In the retail industry, the mantra over the decades has been location, location, location. Even in today’s highly mobile internet environment, the ease with which a potential consumer can find a retailer on any browser, platform or device is critical to that retailer’s success.
In construction the mantra is coordination, coordination, coordination. And yet according to a 2005 study inThe Journal of Construction Engineering & Management up to a whopping 49.6% of productive time in construction is lost due to coordination issues.
Think about it: almost 50% of productive time can be squandered due to poor coordination. More than the highest marginal tax rate.
So why, despite all of the Health & Safety and technological advances from ergonomic crimpers and hammers to laser guided tools does the construction industry still thrive in our economy despite poor productivity levels and high prices? (And let’s face it: in the annals of the construction industry, there has never been a project completed for the quoted price. And I don’t mean a lower price than quoted.)
The answer is COORDINATION.
Not that coordination is peculiar to construction. It’s not. Let’s just say it’s just handled differently.
If you think about it, no other major industry in our economy that has managed to survive these past 40 – 50 years has done so without pulling up its socks. Whether its JIT (just in time) delivery in the manufacturing sector or CRM (client relation/retention management) in the retail, banking, marketing industries, every business has had to respond to increasing complexity and competition by becoming more productive.
And here’s the rub: most of those productivity enhancing programs, disciplines and technologies where implemented to address the underlying challenges of coordinating information, transportation, supply and delivery chains etc. within each industry to eliminate waste, duplication and redundancy.
Not that the construction industry has been immune to complexity and competition. Far from it. But as far as productivity goes, construction still lags behind the pack and does so to its own advantage, by keeping clients steadfastly focused on the price of individual disciplines, trades and products in silos, while ignoring the cost of sub-standard coordination. Consumers’ attention is directed to the price of a door, or a lineal foot of drywall, and not to the cost (or potential efficiency) of coordinating the 5 – 8 trades that will have to interact with each other and the supply chain for any given product. Not only that, but the cost of coordination in construction can often exceed the cost of the product by several multiples.
Is it any wonder that conventional interior construction projects run behind schedule and come in over-budget?
So here’s my question: if you’re in public sector where budgets keep shrinking, can you afford to spend almost 50 cents of every dollar in lost productivity, aka, the trades and consultants “figuring it out on site” or playing the “that’s not my problem” game? Or if you’re in the private sector wouldn’t you rather spend your money on something that makes your business more profitable or provides value to your customers?
And while you’re mulling that over, count the change left in your pocket.