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March 08, 2018

7 Ways to Make your Company the Powerhouse it Can Be

Much has been said, written and analyzed about the construction industry’s challenges with 7ways.jpgmatching the productivity levels of other sectors of employment. Studies are performed annually to determine if the industry as a whole is moving the needle, and time and again, the answer is the same: the needle is moving, but not fast enough.

There are a variety of factors at play, many of which cannot be directly placed at the feet of the industry as a whole. An over-reliance on public sector work and the uncertainties that come with it; poor balance of risks versus rewards; and lack of clarity, especially when contractors aren’t managing projects themselves. All of these are obvious roadblocks to investments in technology solutions and other tools that might enhance productivity; the question now is how to sidestep those roadblocks and pave the way for productivity gains.

The McKinsey Global Institute Report, “Reinventing Construction: A Route To Higher Productivity” features the organization’s findings about the lack of progress in overall construction industry productivity, along with feedback from company representatives to dig down into ways these obstacles can be overcome while pursuing impactful process improvements. The report broke these findings down into seven major categories:

  1. Reshape regulation and raise transparency: The report recommends that government agencies work hard to reshape regulatory environments, streamline permitting, cut down on corruption and encourage greater transparency.

  2. Rewire the contractual framework: Overall, move away from the unpleasantness of the current hostile contracting environment that prioritizes cost over collaboration.

  3. Rethink design and engineering processes: Introduce higher levels of standardization. Utilize tools such as a standard design library as opposed to relying on custom scopes.

  4. Improve procurement and supply-chain management: The industry ranks poorly in this category. More sophisticated logistics protocols are needed, such as digitizing procurement and supply-chain workflows.

  5. Improve on-site execution: Many construction companies still do not adhere to best practices for on-site execution. Utilizing lean principles, defined Key Performance Indicators (KPIs) and finishing pre-work before beginning on-site tasks are all ways to improve productivity and execution.

  6. Infuse digital technology, new materials, and advanced automation: Technology adoption remains slow in the construction industry, but data also suggests companies are aware of the positive impact these applications can have. However, companies still need to do more to ensure buy-in from key stakeholders supporting the adoption of new technology in order to achieve a successful deployment.

  7. Reskill the workforce: This area of improvement reflects a major demographic shift unfolding, which workers aging out of the workforce and a pool of young workers that is increasingly migrant-based. Industry representatives need to work closely with educators, funding sources and public officials to ensure adequate job training programs are available to improve workforce stability.
Overall, the future for the construction industry is as positive as it’s ever been – provided companies can put the pieces in place to make the industry the powerhouse that it could be.  McKinsey’s reporting found that if construction productivity were to catch up with that of the total economy, the sector’s value added would increase by an estimated $1.6 trillion!

For more information on how to make your company the powerhouse that it can be, contact USI today for a product demonstration or free consultation.

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