does the subcontractors turn out to be right in his assessment? Then you will have less costs of failure and the subcontractor will receive other commissions from you.
Keep an overview of all important information
An email here, a WhatsApp there, documents via WeTransfer or should you share them in Google Drive after all? Communication often takes place through many different channels and that is why you can often lose the overview. The best way to prevent this is by adopting a project-based approach to all communication. With the costs of failure it concerns the entire process, up to the finished product, and it involves a variety of people. It is therefore important that everyone in the process has all the information available at all times. So make sure that the information is up to date and that no information is missing.
If you work with 12Build, you can be certain that no information of a construction project will be lost and that you will always see the most up-to-date version of a document. This is because 12Build is a cloud-based solution. Your files are uploaded to the cloud, where all your colleagues can access them. Everyone has the same information. As easy as that!
Choose quality
You will often understand each other better if you work with subcontractors you trust. You are more likely to be on the same wavelength. This ensures that you work more efficiently. 12Build gives you the opportunity to indicate your preferred regular partners in our database. No more Excel spreadsheets with contact details of subcontractors. With 12Build you have all the contact details and your evaluation of a subcontractor in one clearly structured tool
If you prefer to work with a new subcontractor because your regular partners are perhaps unavailable or are on the other side of the country, it would be convenient to be able to choose a subcontractor on the basis of quality. A lot of time is spent on checking references and experience and searching for contact details. 12Build shows you at a glance which subcontractors specialise in the area of work you are looking for.
Evaluate a construction project
It is so busy in the construction industry that things going wrong now will be repeated the next time. It is therefore important to evaluate every project after completion. We often fail to allow ourselves time for this. But the time spent doing it would easily be earned back. With such an evaluation you will increase your profits in the next project!
12Build gives you the opportunity to evaluate subcontractors and suppliers for yourself. This evaluation will only be visible to your company. It enables you to see at a glance whether you were satisfied with the previous work of a subcontractor.
Commit yourself to innovation, process optimisation and standardisation
Long-term collaboration and standardised processes are not yet universal in the construction industry. But they are crucial for reducing the costs of failure. In an industry where many parties work together to realise a single product, good collaboration and communication are key. Process optimisation through partnerships and automation can help in this. By committing yourself now to innovation, you can reduce costs of failure in the longer term.
