Construction Productivity - 5 ways to crack the code

Productivity in construction remains a riddle.  

A recent McKinsey study suggested that the construction industry could save $1.6 trillion annually by bringing the sector in line with average productivity across other economic sectors.  RICS latest construction productivity study reported that most respondents to their survey said productivity has remained unchanged or fallen in the last 12 months.  

RICS also reported that at a global level the top 3 interventions made by construction companies focused on productivity are - 

• Upskilling the workforce
• Greater investment in data/digitisation
• Improving procurement and supply chain management

These are well known trends and investment priorities for both governments and construction companies with obvious potential benefits.

With so much investment in innovation, digitalisation and modern methods of construction why have we not made better progress in levelling up construction productivity with every other sector?

Have we explored the not so obvious ideas and as an industry how are we able to understand the root causes of low productivity and learn from them?

This article will explore potential areas that are under invested in, unloved and potentially overlooked.  Let’s start with paper!

Paper

The only type of office where paper may be more abundant is possibly the legal profession.  The construction industry is still addicted to paper.  Even where digital platforms are embraced often screen images, pdfs and on screen dashboards are printed out and placed very neatly in lever arch folders.  Has any construction company become paperless?  

Considering the obvious productivity and cost savings of eliminating paper, a simple tactic could be to review every piece of paper in a construction office and relentlessly pursue the process that created it to understand whether a better and more efficient, paperless method could deliver the same outcome?  Often the paper created is for comfort or legacy reasons and never been questioned…

Outsiders

How often do we invite non-construction people onto construction sites?  As graduates we start on site indoctrinated with how things work and have never operated in any other environments which may give us the tools, knowledge and experience to question how things are done.  Alongside investing in the skills of our existing workforce it’s clear we need to attract more people into the industry.

Bringing alternative and high value skills such as Agile project management experience into the construction industry may accelerate adoption of novel process thinking not widespread in our sector.  The ability to harness an iterative approach with adaptive planning and continuous improvement at the heart of project management may provide a step change in how we plan and deliver construction projects.

Disputes 

A survey noted in the Australian Constructors Association (ACA) productivity study reported that industry professionals spend nearly 5 hours per week dealing with disputes.  They extrapolated this finding to suggest that for Construction Managers alone this is costing the Australian construction industry $1.7 billion.  It’s hard to confidently describe what the root cause of this problem is, however it’s clear that there is a huge opportunity to increase productivity by improving the efficiency of dealing with disputes.  

The same report suggested standard forms of contract, such as NEC4, may help by providing a more consistent framework for contract administration.  Another underused tool, certainly outside the UK, are contract management software solutions which allow for huge efficiencies in managing and progressing contractual administration including disputes. 

Procurement

the cost, time and drain on valuable resources to constantly work on pre-qualification and tendering requirements must be reviewed and rationalised if we’re to improve productivity in the pre-construction phase.  A Construction News article found that mega projects could cost tenderers over £2M with some companies spending more than a fifth of their operational turnover on winning work.

ACA’s report noted that in Australia with infrastructure spend of $63.75 billion, even a modest 15 per cent reduction in the cost of tendering would result in annual savings of $0.5 billion pa for government projects alone. Perhaps more importantly, resources could be allocated to activities that could generate even more savings and efficiencies such as by value engineering the design or developing alternative more innovative ways to deliver the project. A recent ACA survey found that improving procurement processes was the single biggest opportunity for improving industry productivity.

Capturing best practice 

Possibly the most overlooked and underinvested area of construction is measuring performance from objective site data and capturing best practice.  Lessons learned are almost always left to the very end of a programme of work when most of the team have already moved on to the next project.  Recognition of best practice, high productivity and nurturing that to spread across an entire site team is almost non-existent with limited resources and tools developed to leverage this knowledge.

At Raildiary we consistently capture data on every shift to deliver accelerated, data driven decision making, empower commercial teams to effectively administer contracts and leverage structured site data for long term learning.  At Raildiary we’re obsessed with making productivity gains simple and easy to achieve.

Discover more on productivity, by checking out our article on 10 Ways to Boost Productivity and Efficiency with Your Site Diary.

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