I spoke to Simon Cross, DirectorÂ of SiteSmartÂ at BRE,Â to gain a better understanding of productivity issues in the construction sector, what BRE is doing to help address these issues and the future of the sector as a whole.
Low productivity was identified as a critical symptom of poor performance of the UK construction sector by the 2016 Farmer Review. Why in your opinion is productivity so low/static in this industry?
In my opinion, there are several reasons for this low productivity. Firstly, the construction sector suffers from low margins (average contractor margins are around 0.8%) which leads to low opportunities for capital investment and low R&D investment. The sector is stuck in a cycle of not having enough capital to reinvest to innovate and do things in a better way, and therefore hasnât been able to move forward.
Another observation is there is a relatively low entry cost to start a new business in the construction sector with minimal training required. This means the sector is extremely competitive, with thousands of competitors. High competition is a good thing, but has resulted in a self-perpetuating habitual building sector,, where buildings are built again and again in the same way, rather than investing and inventing new ways of building.
I believe there are great opportunities for productivity savings in the construction process, including for labour, time and effort to design. Changes to business models are required to take full advantage of this.
How is BRE helping to address this productivity issue?Â
The SiteSmart suite of tools – including YellowJacket, Smartwaste, and our Lean process improvement tool – help to affordably measure characteristics of construction sites. The goal of our tools is to help customers measure data associated with their construction projects, which can then inform them how to make improvements to productivity and to save money. Measurement and improvement tools help to reduce costs and in turn enhance profit margins
For example, our Lean process improvement tools has shown that non-value added time (NVA) can up make up 50-55% of construction time, which shows that there is a lot of room for improvement. This information allows decision makers to identify barriers to productivity, focus on problem areas and refine their processes with an evidence based approach.
What results have customers seen of ways BRE can help them increase/improve productivity?Â
Our tools have demonstrated that it is possible to build to a higher spec at no or minimal extra cost, when focusing on process efficiency, lean construction, offsite construction and similar productivity improvement measures.
For example, when using SmartWaste, our data shows that construction projects save an average of ÂŁ12,000 per project on waste.
What would you like to see within the industry going forwards to improve this issue?
Continued development and uptake of smart construction techniques such as offsite construction, the use of BIM and control systems. BRE has already helped to prove with clear evidence that these techniques save money for construction projects.
It is crucial that we break the cycle between techniques and skills. Actors within the sector continue to do things the same way again and again because there is no confidence to innovate, partly due to low margins as mentioned before, so skills remain static and innovation stagnates. Improved access to investment is one of the key drivers required to transform the productivity of the sector.
How would you respond to the sometimes negative perceptions of offsite construction? Â
I would argue that any negative perceptions are a lag effect from 50 years ago. Good performance is all about design – many of the designs available today are far superior in terms of performance than those available in the past, and some of them even look fantastic! Most offsite construction methods use âregularâ materials, which are just brought together in a more effective and efficient way.
You are a member of the Construction Leadership Council, tell me more about this organisation and where they fit in to this sphereÂ Â Â Â Â
The main aim of the Construction Leadership Council is to demonstrate improved ways of constructing our built environment by great leadership, backed up with a clear cut evidence base. We are doing this by gathering the right people together with the right evidence, who can collectively demonstrate that there is a better future for the construction sector, in terms of more money, better delivery of projects and better buildings and infrastructure.
How might other emerging/disruptive technologies affect the sector?
I believe that it is inevitable that technology organisations with high Research and Development budget and a culture of innovation will act as a significant market disruptor for the construction sector. It might be one of the existing technology giants such as Microsoft or Google, or it might be a brand new start up that completely transforms the industry
The UK has been very successful developing advanced manufacturing techniques in the last 10 years or so, with investment in in-factory automation and robotics. However, even greater integration of automation will likely act as a major disruptive force for the construction sector, and may help address many of the issues I mentioned earlier as well as others identified in the Farmer review, such as problems with workforce size and demographics – what if the ageing workforce is replaced by robots?
Already, we have seen drones used on construction sites to aid project logistics and to guide automated bulldozers; and the use of 3D printing to manufacture building materials, components and recently even prototype whole buildings on site. It may not be too far in the future when we see robots move from the factory floor to onsite?
Other large international constructors who can challenge status quo, such as from China or other emerging markets, might also transform the sector by shaking up our existing practices in the UK and out-competing domestic firms.
Personally, I am looking forward to these future disruptions, as they have been a long time coming!