Page 100 - Build 161

Departments/Productivity By Dael Climo, Build Deputy Editor
A productivity revolution
If a seven-point plan was adopted by the global construction industry, it could dramatically increase the sector’s notoriously low productivity.
POOR PRODUCTIVITY has been a perennial problem in the construction sector, but now a leading global management consul- tancy has pinpointed seven areas that, if addressed, could transform the industry.
Industry slow to evolve
A report by McKinsey Global Institute (MGI) called Reinventing construction through a productivity revolution says that much of the construction industry has evolved at a glacial pace. It is one of the least digitised sectors in the world, coming second to last in the US and last in Europe, based on MGI’S digitisation index.
Globally, labour-productivity growth in construction has lagged behind other industries for the past two decades (see infographic) with growth of 2.8% for the total world economy and 3.6% for manufacturing.
If construction sector productivity was to catch up with the total economy, it would boost the sector’s value by over a trillion dollars and add about 2% to the global economy.
Seven actions that could bring change
The report says that actions taken by inno- vative firms and regions show there are seven areas that could boost productivity by 50–60% if all were implemented simultane- ously. These are:
● reshaping regulation
● rewiring the contractual framework to
reshape industry dynamics
● rethinking design and engineering
processes
● improving procurement and supply chain
management
● improving on-site execution
● infusing digital technology, new materials
and advanced automation
● reskilling the workforce.
Parts of the industry could follow manu- facturing and move to mass production, boosting productivity tenfold.
Barriers to change being lowered
While many barriers to higher productivity and ways of overcoming them have been known for some time, the industry has been
deadlocked. Most individual players lack the incentives and the scale to change the system. Now, however, there are in uences that
are lowering barriers to change including: ● rising requirements and demands in terms
of volume, cost and quality
● larger-scale players and more transparent
markets
● disruptive new entrants
● more readily available new technologies,
materials and processes
The labour-productivity performance of construction sectors around the world is not uniform, with large regional di erences as well as pockets of excellence. In the US, for example, labour productivity is lower today than it was in 1968. However, due to its size, the US construction sector accounts for a third of the opportunity to boost global productivity.
In Europe, productivity is static, while in China and South Africa, it is rapidly improving, albeit from a low base. A few smaller countries, including Australia and Israel, are managing to combine high
98 — August/September 2017 — Build 161