The construction operational systems utilized by various construction firms lag behind many of the other industries in the adoption of innovation and technology. So, their project delivery system may have processes, procedures, and practices that may need improvement to provide their operational staff with the tools and support needed to perform their work more effectively and efficiently. Leadership must ensure that their organizational means and methods are fully integrated and aligned so as to enhance business and operational efforts. Management must ensure that the project staff has the necessary information, resources, support, capability, and knowledge required for operational excellence and to ensure transformational value creation.
Improvement Initiative
Leading industry groups, such as the Construction Industry Institute, American Institute of Contractors, and Construction Users Roundtable, have identified the critical need for fully integrating and automating life-cycle construction project delivery processes. This would primarily interest the contractor and involve the production of work, effectiveness of systems, and productivity of people by having practices, procedures, tools, and metrics to identify the improvement needs, evaluate the problems, devise timely solutions, implement the necessary change, and track and improve the results.
The project owner could evaluate the construction data to determine the value derived from the investment made. The owner may also look at the quality of the design to determine the effectiveness of the facility to meet their operational needs as well as the cost of operating and maintaining the completed facility to get a holistic sense of the benefits (value) derived from materials used to reduce utility usage, maintenance, and repairs.
To improve the project delivery systems, the contractor must make a determination of what functions or elements of the process work well and what do not. The next step is to study the functions or elements with inferior results and determine the cause. These must then be modified or redesigned to get them to function well. This improvement process must be tracked to ensure that all systems have a good outcome. Having achieved that milestone, the next challenge is to evaluate every system to ensure that their performance is optimized so that all systems will operate at their optimal level. Some of the general improvement areas may include the following.
Technology
The use of innovations in technology can substantially improve performance outcomes involving productivity, quality, and safety. This involves big data and analytics of the project phases, starting with the design, preconstruction, construction, turnover, use, improvements, and demolition of the asset. This requires the digitization of data to enable new functionalities to better manage information along the value chain. The big data approach generates new insights and allows for simulation and the application of virtual reality, which highlights interdependencies and assists in clash detection. Technology allows for greater mobile connectivity and augmented reality fostering real-time communication that allows for improved problem-solving, conflict avoidance, and superior partner relationships.
Technology can facilitate interactions with people and enable real-time communication. It can facilitate the inspection and tracking of material and equipment through the use of drones, embedded sensors, tags, and barcodes garnering real-time information on location and deviations, facilitating immediate intervention and correction. Another innovation with great potential is building information modeling (BIM). 3D scanners and printing are innovations with great potential for facilitation, standardization, prefabrication, and modularization in the construction process.
Another way is through the off-site prefabrication of building elements in a "factory-like" setting. This could increase the potential for modularization, which, in turn, can lead to standardization. All of this has a tremendous effect on operational efficiency, increases productivity, improves quality, and benefits worker safety. There are other benefits such as improving workflow, allowing for just-in-time delivery, fewer interface and tolerance problems, possible reduction of weather-related holdups, and reducing on-site activity such as congestion, stacking of trades, on-site storage, damage, and possible pilferage, as well as a reduced time to complete the project and overall cost.
Operations and Processes
The design of a project goes through four general phases: programming, schematics, design development, and working drawing. Usually, during this time, a construction manager (CM) may provide periodic estimates that can be made to the design, whose volume and timing may follow some sort of bell curve. Typically, early design changes are easier to make because they require drawing modifications with little cost impact. Later changes require modifications to the design development drawings with some time and cost impact.
If the project is fast-tracked, which is a common occurrence, then some subcontractor commitments may have been made and some construction work may be underway. Any changes made at that point may require changes to buyouts made for long-lead items, workflow may be interrupted, and installed work may have to be removed to accommodate such changes. These would be much more disruptive and potentially add time to the design as well as the construction of the project, which increases the project cost. To avoid the impact of this traditional design improvement, its development must be pushed to occur earlier in the process and the resulting time requirement compressed as much as possible to minimize its adverse effect on the project's progression.
To encourage the above improvements, the contract tone must be revised to a more integrative approach. Changes to the contract terms and conditions will go a long way to turn the traditional adversarial relationship into a more cooperative stance during the life of the project. The contract language should be beneficial to all the parties involved to foster active partnering. Transitioning from a risk transfer to a risk-sharing approach would encourage collaborative decision-making, mutually beneficial problem-solving, and shared control fostering cost optimization, leading toward an early project delivery, with goal achievement and partner satisfaction.
The collaborative approach will encourage the adaptation and use of the five fundamental elements of lean, which are value, value stream, flow, pull, and perfection, to ensure project success. The lean approach reduces complexity, uncertainty, and, to some extent, guesswork. This fosters waste and non-value-adding activities throughout the entire value chain, thereby reducing schedule deviations, waiting time for building materials, and storage issues, as well as substantially reducing rework. All of this results in greater process stability, predictability, and efficiency.
This will set the stage for a productive, rewarding, and mutually advantageous project management framework and should encourage the timely sharing of information; collection, consolidation, and use of project data; standardization of best practices; early addressing of problems with the goal of rapid resolution; and stressing the value and importance to the interdisciplinary, interpersonal, and integrative aspects of all those involved in the management of the project.
People
Over the last few decades, the people involved in construction have, on average, been getting older. The need for increased sophistication in technology demands newer and broader skill sets at all levels of the organization. The transitory nature of construction jobs discourages younger workers from looking to join the workforce and those in it from remaining there. This places pressure on project managers and companies to engage in strategic workforce planning in anticipation of the volatility of the demand.
To remain competitive, construction organizations must develop defensive measures such as "smart" hiring, enhanced retention, and robust knowledge and talent management.
To enhance capability as well as retention, the organization must provide opportunities for workers to feel that their position is secure. This can be accomplished through knowledge management, which provides the workers with continuous education and training in understanding and utilizing various technology tools, as well as providing opportunities to use such tools. Companies need to ensure they have a structured, robust approach to knowledge management and implement pertinent processes and functions to enable and ease the transfer of knowledge and institutionalize this so as to provide workers with the opportunities to access and apply the right knowledge in the tasks assigned to them. Unfortunately, many construction firms make poor use of such an approach.
As an industry, construction is conservative, which characterizes and defines the culture as well as shapes the work (climate) environment. Construction firms need to affirm fair and ethical values, articulate a compelling vision, and create an open, fair, and trusting work climate to enable and enhance worker opportunities for growth and development. To bolster an innovative, interactive, and forward-thinking business, organizations need to inspire and motivate progressive changes to foster the overall systems integration, alignment of people and organizational goals, and development of a work environment that affirms diversity, inclusion, openness, and trust.
Work by Others
Since much of the work, and in many cases all of the work, is performed by subcontractors, the general contractor (GC) or CM must ensure that the partners they select also have a robust management system with successful processes, practices, and procedures, as well as competent field staff, reporting to company management so as to ensure that their work is going in place in accordance with the project's overall goals and requirements. Project staff must take an active role in ensuring that all subcontractors put work in place in accordance with project-specified requirements, along with meeting all partner expectations. The following is a summary.
- Operations
- Front-loading
- Risk sharing
- Project management alignment
- Enhanced partner management
- Lean factors
- Safety practices
- Rigorous monitoring
- Technology
- BIM
- 3D printing
- Big data
- Process standardization
- Component prefabrication or modularization
- Equipment automation
- Strategy
- Partnership
- Value proposition
- People
- Hiring and retention
- Knowledge management
- Culture
- Climate
- Collaboration
- Mutual standards
- Data sharing
- Collaboration along the value chain
- Marketing
- Sales collaboration
- Agencies
- Interactions
- Technology
improvements
- Data and information
- Tools and equipment
- Means and methods
- Operations
- Integrate systems
- Process innovations
- Align practices
- Improve procedures
- Strategy
- Supply chain partnerships
- Value proposition
- People
- Human resource innovations
- Organization
- Culture
- Climate
- Business
- Relationships
- Partnering
Measurement Systems
Measurement is essential to effectively and efficiently manage any aspect of the organization's performance. The system must be able to determine how well the organization is meeting its goals and objectives in any of its areas of endeavor. The system should be able to identify trends, problem areas, and possible improvements or gains achieved through the implementation of change initiatives. The system should also be able to determine the rate at which the improvement process is progressing. This information can then be used to modify and enhance the implemented initiative so as to garner faster as well as superior change results.
To effectively and holistically manage operations, the measurement system must provide information at the task level for the supervisor to effectively manage the workforce—at the project level for the managers to improve the project performance and at the company level for the senior management to guide, oversee, and enhance the organization's accomplishments.
Task
If the task is performed by the GC's workforce, then the superintendent would more than likely be interested in the performance of each individual worker. This can be measured by the amount of work put in place by one worker that day divided by the number of hours expended or the number of days involved. If it is the subcontractor's crew productivity, then more than likely, the project supervisor would want to determine the productivity of the crew. This can be measured by the amount of work put in place that day divided by the number of crew hours expended or the number of men times eight.
After determining productivity, it must then be compared with some standard to determine if it is acceptable or needs to be improved. The supervisor has the option of determining the production of a worker or crew by comparing that day's work-put-in-place and then comparing it to an RSMeans data published productivity value. Or they can calculate it and then compare it to past work data by that same crew or the data from other crews on this or other projects.
Job (Trade)
There is the possibility that the subcontractor may have a number of workers in different locations or multiple crews. In that case, the project supervisor will want to determine the subcontractor's overall daily performance. This can be determined by the amount of work put in place on that day by a subcontractor divided by the total number of workers multiplied by eight.
Project
Project productivity is somewhat more complex than those of a task, as it represents a cumulative amount of work that was put in place in parallel in 1 day by all of the workers of the different trades combined. The data can be collected in such a way as to identify the characteristics of the various inputs to determine the best and worst-performing constituents. This metric would be of interest to management.
Company
This metric would also be of interest to senior management. At the company level, the amount of production or value can be measured to determine the daily performance in order to compare it to a predetermined standard to decide if the performance is at an acceptable level or if it needs improvement. It can also be compared to past performance on the same project to measure daily improvement compared to past performance.
Conclusion
To thrive in the business environment, all stakeholders along the value chain must make a concerted effort to transform themselves as well as their potential partners. Everyone must assess the benefits that can be derived from the adaptation of new technologies, materials, means, methods, and tools to modify, streamline, and enhance their project delivery systems as well as operational processes, practices, and procedures.
If organizations succeed in optimal restructuring, they enable their people to operate at their highest potential; foster innovation; create greater value; enhance communication, collaboration, and teamwork with their partners, vendors, and suppliers; arrive at greater alignment with common goals, objectives, and standards; and implement effective strategies—all of which will improve business opportunities and achieve superior financial results.
Many of the issues discussed above are common across the industry, but there also exists a tremendous variability in size, available resources, diversity, and fragmentation, as well as regional and sector differences. So, all of the improvement opportunities may not have equal utility at the same point in time. Every organization must improve the quality of their operations, but they must proceed carefully and judiciously to arrive at the best possible outcome for their unique situations.
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