Another Advancing Preconstruction conference is in the books! This year’s event was held in mile-high Denver, Colorado, where Epsilon had the honor of addressing the plenary audience of over 1,000 attendees. Our own Paul Kirchhoff joined a panel of experts discussing best practices for addressing supply chain risks through creative preconstruction planning.
As with many of the events where Epsilon is speaking, we also attended other presentation sessions and networked with more industry leaders. The result: some key takeaways that are important to modular and prefab construction approaches.
1) Inflation is (still) the cause of many misleading business decisions. Ed Zarinski with Construction Analytics kicked the event off with another thorough evaluation of the construction industry from an economic standpoint, and his message echoed themes from last year. Namely, don’t let inflation fool you into thinking you’re growing faster than you are or that you need to staff up more than you do.
As we highlighted in this newsletter following last year’s Advancing Preconstruction conference, a growth in revenue does not equal a growth in volume. For example, if your revenue grew 10 percent between 2022 and 2023, but the relevant inflation metric for the same period was 12 percent, then your business actually shrank by 2 percent! And if you thought you needed to staff up for that increased revenue, you would likely get into an overstaffed situation – something no business wants. Even though the rate of inflation has dropped substantially in the past year, it’s still a factor to consider.
Bottom line: make sure you’re adjusting any revenue growth figures by the relevant inflation metric, before making any important business decisions, particularly around staffing. Relevant inflation metrics for our industry can be found on the Construction Analytics website.
2) Getting the design right takes a (proverbial) village. Layton Construction led a refreshingly frank discussion about the challenges we’re all facing with quality control (QC) in the design phase of a project. When designs are late or incomplete, the trickle-down impact on the project as a whole can be significant. But rather than assigning blame to the AE community, the speaker recognized that AEs are impacted by many of the same negative dynamics plaguing the industry at large: namely, compressed schedules and limited resources.
Furthermore, he suggested that design QC should be the responsibility of everyone on the team – with each stakeholder (owner, constructor, trades, and strategic subject matter experts or SMEs) playing an important role. He then shared a number of specific recommendations to address this as a team; these included:
- Don’t begin any design process without a design QC kickoff meeting, establishing who’s doing what and when. This helps ensure everyone involved understands their role in making sure the design process aligns with the project schedule and goals
- Be more deliberate with design reviews — they should be far more comprehensive than the traditional “constructability review.” Think about getting the right stakeholders to lend their perspective as the design evolves, potentially through Design Assist engagements. If it feels like it’s too much work, consider this timeless adage: “Do it now or do it later.”
3) Design Assist (DA) comes of age. We see more focus each year on the topic of DA. The sessions are always well-attended and involve lots of insightful (and often challenging) questions from attendees. We see this as a critical trend since DA is a key component in leveraging OSC strengths. And this year was no exception, with Mortenson and Harris Co leading a panel discussion of the good/bad/ugly surrounding how to leverage DA. A few high points we noted:
- The benefits of DA to the project team extend far beyond the traditional cost certainty and schedule surety. It injects invaluable perspective as major decisions are being made around the latest equipment options, including those that an owner might not know of. Design assist maximizes the potential for utilizing modular and prefab solutions throughout the project. It enables early procurement of long-lead items and can plug the gaps that sometimes exist in the design phase (reference takeaway #2 above), enabling the AE to focus valuable resources where they can make the most impact on the project.
- When discussing the value of DA with a skeptical owner, success stories are influential factors; make sure to capture those stories for future use.
- Ultimately, consider the DA commitment an early investment that will pay dividends throughout the project lifecycle
If this seems like a lot of information, imagine attending two days of sessions at the Advancing Preconstruction conference. We find the event to be one of the most important for the construction industry. Get in touch today if you’d like to learn more about OSC and the Epsilon approach.
