Most new products and services yield high profit margins because they are new and different; however, with maturity and more competitors in the market, profit margins tend to decrease. The design and construction industry faces declining profit margins and must improve productivity in order to remain competitive in today’s national and international market.
The design and construction industry has been heavily criticized for its slow adoption of new and innovative technologies. While the design and construction industry takes decades to implement a new technology, other industries such as the computer and consumer electronics industries are innovating and bringing to market new technologies in a matter of months.
Considering that measurement is an essential step to improvement, a reliable standard construction productivity metrics system is critical. However, measuring productivity alone will not lead to the implementation of innovative technologies and eventually better profit margins. Furthermore, the development of a standard construction productivity metrics introduces a multitude of complexities given the design and construction industry’s fragmented nature.
Although productivity is important, it is but one factor that affects the “performance” of the construction process that focuses primarily on on-site activities. The word “performance” involves all aspects of the construction process and is a broad, inclusive term that encompasses four main elements, namely productivity, safety, timeliness, and quality.
Studies have found that a significant number of technologies with potential exist; however, the implementation of these technologies faces a number of barriers. One barrier is the design and construction industry’s inherent nature to resist change and “do the tried and tested way,” which can be attributed to the lack of quantitative data to develop convincing cost-to-benefit analyses.
A Benchmarking Process to collect quantitative data essential for the support of cost-to-benefit analyses will help break down the barriers to implementing innovative technologies in the design and construction industry that will yield improved productivity and ultimately better profit margins. Thos organizations embracing a Benchmarking Process will undoubtedly have a distinctive advantage in a market that continues to grow more competitive.
Please send comments and responses to Marvin Oey.
Construction Institute of the American Society of Civil Engineers