The efficiency of the construction industry has been the subject of a number of studies over the years; one of the most credible was the McKinsey Report on global construction productivity in 2017 which reached some startling conclusions.
The first was that over the previous two decades, the industry lagged hugely behind the growth achieved across all industries by 170% and compared to manufacturing, by 260%.
These are generally accepted as accurate (well, as accurate as a study of this nature can be) but those statistics mask some major differences between the respective industries and their operating environments.
Modern factories are highly automated, deliver huge volumes of products with a high degree of repetition with known parameters and pre-determined and tried and tested processes. The Hyundai factory in Poland can produce almost one thousand vehicles per day.
Most construction project are bespoke, in terms of location, size, style, function, components and the teams producing them. Whilst they may of relatively high value, around US$ 200,000 for a small three bedroom house, to over a six month period, the output value of the Hyundai factory in Korea, of1,600,000 Tuscon cars over a year, is somewhere in the region of $48Bn.
It is therefore a little blinkered to make real productivity comparisons across the two industries, but having said that, construction is out of kilter from both a productivity and technological perspective and although we have a long way to go, the ability to track down this path exists now.
And that is that I want to examine.
Several initiatives are making in-roads in construction, or disrupting the industry as common parlance would call it, and the most well know is probably BIM. For government procured projects in the UK, the adoption of this process is now mandatory and it has a growing presence globally.
Collaboration is the bedrock of BIM and used in conjunction with tools such as Aconex, Procure, Viewpoint and others, it addresses some of the key areas where productivity gains can be made.
How well the supply chain is connected (as well as interconnectivity between designers, stakeholders and clients) is important; BIM can enable that and collaboration tools correctly structured allow for the efficient management of the Common Data Environment that underpins BIM and provides of the Holy Grail of data sharing, the single source of truth.
Structuring collaboration tools requires careful thought and planning in order to maximise the efficiency of what is a connected process. It is not sufficient to just have BIM and workflows and a collaboration tool; they must be utilised correctly; a chainsaw’s pretty good for cutting logs but you can’t dig a hole with it!
What is required are two separate but very interlinked processes; one for data management and sharing, and the other, the contract administration which governs how that data is utilised and shared.
The latter process is undertaken by the use of workflows and they require comprehensive understanding of and adherence to, the following if they are to be of any real use;
1. The conditions of contract, be they NEC, FIDIC or some bespoke form, the obligations on both parties and the concomitant risk allocation must be wholly understood by those structuring the tool as the electronic embodiment and processing of the contract terms and conditions, is no less onerous than the legal commitment represented by the signed contract. Comprehensive understanding of contract law and the use of contracts is essential. It is all too easy to create back-door variations or quasi – contractual links (where none were intended) by inappropriate protocols, process or wording on forms.
2. Structuring of collaboration protocols requires (ideally) buy-in of the processes by all parties. This is best done in a workshop structure, early on in the process and it provides the Project Manager with the opportunity to lead and demonstrate from the outset, a collaborative and equitable mind set. Client presence at this workshop and clear support of the process is essential.
3. Construction process; how things are built and how contractors and designers work; really only experience can inform this but it is essential to understand the client and design team modus operandi as well as the contractors’. This extends to the procurement and management of sub-contractors and suppliers.
4. Design team members obligations; these must be clear and unequivocal and they are often already procured when the collaboration tool is being implemented; avoid gaps, avoid overlaps, ensure that what the client expects to be delivered is aligned to the consultants’ outputs… or if there is mis-alignment, then identifying that is essential.
5. If collaboration is to be achieved, it must demonstrable and that can be built–in to the process and potentially confrontational roadblocks can be avoided; take shop drawing approval. The submitted drawing upon review, does not meet the requirements of the spec or the design; the tool can be structured such that this is simply rejected, alternatively, it can be stipulated that the matter is resolved at a face to face meeting convened at the discretion of the reviewer, an altogether more personal and probably more productive means of resolution.
6. Don’t let the mere presence of such a tool/process dilute the clear obligations on the parties; it is not a substitute for a diligent work ethic or abandonment of QA and coordination of designs. Designs must still impart clear and relevant information; the efficient transmittal and tracking of a poor or inaccurate drawing is still a waste of everyone’s time.
The McKinsey report identified a number of areas for improvement where the cumulative productivity gain would reach to between 50 and 60%; the above is just one element that is very much present in the industry now.
I believe we are on the cusp of a major technological shift in how we build, a much needed one in an industry that is of vital importance to society; it’s a shift that is just over the horizon and when it does appear we need to be ready to grasp it with both hands
Joe (I.Eng. MICE, PMP) is qualified civil engineer and project management professional with a post-graduate diploma in engineering management and contract law. He has wide ranging experience in civil engineering infrastructure, railway construction (main line and underground) buildings and property development in the UK, the Middle East and latterly, New Zealand where is currently resident. His specialisms are contract related; the NEC form of contract, FIDIC, the New Zealand Standard, 3910 and structuring collaboration tools using contract workflows.