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By Jeff Cann, Chief Strategist & CIO, Encore Electric

Technology-Enabled Construction: Will there be Real Gains in Labor Productivity?Jeff Cann, Chief Strategist & CIO, Encore Electric

I read with interest the recent announcement of Chinese firm WinSun that 3D printed a large home and a 6 story apartment building in Suzhou Industrial Park in Eastern China. 3D printing—also known as additive manufacturing—was developed for manufacturing in the early 1980s. The WinSun project is a fantastic combination of prefabrication techniques, recycling materials and technology. They claim to save 80 percent on labor, compared to traditional construction.

There are a number of other advances in the use of information technology in the construction industry. For example, many commercial projects use 3D coordination between the trades for clash detection to avoid unnecessary rework on the job site. 3D laser scanners promise to eliminate “old school methods of measurement” that lead to “increased labor hours and rework.” ABC’s Project Virtual offers training on a number of Building Information Management (BIM) technologies and recommendations for companies to use BIM effectively.

Makers of software for digital plans, such as Bluebeam, now offer the ability to Batch Slip Sheet which will “automatically match new revisions with their corresponding sheets.” Talking to our Project Engineers, this is a significant impact to their work routines. It should eliminate countless hours of manual revisions to digital plans.

SmartReality offers augmented reality technology for commercial builders. Their mobile application allows you to generate and navigate a virtual reality 3D model of your 2D plan. Users can visually validate designs; track construction project progress and record a video—for your customer—to more easily envision the result of the construction project well before dirt is moved.

All of these technology tools and innovations promise to save labor on construction. However, the industry has not seen increases in labor productivity.

How can we take advantage of technological changes in our industry to improve the productivity of our labor?

In fact, Stanford Professor Emeritus Paul Teicholz demonstrates that from 1964 – 2012, construction labor productivity declines 0.32 percent each year while all non-farm industries increase 3.06 percent each year. Figure 1 shows the cumulative impact: non-farm industries are now more than 2.5 times productive than the construction industry.

Professor Teicholz cites “6 causes of stagnant labor productivity in the construction industry” and one of these—“poor use of data”—is related directly to technology innovations. Three of the four technology examples above attempt to address the poor use of data by improving the ability to collect, interpret and share information necessary to build a successful construction project.

Given that the use of technology in construction will only increase over time, the important question for construction companies is: How can we take advantage of technological changes in our industry to improve the productivity of our labor?

There is no easy answer because technology is only part of the solution and in my experience, it is the smallest portion. There are three legs to efficiency: people, process, and technology. People are the most important and largest share of the solution (50 percent), followed by process (30 percent) and then technology (20 percent).

To obtain realized gains in productivity due to technology requires planning—much more planning than the technology vendors would like to admit. The common technology sales approach is to focus on the pain points of the company and demonstrate that the vendor’s technology solution reduces or eliminates them.

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Unfortunately, the responsibility falls to the buyer of the technology to properly determine its impact on the business processes and whether the technology has improved efficiency. Many construction companies do not have the resources to assess and measure the impact. However, just like a successful construction project, foresight, planning and a focus on measureable results will help companies achieve better rates of return on technology investments. Here are four suggestions to help:

1. Stay focused on your craftsmen

The stagnant labor productivity problem will not get better if the technology only helps the people in the job-site trailer and not the craftsmen on the job site.

For example, suppose your foremen are spending too much time preplanning in the trailer. Help them and find solutions so they can preplan more efficiently. You could measure the amount of time spent preplanning and the amount of time spent in direct craftsmen supervision. The technology should yield a measurable decline in preplanning time. Then your foremen should see a decline in rework or error rates when they are able to increase their direct supervision.

2. Ensure processes are lean

Technology vendors like to discuss the importance of business processes. They are right! Yet, technology alone rarely improves a process. Technology is a tool. It takes the people to operate the tool according to the process. So, spend time with your craftsmen to understand their process challenges and fix these prior to introducing new technology. Not only will it save time and money, it will improve morale.

3. Validate the technology vendor’s case studies

All technology vendors cite successful case studies. I use the case studies as the most optimistic outcome of a technology project. For example, if a vendor cites 12 percent improvement in their case study, I will work with my internal experts to determine what our expected improvement will be if we use the vendor’s technology solution. If our internal team agrees with the vendor’s expected outcome, then we will base our decision on it. Or we will revise our expected outcome according to our situation.

Also be sure to test drive the technology—with specific outcomes from your craftsmen—and be sure to talk with other users of the technology to validate the technology vendor’s point of view.

4. Measure results

This is the hardest part of any technology project. Make sure you measure the before and after impact of the technology project. If the impact after the project does not meet the expected efficiency, work with the project team to determine the cause(s) of the variance. Continue to make controlled changes either to the process or technology until you reach your goal.

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