A New Era of Construction Management

The Construction industry is experiencing consistent pressure to change profoundly its conventional method to oversee construction projects, as the market needs a construction system that can deliver projects with higher quality, lower cost, and in a shorter time span. But sorry to say that the conventional construction projects are unable to meet these criteria and experience a constant increase in price and decrease in productivity, and exceptionally high levels of waste. The main reason for the continuous decline is that construction projects are overseen under the concept of divisibility of work. In this concept, the activities are dispensed in specific departments favoring the absence of communication, divided teams, isolated information, independence, and absence of trust.

On the other hand, there is a dire need of transforming this old concept into the concept of integration in which all activities are in proper interaction. Fortunately, three new concepts have been successfully established to transform the construction industry from the old conventional concept to project integration. These new concepts are the Design-build concept, Building Information Modeling (BIM) concept, and Lean concept. After having a look at the historic levels of price, waste, and productivity in the construction industry, this article will discuss three new concepts to manage and optimize the construction projects.

Price: The Census Bureau figured out the price index for the construction industry that shows a positive incline from 25 up to 225 during a period of 46 years. An investigation from Harvard University shows that the average price of a house in the year 1950 was $59,575 that recently hops to $ 138,601 indicating a 132.6% expansion in price.

In contrast, successful service business approaches indicate exactly the opposite pattern to the construction business approaches, in which the unit cost of services has a historic pattern to decrease over time. One example of this is electronic business. However, the construction industry is not exploiting technological inventions and following its old conventional manner to oversee projects.

Waste: The Engineering News Report evaluates that out of $1.288 trillion of construction capacity in the United States, half of that cost is due to waste. The reason includes the absence of trust, joint effort, and manageability discovered in the construction industry producing additional costs.

Productivity: As indicated by the U.S. Department of Commerce Bureau of Labor Statistics, the construction industry demonstrates a consistent decline in productivity with a linear pattern of -0.32% every year. A survey made by The National Institute of Standard and Technology demonstrates the loss of $1.2 billion per year in lost productivity because of the incompetence to oversee and impart project information electronically.

Reduced labor productivity is referred to experts who are resistant to change. Poor productivity is associated with the absence of incorporation of design and construction, lack of cooperation among colleagues and poor utilization of information.

How to reengineer this management process?

It is time to manage and optimize the process of construction projects to secure a competitive advantage and best serve the market. Three concepts – Design-build concept, BIM concept, and Lean concept – have been proposed to be consolidated in the optimization of the construction management process.

Design-Build Concept

The first growing concept is the Design-build technique of project delivery where the design-build team works under a solitary contract with the project owner to give design, architectural and engineering services along with labor, material, and other constructional aspects emphasizing on cost, quality, and delivery speed.

The design-build approach is also termed as a “master builder” approach bringing back integration in the construction process, reduction in cost, increment in a joint effort, less waste, trust, better risk management and the best kind of correspondence. This concept is developing quickly in the construction project management and touched a market share of 40% in a short time-frame (15 years). It is assumed that the upcoming market share will reach the levels of 80% design-build and the rest of 20% of the market will be shared by the CM and conventional design-bid-building (DBB) management processes.

Building Information Modeling (BIM) Concept

The next concept is Building Information Modeling (BIM) which is a process of generating and handling 3D building data during its development. The 3D process is planned for accomplishing savings through collaboration and visualization of building constituents into an early design process dictating variations and modifications to the actual construction process.

BIM gives an idea of data integration, an approach to connect and exchange the information to and from, and a structure enabling the information to interrelate. It also provides mechanized quantity takeoffs with material cost and labor approximations. It is an extremely powerful tool that when utilized accurately will reduce cost, time and even streamline the construction process.

Lean Concept

The third concept is lean – the most dominant tool to remove waste and increase value. In 1930, Toyota administrators visited Ford and GM. They found that the US auto line created 9,000 units for each month, while Toyota would produce only around 900 units, and Ford was ten times as productive. After a reflective investigation of the production process, they distinguished seven regions of waste generation and inferred that they are absorbing resources without making value. To resolve this issue, they built up a management concept “How people can cooperate for value creation” later known as a lean concept.

The investigations of GeogeZettel demonstrate that 50 % of the construction laborer’s time is waiting. Rework is also the source of waste and can contribute up to 10 % of the cost in a conventional construction project. Instead, the lean concept aligns the process and supports trust and integration. It depends on evaluating the process to discover what is being done right and removing all the steps that are producing waste.

Note: The above three proposed concepts are being utilized by successful construction enterprises that are enjoying high-levels of profit and customer satisfaction.