Managing Productivity in Construction

JIT Operations and Measurements

Low Sui Pheng, Chan Yue Meng

• Publisher: Routledge
• Year: 2018
• ISBN:
  9780429829727
• Edition: 1
• Topic: Business
• Subtopic: Construction Industry
• Index: Business

First published in 1997, this volume joined the debate assessing the potential of the Just-In-Time management philosophy from the manufacturing industry for Singapore's construction industry by examining the "off-site" prefabrication of precast concrete components in Singapore, in comparison with traditional management systems. In the wake of the 1991 Strategic Economic Plan of Singapore, which forecasted alarmingly low productivity in the local construction sector, the authors noted that construction in Japan was 35% more productive, whilst Finland was 75% better. Highlighting immense potential for the JIT approach, they explore the JIT philosophy, traditional systems, construction wastes and comparisons between construction and manufacturing.

1
Introduction

Background

Over the last two decades, Construction and Works made up, on average, 46 per cent of Gross Fixed Capital Formation in Singapore. This undoubtedly shows the importance of the construction sector’s role in the national economy. Despite this significance, the 1991 Strategic Economic Plan had alarmingly highlighted the comparatively low productivity of the local construction sector. As further confirmation of the findings of the 1992 Construction Productivity Taskforce Report, Prime Minister Mr Goh Chok Tong in his 1992 National Day Message, likewise, noted with concern that construction productivity in Singapore is some 53 years behind that of Japan. It is therefore of crucial importance to increase productivity in the construction sector if Singapore aspires to join the realms of developed nations by the year 2030.

The concern for low productivity in the construction sector is both instructive and timely but disturbing. It is instructive and timely because as the age of trade globalization draws imminently near, the construction industry, like many other sectors of the national economy, would need to export its services more aggressively overseas. This is already evident from the substantial investments made by Singapore’s construction-related corporations in countries like China, Vietnam, Cambodia and Myanmar. The construction sector’s ability to provide a high level of productivity is therefore a significant one if the industry is to compete effectively for projects in overseas countries.

Whilst Singapore’s superb infrastructures and amenities like her first-class airport, harbour, road network system and telecommunication facilities are held in high esteem, it is disturbing to note that many have taken these achievements for granted. The truth is that Singapore’s economy may not have taken off into maturity so rapidly without the crucial contributions from the construction industry. The construction industry should not, therefore, be taken for granted but a concerted effort should instead be made by everyone concerned to make it more productive and cost competitive. Only then can Singapore’s construction entrepreneurs achieve success in their a long-term objectives towards regional expansion.

Review of existing literature

A review of past literature has revealed that low construction productivity is not a new issue of concern to the construction industry. General problems which led to low levels of productivity in the construction industry have been examined by numerous researchers over the past two decades. (Bishop, 1975; Maloney, 1983; Sumanth, 1984; Lewis, 1987). These studies have concentrated on factors such as effects of the learning curve and benefits of repetition on the labour force (Thomas, Mathews & Ward, 1986), adverse effects of inclement weather (Grimm & Wagner, 1974), use of plant, equipment and hand held power tools (Cheetham & Hall, 1984; Sozen & Giritli, 1987), and use of computers and artificial intelligence (Christian, 1987; Oglesby, Parker & Howell, 1989); all of which have an impact on construction productivity.

Likewise, specific problems relating to productivity on construction sites were also investigated (Baxendale, 1985). The motivation and training of the workforce has been identified as a crucial factor in the productivity movement. (Thomas, Mathews and Ward, 1986). Where the labour force is concerned, studies have urged management to retain a tight control over workers. Apart from control, training and other forms of incentives have also been shown to be important in motivating the workforce. However, the degree of management control rather than level of financial incentive has shown a strong positive effect on productivity. (Malcolm, et. al., 1987).

The construction industry has been perceived to be a highly complex and fragmented sector of the economy. (Lim and Low, 1992). Empirical approaches have therefore often lend themselves suitably for operationalising productivity in construction activities. The establishment of various norm values or average output rates at different levels of the worker, gangs, subsector and sector has been emphasised. (Suite, 1987). Assessments of actual realised rates for a particular job site against the established norm values should be carried out constantly to assess productivity performance.

Despite the numerous studies on construction productivity, it is surprising to note that not many of these studies have emphasised the need to efficiently control the allocation and management of scarce construction resources to reduce wastage and idle time on construction sites (Malcolm, et. al., 1987). The three major resources in construction - namely, manpower, machinery and materials - have therefore been subjected to much scrutiny as to how their utilisation may be achieved more efficiently.

Productivity in construction has subsequently been examined in the light of the collective incorporation of manpower, machinery and materials on work sites. Where hazardous and other mass rugged activities are encountered in construction, the preferred use of machinery and equipment over manual labour can lead to productivity improvement. However, the use of construction plant and equipment should only be planned and managed to justify their usage with actual corresponding requirements on site. Unless necessary, no plant and equipment should be left idle with excess operating capacities. Likewise, the use of materials should also be planned and managed appropriately to reduce wastage on site. Construction productivity would be affected adversely if the materials required for use are not available in the quantity or quality required when they are needed (Low, 1992).

Productivity in the Singapore construction industry

In order to gain an insight of the low level of construction productivity in Singapore’s construction sector, it is essential to highlight the findings of the 1992 Construction Productivity Taskforce. The Taskforce is an ad hoc executive committee set up to critically examine and address the low level of construction productivity. The Taskforce was chaired by the Construction Industry Development Board (CIDB) and comprised of professional members from key governmental bodies, statutory boards and the private sector. This section is mainly concerned with the findings of the Taskforce.

The construction sector in Singapore has been perceived by the Taskforce as a low productivity sector primarily because of its visibly low-technology image and acute employment of a large number of foreign workers.

Using value-added per worker (the only indicator for comparison across economic sectors) as the economic indicator to measure construction productivity, it can be seen from Table 1.1 that construction productivity had only increased at an average rate of 3.1 per cent between 1982 to 1991. This was lower than the average of 4.5 per cent for manufacturing and 4.2 per cent for the whole economy. It is thus evident that construction productivity had lagged behind that of manufacturing.

Although value added per worker is the only indicator for comparison across economic sectors, the Taskforce viewed it as a rather limited one when applied to construction. This is due to the following limitations:

1. The severe magnitudes of boom and bust cycles in construction always tend to artificially inflate and deflate the value added respectively.
2. Value added only measures the productivity of one part of the construction process - that of site production which tends to be the least productive part of construction.
3. Material and labour cost increases after contract awards can profoundly alter value added due to depression in the profit margins.
4. It is difficult to use the value added per worker indicator to compare with the construction indicators of other countries.

The Taskforce therefore used an alternative indicator of “square metres of built-up area per manday” based mainly on the physical output per worker. This productivity indicator has been used in some developed countries such as Japan and Finland. The indicator measures the on-site mandays required to put together a unit of completed floor area. The project, or industry, is more productive if less site workers are needed to put up the same amount of finished floor space.

Table 1.1 Changes in productivity by sector
(computed based on value added per worker)

Year	Manufacturing	Construction	National Average
1982	−0.7	4.2	1.6
1983	9.1	10.1	5.3
1984	7.2	9.0	6.9
1985	−1.5	5.7	3.1
1986	13.6	−4.3	6.3
1987	3.7	0.8	4.8
1988	2.0	1.6	4.5
1989	3.8	0.1	4.8
1990	4.6	1.4	3.4
1991	3.4	2.8	1...