Disruptors and Innovations: Raising the Bar for Productivity in Project Delivery

In recent years we have watched many industries (such as retail with the growth of Amazon and transportation with Uber) transform almost overnight through disruption and innovation. Our construction processes, however, are in many cases tied to outdated practices which better suited previous generations. A 2017 report from the McKinsey Global Institute entitled “Reinventing Construction: A Route to Higher Productivity” explored the emerging factors which could drive the construction industry toward disruption and positive change, and identified a number of key strategies which have the potential to dramatically increase productivity across the entire construction sector. Here in the Lowcountry, we haven’t come across many teams with wholesale modified approaches to prefabrication, but prefab is coming. It has to.

Factors driving the construction industry towards disruption include increasing demand (this applies not only to volume, but also to tighter schedules, tighter sites, leaner budgets, higher quality, and higher building performance); new players within the industry, including larger companies who may be doing business very differently; new technologies which are shaping both processes and material choices; and rising wages coupled with a shrinking pool of available labor. This situation is even worse along the coast. All of these disruptors point to the need for better efficiency to help us do more with less.

The McKinsey report delineates seven key strategies which, with an industry-wide effort, have the potential to boost productivity by 50-60%. Areas of focus will require changes in external forces such as regulation, changes in industry dynamics, and changes at the individual firm level. Taken together, these strategies will change the way we operate to better reflect our current 21st century climate.

1. Reducing friction in the submittal and approvals process would improve regulatory efficiency. Exploring global case studies from countries who are innovating processes and encouraging research into alternate materials and construction methods could offer new avenues to regulatory efficiency. Permit times in some of our firm’s office cities are 3 months!
2. We also need to focus on collaborative processes throughout the AEC industry. Contract language can create an adversarial climate; working together, project teams can cultivate a climate in which they can coordinate and communicate proactively. Further, exploring and fully embracing alternate delivery methods such as Integrated Project Delivery (IPD) can better harness expertise from all team members, earlier in the process. LS3P has successfully implemented various versions of IPD with multiple clients.
3. We can improve design and engineering for constructability through better utilization of standardization where appropriate. Designing thoughtfully with standard modules and repeatable elements still leaves room for design innovation and aesthetics. Incorporating more materials which can be constructed off-site and fabricated accurately under factory conditions yields both economies of scale and easy-to-integrate building components, and minimizes the impact of weather delays on materials. We’ve encountered significant aversion to this approach in the Southeast for large-scale projects, but attitudes are slowly evolving as the need becomes clear.
4. Firms need to seek out robust support technologies to manage procurement and supply chains. Cutting-edge tools will help provide better product transparency, and can even use IoT and digital tracking to automate ordering of standard materials as supplies run low.
5. Companies can streamline onsite execution through more efficient planning, integration, and lean design processes. Better real-time communication can also lead to early conflict identification and resolution, taking advantage of pre-determined Key Performance Indicators.
6. Firms can harness available and emerging technology for improvements such as standardization of BIM components, cloud technology for real-time information sharing, and mining big data for more accurate cost and schedule estimating. Many Southeast firms are practicing some form of this strategy.
7. To better prepare workers for a rapidly evolving construction environment, companies must commit to continuous workforce capability building, including ongoing retraining in new processes, technologies, and techniques. This element is particularly important in attracting and retaining previously underutilized segments of the construction labor workforce, including women.

What do all of these strategies mean for the future industry? Companies who evolve along with the disruption and embrace the tools which will carry the AEC industry into an exciting future will be more likely to thrive and grow, while companies that are slow to adapt will struggle to keep up with the new paradigm. Fortunately, all of the tools listed above are at our disposal, and fully implementing them at a widespread scale will yield significant positive results for our productivity in the AEC industry and the economy as a whole.