Unlocking Productivity for the Future

Better tools for the field and reducing risk on every project!

Long considered the backbone of economic growth, the construction industry continues to face a productivity challenge that cannot be ignored any longer. According to a McKinsey report, construction productivity has remained stagnant for decades, with the sector’s growth rate falling far behind that of the global economy.

For an industry that influences everything from infrastructure to housing, this productivity gap is not just a business problem—it’s a societal one. However, a growing consensus is that construction owners who commission and pay for projects hold the keys to transforming the industry. By leveraging their influence and adopting modern practices, owners can be the driving force behind a new era of construction productivity.

The Current State of Construction Productivity

Before exploring solutions, it’s essential to understand the scope of the problem. McKinsey’s analysis highlights that construction productivity has only increased by 1% annually over the past 20 years, compared to 2.8% for the global economy. This productivity gap has resulted in significant cost overruns and delays, with projects exceeding budgets by 80% and timelines by 20 months on average. The industry must adopt new innovative technologies and practices faster to mitigate this trend.

The factors contributing to this stagnation are numerous, including:

• Fragmentation: The construction industry needs to be more cohesive. Many construction firms work on different project parts, leading to inefficiencies and communication breakdowns.
• Lack of Standardization: Unlike manufacturing, where standardization is the norm, construction projects are often bespoke, leading to inconsistent quality and productivity.
• Outdated Practices: Many construction firms still rely on traditional methods that have not evolved in decades, resisting the adoption of digital tools and innovative approaches.

Given these challenges, it’s clear that a radical shift is needed. And that shift can start with the owners.

The Owner’s Role in Driving Productivity

Owners play a pivotal role in the construction ecosystem. They are the ones who set the expectations, define the scope, and ultimately bear the financial risk of projects. Owners can drive change across the industry by taking a more active role in risk mitigation and pushing for productivity improvements. Here’s how:

1. Adopting Performance-Based Contracts

One of the most effective ways for owners to drive productivity is by adopting performance-based contracts. These contracts tie compensation to achieving specific milestones and performance metrics, such as staying within budget or completing a project on time. This approach aligns contractors’ incentives with the project goals, encouraging them to innovate and find more efficient work methods.

2. Embracing Digital Transformation

Digital tools can revolutionize construction, from design to execution to delivery. Owners who prioritize digital transformation can see significant productivity improvements. For example, Building Information Modeling (BIM) allows for more accurate planning and coordination, reducing the likelihood of costly errors and rework. Doxel empowers construction teams with AI-driven project benchmarking and analytics, enabling faster, data-backed decisions that reduce costs and improve on-time delivery.

According to McKinsey, using digital tools could improve overall productivity by 14-15% and reduce project costs by 4-6%. Project management software can also streamline communication and collaboration, ensuring all stakeholders are on the same page.

3. Leveraging Technology for Project Benchmarking

One of the most potent tools that owners can use to enhance productivity and benchmark their projects is Doxel. Doxel is a powerful tool for project owners looking to enhance productivity and benchmark their projects. Its Production Rate tracking simplifies comparing completed work against the schedule, enabling owners to measure progress and manage timelines effectively.

The data collected from the site is analyzed to deliver precise insights into project progress, quality, and potential risks. With Doxel, owners can establish clear benchmarks, compare them against industry standards and past performances, and identify inefficiencies early. This empowers them to make informed decisions that keep projects on track, within budget, and up to the highest quality standards.

By integrating Doxel into their project management practices, owners gain a significant competitive advantage, ensuring precision and efficiency in every project. 

4. Fostering Collaboration and Integration

The fragmentation of the construction industry is a significant barrier to productivity. Owners can address this by fostering a more collaborative and integrated approach to project delivery. 

Integrated Project Delivery (IPD) is one such approach, where all parties—owners, contractors, architects, and engineers—work together from the outset, sharing risks and rewards. This collaborative environment encourages innovation and problem-solving, improving outcomes for all involved.

5. Prioritizing Sustainability and Resilience

Sustainability and resilience are increasingly important in construction, not only for environmental reasons but also for long-term cost savings and productivity gains. Owners who prioritize sustainable practices, such as energy-efficient designs or renewable materials, can reduce their projects’ lifecycle costs. Furthermore, resilient designs that withstand extreme weather events or other disruptions can minimize downtime and maintenance costs, ensuring the project remains productive over its lifespan.

Investing in Workforce Development & Solving Your Labor Issues

A skilled workforce is crucial for enhancing construction productivity, but the industry is currently grappling with a significant labor shortage. With many skilled workers nearing retirement and fewer young people entering the field, construction projects face increasing risks. However, Owners can address these challenges by investing in the right technology, such as Doxel, which offers three key solutions to keep projects on track:

(1) Accelerating the onboarding process due to its ease of use, 

(2) Boosting jobsite worker productivity, and 

(3) Enabling project leaders to identify when additional skilled trades are urgently needed to meet schedules.

Feedback from our clients highlight that Doxel helps onboard new engineers quickly, bringing them up to the level of experienced superintendents. Moreover, Doxel reduces the time spent manually tracking progress by 95%, freeing up the most skilled team members to focus on higher-value tasks.

While attracting more people to the industry is vital, a long-term perspective is essential. However, Doxel provides an immediate impact by optimizing the available labor on-site. For skilled trades, Doxel’s production rates are particularly valuable. They empower superintendents with hard data, allowing them to demand additional labor from trade partners when it’s clear that the current workforce won’t meet project deadlines. This data-driven approach helps ensure that projects stay on schedule and that trade partners fulfill their commitments, avoiding potential liabilities for delays.

Featured Case Study:

Layton Construction’s experience with Doxel has been transformative, particularly regarding time savings and efficiency. On a recent 82,000 SqFt healthcare facility project, six superintendents and project engineers were initially spending a combined 60 hours per week manually tracking progress. With Doxel’s technology, this time was slashed by 95%, reducing the task to just 3 hours total. This significant reduction in manual labor translates to 57 hours saved weekly, allowing the team to redirect efforts toward safety, quality, and effective coordination with trade partners—resulting in an additional $2.17 per square foot per year being reinvested into these critical areas.

The benefits continued beyond time savings. Doxel enabled a 10% reduction in overbilling by providing precise progress tracking, simplifying billing processes, and eliminating disputes over the percent complete. Additionally, Doxel’s production rate tracking made it easier to secure commitments from trade partners to meet deadlines, ensuring the project stayed on time. As Brandon Bergener, Superintendent at Layton Construction, noted, Doxel has also made it easier to access additional manpower when needed, further enhancing project efficiency and productivity.

The Benefits of Owner-Led Productivity Improvements

When owners lead in driving productivity improvements, the benefits extend beyond individual projects. Here are some of the broader impacts:

• Cost Savings: More productive projects are less likely to experience cost overruns, saving owners money and allowing them to reinvest in other areas.
• Faster Delivery: Projects delivered on time or ahead of schedule enable owners to bring assets to market faster, generating revenue sooner.
• Improved Quality: Focusing on productivity often leads to higher-quality outcomes, as fewer errors and rework mean that projects are completed to a higher standard.
• Enhanced Reputation: Owners who consistently deliver successful projects build a reputation for reliability and efficiency, attracting more business opportunities in the future.
• Sustainability and Innovation: By pushing for sustainable and innovative practices, owners can position themselves as leaders in the industry, setting a standard for others to follow.

Overcoming Barriers to Change

While the potential benefits are clear, driving productivity improvements in construction is challenging. Owners may encounter resistance from contractors accustomed to traditional working methods or stakeholders who are wary of the costs associated with new technologies. To overcome these barriers, owners should:

• Communicate the Value Proposition: Clearly articulate the benefits of productivity improvements, not just cost savings but quality, safety, and long-term value.
• Support and Resources: Offer training, resources, and financial incentives to help contractors and other stakeholders embrace new practices.
• Lead by Example: Demonstrate a commitment to productivity by adopting these practices on their projects, showing they are serious about driving change.

Conclusion: The Future of Construction

The construction industry is at a crossroads. It must overcome its productivity challenges to remain cost-effective and meet future demands. With their unique influence and authority, owners are in the best position to lead this transformation. Owners can drive the industry forward by adopting performance-based contracts, embracing digital tools, fostering collaboration, prioritizing sustainability, and investing in workforce development. The time for change is now, and the future of construction lies in the hands of those who are willing to push it forward.

Delivering on construction productivity is no longer optional—it’s essential. By taking a proactive role, owners can unlock the full potential of their partners and projects and set a new standard for the industry as a whole.

Citations:
McKinsey & Company. “Delivering on construction productivity is no longer optional.” Retrieved from McKinsey & Company.