Improving productivity in the business of construction

Abstract

Productivity has a direct impact on profitability and is essential for the success and sustainability of any construction organisation. Consequently, productivity must be effectively managed at top and middle management levels, and not solely at the operational level. The objective of the study was to determine construction organisations’ perceptions and practices relative to the productivity of their organisations, as opposed to the productivity of construction activities. The study was conducted among general contracting organisations in the Nelson Mandela Bay metropole in South Africa. Findings include, inter alia, that construction organisations are not fully productive due to the fact that there is a lack of strategic thinking, new technology and construction methods are not being fully utilised, and there is a lack of innovation and efficiency. Construction organisations can optimise their profits by increasing their profit and overhead mark-up on projects, ensuring a positive cash flow at all times, and utilising their resources in the most efficient and cost-effective way possible. Recommendations include, inter alia, that construction organisations should: review the manner in which they conduct business; opt for more advanced methods of construction and utilise new technology, and regularly prepare budgets, use financial indicators to review productivity, monitor cash flow, and review the skills of their employees.