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Enterprise Resource Planning (ERP)
What is Enterprise Resource Planning (ERP)?
Enterprise Resource Planning (ERP) in the construction industry refers to a suite of integrated software applications designed to automate and control the core processes of a construction company. It serves as a central platform that facilitates the flow of information among different business functions such as accounting, human resources, procurement, project management, risk management, and compliance. ERP systems simplify data-driven decision making by providing real-time insights into every aspect of the construction project which include, but aren't limited to, project costing, inventory management, and workforce allocation. By enhancing visibility and streamlining workflows, ERP systems can significantly boost productivity and efficiency in the construction sector.
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Other construction terms
What is a Project Manager?
A Project Manager in the construction industry is a professional responsible for overseeing and directing the progression of projects from conception to completion. This role entails coordinating a team of professionals such as architects, engineers, and builders to ensure the successful completion of a construction project. Key responsibilities include preparing budgets, scheduling work plans, monitoring progress, managing risks, and ensuring quality standards. It is essential for a Project Manager to possess skills in leadership, negotiation, risk management, and problem-solving. Overall, their primary goal is to manage the project to finish on time, within budget, and in keeping with safety standards and regulations.
What is a G702?
A G702 is a document form used in the construction industry known as the Application and Certificate for Payment. It is issued by the American Institute of Architects (AIA) and is used by contractors to apply for payment for the work completed and materials supplied on a project. It details the contractor's progress on the project, summarizing the total project to date, change orders, previous payments, and the current payment due. The form needs to be signed by the contractor, the architect, and the owner, certifying that the work has been completed and payment is deserved.
What is Subcontractor Default?
Subcontractor Default, often seen in the construction industry, refers to the circumstance when a subcontractor fails to fulfill their contractual obligations. This could be due to many reasons - ranging from financial instability and resource unavailability to poor performance or bankruptcy. When a Subcontractor Default occurs, the prime contractor becomes liable, which could lead to significant project delays, increased costs, and potential legal issues. It represents a major risk in the construction industry, which is why many firms secure themselves with Subcontractor Default Insurance (SDI) as a financial risk management tool. Managing relationships with subcontractors carefully, monitoring their performance, and conducting background checks are some ways to avoid Subcontractor Default.
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