After a period of intensive trialling the University of Melbourne Enginuity 2024 Competition is underway, with a competitive field of teams all battling for supremacy against their peers.

And so to the action, and all the teams made excellent starts, with the early pacesetters after 41% growth being "Group 1 Consulting" with 1,407 pts, but they cannot rest on their laurels with the chasing pack very close behind led by "Hungry Mate", just 6 points further back, and "Myth Build" and "PROEng" tied in 3rd place. However, it is early days, and there are sure to be plenty of twists ahead as the journey through the Early Years unfolds.

The early signs are that the competition will be very competitive, with all the teams improving their overall position in period 5. However, this was not unexpected. After being formed at the beginning of period 1, overhead costs were incurred whilst the companies were being established, without any profits being generated. The companies were now in a position to generate profits against a more stable overhead base, and this was reflected in improved operating profits. Of course, growth will be impossible without an effective strategy, and all the management teams have had time to think about this carefully, and come up with a set of objectives to deliver business success for their stakeholders.

2023 proved to be another turbulent year for the UK. Food and energy prices rose sharply, caused largely by global supply chain disruptions and the effects of Russia's full-scale invasion of Ukraine, resulting in a Cost of Living crisis in the UK, and the Bank of England were forced to increase interest rates many times to combat rising inflation, with resulting growth of only around 0.4% in the whole of 2023.
Hopes were growing towards the end of 2023 that 2024 could see some green shoots of recovery, with interest rates reaching their potential peak. However, many observers are sceptical with the upcoming general election, and a likely change of Government expected to prolong the uncertainty for businesses and delay investment, and growth is expected to fall to 0.3% in 2024.

Further afield global real GDP grew by around 2.9 percent in 2023, but is expected to slow to 2.5 percent in 2024, weighed down by high inflation and continued monetary policy tightening. Growth forecasts for 2024 are generally strongest in emerging Asian economies, and weakest in Europe and the US.
The outlook is not helped by the continued impact of the Russia invasion of Ukraine, and the Israel invasion of Palestine in the Middle East, all potentially putting further global pressures on energy prices across the world.

League table at the end of period 5

After the impressive growth figures posted in period 5, not unexpectedly period 6 proved to be a much tougher quarter. This was largely driven by the companies being unable to win as much work as they had previously, with the corresponding reduction in forward workload and margin KPIs. The result was major turbulence in the league table with a change in every position.

At the top of the table new leaders emerged as "Hexagonal" took advantage of the decline of many of their rivals, and 4% growth was enough to enable them to climb 13 places to secure the lead with 1,405 pts, and they have opened up a significant gap to the chasing pack.

The chasing pack are led by "The group of 7" in second place, who posted the best positional gain with a superb 15-place climb up the table, and they are just 2 points clear of "Tilted Towers Trading" in 3rd, who also made a maor positional gain of 10 places. The teams who found new work difficult to come by will have to look carefully again at their bidding strategy, and in particular at the margins they are setting to try and undercut their rivals and still make a profit on the jobs they bid for.

With KPI points hard earned it will become increasingly important that the management teams look very carefully at every aspect of their business for potential improvements, and those that are most successful in doing so should prosper the most. Two areas that the teams need particular attention are Marketing strategy and Procurement (rival bidders), which are discussed in more detail below.

Marketing is possibly the area of the business that requires the most thought, as there are numerous strategies that could be adopted. The market trend can only be gauged for one year ahead, and not always accurately, and as marketing departments are expanded, the choices of where to direct the marketing effort are wide ranging, by sector, country and job size. The task is not an easy one, but has a major impact upon procurement options, and the future work undertaken, and ultimately on the long term prosperity of the company.

Another important consideration is that rival bidders do not necessarily stick with the same bidding strategy, and as time goes by they can change their strategy according to market conditions. This makes it imperative that teams keep a close eye on the margins rival bidders are applying, and how they may be changing. Evaluating these strategies could make the key difference between success in securing work, or not. To complicate matters even further there may be UNKNOWN rival bidders, and the only clues to these may be in the ENGINUITY NEWS NETWORK (ENN) for the period.

League table at the end of period 6
Improvements, or otherwise, during period 6

Period 7 proved to be one of impressive growth figures for many of the teams, and none more so than for the "Tender Titans", whose 15% improvement was the best in the round, and enabled them to complete an impressive turnaround in fortunes. After sitting second bottom at the end of period 5, they climbed to 12th at the end of period 6, and now sit top of the table with 1,449 pts, and have opened up a 50 point gap to the chasing pack, but they will have to work hard to stay top in the remaining two rounds.

The lead has now changed hands in 3 consecutive rounds, indicating that there is not a lot to choose between many of the teams. Behind the new leaders "Monarch" and "Procurement Pro Consulting" both grew by 10% to move up to second and third respectively as previous leaders "Hexagonal" dropped back to 4th, but still well in contention. At the other end of the table there is an intense battle to stay off the bottom, with 3 teams separated by just 6 points, and their management teams will need to take a closer look at the margins they are setting when bidding for work, with uncompetitive bids holding back their ability to secure new work and grow their businesses.

IEWP = SUCCESS

A leading industry think tank have come up with a simple formula for running a successful construction business.

1. IDENTIFY new work
2. EXPAND the infrastructure (capital base) of the company to take on more work
3. WIN new work through competitive bidding
4. PROFITABLY PROGRESS of the jobs won

Another essential part of running a successful business is being able to form an effective Risk Management Strategy to keep the business as profitable as possible. This can take a number of forms, firstly by building sensible risk contingencies into the original bids based upon the likelihood and cost of the risks occurring. Secondly, and just as importantly is mitigating the affects of any risks that strike through targeted investment into risk management companies, using a BIM model if available, and employing the most suitable project managers to jobs in progress. However, even when these mitigating actions are taken, risk can still be costly to job and company profits, and during period 7 problems with structural defects affected the construction of a new health spa for the client, Orlando Adventure World, in the United States, with an estimated risk cost of around 280k before mitigation.

League table at the end of period 7
Improvements, or otherwise, during period 7