ARCH., ENG. & CONSTRUCTION BREAKING WITH TRADITION : Why the construction industry needs an industrial revolution

Until recently, the construction industry has suffered a technology bypass, relying on centuries-old processes and procedures to manage complex modern projects. Today, however, the same software applications that make manufacturing industries efficient are being deployed in building construction. Compass spoke with leading construction industry consultant Dr. Perry Daneshgari about why the industry must evolve.

In 50 years of the most accelerated technological advances, a period in which industry after industry has used technology to improve efficiency, the art of building has  lagged. Studies by the National Institute of Standards and Technology (SITC), as well as Tulacz and Armistead, have documented 25% to 50% waste in coordinating labor and in managing, moving, and installing materials. In many cases talent and skill are underused, avoidable accidents happen and productivity remains low.

With high projections for growth – PriceWaterhouseCoopers (PwC) predicts that by the end of this decade, construction will account for more than 13% of the global economy – the time is ripe for change.

Dr. Perry Daneshgari, a construction industry consultant famous for championing the adoption of process and product control, believes that the construction industry needs to look to economist Adam Smith for inspiration.

“Adam Smith’s ideas of segregating tasks and the division of labor have been implemented in manufacturing over the past 250 years to produce an abundance of goods at affordable prices,” Daneshgari said. “Productivity has been accelerated through the application of statistical process control (SPC) that helps to generate supply and to satisfy demand.”


Process models for construction have remained largely the same for hundreds of years, with highly skilled labor carrying out tasks for which they are overqualified 80% of the time. “Making components in a factory enables manufacturing by lower-skilled operators,” Daneshgari said. “This cuts cost, improves quality, reduces onsite re-work and allows total operational control. In this system, work onsite consists of assembly of quality-assured parts, each guaranteed to be fit for purpose.”

Applying SPC to the automotive industry allowed cars to become better and less expensive. The lack of the same methodology in construction has contributed to waste and to soaring prices, Daneshgari said, but he believes that dynamic is about to change.

“New types of companies are looking at construction as a huge opportunity. For example, an air-conditioning contractor ( has branched out and started to industrially produce and erect large buildings in just six days. In China, the world’s tallest building, Sky City, will add five stories per day to be built in 120 days. We are also seeing contractors join into larger groups. They are changing building from a cyclical, low-tech, physically exhausting and unsafe industry to one that is attracting new, innovative talent.”

About the benefits of industrialization, “it has been proven that you can build at twice the speed using half the resources,” Daneshgari said. “Technologies are slow to reach construction, but when they do the impact and rewards are significant and worthwhile.”


Stacking problems occur when small errors in each building component multiply over multiple floors. This leads to electrical, power and other services, such as heating and ventilating, no longer fitting the structure. “That usually requires the deployment of highly skilled workers on site, remodeling concrete with rock drills or making expensive and potentially problematic changes to mechanical services at the point of fitting,” Daneshgari said. “Statistical variation techniques, which have been standard practice in the auto industry for 60 years, would solve the problem.

“Unfortunately, the construction industry’s investment in research and development is among the lowest of any major industry,” Daneshgari said. “But when you start to innovate with technology to drive the use of standardized products and modularized processes, productivity gains are spectacular. 3D has made significant inroads into architectural design and fabrication, but process modeling is virtually non-existent.”

To increase efficiency, eliminate waste, and increase profit margins, companies in the construction industry, as well as governments, must invest in R&D, Daneshgari said. ”Those that have invested achieve cost reductions and quality improvements that let their companies win contract after contract,” Daneshgari said. “New types of companies are building shopping malls at 40% lower cost. Zero-error buildings are being made where the reduction of re-work is producing bigger profits for those involved.”


Attracting outside talent to newly structured construction enterprises gives them a much needed and valuable intellectual boost. “The construction industry is being changed by a small number of very clever and enterprising people who are transforming the industry by taking new approaches,” he said. “Unshackled by tradition and equipped with portable, powerful and robust technology, they are bringing the business into the 21st century.”

Construction industry players who don’t step up to the challenge of modernizing their processes will hold the entire industry back, Daneshgari believes. He cites W. Edwards Deming, who made significant contributions to industrial science and practice. Deming proved that individual performance could only be improved by “elevating the entire system,” Daneshgari said. “Using ideas from Newton, Adam Smith and, in the 20th century, Deming, industry in general has been able to progress to its current advanced state. Generally, the construction industry did not follow the same enlightened path. Unless prompt action is undertaken, it will be surprised by new companies that efficiently capitalize the massive economic opportunities that present themselves in this rapidly growing industry sector.”


Dr. Perry Daneshgari, a widely published consultant to construction and other industries, holds a Ph.D. in Mechanical Engineering from University of Karlsruhe, Germany, and an MBA from Wayne State University (USA). Through his company, MCA Inc., he advises businesses around the world on process and product development, waste reduction, labor productivity improvement, project management, estimation, accounting and customer care. (Photo by David Lamarand)

by Nick Lerner Back to top
by Nick Lerner