Real estate builder: projects back on schedule, and costs back under control
- INDUSTRY
- Construction and real estate development
- LOCATION
- Kozhikode, Kerala, India
- ENGAGEMENT
- 6 months
- FOCUS
- Project control, site management, procurement, stage billing
The challenge
The company was building several residential projects at once, each with its own site team, contractors and suppliers. Demand was good, but every project ran late. Costs crept past budget, and buyers kept calling to ask when they would get their keys.
Site engineers spent their days firefighting. Materials were ordered in a rush and at a premium, and the cash from stage payments came in later than it should have. The company had 4 projects under way, about 320 apartments in all. Projects were running an average of 7 months late, with cost overruns of around 12%.
What we found
We walked every site, sat in on contractor meetings, and compared planned and actual progress, cost and cash for each project, putting a rupee value on each gap.
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01
Sites had no working plan.There was a master schedule on paper, but no weekly look-ahead that crews and contractors worked to. Only half of planned monthly milestones were met, and idle labour and equipment cost about ₹ 6 lakh a month.
-
02
Purchasing was reactive.Materials were bought when a site ran short, at higher prices, with wastage and pilferage nobody measured. Emergency purchases cost 8 to 10% above normal rates. Material wastage ran at about 7% against a norm of 3%, roughly ₹ 18 lakh per project.
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03
Stage billing lagged the work.Buyers were invoiced weeks after each stage was finished, so the company funded construction out of its own pocket. Stage invoices went out 3 to 4 weeks late, keeping about ₹ 2.5 crore tied up at any time.
What we built
Across the layers of the Organise to Grow model.
The results
Every project now has a plan that the site actually works to. Materials arrive when they are needed, cost overruns are visible early enough to act on, and stage invoices go out as soon as each stage is complete. Milestones met rose from 50% to 85% and material wastage fell 30%. Cost overruns came down from 12% to 4%, and stage invoices now go out within 3 days of completion.
