Friday, December 5, 2014

Fifty (50) Years of Failure in Construction: Let's Change That!

As an advocate of building information modeling, (BIM) it's kissing cousins virtual design and construction, (VDC) and integrated project delivery, (IPD) I closely follow developments in the construction industry.  In 2001 I read an article by Dr. Paul Teicholz in which he detailed deficiencies in the labor productivity rate in construction.  As a construction lawyer involved in the triage of failed construction projects I was keenly aware of the failure points that lead to low productivity rates in the industry.  The 2001 article highlighted fundamental failings in the construction industry and I began to question the wisdom of the legal framework within which I operated on behalf of my clients.

Dr. Teicholz's article gnawed at my conscience and I eventually launched Collaborative Construction, which regular readers know provides preventive legal services and collaborative consulting to the construction industry.  Dr. Teicholz recently published a follow up study in AECbytes Viewpoint #67 (March 14, 2013) titled Labor Productivity in the Construction Industry: Causes and Remedies (Another Look), and like the initial article in 2001, the study commands the attention of the industry.

I linked to the article on this blog when it first came out but I recently re-read the article in preparation for two upcoming presentations (NAHB International Builders' Show in Las Vegas and the 2015 Construction CPM Conference in San Diego) and I wanted to again bring Dr. Teicholz's excellent analysis to the attention of the industry.

I tell clients' all the time there is a 40% to 60% rate of waste on capital projects and they routinely push back, arguing there are no lean six sigma style studies in the construction industry that confirm those claims.  I counter those arguments with a detailed review of Dr. Teicholz's study.  The keystone of his analysis is the chart below that shows the stagnant nature of labor-productivity rates in construction compared to all non-farm industries.

While the chart ends in 2012 we know the trends continue and we are now at the 50 year mark.  How much longer will we wallow in this failure as an industry?

Dr. Teicholz identifies the problem with ruthless precision and the outlines a number of potential solutions as well.  It's time for the industry to step to the plate.  Below I've outlined the problem, solution and strategy in simple terms.  This is the approach Collaborative Construction and its allies, like FirstPlan, LLC, and Benjamin Yocum & Heather, LLC take.  If you have questions about how to create a smart built culture within your organization please call.

Problem: The industry wastes 40% to 60% of the labor, materials and time invested in capital projects.

Solution: Integrated teams capable of deploying better planning, design and construction processes.

Strategy: Create a smart built culture that supports and enables planning, design and construction in a trust based environment.

Action: Contact us to learn more about the key to creating a smart built culture strategy in your organization.

Welcome to the Collaborative Revolution!

James L. Salmon, Esq.
Collaborative Construction
300 Pike Street
Cincinnati, Ohio 45202
Summary of Services and James L. Salmon's CV

Office 513-721-5672
Fax 513-562-4388
Cell 512-630-4446

Collaborative Construction Website
No Silos Website

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