The biggest single challenge to your operations - and what you can do about it
What is the Biggest Single Challenge to Your Operations (and What You Can Do About It)?
Whether you’re in construction, engineering, or highways, there are several core challenges that must be tackled to ensure smooth operational flow and future growth. Compliance and regulatory pressures, decarbonisation targets, skills shortages, and financial management are today’s key hurdles. But what is the biggest single challenge to your current operations, and what can you do about it?
Compliance and Regulatory Pressures
Compliance and regulatory requirements are a significant challenge, especially those in highly regulated sectors like construction. Understanding complex regulations, such as health and safety standards, environmental requirements, and building codes, is a huge task, with non-compliance leading to hefty fines, project delays, or even reputational damage.
What You Can Do About It
- Stay Informed: Regulations change frequently, so it's crucial to stay informed. Assign a team member or hire a compliance officer to keep up with regulatory updates and remain compliant.
- Training and Awareness: Regular training sessions for employees on compliance topics can help create a culture of safety and compliance.
- Digital Solutions: Use compliance management software to track and manage regulatory requirements, tracking certifications and helping to ensure key deadlines are met.
Decarbonisation Targets
The pressure to reduce carbon emissions and meet decarbonisation targets is growing as the UK government works towards achieving net zero by 2050. For industries such as construction and manufacturing, decarbonisation presents a unique challenge that requires significant changes in processes, materials, and energy consumption.
What You Can Do About It
- Energy Efficiency: Conduct an energy audit to identify areas where your business can reduce energy use; implement energy-efficient technologies and energy-efficient machinery to reduce your carbon footprint.
- Sustainable Procurement: Work with suppliers who prioritise sustainability.
- Innovation and Technology: Embrace innovative technologies that can help reduce emissions, such as renewable energy sources, electric vehicles, and digital tools that optimise resource use.
Skills Shortage
The skills shortage is an ongoing challenge for many industries, particularly in construction and engineering. An ageing workforce, fewer young people entering technical trades, and the increasing complexity of projects have left businesses struggling to find the talent they need to maintain productivity and deliver quality work.
What You Can Do About It
- Invest in Training and Development: Developing the skills of your existing workforce can help bridge the gap. Offer training programmes, apprenticeships, and upskilling opportunities.
- Promote Careers in Your Industry: Engage with local schools, colleges, and universities to promote careers in your industry, offering work experience placements, internships, and school visits.
- Retention Focus: Create a positive working environment that encourages employee retention.
Finance and Cashflow
Rising costs of raw materials, labour shortages, and supply chain disruptions are leading to supply inflation. Prices for essential materials, like steel, and concrete have surged, partly due to global demand, transportation issues, and Brexit-related delays. Increased costs are putting pressure on contractors' margins and leading to project delays and even cancellations. To manage the impact, many construction firms are adopting strategies such as forward purchasing and renegotiating contracts.
What You Can Do About It
- Forward Planning and Bulk Purchasing: Secure materials in advance or purchase in bulk to lock in prices before further increases. Work with suppliers to negotiate favourable terms and fixed-rate agreements.
- Value Engineering: Revisit project designs to identify areas where costs can be reduced without compromising quality.
- Flexible Contracts: Negotiate contracts that allow for price escalation clauses to share the risk of inflation between stakeholders and prevent disputes when costs rise unexpectedly.
- Diversify Supply Chain: Avoid relying on a single supplier and diversify your supplier base.
- Adopt Technology: Utilise digital tools, such as Building Information Modelling (BIM), to increase project efficiency, minimise waste, and improve cost estimation accuracy.
- Improved Communication with Clients: Keep clients informed about potential cost changes and inflation risks from the start.
What is the Biggest Challenge for Your Business?
All challenges—compliance, decarbonisation, skills shortages, and cashflow—are significant, but the biggest challenge for your business will depend on your specific circumstances. The key to overcoming these challenges lies in understanding the root cause of the issue and taking proactive steps to address it.