SenSat | Basic Inefficiencies in Construction Costs Billions

CONSTRUCTION | INNOVATION

Addressing Basic Inefficiencies Could Save Construction Companies Billions


A report from BRE found that defects in the UK construction industry cost at least £20 billion to repair or rebuild every year.

Mia Monaghan

20.05.2019 // 4 minute read


The report outlined that both delays and rework are happening for a variety of reasons such as insufficient and outdated information being passed on, limited resources, lack of supervision, and failed communication. Fast-track technology adoption needs to occur to address the inefficiencies in these areas causing these errors costing billions.

Construction project cost overrun has become so common that they’re basically expected in the industry. McKinsey estimated in 2016 that large construction projects are typically completed 80 percent over budget and take 20 percent longer than originally scheduled. This leads to pressure from project owners, investors and taxpayers alike.

In 2018, PwC produced a digitisation index which identified the impact that technology has had on productivity over the last 30 years. The report outlined what you would expect - digitally native industries such as Finance, Telecoms, and Media have seen mass productivity uplift due to digital influence. Industries that are inherently more physical - where tasks tend to be more manual, such as construction, real estate, and utilities - haven't been able to participate in this digital revolution on the same scale. Construction is the most laggard of these sectors.

The Cost of Paperwork

 

Another recent national study from Re-flow looked at the cost of paperwork. UK construction companies spend an average of 90 hours a year per employee on paperwork. This comprises of nearly 40 hours reading paperwork, 38 hours filling out forms and 14 hours searching for mislaid documents.

 

With an average weekly salary of £607 according to the ONS in 2018, paperwork alone is costing the construction sector nearly £1,500 per employee every year. Historically, blueprints, paperwork, and updates have been recorded using pen and paper and passed around manually or communicated via phone calls. A system like this is ripe with potential mistakes that lead to mistakes and cost overruns.

 

With such high volumes of traditional form filling and paper worksheets in the UK construction sector, a more flexible approach to what information is required and an easier way to update progress and project changes are required.

 

By digitising through the use of construction task management software, construction project owners are aware of—and have records of—everything happening onsite. This ensures that everyone working on the project including designers, contractors and project owners receive the most up-to-date information in a timely manner. More time can therefore be spent on productive work in the field and less time can be spent on redundant tasks such as data entry, paperwork, and waiting for equipment.

Stress Factors:

 

YouGov also found that these inefficiencies like static forms such as job sheets and task lists that get issued to field workers are causing 21% of workers to feel stressed about not being able to change plans once they’ve been distributed.

 

By not embracing digital technologies, simple administration tasks are taking more time, increasing the risk of outdated information being followed and making workers feel unnecessarily stressed as well as increasing financial overheads due to project delays and rework. Inefficiencies in these areas are also making it more difficult to win jobs. A project manager wants to ensure a 100% safety record when submitting a bid but will find that difficult if records are hard to find or missing altogether.

Technology Adoption:

As advancements further in the world of construction, we’re seeing a shift in the adoption of technology among construction workers.

 

With the help of new technologies and the development of construction management software, project managers can do their job with higher precision, therefore reducing inefficiencies. BIM systems can integrate with construction management software, making it easier for construction managers to cost and time-estimate their jobs and keep everything in one place. New software also provides the ability to keep a detailed depiction of the project’s progress, this is extremely powerful as it can save the sector valuable resources both in terms of time and budget. Records are kept up to date and communication across teams is made easier enabling collaboration.

The Move Towards Digital Collaboration:

For construction workers that have experienced any struggle to access or share information, development in digital collaboration has been a huge positive. Many construction companies have begun incorporating new construction technologies into their daily activities around digital collaboration.

 

There are tools available now that allow construction companies to track project progress, and record all decisions made. They can then seamlessly share this content with stakeholders and project contractors seamlessly through platforms hosted in the cloud. Some successful startups in the construction management space include Procore, Katerra, and Uptake - all three of which have achieved “Unicorn” status. In some cases, construction management tools can also serve as a permanent repository, giving construction firms easy access to past records - preventing the loss of important documents and information - thus saving time and money through unnecessary project delays.

What Does the Future Look Like?

The adoption of new technologies in the construction industry looks promising. Government officials, unions, developers and other groups are aware of the inefficiencies of conventional construction, and although there is some hesitance to embrace and learn modern strategies, endorsement appears to be picking up. The solutions show the construction industry is slowly, but surely, heading in a positive direction. As systems and software become more accessible to companies and project managers, it's safe to speculate productivity in construction will see improvement, saving construction companies billions spent on reworks and repairs.

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