Is our industry stuck in the sixties?

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by YVES FRINAULT, CEO, Fieldwire | Nov 11, 2015

This question might raise an eyebrow or two, but it’s nonetheless a critical query worth answering. Construction is a massive industry, representing $8.5 trillion worth of work worldwide every year and it accounts for nearly 10% of the GDP in most countries. Yet it’s also an industry known for finishing on average nine out of 10 projects late, or over budget.

When you compare labor productivity from the 1960s with today, you can see that not much has changed in this industry. In the same time period, other large industries like farming and manufacturing have undergone a revolution, increasing labor productivity three-to-fivefold. Of course, this doesn’t mean that construction hasn’t progressed from a technological perspective. Architects and design firms have gone completely digital in recent decades. The project manager’s office now can run entirely in the cloud with a powerful suite of tailored software for bidding, planning and accounting.

Yet, we are still running the job site off of the lowest common tech denominator: paper, emails and phone calls — and that’s when we’re not physically trying to track down someone. In short, the way we design and plan projects has undergone much innovation, but the way we execute those projects in the field — where 90% of the money is spent — has not. And there is a heavy price to pay for that.

During a typical workday, for example, a journeyman will only spend 30% of his/her time actually building, aka “direct wrench time”. Another 40% of that day is spent preparing for tasks, gathering equipment and materials, and transitioning from one area to the next. The last 30% is often spent idling, which is what happens when we fail to answer one important question: How do we get the right people, with the right information, materials and equipment, into the right spot at the right time? Otherwise, wasting nearly a third of a journeyman’s day is the price we pay for using outdated management processes in the field. So the question then becomes: Is this an acceptable cost?

In most modern countries, the answer is understandably ‘No’. When faced with a problem like this, you often have two choices: Solve the problem with labor or technology. Since the 1960s, the cost of labor has risen significantly while the cost of technology has continued to drop. It used to be cost-effective to throw a lot of manpower at problems — and it still is in many parts of the world — but that’s no longer the case in the U.S. or Europe.

So, the winning strategy then becomes quite obvious: Hire the most capable craftsmen you can find and provide them with the technological leverage they need onsite to get their jobs done better. Then, and only then, will your field operations be able to make that leap into the 21st century.

Based in San Francisco, the author is a mechanical engineer with a 2008 masters degree in construction engineering management from Stanford University. Born into a family of builders in his native France, Frinault co-founded Fieldwire in January 2013 with business partner Javed Singha. For more, read the BuiltWorlds feature story. A slightly different version of this blog post appeared earlier here.