Poor Construction Industry Accountability is the Root Cause of Historically Poor Industry Productivity

Blake Ratcliff – April 2020

Closing the productivity gap hinges on effective accountability.  Accountability is based on 5 building blocks: 1) clear expectations, 2) capability to deliver, 3) measurement, 4) feedback, and 5) consequences.   “Accountability is about delivering on a commitment.” Construction industry firms aiming to close the productivity gap, lower cost, and drive profitability must build commitments between management and teams that balance and align accountability building blocks with their goals to deliver consistently improving results.

Aligning Accountability Building Blocks  to Attack the Sources of Construction Industry Waste

Peter Drucker once stated, “Doing the right thing is more than doing the thing right.”   For the construction industry, too much time has focused on compliance, workmanship, and risk.  This has resulted in “religion” around how work is completed, endless iterations making decisions on execution, and over-processing as items are inspected, re-inspected, and an ever-increasing amount of documents aiming to prove almost unprovable outcomes.

 

The Lean Construction Institute identifies the following sources of construction waste:

  1. Transportation
  2. Inventory
  3. Motion
  4. Waiting
  5. Over-processing
  6. Overproduction
  7. Defects
  8. Underutilized talent
  9. Over-Burdening

 

Focusing on processes and activities to eliminate or reduce these sources of waste is critical for the industry to begin achieving productivity gains.  Companies that institutionalize this approach will see their costs fall and profits rise.

Clear Capacity to Collect Impactful Data and Achieve Effective Collaboration is the Starting Point

FMI research concludes 96% of available data from the construction site is never used and 90% of collected data is unstructured (tweets, photos, texts).  These figures indicate that the industry collects almost no usable data.

The good news is that sources of infrastructure to change this are rising with enterprise mobility tools, Building Information Management (BIM) systems, construction-focused data analytics tools, contract management tools, and others.  High speed, flexible enterprise tools enabling rapid data collection, immediate insights, and actions offer tremendous value to the industry.

Selecting Measurable Data Opportunistically Attacking Waste Can Drive Business Success and Transformation

Tools can’t solve the problem alone.  Again as Drucker stated, “What gets measured gets improved…Leaders must clearly and simply define what accountability means” and that implies understanding what a company must measure to support the other accountability building blocks.  

In the past, the construction industry struggled to achieve clear, effective and easily collected measurements.  Rightly, leaders identify goals like profitability per week, profitability per FTE hour, utilization rate, etc.  

Attacking the sources of waste as they impact FTE effectiveness, profit per week, utilization can connect the causes to the goals producing useful leading indicators and levers that can drive profit, reduce cost, and cut risk.

The Foundation – Data Requirements

 The data has to be credible.  The data has to be consistent.  The data must not be vulnerable to tampering.

Data should include:

  1. Time and date stamps
  2. Identification of the source
  3. Where the data was collected — precisely with latitude and longitude
  4. Clearly defined sources
  5. An audit trail of all changes to the data

 

Highly credible, consistent, safe data is the first step to reliable measurement and analysis.

Concepts for Selecting Data

Selected data should be based on industry waste sources with an eye on your business priorities.   

For example, the International Code Council (ICC) has recently endorsed remote inspections stating that a large portion of site visits can be eliminated.  Perhaps many or all of your site visits for code and other inspections could be eliminated.  

Data could be collected from crews before and after their workday collecting or rating: 1) the right skills, 2) the right resources, 3) right materials, 4) conditions, and 5) their confidence performing.  At the close of the day, a business could measure 1) unexpected delays, 2) materials that were deficient, 3) other issues that may have occurred.  As trends emerge the business can begin finding means to improve onsite performance.

Key risk points could be identified for real-time or near real-time remote monitoring eliminating redos and reducing other known failures with intense data-driven feedback from experts, management, trade skills.

Labor data for onsite performance can be captured to assure adequate staffing, identifying weaknesses of onsite staff presence, and revealing these issues for proactive management resolution.

Construction companies implementing high-speed tools enabling measurement and accountability while delivering immediate actionable insights can drive profits up, push costs down, and contain or reduce risk.

 

About IntelliSpeX:

IntelliSpeX provides a SaaS and mobile app solution that is field-validated with over 5,000 site visits in the United States and Puerto Rico.  IntelliSpeX users cite benefits including ease of use for personnel regardless of technology background, rapid familiarization and deployment cycle, efficient data capture, and total cost of ownership.  These benefits result in better safety and security, improved management visibility and collaboration, and meaningful gains in waste reduction. Remarkable outcomes are achieved via reduced times to process change orders and information requests.

IntelliSpeX is a Delaware corporation founded in 2015.  The company provides patent-pending productivity technology to support the construction and disaster recovery industries.