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Objective:
Develop metrics, tools, and data for measuring construction productivity at three levels: (1) task; (2) project; and (3) industry.
Problem:
Construction industry stakeholders need compelling metrics, tools, and data to support major investments in productivity enhancing technologies. The development of metrics, tools, and data is complicated because each measurement level (i.e., task, project, and industry) has different analysis requirements.
Proponents of construction productivity metrics tend to focus exclusively on the measurement of task productivity. The current practice for producing these metrics suffers from two serious short-comings. First, the published task level productivity metrics do not address changes in technology. Second, they do not include any means for identifying improvement opportunities. This project addresses both of these short-comings by: (1) collaborating actively with CII Research Team 240 on the development of a technology prediction model; (2) participation on CII Research Team 252, Craft Productivity Research Program; and (3) leading a “data mining” effort in collaboration with the Benchmarking and Metrics Committee focused on how best practices and automation and integration technologies affect construction productivity.
There are currently no project-level construction productivity metrics. Project level metrics are hard because of the many different tasks that must be rolled up to produce a single productivity measure. OAE researchers have identified two promising metrics for producing a project productivity index. The first is patterned after Teicholz’s seminal paper on construction productivity. The second employs a weighting system developed by the Bureau of Labor Statistics (BLS).
Currently, there are no industry-level measures of productivity for the construction industry. Such measures exist for manufacturing and are routinely disseminated by BLS. OAE has reviewed the BLS metrics and the data types used in the manufacturing sector. Based on that review, OAE has identified a process through which industry-level metrics could, in theory, be generated for selected construction industry NAICS Codes. The industry level problem is hard, because of the extensive data requirements associated with the total factor productivity metrics that BLS recommends. Total factor productivity metrics are more desirable, because they enable separable estimates of the contribution of labor, capital, and technology to productivity. BLS also produces a metric for labor productivity, which shows more promise due to its lesser data requirements.
Overall, measuring construction productivity is hard because on the one hand construction industry stakeholders, such as building owners and mangers, want easy answers to complicated questions that are made available through task-level metrics, while, on the other hand, industry leaders, policy makers at the federal and state levels, construction industry researchers/academics and BLS industry specialists demand complicated data-intensive metrics to assess national and industry-wide trends and challenges facing this critical sector of the U.S. economy.
Approach:
During FY 2008, economists from BFRL’s Office of Applied Economics (OAE) will produce a series of white papers focused on issues related to the measurement of productivity in the construction industry and use those white papers to focus discussion topics for a National Academies/Board on Infrastructure for the Constructed Environment (BICE) Workshop; complete the “data mining” collaborative effort with CII/University of Texas at Austin (UT) on how the combined use of best practices and integration and automation technologies impacts productivity in the design/engineering and construction phases of the project delivery process; and publish the technical report which CII/UT will produce as a NIST GCR.
As part of the “productivity” study, OAE will also: (1) initiate a study focusing on construction work process improvement issues (e.g., application of automation and sensor technologies) and (2) use their expertise on the Analytic Hierarchy Process (AHP) in the development of a technology prediction model. R. Chapman will continue to represent BFRL on the CII BMC and on Research Team 240, where the technology prediction model is being developed. Finally, Chapman will work closely with his co-authors at CII/UT on two CONSIAT-related journal articles.
NIST GCR 04-867 estimated $17.2 billion (expressed in 2005 dollars) as the annual cost burden due to inadequate interoperability in the capital facilities segment of the U.S. construction industry. More than $7.3 billion of the annual total was due to inefficiencies in the design/engineering and construction phases of the project delivery process. In the technical plan for FY 2008, economists from OAE will initiate an exploratory study of issues related to the measurement of construction productivity (e.g., challenges in measuring productivity in the construction industry at the project level (jobsite and offsite) and industry-wide level and why there are no National-level productivity statistics currently being published) and document their findings in a series of white papers.
The white papers will be used to focus key stakeholders on the importance of metrics, tools, and data for measuring construction productivity at each of the three levels. The white papers will be provided to BICE as part of its scoping phase for the proposed Construction Productivity Workshop. Economists from OAE will periodically brief the CII Board of Advisors on the development of metrics and tools for measuring construction productivity and the contents of the white papers.
Economists from OAE will also initiate a construction work process improvement study and produce a white paper summarizing preliminary findings. These findings will help key industry stakeholders understand how increased use of integration and automation technologies impacts engineering and construction productivity and ultimately the corporate bottom line. The CII/UT “data mining” study started in FY 2007 that focuses on measuring the value added of the combined use of best practices and integration and automation technologies through their impacts on productivity will be completed and published as a NIST GCR.
The study will develop statistical relationships that correlate increased use of best practices and integration and automation technologies with engineering and construction productivity. Additional analyses will be conducted to correlate the combined use of best practices and integration and automation technologies on reductions in cycle time, reductions in construction cost, and reductions in field rework, which also affect construction productivity. These findings will help key industry stakeholders understand how increased use of best practices and integration and automation technologies impacts the bottom line. Researchers from CII/UT will come to NIST and present their findings at a seminar.
In FY 2008, Chapman’s work on the CII BMC will focus on ensuring that CII’s extensive data collection effort continues to have a focus on those project outcomes—reductions in cycle time, reductions in construction cost, reductions in field rework, and improved safety for construction workers—which are of mutual interest to BFRL and CII. Chapman will continue to provide guidance in analyzing data received from CII member organizations and will participate actively in the development of new metrics for measuring performance and/or process improvements. Chapman will work with his co-authors at CII to respond to referees comments and gain approval for the “business process management functions and integration/automation technologies” article that was submitted to the ASCE Journal of Management in Engineering. Finally, Chapman will work with his collaborators at CII/UT to produce an article on how the combined use of best practices and integration and automation technologies impacts engineering and construction productivity and upon approval by WERB submit it to a suitable peer-reviewed journal.
During FY 2009 and 2010, R. Chapman will continue to represent BFRL on the CII BMC. In FY 2009, Chapman and Butry will produce an article on how to use macroeconomic data to measure productivity in the construction industry, submit it to WERB, and upon approval submit it to a suitable archival journal for publication. Chapman and Butry will also develop a tool for measuring construction productivity at the project and industry levels and present it to a focus group of key stakeholders. In FY 2010, Chapman and Butry will produce an article on the economics of work process improvement-related issues, submit it to WERB, and upon approval submit it to a suitable archival journal for publication.
The significant idea behind this research is the provision of a combination of services and products that are needed to encourage investments in improved productivity and interoperability (e.g., information, communication, and automation technologies). The planned approach of establishing improved measures of productivity and interoperability benefits, paired with codifying them in cooperation with the CII BMC, increases dramatically the chances of stakeholders making higher investments in technologies that improve productivity and interoperability, because they will be able to measure the benefits from those investments. OAE/BFRL, because of our unique expertise and experience, is uniquely positioned to play this leadership role in the development of economic measurements. Furthermore, we should do this work, because it supports NIST’s and BFRL’s missions. Progress will be measured by the number of readers accessing our published documents, the number of industry stakeholders adopting the CII BMC performance metrics, and general feedback from our customers. The extraordinary national response to NIST GCR 04-867 demonstrated the breadth of our potential market constituency.
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