What Are The Biggest Challenges In Commercial Construction?

What Are the Biggest Challenges in Commercial Construction?

Commercial construction projects come with unique challenges that, if left unchecked, can lead to costly delays, budget overruns, and other inefficiencies. In this blog, we’ll explore some of the biggest challenges in the industry, explain why they happen, and provide actionable solutions to overcome them. Stay with us as we dive into these crucial insights!

1. Budget Overruns:

Budget overruns are a significant issue in construction, with research revealing that the average project runs 60% over budget. This often occurs due to inadequate planning and risk management during the early stages.

To avoid budget overruns:

• Create a Macro-level Takt plan early on to establish realistic labor hours and project costs.
• Use a reference class for your budget to ensure it aligns with historical data from similar projects.
• Conduct a risk review to identify and address potential overruns, documenting everything in a risk and opportunity register.

Through proactive planning and risk assessment, you can significantly reduce the likelihood of budget overruns.

2. Workforce Issues & Skilled Labor Shortages:

Labor shortages and workforce inefficiencies are often misunderstood. The root cause is not a lack of workers but poor resource utilization. On any given day, approximately 80 workers on a typical project site are underutilized, waiting for tasks, or performing rework due to preventable issues.

To tackle this problem:

• Implement the Takt Production System and Takt planning to create even workflows.
• Ensure tasks are properly sequenced and roadblocks are cleared before work begins.
• Provide proper training and prepare work packages in advance to ensure readiness.

By focusing on efficiency and preparation, you can make the most of your available workforce and overcome labor shortages.

3. Project Delays:

Delays are inevitable in construction due to weather events, missing materials, or unexpected disruptions. Unfortunately, the typical response—rushing, adding more workers, and increasing overtime—often exacerbates the problem.

A better approach includes:

• Identifying trade and zone bottlenecks and optimizing them.
• Properly zoning projects to streamline workflows.
• Preparing better designs for work packages to reduce duration without overburdening teams.
• Aligning work-in-progress with resource capacity using tools like the Last Planner System.

This approach not only narrows timelines but also minimizes the negative impact of delays.

4. Safety Risks:

Safety is a non-negotiable priority in construction. A safe worksite requires a well-maintained environment, clear expectations, and proper onboarding for all team members.

To maintain safety:

• Define clear standards and expectations for every worker on-site.
• Provide comprehensive training and onboarding sessions.
• Regularly inspect and maintain a safe working environment.

Commit to holding the line on safety, ensuring that nothing compromises the wellbeing of your team.

5. Supply Chain Issues:

Supply chain challenges often stem from poor planning and management. Late procurement or mismanaged logistics can halt progress and inflate costs.

To overcome supply chain issues:

• Map out your production plan early, identifying long-lead procurement items.
• Break down procurement by project zones to streamline delivery.
• Establish a weekly procurement lock to track and address real-time issues.

Starting early and managing procurement efficiently will mitigate supply chain delays and ensure smooth operations.