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PRODUCTIVITY & COST

IMPROVEMENT
By the year 2000 productivity within the
construction industry could be improved by
30% if the right management tools and
techniques are adopted by clients and
construction companies.
The potential for 30% cost reduction was
identified by Sir Michael Latham during his
review of the construction industry and was
also strongly advocated by construction clients.
The Construction Industry Board, charged with
implementing the findings of his report
Constructing the Team, set up Working Group
11 to examine how this potential could best be
realised.
Their report, Towards a 30% productivity
improvement in construction, concluded that
there is no simple solution to improving
construction productivity, and that it will only be
achieved through a range of tools and
techniques being adopted.
It also concluded that all members of the
project team from client onwards, have a role
to play in reducing costs.
This fact sheet summarises the key issues
identified by the CIB which practitioners need
to address in their quest towards productivity
and cost improvement. All of the techniques
and measures advocated have already been
successfully tried and tested by key pathfinding
companies.
This Fact sheet also contains information on a
number of systems developed to help monitor
on-site construction productivity and details of
the CIB’s Codes of Practice which should be
adopted as standard practice by all clients and
construction companies in the management
and selection of their project teams. Finally, it
and introduces the new Construction Best
Practice Programme and the services it will be
offering companies wishing to improve their
performance.

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Value
Management
Supply
Quality
Chain
Management

Standardisation Partnering
& and
Prefabrication PRODUCTIVITY Teamwork
&
COST
IMPROVEMENT

Research
&
IT
Development

Health Risk
& Management
Safety
Benchmarking

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Benchmarking is about companies and
organisations comparing their practices and
performance in key activities, either internally or
externally. Fundamentally it involves answering
two questions - who is better, and why are they
better? - with the aim of using this information to
make changes that will lead to improvements in
process and practices. For more information see
the CIB’s fact sheet on benchmarking.
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Value management is a structured approach to
establishing what value means to a client in
meeting a perceived need, by clearly defining
and agreeing the project objectives, and
establishing how they can best be achieved. It
usually incorporates a series of meetings,
interviews and reviews, through which the
project requirements are evaluated against the
means of achieving them. For more information
see the CIB’s fact sheet on value management.
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Partnering is a management approach used by
two or more organisations to achieve specific
business objectives by maximising the
effectiveness of each of the participant’s
resources. The approach is based on mutual
objectives, an agreed method of problem
resolution, and an active search for continuous
measurable improvement. For more information
see the CIB’s fact sheet on partnering.
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The use of more standard components and
products in construction and the increased
application of prefabrication within construction
could have significant benefits in terms of
improved quality, better predictability, and time
and cost savings. Standardisation and
prefabrication need not limit the scope for
design innovation. Standardisation and
uniqueness are not incompatible. For more
information see the CIB’s fact sheet and CIRIA’s
‘Snapshot’ on standardisation and pre-assembly.
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Supply chain management is about practically
and effectively influencing and improving your
suppliers activities to the benefit of your own
company or project. Some experienced repeat
business clients have already developed their
own approaches to supply chain management.
But the bulk of the industry, which comprises
small and medium size businesses, have yet to
achieve the benefits available by shifting from
traditional procurement procedures. For more
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information see the CIB’s forthcoming fact sheet
on supply chain management.
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Improving the application of information
technology both within a company or across a
project can bring major benefits in terms of
improved communications, time and cost
savings. However, no new system should be
introduced without appropriate training and
consultation with the workforce involved. For
more information see CIB’s forthcoming fact
sheet on IT.
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It is still common practice for each party in a
construction contract to transfer risk to another
without consideration of their or the others’ ability
to manage it. Adopting and implementing risk
management techniques can help improve
certainty of outcome by identifying, defining and
quantifying risk and then managing it throughout
the process. For more information see the CIB’s
forthcoming fact sheet on risk management.
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TQM is a management led process to obtain the
involvement of all employees in the continuous
improvement of the performance of all activities,
as part of normal business, to meet the needs
and satisfaction of the customer whether internal
or external. For more information see the CIB’s
forthcoming fact sheet on TQM.
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Research is about improving performance
through better use of existing knowledge, and
adding to that knowledge base when necessary.
Innovation is the successful exploitation of new
ideas. Investment by construction companies in
R&I can help to improve their competitive edge
but is also vital for the long term prosperity of the
industry as a whole. For more information see
CRISP’s leaflet on Innovation in construction,
available through the CIB.
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The cost to employers of personal injury work
accidents and work related ill health has been
calculated by the Health and Safety Executive to
be between 5% and 10% of all UK industrial
companies gross trading profits. For the
construction industry, with higher than average
accident and injury rates, and lower than
average profitability the figures could be
assumed to be even greater. Health and safety
should be a part of any standard cost benefit
analysis for any construction project. For more
information, contact the Health and Safety
Executive.
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Three research and development projects focused on the direct measurement of on-site
construction productivity for real construction projects. Each developed a particular
methodology for measurement. In each case, the studies concluded that the factors which
most affected productivity were largely outside the control of the operatives involved. These
were mainly related to problems with the design, changes to the specification, and also from
interfaces and management in the construction team as a whole.

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CPIC have developed CALIBRE, a management tool involving the complete supply chain,
for collecting and analysing data relating to site productivity. The main steps of the
methodology include mapping the process, identifying and coding work packages and
monitoring processes on site. Data is analysed in real time on a daily basis and also at
periodic review points, information is fed back to operatives, site managers, designers etc.
and also centrally to the CPIC database, whereby the industry can obtain a series of
benchmarks for different products, systems
CALIBRE is based on the collection of detailed, objective data about progress and
performance of individual operatives, recorded by an independent observer on a regular
basis throughout the day. Each observation is recorded electronically using a hand held
computer and down loaded onto a PC in the site office at the end of the working day.
Feedback is then obtained from the operatives and foremen on the causes of non-value-
added time, and the actions needed to eliminate waste. The data also feeds back into a ‘risk
register’ at CPIC, which can be used to help the whole industry to learn from the
experiences of participants

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This project identified a definitive list of 90 factors which affected productivity on any
construction project and also a definitive categorisation of tasks undertaken on-site. On this
basis a set of questionnaires has been developed which can be completed by project
participants at the end of their contracts. Using the information gathered a productivity
quantification between 0 and 100 is obtained for each element of the project and also for the
project overall. This enables targets to be set for improvement in future projects. The
methodology also highlights those factors which have caused the greatest productivity
losses showing the priority areas for improvement.

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BSRIA undertook this investigative study to highlight the productivity problems related to
mechanical and electrical building services. The study focussed upon activities specific to
the on-site works, the aim being to divide output into its productive and non-productive
components and develop practical guidelines relating to input that could be used to
maximise the productive time and subsequent productivity achieved at the workplace. The
project produced a set of productivity measurement sheets which are used on completion of
a construction project. The information gathered is then used to quantify the Task
Productivity (ratio of Output to Productive Time) and Overall Productivity (ratio of Output to
Available Time)

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The Construction Best Practice Programme has been established in recognition that the construction
industry needs to stimulate and accelerate change and continuous improvement to deliver world class
performance. To that end, the Programme aims to provide advice and assistance to construction
industry organisations wishing to improve their performance and practice.

7KHFKDQJHSURFHVV - Organisations that change and improve follow a broadly similar approach. The
initial awareness of the need to change is followed by an evaluation of their current situation, the
identification of what needs to be changed, and the difficult task of implementing the changes.
Repetition of this cycle results in the development of a culture of continuous improvement.

The Construction Best Practice Programme will consist of a range of coordinated services including:
„ Information helpline „ Benchmarking
„ Contact advice information „ Demonstration project facilities
„ Company visits „ Advice service consultation
„ Case studies „ Technical best practice initiatives

Combined, these services will help to deliver the objectives of the Programme:
„ To provide a focus for UK industry best practice
„ To provide access to best practice information
„ To support construction enterprises that want to improve
„ To act as a broker for continuous performance improvement for clients and providers
The Construction Best Practice Programme is a joint initiative of the Department of the Environment,
Transport and the Regions, and the Construction Industry Board, funded by Government and
managed by the Building Research Establishment. For further information on the Programme or to
access any of its services contact the Programme Management Unit on 01923 664232.

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The Construction Industry Board is a partnership
of the construction industry, its clients, and
government working to improve effectiveness
and efficiency in construction. The Board aims to
secure a culture of co-operation, teamwork and
continuous improvement in the industry’s
performance, and its principal objective is to
implement the recommendations of Sir Michael
Latham’s 1994 report ‘Constructing the Team’.
You can contact the CIB at:
The Building Centre
26 Store Street
London WC1E 7BT
Tel: 0171-636 2256 Fax: 0171-637 2258
E-mail: cib@ciboard.org.uk
Web site: http://www.ciboard.org.uk
The CIB have published the following six key
codes of practice and guides summarising the
principles of good practice in construction
procurement. Copies of these can be purchased
individually or as a set from Thomas Telford
Publishing. Tel. 0171 665 2464, Fax: 0171 537
3631.
FRGH RI SUDFWLFH IRU FOLHQWV is the CIB’s lead
code of practice. It identifies the roles of the
client and the project team in any
construction project and gives clear
guidance on good practice in the
procurement of construction.
„ 3DUWQHULQJ LQ WKH WHDP defines the elements
which should be present in a real partnering
arrangement. It also contains 5 case studies.
„ %ULHILQJWKHWHDP defines the briefing process
and is designed to help clients improve the
communication of their needs from a
construction project.
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TXDOLW\ DQG SULFH sets out a specific quality
and price assessment mechanism for the
engagement of professional consultants.
„ &RGH RI SUDFWLFH IRU WKH VHOHFWLRQ RI PDLQ
FRQWUDFWRUV sets out procedures which should
be used by clients in the selection of main
contractors
„ &RGH RI SUDFWLFH IRU WKH VHOHFWLRQ RI
VXEFRQWUDFWRUV sets out procedures which
should be used by clients and main
contractors in the selection of
subcontractors.

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