Now that we’ve laid the foundation for the four P’s of construction improvement (performance, predictability, planet, and people), let’s add some framework around performance. Particularly, the way performance impacts one of our most coveted metrics of measure—productivity.
Contrary to other industries with specific key performance indicators (KPIs) that benchmark productivity, the construction industry has traditionally lacked such KPIs to set those standards and thus optimize productivity. Also unique to our industry, we can use cost as the dividing factor (rather than time) to measure success. Why? Because cost is much easier to track, cost data is more generally available than time data, and it thus generates a more accurate metric than say, labour hours.
Nevertheless, abundant gains are at stake. Research states that if construction productivity caught up with that of the total economy—and it can—it would spike the sector’s overall value by $1.6 trillion and add about 2% to the global economy’s bottom line. To put this in perspective, this equates to about half of the world’s annual infrastructural needs.
A lofty goal indeed, but an attainable one, nonetheless. To start, we must identify the six productivity pitfalls to devise an effective plan to combat them.
1. Transparency & Regulation
Too often, regulatory complexities hinder productivity. In fact, more often than not, a majority of poor outcomes stem from non-technical risks more often than from technical risks (think: political risks related to regulation and transparency). The solution? Governmental change. Governments have the power to reshape regulatory bodies by streamlining planning and approvals processes, reducing informalities and corruption, and encouraging more transparency with cost and performance. Many governments also allocate grants for innovation and training.
Imagine, for example, what could happen if the government incentivised industry-wide innovation by prescribing the means and methods of delivery (example: de-carbonisation targets) or mandating the use of certain technologies (example: BIM mandates).
While collaborative approaches are implemented with good intentions, the follow-through is often cut short due to a reluctance to comply with a project’s contractual terms. And while it’s a no-brainer that projects are more likely to meet programme and cost targets if interests are aligned and have well-defined outcomes, it’s easier said than done. Taking a note from the Value Toolkit playbook—a UK government-backed initiative focused on redefining the measure of value—what would happen if procurement decisions were determined by the value and quality of past performances rather than cost and time alone? Or if contracts were designed to favour performance and alignment benchmarks? One way to take baby steps towards implementing this best practice: adopt alternative contracting models, such as integrated project delivery (IPD), and build up alliances to help sustain long-term collaborative relationships.
As with any relationship, the foundation of effective collaboration is trust. Yet, owners are keen to incorporate some aspects of collaborative working into their traditional models—those that optimise project decision-making, encourage innovation, and reduce variability—yet leave other, more impactful aspects of the approach in the dust. For a contract management paradigm shift to remain sustainable, changes in behaviour, attitudes, and skills are essential for construction professionals and legal advisers. The end goal? Building longer-term supplier and subcontractor relationships.
3. Design Standardisation
Another potential game-changer beckoning productivity improvements is the use of repeatable design elements. Many developers and construction firms do not utilise a standard design library during their projects and instead, build the basics from scratch each time. Imagine the time savings if these repeatable assets were ready-made and available. Repeatable design elements are tried and true. Take deepwater oil and gas companies for example, where standardisation might not be the panacea, but the reliance on parameter specification over individualised company specifications is significant.
Coupled with design for manufacturing and encouraging off site works, this could substantially reduce process waste.
But as with all new ideas, utilising repeatable design to spike productivity will only ever be realised if the key stakeholders are willing and open to trying it. Asking owners and contractors to shift their mindset from custom project scopes to standardisation and repeatability is undoubtably a tall order.
Standardising best practices across all sites, projects, staff, and the procurement and development of project management talent is another gaping opportunity for improvement. It’s indeed problematic when the lack of hard data to baseline project (and project managers’) performance, results in defaulting to anecdotal information about a project’s difficulties.
To truly enact such a robust onsite transformation, owners must be willing to implement changes in a comprehensive fashion—across all three aspects of a project: management systems, technical systems, and the staff’s receptivity to the changes at hand.
There are however, four approaches to successful implementation well-known in the industry for increasing productivity and yet, surprisingly underutilised. First, adhering to a rigorous planning process to ensure activities are achieved on time and on budget. The use of integrated planning tools on a large-scale oil and gas project, for instance, achieved a 70 percent increase in the project’s productivity. Second, establishing key performance indicators (KPI’s) and using them to guide performance reviews. It is critical to complement common KPI’s with forward-looking metrics to identify, and subsequently reduce, variance. Third, conducting all prework, such as approvals, to completion prior to starting on-site work to improve overall project mobilisation. Fourth, strategically planning and coordinating on-site disciplines and incorporating lean principles to reduce waste and variability.
Comparatively speaking, it’s no secret that the construction industry is reluctant to change and is rather laggard in adopting tech, new materials, and methods. Which is an unfortunate fact because the magnitude of change that today’s advances could impart upon the industry’s overall effectiveness and efficiency is monumental. Notable construction game changers include digital tech, advanced materials, and automation.
From 5-D building information modelling to advanced analytics—the sheer number of improvements realised from the worldwide use of digital tech is truly astounding. And while it’s certainly true that digitalisation alone won’t solve all our productivity problems, to realise the benefits of tech-enhanced solutions such as more adequate systems and processes, studies state that a fundamental cultural change is required, right alongside buy-in from the field.
Lastly, widespread changes can only be as successful as our people are knowledgeable. The changes undergone by our workforces (from major demographic shifts, to retiring management and new hire influxes) demands added attention and support.
Apprenticeship programs can train frontline workers in core skills that are currently underdeveloped, and modern technologies can offset seasonality and cyclicality to improve workforce stability.
Funders, educators, and professionals who drive workforce-training program agendas can collaborate alongside contractors and trades to ensure the skills taught match the industry’s needs. Not to mention the missed opportunity to maximise takeaways from megaprojects. After all, if done properly, megaprojects are prime catalysts for collaboration with local workforce boards or non-profits that could yield well-informed regional training programs.
And, more radical still is the potential productivity spikes possible from changes to off-site practices. For example, imagine a system devoid of market failures, arguably one of the largest factors currently stifling productivity. Thus far, firms shifting this direction are already predicting productivity boosts several times over.
As far as newfound capabilities go, many have reported that using different, lighter-weight materials eases shipping and makes achieving complex sustainability goals such as solar technology, rainwater harvesting, and high-quality building insulation that much more attainable.
The insatiable hunger to increase productivity is pervasive and is driving changes in all directions and in ways we’ve never seen before. As key stakeholders in this industry, the decision resides with us: we either hop atop the bandwagon of change or continue to hold our ground on the side lines, resisting with as much fervour as we can muster.