Construction schedule: projects on time and budget

Scheduling is one of the basic concepts of project management in construction. When approached skillfully and thoroughly, effective scheduling can shorten construction duration and reduce project costs. Here are the 5 ways quality construction carries out projects on time and within budget:

1. Set a realistic date to help the owner make decisions

Whether the building is residential, commercial, or industrial, the completion date is an important factor for owners and can form the basis of personal, business, and financial decisions.

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Unfortunately, some homeowners may be unaware of the complexities of their project and have unrealistic expectations for the project's completion date. That's why for contractors, setting a realistic completion date is a vital step in managing expectations and helping the client achieve project success.

2. Shorten the schedule with concurrent tasks

Creating a schedule allows the contractor to plan various construction tasks and set deadlines for their completion. During this exercise, the contractor will identify interdependent tasks. Some of these can float, meaning that they can be done within a longer period than the task will take. Others, when taken in sequence, create the shortest possible build duration, known as the "critical path". Each critical path activity must finish before the next begins, so setting achievable deadlines for these tasks is key to planning a realistic finish date for the project.

Once the critical path is established, the contractor must be able to schedule tasks that do not depend on each other, or that do not affect the critical path and can be executed simultaneously. This technique is a great strategy to ensure that non-critical routine tasks don't end up impacting the schedule.

3. Help manage cash flow

One of the most common reasons for construction project failures is financial mismanagement. During operations, the contractor receives payments from the project owner according to an established payment schedule. Meanwhile, contractors must also compensate their staff, subcontractors, vendors, and suppliers.

Due to the time lag between payments from the contractor and receipt of money from the owner, some find it difficult to continue financing construction activities. Also, contractors do not receive the full amount immediately. This means that contractors often face negative cash flow before final payment, which includes final progress payment and retention.

To keep the project afloat, many contractors have to rely on their working capital or pay interest on their line of credit to maintain their cash flow and keep making payments on time. Even those who use their funds are technically missing out on the opportunity to invest the money elsewhere.

In light of these challenges, contractors must approach scheduling as a valuable tool in cash flow management. Payment dates are important factors to consider when setting up various activities. For example, completion deadlines for activities outside the critical path have some room and often have "early" and "late" completion dates. Meeting the above dates forces the contractor to spend money as soon as possible; Conversely, going with the late dates allows the contractor to make payments later. Ideally, the activities and spending would be somewhere between the early and late dates.

4. Help the owner verify payments

Most progress payments to the contractor are made monthly according to the agreed schedule. In this scenario, the project is broken down into individual work items, which are then assigned a value. Together, the work items reflect the contract price of the project. Each month, the contractor bills the customer based on the amount of work completed. Alternatively, the payment schedule can track project milestones: the completion of vital tasks, such as the frame or the envelope. In either case, a construction schedule allows homeowners to better track progress payments and control their cash flow.

5. Keep track of changes

Most construction projects deviate from the approved design to some degree. Modifications may result from customer design changes, a design flaw, or an unforeseen condition. In either scenario, changes to the contract price, schedule, or budget can affect the end date.

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Having a complete construction schedule will help the contractor find a strategy to reduce delays in case of changes. If fast-tracking, or concurrent scheduling, is not an option, the contractor may attempt to "lock" the schedule.

Blocking generally involves allocating more resources to activities on the critical path. Alternatively, the contractor may advise sacrificing portions of the scope or waiving certain design requirements. Ultimately, the method aims to achieve the greatest time savings at the lowest possible cost.

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In conclusion, effective scheduling is an important step in keeping a project on time and within budget. It helps the owner and contractor plan their finances and allows the contractor to track and speed up construction activities.