After a period of intensive trialling the University of Melbourne Enginuity 2023 Competition is underway, with a competitive field of teams all battling for supremacy against their peers. And so to the early action, and the pacesetters after impressive 35% growth are the "Contract Warriors" with 1,352 pts. However the early leaders cannot rest on their laurels with the chasing pack close behind, led by "H1" and the "Easygoing Contractors", separated by just one point in 2nd and 3rd respectively. 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.

2022 was a turbulent year for the UK, both politically and economically. Rishi Sunak became the third Conservative Prime Minister in 12 months in October, and the surge in demand post COVID, coupled with goods and energy supply problems caused largely by Brexit and the Russia-Ukraine war, caused a cost of living crisis with soaring inflation and rising interest rates.
The upshot was that many observers, including the influential CBI, predicted that the UK economy could contract by 0.4% in 2023, with further interest rates rises, weak productivity, a continuing squeeze on consumer spending and inflation expected to stay above the Bank of England’s target, although it is expected to peak during the year.

Further afield global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on the outlook.
Global growth is forecast to slow from 3.2% in 2022 to 2.7% in 2023, with challenges to be faced including the potential of higher financing costs, heightened financial market volatility, inflation risks driven by rebounding growth and supply-chain bottlenecks, ongoing labour shortages and intensifying climate risks.

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. However, encouragingly a number of teams were still able to post positive growth figures, and many more only fell back slightly, highlighting the high standard amongst the management teams.

At the top of the table as previous leaders "Contract Warriors" slipped down to 11th, it opened the door for "H1" to move up one place and takeover top spot with 1,363 pts. However, the new leaders cannot bask in their new found status with "CPE" turning in an impressive set of results in traditionally the hardest round in the Competition, and also the best in the period, 11% growth that saw them storm through the field from 26th to 2nd, and only 7 points behind the new leaders. The only other 2 teams to post positive growth made a big impact on the league table also, with "WE 2 N" and "Just Engineers" moving up 20 and 13 places to 3rd and 4th respectively. There are many more teams well placed to take advantage if those above them slip up.

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

In what is becoming an incredibly unpredictable competition, demonstrating how closely matched many of the teams are, for the third consecutive period new leaders emerged as "The North Pacific Group", who had been hovering around the top in the previous two rounds, crossed the divide above them, to secure top spot with 1,391 pts at the end of period 7. As a lot of the previous high flyers struggled to win new work, and fell back, not so "10 Percent" who climbed 4 places to second, with "Just Engineers" not far behind in third. The best performance in the round came from the "Monash Students" posting a stunning 20% growth which enabled them to make the best positional gain as they climbed 19 places to 7th.

In a period of mixed results, with 50% of the teams posting positive growth figures, for the other 50% one of the major problems encountered in the round was winning enough new work. This was a combination of 2 factors.

• Firstly, many of them put all their eggs in one basket by bidding for just the value of work that they could win, based upon capital base restrictions. A great strategy if you are able to win all the job(s) bid for, but what happens if you do not, and a more prudent contractor would have bid for some other work just in case.
• Secondly, in a highly competitive bidding environment, teams must ensure they set sensible oncosts, and margins that are likely to be lower then those set by their simulated rival companies.

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

In what is becoming an incredibly unpredictable competition, demonstrating how closely matched many of the teams are, for the fourth consecutive period new leaders emerged as "10 Percent", with solid 11% growth, moved up one place to the top of the table, and their current KPI score gives them a 50+ point lead from the chasing pack.

Previous leaders "The North Pacific Group" dropped back down to 8th, but I amsure we haven't heard the last of them yet. In a more encouraging round for growth, 66% of the teams posted positive growth figures, and none more so than "H1", the leaders from period 6, whose impressive 20% growth, the best in the round, propelled them 11 places up to second, and right back in contention, wih the "Monash Students" also fairing well as they move up 4 places to 3rd.

At the bottom of the table the "Green Team" proved the old line from a Billy Ocean song (for those who remember him) that 'When the going gets tough, the tough get going' as they posted ban impressive 17% improvement to move them up 5 places, with "Terms Titans" with 18% growth also moving away from the foot of the table.

There is now just 3 rounds to go before we will know the identity of the 2023 Champions, and with so many changes in the leaderboard each week it could come down to the wire. Watch this space!

League table at the end of period 8
Improvements, or otherwise, during period 8

Period 9 saw 63% of the teams post positive growth figures, and for the fifth consecutive round new leaders emerged as "Just Engineers", who had been hovering in the top four for several rounds, improved by an impressive 14% to become the latest new leaders with 1,606 pts at the end of period 9. Significantly they also opened up a 100 point lead to the chasing pack, and it is now a question of can they be overhauled with just 2 rounds to go.

The chasing pack are very tightly bunched, with just 23 points separating teams from second to 5th. "Monash Students" climbed one place to second, but "H1" fell back to 3rd, and previous leaders "10 Percent" slipped back to 4th, but the "The North Pacific Group" grew by 9% to move back up to 5th.

Further down the table the best performance in the round came from "Ikun", whose eye catching 16% growth also propelled them 7 places up the table and away from the foot of the table. The management team of "One-piece" may face a difficult week as their slump continued, and they have been asked to attend an emergency shareholder meeting to discuss the companies plight, and in particular why they are not able to secure more new work; clearly they need to take a close look at their bidding strategy to try and find a way to recover in period 10.

League table at the end of period 9
Improvements, or otherwise, during period 9

Encouragingly Period 10 saw 77% of the teams post positive growth figures, and at the top of the table there was finally some consistency as "Just Engineers" held onto top spot with 1,669 pts at the end of period 10. However with just one round to go in this year's Competition, the leaders are not home and dry with "10 Percent" climbing 2 places to second, and still well placed should the 'Engineers' slip up, and the "The North Pacific Group" and "H1" are also still in contention.

Further down the table the best performance in the round came from "Team Rocket" with an impressive 22% improvement that lifted them 7 places up the table, and in terms of positional gain those "Easygoing Contractors" took the honours with a 9-place gain that propelled them into the top 10. And at the bottom of the table the management team of "One-piece" survived the emergency shareholder meeting, and came back strongly with a 16% improvement that lifted them off the foot of the table.

League table at the end of period 10
Improvements, or otherwise, during period 10

The final round of the Competition saw "Just Engineers" pull way from their nearest rivals with 5% growth to deservedly be crowned the University of Melbourne Enginuity 2023 Champions with an impressive finishing score of 1,753 pts, and a 100 point gap to their nearest challengers, and ultimately their success owed much to them demonstrating one of the guiding principles in running a successful business, consistency, having led the competition for the final 3 rounds, and only being out of the top four on one occasion.

In a final round in which 88% of the teams posted positive growth figures, behind the Champions "10 Percent" held onto the Runners Up spot, but only just as a strong finish from the "The North Pacific Group" saw them move to within just 4 points in 3rd. "WE 2 N" made a late surge up to 4th after posting the best performance in the final round, a hugely impressive 19% improvement that enabled them to climb 7 places.

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 7 simulated quarters of management.

League table at the end of period 11
Improvements, or otherwise, during period 11