Increasing Productivity with Technology

 OP COMMERCIAL 01By Guy Skillett

On a typical construction project, there is one resource that dominates all other costs: labor. Up to 50 percent of the cost of construction can be attributed to the cost of the craft workforce. Not only is labor a significant cost on many projects, it’s also the most variable and the least understood. Construction sites are complex and rapidly changing, where unforeseen events like weather, equipment delays and worker turnover are all levers that can seriously impact productivity.

The construction industry often considers labor as a fixed cost, where little can be done to optimize craft performance and productivity. There’s some obvious reasons why this is the case. Construction is largely executed by subcontractors, where jobsite conditions and project execution are defined by planning and sequencing of work by contractors. Subcontractors are often not in control of all the factors that define project success.

This is beginning to change however as construction firms and emerging technology solutions develop new workflows for making the factors that impact the construction workforce more transparent. Firms that embraced digital solutions several years ago are now leveraging those early investments and deploying new technologies that improve the management and measurement of their field workforce. These companies are seeing how technology reduces the time spent on low value tasks – allowing them to more proactively manage their projects, mitigate risks, and deliver more successful outcomes.

Less Paperwork = More Time

An obvious benefit of digital technology is time saved doing manual data entry. Necessary but often time-consuming functions like timekeeping, daily construction reporting and tracking for potential change order work are often the responsibility of superintendents and seasoned field managers. Having them bear the burden of manual data capture means they’re often spending their valuable time not at work or directing their crews, but in the trailer after a long day. The question is, as a construction owner, would you rather have your valuable frontline supervision spending their time on paperwork or planning the next day of work?

The good news is that many of these manual data processes are functions that can be digitized and automated. The increasing adoption of smartphones and tablets on the jobsite, paired with a growing number of construction specific applications, ensures the barriers to digital data entry direct from the field level are eliminated.

Immediate Visibility

When field data is made available in real-time, a cascade of benefits is made available for project stakeholders. Digitization makes possible a daily view of project production, productivity and progress, rather than a static spreadsheet-like report a week later. Empowered with this data, foremen and front-line supervision can partner closely with project managers and engineers to identify risks and take action to resolve them before they become problematic.

Consider the manual process for documenting time and material tickets. Today, the industry standard is to track out-of-scope work completed by subcontractors with a manual, carbon-copy ticket. Time and materials (T&M) scope is often unaccounted for until these tickets are processed. More importantly, subcontractors cannot be paid for their work until these paper tickets are processed and approved in contract change orders. Often, the result is that subcontractors aren’t paid until months after the work has been completed. 

By digitizing T&M tickets, additional costs are immediately visible to both subcontractors and general contractors, timely administration and processing is supported and project owners gain the opportunity of approving costs in a timely fashion. Subcontractors are compensated for their work, cash flow is mitigated, and their cost of working capital is reduced.

Accurate Bidding, Increased Profits 

Clearly, for digital technology to be fully embraced it must have a positive impact on the bottom line. Not just for the owner but the contractor making the investment as well. While the industry is still in the early days of digitization, all signs point to “yes” when it comes to improved operating conditions. Firms are finding that digitization at the field level not only delivers better operating conditions for their project teams, but generates highly insightful data on historical costs, future estimates and forecasting. Project unit rates are assigned in estimates with greater accuracy, and the underlying financial position of projects can be better predicted and protected.

Of course, none of these changes happen overnight. Like every journey, the process of improving project outcomes starts with a single step. For many firms, that first step is saying goodbye to manual paper-based processes and embracing digitization. Firms looking to begin the digitization journey should evaluate all relevant field data sources they need to track and then find a solution that makes collection as seamless as possible. With a focus on bottom-up digitization and collection of data at the field level, firms will begin to build a foundation towards improved productivity for years to come.

Guy Skillett is vice president of construction innovation for Rhumbix

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