Smart logistics on the construction site - which processes can be optimized by using proper technology?

It is very difficult to plan the construction process effectively if you do not have precise information on what materials, in what quantity, from which supplier will be shipped to the construction site at what point in time. This translates into stagnation and delays at the construction site, which in turn leads to increased costs and reduced sustainability of the entire development project. Lack of coordination is also devastating for traffic in the surroundings of the construction sites.

Another important aspect that badly needs procedural improvements is waste management. According to the study on wastage of materials on construction sites, the average percentage contribution of building material wastage to project cost overrun is between 21-30%. Why those materials are wasted? Main reason is poor logistics - deliveries are not scheduled properly and in effect there’s not enough room to store them.

On the other hand, real estate companies are not doing enough to change the way work on the construction sites is done, even though 9 out of 10 of responders of KPMG's Global PropTech Survey agree with this statement: “Traditional real estate organizations need to engage with PropTech companies in order to adapt to the changing global environment”. At the same time, as the KPMG survey also shows, 66% of the industry's entities don’t have a clear enterprise-wide digital and technological innovation strategy. What is more, ING study shows that there is hardly any investment in R&D throughout the whole industry.

Investing in proper technology to tackle legacy process will provide the industry with a lot of savings. According to the McKinsey study, 5–10x productivity boost is possible for some parts of the construction business by moving to a manufacturing-style production system. There is a big room for improvement in the sector as data shows that direct work typically amounts to no more than only 35-45% of a craft worker’s time on the job. Time and money are wasted as workers wait for unloading of materials delivered to the site in an uncoordinated way or because of any other reason.

Implementation of holistic software solutions built for optimizing problematic logistic processes, according to our estimates, can save up to 15% of the costs of construction projects. So, how the industry can reach for the productivity boost and cost-cutting solutions? What can be done to optimize processes and introduce smart logistics to the construction site all over the world?

By introducing to the construction site a cloud-based digital platform general contractors have a system to control and monitor the flow of materials delivered by subcontractors. Investors, in turn, have a tool to check how general contractors are progressing with the work. Investors also gain a proof of finishing another phase of the project in the form of purchase and delivery reports. Those reports can be useful in the process of receiving the next tranche from the bank that is financing the development process. The subcontractors gain a tool to plan the deliveries of materials they need for their work and as a result, they won’t have to go around putting out fires by organizing last minute deliveries. Using construction technology solution means that every delivery arrives on the site just in time and thanks to that everyone wins.

Employees responsible for the provision of materials for the execution of tasks on the site can for example use a web application (in a browser), on a computer or on their own mobile device. Thanks to this, logistic tasks are constantly monitored, coordinated and, if necessary, corrected. The whole logistics process is clearly scheduled and coordinated via cloud-based ICT system. That means gaining unlimited access to reports and operational support for participants in these processes such as logistics coordinator, traffic marshall, security guards at the gates, equipment operators, drivers, subcontractors, investors and suppliers themselves.

Using proper digital solution also means introducing transparency to the construction process. Typically, when a delivery arrives on the site very often nobody knows who should receive it, who ordered it and where the delivered materials should be stored. Software system can makes all those things clear, as every delivery is properly described and assigned to particular subcontractors and vendors, unloading spots and equipment as well as storage area where expected quantity of materials should be off-loaded.

Currently, construction sites to plan logistics processes use mainly pen and paper, whiteboard, excel and phone calls. But ProperGate introduces an innovative approach to the traditional and chaotic process of supply management at the construction site by optimizing and automating manual and time-consuming activities, using ICT technology and the latest trends in designing user-friendly interfaces. Simply put, by using proper technology general contractors can make construction projects more sustainable and transparent as well as will likely finish them according to the schedule set by the investor.

We have built our solution on a solid background of hundreds of hours of talking to construction site managers from Europe, North America, and the Middle East as well as our own experience in the construction business (34 years of combined experience in the built environment). Everything we have written above was verified and adjusted to the work environment and processes on big construction sites. All of this knowledge is included in ProperGate’s solution and it is why this an ideal solution for the construction business.