How to Hone Your Construction Resource Management Process to Run More Profitable Jobs

Before you start any construction project, you have to know its scope. And to maximize your profitability, one aspect of scope you can’t ignore are the resources needed to complete the project. From raw materials to labor, every resource needs to be accurately accounted for to minimize roadblocks, optimize your time spent on the construction site, and deliver a successful project outcome. 

This is where an effective construction resource management process comes in. With the right plan, you can better understand project constraints ahead of time. Instead of reacting to things like fluctuating material prices, you can proactively take the reins and steer projects where you want to go. 

Key Takeaways

• An important part of a construction project’s scope is the resources it will need to achieve lift-off. These resources can range from raw materials and equipment to labor.
• By planning the purchase/rental and allocation of these project resources effectively, you can ensure projects stay on budget and on time, all while being able to navigate roadblocks like long lead times.
• Ultimately, an effective construction resource management plan will help you stay proactive on projects, rather than reactive.

Why Resource Management is a Must in Construction

The construction industry is complex and deals with multiple variables that can change in real-time. Because of this volatility, general contractors have to be able to not only choose the right resources and team members to get the job done, but plan those resources effectively to avoid hiccups along the way.

With a good construction resource management plan in place, you can:

• Proactively plan your resource allocation and stay ahead of potential issues
• Track resource scarcity and pricing based on your initial bid
• Optimize time and effort on the job site
• Coordinate with stakeholders to make sure resources are allocated appropriately

And this is just the tip of the iceberg. Before we get into the nitty gritty though, it’s worth looking at the most common resource types you’ll find on every project.

5 Common Resource Types

While every project’s specific needs will differ, you’ll always need to consider these five resource types when putting together a construction resource management plan.

Raw Materials: This can be anything from the lumber and cement to the metals used on-site. Their cost and availability play a significant role in what the project management team ultimately selects. 

Equipment: Depending on the project you’re undertaking, you could need excavators, cranes, lifts, ladders and more. 

Labor: Labor resources are broken down into two categories: your own workforce (finance managers, architects, estimators, etc.) and subcontractors. Together, these people create the project team.

Facilities: From toilet facilities and locker rooms to drinking water, many facilities are not only required by law but also improve workforce morale and efficiency.

Financial resources: You can’t run a successful construction business without understanding the underlying financial mechanisms at play on a given project. For example, you need to know when and how much funds are available to pay your workforce and purchase materials.

How to Hone Your Construction Resource Management Process to Drive More Profit

The ultimate goal of construction management is to deliver successful projects within the project timeline, on budget, and as planned. To help you get there, here’s our three-step process to hone your resource planning and management.

1. Conduct a Material Takeoff Analysis

During preconstruction, you’ll need a list of materials and resources necessary to complete the project objectives. This info will help guide your budget and schedule. Once you know the quantities of each resource, use your expertise to assign the appropriate labor and create a preliminary schedule.

Tip: Using an estimation software with automated takeoff tools can make this stage even easier. This type of software can measure, count, and itemize required materials during the preconstruction phase and assist estimators in preparing budgets. 

2. Estimating & Budget

Now that you know the materials and equipment needed, you can begin forecasting the direct cost of those items, along with the labor costs needed to complete the project scope. Make sure you’ve got some extra financial padding to cover any unexpected expenses that pop up.

Tip: You can further streamline this stage by confirming material unit counts along with the labor necessary to complete certain tasks. Once you get those costs from suppliers and subcontractors, double-check how long their proposal is good for. If a project is delayed, the price you received 30 days ago may not be the same as it is today.  

Lastly, a major pitfall with construction budgets is not accounting for unforeseen conditions. To make sure you’re covered, don’t forget to set aside some contingency. From scope creep to volatile material costs, planning ahead for unexpected events can give you the wiggle room you need to stay on top.

🔎 Dive Deeper: How to control costs on your project

3. Acquire Resources

Once the project budget is approved, you can re-engage suppliers and vendors to ensure their projected timelines haven’t changed. Now it’s time to place your orders and double-check there are no delays. 

Tip: Stay proactive by ensuring all the resources you need are available according to the project schedule. Whether it is steel, wood, tile, or even something like storage space, knowing lead times can help you prioritize what needs to be ordered ahead of time. This is especially important if you’re worried about scarcity. Sometimes, it’s best to order the material sooner and pay for storage instead of risking a delay because of a shortage or price hike.

4 Benefits of Good Resource Management

Construction resource management is a foundational part of any project. To hit your milestones and avoid shortages, you need these skills. And once you’ve mastered them, you’ll see benefits like:

Better Equipment Tracking: Whether through specific construction resource management software or an internal spreadsheet, a solid construction resource management plan will make it much simpler to make sure the right equipment is available at the right time.

Reduced Project Costs: Effective resource management will help you monitor schedules and forecast availability, so you can make sure there are no staff or material shortages. Fewer delays = fewer chances of budget overruns.

Improved Productivity: A detailed resource management plan takes supply chain, project requirements, and resource availability all into consideration. With this level of attention, you’ll be less prone to errors in scheduling and ordering, facilitating a much smoother, more efficient project.

Easy Adaptation: Because you’re tracking resources in real-time, you can quickly identify issues with allocating resources and reduce the time it takes to make limportant decisions. On the job site, project teams will receive notifications of any issues so they can keep track of project progress and respond accordingly.  

Last Thoughts

If you want to stay on budget and on schedule, you have to track your resources - and this means taking a proactive stance instead of a reactive one. Every job will have its speed bumps, but the more you’re in contact with suppliers, vendors, and project stakeholders, the better you can manage expectations (and more importantly, your bottom line).  

Further Reading: Foundations of Construction Project Management for Emerging Contractors