What is productivity? Oxford Dictionary defines productivity as “ The effectiveness of productive effort, especially in industry, as measured in terms of the rate of output per unit of input”. Oxford Dictionary
Let’s talk about productivity in the construction industry—or, rather, lack of it. Labor productivity is a measure of economic performance that compares the amount of goods and services produced (output) with the number of hours worked to produce those goods and services. On top of that tracking sales in construction can be simplified massively in order to be more productive. Using sales management dashboards would be able to do this.
It’s been widely reported that construction productivity has been flat for decades. According to the Bureau of Economic Analysis (BEA) and Bureau of Labor Statistics (BLS), productivity in the construction industry has in actuality declined over the past 15 years. If you own a construction company, protect your business with public liability insurance.
In manufacturing, by contrast, productivity has nearly doubled over the same period, and continuous improvement has been the norm. Manufacturing as an industry description is a broad term. Manufacturing encompasses a wide variety of industries ranging from food and beverages to pharmaceuticals, iron and steel to textiles, as well as lumber, automobiles, petrochemicals and many others. Innovation and technological advances are prevalent throughout the manufacturing sector which has allowed the magic results of fewer workers and more output….an increase in productivity.
What makes up the manufacturing industry:The Manufacturing sector comprises establishments engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products.North American Industry Classification System
Why is productivity so important to an industry?
It is all about growth. An increase in productivity means growth for the industry, it’s companies and the individual workers. If we increase our efficiency by producing more goods and services without increasing the number of hours we work can increase our standard of living.
Why can’t the construction overcome the hurdles to efficient working?
There are many reasons the construction industry has not experienced productivity gains. It is an industry which is deeply almost pathologically resistant to change. Historically construction professionals are notorious for continually challenging the potential gains offered by new technology. In addition to an aversion to change, there is a myriad of other factors that impede productivity growth in construction. Today a lack of available labor is a factor more than ever before. Poor communication, failure to retain and recruit talented professionals, and contractual flaws that create a climate of finger pointing and risk mitigation vs. collaboration are several more examples of an industry that is stuck.
What can construction professionals do to move the industry?
Advocate for a culture change.
Work together with your colleagues and investigate the possibilities for innovation. Let go of assumptions and deeply rooted beliefs that the way it has been done for 50 years is the best and only way (this will be easier said than done).
Get past the aversion to disruptive technologies
Almost every building that we build in the U.S. is a one-off design, constructed piece by piece on site. Standardizing designs and modularizing components will save costs and time. Prefabrication of systems offsite takes some of the labor off site and into a manufacturing environment where studies have proven it is simply more efficient.
There is extensive research available on the subject of productivity. Links below are resources referenced above.
United States Department of Labor – Bureau of Labor Statistics Labor Productivity and Costs
Commercial New by Alex Carrick “Manufacturing Rates Highly According to One Important Metric in Daily”
McKinsey & Company “The construction productivity imperative”
What are some other ways the construction industry can gain efficiency?
Comment below and share your ideas.