Why BIM? Origins of New Solutions – Agile BIM Part 1/10
Causes of Low Productivity in the Construction Industry
Currently, an IT revolution is taking place worldwide, which among other things, facilitates easier access to goods and services and increases productivity in most sectors of the economy.
Low Productivity in the Construction Sector
Construction is one of the sectors with the lowest productivity growth (measured as gross value added per hour worked) over the past twenty years. Therefore, the average contribution of one hour of work by a construction worker is low. If it were higher, the work would be finished earlier, and both the company and the worker would earn more by offering cheaper facilities to their clients.
This post is part of the “Agile BIM” series. Click below to check out other posts.
- Why BIM? Origins of New Solutions – Agile BIM Part 1/10
- British Approach to BIM – Standards and Protocols – Agile BIM Part 2/10
- CDE in British Standards – Agile BIM Part 3/10
- Why is CDE so important in BIM? – Agile BIM Part 4/10
- Przykłady platform wymiany danych CDE – zwinny BIM cz. 5/10
- What is BIM? – Agile BIM Part 6/10
- BIM vs. Traditionally Managed Construction Projects – Agile BIM 7/10
- Agile Project Management – Introduction to Agile – Agile BIM 8/10
- Translating Agile Principles into BIM – Agile BIM Part 9/10
- How to Make BIM Agile? – Agile BIM 10/10
McKinsey & Company Report from 2017
A report prepared by McKinsey & Company [1] in February 2017 not only confirms this but also relates it to other sectors of the economy. For example, in the USA, productivity in the construction sector has halved since 1960; in Italy and France, it has decreased by about one-sixth since 1995; and in Germany and the UK, it has hovered around zero.
McKinsey describes factors that, in their view, make construction such a low-productivity sector, including:
- Poor communication between participants in the investment-construction process
- Inadequate performance management systems
- Lack of consistency in short-term task planning
- Limited talent management and employee creativity utilization
The Role of Innovation in Construction
According to experts from the British Chartered Institute of Building and a 2016 World Economic Forum report, there is little difference between how a construction investment was carried out 50 years ago and how it is predominantly carried out today. The report suggests the necessity for construction companies to specialize (currently, most do almost everything), which should be accompanied by innovations, particularly those that enhance efficiency and better communication between companies.
Innovation in construction can take many forms, the most obvious being new materials and new execution methods. The changes introduced aim primarily to improve two variables: time and cost. We want to build faster and cheaper while maintaining appropriate quality.
Prefabrication as an Example of Innovation
Apart from a few exceptions, every building can be treated as a separate product, so each construction investment has its unique project in which the facility is tailored to the defined requirements of the client. However, many specialized organizations can be found performing defined processes to deliver predictable products. A clear example is prefabrication. This indicates that construction has certain characteristics of production repeatability.
The aforementioned McKinsey & Company report identifies the need to utilize knowledge from other sectors of the economy, change management methods, work culture, and processes used in construction. This means the need for transformation and the introduction of innovation in a sector perceived as very conservative.
Problems of Traditional Construction Project Management
Construction investments are planned and managed using traditional management methods. It is commonly assumed that the construction process has a clearly defined goal and easily definable, repeatable stages. It is assumed that the investor knows what they want to achieve, the individual stages of the project are known, and construction proceeds according to a similar scheme: before we build the roof, we must make the foundations and walls, etc. If we assume that everything can be planned and divided into stages, the question arises: why doesn’t it work? Why is productivity low? Examples [2] of plans diverging from reality include projects like Berlin-Brandenburg Airport (as of the end of 2015, budget overrun by 148% of costs and an unknown opening date) [3], Stuttgart Railway Station (by mid-2015, budget overrun by 54%), or the Hamburg Opera (6 years delay and budget overrun by 300%).
Berlin-Brandenburg Airport
Difficulties in Managing Variables in Construction Projects
Traditionally managed construction investments are planned and divided into clearly defined stages, often using Gantt charts. Due to the very large number of unpredictable variables, construction projects require constant adjustments. In practice, the plans and schedules created have minimal value. As a result, there are often attempts to bend reality to fit the planned schedules, necessary decisions about adjustments are postponed, and this is the best path to failure.
One might ask where the problem of low productivity in the construction industry lies and how to address it.
Of course, the answer is not easy, and the causes are found in many places. The UK Government has attempted a comprehensive response to this question.
Proposals to Overcome Low Productivity in the Construction Industry by the UK
Diagnosis of the Problem and Systemic Solutions
In 2010, the UK was the first to diagnose the issue of low productivity in the construction sector at the level of government documents, including:
- Conducting one-off investments not based on any clear action plan
- Lack of transparency in key decision-making processes
- Ambiguity of roles and responsibilities
- Over-specification of requirements and ordering customized products
- Shifting too many risks onto contractors in contracts
- Lack of investment in key skills of firms to increase efficiency
Government Construction Strategy
In 2011, the UK government proposed a complete overhaul of the construction market in its strategic document “Government Construction Strategy” [4], including:
- Creating investment strategies and not acting “ad hoc”
- Reorganizing the service procurement system
- Strengthening the use of the potential of construction firms
- Eliminating payment delays among contractors (changing the payment system)
- Improving the skills of clients
- Introducing BIM (Building Information Modeling) methodology
In the next entry, we will explore the British approach to BIM, particularly the standards and protocols that organize the investment and construction process.
References:
[2] KPMG Report “BIM Methodology” from November 2016
[4] https://www.thenbs.com/knowledge/what-is-the-government-construction-strategy
