Productivity Growth Chart - Best Construction Management SoftwareThe truth is that there is possibly no other industry that requires more cooperation than the construction industry. Dexter + Chaney surveys have determined that design/build firms and self-performed workers engage in on average 10-15 different subcontractors just on small projects alone. Larger projects can have more than 100 different subcontractors per project. Additionally, owners, banks, finance accounting professionals, project managers, construction managers, surety agents, and vendors are only the tip of the iceberg when it comes to the different stakeholders in each construction project, all which must work closely together to effectively complete a construction project on time, and on or preferably under budget. In fact, it is this reason that there have been many comparisons of the construction industry to manufacturing. While both industries rely on teamwork to produce products, the manner in which they work together differs greatly. This is of particular interest because if you look at the two industries side by side we see that while productivity of manufacturing in the U.S. has grown, construction on the other hand has actually decreased.

According to the Bureau of Labor Statistics, while other industries including manufacturing have seen significant productivity increases, productivity in the construction industry has not only declined but also that construction workers only operate at about 40 percent efficiency. This is where the differences between construction and manufacturing are realized, but it’s not as easy as just blaming construction industry employees for these inefficiencies. Let’s explore some of the issues surrounding construction productivity by taking a deeper look into the comparison with manufacturing.

Construction is Local

Manufacturing takes raw goods and produces a product with a specific use that most likely will be sent to another location to be distributed and sold. Construction on the other hand, takes raw goods and produces a product (a building) that almost always is built at the location it will permanently live.


There is no question that manufacturing companies have taken advantage of the cost benefits of off-shoring for most if not all of their production. The same cannot be said for construction as their industry in limited to production on site. While the construction industry has and does take advantage of purchasing outsourced materials, off shoring to reduce labor cost is simply not an option for the construction industry.

The Assembly Line

LineManufacturing has been extremely diligent in implementing lean processes like the Kiazen method, which imple-ments continuous improvements and eliminates waste. It was the Kaizen method developed by Japanese auto maker Toyota that helped them dominate the car manufacturing industry by encouraging employees to share ways to improve their job function. This model, while highly effective in the manufacturing industry, is not as applicable in the construction industry. Because each new construction job is completely different, standard processes of workflow are difficult to establish in order to create better efficiency. The construction industry does have its own standard processes within each job, but these standards are not easily transferred project to project since project participants change. There is no standard assembly line in construction.

Change Orders

In Manufacturing, “change order” is not a term that is frequently used. Typically, manufacturing companies create a finite number of product lines that are continuously produced the same way every time. If there is an issue with one of the product lines, engineers must go back to the drawing board and meticulously redesign and engineer a product that can be reproduced again and again. Just the opposite is true for construction industries which According to the Journal of Construction Engineering and Management, construction jobs on average have five change orders per project, making change orders extremely common in almost every construction project.

Change orders can mean more revenue for contractors as the American Society of Civil Engineers predicts that change orders typically increase contract prices 5-10%; however this doesn’t necessary lead to more profit for the contractor. This is true because contractors cannot accurately estimate issues that arise from change orders including: lost productivity, inefficiency costs, increase in equipment costs, additional labor costs, overtime compensation as well as opportunity costs that are lost because of additional time spent on the same job.

Achieving collaboration

Collaboration Today Infographic
Figure 1. Today’s collaboration tends to be a confusing web of various communications.

Construction is clearly and fundamentally different from manufacturing. However, new technologies are emerging that promise to bridge many of the productivity gaps between the two industries. Information sharing is part of the solution, but the platform for sharing has to accommodate constant revisions, version control issues, and live construction change orders that are inevitable in every project. In addition, access to the information must be available to all project participants. “Having everyone working from the same plan at the outset makes it easier to iron out wrinkles before construction begins,” said one contractor.

Another important part of the solution is the creation of a common online workplace. More than just a common document repository such as SharePoint, construction project teams need to share common communication and project management tools. This is not to say that all participating companies need to use the same project management software for their internal planning and scheduling, but for the (large) part of the work that is collaborative, having a standard tool set has enormous productivity advantages. According to another general contractor, “As we get closer to bid day, I feel like I’m herding cats – everyone is submitting information in their own format and sending information in every conceivable way – from email to fax.”

To move project collaboration from a “good idea” into a repeatable, real process, contractors will have to create a collaborative environment with these three characteristics:

  1. Accessibility: All participants must have access to project information from anyway and any device. If you require special software, subscriptions, or limit access in any other way, you dramatically reduce the likelihood of establishing effective teamwork and sharing. Web-based applications are emerging that require nothing more from participants than access to a browser and a password. These applications will likely become the platform for construction collaboration going forward.
  2. Control: Sharing project information is a necessary but not a sufficient approach toward achieving effective collaboration. Both the large volume and the changing nature of construction project information beg the need for automated version control and alerting. No one person or team can effectively juggle and track all the changing information involved in projects without dropping a few balls. However, this type of work is precisely what software can provide – the ability to process huge amounts of data and implement rules-based version control and automated alerts.
  3. Standards: standards have the ability to drive collaboration in the construction industry. The issue is that while protocols and standards such as BIM and Integrated Product Delivery (IPD) have been available for a number of years, there hasn’t been a common platform that delivers to construction professionals.
Best Construction Management Software
Figure 2. The industry is moving towards collaboration based on sharing the same information with every memeber of the team.

Fortunately, a confluence of new technologies holds the promise of delivering connection without complexity. The combination of web-based computing, ubiquitous Internet access, and a new generation of portable hardware is driving vendors to create a new class of business software.

Making complex enterprise software accessible over the Internet is not new. Virtualization technologies have been around for years and are still the default answer to the problem of accessibility. But they do not touch the issue of usability. Enter true web-based solutions; software designed specifically for access via the Internet from any place, using any device. To build business software for this environment, developers are redesigning user interfaces to be simpler without sacrificing functionality. This is not easy. But the result is software that is easier - both to access and to use.

This confluence of technologies is occurring just in time to help the construction industry reconnect, encouraging tighter integration between the field and the office and encouraging the adoption of new collaboration platforms. And with these better connected workflows come healthier cash flows - a connection every contractor is happy to make.

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Latest Blog

Leveraging Construction Management Software to Deal With Risk

More often than not, the success of a particular construction project is determined by how well project leaders deal with risks. Risks are inherent in every business—and it’s obvious that they carry a dollar value—just look at the insurance industry. Contractors who are able to understand the risk factors in their business, and can work to mitigate these risks, are in a position not unlike insurance companies. By assuming more of the risk for the projects that they are involved with, contractors can take the burden of risk off of owners or subcontractors and charge a premium for doing so. Even if this doesn't become an actual source of profit in and of itself, contractors who work actively to understand and control risk are in a position to make smarter project decisions which can lead to higher profit margins.

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