Asset Intelligence and Management

Asset Intelligence and Management

EZOfficeInventory Blogs Construction Industry Challenges

Top 8 Challenges In The Construction Industry and How to Solve Them


Construction workflows involve multiple stages starting from design and procurement to quality control leading to post-construction inspections. Each stage centers around different types of assets, risks, and budget constraints. These factors pose certain challenges in the construction industry and can hinder project execution if not managed properly with the right tools. 

In 2022, 423 out of 1056 worker deaths were due to falls, slips, or trips. Such accidents mostly happen due to neglect of safety precautions or failure to meet regulatory requirements at project sites. In order to avoid such mishaps, it is critical to understand the key challenges faced by construction workers. This helps construction companies set up best practices to avoid roadblocks and achieve seamless project execution.  

This article will first discuss the major construction challenges, and the role technology can play in overcoming these and how.  

8 Common construction management challenges

Construction machinery, materials and tools are a heavy investment and need to be properly monitored to ensure maximum returns. However, there are some roadblocks that may prevent construction companies from attaining optimal efficiency. 

Let’s look at some of the issues in the construction industry in detail: 

1. Cost mismanagement

One of the most common challenges in the construction industry is cost overrun. In such a case, a construction project usually exceeds its initial budget due to unpredictable raw material costs and unforeseen circumstances. These costs can pile up and lead to prolonged delays in project completion. 

According to research, construction profits dropped by 27% due to labor shortage and material costs in 2023. Cost mismanagement occurs due to a few primary reasons including incorrect project estimation. Complex projects involve a lot of cost planning and anticipation. If budget schedules are flawed from the start, the effect will only multiply over time. Last minute changes in the project schedule, administration errors and labor challenges can also lead to cost overruns.

As a solution, dedicated time needs to be allocated to perform specialized project cost analysis and get it vetted by experts to avoid any major pitfalls during the project. 

2. Slow adoption of technologies 

The construction industry has always been slow in adopting modern technologies, with the majority of workflows still being recorded in spreadsheets. Paper-based documentation is widely accepted because it’s a familiar source of data preservation. While manual methods are readily available, they are fraught with errors and slow projects down while being inefficient. 

The biggest reason for slow adoption of technology is the complex nature of construction projects. A single project is fragmented over multiple stakeholders, sites, workers and owners. In case of a new software being introduced, all parties involved will have to be taken on board and trained to make implementation smooth. All this coupled with resistance to change makes it difficult to follow through with a new technology, given the tight budgets and development deadlines. 

3. Changing regulatory requirements

Keeping up to date with regulatory requirements is another challenge for the construction industry. Due to a variety of assets involved, there are multiple compliance rules that need to be followed. These rules are constantly evolving and can be difficult to track without using a dedicated system. 

Moreover, regulatory requirements for construction vary across states. This is cumbersome for multi-national or across state companies as the changing regulations require deep understanding and appropriate maintenance and usage policies to be implemented on site. In order to do so, construction companies need to maintain proper documentation and reporting for all equipment they own– adding additional responsibilities for the workers. 

4. Lagged communication

To carry out massive construction projects seamlessly it is important to have clear communication throughout the process. This involves critical details from the stakeholders to attaining minute updates from the workers on site. 

Due to the lack of a centralized system, key requirements are not communicated to the relevant party at the right time, resulting in unnecessary delays. According to a study, 77% of construction projects suffer significant lags due to poor communication. This occurs because workers may be relying on word of mouth to complete their daily tasks without access to real-time information. 

Large scale companies may not have all the related parties on board on a single platform to disperse critical information. Staff users commonly are on the field and often missed out from being added to a management system. 

5. Inadequate risk management

With the involvement of heavy machinery and equipment, it becomes challenging for the project managers to fully implement risk assessment and management strategies. Without proper safety protocols in place, accidents are bound to happen, leading to casualties and prolonged lawsuits for the construction companies. 

There are a few common cases of poor safety management at job sites. Failure to identify risks at the right time can snowball into a bigger problem and eventually halt operations or even incur higher maintenance costs than expected. Secondly, lack of continuous inspections and monitoring can amount to major downtime for heavy equipment. 

6. Labor shortage 

Due to a mismatch between the supply and demand of construction workers, the industry has recently declared a shortage of skilled labor. Those already employed are nearing retirement, further reducing the number of skilled labor present in the workforce. All these factors have a negative impact on productivity and prolong project completion times. 

The inability to find a skilled labor force leads to increased wages that can inflate project costs– reducing profit margins and compromising quality. Consistent shortage of labor eventually takes a toll on the operational efficiency and may lead to stunted growth. 

7. Keeping up with a schedule 

One of the many common issues in the construction industry is planning and sticking to a work schedule. This happens mainly due to the complex and fragmented nature of construction projects. When numerous stakeholders and subcontractors are involved, schedules get delayed due lack of coordination and centralized management. 

Miscommunication or lack of coordination can be a result of manual project management. With a manual system, there is no way of letting everyone know regarding the changes in the project setup. Other than this, multiple quality assurance reworks and unforeseen accidents also make it difficult to keep up with a construction work schedule.  

8. Lack of planning and forecasting 

Construction projects are heavy investment jobs that involve a lot of planning and budgeting. Without strategic implementation, it becomes difficult to achieve project goals and objectives. Failure to forecast inventory, labor and material costs can lead to over expenditure and even operational halt in extreme cases. 

Inadequate data management is one of the leading causes of poor planning and forecasting. Absence of a centralized system to control costs and assets can lead to haphazard documentation inhibiting the ability to forecast accurately. 

How can technology help overcome challenges in the construction industry?

Construction companies can resort to cloud-based systems that offer real-time updates about the availability, condition and ownership of machinery, equipment and tools. An asset management software offers barcode tracking abilities to maintain accurate inventory records at all times. 

Deploying a reliable solution can help project managers achieve the following benefits:

Location tracking

A cloud based asset management system helps construction companies tag all their machinery and equipment. These labels can be used to track items every time they are checked out for projects in different locations. A detailed location map can be generated alongside each asset to help admins overview where the item is being used at the moment. 

Real-time GPS asset tracking helps project managers keep track of expensive equipment and small tools across sites – minimizing chances of loss and theft. 

Proactive maintenance 

Damaged equipment can slow down operations and delay project completion if not dealt with in a timely manner. Asset management technology enables you to schedule service sessions for all construction tools and equipment according to their usage. These scheduled inspections can help highlight potential problems with the equipment before they bottle down to major breakdowns. 

In this way, proactive maintenance eliminates the need for last minute corrective repairs, saving costs and time. 

Compliance management 

An automated asset tracking system records all equipment and tool kit details in a comprehensive form. The software enables project managers to attach any important documents or regulations that refer to asset usage or maintenance. Proper documentation management makes it easy to adhere to regulatory requirements and update them whenever necessary. 

In addition to this, asset tracking technology offers construction managers to run regular audits. Routine health checks act as a mechanism to ensure that the current equipment is being used in accordance with the compliance regulations and rules. 

Alerts and notifications 

The majority of asset tracking systems offer remote access through a mobile app, making it convenient for field workers to log in progress and communicate with each other. 

For instance, for an excavator maintenance event, alerts will be sent to all relevant admins and staff workers involved. Such timely notifications streamline communication making it easier for workers to make alternative arrangements for uninterrupted operations. 

Dashboard KPIs 

One of the major goals for the construction industry is to manage health and safety risks on and off site. A simple way to do so is to create risk KPIs and track them throughout time to minimize the risk of accidents. Some popular KPIs to populate in an asset management system include lost items, number of breakdown incidents, number of successful audits, and maintenance costs. 

Efficient project management with asset management technology

Adopting a cloud-based technology to manage construction workflows improves efficiency and performance by overcoming common challenges. Accurate asset tagging enables construction firms to track equipment at all times and minimize loss and misplacement. Other than this, timely maintenance prevents unexpected breakdowns and facilitates smooth operations. 

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Frequently Asked Questions

  • What are the top challenges faced by the construction industry?

    A few common challenges in the construction industry include cost overruns, slow adoption of technologies, changing regulatory requirements, slow communication and inadequate risk management strategies.

  • How to overcome challenges in the construction industry?

    Construction companies can mitigate challenges through adopting a cloud-based asset management system to track, maintain, and optimize equipment by using barcode labels. Real-time location tracking minimizes risk of loss and misplacement– saving costs.

  • Why is technology adoption slow in the construction industry?

    The construction industry is quite resistant to technology adoption due to the training costs involved for multinational companies. Construction projects are complex with multiple stakeholders, who might not be so keen for a sudden change in management.

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