The construction sector has been significantly affected by the COVID-19 crisis. The interconnectedness, complexity, and collaborative nature of the construction industry’s supply chains and workforce affect the cost and schedule of infrastructure projects.
Due to the Covid pandemic, construction sites have shut down, or the open sites have faced disrupted supply chains and operational restrictions. Supply chain interruptions such as restrictions on the movement of the material and manpower, will likely continue, affecting the availability of parts and equipment; and eventually, impact project financials and even the viability of the project. WHO has cautioned about the long-lasting effect of the virus, believing it will stay amongst us longer than expected. In this situation, social distancing may become the new norm and humanity will need to find yet new ways to be productive.
The biggest challenge for this sector is to continue construction activities continues while ensuring that workers are safe. While remote working is the norm for millions of people, this is not true for the construction sector.
Protecting the three critical Ps
For any construction firm, for bouncing back to normalcy, it is vital to concentrate or focus on protecting three critical Ps (People, Projects, and Performance) using the power of technology.
Protect the People
In construction projects, numerous people work in close quarters by using common facilities. This means construction sites carry elevated COVID-19 risks — an outbreak could affect an entire workforce. Organizations need to develop new working norms, adopt a more flexible working system, and address broader concerns associated with the pandemic to protect the most valuable of all resources: people. Without shortchanging safety, organizations must first defend against on-site transmission by intensifying existing safety measures to account for COVID-19, such as by changing operating practices to ensure physical distancing and proper sanitization.
However, even the most experienced organizations lack a response plan for more profoundly disruptive events, something that the COVID-19 crisis desperately calls for. Acting swiftly in the face of changing policies requires project owners to develop a strategy that stratifies risks, defines triggers for action, and provides guidance on what to do. Having this system in place means they can quickly identify threat levels and advise their workers.
Technology can help organizations maintain social distancing and contact tracing to prevent any spread of the infection. Using AI-enabled high definition CCTV cameras, they can even identify areas where social distancing norms are being flouted and take corrective actions. Technology can also aid in better planning for construction activities, including the type of manpower that will be required due to the labor shortage caused by the pandemic.
Protect the project
Projects are now facing unforeseen market conditions, contracting challenges (including potential bankruptcies or invocations of force majeure clauses), supply-chain bottlenecks, and cash-flow shortages. Technology can play a big role by providing full visibility into potential risks that can help safeguard the project’s overall business case. Organizations also could identify risks on continuing projects and opportunities that take on new relevance in the face of Covid-19. For example, organizations may not be able to justify expensive public- transit projects when the pandemic has drastically reduced ridership.
Technology can help organizations to map out their entire supply chains to take more proactive measures during Covid-19, including identifying alternatives, considering where to stockpile, and reviewing contingency budgets to source and expedite critical materials. Technology can also help in creating greater collaboration with functions such as procurement, labor, or finance, which in turn can help project owners conserve cash. Potential actions include negotiating with vendors on discounts and payment-deferral plans, aggregating demand for commoditized materials across multiple projects to take advantage of bulk discounts, or identifying and applying for appropriate stimulus or relief funds, when available.
The high bar for infrastructure-project performance will not change even in the pandemic condition. Organizations need to explore how best to adjust their operating models across engineering, procurement, and construction so that performance can be maintained in the face of Covid-19.
A comprehensive project management solution can help organizations proactively develop a mitigation plan for potential slowdowns, shutdowns, and project restarts. This can also help firms to review projects to identify what work may need to be mothballed and how to strategically do so. They can also consider different scenarios for how projects may play out across planning, design, and management. Factors such as disruptions to the supply chain; potential insolvency and bankruptcy of suppliers, vendors, subcontractors, and contractors; and delays in obtaining permits, can also be considered while planning risk mitigation strategies.
The performance of a project can be protected using multiple technology levers and controls. Some of these techniques include:
1.A central control and command center can be deployed for transparency and alignment
2.Digital and advanced analytics can be used for effectively managing to contract and procurement strategy
3.Lean construction techniques can be used to reduce process waste and variability in delivery
4.Incorporating modular elements into designs to limit on-site crews
5.Optimizing the total cost of ownership to increase reliability and resilience
6.Identifying and analyzing key risks impacting safety, quality, cost, and schedule
7.Setting up governance for decision making
From ensuring worker safety to making sure that projects are financially viable, technology can make a huge difference in the way construction projects are planned and executed. Hence, if the Covid 19 crisis is seen as an opportunity to innovate, it can help construction firms build a strong digital foundation for the future.
Highbar Technocrat is one of the leading end-to-end IT solution providers for the Infrastructure, EC&O, Real Estate, and Power sectors. They are SAP Gold partner and offer a wide bouquet of digitally integrated solutions ranging from implementing SAP-based ERP solutions like Rise with S/4HANA, Cloud-based solutions to 5D BIM for mega infra-projects, RPA & IoT solutions, and many more. With an in-depth understanding and core competence of the construction & infrastructure industry, Highbar is the perfect blend of domain knowledge in the infrastructure business with a team that is well equipped to understand and relate to the requirements of the sector.
To know more write us at email@example.com or call +91 89767 11399
Blog is written by — Joydeep Banerjee, Head of Business Development, Highbar Technocrat Limited