Rolled drawings with three construction workers in the background 1200x816
Rolled drawings with three construction workers in the background 1200x816

Low Productivity is Prevalent in the Global Construction Industry – But It Doesn’t Have to Be in Your Business

If you’ve been in construction for a while, you know that, as an industry, we have a productivity problem. We often deal with rework because poor design or a lack of visibility requires the inefficient repetition of tasks. We face environmental conditions and supply chain problems that slow us down when we least expect it. We even have safety, training and other staffing challenges to contend with. In construction, being productive isn’t ever simple… but—like many players in the industry—are you stuck with a yawning productivity gap?

The short answer: No. Many firms are running into completely avoidable problems because they have neglected to update their information systems to solve the visibility and communications shortcomings that undermine productivity at every turn. You can step up and solve your organization’s efficiency problems. The first thing to do is take them seriously.

Construction Productivity May Be Worse Than You Think

You’re probably aware of how quickly projects get stuck due to budget, supply and/or staffing issues, but have you thought about how these problems become additive and escalate? According to the McKinsey Global Institute, the construction industry leaves a whopping $1.6 trillion of potential revenue on the table as a direct result of low productivity.

According to the research firm, the global construction sector represents almost $10 trillion in annual spend. Think about that. Collectively, construction firms are foregoing 16 cents of revenue for every dollar spent due to sub-optimal productivity. And although it’s an industry-wide problem, you can’t afford to sit back and conclude that there’s nothing you can do about it.

The simple reality is that other industries that have faced similar productivity challenges have pushed through and found success. Take manufacturing. Lean operations, connected devices, big data, automation and just-in-time supply chain management have all become prevalent in global manufacturing operations. In construction, many organizations are still relying almost exclusively on paper-and-pen recordkeeping, spreadsheets and basic accounting software to manage projects.

McKinsey explained that the construction industry has fallen behind when it comes to deploying and using digital technologies. In terms of digital maturity, the construction sector is 2nd-worst among U.S. industries and dead last in Europe.

However, it isn’t too late to begin closing the gap. Launch—or accelerate—your digital journey… it’s the only way to make meaningful productivity improvements a reality. Here’s how:

Put In Place a Tailored ERP System

Most enterprise resource planning (ERP) software can be delivered through the cloud, delivering price and deployment flexibility that smaller organizations can afford. You can’t coordinate operations to boost productivity when your workers are dependent on spreadsheets and paper records to get the job done. But you can when employees are all working from a central, mobile-enabled ERP that is purpose-built for construction-industry workflows.

Start By Solving Specific Problems, and Work Your Way Out

Deploying a complete ERP system can transform your business, but it may be a lot to chew in one bite. By honing in on a single, critical issue, you can focus your productivity efforts and measure your gains. For example, a report explained that embracing digital technologies helps firms eliminate rework. The improved communication and collaboration ends up paying for the investment by ensuring that tasks are completed correctly the first time, preventing duplicative efforts, compressing timeframes and reducing risks.

Unify the Office and the Field

Driving solid productivity gains in construction is often a matter of effective synchronization between the office and the field:

  • Accounting needs invoices in a timely matter to collect bills in time to order products for future projects on schedule.

  • Project managers need real-time inventory updates so they can tweak work orders relative to changes in supply availability.

  • Engineers depend on quick notifications of design problems that arise in the field to adjust plans before productivity slows.

  • Executives need complete data related to challenges when they arise so they can make well-informed decisions quickly and effectively.

You can’t meet all of these needs if your field staff and your office-based resources aren’t working from the same source of truth. A single ERP and field operations platform breaks down barriers between headquarters, field offices and job sites, eliminating the operational obstacles that impair your ability to secure, manage and deliver multiple projects profitably.

Embracing modern digital technologies can seem overwhelming for any construction firm. For the past 40 years, CMiC has made the digital journey predictable, transparent and cost effective for hundreds of construction and capital projects firms. Our ERP platform is architected specifically for these industries, minimizing the amount of customization, management and maintenance you’ll need to take on as you tackle your productivity challenges and realize your true potential.