One of the fundamentals of construction management is scheduling. Effective scheduling can cut construction times and lower project costs when done carefully and skillfully. Here are 5 ways that effective construction schedules keep jobs on schedule and within budget:
1. Determine a Reasonable Completion Date to Help You Make Business Decisions
The completion date is a crucial consideration for owners regardless of the building’s use—residential, commercial, or industrial—and may serve as the foundation for decisions on finances, business, and personal matters.
Unfortunately, some owners might not be aware of the difficulties involved with their project and may have inflated expectations for when it will be completed. Because of this, setting a realistic completion date for the project is crucial for contractors to control expectations and ensure project success.
2. Reduce the Timetable by Using Concurrent Tasks
The contractor can plan out numerous building projects and establish completion dates by creating a schedule. The contractor will identify interrelated jobs during this exercise. Some of these activities can be floating, which means they might be completed in a period of time longer than the task’s actual duration. Others, when done in the right order, produce the “critical path,” or the lengthiest construction time. Setting reasonable deadlines for these tasks is essential to determining a realistic completion date for the project because each critical route activity must be completed before the next one can begin.
The contractor should be able to program jobs that don’t depend on one another, don’t affect the critical path, and can execute concurrently once the critical path has been defined. This method is a wonderful way to make sure that non-critical path jobs don’t ultimately affect the timetable.
3. Support Cash Flow Management
Financial mismanagement is one of the most frequent causes of building project failures. The project owner pays the contractor throughout operations in accordance with a set payment schedule. The contractor is also required to pay their employees, subcontractors, vendors, and suppliers.
Some contractors find it difficult to continue funding building projects because of the delay between the contractor’s payments and their receipt of the owner’s money. Additionally, since owners often hold back 10% of the payments until completion, contractors do not always get paid in full up front. This means that before the final payment, which includes the final progress payment and the retainage, contractors frequently experience negative cash flow.
Many contractors must rely on their own working capital or pay interest on their line of credit to maintain their cash flow and continue making payments on schedule in order to keep the project afloat. Even individuals who pay with their own money theoretically miss the chance to put the money to other uses.
Contractors must consider scheduling as a helpful tool in cash flow management in light of these difficulties. When developing diverse activities, payment dates are vital considerations. For instance, there is some wiggle room in the completion dates for tasks off the critical route, and these tasks frequently have alternate “early” and “late” completion dates. The contractor is compelled to spend money as soon as possible if the earlier deadlines are followed; however, if the later dates are followed, the contractor is free to delay payment. The ideal time for the activities and the expenditures would fall between the early and late dates.
4. Confirming Payments on Time
The contractor typically receives progress payments on a monthly basis in accordance with the Schedule of Values (SOV). In this case, the project is divided into discrete work items, each of which is given a monetary value. The total cost of the job components reflects the project’s contract price. The amount of work finished in relation to the SOV is taken into account when the contractor bills the client each month. Alternately, the payment schedule could coincide with the project’s checkpoints, which are when crucial tasks like the structure or the envelope are finished. In either case, a building timetable enables the owner to better manage their cash flow and keep track of the progress payments.
5. Keep Tabs on Modifications
The majority of building projects depart somewhat from the approved plan. The revisions may be the result of alterations made by the client, a mistake in the design, or an unforeseen circumstance. The completion date could be impacted by pricing, schedule, or budget changes in any situation; this is especially true when the project in question is on the critical path.
In the event of changes, a thorough construction schedule will assist the contractor in developing a plan to minimize time delays. The contractor may try to crash the schedule if fast-tracking or concurrent scheduling is not an option.
Typically, when a crash occurs, the critical path tasks receive greater resources. Alternately, the contractor can suggest omitting some criteria for the design or part of the scope. The method’s ultimate goal is to save the greatest time while spending the least amount of money.
An essential element in keeping a project on schedule and under budget is effective scheduling. It enables the contractor to keep track of and expedite the building activities, as well as aids the owner and contractor in budget planning.
If you’re organizing a construction project, think about hiring a pro to lead your crew. A business that provides project management services for construction can create a timetable and assess your contractor’s scheduling efforts.