BIRMINGHAM CITY UNIVERSITY 2024 (A)/THE STORY OF THE COMPETITION
PERIOD 5: "'VictorianVista Construction' are the early pacesetters!" |
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After a period of intensive trialling the Birmingham City University (A) 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
37% growth being "VictorianVista Construction" with
1,368 pts, but they cannot rest on their laurels with the chasing pack
very close behind led by the "Furan Allies" only 3 points adrift
of the leaders, and "Solid Build Constructors" in 3rd.
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
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PERIOD 6: "A tough round sees 'Solid Build Constructors' emerge as the new frontrunners" |
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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.
As 90% of the teams posted negative growth figures, one team defied the odds as
"TBC" climbed 4 places up the table and away frrom the bottom after
a 4% improvement, much to the delight of their shareholders.
It was all change at the top of the leaderboard as "Solid Build Constructors"
tookover pole position as others around them declined even more, but their score of
1,327 pts is only a slender one from
"Beehive" in second, and there is very little between the top 8 teams
in what is already becoming a very competitive Competition.
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
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PERIOD 7: "All change again at the top as 'Furan Allies' takeover the lead" |
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After 3 rounds it is already clear that there is not a lot between many of the teams,
and this was demonstrated in period 7 as the lead changed hands again.
Previous leaders "Solid Build Constructors" dropped 6 places, and
"Furan Allies", who have not been out of the top three,
took full advantage with 6% growth to takeover top spot with 1,382 pts.
However their lead is a narrow one of just 6 points from "VictorianVista Construction",
the leaders from period 5, who also grew by 6%, the best posted in the round.
Further down the table the best positional gain came from "Phoenix" with a 3-place again,
and their shareholders will be hoping that they are now rising up the table like the mythical bird.
At the wrong end of the table the management teams of "VAHA" and
"Synergy" will need to review their decisions for period 7 to see
why they posted worrying deteriorations to ensure they bounce back in the following round.
IEWP = SUCCESS
A leading industry think tank have come up with a simple formula for running a successful construction
business.
- IDENTIFY new work
- EXPAND the infrastructure (capital base) of the company to take on more work
- WIN new work through competitive bidding
- PROFITABLY PROGRESS of the jobs won
It sounds so simple in theory, but in practice it is much far harder to achieve. Most teams prove to be more
than competent in the first two areas, identify new work and expanding the infrastructure, but the bidding
and successful job progression proves more challenging. Winning new work is not easy with so many known and
unknown rival bidders working in different sectors and locations, and progressing jobs through to successful
completion is hindered many things, such as finding suitable project managers, labour scheduling and overcoming the
many obstacles that can occur, such as delays caused by risks strking. Steady growth also requires replacing
work progressed with at least the same amount of work again, and this is often the hardest factor of all to get right.
The teams can take some comfort from knowing that many management teams in the real world also struggle for
consistent growth, and at least in the virtual world it is not critical, although it may feel like it at times!
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
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PERIOD 8: "'VictorianVista Construction' lead again, but it is so tight at the top" |
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With just one round to go in this year's Competition, it is all to play for at both ends of the league table.
At the top, previous leaders "Furan Allies" lost out on a number of key bids that
saw them fall 4 places, opening the door for the leaders from period 5,
"VictorianVista Construction" to regain top spot with
1,432 pts. However, close on their heels are the
"Corporate Catalysts" up one place to second, and just 8 points
adrift of them are another previous leader, "Solid Build Constructors",
who grew by an impressive 15% that lifted them four places to third.
Only 32 points separate the top three, and the destiny of this year's Championship is going right down to the wire.
At the other end of the table, there is just 3 points between the bottom two,
"PSWM Ltd" and "VAHA" and both management teams will
not only be trying to avoid the dreaded wooden spoon, but also hoping to finish strongly to remain above the 1,000
KPI points starting position back at the beginning of period 5.
With just one round to go each team will be looking to finish strongly, and every decision will
count in the final reckoning.
League table at the end of period 8
Improvements, or otherwise, during period 8
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PERIOD 9: "Timing proves decisive as 'Beehive' are Champions" |
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There is an old saying that 'timing is everything', and that was demonstrated to perfection in
the final round. "Beehive", who had been buzzing around the top of the table
from the beginning, won a lot of new work in period 9 to bolster their order book, and their soaring
forward workload and margin KPIs enabled them to leapfrog the 3 teams above them to become the
Birmingham City University (A) Enginuity 2024 Champions with a very impressive finishing score of
1,531 pts, and a decisive margin of victory of just over 50 points.
Behind the Champions previous leaders "VictorianVista Construction"
dropped back on place to finish Runners Up, with the "Corporate Catalysts"
holding onto 3rd position.
During the Competition no team had been able to hold onto the lead for more than one round,
showing how closely match the team were, and there were some impressive finishing performances
with growth across the board, and none more so than the teams battling at the wrong end of the table
with 20% and 18% improvements from "VAHA" and
"PSWM Ltd" respectively.
In the final analysis all of the teams finished with stronger, more sustainable companies than when they took over in period 5,
a testament to the skill and application shown by the management teams in what was a roller coaster of a journey through
5 simulated quarters of management.
League table at the end of period 9
Improvements, or otherwise, during period 9
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