Grappling with razor thin margins? Lessons from the logistics industry

Hundreds of builders have gone bust this year and more are expected to follow, according to “Construction Woes” an ABC TV 7.30 Report episode that aired last night.

Chris Pearce, executive chairman of EV20 and former Toll Global Logistics president, urges construction companies to reach out for local, expert assistance.

EV20 is an Australian software developer with a combined 400 years of software development and integration experience amongst their Australian developers. They have used their knowledge in logistics software to develop a construction software solution that will improve operations thereby improving margins and reducing the financial stress for Australian construction companies.

According to the 7.30 Report last night, many more construction companies are expected to collapse due to skill shortages, rising building material costs and fixed prices in contracts.

“We are a small business who has just happened to be extremely successful in the logistics industry, helping some of Australia’s largest logistics businesses become more efficient. And we’re here to stay.

“So, if you are grappling with razor thin margins, and are in need of a digital transformation or can exit an expensive software contract, we can help you become more efficient in your operations, win more work, and resource the work through efficient project management, making better use of your resources at hand.

“We promise, at this stage of our product’s development, to service you to our best ability to ensure your viability in today’s exciting building boom,” said Chris.

Key mistakes in construction

  • Manual processes carried out by expensive project managers that take them away from the critical area of key oversight of their projects
  • Paper based processes which require administrative data entry. On some major projects, there can be between 4-8 site administrators helping workers complete timesheets, log and manage leave and time off
  • Idle periods for project resources or worse – time theft (people standing around on site doing nothing because they are waiting for materials but still billing time)
  • Many small software solutions that don’t talk to one another (as opposed to ours which replaces many small apps with one app)

Key improvements for construction

There are some macro improvements. Structural factors such as industry culture, pricing and procurement overhaul, increase in apprenticeships and traineeships are needed. Seasonal and cyclical factors such as COVID and now in Post pandemic, working conditions will see gradual return of immigrants and this should provide a solution to shortages across the industry and slow the pace of inflation.

Key improvements for construction businesses

  • Construction companies that embracing technology will be better placed to remove the manual, tenuous and routine-based tasks (and make it easier to onboard new people)
  • Companies need to invest in the right people (overheads)
  • ‘Think out of the box’ to procurement and mobilising project resources
  • Proper and prudent planning and job control underpinned by core technology to support
  • Promote efficiency and have the plans and processes in place to take action to minimise business disruption and key person loss. 

Check out the Drive Lynx construction software and get in touch with us today.