How Technology and other Business Strategies Improve Operational Efficiency in Construction

How Technology and other Business Strategies Improve Operational Efficiency in Construction

Technology in construction is rapidly changing the landscape of how we build.  That’s what the adopters say.  However, the reality is that most construction trade contractors continue to do some things the same way they have for the last 20 years.  This is why labor productivity and operational efficiency has only inched forward with the implementation of new technologies, such as mobile devices. These are point solutions that can cause data silos and inhibit real productivity gains.

 

JBKnowledge’s Contech 2018 report reported that approximately 65% of trade contractors use tablets on the job site and 93% use smartphones. According to the McKinsey Global Institute’s 2017 study, although other sectors like manufacturing have grown 3.6%, the construction industry has suffered only 1% growth over the past two decades because of a lack of productivity gains and digital transformation.

 

To truly transform project delivery, trade contractors must implement change across all three aspects of a project: planning, management/tech systems, and mindsets. McKinsey research finds seven levers can fix construction’s productivity problem, but they require a new approach from all players. A new holistic approach is right.  Not, just implementing mobile tablets or drones in isolation.  In this article, I introduce strategies that subcontractors can leverage to boost productivity and create a better operational system.

 

What is operational efficiency?

Operational efficiency consists of a company’s ability to deliver products and services in the most cost-effective and profitable manner.  Operational efficiency is achieved by ensuring production resources (people, time, materials) and delivery methods reduce waste, rework, and employee idle time.

 

Why Is Operational Efficiency Important?

It’s a measurement that directly correlates with production and profit.  The challenge for construction firms is a myriad of problems to overcome to improve production. Things like manpower, environmental, technological, legal, domain expertise, cultural, and several others factor into operational efficiency.  The transcending goal for an enterprise construction firm is to lower costs without compromising productivity, profits and quality. Your firm’s reputation is on the line here, so we can’t sacrifice quality from the operational efficiency model.

 

Pre-Construction Planning: How Can Construction Subcontractors Increase Operational Efficiency

 

Integrated Labor Delivery

Construction trade contractors are continually searching for ways to improve project efficiencies to reduce costs and schedule overruns. Industry experts have offered many methods to accomplish these goals, from technological advancements to new building materials to enhance building environments.

 

However, one aspect of the building process has recently emerged as one of the most important factors affecting a job’s success: project delivery method. Although the delivery method debate has typically been dominated by design-bid-build and design-build, there’s a new method creeping into the narrative and demonstrating successful results: Integrated Labor DeliveryTM.

 

Under the basic principles of Integrated Project Delivery, Lean Construction Institute, and Design-Build Institute of America, ILD brings labor (subcontractor) closer to the delivery framework by being included in the design phase of construction.  Not given merely marching orders after the design is complete, but fostering real collaboration of all parties (architects, owners, GC, and subs).  ILD streamlines the process from design through prefabrication and assembly and presents a unified framework to an industry plagued with labor shortages and poor productivity.

 

The Jobsite:  How Can Construction Subcontractors Increase Operational Efficiency and leverage technology?

 

Job Costing & Cost Savings 

Construction job costing enables subcontractors to track expenses on the overall project as well as breaking it down into smaller pieces for specific areas.  This can help the contractor view expenses at both a macro and micro level. Job costing helps construction firms determine which projects, tasks, or crews are profitable or in the red. With this level of information, a construction project manager using eSUB can make any adjustments to ensure the profitability of a project and leverage this into a plan for sustainable growth. Imagine having this kind of real-time data at your fingertips every day, and in a forward-thinking position to adjust resources, and make sure the project stays on time and within budget.

 

Effective Communication

THE OFFICE – Miscommunication is one of the leading issues causing companies and projects to fail, so the communication structure, process, and technology used are important to ensure success.  A construction trade contractor that has a comprehensive stakeholder-driven communications plan for how to conduct the business of building and operations protocols will ensure that each member understands their roles and responsibilities.  And, how they may change to ensure a project’s success. This includes instructions for when and how to communicate with all stakeholders – owners, architects, engineers, pre-fab team, project managers and jobsite workers. Communicating also ensures that down times are avoided, and employees are kept productive on other assignments.

 

THE JOBSITE – Construction communication during the project should have a similar systematic approach. Having a construction management platform with email integration can help tag all project communications related to tasks and assignments and teams.  These emails are also easily accessible at any time. Communicating with jobsite workers regarding optimal start times, locations and priority tasks can help develop a more robust and efficient system (there’s technology for this).  If work is stalled, ask yourself what the response plan is?  This approach entails reducing the amount of unproductive work, like travel times during rush hours and lengthy pre-shift meetings. Ensuring materials are received at the necessary locations at the appropriate time also helps to eliminate downtime that almost all jobs experience.

 

Time Tracking and Labor Productivity

If you’re not digitally tracking labor and loading that data into a project management platform, you will never increase operational efficiency. The primary reason is you’re not leveraging the power of data to evaluate the picture of performance.  Scheduling is a crucial planning process for project managers, and historical productivity data is key to scoping durations, activity levels, and resources. During construction, having real-time data available to adjust resources and schedules is mission-critical to addressing the unpredictability of construction to ensure profitability.  Analyzing and studying elements of the entire project enables construction subcontractors to figure out what alterations need to be put into effect to improve delivery times. Time tracking provides a clearer picture in terms of how workers are managing their time, creating opportunities for boosting operational efficiency. Post-Mortem breaking down the entire construction process into individual diagnostic parts can provide insight into how labor productivity can be improved from project to project.

 

Daily Reports and Regular Check-Ins

Countless subcontractors relying on manual processes and paper to create Daily Reports repeatedly say this time-consuming, but vital task ends up being a weekly report to management from Field Forepersons.  Waiting for formal weekly updates translates into operational delays.  Imagine 3-hours to create a Daily Report being trimmed down to 30 minutes because the foreperson can capture and digitally document and voice-text all his or her activities (e.g., field notes, images, issues, comments, etc.) throughout the day while canvassing the entire project.

 

In addition, regular check-ins with field workers are useful for keeping everyone on a construction site up-to-date and provides a time where instructions can be offered. Keeping morning staff meetings to a minimum before the day starts, quick check-ins allow Forepersons to visually assess the productivity of workers on a frequent and daily basis as well as leverage hands-on expertise on how to best proceed on an issue.  This is a more proactive management approach and keeps employees on their toes and productive throughout the entire day.

 

Gamification & Employee Rewards

Employee rewards in the form of gamification is another strategy for increasing efficiency, productivity, but it’s also a morale builder and can get employees vested in collaborating in teams.  Both individual and team awards can be designed around performance milestones, goals, scores and quality.  Prizes can be announced and handed out throughout the project and can be set up and tracked on mobile apps. Games and competitions often friendly in nature but can provide some workers with an extra push or motivation to get work done.  Done right.

 

Mobile Technology Adoption

As JB Knowledge mentioned in their 2018 Report, many contractors are rolling out tablets and mobile smartphones on the jobsites.  These are fantastic tools for increasing operational efficiency if they are ONLY integrated with a cloud-based project management and document control platform. A centralized database is crucial for your new anti-data silo policy.  The platform is a single data “source for truth,” that mobile devices running applications can improve communication, yet, capturing mission critical project and employee performance data for real-time analysis.

 

Communication through mobile devices ensures that all stakeholders of a construction project can connect, both on and off the jobsite. Real-time mobile connection can also provide real-time instructions or version-controlled designs to workers, as well as adjustments to the project throughout the day. Your mobile devices can also include instant messaging and other tools used to save time and reducing the need for face-to-face interaction which is often time-consuming.  However, buyer beware.  If you get in the app buying business, you may inadvertently be creating data silos which have adverse effects on increasing operational efficiency.  Best of breed integrated platforms are the way to go.

 

Cloud-Based Construction Software Platform

Mobile construction software needs to be connected to the cloud and offers several advanced features, functionality, and automated workflows to help turn operational efficiency and profits into hyperdrive. This fully-integrated system helps with everything from project ROI dashboards, to purchase orders, daily reports, submittals, RFIs, to billing and document management. Subcontractors now have this affordable technology that is designed for them not forced to sacrifice using a system designed for general contractors. Cloud construction software helps executives, project managers, estimators, field forepersons, VDC designers, accountants – everyone related to staff management and project delivery, to auto-complete tedious and time-consuming tasks, and better keep track of the overall productivity to improve operational efficiency.

 

 

2019 Construction Industry Technology Trends: Knowledge is Power

 

Conclusion


From the executive to the jobsite laborer, it’s essential for the enterprise construction firm to commit to maximizing operational efficiency if you want to keep productivity levels a high-level. The conditions at jobsites are unpredictable and in flux, so policies – measures and motivations need to be in place to maximize operational efficiency. All parties need a culture governed by flexible and open-to-change policies or plans designed to mitigate worker anxiety during project shifts. The affected staff will expect shuffling to occur.  For example, when a team is mobilized to shift projects.  These strategies highlighted aim to make incremental, yet, quantifiable progress on the overall productivity of a project.  When these are put in action by a dedicated team, they are empowered to accelerate any given project and lead to far more efficient results that save both time and money. And, increase operational efficiency ten-fold.

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