Construction Productivity: Time for Some Good News!

Posted by Stephanie Patterson, Rhumbix Insider on 8/24/17 9:30 AM
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Construction Industry Productivity: Time for Some Good NewsThere’s a lot of talk about productivity when it comes to construction. Even people that aren’t in the industry are used to hearing about time delays and cost overages on major civil projects. But what they tend to miss are the early signs of change that indicate our industry has reached its tipping point.

From McKinsey Report - The Construction Productivity ImperativeIf you’re in the industry, you have likely seen this chart comparing construction productivity to all other industries. If you correlate this chart with major technology milestones, you begin to see a pattern of significant boosts in productivity for every other industry right after a new technology was introduced, or became mainstream.

But construction productivity remained relatively flat. Why? Because we still didn’t have the right mix of tools and technology to make advancements work in the field.

The story begins to change in 2010 with the introduction of the iPad. Now, we're not suggesting the iPad is solely to credit for the uptick in productivity. There were other advancements which happened around that time in the form of broadband connectivity, cloud processing power, and lower cost of sensors and electronics in general. But it does represent the first time software has been made available to workers in the field.

How far will the industry go?

If the iPad was the beginning, then we are still in the early stages of determining just how far and how fast we can improve construction productivity. And it couldn’t come at a better time.

There is a shortage of 250,000 skilled craft workers and that’s just in the U.S. Average labor productivity on job sites today is about 35%, and we’re building with an industry average of C-minus in infrastructure across all U.S. cities. What’s more, all this is happening at a time when we’re anticipating a trillion dollar infrastructure spend.

The speed at which change happens depends on our willingness to adopt new solutions and uplevel our commitment to investing in new technology. 

And the good news is that we see three promising signs that these changes are happening.

1. New Class of Technology for the Field

The Smartphone and iPad ushered in a new class of construction technology for the field that we believe is the hinge moment of our industry. With companies like PlanGrid, Procore, Bluebeam and the many field-based solutions in the Procore App Marketplace, we’re seeing technology finally reach the 67% of workers on construction projects that have never before had access to technology.

The benefits for completing this last mile of data collection from field workers holds great potential. Not just for the workers themselves, but for the entire project team.

With the right field technology, you can understand the nuances of construction down to the crew level. This, in turn, enables you to make better decisions at each phase of the project lifecycle: from design, to estimating, all the way through to project execution.

2. Faster Rate of Adoption Among General Contractors

Another promising sign is the speed at which general contractors—and even smaller companies—are adopting new technology. This is in stark contrast to what we were seeing just three or four years ago.

Rhumbix is currently engaged with 5 of the top 10 builders in the U.S, and we're seeing an increase in inbound interest. We know the same is true for other construction tech companies.

What we’re hearing from firms today that we didn’t hear before is an understanding that investing in technology is going to increase their operating margins. Construction is a highly competitive and fragmented industry, so any solution that enables a company to come to the table with a more competitive bid gives them a big strategic advantage. It’s also a differentiator.

Owners and people paying for the project want to see technology in the hands of workers because they know they’re going to get better results.

3. Tools to Augment Human Work

In addition to field technology, construction is seeing the early potential of exoskeletons and robots to create a safer jobsite. We’re excited about where this is going because safety is something everyone can get behind; it’s really a unifying objective.

And construction really is the perfect ecosystem for an Internet of Things (IoT) deployment with materials, equipment, and people all working together in a dynamic environment. There is tons of opportunity to better understand and manage jobsite operations by wiring everything up and having it talk to each other.

Facing the Future Together

Despite all the advancements in new tech, there are still very real challenges the industry must overcome to realize the full productivity benefits. Many field tools require a measure of behavior change for the user, and this does not happen without effort. And most existing solutions are targeted at large General Contractors, while overlooking the many subcontractors engaged on large projects.

But we're optimistic that by working together, construction firms and technology companies can solve these challenges and make adoption as seamless as possible.

The future is bright, and at Rhumbix, we’re committed to doing everything we can to push construction productivity as far and as fast as it will go.

Topics: Construction Technology, Construction Innovation

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