The Covid-19 pandemic has affected societies globally, with more than 96 million reported cases as of January 2021; This number is expected to continue rising with time. And while governments and health organizations globally are responding quickly, a lot remains to be done.
During such difficult times, the construction industry has not been spared, and they’re also on the receiving end of the pandemic’s wrath. Many construction companies across the globe have shut down. Even those operating have faced deranged supply chains and operational hurdles. Other than these disruptions, players in the construction sector are also overburdened by other issues such as the validity and efficiency of existing construction policies.
However, construction companies need to put measures in place to help them manage the effects of Covid-19. Here are some key changes many of them are using to stay afloat.
1. Restructuring their Supply Chain and Suppliers
We can all agree that Covid-19 has interfered with many aspects of most people’s daily professional and personal activities. There’s no avoidance as these effects can also be seen in the construction industry. One key area that has experienced a severe level of disruption has been the material/supply chains.
If your construction site is still operational, we recommend using reinforcing mesh to ensure quality in your structural elements. Many construction companies have felt the effect of the material delay or even shortages for some time on their projects.
This is why we recommend creating new solutions to mitigate the effects that can halt your projects. Additionally, work with your suppliers to negotiate potential changes for schedules, time, project completion, and management.
2. Finance Assessment
We’ve seen many businesses laying off staff or improvising strategies to reduce cost expenditure because of the pandemic. Many businesses have had to analyze their financial standing to assess whether it’s in good condition. Understanding the state of your finances gives you a stable ground when making your business decisions.
We recommend first checking the money that is available for business emergencies. Having a good cash backup will help your business weather the financial storm in weeks or months to come. Since there’s a rapid hike in material costs, you require more than the usual amount of money to run your operations.
Additionally, you should also analyze how long it will take before your operational expenditure consumes your tax reserves and ensure that you plan appropriately.
3. Implementing Crisis Management and Response
The construction industry should continue to prepare for potential struggles as time goes. This is evident with many construction sites closing down on a large scale, which might continue for a prolonged duration. As a company, we recommend sitting down with your management team and come up with viable solutions to mitigate the effects caused by Covid-19.
For instance, you can apply for the federal stimulus package in the US, which will ease the pressure your business is facing. For this reason, many construction companies are now working with governments and subcontractors. Such close relationships have helped organize plans for employees and consumer safety while keeping vital projects running.
4. Change of Contracts and Client Acquisition Process
The construction industry is always marred with payment issues. However, with the current crisis, there’s a high chance of acquiring negligence. As a business, we recommend that you avoid writing off your receivables. To achieve this, you may have to reorganize your client acquisition process in-line with the current situation. As a construction company, ensure you put effort into protecting your revenue sources by conducting strenuous credit checks and ensure that your clients are creditworthy. Many businesses are now demanding payment reference or collateral during payment. In simple terms, this means being proactive in getting payments. Additionally, you can also try changing your billing cycle to a shorter one.
5. Using Digital Collaborative Platforms
The significant advantage of such a platform is that it supports multiple relationships by connecting each supply chain participant involved in the construction project. An excellent digital network uses tools, techniques, and best practices to implement a functional space.
The parties involved in a particular construction project are notified of different parts of the project’s status and can quickly change to expected changes; this can happen without handling relevant paperwork or meeting in person. Many construction companies have embraced digital platforms since all parties work with one single version of the truth. We’re also seeing new tools introduced every day to help construction firms continue operating during the pandemic.
Covid-19 has disrupted how businesses operate. Many companies now understand that working at the standard operating mode is now no longer feasible. Keeping employees safe at a job site is always a top priority for any construction company. Because of the pandemic, it’s vital to deliver peace of mind to employees and their families by creating procedures that ensure their safety.