Why can't the construction industry improve productivity?

Much has been written on this topic already. We know that efficiency, productivity and profitability are stagnant in the construction industry, while other industries are leaping ahead. Professional services across a range of industries are putting digital technology to use for significant productivity and profitability gains - there are examples in accounting, law and medicine, and yet we seem unable to transfer these learnings to construction.

What is it about our industry that makes it so hard to implement change and to make use of the technological advantages that are there for the taking??

An Environment of Protection

Firstly, construction is unique because it is complex and complicated. It is a tangle of contracts, specialists, regulations, social expectations and real world limitations like materials supply and the weather. Projects run for long periods of time, costs are high and margins are tight, which reduces everyone’s appetite for risk, and encourages an environment where mitigating against risk determines the rules of the game. None of these factors create an environment for certainty or collaboration, where risks can be taken and shared.?

Technology alone is not enough

Technology is often cited as a solution, however technology is only a tool. To develop and use technology effectively in construction, it needs to fit within existing workflows, and clearly demonstrate improvements to current practice. There is no time or space for individual players within the industry to risk changing their practices unless the outcome is 100% certain.

Adapting technology that has worked in other industries for construction is therefore not a solution. Technological advances need to be developed with a deep understanding of the construction environment, targeting specific areas of inefficiency in ways that resonate with those who will adopt them.

Understanding the Specific Causes of Inefficiency

Looking more specifically at the challenges faced in the delivery of engineering engagements, BVT has considered the workings of the construction ecosystem. The? following issues were identified as productivity hindrances. While they are specific to our experience as an engineering consultancy, the concepts are relevant across the industry.

Lost “hang” time

Delivering engineering solutions to clients with speed improves a project’s productivity. While the engineering component is the measurable output, a closer inspection of our processes found that time was lost elsewhere. In fact, one of the largest causes of lost time were the pauses between each stage of completing a project. This could be waiting for an e-mail response, needing further information, clarifying a change or completing an internal review. As more specialists became involved in a project, more communication was needed, and the pauses between work were increased.?

The misalignment between regulatory requirements and construction processes

?A particular and common issue for interior design is the need to provide a specialist interior design before the contractor is engaged to build. This occurs, for example, when a Producer Statement 1 (PS1) is required in the design stage of consent. However, the contractor is responsible for specifying, procuring and building the design. Specifying products before the contractor is engaged can reduce their choices, thereby impacting on their ability to deliver value for asset owners.

Alternatively, there are also issues when a specialist interior design has not been completed prior to contractor engagement. A contractor will need to obtain a PS1 as part of their tender. Rather than paying for this, and being out of pocket if they don’t win the business, they may be tempted to use the ‘free’ services of a manufacturer. In this case, the manufacturer absorbs the cost of the PS1, but in return is able to lock in the use of their own products. Any change to design or products later in the process will require a new PS1 at additional cost. In both cases, there are cost and quality drawbacks.?

This is an excellent example of where the consenting process does not match the tendering processes in construction. Regulatory bodies have the power to assert their processes, and for the industry to fall into line. However, by taking a collaborative approach with the industry, there is an opportunity to align and improve consenting processes for the benefit of both sides.

Project-by-Project focus

The majority of projects are considered bespoke and managed as end-to-end engagements despite the many repetitive aspects within projects for which the learning could be applied to subsequent projects. However, construction professionals are so busy in their everyday work, there is no time to step back and consider more efficient ways of working. This includes firstly having the time to create better systems, and secondly having the time to learn and implement new ways of working even when they are available. To be successful, any new tool or process needs to be fast to learn and easy to use.?

To really drive change at pace, there needs to be stronger leadership from the government, mandating the adoption of technology in procurement of services for example.

Knowledge transfer

Construction professionals accrue increasing levels of knowledge about a project as it progresses, however this knowledge is often not captured in a way that enables others to use it or build on it. If the professional leaves the project, the incumbent will often need to undertake their own learning before they can continue to make progress.

This creates an issue for firms who invest in their employees' development, but lose the value of this when the employee moves to a new company. There are few tools and processes being used within the construction industry that allow firms to capture and retain knowledge in a way that creates a tangible asset for the firm.

The collection of quality data is essential for digital change, but without the investment in systems to do this, the industry is stuck relying on the information in employees' heads and in files that are not worth the time to access.

There are signs of hope, with the National Infrastructure Strategy recommending a national digital strategy (one is underway) and MBIE’s Building for Climate Change guidelines for designing, constructing and maintaining new buildings better, having technology playing a crucial role.

At an organisational level, we have been laying the groundwork for digital transformation for sometime, from coding courses for our engineers, to changes in the way we recruit, structure our team, and manage our workflows. In addition, we are developing technologies that can integrate into existing construction processes and add value. Visit our BVT website for our latest strategic thinking and the Prenguin website to see technology in action.