Why Work Goes to Waste: The Productivity Issue in the Construction Industry

From the 1960's to today, all industries have been increasing their productivity - except construction. While it’s not decreasing, it’s also not getting significantly better with the introduction of new tools, which is the general trend of the world.

There are striking deficiencies in construction workflows, which causes projects to lag and money to go down the drain. The root cause is a serious information gap.

Only 30% of working time is used for production

Research shows that when all the time used by workers in a construction process is analyzed, only a third is used for value-adding work. Approximately 40% of the time is spent waiting for deliveries, instructions or other things that take the project forward. The remaining 30% of the time is spent on transfers.

“Construction as an industry is absolutely huge, but only 15% of the work is done at the right time, in the right location,” explains Jukka Suomi, the Product Manager at Trimble. “It is so fragmented and has so many coordination issues, that materials are wasted, projects are late and go over budget. It is a clear problem.”

One hand doesn’t know what the other is doing

Poor productivity is only a symptom of the underlying problem, which is lack of information. Construction hasn’t properly adopted digital information tools, and projects traditionally comprise of several stakeholders, complex processes and constantly changing plans.

“In every project, a new band is put together, so to speak,” Suomi explains. “Planning is not done properly, and competences don’t meet. High-level plans exist, but a production management plan is either not done or not followed. There is no transparency going top-down in the production chain.” The result is much-needed resources diverted from production and wasted on sorting out processes.

According to Suomi, it all comes down to a very simple goal. “The biggest thing in solving the productivity issue is that at the construction site, every person knows what to do next.”

“The biggest thing in solving the productivity issue is that at the construction site, every person knows what to do next.”

 Jukka Suomi, Product Manager, Trimble

Low productivity means low profitability

It goes without saying that when work power is wasted on things that don’t add value to the project, it’s a huge financial blow to the project. The market size will top 10 trillion in 2020, and such staggering amounts of unproductive work translate into a massive monetary loss. Constantly spending resources on work that doesn’t add value is detrimental for each individual business within the industry, too.

It’s not sustainable to continue with only a third of work providing value. “The productivity problem is so huge, that the industry will have to change going forward,” Suomi concludes.

 

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