Are High Building Costs Robbing Your ROI?
In a recent study entitled “Reinventing Construction: A Higher Route to Productivity” (February 2017) the McKinsey Global Institute reported that the construction industry’s labor productivity “appears to be in a time warp” largely due to a fragmented approach and an inability to embrace technology. It also reported that in the United States, labor productivity in the construction industry has actually declined at a compound annual rate of -1.04 percent over that same twenty-year period. Conversely, the manufacturing industry has seen a compound annual increase in productivity of 3.6 percent globally.
According to the report, the construction industry could realize a dramatic productivity boost “…if construction were to depart from entirely project-based approaches to more consistently employ a manufacturing-like system of mass production with much more standardization and manufacturing of models and parts in factories offsite...”
So, why can’t the construction industry emulate the manufacturing industry? We believe the construction industry is in dire need of an overhaul. In addition to suffering from limited technological capabilities and production methods, it is fraught with inefficiency and waste. Collectively, the industry has failed to make radical changes to reverse this negative productivity trend. Instead, the industry players have perpetuated the fragmented approach that is “the norm” – where project owners work with a loose alliance of architects, engineers, and contractors – hampering productivity and diminishing returns on investment for all parties involved.
It doesn’t have to be this way. To learn more about how FINFROCK brought a manufacturing mentality to the construction industry, significantly increasing our productivity and lowering our client’s construction costs, turn the page.