Why The Construction Industry Needs To Embrace Measurement

The construction industry is at a turning point. A recent government commission found that costs are on the rise but productivity growth is steadily slowing. To turn this around and lift productivity, it’s essential to embrace the use of data and tracking technologies. Historically the industry has been considered resistant to this kind of reporting. But without data on the inefficiencies that are slowing down your business, productivity will only continue to fall.  Measuring past performance will also determine your success in the current climate. David Chandler, Director of Construction Resolution Services, predicts that 30 per cent of existing construction businesses won’t survive the next ten years, due to a state of ‘unquantifiable dysfunction’ in the industry. As he says: “The reality is that unless you can measure it, you can’t meaningfully change anything.”

How measurement will boost performance

Measuring your business output allows you to make decisions based on important metrics like asset utilisation and driver performance, rather than working off assumptions. Measurement will also help you to significantly drive down costs. The cost of labour is closely related to how well your projects are planned and how cost-effectively resources are allocated. Armed with the right data, you can plan better for future projects by predicting risk, identifying potential issues and pinpointing inefficient use of people and equipment. “There is no place in a modern construction industry for any player not to be focused on how construction can be performed smarter, better, safer, faster and as a result cheaper.”

• David Chandler, Director, Construction Resolution Services

With accurate, real-time data on the number of people on a worksite or the duration of a project, you can get a full picture of your output compared to your results. From this data you can create a set of KPIs that will help you to improve future efforts. These quantifiable performance benchmarks will give you a significant competitive advantage by streamlining your operations, boosting productivity and minimising costs.

What you should be measuring

So which metrics are the most useful? The beauty of telematics is that it’s completely customisable so you can track the goals and challenges that matter most to your business. However, to get a full picture of productivity and identify areas of improvement, here are some key metrics to start with. These will help you understand where you might be losing profits or chewing through unnecessary time.

• Project duration: Do you typically deliver projects on time, or are you consistently starting or finishing late? If you’re often missing the mark, you can locate key inefficiencies that might be contributing. If not, having the data to prove your high performance levels will assist when bidding on new projects.

• Workforce tracking: How many people are on site every day? Are all of these people being used in the most effective way? Understanding exactly who is on site at any given time will help you allocate resources more effectively.

• Injuries: Safety is a paramount concern. But rather than simply measuring how many injuries have occurred, track the behaviours that might be contributing to them. For example, accurate data on the number of drivers speeding on-site may be a catalyst for you to put measures in place that enforce speed limits and reduce related injuries.

• Billable hours: To find out if time is being used most effectively, it’s not enough to know the date a project started and finished. Inefficient use of time might seem inconsequential but can have major impacts. For example, if the distance to travel from site to a break area is an extra 10 minutes, this adds up to 20 minutes, per machine, each day. Multiply that by 30 machines and it will add up to hundreds of thousands of dollars in wasted time over the duration of a project.

• Project costs: Are you consistently going over budget? Track exactly how much every asset, driver and vehicle is costing you, so you can cut back on unnecessary spend. By breaking down your costs –down to the exact cost of moving a cubic metre of dirt – you’ll be able to plan better for future projects.

Summary

With the ability to measure everything that happens within your business, you can dramatically improve productivity. Telematics allows you to measure the metrics that have the most value to your organisation, from movement of materials and fuel consumption to exactly when vehicles arrive and depart from site. Isolating areas of wasted time or unnecessary costs can have far-reaching benefits beyond efficiency. In particular, the right data can prove your performance levels, helping you to win future projects and demonstrate value to existing customers. Download our ebook "Getting The Most From Your Mixed Construction Fleet".