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Construction
Drivers for construction productivity
productivity
Jeff Seadon
Department of Built Environment Engineering,
Auckland University of Technology, Auckland, New Zealand, and
945
John E. Tookey Received 27 May 2016
School of Engineering, Computer and Mathematical Sciences, Revised 23 May 2017
14 November 2018
Auckland University of Technology, Auckland, New Zealand Accepted 24 November 2018

Abstract
Purpose – The New Zealand construction sector is similar to many other countries with a few large
companies and many small and micro enterprises. It seeks to achieve a 20 per cent increase in productivity by
2020 which requires a step change in how the sector operates and buy-in from key stakeholders. The purpose
of this paper is to provide a set of levers to improve productivity in the construction sector and develop an
implementation schedule.
Design/methodology/approach – This paper adopts a systems approach taking account of the nature of
the building sector and the whole life cycle of a building from design to end-of-life. Information gained from
the post-construction phases informs the pre-construction and construction phases.
Findings – Productivity is an integrated model whereby increases in process efficiency are executed
with quality materials and workmanship, in a manner that is affordable for both the client and
contractor and sustainable over time. A series of interviews and workshops produced 10 nodal points
and 19 crucial levers which were prioritised for implementation. Additionally, indicators were developed to
monitor progress over time and provide information for further corrective action to the system.
Practical implications – The effect of using a few targeted levers in unison provided significantly
more gains than individual applications. Modelling real world responses to process stimuli outlined in this
paper is extremely valuable. This provided the opportunity for key construction stakeholders to estimate
the effects of decision making during a project.
Originality/value – Previous studies identified factors affecting productivity. Piecemeal approaches
to improve productivity have resulted in systemic failure. A whole of life approach provides valuable
insights to improve productivity in the construction and pre-construction phases which have a flow-on effect
through the life cycle. Importantly, this research proposes drivers, an implementation scheme and indicators
that provide leverage on nodal points to improve productivity.
Keywords Buildings, New Zealand, Construction, Life cycle management, Optimization techniques,
System analysis
Paper type Research paper

Introduction
Construction productivity is a worldwide issue as low productivity adds cost to a building
project without adding value. Many studies (examples in Table I) provide lists of factors
derived from surveys but this paper focusses on identifying a pathway to reduce
productivity losses. The objective of this paper is to determine the crucial levers in the life
cycle of a building and an implementation strategy to improve the productivity of the
New Zealand (NZ) construction industry.
Since the profile of the NZ construction industry is similar to other, larger countries,
results from this project are applicable in other jurisdictions. The NZ construction sector
profile comprises predominantly micro-companies with a few large companies. In 2008, of
NZ’s 51,000 construction companies, 91 per cent were micro-companies ( fewer than five
Engineering, Construction and
employees) and less than 2 per cent had more than 20 employees (Statistics New Zealand, Architectural Management
2013). The profile is similar to, for example, Canada (60 per cent micro-companies and Vol. 26 No. 6, 2019
pp. 945-961
1 per cent greater than 100 employees) (Industry Canada, 2013), the USA (70 and 1 per cent, © Emerald Publishing Limited
0969-9988
respectively) (USCB, 2013) and Great Britain (83 and 1 per cent, respectively) (ONS, 2013). DOI 10.1108/ECAM-05-2016-0127
ECAM Number of
26,6 studied Major factors ranked in descending order based on their
Locality Reference factors relative importance

Australia Loosemore 9 Relationship management; tender practices; project

(2014) documentation and control; project management and
supervision; planning, scheduling and coordination; low
946 innovation; burnout; administrative burden; industrial
relations
Canada Moselhi and 9 Temperature; work type; floor level; wind speed; labour per
Khan (2012) cent; precipitation; gang size; humidity; work method
Chile Ballesteros- 6 Activity planning and coordination; work methodology;
Pérez et al. (2015) lack of supervision; material supply; weather conditions;
criteria for lost days;
Egypt El-Gohary and 30 Labourer experience and skill; incentive programs; availability
Aziz (2014) of materials and ease of handling; leadership and competency
of construction management; competency of labour
supervision; construction technology; labour operating system
planning, work flow, and site congestion; constructability;
clarity of instructions and information exchange
Indonesia Kaming et al. 11 Lack of materials; rework; absenteeism of operatives; lack
(1997) of suitable tools and equipment; crew interference
Kuwait Jarkas and Bitar 45 Clarity of technical specifications; extent of variation/
(2012) change orders during execution; coordination level among
various design disciplines; lack of labour supervision;
proportion of work subcontracted
Malaysia Kadir et al. 50 Material shortage at site; non-payment to suppliers, causing
(2005) the stoppage of material delivery to site; change orders by
consultants; late issuance of construction drawings by
consultants; incapability of the contractors’ site
management to organise site activities
NZ Durdyev and 56 Rework; level of skill and experience of the workforce;
Mbachu (2011) adequacy of method of construction; buildability issues;
inadequate supervision and coordination; statutory
compliance; unforeseen events; wider external dynamics
Palestine Ibrahim (2013) 31 Rework; lack of cooperation and communication between
construction parties; financial status of the owner; lack of
labour experience; lack of materials; lack of equipment;
misuse of time schedule; out of sequence work; poor site
management by contractor
Saudi Al Sehaimi et al. 9 Quality of work practice; enhancement of managerial
Arabia (2014) practice; knowledge expansion; collaborative planning;
information accessibility
Singapore Lim and Alum 17 Difficulty in recruitment supervisors; difficulty in recruiting
(1995) workers; high rate of labour turnover; absenteeism at work
site; communication problems with foreign workers;
inclement weather that requires work stoppage for one
day or more
South-West Alazzaz and 5 Resource development; worker involvement, process
Asia Whyte (2015) improvement; employee turnover; operational management
Uganda Alinaitwe et al. 36 Incompetent supervisors; lack of skills among the workers;
(2007) rework; lack of tools/equipment; poor construction
methods; poor communication; stoppages because of
work being rejected by consultants; political insecurity;
tools/equipment breakdown; harsh weather conditions
Table I.
International
productivity factors (continued )
 Number of
Construction
studied Major factors ranked in descending order based on their productivity
Locality Reference factors relative importance

UK Naoum (2016) 50 Ineffective project planning; delay caused by design error

and variation orders; communication system; work
environment; constraints on a worker’s performance;
design and buildability-related issues; management/ 947
leadership style; procurement method; lack of integration of
the management information system for the project;
management of material on site Table I.

The NZ construction sector generates 4 per cent of the national gross domestic product and
represents 8 per cent of those employed with a further 2 per cent in construction-related
services, making it the fifth largest sector in the economy (PWC, 2011). This is comparable
to, for example, the USA at 6 per cent (Barrett, 2007) and the UK at 6.5 per cent (Rhodes,
2015). Hence, changes in the productivity of the construction sector can significantly
influence the country’s economy. Instituting productivity change in the sector is
complicated by the complexity of the building sector which includes multiple stakeholders
at different levels, conflicts over desired outcomes, uncertainty of the effects of
actions, unreliable data, numerous possible intervention points and a great resistance to
change (DBH, 2009).
Construction productivity has been extensively studied in many different settings
worldwide with an aim to drive building costs down while improving quality. Literature
contains examples that identify factors that contribute to low construction productivity.
A summary of selected cases from around the world is shown in Table I.
The top issue emerging from Table I is management capability, identified in all the
papers. Following that is the skill level of the workforce identified by 71 per cent of the
papers. The lack of both these proficiencies indicates that skill development is lowly rated in
the construction industry which leads to many of the other issues identified by authors
in Table I. The next most identified factors (57 per cent of papers) are appropriate
designs and quality management systems (QMS) which are also worldwide productivity
issues. These two issues address the quality of the design and building processes. Quality
issues can be partly alleviated by incorporation of buffers and work planning (identified
by 43 per cent of papers) where appropriate time is integrated into the construction process
to allow for unexpected events that may disrupt the build process. Completing the top nine
factors are the inspection process (identified by 29 per cent), information accessibility and
health and safety (21 per cent). Other productivity factors were identified by less than
20 per cent of the papers. None of the nine above factors had a regional or local bias and
hence are identified as worldwide issues for productivity.
While identification of factors affecting productivity is an important first step,
effecting sectoral change requires an understanding of how the sector operates. The
conventional view of construction as a sequential set of processes leads to difficulties
including constraints in the post-design phase unaccounted for in the design phase,
segmented project control leading to little feedback for onsite specialists and suboptimal
solutions due to lack of innovation and improvement (Koskela, 1992). The results of the
lack of understanding how the sector operates are exemplified by a previous attempt in
NZ to increase productivity, decrease cost, improve quality and increase innovation in the
construction sector in the 1990s which ended in systemic failure. Construction sector
reforms disregarded wider effects of changes on the construction system. Seemingly
disparate decisions accumulated, producing a combined effect resulting in system failure
ECAM and a repair cost of at least $11bn (PWC, 2009). Examples of those disparate decisions
26,6 included: the cessation of import controls opening the introduction of new materials that
were not understood by the building industry (Easton, 2011); heavy reliance on market
solutions being superior to government control and regulation (Howden-Chapman et al.,
2011); and the sale of the government’s major infrastructure construction department, the
Ministry of Works, in 1988 resulting in termination of the social goal of apprenticeship
948 training followed by severe reduction in support for apprentice training across all sectors
by government (Dyer, 2012).
An approach that takes account of the nature of the building sector to achieve a positive
step change requires a different perspective than has been applied previously in NZ to effect
a different result. A systems approach is just such a method. Systems approaches have been
used internationally in construction to improve productivity. Examples of these include the
role of ergonomics in construction providing an ergonomics framework for the refinement of
tools, equipment and processes (Vedder and Carey, 2005) and examining the
interdependencies which exist in supply chains in construction projects. Bankvall et al.
(2010) found that the emphasis on coordination of sequential interdependence within
individual supply chains did not fit with the complex interdependencies in and among
supply chains in construction projects. The effects of the interdependencies challenge
traditional supply chain management recommendations, such as moving activities from the
site to a factory.
A systems approach was used in a retrospective project study by Saeed and
Brooke (1996) to explore performance enhancement in construction organisations.
They found that the contract design did not account for the complexity of internal and
external information relationships. The complexity of relationships was investigated by
Love et al. (2002) by considering the effects of project management changes on a
residential apartment block. The construction process ran 12 per cent overtime, was
10 per cent over budget, of which 3 per cent was due to rework and 7 per cent due to
variations. Analysis demonstrated that the higher the number of parallel activities,
the slower the progress and the greater the cross relation between parallel activities, the
higher the modification rate and number of delays due to variations and rework.
Furthermore, an inadequate design process had significant subsequent effects including:
purchasers wanting changes during construction resulting in variations, rework
and significant non-productive time; sections of the work did not comply with the
building code; and slow information provision and the poor quality documentation
delayed materials procurement resulting in staff working overtime and employment of
additional resources (Love et al., 2002).
While systems approaches can be utilised in business-as-usual situations, they can also
be applied when seeking systemic innovations which require relationships between
organisations and require a coordinated change in processes. Lindgren (2016) cited
Building Information Modelling (BIM) and industrialised housing fitting this category.
Fulford and Standing (2014) surmised that: the strength of relationships in the
construction industry do not encourage trust and shared values; design processes need
both value engineering and life cycle perspectives; standardisation is vital; and project
management activities need to add value.
Most published case studies using systems approaches concentrated on the construction
phase of the life cycle, as shown above. However, the ensuing post-construction phases
provide significant productivity information that is relevant for the earlier phases, which is
a significant gap in the literature. This paper adopts a whole of life approach and
the following sections in this paper outline the research methods and provide results on the
major nodes and critical intervention levers to effect productivity improvements. The paper
then considers priorities for implementation and progress indicators.
Research methods Construction
The overall purpose of the project was to determine potential productivity increase leverage productivity
points and an implementation sequence through evaluation of the life cycle of buildings as
shown in Figure 1.
A full life cycle was chosen to incorporate valuable information from the post-construction
phase to feedback to productivity improvements during the construction phase. The system
boundary was defined after clarification of the factors having a significant impact on 949
productivity. External to the system under consideration were horizontal construction
(infrastructure) and urban environments (buildings and their surroundings). The key issues
derived from the Research Action Plan (Building and Construction Productivity Partnership,
2012) were to understand what productivity meant within the sector and identify the critical
intervention points across the life cycle of a building to maximise productivity gains,
including a productivity gain of 20 per cent by 2020.
A soft systems dynamics (SSD) approach was used since it is useful in situations where
there is agreement on the problem (in this case a step change in productivity), time
constraints and feedback loops and leverage points that most participants can agree on.
SSD combines two widely used systems methodologies – systems dynamics and soft
systems methodology (SSM). An SSD approach not only helps the decision makers to make
sense of a problematical situation, but it also models the real world under the feedback
paradigm to enable intervention and implementation of systemically desirable and
culturally feasible changes in the real world. SSD is based on the work of researchers
including: Vennix (1999), Vennix et al. (1996), Anderson and Richardson (1997), Rodriguez-
Ulloa and Paucar-Caceres (2005).
A SSD approach was adopted in preference to system dynamics due to the latter being
very costly, time consuming and difficult to action. The SSD approach is more useful than
a SSM study, because it is possible to identify feedback loops and leverage points which
most (if not all) stakeholders would agree need to be the focus of action. SSM is better
when people are in conflict over what the problem is and what objectives should be
pursued; SSD is better when there is agreement on the problem – in this case the need for a
step change in productivity. The limitation of the process was that the participants’
experiences provided a snapshot that could be different under different circumstances.
This limitation was partly mitigated by having such a diverse set of lenses through which
participants observed the industry.
Overall, 178 people were involved in interviews and/or workshops which included architects
and other designers (36 people), builders (34), industry associations (32), material suppliers (30),
consultants (21), local government (12), central government (9) and trades people (4).

Design
Construction

Manufacture Maintenance

Use
Extraction Reuse
Recycle

Renovation

Figure 1.
Disposal Deconstruction A basic life cycle
of a building
Source: Adapted from SETAC (1991)
ECAM The study began by looking at the situation in an unstructured way derived
26,6 from a series of 41 interviews of key stakeholders in the construction sector drawn
from across the spectrum above. The interviewees had, on average, 16 years of experience, with
a range from 3 to over 30 years. From those initial interviews a set of rich pictures
were developed that attempted to view the life cycle of the construction sector from a
productivity perspective.
950 Root definitions that described the system were developed and from that a series of
causal loop diagrams were produced. The validation of these diagrams was tested through
workshopping in different regions of New Zealand with a wider set of industry stakeholders
and adjustments made as needed.
Nodes of influence and potential leverage points were identified from the completed set
of CLDs. These modes and leverage points were presented to another set of workshops
and the participants were asked to identify which leverage points were culturally feasible
and systemically desirable changes. A model of the “solving situation” was then
developed and submitted to the stakeholders for final comment. This included the
transformation processes needed to make improvements of the problematic situation.
The transformation processes provided an action plan that included priorities for
implementation and change indicators. The results presented in this paper arose from
general agreement by stakeholders from across the spectrum of stakeholders and were not
attributable to a specific sector. A benefit of the approach taken was that it enabled
various stakeholders to gain an understanding of the perspectives of other actors in the
construction life cycle.

Results
Productivity
One of the fundamental issues to determine is the definition of productivity. The
Organisation for Economic Co-operation and Development (OECD, 2001) defined
productivity as the ratio of the quantity of outputs to the inputs. The ratios are
expressed in terms of labour, capital, multi-factor (capital and labour) and total factor
(capital, labour, management practices and work environments). Increasing complexity
increases the difficulty of obtaining reliable data (OECD, 2001). The Building and
Construction Productivity Partnership additionally defined productivity in terms of whole
of life performance, skills development and technology and innovation change (Kane, 2012).
The participants’ understanding of the definition of productivity was of critical
importance. Participants described 90 concepts which were amalgamated into four
categories as summarised in Table II.
Consideration of the four categories as unrelated or overlapping entities results in a
weak, competitive productivity model destined to failure. This was evidenced in NZ by
reforms in 1990 focusing on process resulting in some affordability benefits. Lack of
consideration of the other two categories resulted in systemic collapse producing low
quality, unsustainable buildings (Hunn et al., 2002).

Category Examples of concepts

Process Inputs; outputs; labour; timelines; supply systems; centralisation

Quality Training; needs; effectiveness; value; workmanship; materials
Affordability Efficiency; income ( for the customer and the building team); living well
Table II. ( for the customer and the building team)
Productivity Sustainability Whole of life; lean manufacturing; lean construction; waste minimisation;
categories feedback systems; boom-bust absence
Long-term productivity improvement needs to be framed in terms of all categories shown in Construction
Table II. An integrated approach ensures that productivity increases in processes are productivity
executed with quality materials and workmanship, in a manner that is affordable for both
the client and contractor, and sustainable for a nominated time (e.g. 50 years in NZ as
determined in the Building Code, unless specified). An example of a strong productivity
concept diagram is shown in Figure 2.
951
Nodal points and intervention levers
Consideration of the causal loops derived from participant interviews generated a set of
nodal points (dark grey) that the causal loops coalesced around and critical intervention
levers (light grey) that participants identified as the most crucial to effect change, as shown
in Figure 3. For clarity, Figure 3 only shows the connections between nodal points and
critical levers. Each of the nodal points and levers has a series of interactions that also affect
productivity, but to a lesser extent.

Sustainability

Affordability

Quality

Processes

Figure 2.
A strong
productivity model
Source: Adapted from Lowe (1998)

Buffers BIM

Literacy and Management

Building Activity Standardisation
Numeracy Capability

Customer
Liability
Education Customer
Education
Design, Building
Quality Work Planning
and Trade Skills Standardisation Indoor
Management Life Cycle
Environmental Maintenance
Systems Impacts
Quality

Alterative Life Cycle

Financial Impacts
Products

Life Cycle Appropriate Operational Operational Modularisation

Financial Risk Build Cost Standardisation Adaptability
Impacts Building Design Efficiency

Refurbishment Operational
Intervals Adaptability

Customer Information
BIM Accessibility
Education

Customer

Figure 3.
Liability
Affordability

BCA Validation
Nodal points and
Alterative
Financial
Customer
Quality
Management
Health and
Maintenance
intervention levers
Education Safety
Products Systems
ECAM Discussion
26,6 As shown in Figure 3, the components of a construction system are interrelated with each
part influencing the others. A sustainable productivity increase requires a package of
interventions that build to collectively create more impetus than would have been
achievable by using each intervention singly. Within Figure 3, the flow broadly reflects the
life cycle of a building (see Figure 1). Figure 3 can be divided into three aspects: people and
952 professional (design, building and trade skills and work planning); financial ( financial risk,
customer affordability, liability and build cost); and life cycle quality (standardisation,
appropriate design, operational efficiency and operational adaptability). These categories
are considered below.

People and professional

The people and professional nodes and drivers focus particularly around skills.
Participants identified design, building and trade skills as fundamental to improving
productivity. Skills development in this context includes the trades, professions and
management which was identified as a worldwide issue in the literature (see Table I).
As Figure 3 shows, participants identified building activity, literacy and numeracy, and
management capability as intervention levers to drive skills development. Retention in the
industry has long been an issue with boom-bust cycles, so by providing information
through building activity reports, sector employees can provide more certainty on job
prospects and hence their investment in training. Participants identified the lack of
literacy and numeracy skills (even among professionals) as a significant barrier to
increasing productivity (this was also identified by the Malaysian study; Kadir et al., 2005)
and hence they provided a significant driver for skill development. As well as skills at the
trade level, participants identified management capability as a significant driver, which
was also identified as a major factor in the literature.
Management requires tools to enable effective work. Work planning is primarily a people
management activity and is fundamental to working effectively. Lack of work planning was
identified in 43 per cent of recent literature (Table I) as inhibiting productivity. Workshop
participants identified three drivers to improve work planning: BIM, buffers and
standardisation. Providing an integrated platform like BIM enables efficient work planning
and the reduction of waste caused by, for example, clash detection. The absence of BIM as a
factor in Table I points to it being a driver to improve productivity rather than a cause of
loss. The second driver, buffers, make provision for time allowances, extra resources and
materials or making-do with what is available and diminishes stress levels, thus allowing
more efficient work planning. Inadequate buffer allowances were identified worldwide in
Table I in 43 per cent of the papers. The third driver for work planning is standardisation,
which is both a node and a lever. By standardising design and work practices productivity
increases and work planning is made easier through standardised tasks taking similar time
between building sites. Standardisation was noted by participants in this project as a strong
productivity driver.

Financial
The four financial aspects: financial risk; customer affordability; liability; and build cost,
significantly influence productivity. Financial risk elements such as boom-bust cycles and a
client’s ability to service the mortgage through interest rates changes were identified by
participants as influences on productivity. Financial risk was also found to be an issue in
Australia (Loosemore, 2014). Reduction of financial risk can be driven by the provision of
alternative financial products, considering life cycle impacts and refurbishment intervals as
shown in Figure 3. While alternative financial products provide more options for clients, the
other two drivers promote long-term thinking and not just the lowest upfront cost.
Alternative financial products were also mentioned for Malaysia (Kadir et al., 2005) and Construction
Palestine (Ibrahim, 2013). However, life cycle impacts and refurbishment intervals were not productivity
mentioned in other studies. The absence of these two drivers points to a significant
difference in this work from previous studies in that the participants in this project were
thinking in terms of the full life cycle of a building and not just the construction stage as is
generally found in the literature.
Closely aligned to financial risk is customer affordability, a factor that is unique to this 953
study. Drivers for this, as shown in Figure 3, are alternative financial products, customer
education and QMS. The inclusion of alternative financial products here as well as a driver
under financial risk shows an important aspect of this work in that one driver can act on
multiple nodes, enabling an effect across the system that is far greater than that achieved at
just one application point. Customer education is another driver that acts on multiple nodes
(standardisation and appropriate building design (see Figure 3). While customer education
is only mentioned in this study, the third driver, QMS are noted in 57 per cent of the papers
in Table I. QMS has the added impetus of also being a driver for build cost.
Another financial nodal point is liability which provides accountability for actions
taken, also mentioned in the Malaysian study (Kadir et al., 2005). It should be noted that
liability is both a node and a driver ( for build cost) as shown in Figure 3. The prominence
of liability in New Zealand comes from the operation of a “joint and several” liability
regime which dilutes the level of individual responsibility on the work site; calls for a
change to proportionate allocation have been ongoing (e.g. Harris, 2008). Participants
noted three drivers reduce the productivity effects of liability: Building Consent
Authorities’ (BCAs) validation, health and safety, and maintenance. BCAs provide local
government inspection services and inspection was indicated in 29 per cent of the studies
in Table I. Health and safety was remarked on in 21 per cent of other studies while the
current study provided the first mention of maintenance. Once again, maintenance is a
driver in more than one node, also appearing for operational efficiency.
The final financial nodal point is build cost. As can be seen in Figure 3, build cost is affected
by four other nodes, and it, in turn affects two nodes. Hence build cost influences the degree of
standardisation and customer affordability and is influenced by financial risk, design, building
and trade skills, work planning and liability. The centrality of build cost in Figure 3 means that
in itself is not a good discriminator of productivity. Build cost was also observed in Malaysian
(Kadir et al., 2005) and Australian (Loosemore, 2014) studies. Participants observed that
customer education, liability and QMS were productivity drivers for build cost.

Life cycle quality

The final four nodal points (standardisation, appropriate building design, operational efficiency
and operational adaptability) take account of the ongoing repercussions of decisions made at
the design and construction phases. Standardisation was mentioned above as a driver for work
planning. Here, standardisation is both a driver and a node and customer education is an
additional driver. Of the four nodes, only appropriate building design is mentioned in the
literature (57 per cent of papers in Table I). Appropriate building design meets the requirements
of the building code (as a minimum) and the needs of the owners and occupiers throughout the
lifetime of a building. These designs incorporate the influences from the customer, design,
construction and the operational phases. The drivers identified by participants for appropriate
designs are BIM, customer education and information accessibility (see Figure 3).
The interconnectedness of the nodes is demonstrated by BIM also being a driver for work
planning and customer education is also a driver for standardisation, build cost and
customer affordability. The remaining driver, information accessibility, is also reported
from Australia (Hughes and Thorpe, 2014), Malaysia (Kadir et al., 2005) and Saudi Arabia
(Al Sehaimi et al., 2014) as a productivity issue.
ECAM The remaining two nodal points are not covered in the construction productivity
26,6 literature in Table I. Primarily this is due to the most construction-related literature
terminating at the handover stage. However, from Figure 3 it can be seen that the life cycle
impacts and maintenance drivers operate in the use phase nodal points of the building and
connects back to the financial risk and liability nodes at the start of the life cycle.
Operational efficiency determines the productivity effectiveness for a building during
954 use phase. Efficiency incorporates costs of running the building, occupancy levels and the
health and performance of the occupants. As well as life cycle impacts and maintenance,
Figure 3 shows that indoor environmental quality is also a driver for operational efficiency.
Indoor environmental quality (microbial contaminants, particulates, gases, noise, daylight,
temperature and lighting) can reduce operational efficiency by 5–15 per cent (MfE, 2006)
through poor working conditions and health-related absenteeism. Iran (Ghoddousi and
Hosseini, 2012) and the UK (Ogunbiyi et al., 2014) reported indoor environmental quality as a
productivity issue. However, the other driver, maintenance, is only mentioned for
New Zealand. Participants observed that maintenance was not carried out in New Zealand,
which was substantiated by Hindley (2011) who commented that few of the approximately
35,000 houses each year built from the 1930s to the 1950s that needed renovation each year
to maintain condition were overhauled.
The final node, operational adaptability, is the capacity to adjust to meet the
changing needs of building occupiers and owners during the use phase of a building life
cycle. Influences from the design and construction phase, financial drivers and
obsolescence are incorporated within operational adaptability. Participants observed that
operational adaptability is both a node and a lever, hence it appears in both categories.
Of the other two drivers, life cycle impacts have already been mentioned, leaving
modularisation. Modularisation in this paper’s context can mean anything from modules
within rooms (e.g. kitchen cabinets) to prefabricated buildings. Participants noted that, in
NZ, the key to greater modularisation uptake is a “mass bespoke” perspective whereby
the designer/customer personalises a mass-produced product by, for example, assembling
in different configurations. Modularisation was also reported as an issue in Australia
(Loosemore, 2014).

Implementation
A prime motivator for developing nodes and leverage points is to effect change on the
system to increase productivity. Each change produces side effects including that systems
demonstrate inertia to change due to the numerous links between components in the system
(O’Connor and McDermott, 1997). Careful planning coupled with an understanding of the
dynamics of the construction system under study, along with a degree of serendipity,
provides occasions when large changes can be effected with very little effort. The
mechanism to achieve change is through the use of levers.
Levers have differing levels of impact dependent on coverage (e.g. collecting information
has less effect than changing regulations). Recognition of the different types of levers
provides a guide to a hierarchy of order of effectiveness of intervention levers. Meadows
(2009) suggested ten categories to change the effectiveness of the operation of a system.
For this project, the levers suggested by the participants were spread amongst Meadows’
(2009) basal seven categories as shown in Table III.
As can be seen in Table III, the human capabilities (literacy, numeracy and
management) provide the most effective intervention levers. Industry already
self-organises around the human capabilities but, according to participants, this is done
ineffectively. In the promulgated pathway forward, human capabilities drive the
design, building and trade skills, which assist the drive for greater standardisation and
reduced build cost (as shown in Figure 3).
Category Intervention levers Nodal point
Construction
productivity
Self-organisation Literacy and numeracy Design, building and trade skills
Management capability Design, building and trade skills
The rules Standardisation Work planning
Standardisation
New information flows Building information modelling Work planning
Appropriate building design 955
Customer education Customer affordability
Build cost
Standardisation
Appropriate building design
Life cycle impacts Financial risk
Operational efficiency
Operational adaptability
Reinforcing feedback Alternative financial products Financial risk
Customer Affordability
Modularisation Operational adaptability
Operational adaptability Operational adaptability
Balancing feedback Liability Build cost
BCA validation Liability
Health and safety Liability
Indoor environmental quality Operational efficiency
Maintenance Liability
Operational efficiency
Quality management systems Customer affordability
Build cost
Refurbishment intervals Financial risk
Materials stocks and flows Buffers Work planning Table III.
Parameters Building activity Design, Building and trade skills Order of effectiveness
Information accessibility appropriate building design of intervention levers
Sources: Adapted from Meadows (2009) and Seadon (2010) from highest to lowest

Implementing a package of interventions that build together to create more change than
would have been achievable by using each intervention in an unconnected manner is
necessary. A sensible pathway to implementation is to determine implementation priorities
of the levers that will drive the productivity gains going from the left to the right hand side
of Figure 3.

Priorities for implementation

Application of similar logic to the components in Table III with a view to driving
productivity gains in Figure 3 from left to right produces a set of implementation priorities
that stimulate productivity gains throughout the life cycle. Results of the analysis giving the
priorities for implementation with the rationale are shown in Table IV.

Indicators of progress
Measuring and monitoring progress requires indicators. A mixture of short term (1–3 years)
and long-term (3+ years) indicators are summarised in Table V.

Conclusions
The project set out to provide a set of levers to improve productivity in the construction
sector and develop an implementation schedule. Construction productivity is a significant
ECAM Priority Intervention lever Rationale
26,6
1 Improve literacy and Drives design, building and trade skills which drives standardisation and
numeracy build cost
Key to competent practitioners starts with good literacy and numeracy
Increase management Management capability builds on business skills and builds to a
capability development pathway
956 Determine building Building activity provides information about future work stream. While on
activity pipeline its own it is not step-changing, in combination with the other two levers, long
term building activity provides useful information for industry people to
evaluate career opportunities
2 Improve customer Provides a good grounding for the processes at the beginning of the life cycle
education to inform customer affordability, build cost, standardisation and appropriate
building design
Customers become aware of their responsibilities throughout the life cycle
of a building and methods to discharge those responsibilities at the time
of purchase
Enables the customer to engage knowledgeably at the design stage when the
most crucial decisions are made
3 Determine life cycle Provides new information flows to assist customers and builders to consider
impacts long term environmental, social and economic effects of their actions at the
commencement of the life cycle
The cost of maintenance and operations of a building is 5–10 times the
design and construction cost ( John et al., 2004)
Provides significant information for the operational part of the life cycle
Life cycle impacts provide a more comprehensive measure of the real costs
when comparing indigenous and imported components
Decrease Provides a balancing loop to maintain the quality of the building
refurbishment Refurbishments of houses exceed new-builds by 50 per cent (BCPT, 2009)
intervals Long refurbishment intervals lower the standard of living
4 Develop alternative Develops different ways of addressing affordability
financial products Lower interest rates have not resulted in greater affordability
Delineate liability Increasing liability costs are passed on to the customer and unclear liability
costs (e.g. joint and several) are passed on by all who could be implicated
5 Increase The cost of maintenance and operations of a building is 5–10 times the
standardisation design and construction cost ( John et al., 2004)
Standardisation needs lower skill levels to produce better quality workmanship
Expand building BIM provides significant new information flows to people who did not
information previously have that information which translates into greater build
modelling efficiency. BIM improves the connectivity of the workforce on a project
Expand Modularisation can significantly reinforce productivity gains and when used
modularisation with the other three elements in this group, even greater efficiencies
can be achieved
Incorporate buffers Buffers reduce clashes on site which reduces stress levels improving
management’s coping capacity
6 Expand quality The reduction in rework which increases costs by about 4 per cent will
management systems improve productivity significantly
Encourages better work planning which reduces variations
7 Reduce health and Health and safety deficiencies decrease productivity through
safety issues increased absenteeism
Reduce BCA BCA validation is related to the strength of regulations, workforce
validation engagement and the level of responsibility for workers
Increase maintenance Client perception of housing condition was significantly lower than
professional opinions (Buckett et al., 2012)
Lack of maintenance increases the cost of building operations in the longer term
Table IV.
Priorities for
implementation (continued )
Priority Intervention lever
8 Improve indoor
environmental
quality
Increase information
accessibility
Improve operational
adaptability
Intervention lever
Alternative financial products ST: housing affordability indicator
BCA validation
Buffers
Building activity
Building information
management
Customer education
Health and safety
Indoor environmental quality ST: number of sick days per occupant per annum
Information accessibility
Liability
Life cycle impacts
Literacy and numeracy
Maintenance
Management capability
Modularisation
Operational adaptability
Quality management systems ST: new house owners’ satisfaction surveys
Refurbishment intervals
Standardisation
Rationale
Construction
productivity
Microbial contaminants, particulates, daylight, temperature and lighting can
affect productivity by 5–15 per cent (MfE, 2006)
Indoor environmental quality provides a long-term incentive to assist
operational efficiency
Better information accessibility promotes better design and operational
efficiency 957
Prolongs the life of a building
Allows buildings to be operationally efficient Table IV.
Indicator
ST: comparison of processes between BCAs
LT: ease of building professionals working across BCA boundaries
ST: number of specialist trades on site at one time
ST: waste generation
LT: change in litigation levels between contractors and sub-contractors
ST: unemployment rates for design, building and trades people
ST: emigration and immigration rates for design, building and trades people
LT: length of time people remain in the industry
ST: number of design firms that use BIM
ST: percentage of constructed buildings utilising BIM
ST: better quality materials chosen
ST: building consent rate increase
LT: buildings last longer
ST: number of work days lost due to accidents and medical claims resulting
from onsite operations
ST: number of successful prosecutions undertaken by building inspectors
ST: number of consents processed by BCAs without alteration
LT: change in amount of rework undertaken
ST: amount of rework
ST: absenteeism levels
ST: number of BCA re-inspections
LT: change in litigation levels
ST: number of buildings incorporating life cycle impact studies.
LT: absenteeism rates
ST: pass rates in literacy and numeracy testing.
LT: change in literacy and numeracy levels.
LT: change in number of regulations needed
ST: percentage of current value spent on maintenance per annum
LT: building utilisation rate
ST: change in proportion of the sector with management qualifications
LT: length of time people remain in the industry
ST: uptake of modularisation into non-traditional areas
LT: rate of change of building cost compared to the rate of inflation
ST: percentage of current value spent on maintenance per annum
LT: building utilisation rate.
ST: number of building consents for refurbishments or renovations
LT: Length of time between refurbishments
ST: quantity of standard processes and components needed on site
LT: levels of skill needed on site Table V.
LT: uptake of work planning tools Progress indicators
ECAM issue worldwide because increasing productivity reduces activities that do not add benefit,
26,6 thus providing better value to the client.
Industry participants understood productivity in a variety of forms. A narrow view of
productivity only considering processes is unhelpful when targeting significant
productivity improvements in the construction sector. An integrated concept is advocated
that considers efficient processes using quality materials adopting quality workmanship,
958 affordable to both the industry and the customer and are sustainable over time.
The temptation to target easily obtained gains or just “do something” that will make a
difference is counter-productive to achieve a step change in productivity that government
and industry seeks. The construction industry is complex with actions potentially having
many repercussions. Therefore, a systemic approach to managing the complexity found in
the construction industry provides better results.
A project of this size necessarily involves significant amalgamation. Examination of the
nodal points revealed 10 that had the greatest influence through connection to the
largest number of factors. In addition, construction sector participants identified the 19 most
crucial levers to drive productivity improvements which were grouped into eight
priorities for implementation. The grouping is based on the level of influence the levers
would have and their effectiveness on other nodal points to improve productivity across the
life cycle of a building. Step changes in productivity in such a complex industry are only
achieved through a systemic change, implemented in a staged set of leverages and
monitored for progress.
An integrated approach that encompasses a whole of life and cross sector approach is
new to the construction industry. Analysis of post-construction activity provides valuable
insight to improve pre-contract and construction practices. The effect provided through
using a few targeted levers in unison provides significantly more gains than their
individual application. Historically the tendency in construction has always been to value
the ability of engineers and constructors to troubleshoot problems and fight the emergent
fires, be reactive to change and tidy up emergent process challenges. The ability to model
real world responses to various process stimuli as outlined in this paper is extremely
valuable. The research and findings offers the opportunity for clients, designers, planners
and engineers of the construction process to estimate the effects of decision making
during the project. Hence there is an opportunity to, in effect, “wargame” or simulate the
likely response scenarios generated during construction “offline”. Thus advisors can
incorporate more nuance in their professional advice to key decision makers. This is a
substantial step forward if it is operationalised.
The model has been used by the NZ government building and housing groups to inform
their policy-making. The effect has been to provide better understanding of how their
interventions affect the industry. The model is also starting to be used by industry to
improve their productivity and market opportunities. These are early days. However,
results are promising. It is hoped that further planned research will provide additional detail
to the response frameworks as described. As further refinement occurs so the degree to
which companies and organisations utilise this tool will similarly grow.

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Corresponding author
Jeff Seadon can be contacted at: jeff.seadon@aut.ac.nz

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