- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 30 May 2017
Productivity in the construction industry
In the manufacturing industry, productivity increasing means better margins and improved efficiency within projects, and there are lessons that can be learned from this to aid organisations and supply chains within the construction industry.
Don Ward (DW):
Productivity is a measure of output/input or efficiency, rather than a measure of quality, effectiveness or value and in that sense we risk focusing on the wrong issues. Nevertheless, if we need a measure, then it would be earned value/person-hours, expressed as £K/person-year to enable sector and international comparisons.
However, ultimately we do need to focus on measuring outcomes, in terms of economic impact on the rest of the economy. We also need a more holistic look at analysing productivity that takes into account an increased used of offsite manufacturing.
Simon Cross (SC):
Construction productivity can be measured at macro and micro scale, the former at asset value (output achieved) for the sector and the latter as how much to a specific project asset. At macro scale productivity is typically £ generated per man hour, and at micro scale it could be £ to construct versus m2 covered for a building.
What is stopping companies from improving productivity of their workforce?
A thoroughly flawed process – from procurement to delivery – that lacks integration, collaboration, a holistic project-level and whole life view. All this impedes the uptake of digital, automated and offsite approaches.
Constructors typically lack capital investment, they are stuck in a cycle of low margins leading to low capital. Often contractors work at less than 1% margin. Raising capital is therefore very hard. Low capital leads to low investment in new technologies and skills. Traditional projects are built on packaged prices with contractors and subcontractors, and the nature of these business models and contract types is not always collaborative.
Can and should companies improve the way they engage their supply chain?
Yes this is essential throughout the supply chain. It starts with the clients and their initial appointments of consultants and Tier 1 contractors, with the latter adopting the same principles in procuring subcontractors and materials. Hastily arranged one-off subcontracting arrangements bought on lowest tender price are not supply chains.
Eliminate or at least reduce the duplication of data and information by providing one source of the truth for all project participants. The use of BIM both requires and enables better integration and collaboration of the project team, so the benefits extend far beyond this into facilitating lean approaches and eliminating waste in all its forms.
BIM can be used across the supply chain as a flow of good information for decision making. Moving through the BIM levels will enable increased design and construction data sharing, aiding better decision making and collaboration between parties.
What key lessons can construction learn from manufacturing?
Establish a reliable predictable process and then continuously improve it by engaging the workforce and supply chain. Target automation and digital wherever possible, and move towards offsite production wherever possible because it delivers better safety, better quality, better reliability/predictability, and speed. And with critical mass, cost savings will also follow.
Advanced manufacturing and driven productivity in the manufacturing substantially over the past 20 years. Adding value has been achieved through new technologies and automation, better standards and design, new business models, including sales, operations and technical. Improving skills for project management, lean design and delivery.
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