Construction Productivity Versus Manufacturing Productivity

Construction Starts = Leading Economic Indicators

Why is the construction industry such a technology laggard, generating time and cost overruns continuously — and yet is one of the largest segments contributing to a nation’s GDP? Or, why is construction a leading indicator ofconstruction-productivity recession/recovery, when its overall financial stability is hardly indicative across all employment sectors…?

With research exposing staggering statistics like, “70% and 90% of projects exceed the original planned cost and that the overrun commonly varies between 50% and 100% of budget” — one would think with other sectors’ adoption, deployment of, and success with Lean and/or Agile Methods, that the construction industry would jump on the efficiency bandwagon!

Compared to any other industry, productivity in construction is abysmal. The United States Bureau of Labor Statistics published data showing that in the last 40 years, while non-farm productivity has increased by over 200 percent, productivity in the construction industry has actually declined. Succinctly put by the Ennova blog, “This is creating a crisis for the construction industry given the global demand for construction and the typical size of financial commitment and therefore risk involved.”*  That would mean Surety Bond companies are driving the Risk market – making the expense of construction escalate even more!

Variables in Construction are Major Contributors to Poor Performance

Further research reveals that non-valued activities in Construction are adversely affecting productivity, as compared to Manufacturing. Extenuating factors causing changes, i.e., material, quality, environmental or weather conditions also drive a higher non-productive ratio.

This begs the question, “If the construction industry is AWARE of these trends and discrepancies, why don’t they change?”

We Have the Tools but Not the Business Discipline?

The answer to that question is the only thing NOT measured, analyzed, reported and documented. Are we too old? Too busy? Too cheap? With BIM and altered reality, mobilization, cloud access, 3D printing, and more – you would think construction would be at forefront of embracing innovation! The Construction Users Roundtable AEC Productivity Subcommittee published their recommendations (note: OVER TEN YEARS AGO!!):

  • Leadership from owners needed to increase
  • Integrated project structures should be implemented
  • Participants need to engage in open information sharing
  • Virtual building models should be employed in projects

See, not much has changed in the ten years from this AEC Study, withe the exception of bullet #4. The point is, the CULTURE has not kept pace (advancing) with other sectors.

The Last Cowboy?

Perhaps it’s an implied ‘romantic’ choice? Do you think that the industry prefers the notion of a GC riding in a pickup with his dog and a set of plans, whose contract with a handshake — is the preferred way of doing business? I don’t disagree. I would just rather telecommute, view BIM plans via the cloud, review the workflow and process documents online, and echo-sign the contract.

At Starbucks, with my dog and my pickup.

*(Source: http://ennova.com.au/blog/2011/09/agile-lean-compared-applied-construction.)

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