The impact of crises on construction projects
How COVID-19 has changed the project landscape
The impact of COVID-19 cannot be ignored anywhere. Companies around the world have had to shut down in entirely or partially. The issue has been a major challenge for the past two years and the virus has been a topic of heated discussions. The pandemic and the accompanying closure of borders have had a drastic impact on the economy and global markets. This pandemic is undoubtedly one of the biggest challenges in my 12-year career as a project manager. The pandemic has had a severe impact on all areas such as logistics, supply chain and economy. In my opinion, however, construction sectors in particular had to take active action to protect their ongoing projects and also their employees.
In the meantime, the vast majority of companies have adapted to the situation and implemented alternative working methods. Especially working from home is a concept that became relevant overnight in the last two years and is now part of everyday life for many employees.
We know that COVID-19 has changed the landscape of ongoing projects over the past two years, that major projects have been delayed and that project opportunities have been severely affected. Overall, contractors, subcontractors, suppliers and the labour market have been severely impacted due to the shutdown.
Gradually we are witnessing that the crisis associated with the pandemic is approaching an end. The shutdowns are decreasing, there are fewer and fewer restrictions and we can slowly think of a post-crisis period. We can recapitulate and ask ourselves the question: What measures did we take as project managers to be able to carry out projects in this complex environment? What did we have to pay attention to in the last two years and what will happen after the crisis? Can we apply the concepts we have learned to other crises?
Budget review during and after crises
In this case, we as project managers should focus on two perspectives. First, on the current environment and second, on the post-crisis period. As we know that smooth cash flow is important for project activities, the estimated project budget should be reviewed again within a crisis and reallocated based on the two perspectives. Identify the current project stage and priorities to ensure optimal cash flow. Both perspectives need to be considered here: Today and tomorrow, or to rephrase it - during and after the crisis.
Adapting the way of working while taking all safety measures into account
Construction companies tried to take measures to reduce the spread of COVID-19, such as social distancing. The possibility for employees in the construction industry to work from home was difficult to implement. We know that construction projects are of longer duration and involve a variety of stakeholders, and that it is difficult to make adjustments. On a day-to-day basis, there were many new challenges and each of us had to adapt - and so did construction companies. They had to look for innovative and creative ways to cushion the severity of the COVID-19 crisis on project activities. As project managers, we can review and revise project planning, we can identify cost and time variances, and we can communicate our revised milestone targets with all stakeholders, and perhaps it is these freedoms and skills that have helped us deal with the pandemic?
Resilient logistics and supply chain management
The backbone of any project is the supply chain and logistics team, the two integral parts of the value chain. The ongoing shutdown and closure of the borders restricted the movement of goods from the factory to the project site. Apart from this, security measures such as social distancing and factory closures also posed a major challenge to the movement of materials from the factory to the project site. Looking at the global supply chain and transport impacts of COVID-19, the following can be observed:
Sea, air and land freight were all affected by these constraints. We knew we were in a bottleneck. We had to plan better with the help of virtual technology, taking into account all safety aspects, so that operations could continue optimally. The project manager was able to prioritise the movement of materials by focusing on the progress of the site in real time. This allowed us to avoid unwanted delays and the team on site could work efficiently.
Efficient use of project resources and reassessment of the resource plan with stakeholders
Due to supply chain and transport challenges, timely availability of materials and machinery is another issue for project managers. When a bottleneck occurs, as during the pandemic, a project manager needs to reassess the resource plans previously prepared by the stakeholders (client, project team, engineers, site managers, contractors and subcontractors). The most important thing is to identify together the current need for resources as well as the expected need during the life of the project. For example, a project manager can identify the resource buffer, equipment and labour, etc. in the local zones without affecting the project schedules. A project manager can monitor and identify the development of resources on site in real time to create and forecast the project schedule.
What measures can we take proactively in uncertain times?
- Review the ongoing progress and the level of completion. As a project manager, consider what proactive and unforeseen actions you can take on the site and explore with all stakeholders the possibility of milestone-based execution.
- Create and track an updated resource plan.
- Keep a logbook on the construction site to better utilise the resources according to the resource plan.
- Conduct schedule impact analysis.
- Always maintain an open communication platform with all stakeholders.
- Raise awareness among staff about safety or other specific issues. The same can be discussed in the daily toolbox talk.
- Act as recommended by the government and other authorities (e.g. in the case of the pandemic: regularly clean the common areas on the construction site).
To sum it up: Yes, a global crisis is a real threat to all construction projects and affects day-to-day project activities, but in my opinion, a project manager can use their coping skills during this time. The whole stakeholders should be more careful, vigilant and proactive to move the project forward in this complex situation. Communication between stakeholders is particularly important at this time. Read the contracts and evaluate the options. Take full advantage of the best and most innovative approaches to project management.
Author: Mahesh EV is a project manager with more than 11 years of practical experience and the Senior Official of the IAPM in the metropolitan regions of New Delhi, Trivandrum and Calicut, India. Mahesh's implementation of many procurement and construction projects has broadened his experience. He has demonstrated his skills in the successful planning and execution of several projects, such as thermal power plants and renewable energy projects across India – from kick-off to handover of the plant.
Key words: Project management, Project planning, Crisis Management, Tip