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What McKinsey gets and does not get about construction

McKinsey has written about Improving construction productivity back in 2017 and we decided to take a look at how "right" they were.



McKinsey is known for working large corporation upper management, so we were interested if they have a clue what bringing those suggestions to practice means and has any of the suggestions happened. As article states, construction sector's productivity could increase 60% if all items are adopted into practices. So let's dive in!


1. Reshape regulation and raise transparency

This one is not directly in the hands of construction sector, so we can't blame them, but sadly there is no clear progress. Overall transparency is in better shape thanks to digital tools, but getting that transparency towards bureaucrats is still prospect in future.

“Rules and regulations are the scar tissue for past transgressions. Just like scar tissue, they eventually limit what you can do.”

2. Rewire the contractual framework

"To align interests, the industry must move away from the hostile contracting environment that characterizes many construction projects to a system focused on collaboration and problem solving."

There is a long way to go, but it is something that is finally being taken more seriously! Our guiding principle that all parties in construction must be aligned in order to reap the benefits. Main contractors need to listen subcontractor's expertise and subs need to understand the incentives to whole project instead of maximising their slice of the work.


3. Rethink design and engineering processes

"There is a major opportunity to improve productivity by institutionalizing value engineering into the design process and pushing for repeatable design elements."

This is still lacking unfortunately, too much information is siloed and company-wide policies overall are not there yet. From our perspective design should be also scheduled within takt schedule, so there is also pressure on getting the designs on time. And more process for information and best practices sharing, please!


4. Improve procurement and supply-chain management

"Digitizing procurement and supply-chain work flows will enable more sophisticated logistics management and just-in-time delivery."

This is something we are (slowly) seeing happening. Logistics is longer just the worker carrying stuff and then starting installations, but something that has been planned. Our friends at Carina 4 are thinking and executing digitalization of logistics.


5. Improve on-site execution

"Stakeholders voiced several challenges with on-site execution, including inconsistent use of best practices across all sites, projects, and staff, as well as difficulty finding and developing talented project managers."

YES! Lots of room for improvement, although the complexities of construction projects can often throw your plans away. This was the chapter where we also expected some concrete suggestions, but it was mostly higher level hand-wavy stuff.


6. Infuse digital technology, new materials, and advanced automation

"Technology alone will not address poor productivity."

This chapter glosses over concepts like 5D-modeling and digital twins without furtner elaborating how those would help. However, there are some concrete examples like owners and contractors pooling resources to pilot new experiments. And the quote above, that is something we agree 100%.


7. Reskill the workforce

"Change cannot be achieved without investment in retooling a workforce that is undergoing major demographic shifts.."

It's popular and not even wrong to complain about lack of skilled workers, construction does not differ from other industries here. But understanding what is exactly missing and what would be the incentives to fill the gap, are much harder questions.


Conclusion


Overall, McKinsey recommendations were on the high-level, not much on actionable items. It was expected, as they don't act on the level of an actual construction project. But we believe there can be a business opportunity within all of the high-level subject, if you are skilled enough to understand the problems and willing to iterate the solutions with your customers.

Mestamaster has chosen to work on a narrow area of construction; enabling takt time scheduling and process on projects. But our vision is larger, we want to create an app that moves construction from project to process. And makes life easy for site management.


P.s. If you want to change the construction world, we are hiring construction engineers!

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