The construction industry has long been chastised for its low productivity levels, high rework costs, and command and control approach to job site coordination and planning, which has unfortunately remained consistent over the years. Sir John Egan published ‘Rethinking Construction’ around the turn of the century, emphasizing the critical need to address spiraling construction costs, schedules, and defects. Several high-profile reports, most notably the McKinsey Productivity Imperative Report, have since reiterated this criticism, but the data suggests that little has changed.
According to a recent international study, the measured direct costs of avoidable errors are in the order of 5% of the project value. When these poor performance factors are compared to an industry in the UK with average profit levels of only 3%, the immediate and pressing case for change becomes apparent. This article discusses practical steps construction companies can take to address the productivity imperative, reduce rework costs, and begin the journey toward a high-performance culture.
Every year, the UK construction industry spends billions of pounds on the costs of poor quality, rework, and error, with far-reaching consequences and root causes. In our experience, these range from outdated and ineffective planning, communication, and coordination throughout the Design and Construction phases to insufficient quality attention due to increasing cost and schedule pressures and poorly executed supervision.
Many of these require significant strategic invention at the political, client-owner, and organizational levels to influence the necessary change. Many of these initiatives are just getting started for the industry, including:
- Transformation to the Digital Age (Digital Twins, digital design integration, autonomous plant, and digitized construction processes).
- Modern Building Techniques (PDfMA, offsite manufacture, and onsite assembly).
- Project 13 (Value-based innovative procurement and outcome-focused project delivery models).
Integrating these long-term solutions will result in significant changes to the infrastructure landscape. They will, however, take time. Nevertheless, there are tactical measures that construction companies can put in place right now that have been shown to reduce rework and improve job site productivity and delivery performance.
We’ve highlighted our top three tips for harvesting low-hanging fruit from a low-productivity tree: Make problem-solving a celebrated behavior, 2) Short Interval Control Drives Short Interval Learning, and 3) Process Confirmation Today Prevents Process Error Tomorrow.
Make Problem Finding a Celebrated Behavior
How do we usually react when someone comes to us with a problem? What are our initial reactions? An eye roll or an exhausted gasp at the prospect of fighting another fire – This cynical approach increases the likelihood of concealing poor quality or encountering latent defects later on. Construction Leaders must change their leadership attitudes to make improvement, adaptation, and evolution a part of their daily work; first, leaders must make “problem-solving” a celebrated behavior.
When someone comes to you with a problem, instead of beginning with, “thank you for bringing this to my attention. Could you tell me the target condition of this operation and what obstacles prevent you from achieving this?”. By implementing an improvement coaching cycle, leaders will spend less time-fighting fires and more time coaching their army of problem solvers.
Short Interval Control Drives Short Interval Learning
Creating an end-of-project Lessons Learned log is one of the most pointless exercises on infrastructure projects. In most cases, this excel document is regarded as a tick box exercise and will be buried in the cemetery of dead Lessons Learned logs, never to be used again by another project. The problem with deferring our learning until quarterly reviews or end-of-lifecycle closedowns is that we are unlikely to benefit from even the best ideas in Construction because the process will have elapsed. As a result, we will have missed our window of opportunity for improvement. In addition, construction schedules could be more flexible, exacerbating the problem. Construction projects span vast geographies, timeframes, and circumstances, complicating the creation of detailed forecasting plans and limiting the team’s ability to respond to unavoidable changes.
“Everyone has a plan until they get punched in the face,” Mike Tyson once said. To combat this, construction teams must first make their performance visible and measure output at the shortest control interval possible by properly deploying the Last Planner System* (Collaborative Planning) and Tiered Visual Performance Management. This Lean planning approach stimulates improvement opportunities through short learning cycles, which, when implemented, quickly drive productivity, reliability, and quality improvements.
Process Confirmation Today Prevents Process Error Tomorrow
Quality is never an accident; it results from careful planning, sincere effort, wise discretion, and deft execution.
Transforming the sector’s approach to Built-in Quality by capturing, containing, and controlling error at its source and addressing root causes permanently will go a long way toward recouping some of the lost revenue on Construction programs.
Although we have seen developments in safety-critical sectors such as nuclear Construction, there are better solutions to the Construction industry’s rework crisis than moving to 100% inspection because it adds high cost and schedule pressures to an already stretched environment.
Furthermore, when an error is discovered following an investigation, it is frequently found that the process needs to be more ‘robust enough,’ which leads to additional layers of bureaucracy being added to the process. This effort is usually futile because the process was never followed in the first place, so complicating it further will not solve the problem. To address the high levels of rework and error in Construction, our Leaders must set the culture and lead the change.
Set the Culture
Make the Right First Time principle a way of thinking and empower employees to take pride in their work. This mindset is the foundation upon which Leaders can build more complex systems to reduce and eliminate errors, such as Andon support, Standardized Work Methods, and Error Proofing.
The principle of Right First Time is to:
- Never accept subpar quality from a supplier (internal & external).
- Never allow poor quality to enter your processes.
- Never give poor quality to your customers (internal & external)
Lead the Change
Create a mandatory placeholder in your weekly Leadership standard diary for Process Confirmation & Go, Look, See. To begin, Process Confirmation is not an audit but a coaching opportunity to establish transparent process and performance expectations, model the value of standardization and process discipline, and understand how your employees think. Second, a Go, Look, See is not an opportunity to parade around the site like the Queen. Instead, see the waste for yourself and seek understanding by showing respect and asking why. Leaders should coach rather than fix.
To summarize, construction firms can set the standard for high performance and address the sector’s challenges by embedding cultural enablers and an operating system aligned to a Lean thinking approach at the tactical and enterprise levels. Start your journey by implementing a practical short-interval control approach that includes visual and candid performance dialogue. Empowering project teams with those five interconnected conversations will immediately improve site productivity, planning reliability, and rework and defect reduction.
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