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Why construction productivity sucks and how it might be fixed

Why construction productivity sucks and how it might be fixed

We are living through an inflationary hard cost environment. In speaking with one of our cost consultants the other week, he was predicting that overall we could see another 9-10% increase next year here in the Toronto area. Now, who knows what will ultimately happen. But this is top of mind for everyone in the industry and it will continue to impact how and what we build.

One of the challenges with construction -- and this is will documented -- is that unlike the manufacturing industry, which has seen sustained productivity improvements over the years, the construction industry has seen relatively little productivity growth over the last half century. In fact, you could argue that it's been mostly negative in recent history.

The obvious thought is why not just apply what we've been doing in manufacturing to construction. There is, of course, a long standing tradition of trying to do this, with varying degrees of success. But at the end of the day, building a house remains different than building something like a car.

Probably the key difference is that every construction site has unique constraints and conditions and so the process is constantly changing. Whereas the innovations that Henry Ford pioneered were centered around interchangeable parts and a well-defined process that could be repeated millions of times to generate the exact same output.

From what I can tell, there seems to be two ways in which we can think about improving productivity. One, we can try to be more Ford-like and drive standardization. This means more off-site factory construction and more standardization. This is the typical "pre-fab" approach and companies like R-Hauz, as well as many others, are already successfully doing this. The trade-off is less design flexibility.

The second option has to do with better software and hardware. What if we had significantly better "digital twins" for our buildings such that we could see and experience it in 3D before it is physically built? I'm thinking strap on VR goggles and do a walkthrough with the team. This could allow us to pinpoint all of the issues before they actually happen on the job site.

In parallel to this, what if we had far better on-site automation and robotics to then execute on the above digital twin? Think 3D printing concrete instead of using traditional forms. This is all happening and being worked on, but it doesn't seem to be at a point where it is changing our industry. But it is exciting to think that it may one day.

Photo by Di on Unsplash

We are living through an inflationary hard cost environment. In speaking with one of our cost consultants the other week, he was predicting that overall we could see another 9-10% increase next year here in the Toronto area. Now, who knows what will ultimately happen. But this is top of mind for everyone in the industry and it will continue to impact how and what we build.

One of the challenges with construction -- and this is will documented -- is that unlike the manufacturing industry, which has seen sustained productivity improvements over the years, the construction industry has seen relatively little productivity growth over the last half century. In fact, you could argue that it's been mostly negative in recent history.

The obvious thought is why not just apply what we've been doing in manufacturing to construction. There is, of course, a long standing tradition of trying to do this, with varying degrees of success. But at the end of the day, building a house remains different than building something like a car.

Probably the key difference is that every construction site has unique constraints and conditions and so the process is constantly changing. Whereas the innovations that Henry Ford pioneered were centered around interchangeable parts and a well-defined process that could be repeated millions of times to generate the exact same output.

From what I can tell, there seems to be two ways in which we can think about improving productivity. One, we can try to be more Ford-like and drive standardization. This means more off-site factory construction and more standardization. This is the typical "pre-fab" approach and companies like R-Hauz, as well as many others, are already successfully doing this. The trade-off is less design flexibility.

The second option has to do with better software and hardware. What if we had significantly better "digital twins" for our buildings such that we could see and experience it in 3D before it is physically built? I'm thinking strap on VR goggles and do a walkthrough with the team. This could allow us to pinpoint all of the issues before they actually happen on the job site.

In parallel to this, what if we had far better on-site automation and robotics to then execute on the above digital twin? Think 3D printing concrete instead of using traditional forms. This is all happening and being worked on, but it doesn't seem to be at a point where it is changing our industry. But it is exciting to think that it may one day.

Photo by Di on Unsplash

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