BuildBinder Blog
Problem solving in construction.
When the end of a construction project is near, results must be measured. If results aren't the ones you and your team expected, then clearly something went wrong in the process. It's not enough to only check the end result, the whole process needs to be evaluated as it goes. Learn more about proper problem solving in construction.
Establishing a problem solving framework for your construction project
Traditional project management is generally the framework that construction professionals follow to organize and complete their construction project. Within that framework, milestones need to be set as a way of evaluating quality and progress of the construction project. If these milestones aren't set, then quality control cannot exist, and thus the end results will suffer greatly. A few tips on how to place the proper framework for your construction project:
- Establish milestones or KPIs
A construction project needs to be broken down into smaller projects. Each project must reach a milestone and follow a Key Performance Indicator. Establish what these are, and by what date should they be achieved.
- Establish minimum quality standards for materials
Materials need to comply not only with legal regulations, but also with budget, and with the original design. If these terms are not met, then they need to be replaced by better and more satisfying materials. Establish this rule beforehand with your providers and procurement personnel.
- Assign responsibility to team members
All stakeholders need to have a level of responsibility. They will be held accountable when things go right and wrong. It is this person's job to deliver on their assigned tasks on time and format.
- Behavior manual
Establish a behavior procedure or manual with your staff. If something goes wrong, then what should they do? Given them enough room to make decisions on the spot as to not cause any more delays or budget overruns in the long term.
- Contingency plans
If something gets out of hand, or cannot be fulfilled (like a missed deadline), there needs to be a contingency plan in place to correct these mistakes.
With these tips in mind, your construction will be more resilient to any complication that may come your way.
Problem Solving Skills in Construction
In the construction industry, fixing issues is what trained professionals do on a daily basis. Things don’t often go according to plan, so possessing problem-solving skills is a key character trait of successful project managers.
Today, with the aid of modern technology, we can approach problems from a data-driven standpoint and provide solutions to them. Years ago, this was unthinkable, but today it has become a reality. Solving problems and decision making is a regular activity in the construction business, but nobody was born with problem-solving skills. Rather, it is a skill that is honed via experience and relentless application.
Steps to solving construction project problems
Problem-solving is a learned skill that can be developed over time. Find below some steps you can deploy to develop your problem-solving skills so as to become a successful project manager .
- Identity the root cause of the problem: The first step to solving a problem is to identify the root cause of the problem. Root cause identification will offer you clarity about what needs to change.
- Identify the stake of all participants in the process: You cannot solve the problem on your own unless it is a limited one. Identify the parties involved and prioritize their recommendations.
- List all the possible solutions that come to mind: Brainstorm to come out with every conceivable outcome.
- Evaluate all solutions: Evaluating all solutions will help you identify the ones that will address the issue. Rating the success of each solution with a 0-10 rating helps.
- Pick the best option: From your list of solutions, pick the one with the best rating.
- Expand the solution: Expand the possible outcome of your desired solution by writing down in detail the far-reaching implications of executing it.
- Make Contingency Plans: A change in the expected outcome of your solution may have a knockdown effect on your plan. To avoid this, make a contingency plan by consulting your list for other solutions. You can do this by making a plan using your next best solution.
Problem-solving may or may not require a step by step process. You may also need to use the recommendations of others to achieve the best possible outcome. This is why it is important to seek the opinion of other people involved in the process or those who will be affected by the eventual outcome. And finally, recording problems and the solutions adopted to solve them creates a very healthy database for the future . Consulting your database from time to time will open you to a new perspective and improve your problem-solving skills maximally.
Do you have tips on solving construction project problems? Let us know in the comments section below!
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Seven Steps to Problem Solving in the Construction Industry
“How do we fix this issue?” It’s a common worry, especially in the construction industry. How often do things actually go to plan? Not very often! Even with the assistance of modern technology we still find ourselves running blind, on the fly and under the cosh.
There are few working arenas like construction that provide such a unique mixture of puzzle-solving, 3D thinking and urgency. But that’s okay, because you are the Ultimate Innovator and you have amazing problem solving skills.
Perhaps you’re not aware of these skills or at least, never bothered to take a closer look, but there is good reason to.
Problem solving and making important decisions are a regular part of the construction industry day, but were you formally trained in problem solving? Probably not. This is a grown and personally honed set of skills that you have developed over time.
There’s another point about problem solving that isn’t in conscious awareness, and that is that they are also opportunities to improve areas of the construction industry and the way it operates.
Problem solving abilities are a valuable set of personal skills that help improve the construction industry.
Although we’re born problem-solvers and Ultimate Innovators, we naturally shy away from problems and this makes a problem seem much worse than it actually is. The first goal of problem solving should be to approach the issue with a ‘problem-friendly’ attitude. In the words of Albert Einstein,
“We cannot solve our problems with the same thinking we used when we created them.”
By breaking down any internal resistance you’re feeling you can view the problem fairly.
Here are seven proven steps to problem solving and they can easily be applied to most common problems in the construction industry.
7 Steps to Solving Construction Industry Problems
- Get clear on the issues that created the problem. What really needs correcting here?
- Get clear on everyone’s interests. This will help prioritise the resolution.
- List all possible solutions. Get creative and brainstorm every conceivable outcome.
- Evaluate the possible solutions. Sometimes a simple mark out of ten helps.
- Select the best option.
- Write down the best solution with all the details and implications.
- Make contingency plans. Any change will probably produce a knock-on effect elsewhere. Be sure to have it considered, if not covered!
Problem solving doesn’t always follow a step by step process so be prepared to jump around the points.
This process can be very helpful during a site meeting. Take the seven steps with you and get other’s input.
In a Nutshell: Approach a problem with your Ultimate Innovator hat on. You CAN solve this. Go through the seven steps, with others if possible, and make a note of your solutions.
Additional Take-Away: There’s an important trend developing in some construction companies, they are recording problems and how they get solved so there’s a searchable system in place for the next time that problem arises. There’s no reason to reinvent the wheel each time there’s a problem, so why not start your own in-house system?
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Developing problem solvers to advance lean construction
FEATURE – Construction is rife with waste, and yet lean is not widely adopted in the industry. The authors highlight how lean could benefit the sector, emphasizing the importance of developing problem-solving capabilities.
Words: The LGN Lean Construction Working Group
As far as work goes, it is hard to deny the complexity that construction companies face on a daily basis. In part, this is the result of the diversity in the types of projects that they take on (from infrastructure to residential and mining), but also of the difficulty of coordinating and integrating the work of several players – including owners, designers, suppliers, contractors and subcontractors – throughout the process, from planning to product delivery and aftersales. Quality self-control is all but missing, and incomplete designs often cause errors, delays, cost overruns and rework. Add to the mix a common lack of leadership across the value chain, stressful working conditions at the front line, adversarial relationships in the traditional Design-Bid-Build contracting system and a tendency to not trust that people (at all levels) can really solve problems, and you might be excused for thinking that construction is beyond saving.
And yet, this traditional industry is evolving. As a movement, construction industrialization – inspired by manufacturing techniques – has existed since after World War 2, when the need to rebuild entire countries put pressure on the sector to deliver faster than it ever had. In recent years, we have seen a new wave of industrialization, with innovative offsite techniques like modular construction, jobsite assembly rationalization, and advances in digital technologies (such as BIM, Building Information Modeling, and new planning and management software).
In this new stage in its evolution, construction is also showing an increased interest in Lean Thinking. More companies are realizing that lean can bring a deep transformation to this industry, as it did in almost all economic sectors. With a few notable exceptions, however, construction companies still tend to perceive lean as mere process improvement. What happened with lean in manufacturing 40 years ago, when people thought all there was to it was Kanban and a bunch of other tools, is happening today in construction. What’s worse is that the improvement work is often taking place in isolation – perhaps in one job site – and even when it leads to good results the fact that the rest of the organization has no exposure to lean makes progress limited and hard to sustain.
At the Lean Global Network, we aim to help companies to achieve a sustainable lean transformation by addressing five dimensions of our very own Lean Transformation Framework (LTF): value-driven purpose, improving processes, developing capabilities, changing management systems and leadership behaviors, and transforming mental models. If we look at construction from the perspective of the LTF, one can see that most of the improvement work in this sector is limited to the process pillar of those five dimensions. Even then, it only touches on the planning stage. Indeed, in a project-based industry like construction, planning is fundamental, which makes the commonly used Last Planner System a valuable tool for organizations interested in achieving some basic stability. But there is much more to lean construction that just Last Planner!
The LTF teaches us there is much more to explore here. What can we say about people development in construction? Can construction companies define value for customers well enough? How often do managers in construction go to the gemba to see the work with their own eyes, listen and provide support to people as they try to solve problems? Does the management team understand the value stream in detail, from start to finish, and work with the team on the ground to improve it as a whole?
In the construction industry, lean is still not seen as a strategic asset that can transform the entire organization – and its culture – by turning front-line workers into autonomous problem solvers so that more value can be provided to the end customer. We believe that it is about time that changed. A broader adoption of Lean Thinking as a socio-technical management system is fundamental to help the industry to overcome its most pressing issues, like safety, cost overruns, low productivity (according to OECD data, productivity in construction hasn’t changed in 20 years), quality problems, and chronic delays.
DEVELOPING PROBLEM SOLVERS IN CONSTRUCTION
To solve the problems highlighted above, however, we need to primarily focus our efforts on developing the problem-solving skills of everyone, from top executives to foremen, from tradesmen on site to employees working in supporting functions. But what does it take to create an army of problem solvers in the construction sector? In our mind, it requires us to provide people with the ability to raise problems, the tools and knowledge to solve them, and the support to make problem-solving a part of their every-day work.
Critically, we also need to make sure that the right people are addressing the right problems. For this, Art Smalley’s 4 Types of Problems framework is particularly useful. Before we delve deeper into problem solving, let’s see how the framework can apply to construction.
First of all, as a precondition for any sustainable improvement to happen, we need to create basic stability in the process. This can be achieved by fixing Type-1 (Troubleshooting) and Type-2 (Gap from standard) reactive problems right at the front line. Unfortunately, in construction, there are usually few standards in the work, which makes problem-solving difficult. How can you address a gap from standard if you don’t know what the standard is? Before any improvement can be made, therefore, it’s necessary to establish clear work standard.
Once basic stability is achieved, the company can start paying attention to more high-level, strategic issues that concern the entire value flow – Type-3 (Target condition) and Type-4 (Open ended Innovation). To solve these problems requires management to get involved, together with all business functions – from supply chain to design. At this stage, an organization can begin innovating on a regular basis. By achieving basic stability and establishing a structured approach to problem solving, Lean Thinking can give innovation in construction a clear purpose.
Let’s now look more specifically at how we can turn our job site workers into skilled and autonomous problem solvers.
To develop problem-solving skills at the gemba, we first need to take fear out of the workplace and replacing it with trust. This can cause a huge shift in the mindset of an organization and encourage people to raise their hands whenever a problem occurs. To have this in place, we need to change behaviors and to build a system in which visual management allows for problems to be tracked and people across the business to be aware of them and know what to do about them. This is a particularly big problem in construction because of the project-based nature of the work, with different companies and teams acting in each job site. That is why a lean implementation should be seen as a company-wide transformation rather than an initiative taking place in one site or project.
Communicating to everyone what should be done, by who and how is hard on a construction site, where thousands of people might work at any one time and deadlines are often tight. The foreman typically makes the decisions on what work to do and when, but the focus is typically on production rather than productivity. With this approach, as soon as a problem occurs the answer is normally to throw more resources at it (in the form of people or overtime, for example). Alas, that’s often not enough to avoid compromising safety and quality. Conversely, standardization breaks the work down into smaller tasks, clearly defines roles and responsibilities and, more importantly, makes it easier to recognize deviations before they become problems that are too big to manage. (More on this in the next article from our working group.)
Once problems are seen as opportunities for improvement and a system is put in place to identify them and tackle them swiftly and effectively, it’s important for a company to focus on providing everyone contributing to the creation of value with the tools they need to become problem solvers. When they hear training, people normally think about classroom training, but in the lean world capability development happens at the gemba, on the job. Simply put, there is no other way of developing problem solvers than having them solve problems!
But how can we solve process problems without mentors helping people through it? As ever, the role of leadership here is absolutely critical, as the following examples show.
Turner Construction Company (one of the largest construction companies in the USA and a co-learning partner of the Lean Enterprise Institute) has been on a lean journey for the past six years, with a strong focus on developing the problem-solving skills of senior leaders through LEI’s Lean Leader Program (LLP). We all know how important coaching is, but if you want leaders to be coaches, they need to first become problem solvers themselves (“We need to model the behaviors we want to see in our people,” a senior exec from Turner recently said). Following several “lean field trips” at the gemba, senior leaders clearly appreciated that to truly engage their people they had to ensure the improvement work focused on their problems. They committed to understanding the work from the perspective of the workers, and to making things easier for them. This transformed attitude, fueled by an extensive use of A3 Thinking, has become a powerful catalyst for change at the North America-based construction company.
A3 Thinking was also a fundamental tool at Socovesa, a Chilean construction company that has been on a lean journey for four years. LGN affiliate Lean Institute Chile has helped Socovesa to understand this important problem-solving framework. Their first step was to stabilize and standardize the planning process for all projects – no matter how different. This helped to generate a common language and create an opportunity for weekly interaction. The initial experiments with problem solving, which concentrated on one specific project and three teams, led to exceptional results. According to the project manager, however, the best outcome was the fact that the area supervisors began to develop the capabilities of their team members and that everyone started to learn to solve problems.
A similar approach is being followed at Battistella Spa, a small construction firm in northern Italy, which recently started its own lean journey, with Italy’s Istituto Lean Management’s help. After receiving some basic lean training, the management team started focusing on real business problems (using the Lean Transformation Framework as a reference) while A3 Thinking at the front line led to a number of quick results in process efficiency. This is gradually creating awareness across Battistella that change is possible and that processes can be improved continuously.
Indeed, the most effective way to engage people in problem solving is showing results, especially those that most directly impact their work. Leadership should get involved in small cycles of PDCA, while at the same time showing workers how their problem-solving efforts are making the work safer and the company more productive.
This strategy worked for conglomerate Andrade Gutierrez, a major Brazilian infrastructure company that operates in several countries, which Lean Institute Brasil (another affiliate of the Lean Global Network) helped to create a different culture by supporting the development of an initial group of lean facilitators. LIB provided them with the lean knowledge they would need to effect change across the group. This clearly paid off, since over the years Andrade Gutierrez has developed four generations of facilitators, who have progressively been able to introduce Lean Thinking in all job sites and business areas.
A MORE HOLISTIC APPLICATION OF LEAN
Lean Thinking is more than just transforming operations. If looked at as an all-encompassing framework, lean can cause a shift in the company’s overall mindset, in its leadership, and in its strategy. When it is applied to the entire value-creating process (as it should), it can lead an organization to a complete turnaround. We already know how impactful Lean Thinking has been in industries like manufacturing or healthcare, and there is no reason to believe it shouldn’t bring just as many benefits to construction.
As briefly mentioned above, the construction process is very atomized and the supply chain supporting it incredibly fragmented. It is normal, therefore, that investors and construction companies interact with one another through lawsuits, that designers and builders have to deal with constant project changes, that material suppliers deliver late, that invoices are routinely disputed at the end of each month, that aftersales service is slow, and so on. Additionally, and more dangerously, the culture that permeates the industry discourages people from highlighting problems. Ultimately, all of this impacts the real customer, be it the owner of a house or an operator in a hydroelectric plant.
Thanks to the holistic, “big picture” view it affords, lean can help the industry to overcome these obstacles, thus becoming a powerful differentiator for the businesses that decide to take the lean leap. In particular, we believe it can be extremely beneficial in addressing issues like culture, supply chain, and the industrialization of the construction process.
Transforming the culture that prevails in the industry, which is notoriously tough and based on a command-and-control approach to leadership, is perhaps the most fundamental outcome that lean can achieve. In an environment in which trust is lacking, people tend to hide problems rather to flag them up, compounding an already difficult situation. In such a scenario, problems only appear at the end, when the project is handed over to the customer. Lean teaches leaders to respect people, to lead by example, which is key to the creation of a working environment where problems are welcomed.
Lean Thinking can also contribute to the effectiveness of the construction supply chain, by boosting collaboration among owners, designers, suppliers, contractors and subcontractors and moving past the toxic relationships that so often exist between them. Much like with culture, this is a matter of injecting trust in the communication and interaction among different players, for example by running experiments like relational contracts and Integrated Project Delivery (IPD). The increasing use of BIM (Building Information Modeling) is another enabler of supply chain integration, and combined with lean concepts it can represent a powerful catalyst for change.
Finally, lean can help this sector to fully leverage the opportunities provided by new technologies to achieve a full industrialization of the construction process. For this to happen, the industry will need to incorporate the principles brought forward by Lean Product and Process Development, which emphasize the importance of bringing design and production (in this case, construction) together from the very beginning.
In conclusion, applying lean to construction can lead to:
- Greater safety in the work.
- Higher quality in the delivery to customers.
- Shorter delivery times.
- Increased productivity.
- Reduction of materials wasted.
- A working environment conducive to continuous learning and collaboration.
- The ability to anticipate problems and better manage risk.
- More integration between subcontractors and project owners.
To make the most of these benefits and sustain them, the construction industry needs to engage in a broader and more strategic application of lean management. A shift from tools to problem solving can help it to improve considerably and support its evolution into a real 21st-century industry.
The Lean Global Network’s Lean Construction Working Group aims to contribute to the development of the industry. We have witnessed and supported several experiments in lean construction and believe that our global and multi-industry experience might contribute ideas and concepts that until now have not received the attention they deserved.
THE AUTHORS
Flávio Picchi, Lean Institute Brasil
Rodrigo Calderon, Istituto Lean Chile
Luca Martinello, Istituto Lean Management Italy
August Casanovas, Instituto Lean Management Spain
Mark Reich, Lean Enterprise Institute, USA
Related Posts
FEATURE – How lean daily management helped a Brazilian construction company to stabilize production in a tailing dam elevation project.
NOTES FROM THE GEMBA – With a strong focus on quality and on solving problems once and for all, Paris Ouest Construction has managed to weather the storm of the recession, the author finds out during a gemba walk.
FEATURE – Building on the benefits of the Last Planner System™, lean thinking is supporting people at Turner Construction Company as they solve problems in a structured way.
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Root Cause Analysis: A Quick Guide
Issues arise in almost every project. But knowing there’s an issue is one thing; figuring out its cause and how to solve the problem is another. If you’re missing deadlines and the quality of your product or service is suffering, then you might have a problem that you can solve through root cause analysis.
What Is Root Cause Analysis (RCA)?
As the name suggests, root cause analysis is a set of problem-solving techniques and tools that offers teams an opportunity to identify the root causes of problems they’re facing. But root cause analysis involves more than just identifying the root cause of a problem. It also helps teams identify contributing factors, prepare corrective actions, and improve business processes through continuous improvement.
What Is Root Cause Analysis Used For?
RCA is very versatile and can be employed by any organization for problem-solving. There are many different purposes for RCA such as six sigma, DMAIC, lean manufacturing, total quality management and software development, to name a few. This is because RCA is a set of methods and tools and not just one method, which gives teams the freedom to choose which RCA tools are best for them.
Project management software like ProjectManager helps teams keep all their project documents in one place, which greatly helps when performing root cause analysis. In addition, you can use project management tools such as Gantt charts, work breakdown structures, kanban boards and risk and resource management features to identify issues affecting your workflows, budget and schedule.
When to Use Root Cause Analysis?
Root cause analysis is used when there are problems with a project, or any aspect of a business, especially those that negatively impact the client. This could range from a client complaining about some aspect of the project to teams being blocked and deliverables falling behind schedule.
Of course, problems in a project aren’t the result of a single cause. That’s why RCA is set up to capture a variety of root causes and contributing factors that are causing the problem you’re experiencing. Based on that information, you can then create corrective actions to solve the problem. Now, let’s learn about the steps of the root cause analysis process.
Root Cause Analysis Methods, Tools & Techniques
As stated above, root cause analysis involves several methods, tools and techniques to help organizations better understand the root causes of issues affecting their workflows, business processes and project budgets .
The 5 Whys of Root Cause Analysis
One of the best techniques when performing a root cause analysis is called the “Five Whys.” This approach is simply asking “why?” over and over again. This exercise is a deeper dive into the problem and its causes, rather than accepting the first answer, and brings you closer to what’s actually causing the problem.
The best way to understand this technique is through an example. Note that, while called the “Five Whys,” it can be only a few whys or dozens before you reach the root cause of your problem.
Let’s say you’re building a bridge, but deadlines are being missed.
Q: “Why is the deadline being missed?” A: The team couldn’t finish their task in time. Q: “Why couldn’t the team finish their task on time?” A: Materials were delayed. Q: “Why were materials delayed?” A: There was no follow-through with suppliers. Q: “Why was there no follow-through with suppliers?” A: Teams weren’t adequately trained. Q: “Why weren’t teams adequately trained?” A: The hybrid methodology has gaps.
This question-and-answer exercise lead to the root cause of the missed deadlines problem. In this simple construction project management example, there are many issues, including lack of training, poor supplier relations and so on. The root cause is the methodology that hasn’t properly managed the project.
The Fishbone Diagram
Root cause analysis is about cause and effect. Identifying and documenting causes requires a diagram or document of some sort. The most commonly used one is the fishbone diagram also called the Ishikawa diagram and herringbone diagram.
A fishbone diagram is so-called because it looks like a fish skeleton. There’s a line down the middle from which spines sprout from the top and bottom, with each spine collecting the causes of the problem. They lead to where the fish head would be, which is the problem itself.
ProjectManager offers dozens of free project management templates, including this root cause analysis template. Use the free template to spark brainstorming sessions with your team and figure out a solution that prevents your problems from coming up again.
Change Analysis
Another of the many techniques used in root cause analysis is called change analysis. Change analysis is used to identify and understand what might occur if a change is adopted, as well as what’s needed to accomplish that change, how to design it and identify the many risks involved, including impact on resources, effort and schedule.
Of course, this is a great way to get recommendations to successfully manage change , but it can also be used to find problem causes. In order for this technique to work, there must be a basis for comparison. It also involves a lot of resources and the results aren’t always conclusive. Therefore, a lot of testing is required to back up your findings.
Causal Factor Analysis
This root cause analysis approach works on single events. As its name suggests, it consists of finding the root cause of a problem by establishing cause-and-effect relations over a timeframe, which is built based on qualitative and quantitative research, as well as empirical evidence. Once that timeframe is drafted, problem causes are tracked back to the start to find the root cause of the problem.
Barrier Analysis
Barrier analysis consists in finding the root cause of an issue through the analysis of the control methods that have failed to prevent it. This root cause model is a good alternative for organizations that have strong risk management procedures in place. For example, a large manufacturer might use barrier analysis to find out the root cause of a quality assurance issue in a production line.
Root Cause Analysis Steps
There’s no one-size-fits-all RCA approach, as it’s a very flexible set of tools, methods and techniques. However, here are the basic root cause analysis steps to help you get started.
1. Define the Problem
The first step in root cause analysis is to clearly define the problem or event that’ll be analyzed through RCA. Some examples of problems could be a machinery breakdown affecting production planning , a flaw in your customer service procedures or an issue with your supply chain. A clear problem statement is key for effective root cause analysis. Most of the time these problems will cause symptoms, which should be defined and tracked.
2. Collect Data
Once you’ve defined the problem, it’s time to gather qualitative and quantitative data to further explain how long it has existed, the impact it’s had on your business and any symptoms. Data collection is a very important step in root cause analysis, as good data is critical to find the root causes and contributing factors to your organization’s problems.
3. Identify Causal Factors
Now that you have the data you need, it’s time to start asking yourself about the events and conditions that lead to the problem. These are known as causal factors. They’re not the root cause of your problem but still contribute to it.
4. Sequence Causal Factors
Now it’s time to sequence the factors that are causing your problem by mapping them out chronologically. There are several charts and diagrams that can be used for this, such as fishbone diagrams or tree diagrams. These methods help better understand how the problem builds up by understanding the timeline in which causal factors occur.
5. Identify the Root Cause or Root Causes
Based on your findings from step four, you can now track the causal factors down to their root cause. That’ll lead you to find the root cause or root causes of your problem.
6. Create & Implement Solutions
Once you identify the root cause of your problem, it’s time to develop corrective actions to make sure the problem goes away. Don’t forget to create a plan for this, outlining which resources will be needed, who will be responsible for executing tasks and the risks of implementing said corrective actions.
Why Is a Root Cause Analysis Important?
Issues are bad! They mess up your project schedule and cost money. A root cause analysis helps resolve them. That should be enough of an incentive to have you apply this method. Root cause analyses also help prevent the issue from coming up again. Once you know what the issue is and how to stop it, you can prevent it from happening again.
An Iterative Approach
Another reason to use root cause analysis is that it’s a tool for continuous improvement, which is how to keep up the quality of your product or service. No project is successful if its quality doesn’t meet stakeholder expectations.
Documentation
Projects are known for their documentation . There’s research, feasibility studies and more. There’s even documentation when closing a project. But often the documentation of project issues and how they’ve been resolved is neglected. Root cause analysis is a way to document the process and apply it in future projects.
Process Improvement
Other things that the method can identify are deficiencies in the process that can be fixed, again adding future efficiencies, but also noting gaps in team training. Therefore, it can open up opportunities to bring your team up to snuff and make them more valuable resources.
How to Perform a Root Cause Analysis
When performing a root cause analysis it’s important to not get tied up in the symptoms. Remember, this is an analysis to uncover the root causes. Those are the places you want to place your focus and correct any project missteps.
- Identify the problem: Without having a clearly defined problem, there’s no way to go back and look for causes in the process that caused it. This is the most important step: knowing the problem and defining its scope.
- Work backward: To uncover the potential causes for the problem you’ve identified, retrace steps. Again, there is likely more than one, and note as many as are relevant. Part of this process includes brainstorming with your team, using process mapping and a fishbone diagram to capture the various causes leading to your problem.
- Determine what the root cause is: There are other tools that can help, such as the five whys, a fault tree, cause and event tree and more.
- Come up with solutions: Again, brainstorming with the team is helpful. They’re the ones who are intimate with the project and its execution and will be your best resource to find a way to resolve the problem.
- Implement the solution: Remember, this isn’t a one-time thing, but must be sustainable and that the solution is in fact doing what it has been planned to do. This requires patience and follow-up, bringing anyone who is going to be impacted by the change.
- Monitor, track and report on the solution: Project management software can facilitate this step.
Principles of Root Cause Analysis
As noted, the general principle of root cause analysis is to find what’s creating a problem so that it can be corrected and change the processes that caused it. For this to work, however, the root cause analysis must be performed systematically.
Another principle of root cause analysis is that there can be only one. Yes, there might be dozens of causes that are collected on a fishbone diagram, but the root cause is singular. That might mean you’re going to have to invest a lot of time to find it, but it’s always there. It’s important to continue your investigation until you find the culprit.
For your investigation to work, you need to establish a timeline of events. This allows you to understand the relationship between the various causes and reach the root cause. By doing this, you’re not merely solving a problem, but changing a corporate culture from reactionary to proactive. This problem-solving style will reduce the problems you have to respond to over time.
How ProjectManager Helps With Analysis
Getting to the root cause of a problem creates greater efficiencies, which helps keep your project on track. ProjectManager is project management software that helps you find issues and gives you tools to solve problems and work more effectively.
Catching issues before they become problems is the best way to keep your project running smoothly. Because ProjectManager is an online tool, you’re getting live data that inform better decision-making. It also allows you to catch discrepancies faster, and act on them sooner, to avoid delaying the project or going over budget.
Get a high-level view of your progress and performance with our real-time dashboard. It’s already set up for you, unlike other apps, and automatically calculates project variance, workload, time, tasks and more, which are displayed in easy-to-read graphs and charts. It’s like having an instant status report without having to do anything.
Your stakeholders are invested in the project and want to stay updated on any changes that might impact their bottom line. Our reporting features make it easy to create a report with just one click and can be shared in a variety of ways to match how your stakeholders prefer their communication. Better still, each of our reports can be filtered to show just the data you want to share.
ProjectManager is award-winning software that organizes tasks, teams and projects to create greater productivity. Real-time data means you can find issues faster and avoid them turning into problems. Use live dashboards and dynamic reporting to analyze and solve problems today by signing up for free today.
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By: Kendall Jones on July 8th, 2021
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5 Tips for Resolving Conflicts on the Construction Site
Operating Insights
Conflicts on the construction site are a common occurrence. Disputes and disagreements are going to arise when you have multiple parties such as general contractors, owners, architects, subcontractors working together to complete a project. These stakeholders have different opinions and interpretations on how things are supposed to be done. Those differing opinions often lead to conflicts.
Remember, the goal of any construction project is to see the successful completion of the job on time and within budget. When conflicts arise, it can seriously threaten achieving that goal. Resolving conflicts can be challenging. It all comes down to making the best business decision to keep the project moving forward. Here are a few tips for resolving conflicts on the construction site.
Don’t Ignore the Conflict
You can’t just bury your head in the sand and hope the conflict resolves itself. Tackling the conflict head-on and working to a quick and amicable resolution to ensure the project stays on track.
Even a small dispute that may appear inconsequential can balloon into a larger problem if it goes unresolved. If you allow the parties involved to work it out on their own, you still need to follow up and make sure that there aren’t any lingering issues. Take action early to avoid further complications down the line.
Get to the Root of the Conflict
It’s important to determine the underlying issues causing the conflict in order to determine the best solution. Conflicts are often caused by different interpretations of plans and specifications, change orders, scheduling, and poor communication.
Actively listening to the opposing party or parties to understand where they are coming from or why they think or feel a certain way is the key to resolving disputes. This demonstrates to the opposing party that their opinions matter and that you are committed to working with them to resolve the issue.
Check Your Emotions at the Door
Conflicts can escalate quickly from a simple disagreement to a shouting match. This isn’t necessarily a bad thing, it just means that the opposing parties are passionate and feel strongly about their opinions. Having a heated debate is one thing, but you should defuse the situation before it comes to blows.
Resolving conflicts is about making the best business decision for the project, not personal feelings. Both parties should sit down stay focused on developing a solution that is in the best interest of the project.
Don’t Play the Blame Game
When conflicts arise, it’s not always a matter of one party being right and the other one is wrong. Sometimes the best solution is somewhere in the middle and you may have to give a little to get a little.
Be willing to compromise and work together to solve the problem. Construction is all about cooperation and collaboration. Taking the “my way or the highway” approach is a quick way to kill a good working relationship and will hurt your business in the long run.
That being said, there are some nonnegotiables when it comes to resolving conflicts like following safety rules and regulations or adhering to building codes.
Be Clear in Your Communications
Poor communication on the jobsite often leads to conflicts. Make sure that expectations are clearly communicated to everyone on the project. Keeping everyone on the same page and up to date with any changes or alterations being made to the project or schedule.
Resolving conflicts doesn’t always result in a win-win situation for all involved. It’s important that once a resolution has been decided upon, everyone involved gets an explanation and is clear on what is expected moving forward. They might not always agree with the decision, but providing a reasonable explanation and following up will go a long way in accepting the decision.
Conflicts on the construction site can be good. Resolving conflicts can lead to a better understanding or a new way of doing things that improve the overall project.
About Kendall Jones
Kendall Jones is the Editor in Chief at ConstructConnect. He has been writing about the construction industry for years, covering a wide range of topics from safety and technology to industry news and operating insights.
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Construction’s Productivity Problem — and 9 Ways to Help Fix It
162 articles
Construction Contract , Construction Technology
The construction industry makes up a large portion of the US economy: over 6 percent of all employment, and 4 percent of the entire nation’s GDP. With one industry playing such a key role in the direction of the nation, it makes sense to take a look at ways to improve it. And bolstering construction productivity is one of the best ways to do so.
Construction productivity in the US has been on the decline in most of the past decade, despite some signs of incline in recent years. According to the Bureau of Labor Statistics (BLS), productivity in both residential and public construction dropped more than 15% from 2015 to 2019. Commercial construction fared worse in that period, with a drop of 30%.
But there’s a complication: Construction productivity has always been hard to quantify . When it is measured, it consistently shows that productivity improvements lag far behind other industries. So what are the issues stifling construction productivity growth? What is holding the industry back, and what can business owners and those regulating the industry do about it?
Table of Contents
Construction labor productivity statistics
Construction productivity is difficult to quantify, but when researchers are successful, it’s significantly behind comparable industries .
Three out of the four construction sectors below have shown a decline in productivity since 2007, with one showing only slightly improved numbers.
Single-family residential productivity
In the early 2000s, single-family residential productivity, output, and hours worked were at an all-time high. By 2008, output declined sharply, followed by a more gradual decline by both hours worked and productivity. All three reached the lowest points since 1987 between 2008 and 2012, rebounding briefly through 2013.
Productivity then declined steadily between 2014 and 2019 until turning around with increases in 2020 and 2021.
Multi-family residential productivity
Like single-family building, multi-family residential construction experienced high productivity and output in the early 2000s, with a relatively consistent number of hours worked. After a temporary decline around 2008, all three values rose again until another slight decline starting around 2016. After 2019, productivity turned around and has been on a continuous upswing.
Overall, productivity is higher than it was 30-plus years ago but not as high as it was at its peak around 2013 and 2015.
Industrial building construction
The one outlier of the group is industrial building construction productivity, though it isn’t exempt from its ups and downs. After 2008, industrial construction productivity and output spiked for a year or two while hours worked remained largely unchanged.
From 2010 to 2013, productivity remained relatively flat while output started to increase. Both output and productivity peaked around 2015 and steadily dropped off before flattening around 2017, where it has enjoyed relatively uneventful slight growth ever since.
Highway, street, and bridge construction
Public works projects aren’t exempt from productivity issues (surprise, surprise). The industry’s output and productivity spiked between 2008 and 2009 and has since been on a relatively steady incline. Output followed a similar, albeit less extreme curve as well. Hours worked? Well, they had been on a slow rise since 2008, but productivity, output, and hours worked all began to slip between 2019 and 2021.
The challenge of measuring construction productivity
The act of successfully measuring productivity in the construction industry has always been a difficult one. The industry’s unique characteristics make it difficult for researchers to determine where productivity comes from, where it’s lacking, and how to improve it. The following key areas make up the majority of the challenge.
Measuring output
Measuring the construction industry’s output is a challenge all of its own. Unlike widget manufacturing or determining trucking routes, the variables affecting construction change from project to project.
According to the BLS, “Productivity is difficult to measure for construction industries because of the challenges in measuring both output and hours worked.”
For instance, 2,000-square-foot homes come in an endless number of styles and contain a wide variety of materials — and the challenges of building one on the east coast will differ from the midwest, south, or west coast. Even building these homes in different areas of the same county can have drastically different results. Most industries don’t experience the same degree of variability .
Deflating construction prices
To really quantify an industry’s productivity, you need reliable data to base current, past, and future costs off. Finding those deflators within construction is difficult because it’s a unique industry. The Bureau of Labor Statistics agrees, saying “it is difficult to develop reliable output price deflators to convert observed revenues into constant dollar measures of output growth.”
Also, the act of painting with a broad brush simply muddies the water. According to the Building Futures Council , “The use of proxy indices in construction also contributes to the problem (e.g. using the Census Housing Index to deflate commercial and military construction).”
Other industries don’t have these same issues, as accurate deflators are much easier to determine and can be reliable for longer periods of time.
Subcontracting
How a typical construction project comes to fruition also makes it difficult to determine the actual cost of labor. Typically, the general contractor subs out work to specialty contractors. Rather than accounting for those labor hours directly, they’re accounted for in materials inputs.
The Bureau of Labor Statistics states, “The services of subcontractors would normally be included as purchases of materials inputs, much as any other firm purchases necessary inputs from its suppliers. Since the present analysis considers only labor productivity growth, it does not account for materials inputs.” For that reason, the BLS can’t quantify them.
Undocumented labor
Skilled undocumented labor makes up a large portion of the construction industry workforce. According to some estimates, 13 percent of construction labor is performed by undocumented labor, though the actual number is obviously hard to nail down. This creates a significant (if not impossible) challenge for determining construction productivity.
According to the BLS, “It is likely that at least some undocumented laborers are included in official measures of employment,” through one means or another.
However, if those workers are entirely off the books, they may not be included in labor hours, therefore significantly skewing the level of productivity.
9 ways to improve construction productivity
With that understanding of the productivity struggles and why it’s hard to put a finger on it, it’s worth exploring how to improve it.
The following tips could provide the answers necessary to not only boost productivity but also kick the nation’s economy into high gear.
1. Streamline the regulatory process
Construction is one of the most highly regulated industries in the country, and it’s for a good reason. Building safety, life safety, and environmental impacts shouldn’t be taken lightly, so regulatory agencies must exist to oversee projects. But regulation often slows productivity, affecting output while extending hours worked.
Streamlining permitting and approval processes (possibly through web-based portals and apps) can allow the regulatory agencies to help keep the project on schedule.
2. Simplify contractual processes
It should come as no surprise that when two entities work together toward any common goal, the work goes faster and typically smoother. So why do we approach contracting with such an antagonistic, me-vs-them attitude?
The industry needs to consider moving toward a more synergistic, collaborative system focused on solving problems rather than undercutting the next bid. This attitude shift can lead to open communication—the harbinger of better-quality projects, fulfilled and valued contractors, and happy project owners.
Crash Course: Everything You Should Know about Construction Contracts
3. Supply chain management
One of the most significant issues that the construction industry deals with is the ever-changing supply chain landscape. Fluctuations in materials pricing, availability, and shipping costs chew construction company profits to the bone. Yet it remains an issue, year after year.
Obviously, companies need to diversify their supply chain and leverage their efforts to protect their profits. But, the supply chain moving toward digitalization will allow for better logistics management, allowing the chain to fill orders and deliver materials faster, decreasing hours worked while increasing productivity and output.
And not letting cash flow bog down the supply chain is another area worth considering. Financing designed for the supply chain in the construction industry allows contractors to keep moving forward and secure their place in line with an order before they receive a single check.
4. Improve payment transparency
If there’s one thing that can bring a thriving project to a halt, it’s payment problems. And it’s not always a lack of money or dishonesty that causes them. Often, a project owner or GC doesn’t know who needs to get paid, and a check might go unwritten. This missing check can turn into a project delay when the unpaid contractor files a mechanics lien and pursues legal action .
That’s not good for productivity.
To improve transparency, some projects moved to a publicly available database of contractors working on a project. This means that the project owner, GCs, subs, and suppliers all know who is working on a project, keeping everyone on a level playing field.
Also, general contractors or project owners requiring all participants on a project to send preliminary notice will solve a large part of the issue. As the preliminary notices roll in, the GC can develop its own database of involved parties, ensuring everyone gets paid for their efforts.
5. Prequalify contractors
Ever notice that some contractors seem to have a black cloud following all of their projects? Every project is late, over-budget, and riddled with productivity-sapping issues. What if there was a way to identify these contractors before doing business with them? There is, and it’s called a contractor payment profile .
The data that makes up these profiles will help vet contractors and subs for their past performances and technical proficiency. These factors allow the hiring party to estimate how the contractor might handle their project. Also, these profiles include the information necessary to determine whether or not a contractor values transparent payment practices—a must-have for well-oiled productivity.
6. Invest in technology
It shouldn’t come as a shock that one way to improve productivity is to lean on technology. The right technology can limit the number of hours spent working on simple tasks, allowing employees to stretch their problem-solving muscles and improve output. This leads to happier employees and better productivity.
Technology has a place in several areas in construction management:
- Smart contracts automate payments, approvals, orders, and other critical processes to speed up payments, scheduling, and more
- New design technologies like BIM and VDC provide better accuracy for office staff and help reduce errors in the field
- Software that links the field and back-office can improve communication and streamline contract changes
- Real-time management software can improve accounting, subcontractor scheduling, and other regular tasks
- Payment software can reduce the stress on administrative and financial staff while keeping vendors, suppliers, and subcontractors happy
With so many areas typically realizing the benefit of automation, staff can do the more important tasks that a computer program cannot.
7. Prioritize safety
Prioritizing safety is key when it comes to construction productivity. According to the National Safety Council , 99 million days of productivity were lost from work injuries in 2020, with an additional 50 million days of lost productivity projected for future years tied to those same injuries.
Job delays due to injuries can decrease productivity exponentially. It’s important to know what to look for and implement policies that may help prevent loss on projects.
Read more: OSHA’s top construction violations and how to prevent them
Investing in a safety program, training employees to follow safety procedures, and making safety a key component in company operations can help prevent project delays and additional costs that may be incurred due to worker injuries. Implementing safety protocols can also mitigate accidents from occuring on job sites and increase productivity levels.
8. Take advantage of prefabrication
Prefabrication can boost productivity on construction projects as it saves time and doesn’t rely on unforeseen hiccups like inclement weather or scheduling conflicts that are likely to occur during onsite work. Spending less time tangled up in project delays means companies can take on more projects and streamline their process.
It is important to consider some of the drawbacks that accompany prefabrication, however. Since the majority of labor and materials aren’t incorporated into the property until they are installed onsite, modular build methods may run into payment problems. Mechanics lien laws , for example, come into play for improvement on real property. Prefabrication projects are considered an improvement until after the majority of the structure is built.
Read more: Prefab construction: Getting paid for offsite work
This can further muddy the water with efforts to quantify labor, as mentioned above with subcontractor work. Prefabrication is a favorable route to consider to increase productivity on construction projects, but contractors should keep in mind that it is difficult to track data that reflects how productivity is affected by this method of construction.
9. Improve access to project financing
Construction is a cash-hungry business, and it’s impossible to keep productivity up while scraping the bottom of the barrel. In fact, a lack of cash flow is the main reason why construction companies fail . Without the money to spend on project labor, materials, and technology, productivity plummets and takes output with it.
Luckily, contractors have an increasing number of financial options to choose from, and they’re specifically tailored to the industry. Resources such as 120-day materials financing can remove the financial limitation that reduces productivity while also giving a contractor the boost, confidence, and opportunity they need to grow their business.
Get materials now, keep your cash.
Enjoy 120-day payback terms with any material supplier.
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9 Construction Nightmares & How to Solve Them
By HomeAdvisor
Updated July 27, 2018
Building your own home or starting a renovation can be risky. You want to know the risks, anticipate, plan and solve them. Learn what often goes wrong on a custom building or renovation project and find possible solutions.
1. Incorrect custom orders
PROBLEM: You’ve ordered a custom material. Whether it’s cut incorrectly or there’s an unexpected flaw, you can’t install as-is. SOLUTION: Prior to starting the project, your or your builder created construction specifications . The purpose of construction specifications is to define and clearly detail the materials you will order for your job. Compare the project specifications and a copy of the custom order the contractor placed with the supplier should determine responsibility. If the custom order was incorrect, you have a choice:
- You can accept the delivered product with its mistake, averting delays. This may require modification on-site or an aesthetic compromise.
- You may reorder to receive exactly what you want. However, this pushes your completion date.
Understand that accepting an improper custom order usually translates into some benefit for the homeowner . This can be a discount or exchange. For example, the contractor might have to give something in return for the homeowners accepting what they didn’t order. The question is who is paying?
2. Blueprint Confusion
PROBLEM: Subcontractors are working off an old set of blueprints. This is a problem for your contractor, and, unfortunately, it will delay your schedule. SOLUTION: Make sure subcontractors are working with the most recent plans. Date your plans. This eliminates any confusion about which set of plans is current. Note the date of the final set of blue prints in your Construction Agreement and posted with the Ground Rules so everyone and every subcontractor on the site can check their plans to confirm that date is on their set of plans.
PROBLEM: You can only rent another place or stay with family for a set number of months while construction is underway. How can you guarantee this work will proceed as quickly as possible?
SOLUTION: Ask for a production schedule with your contract so that you can monitor your contractor’s progress. Job site managers often draw up a project schedule with blocks of time for each task. You need to communicate regularly with your contractor about construction delays. What are the delays? What will the outcome be? Opening this dialogue can lead to a solution.
There are several acceptable reasons for delays, some of which are above. When there is a problem and there are delays, you and your team need to address them as quickly as possible. The more open the communication between homeowner and contractor, the better.
4. Unexpected construction costs.
PROBLEM: Unforeseen conditions, like bad soil, termite damage or dry rot, often appear during construction. SOLUTION: If you encounter one of these problems, the only alternative to emergency spending is to stop the project. Before beginning your project, budget and set aside funds to cover unexpected costs that aren’t the fault of a manufacturer or contractor.
Your construction agreement already addresses unforeseen circumstances , and if extra work is necessary, your builder is entitled to additional money. If, however, there is some doubt as to whether the circumstances were unforeseen, you deserve a full explanation.
If your contractor overlooked some part of your job and consequently your estimate was low, they are responsible for this oversight. If necessary, a third party could help you resolve any dispute. Share the story with either your architect or an unrelated building official to get an objective opinion.
5. Interval financing loans
PROBLEM: Delays and surprises can complicate more than your time table. If you’re using a modular construction loan that pays your builder at the end of each stage, (like when the framing is done, or the roof is complete), complications can easily arise. You might even find yourself in a Catch-22 .
SOLUTION: Work closely with your builder and lender to ensure they both have a clear understanding of the project timeline and budget. The bank needs to know what stages will be complete and when so that they can disburse the funds to keep up the progress.
If your contractor can clearly communicate with both you and your lender about inspections done, issues that arise and the costs to solve them, the better your chances of getting the money you need to keep the ball rolling.
6. Builder mistakes
PROBLEM: There are times when a carpenter or a subcontractor believes he/she has a more efficient way to complete some part of your plan or feels he/she has an “improvement” you would really like. Unfortunately, in so doing, they may deviate from the blue prints, and you end up with something you don’t like.
SOLUTION: The sooner you discover their mistake, the better. Fixing a deviation may be as easy as moving a wall stud or repositioning a door or window. Whether or not it’s an easy fix, try the following:
- Find out why they made the alteration. There may be a good explanation. If there is neither a good explanation, nor is the problem easy to fix, see if you can spend a couple of days thinking it over. You may begin to like it.
- Agree to accept the alteration in exchange for an “extra” you desire. If the subcontractor faces an out-of-pocket expense, he/she may be willing to do a little bit of “horse trading.” If the mistake was large enough, you may, for example, negotiate for the built-in bookcase you wanted in the den.
- Your final option is always to tear out and rebuild the alteration according to plans.
7. Contractors Asking for Payment Upfront
PROBLEM: Your contractor is asking for money, but the job isn’t done. What should you do when paying upfront was not in your contract, what should you do?
SOLUTION: Don’t pay in full until your contractor has done satisfactory work. Typically, you should only pay in full when the job is done. If you have an agreement for any advance payments, make sure that this money goes into escrow and not into an active spending account. This is a safety net to protect your money in case the job doesn’t go as planned.
Make sure the that the contract also has a payment plan if necessary. A popular payment plan for big jobs is to pay one-third upfront, another third during the project, and the final third at the project’s completion. Adding specifics like these will make the payment expectations clear for both parties.
8. Missing Contracts
PROBLEM: Nothing is on paper. You have a handshake deal with a construction buddy. How protect your home project from incomplete or poor quality work?
SOLUTION: Sign a contract before any work begins. Do not start the job until all the following terms are detailed on paper and signed.
- A payment schedule.
- A work timeline.
- A thorough description of the work that needs to be done.
The contract needs to be signed by both parties to be legally binding. Keep a certified copy for yourself to consult at all times during the project. You can also get a lawyer to look over the paperwork if you have any doubts about the wording.
9. Design Flaws
PROBLEM: There are many paths that lead homeowners to say, “I didn’t know it would look this way.” After framing or any other stage of construction, you may discover the results aren’t what you had in mind and want it rebuilt some other way. Sometimes homeowners have a hard time imagining how 2-dimensional blue prints will translate into real living space.
SOLUTION: You may want to change some things. Budgeting often determines the degree or number of changes you’re able to make. Again, setting aside a fund for surprises can save the day. You can ask your architect or designer to render a 3-D model of the design and walk you through it. If this costs extra, consider the blown-up cost of changing the plan mid-construction.
As the price of your project goes up, you may decide there are certain imperfections you can live with. Remember, however, these are compromises that you will live with for the next 10 to 20 years . Make sure you feel secure in your choice. Otherwise, you may end up regretting your decision every time your eyes cross this “imperfection”. That is not something you want to live with.
Important Things to Know
In general, the Construction Agreement you put together with your builder should provide answers to most of these problems. The General Construction Conditions should communicate the steps to follow in the event of a conflict between contracts. The order of precedence generally recognizes more recent documents. Here is the order of precedence to follow:
- Owner-approved Change Orders.
Problems due to discrepancies between documents are automatically solved by this order of precedence.
Related resources:
- Have It Your Way with a Custom Builder
- Finding & Hiring a Draftsperson: What They Do, Questions to Ask
- What Do Excavation Contractors Do?
- How to Hire Home Building and Remodeling Professionals
- How to Find a Good Home Builder
- What is a Construction Manager vs. General Contractor?
- How to Hire a Construction Project Manager
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Most common construction problems and how construction management software can solve them
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The slow transition to a digital practice has the construction industry underperforming in terms of quality and productivity versus investment growth. As investment in infrastructure is growing fast (predicted to double by the next 15 years), it is surprising to note that the methods and processes employed are still traditional. Work is still performed manually and on-site and mostly outdated with productivity dwindling down since the 90s.
According to a study conducted by the McKinsey Global Institute, global investment in construction and infrastructure will be $57 trillion by 2030 (McKinsey, 2013). The sector, however, barely spends on research and development (just about 1% of its revenues). Software solutions have been developed specifically for the industry but less than 1% of the sector’s revenues were spent on them.
Delays and Overspendings
Traditional construction practices can be costly and inefficient. In fact, with large projects, the industry fails to deliver on time, within budget and to specifications. In a separate study , it was reported that 98% of these projects had cost overruns of more than 30% and 77% were at least 40% late (McKinsey, 2015). Large projects take at least 20% longer to finish and are up to 80% over the budget (McKinsey, 2016). The industry’s unhurried need to adapt to new technology has been steadily declining financial returns for contractors.
An important point to note is that even though construction is inherently long-term, the industry does not think long term. This mindset leads to poor productivity and cost outcomes, which are serious and systemic construction issues that are seen as “normal”. Labor productivity can no longer keep up with the overall economic productivity.
A few important factors of these construction problems have been identified and they are the following:
- Bad Organizational Structure The construction project management practice’s decision making and procurement processes do not have the capacity for the current speed and scale demand.
- Deficient Communication The lack of a central data system results to delayed and inconsistent sharing of information and reports. This leads to subcontractors, contractors, and owners not having a common understanding of the project’s state at any given time. Click here to discover how we can help you to improve your internal communication.
- Weak Performance Management Midstream changes, inadequate communication and lack of accountability lead to unresolved issues piling up.
- Non-Universality of Information When a different team carries over work to a different team for the next process and when a problem comes up arising from the previous process, the construction project manager may have a hard time understanding how to proceed. For example, the procurement team deals with complicated contracts and when a problem with the contracts arise while in the middle of construction, it may confuse the CPM (construction project management) lead.
- Connection Gaps Planning spans a lot of aspects; it includes high-end preparation and daily tasks. If daily work does not align with the day’s goal, schedulers should be notified but often are not. This system ends in delays due to the absence of real-time updating of task priorities.
- Poor Short-Term Calculations Another construction issue is that companies are good at planning and forecasting outcomes in the next 3 months but fail to identify and calculate work in the next week or two. This often results in delays that may be caused by unavailability of an equipment or materials.
- Inadequate Risk Management Construction managers and contractors are usually looking into long-term risks of planning, design, construction, operations, and maintenance. Risks that just pop up on the job are usually overlooked. These tiny construction issues may just have a snowball delay in decision making and compound to major schedule overruns.
- Limited Skill Capabilities Another cultural problem in construction is that companies tend to work with previous people and teams and fail to connect with more capable firms and manpower suited for the job.
Safety Issues
Another aspect to look at is safety management practices. Work injuries can set project schedule back by one week or even more and may cause budget overspending to compensate for its outcomes. Investing in strong safety management programs ultimately reduce injury rates thereby decreasing schedule and budget overruns and ultimately improving project ROI and company reputation.
The integration of technology in the industry like documenting safety concerns, using building information modeling (BIM), and prefabrication and modularization are impacting positive safety outcomes for companies that embrace them (McGraw Hill Construction, 2013).
The Bigger Picture
Improving on “basic” project management skills is the most potent remedy for reducing construction problems and improving construction performance (McKinsey, 2015). Embracing transparency and real-time collaboration create a continuous work flow — a transparent environment makes it easier to resolve issues faster. Efficient and effective tracking aligned with preparedness for unseen events enable the construction team to anticipate micro-changes and allow them to adapt and adjust accordingly.
With transparency, real-time data, and tracking, a change-order process is created and minimizes time delays in disputes during construction. The result would be reduced idle time and a most promising solution to improving construction site productivity.
The integration of technology in the industry practice definitely plays a huge role in improving construction productivity. But do not forget that it is only a tool. Using it strategically to improve project management is the bigger challenge. An improvement in performance and productivity equal to an improvement in financial returns but there is a bigger picture here.
Creating a trend towards a healthy and productive construction industry will benefit the whole world.
An updated opinion piece regarding the construction industry’s slow delivery practice discusses how embracing new ideas could solve construction’s poor delivery practice .
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How To Improve Your Construction Company in 2023
The construction industry is constantly changing; what was once the gold standard could quickly be deemed outdated. With new tools, technologies, and techniques being added to the mix each year, it takes great skill and knowledge to stay ahead. So if you want to improve your construction company in 2023, this post will show you how.
Update Your Equipment With Extensions
Investing in state-of-the-art equipment extensions, such as forklift fork extensions , can bring immense benefits to your construction business. Upgrading your machinery with these enhancements increases productivity and work efficiency.
It will also promote workplace safety by allowing your team to handle heavier loads more effectively. Moreover, modernizing your existing equipment demonstrates your company's commitment to continuous improvement. This gives you a competitive advantage in the ever-evolving construction industry.
Ultimately, updating your equipment with extensions that suit your construction projects will yield a commendable return on investment. In the end, it'll pave the way for sustainable growth and long-term profitability.
Utilize New Construction Technology
Embracing new technology has become essential for construction companies seeking to streamline their operations and stay ahead of the competition in a rapidly evolving industry. By incorporating advanced solutions, your company can significantly enhance collaboration, efficiency, on-site safety, and overall project management.
This can include technology such as Building Information Modeling (BIM), drones, and Artificial Intelligence (AI). Using these innovative tools, your team will be well-equipped to identify potential issues and find creative ways to address them before they escalate.
As a result, you can minimize budget overruns and costly delays. Integrating new technological advancements also enhances stakeholder communication, leading to a more cohesive working environment and a smoother construction process. Investing in new technology is an investment in your company's growth, reputation, and long-term success.
Develop a Marketing Campaign for Your Construction Company
Developing a marketing campaign for your construction company is essential for attracting new customers and expanding your business. As the construction industry continues to grow and change, companies increasingly need to showcase their innovative techniques and expertise in home improvements.
By implementing a well-crafted marketing campaign, you can effectively convey your company's specific skill set and unique approach to prospective clients. This can increase brand recognition, a larger client base, and higher revenues.
In addition, a successful campaign can also aid your company's reputation as a leader in the competitive construction market. In essence, a marketing campaign is an invaluable investment that will reap significant long-term benefits, ultimately contributing to the growth and success of your construction business.
Have an Effective Management Strategy for Your Company
An effective management strategy for your construction company is essential to improve overall business performance. It will ensure project completion but also foster a positive work environment that inspires employees and cultivates success.
A well-designed management strategy will streamline processes, reduce costs, and minimize risks associated with the complex nature of construction projects. Implementing such a strategy enables you to allocate resources efficiently, maintain open lines of communication with stakeholders, and adhere to stringent safety guidelines.
Additionally, a practical management approach facilitates collaboration across teams, enhancing innovation and problem-solving capabilities that ultimately contribute to delivering high-quality work. Finally, in a competitive industry like construction, a robust and efficient management strategy provides a critical advantage by driving consistent project performance, fostering long-term client relationships, and boosting your company's reputation for excellence.
Look for Ways To Improve Your Customer Service Skills
The importance of customer service skills cannot be overstated in the construction industry. Not only do these skills help win contracts and gain repeat business, but they also contribute significantly to your construction firm's overall success and growth.
Excellent customer service fosters a positive image for your company, attracting potential clients and giving them the confidence to entrust you with their projects. Moreover, building strong relationships with clients based on trust and effective communication can set your business apart from the competition. This will bring in more referrals from satisfied clients.
By working tirelessly on your customer service skills, you invest in your company's future. You can pave the way for a thriving construction enterprise with a reputation for delivering exceptional service.
Consider Getting New Contracting Licenses
Acquiring new contracting licenses can significantly boost the success and credibility of your construction company. In the ever-evolving construction industry, staying updated with the latest policies, techniques, and certifications is essential to remain competitive and attract a broader clientele.
As clients become increasingly discerning about the qualifications and expertise of service providers, possessing an extensive set of licensing credentials can be a powerful differentiator. Upgrading your contracting licenses exhibits your commitment to continuous improvement and equips your team with the knowledge and skills required to deliver superior-quality work.
Furthermore, this investment can lead to new and lucrative business opportunities, resulting in increased revenue and an enhanced reputation in the construction sector. In short, obtaining new contracting licenses is a strategic move to ensure the long-term success of your construction business.
Improve Your Construction Company With These Tips Above
Ultimately, the success of your construction company in 2023 depends on several factors. The most important are honing a well-crafted strategy, finding innovative solutions to problems, and investing adequately in necessary resources. Lastly, customer service should be a priority—as it's one of the critical elements of keeping your business successful.
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How to solve construction billing issues in 2023
By Madyson Alger •
Published Mar 16, 2023, updated Mar 16, 2023
The construction industry is notorious for late payments, endless paperwork and poor communication. Since construction projects take place over an extended period of time, it’s important to keep your processes streamlined, and improving your billing process can be the best place to start.
Construction billing differs from business to business, but one thing remains true – there’s power in using a construction billing software. The ability to run your entire process through software will change your business for the better. Follow these tips to help you reduce late payments, minimize paperwork and make your construction billing process more efficient.
Partnering with other parties
5. sync with accounting software, how do you charge for construction projects, what is construction billing.
Construction billing documents an expense for your company. A bill is any payment you owe to your partnering parties like expenses for materials, equipment or services. Billing in construction is similar to purchase orders, but billing is a quicker way to record an expense and get that expense paid in full.
What makes construction billing challenging?
Billing processes in construction can be tricky. When dealing with money, strict timelines and multiple parties, it’s bound to be difficult to manage. Be aware of these specific challenges of construction billing so you can combat them and keep your business running smoothly. Here are the top hurdles home builders face with construction billing:
Too much paperwork
To keep a high-functioning business, you must keep track of your payments. It’s challenging when all your bills pile up on your desk. With construction billing software like Buildertrend , you can maintain a record of expenses that can be accessed easily from anywhere. No more lost receipts in the trucks of your field crew because they can upload them as soon as they buy any materials. This eliminates the need to track down receipts and paper bills and unifies your team .
Late payments from clients
Dealing with late payments from homeowners can deeply affect your billing process. If you’re waiting on payments, you take on the costs, and you’re forced to pay out-of-pocket for materials and labor. By staying ahead with financial features in construction software, you can combat problems before they arise. With Buildertrend’s software, you also have a construction invoicing feature to communicate costs with clients through a formal document.
Poor change order management
Clients can change their minds pretty frequently, and you can also run into issues at your job site. It’s just the name of the game. When change orders happen, you need an easy way to track these expenses, which is where an online billing system comes in handy. All changes are recorded on the platform, where you can sort through extra charges. Without proper documentation, you risk getting underpaid for the job.
Temptation to pay bills too early
A construction company has many monthly bills from subcontractors and vendors and bills for materials and equipment. Paying bills ahead of time can be beneficial, but be aware you could limit cash flow by paying bills too early. For example, if you pay a subcontractor before you get paid by a client, you’re placing the financial burden on yourself.
Billing for construction projects can be tricky when working with other parties. Often, construction companies will source work from subcontractors. This is an inevitable risk that a company will have. If any partner fails to complete their obligation or backs out of the project, the job will be put at risk. To combat this, you’ll need to create a contract or purchase order in a software like Buildertrend.
5 construction billing best practices for 2023
How is billing done in construction when there are so many challenges? Don’t worry – it can be done successfully. Use these construction billing best practices to keep your billing process effortless and organized.
1. Document everything
Keeping a record of all your bills is important, especially in construction. Sometimes you need to reference back to old bills and receipts. Within a construction billing software like Buildertrend, you have the option to record who you’re paying and what the bill is for. You’re able to record the invoice date and a reminder to pay the bill at a later date if needed. You can also attach photos or files to the bill, like a picture of a receipt. This process ensures everything you need to reference is in one place.
2. Run reports at regular increments
By running reports regularly, you can achieve accurate cash flow projection. You can create a variety of reports in Buildertrend to manage your bills. Helpful reports include estimated cost vs. actual cost, cash flow by job and work in progress reports which include how much money is left to spend on each job. There are also billing filters that can be saved and used repeatedly to make the process quick and easy. Use these filters to track due dates and know how much is due at any time.
You also have the power to see where you’re over budget frequently and overages on bills. With construction billing codes, you can run reports on how much you’ve been over budget and target any specific patterns across projects. Learn more about the power of variance codes and financial reporting in Buildertrend with this webisode .
3. Set regular payment schedule
Set specific days of the month or week that you’ll take care of your bills. If bills require a different due date, schedule them using a construction billing software like Buildertrend.
DMJ Restorations has tightened up their financial process with help from Buildertrend’s Scheduling feature which sends bill and purchase order notifications. This ensures they don’t miss their payment due dates and that they pay subs on time.
By setting up reminders for upcoming bills you’re less likely to miss a payment. You’ll never wonder about future bills because you’ve already done the planning to know what’s coming.
4. Use construction billing software
The power of using construction billing software allows you to run your whole process through one platform. You can invoice the client, receive payments and track expenses all from one place. You eliminate the risk of information being lost and you bridge any gaps between your team. Communication is made much more efficient overall.
More specifically, with a billing software, you can easily tag and organize bills without sifting through papers. Everything is held electronically, which makes it easier to search through. You can create bill templates to preplan what you’ll need for each job too. That way, in the future, you can use the template, and the bills will already be created. All that’ll be needed is adjustments of finer details.
Another key benefit is subcontractor collaboration. In Buildertrend’s Sub Portal, you can let subs actively participate within the platform. They have access to see paid bills, and you can pay them through Buildertrend’s online payment features .
Monty from DMJ Restorations is also using this feature to send payments. “Our subcontractors get paid even faster than they were before,” he said.
Implementing a 2-way sync between construction billing software and accounting software can simplify your processes even further. You can quickly enter receipts for your accounting team to review. Then they can code and send expenses directly to the accounting software. Syncing can eliminate unnecessary communication and bridge the gap between the accountant and the field crew. Stay on top of your bottom line by connecting construction software financial features to your accounting software.
Improve your billing process with Buildertrend
Your construction billing process can significantly improve by using Buildertrend’s software. The entire process takes place on the platform – from estimates to purchase orders to invoices to bills to payments. You can streamline your process and keep everything organized. The billing feature creates a quick and simple way to record all expenses and move them along to payment.
You can also improve your bill reporting process. With all data available in the software, you can sort through bills with a few simple clicks and even save the filters or reports you run often. You’ll minimize the need for paperwork altogether because everything is captured in one place.
By using construction billing software like Buildertrend, you’ll reduce late payments with access to reports on billing due dates. In addition, with the power to link your bills to the scheduling tool, you’ll always be aware of upcoming payments.
Ready to improve your billing process? Buildertrend has the tools you need to execute a strong process and keep your business running efficiently. Schedule a demo today and learn more.
Construction billing FAQs
What are the different types of construction billing.
Advanced billing: This type of billing in construction is completed before the project even starts. It’s usually in the form of a lump sum payment. With this method, there’s a lot of trust put into the parties responsible for working on the job. It can be risky because the project can run over budget. This type is ideal for parties who are familiar with each other and have a good long-standing relationship.
Arrears billing: This construction billing method is done at the end of the project. It’s also sent in a lump sum once the final product is approved. This type can be risky for the builder because they can end up paying out-of-pocket for materials and labor during the project. Arrears billing would be an ideal choice for businesses that are looking to form relationships and trust with new clients, and who also have a strong cash flow already.
Progress billing: Billing is done incrementally throughout the project when using construction progress billing. It’s more complicated than the other two types, but it can be beneficial. It allows for the builder to get paid at regular intervals which creates less out-of-pocket costs throughout. With progress billing, the contractor needs to create an agreement with the client for points of payment during the project. This is favored by clients because it incentivizes each milestone to be hit in a timely fashion.
What is the difference between invoicing and billing?
The main difference between invoicing and billing is which party is looking at the document. An invoice is what the contractor sees and sends to the client to be paid. When the client receives the document, it would be considered a bill to them because they’re required to pay it.
What is progress billing in construction?
Progress billing is when the payments are done at certain points throughout the project. The contractor and client will agree on certain points in the project where they will pay. So once certain milestones are hit, the client will pay what they owe at that point.
To charge for a construction project, you’ll send an invoice to the client with the amount they’re required to pay. The document can list each item or service that the client is paying for. Once they receive the invoice, they can pay the builder the owed amount.
About The Author
Madyson Alger
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Construction project management typically includes complicated tasks that can shift wildly, depending on the work at hand, and it requires strong skills in communication, deep knowledge of the building process, and the ability to problem-solve. Construction project management is a complex field, requiring knowledge in many different areas like ...
Establishing a problem solving framework for your construction project Traditional project management is generally the framework that construction professionals follow to organize and complete their construction project. Within that framework, milestones need to be set as a way of evaluating quality and progress of the construction project.
Construction problems can be generally founded in three domains; people, organization and process. Complexity plays a part in construction problems as does the unique nature of...
The Solving Approach This approach focuses on observing a crisis as it is happening and coming up with a unique solution to solve it. It also utilizes creating a workplace environment that prioritizes minimizing unnecessary risk, even if that is in opposition to potential growth. The Proactive Approach
Steps to solving construction project problems Problem-solving is a learned skill that can be developed over time. Find below some steps you can deploy to develop your problem-solving skills so as to become a successful project manager.
In conclusion, resolving construction project constraints is a critical aspect of construction project management. Project managers can use several strategies, such as re-evaluating the project plan, collaborative problem-solving, and effective communication, to overcome constraints and ensure the successful completion of construction projects.
Problem Solving in Projects—Appraisal of the Situation Information Technology has had a tremendous impact, not only on the business world, but also on how we go about solving problems. Consider the following three factors: Equipment, Components and Machinery Can no Longer be Examined in Isolation
Problems can waste a ton of time and money, even causing your project to be delayed as a result! The easier you and your team can work together to solve an issue, the more time and money you'll save. Effectively problem-solving can ensure that your scheduled completion date and budget have the lowest possible odds of needing to be changed.
7 Steps to Solving Construction Industry Problems Get clear on the issues that created the problem. What really needs correcting here? Get clear on everyone's interests. This will help prioritise the resolution. List all possible solutions. Get creative and brainstorm every conceivable outcome. Evaluate the possible solutions.
DEVELOPING PROBLEM SOLVERS IN CONSTRUCTION To solve the problems highlighted above, however, we need to primarily focus our efforts on developing the problem-solving skills of everyone, from top executives to foremen, from tradesmen on site to employees working in supporting functions.
This process is called problem solving. In order to work through the problem analysis, solution selection process most efficiently, it's useful to use a problem solving process. We call our five-stage process DAS/IR. These five stages are broken down into two separate projects: DAS and IR.
Root cause analysis is used when there are problems with a project, or any aspect of a business, especially those that negatively impact the client. This could range from a client complaining about some aspect of the project to teams being blocked and deliverables falling behind schedule. Of course, problems in a project aren't the result of ...
Here are a few tips for resolving conflicts on the construction site. Don't Ignore the Conflict You can't just bury your head in the sand and hope the conflict resolves itself. Tackling the conflict head-on and working to a quick and amicable resolution to ensure the project stays on track.
Financing designed for the supply chain in the construction industry allows contractors to keep moving forward and secure their place in line with an order before they receive a single check. 4. Improve payment transparency. If there's one thing that can bring a thriving project to a halt, it's payment problems.
Here are just six typical challenges facing a construction project, as well as some proactive strategies to curb them. 1. Inadequate Risk Management Often, project managers put safeguards in place for long-term risk. Short-term issues, however, often are left out of the equation.
Project managers in all levels of the company—doing all kinds of projects, both internal and client facing—encounter issues on a daily basis. As much as we try to capture all risks and prepare for them, there will always be an unexpected problem that no one could have predicted. These unknown unknowns can be anything from team members going ...
PROBLEM: Subcontractors are working off an old set of blueprints. This is a problem for your contractor, and, unfortunately, it will delay your schedule. SOLUTION: Make sure subcontractors are working with the most recent plans. Date your plans. This eliminates any confusion about which set of plans is current.
The construction project management practice's decision making and procurement processes do not have the capacity for the current speed and scale demand. Deficient Communication The lack of a central data system results to delayed and inconsistent sharing of information and reports.
Ultimately, the success of your construction company in 2023 depends on several factors. The most important are honing a well-crafted strategy, finding innovative solutions to problems, and investing adequately in necessary resources. Lastly, customer service should be a priority—as it's one of the critical elements of keeping your business ...
Table 1. Differences between problem solving and exercise solving. Problem Solving Exercise Solving 1. Involves a process used to obtain a best answer to an unknown, subject to some constraints. Involves a process to obtain the one and only right answer for the data given. 2. The situation is ill defined. There is no problem statement
How to solve construction billing issues in 2023. The construction industry is notorious for late payments, endless paperwork and poor communication. Since construction projects take place over an extended period of time, it's important to keep your processes streamlined, and improving your billing process can be the best place to start.
Problem Solving Resources Compiled By: Vi Maeers and David Bale, Faculty of Education, University of Regina The following list is one that has been used and found most helpful in the study of problem solving. An * denotes those resources with many actual problem examples. Baker, D., Semple, C., & Stead, T. (1990). How Big is the Moon .
perceived, (b) allowable problem-solving strategies as well as the parameters of solutions, and (c) the degree to which problem-solving strategies resolve the perceived stressful events. Greater attention to the cultural context of applied problem solving and coping will expand existing theoreti-cal models and greatly enhance the empirically ...