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Marginal Gains in Construction – Improved Productivity through Micro-Ideas

Introduction

UK productivity still lags that of other developed nations as repeated ONs reports continue to show.

The problem is complex and successive attempts have made progress but failed to drive the UK to the front of the pack.

A recent Constructing Excellence survey Unlocking Productivity confirms a majority of people in the construction industry believe productivity to be only 60% of what it should be. We all know people are capable of much more, but culture and behaviours interfere, creating insurmountable roadblocks to initiatives. Consequently, most people who responded to the survey expressed a desire for more collaboration together with a need to develop culture and behaviour.

A radical approach is now proposed to develop collaboration, culture and behaviour, based on the results from another industry project. As a means to disseminate knowledge, teams from across the supply chain discussed improvement concepts. Although they did not necessarily get far with any big idea, surprisingly teams found large numbers of, I shall call them micro-ideas, across the minutia of detail of the supply chain. These micro-ideas came in significant numbers suggesting an important opportunity to improve.

This paper looks at a bottom-up programme to capture large numbers of micro-ideas as a method to correct the productivity gap while also developing collaboration, culture and behaviours.

Completed Industry Programme

Over 200 organisations from across the supply chain took part in workshops part-funded by the European Regional Development Fund (ERDF)1. The primary purpose of the workshops was to increase knowledge of some of the known industry opportunities these included:

  • Simpler bid preparation
  • Better quality
  • Better safety and health
  • Customer satisfaction
  • BIM implementation
  • Cost efficient low carbon solutions
  • Lean thinking

In total 28 workshops were organised, with small medium and larger organisations from across the supply chain attending. Eight main contractors took part together with their supply chains. Attendees also included suppliers from the Norfolk, Hertfordshire and Essex County Council Supply Chain Development2.

Micro-ideas only became apparent as the programme progressed. It took some time to recognise their importance and the vast, possibly infinite, numbers available throughout the supply chain. Those micro-ideas have always been there, what is different is finding them in depth and recognising their accumulated value.

Many of the opportunities lie in the interface between organisations, making them difficult to identify and agree except by a cross-representational team, but relatively easily found by such teams.

By collaborating in teams, organisations in the supply chain significantly help one another, for instance, sharing information in a different sequence proved particularly fruitful. Contractual issues never appeared as a problem as the ideas are self-help and not imposed.

Practically everyone taking part proposed micro-ideas, and even better had little difficulty agreeing with them as they are by definition easy to understand and execute.

Nine different people facilitated various workshops with different arrangements and styles in all cases numerous micro-ideas resulted.

Many of the teams drew process maps to study the detail and find and agree on micro-ideas.

At the end of the workshop participants produced a signed plan as a final part of the workshop agenda. Over 200 plans were signed as a form of commitment with most showing a reasonable level of detail. Appendix 1 shows extracts from the signed plans.

Finding a flood of Micro-Ideas

Besides those micro-ideas included in the action plans many more were recorded on process maps or just discussed in the workshops with people agreeing to act upon them.

The following is a list of objective themes that might provide a subject for knowledge transfer and act as a catalyst to find micro-ideas in a workshop environment, many drawn from the “Construction 2025: strategy”3:

  • Simpler more efficient bidding process
  • Early involvement of the whole supply chain
  • Increased collaboration
  • Better quality
  • Better safety, health, welfare, and work environment
  • Clear customer benefits & returns
  • BIM implementation
  • Cost efficient low carbon solutions
  • Lean thinking
  • Just in time and improved logistics
  • Material availability
  • Waste reduction of all types
  • Standardisation
  • Offsite manufacture
  • New methods, technology and R&D
  • Mechanisation, automation, robotics
  • Develop human resources
  • Skills and professional development
  • Market demands and competition
  • Good neighbour dialogue
  • Low cost solutions
  • Faster provision
  • International opportunity

The number of objectives above shows the complexity and magnitude of the problem; there is no quick fix all the above need development. Trying to action any single substantive initiative alone from the rest of the objectives is unlikely to succeed as repeatedly shown over the years. Searching out easy to implement micro-ideas across the entirety of the supply chain provides a realistic answer, with an estimated 10,000 micro-ideas hidden in the complexity.

Most micro-ideas result from discussion between organisations about what they do and how they can help one another. In many instances that help enables another organisation to use better-sized materials or use more efficient methods, technology or equipment. A good example is a case where the structural steel fabricator on hearing the problems of the external cladding fitters suggested an idea to fit lugs during the steel fabrication that would significantly aid cladding installation, saving significant time and cost.

For most people the micro-ideas once explained are no-brainers and easily agreed. Management’s comments commonly include “Why has that not already been done?”

The reality is there is no process in place that makes improvement part of the normal work routine; improvement happens by exception often forced on parties and thereby rarely successful. Unsolicited improvements are discouraged, as they need management time that is scarce. Micro-ideas in comparison, approved at the coalface, require little management involvement.

Micro-ideas are low risk; improvements are small, and therefore quickly implemented, and if found in any way lacking then easily reversed.

Micro-ideas do not just happen – they are the result of a collective effort that needs organising on a regular basis. Workshops with a cross-section of the supply chain are essential to make them happen. For example, mapping the bidding processes in a workshop with the main contractor, architect and subcontractors proved an excellent way to involve the supply chain and gain everyone’s commitment to numerous micro-ideas.

In an industry depending on small specialist organisations, each with an intense knowledge of a small portion of the whole, it is vital to involve all of them.

It is not just a one-off involvement; it is an ongoing journey of improvement, with repeated workshops keeping everyone involved.

Evidence from other Industries

The proposal has precedents, though in somewhat different industries.  Toyota built a culture around large numbers of small improvements happening everywhere4. Lean Thinking says Womac in the book “The machine that changed the world”5 was spawned from Toyota’s programmes principally about stripping out all wasted effort through lots of small improvements. Motorola and many other companies did something similar with Six Sigma. They created people with specialist analytical skills; with the objective to achieve “Repeatability” at levels never experienced previously6 but again through lots of small improvements. What Toyota’s  and Motorola experience show is that even in well-developed process phenomenal numbers of small opportunities still exist. Honda, for example, reports cases of individuals making 2,000 suggestions in one year while the Toyota plant in Kentucky still has thousands of improvement ideas a year, both examples from “Ideas are Free”7. The book also lists numerous examples of people knowing waste was happening but had no means to do anything about it, something that happens presently in the construction industry.

All those cases were in a manufacturing context with large throughputs and well-developed processes. More recently British cycling success in the Olympics and Tour de France resulted in part from a programme of finding every marginal gain. David Brailsford “Performance Director of British Cycling” in a BBC interview8 said: “Success results from attention to every detail and looking for marginal gains everywhere.” He gave examples from how you wash hands, minimising infection, to how to sleep better by taking your own pillows to hotels, or using hot pants to keep muscles relaxed between races.  “Each improvement may seem trivial, but the cumulative effect can be huge.”

British cycling achieved great success, by finding lots of small improvements by tweaking that little extra from an already extraordinary performance.

The situation in construction is quite different with bespoke designs, fragmentation and individual skills dominating considerably different to the well-developed automobile high-throughput manufacturing process, or tweaking for that extra Olympian performance. But that may be an advantage. A less developed process, yet a complex one, means lots of small opportunities existing at a likely even greater density. Womack, mentioned earlier in discussing the history of the car industry – says Toyota had to turn on its head all the traditional thinking of the motor car industry. For example, they recognised that quality did not cost but rather saved – a concept that many today find difficult to accept – they then went on to set dimensional tolerances thought impossible at the time, working to two microns on machined parts. Such a paradigm shift9 is what is needed today in the construction industry, by recognising that creating a high flow of micro-ideas implements big objectives in a collaborative evolving way.

Norbert Sluzewski10 on the AT&T Network Exchange Blog recommends learning how to capture and nurture all of the “little” ideas that otherwise disappear into the ambient noise of everyday work, a source most often overlooked and from which the next BIG idea may come.

Change is High Risk but so is Doing Nothing

In a fragmented industry like construction, organisations are hired on their ability to do a very specific job well. Such companies know learning is costly in an extremely competitive market. Consequently, change is abhorrent to such companies. Change requires something else to be learned, a very expensive experience – risking their hard-won competitive edge – and only considered under extreme provocation.

In such circumstances change demanded from upon high is very unlikely to be accepted, which evidence over the decades demonstrates.

Unfortunately, not doing anything is not an option in an increasingly competitive world. Lack of UK competitiveness is not something new – in the 1970s The National Economic Development Office published a report considering power station construction in the UK, Europe and the USA – it found the UK productivity wanting. Repeatedly, over the years, ONS reports show productivity generally in the UK significantly falls short of that in other developed nations www.ons.gov.uk.

Other studies show the UK use of robotics across all industry is worryingly low compared to other developed countries http://www.ifr.org/industrial-robots/statistics/. Although use in construction is quite low worldwide, improved use of robotics in UK construction might be an opportunity to leap ahead and lead worldwide.

The issue is not one of not being aware, or of not taking action. Regrettably the action follows a well-worn path comprising setting targets and imposing some big change at the top of the industry which repeatedly meets strong resistance throughout the supply chain and fails.

The supply chain and workforce must own initiatives and micro-ideas as described totally involves them.

Fostering Collaboration

Workshops proved a way to both improve knowledge as well as identify micro-ideas – particularly effective were workshops that included an architect and main contractor with the supply chain. In such workshops, a knowledgeable person explains a big objective and then collaboratively the attendees map out what currently happens and look for those easy improvements. Mapping is particularly effective as it allows everyone to understand what everyone else does, and then easily identify how to help each other. Those hidden barriers that exist between departments within larger organisations, and then between small organisations appear less prevalent within a workshop environment.

Though the industry programme did not extend to cover repeat workshops, finding micro-ideas should continue workshop iteration by iteration, ad infinitum.

Workshops build trust between organisations by each helping one another building culture and behaviour. Repeated-iterations develop a culture of constantly working to improve. Everyone has something to offer as they know problems from a different perspective and thus can always bring forward ideas others would not have identified. The programme unleashes everyone from all the conventional restrictions, roadblocks and self-interests.

Research & Development

Many of the micro-ideas might well lead to useful R&D opportunities.

Charles Mills11 in a recent Constructing Excellence blog makes the observation that contracts in generally create a situation where all the thinking and any original thinking is wholly by the client. He goes on to say “the innovative potential of the vast bulk of the industry is completely untapped”.  Accumulated Micro-Ideas should help to change that gradually building trust and involving all parts of the supply chain in a collaborative approach to R&D.

In the book “Evolution of Everything” Matt Ridley12 makes the point better design is a bottom-up evolutionary process and that innovation originates in parallel from more than one person or group. If that is correct, then a collaborative approach to R&D is highly desirable to capture everyone’s thinking lowering costs and ensuring a more equitable solution.

Adrian Farley13, observes insufficient profit is the problem in another recent blog on the Constructing Excellence website. The title explains “Is profit a dirty word in Construction? (What Latham missed and Egan did not have the answer for)”. Adrian provides interesting statistics showing average construction margins of <2.00% that Adrian explains provides no capacity to invest.

To keep the cost of R&D down a collaborative industry approach may be the only solution to rapid improvement. The proposal is to start a collaborative R&D programme with initiatives from the micro-ideas and share results.

Leadership

Notwithstanding a bottom-up process, leadership is essential to promote and encourage the Accumulated Micro-Ideas route and R&D collaboration. The management role includes:

  • Improve productivity by encouraging Accumulated Micro-Ideas.
  • Involve everyone in the supply chain.
  • Conduct regular workshops.
  • Select overall objectives.
  • Fund joint collaborative R&D.

Workshop Design

Most micro-ideas occur at the interface between organisations in the supply chain so it is essential to have those organisations together in a workshop. Organising the whole supply chain at one event is difficult though not impossible. Workshops work well with 15 to 20 people so it may be more practical to organise such sized workshops, and accept that some organisations may have to send delegates to more than one workshop.

Start each workshop by bringing everyone up to speed on a big objective. Then use that as a catalyst to find micro-ideas by mapping what currently happens with possible improvements.

To avoid anchoring people’s thinking, ask attendees to write up post-its of current work steps and micro-ideas, but individually, with initially little interaction. Next place a large piece of brown paper on the wall that everyone can work around. Have everyone sequence the work steps using the post-its created earlier. Once on the wall and with everyone’s involvement, systematically work through to identify micro-ideas.

Subsequent workshops would discuss each of the other big objectives in a four monthly cycle or at key stages in a project. There are plenty of big objectives and no reason they should not be revisited maintaining the rolling wave of micro-ideas and involvement.

That involvement of the whole supply chain is essential as everyone’s ideas count. Smaller organisations in the supply chain already feel pressured – consequently, they are very suspicious. A facilitator keeping everyone focused on the mapping processes gradually gains everyone’s commitment, trust and starts to develop a culture of improvement. A neutral location for a workshop is important; somewhere people associate with an exchange of ideas rather than contractual obligation.

The workshops described should provide benefit with any form of contract. What is essential is the workshops are voluntary as is the implementation of micro-ideas. Convincing participants that involvement is mutually advantageous is vital. The programme should belong to everyone in the whole supply chain.

Bigger benefits are likely by involving the supply chain in pre-contract workshops, creating more positive feelings for later workshops during the project phase – a more collaborative form of contract should endow even more benefits. In all cases a programme needs organising and main contractors are the obvious leaders though clients and other organisations might equally lead.

Another possibility might be to create a badge to recognise organisations that have started the journey and create more industry-wide interest.

Cost

Savings are significant and it should be possible to estimate them to justify the small cost incurred. Costs are probably no more than occur from meetings in a normal contract. Cost can be kept low by meeting in owned facilities and using an in-house facilitator.

Ideally, involvement in the programme is part of the bid price. Being mainly about learning it may alternatively be part of a training budget.

An Accumulated Micro-Ideas programme might comprise:

  • Obtain commitment from the whole supply chain to participate.
  • Determine big objectives to form the basis of discussion in workshops.
  • Organise periodic workshop events with representatives from across the whole supply chain.
  • Employ a facilitator.
  • Utilise simple mapping to draw out ideas.
  • Require each participating organisation to produce a signed plan on completion of the workshop.

Conclusion

Reports have regularly been produced over 50 years showing UK construction productivity lags other advanced nations. Even though many well-understood opportunities exist, getting ahead or staying ahead of other nations is no nearer. A new method, changing the culture and based on accumulated micro-ideas looks encouraging.

Even automobile production with its well-developed processes continues to find small improvements. Even more, should be discoverable in the complex, largely bespoke construction supply chain. Finding the micro-ideas crucially needs to involve people who work close to the detail with some simple tools.

A steady flow of micro-ideas is a credible way to improve, particularly fruitful is studying a big objective and finding micro-ideas around that. Over 20 big objectives within construction are well understood and each might be used as a catalyst to find micro-ideas in a rolling programme of workshops. Vitally the whole supply chain should be involved covering all aspects and developing a culture of improving productivity. A rolling sequence of workshops involving the whole supply chain is proposed organised by main contractors or clients.

R&D and increased robotics, mechanisation and automation are fundamental to costs reduction and increased productivity and are part of the Micro-Ideas programme. Given the very tight margins in the industry and to encourage significant levels of R&D a collaborative approach is recommended seeded from the accumulated Micro-Ideas.

NOTES

Note 1 – The Best East project was part-financed by the European Regional Development Fund (ERDF) Programme 2007 to 2013. The Department for Communities and Local Government is the managing authority for the European Regional Development Fund Programme in the UK. ERDF is one of the funds established by the European Commission to help local areas stimulate their economic development by investing in projects that will support local businesses and create jobs. For more information visit: http://www.gov.uk/browse/business/funding-debt/european-regional-development-funding

Note 2 – Norfolk, Hertfordshire and Essex County Councils programmes with main contractors to improve the supply chain. Events from these programmes provide an opportunity to promote the Best East programme and recruit participants. See www.buildnorfolk.co.uk, www.buildessex.co.uk and www.buildhertfordshire.co.uk

Note 3 Construction 2025: strategy. Joint strategy from government & industry for future of the UK construction industry, see https://www.gov.uk/government/publications/construction-2025-strategy

Note 4 “Toyota Culture by Jeffrey K Liker & Michael Hoseus, McGraw-Hill, 2008.

Note 5 “The Machine that Changed the World” by James P. Womack, Daniel T. Jones and Daniel Roos. “How Lean Production Revolutionised the Global Car Wars”, Simon & Schuster UK, 2007

Note 6 “Six SIGMA: The Breakthrough Management Strategy Revolutionising the World’s Top Corporations by Mikel J. Harry, Richard Schroeder, Currency, 2000.

Note 7 – “Ideas are Free” by Alan G Robinson and Dean M Schroeder, 2004, Berrett-Koehler, San Francisco.

Note 8 – For more details of the marginal-gains programme from British Cycling see http://www.bbc.co.uk/sport/0/olympics/19174302.

Note 9 – The ideas of a paradigm shift – completely rethinking how you do things – is explained by Stephen Covey in his book “The Seven Habits of Highly Effective People”, Simon & Schuster, New York, 1989.

Note 10 Norbert Sluzewski Director, Strategic Advisory Services for AT&T Global Business Solutions writes on the AT&T Network Exchange Blog: “While strategy, process, and organisational priorities drive formal innovation, spontaneous micro-innovation is not an easily manageable entity. It is a dynamic to be harnessed for sure, but not in the same way as its formal cousin. In fact, any formality imposed on micro-innovation tends to diminish its effect by draining it of the spontaneity that fuels its engine.”

He recommends learning how to capture and nurture all of the “little” ideas that otherwise disappear into the ambient noise of everyday work and you may find that your next BIG idea comes from sources most often overlooked http://networkingexchangeblog.att.com/author/norbert-sluzewski/

Note 11 – The Construction Industry Must Innovate 9th November 2015 by Charles Mills, Constructing Excellence Blog http://constructingexcellence.org.uk/the-construction-industry-must-innovate/

Note 12 – “Evolution of Everything” Matt Ridley, 2015, Fourth Estate, London. Not specifically about construction but makes the point you cannot design better things, they evolve bottom up. The book also makes the observation that innovative ideas are almost always happening in parallel by different people and groups.

Note 13 – 26 November 2015 by Adrian Farley, Constructing Excellent blog http://constructingexcellence.org.uk/profit-dirty-word-construction-latham-missed-egan-not-answer/

Partners in the BEST East project included:

John Hall is the Director of Constructing Excellence in the East of England

For further information, please contact john.hall@constructingexcellence-east.org.uk