Construction productivity and process improvement continue to lag behind all other industry. Three major studies highlight our dilemma and no recognized study proves otherwise.
A 2004 study by the Construction Industry institute determined there is 57% waste in the construction process. This compares to only 12% in manufacturing industries
The Department of Commerce reports construction industry productivity declined 20% from 1964 to 2003, while all other non-farm industry productivity increased 240% during the same period.
The American Planning Association study found that owners experience cost overruns in nine out of ten projects. This is due to excessive waste, poor productivity and budgeting.
Application of W. Edwards Deming’s process improvement principles. His Systems Approach brought quality, process improvement and innovation to many industries. With today’s technology, Deming’s system approach is now attainable in the construction process. This page: Understanding the Deming System provides a suitable overview on Deming’s systems approach applied to construction processes.
SYSTEM 1, described in Figure 1, provides a computing platform (i.e. Catalyst) and process improvement for use with CM, IPD and Design/Build practices. The benefits will include cost assurance and some waste reduction.
Significant waste reduction and productivity improvement requires SYSTEMS 2, 3 together with:
♦ Management’s commitment to achieve exceptional, measurable customer value.
♦ A transition to more permanent organizational structures – Design, construction and manufacturing teams are formed to prototype and pre-manufacture high quality, cost effective solutions.
♦ A focus on total cost of ownership rather than just first cost.
♦ Contracting approaches that reward life cycle performance.
♦ The means to measure variation in quality and performance.
Catalyst provides the computing platform for design and production leaders to work from in order to build a system similar to Deming and Toyota.
Figure 1 – Three Catalyst/Deming Systems