Despite decades of progress, construction productivity has barely improved since the 90’s. In contrast, industries like manufacturing have made massive gains – not just through tools, but through smarter processes and an unwavering focus on quality.
At an ACA Conference I attended, this gap was front and centre. While listening to talks on productivity and digital innovation, I found myself wondering: Are we asking the wrong questions? Are we putting too much faith in technology alone, and ignoring the fundamental shift that transformed manufacturing over a century ago?
In this article, I’ll explore lessons from history, from Ford’s production lines to the Empire State Building, and why the real productivity breakthrough for construction may lie in an overlooked KPI: quality.
Construction Productivity: Still Stuck in the Past
A November 2022 report by the Australian Constructors Association (ACA), titled DISRUPT OR DIE: Transforming Australia’s Construction Industry, highlighted that construction productivity in 2022 is lower than it was in 1990. The ACA estimates that “Improvements to the industry’s productivity performance could save Australia $47 billion annually.”
One of the key problems identified is a “myopic focus on achieving value by selecting the lowest price at the tender box” — which has led to a race to the bottom.
The ACA makes 10 recommendations to improve construction productivity. In summary:
- Shift from lowest cost to lowest life cycle cost
- Reduce tendering costs and unnecessary risk shifting
- Reduce work hours for staff
- Increase uptake of technology
The ACA and others keep pointing to the poor uptake of technology as a key factor preventing better productivity.
A Lesson From the Empire State Building
While attending the ACA Annual Conference in Melbourne, the topic of construction productivity, or the lack of it, dominated discussion. As I listened, I found my mind drifting, and I decided to Google something out of curiosity: the Empire State Building.
Completed in New York City in 1931, the 102-storey skyscraper held the record as the tallest building in the world until 1971. It was designed in just 200 days (a little over 6 months) and constructed in only 410 days – less than 14 months.
Compare that to today, where we’d be lucky to get planning approval in 400 days, let alone finish construction. And this was accomplished without modern technology. So perhaps our obsession with tools is misplaced – or at least incomplete.
Technology: Not the Only Answer
In another recent online presentation on digital twins, a speaker made a comment that stuck with me:
“New technology should be faster, cheaper, and better, not cost $4 million more.”
It reinforced the idea that technology isn’t the bottleneck. It’s how we use it. Productivity gains don’t come from software alone – they come from the people, processes, and decisions behind it.
The Manufacturing Benchmark
The poor levels of productivity in the construction sector are often compared to the major improvements in the manufacturing sector. So again, I turned to history.
In his book Exactly: How Precision Engineers Created the Modern World, author Simon Winchester details two important contributions from Henry Ford.
- Redesigning the car: Ford simplified design, reduced weight, and improved reliability. He made cars faster, cheaper, and better.
- Precision manufacturing: Contrary to popular belief, Ford didn’t invent the production line. That already existed in canneries and other industries. What Ford introduced was unprecedented precision and quality control. Parts no longer needed hand-fitting with a file. Whether it was the first car or the millionth, the components fit perfectly.
That commitment to quality transformed manufacturing and drove productivity forward.
The Missing KPI: Quality
So how does this help the building industry?
Currently, our key performance indicators (KPIs) focus on price (cheaper) and time (faster). Some advocate for life cycle costing, but that’s still ultimately tied to price and time, and let’s face it, most evaluators won’t be around in 30 years to verify the outcome.
In manufacturing, quality is the defining KPI. Without it, products fail, and so do the companies behind them. The NSW Building Commissioner has started to push for this shift, introducing quality ratings into the industry. And if we follow Ford’s example, higher quality can improve cost and time outcomes.
Zero Defects: A KPI With Value
So how do we implement the Quality KPI in the building sector?
First, we must stop thinking that technology alone will drive productivity. Tools help, but only when used effectively. That requires changing outdated business processes. If you apply a new tool to an inefficient workflow, the result is usually more data, and more frustration, without real value.
Second, we must start measuring and managing quality. One way to do this is through a Zero Defects mindset.
In manufacturing, every defect is treated as an opportunity to improve. In construction, it’s often just something to manage and close out.
Take this example from a real project:
- Total defects/snags: 27,105
- 77% = poor workmanship
- 16% = incomplete work
- Remainder = poor design and rework
Assume each defect takes:
- 1 hour to record
- 1 hour to close
- 2 hours to fix
That’s approximately 100,000 hours of lost productivity.
At $150/hour, that equates to up to $15 million in unnecessary cost.
This data was captured using OmTrak’s Site Works App. Siteworks uses data already entered during the project, such as defect reporting, and repurposes it for multiple outputs like building manuals, without extra input costs.
But the real value is unlocked when teams change how they use the data. If the project team shifted from simply administering defects to learning from them to improve construction productivity through quality, they could save up to 100,000 hours and $15 million on one project alone.
The Path Forward
The building sector doesn’t need more tools; it needs better use of the ones we already have.
The missing link isn’t just technology; it’s a fundamental shift in mindset. We need to value quality as much as we do cost and time. We need to treat defects not as a paperwork exercise but as opportunities to improve. And we need to expect more from our processes, not just our software.
If you’d like to learn how to use technology to actually improve construction productivity and implement the missing KPI of quality, contact the team at OmTrak.
About the Author
Stuart Smith is the founder of WebFM and the driving force behind OmTrak. With over three decades of experience in construction, facility management, and digital innovation, Stuart is a strong advocate for smarter project delivery and quality-focused outcomes.