The construction sector can be a little…old fashioned. Visiting a worksite sometimes feels like a blast from the past. The new generation arrives at work, puts away the smartphone that’s normally glued to their hand, and they’re instantly transported to a world where paper still rules. And on many sites, plant and tools are sitting idle, losing money through depreciation just because nobody can be found to rent them.
The infamous McKinsey report in 2017 was a fairly clear ‘shot across the bow’ for our entire sector, showing just how badly productivity has lagged compared to other industries. The report says that “the industry loses a huge amount of value because of its low labor productivity, a shortcoming that has dogged the industry—whatever the location or stage of economic development—for decades.”
According to McKinsey, construction has shown a productivity growth of only 1 percent per year over the past two decades, compared with 2.8 percent per year for the total economy and 3.6 percent in manufacturing.
What does that mean for us?
First, it means that for companies willing to look at their processes and explore new technologies, there are easy savings to be made, everywhere you look. The report urges the entire industry to “infuse digital technology’ into our construction processes, which is a good place to start.
Just as one example we know of: site safety observation reports were submitted cards , which sat in boxes for weeks until they were collected, spread out across a big desk, manually sorted into categories and then punched into a spreadsheet, one row at a time.
Imagine the insights and potential improvements in site safety just sitting there in those boxes, or on that spreadsheet on that single computer. A simple, multi-user, paperless, cloud-based way of managing site ‘paperwork’ makes so much more sense. The data is safe, painless to handle and easy to analyse for insights and cost-saving opportunities.
Digital technologies like the Shareplant Rental Marketplace—the first ‘sharing economy’ service in the UK that allows you to list your idle plant and tools and rent them directly to users—bring big savings too. Renting your idle plant is a simple, painless way to offset depreciation and create new revenue streams.
The benefits for your bottom line are right there for the taking.
But it goes further than that…
Big projects like Crossrail, Hinkley Point C, High Speed 2, the urgent need for housing stock, the revitalisation of city centres: these projects are costly to the taxpayer and the private sector, and they’re only getting more expensive. As one example: BBC News estimates that the HS2 project, originally supposed to cost £33bn, is now looking like it will overrun the current £88bn estimate. The cost is going to be a huge factor in how and when the North reaps the benefits of the scheme.
Construction is only one part of the equation, but every marginal cost and efficiency gain we achieve as a sector tips the scales a little more in favour of a house or office complex being built, a railway being delivered on-time and on-budget, an investor deciding to back a vital infrastructure project.
It’s time for our whole industry to look at how we work and to start benefiting from the same revolutionary gains in productivity that other sectors have thrived on for decades.
Get in touch with us to book a free one-on-one consultation to see how our Rental Marketplace could be making savings and bringing in new revenue for you.