This article originally appeared on BUILDER's sister site, Concrete Construction.
If your gut says construction could be so much more profitable if only the industry conformed to higher levels of productivity, kudos to your intuition!
A recent analysis by the research arm of worldwide management consultants McKinsey & Company confirms your hunch and explains why productivity is notoriously and consistently poor. But the question of how to invert the downward trajectory has remained more or less unanswered – until now. “Reinventing Construction” identifies seven strategies that, if executed collectively, in unison across the sector, could put $1.6 trillion back into the global economy by increasing productivity 50% to 60%.
On Nov. 13-15, the Infrastructure Imperative conference welcomes Corey Hopper, a consultant in McKinsey’s New York office, to break down these seven essentials. Because winning any battle requires knowing the enemy, Corey will also underscore barriers to change and how only true collaboration will overcome them.
Our industry’s malaise can be traced to several root causes: “Construction is highly fragmented: Contracts have mismatches in risk allocations and rewards; inexperienced owners find it hard to navigate an opaque marketplace,” reads the report’s summary. “The industry is extensively regulated and depends highly on public-sector demand; informality and sometimes corruption distort the market. The result is poor project management and execution, insufficient skills, inadequate design processes, and underinvestment in skills development, R&D, and innovation.”
The fix lies in:· 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
· Re-skilling the workforce.
Although concurrent implementation of all seven strategies is the path to successful turnaround, a couple deserve priority when a firm is ready to get serious about reform.
“When applied comprehensively and efficiently, technology can reduce overall project costs significantly,” Corey says. “For people in the engineering and construction space, this rapid transformation is critical. After technology, on-site execution has great potential impact. We also see big opportunity in procurement and supply management as well as capability building.”
Corey’s presentation will reveal which half of the construction sector trails vis-à-vis productivity and growth, and whose participation is vitally needed for stakeholders at all levels to be rewarded.
Review the whole conference schedule and reserve your seat at the Infrastructure Imperative in Cleveland today – changing the thinking precedes changing the productivity at your organization, and getting your head around the basic strategies will happen here. Take action soon – space is filling fast in these final weeks.