Our industry has utilized processes such as Lean Construction, Six Sigma and Integrated Project Delivery to improve productivity. After years of attempting to incorporate these procedures on our projects construction professionals continue to talk about the lack of efficiencies in our industry. According to a study by Mckinsey Global Institute the construction industry has the lowest productivity gains of any industry and has shown very little improvement in productivity since 1920. An example of this can be seen in the construction of the Berlin Brandenburg Airport. Originally scheduled to open in 2012 it is currently scheduled to open in October of 2020. This project will be the third most expensive building in the world once completed. The original budget was $1.8 Billion US and currently is projected to be completed at a cost of $8.48 Billion US. The Airport will be completed 8 years behind schedule and 400% over budget. Although this is an extreme example – late delivery and lack of budget control is commonplace in our industry. Another example closer to home is Apple’s Silicon Valley headquarters. It opened 2 years behind schedule and $2 Billion US over budget.
So, after years of research and multiple organizations tasked with increasing our industries efficiencies – we still show no sign of improvement in the last 20 years. A study from Oxford University found that 90% of construction projects are either late or overbudget. These statistics only get worse when you consider that 69% of projects incur changes in excess of 10% of the total cost of work and over 75% of projects finish behind schedule.
What our industry needs are some radical changes to how we plan and build our projects. Project managers in our industry perform on average over 120 specific tasks related to each construction project. What we suggest to improve performance is that all company processes by fully mapped out, a work flow established and systems put in place to maximize efficiencies at each step. New technology should be integrated into a company’s procedures, planning should be early in the process and continuously reevaluated during design and construction. Key performance Indicators should be established, monitored and measured and processes should be streamlined and automated where possible. This is just a start to a continuous improvement cycle, but these procedures alone have proven to reduce project changes to under 5% and have increased on time completion rates of projects to over 88%. At National Commercial Development and Project Delivery System Inc. we work with Fortune 500 companies, owners and contractors at incorporating these strategies and have helped increase project performance while reducing costs through these proven methods.
If you’re interested in finding out more about how your company could benefit from these processes, please contact us at KWhitener@ProjectDeliverySystem.com or visit our website https://projectdeliverysystem.com/.
Keith Whitener is the Owner of National Commercial Development and the Founder of Project Delivery System Inc. Mr. Whitener has over 30 years of experience in the commercial construction industry and has received Awards from the AIA, AGC, ABC and Inc. 500. Mr. Whitener has worked with Fortune 500 companies in addition to large general contracting firms in establishing systems and processes that have demonstrated measurable cost reductions and increases in project performance.
