As construction activity picks up, hidden risks like waste and material substitutions continue to eat into margins. Brittany Harris, CEO & Co-Founder, of Qflow explores how better data and smarter processes can help firms protect profitability and deliver on quality, compliance, and sustainability goals.
In the shifting landscape of construction, where optimism is returning and project starts are forecast to rise, the industry faces a persistent challenge: delivering more with less – less carbon, less waste, and less room for errors.
However, at current, two issues continue to quietly erode profitability and undermine progress: waste and material substitutions. These are not only environmental or compliance concerns, they are critical commercial risks that can destabilise even the most diligently planned projects.
The real cost of poor data
Despite significant investment in digital innovation, fragmented and inconsistent data remains a fundamental barrier to efficient construction. Designers and contractors are often forced to make decisions based on incomplete information, leading to inefficiencies across the project lifecycle. According to the State of Data Quality in Construction report, the average UK project loses around £2m to rework, delivery mistakes, and procurement inefficiencies, all linked to poor-quality or poorly managed data. This is not a back-office issue, it directly impacts how buildings are designed, costed, and delivered.
Waste is a substantial part of the problem. Globally, construction generates more than two billion tonnes of waste each year. In the UK, the sector accounts for around 61% of the nation’s total waste, with approximately 100m tonnes produced annually. These figures represent not just environmental concerns, but also significant financial losses through direct material costs and hidden expenses such as storage, handling, disposal, and the administrative burden of managing waste.
Material substitutions: a growing risk
But it isn’t just excess materials that are impacted by poor data. Material substitutions are increasingly common and are often driven by supply chain disruptions, cost escalation, or regulatory changes. While most substitutions are made with the best intentions, substituting one material for another is not always a like-for-like exchange.
In a recent article by the International Risk Management Institute (IRMI), Cheri Haynes aptly wrote, “You can put your boots in the oven, but that don’t make ‘em biscuits.” This underscores the reality that not all materials are created equal, and substitutions made under pressure can have unintended consequences.
If not managed carefully, even well-intentioned substitutions can introduce significant project risks. These risks range from compromised safety and invalidated certifications to budget overruns and unplanned rework, all of which can seriously undermine a project’s success. The risk is further elevated in today’s interconnected world, where global events – whether inflation, climate disruptions, or geopolitical instability – can quickly impact material availability and cost. When substitutions are made under pressure, the likelihood of these unintended consequences only increases.
The introduction of new regulations such as Gateway 2 have intensified scrutiny: matching design intent is now critical to avoid costly project delays. Discrepancies between design and delivery discovered after this stage can halt projects, trigger expensive rework, and create significant compliance issues. These disruptions derail timelines, inflate budgets, and squeeze already stretched margins.
Data as design infrastructure
With regulatory demands intensifying, compliance is now a live responsibility that extends from design through to delivery and occupancy. The inability to provide accurate, timely data exposes firms to both reputational and financial risk.
Harnessing technology that captures and verifies real-world data throughout construction enables project teams to ensure that strategic design choices, especially those relating to quality standards, are executed on site. This not only provides assurance that the built outcome matches the original vision, mitigating risk, but also prevents costly delays that devour project budgets and already dwindling margins.
Treating data as a core layer of project infrastructure, rather than an optional extra, empowers designers and contractors to make better decisions around substitutions, reduce waste, and deliver on sustainability and compliance goals. But, moreover, it aids project teams to achieve operational excellence by removing hidden costs such as excess material ordering and time spent on admin.
In one example, Morgan Sindall implemented digital waste tracking on an Overground station upgrade at Surrey Quays. This resulted in £7,000 being saved on administration costs alone and a 93% decrease in waste diverted to landfill, saving thousands on unnecessary material ordering and removal. These results were achieved not through expensive interventions, but by identifying and eliminating inefficient processes through better data.
The path forward
The construction sector has a unique opportunity to reset as growth returns. Embedding good data practices into the DNA of how we design, specify, and deliver is essential. The tools already exist, and the commercial case is clear. By leveraging accurate, real-time data and learning from industry best practice, firms can mitigate risks and decrease the cost of waste and material substitution, instead creating opportunities for operational excellence and financial resilience.
The future of construction will be defined not by bold promises, but by traceable performance and a commitment to making every decision count.
