Time Waste and Labor Plague Many Industries

SAN FRANCISCO—Technology, time management and labor issues continue to plague the construction and logistics industries. A recent survey indicates that time spent on non-optimal activities such as fixing mistakes, looking for project data and managing conflict resolution accounts for $177.5 billion in US labor costs per year. The study also found that rework caused by miscommunication, and inaccurate and inaccessible information will cost the US construction industry more than $31 billion in 2018.

PlanGrid shared results from a new industry research report administered in partnership with management consulting firm, FMI Corporation. The partnership surveyed nearly 600 construction leaders about how teams spend time on construction sites, communicate during projects and leverage technology investments.

There were several key survey findings, such as construction workers losing almost two full working days each week solving avoidable issues and searching for project information. Each construction project team member spends more than 14 hours each week on average dealing with conflict, rework and other issues that take away from higher priority activities, according to the survey.

Respondents revealed they spend time each week on non-optimal activities including five and a half hours tracking down revised drawings, material cut sheets and other information relevant to the job.

In addition, there is almost five hours spent on conflict resolution, including managing disagreements between the general contractor, owners and subcontractors responsible for the delivery of the project.

There is four hours spent dealing with rework-related activities, such as managing the mistakes on a project that result in rework, assessing the associated costs and determining why the mistakes happened.

Almost half of all rework is due to poor communication among project stakeholders, and poor project information. Respondents attributed 26% of rework to poor communication between team members and 22% of rework is due poor project information. The top three causes of poor information are erroneous or incorrect project data, difficulty accessing project data and the inability of project members to easily share information about the project. Based on this data, FMI estimates poor communication represents a potential cost to the US construction industry of $17 billion a year, and poor project data represents a cost of $14.3 billion.

“Poor communication among team members, and incorrect or inaccessible information that workers need to do their job is costing the construction industry tens of billions of dollars annually,” said Jay Snyder, FMI technology practice lead. “The majority of industry stakeholders seems to be at a loss for how to remedy these systemic and expensive problems. While construction firms continue to invest in technology, the business-critical issues of communication and data management need more strategic attention than they currently receive.”

More than 75% of respondents provide mobile devices—smartphones or tablets—to project managers and field supervisors. However, less than one-fifth of companies consistently use apps aside from simply email, text and phone calls to access project data and collaborate with project teams. This finding suggests many construction leaders are equipping field teams with technology, but aren’t leveraging mobile software and apps purpose-built for construction companies.

The other issue breathing down the neck of the construction and logistics industries is a shortage of labor.

“The logistics industry is putting pressure on Washington, DC to find solutions on immigration work visas, whether it be bringing in more workers, but it’s becoming a very major issue,” Pete Quinn, national director of Colliers Industrial Services, tells GlobeSt.com. “Because of that you’re seeing companies doing build-to-suits and designing nicer buildings, i.e., putting in air conditioning in industrial buildings. This is not because the product needs to be air conditioned. They want the workers to be comfortable because they want to keep their workers.”

Quinn says another impact on distribution centers and construction is the 25% import tax on Chinese exports.

“How is that going to impact the supply chains?” he asks GlobeSt.com. “This affects labor because the hourly wages are going up pretty significantly and the cost of construction materials is also going up significantly, so it’s a perfect storm right now all across the supply chain.”

Quinn also points to the shortage in truck drivers adding to the labor shortage in logistics and numerous industries.

“The average trucker age is 57 right now. There’s not enough of them to the point that there’s actually legislation being put forward to allow drivers younger than 21 to get commercial truck licenses,” Quinn tells GlobeSt.com. “It’s the running out of labor that impacts markets located close to significant population bases that provide last-mile deliveries.”