Like many industries, the construction market has taken a beating in the past two years. Construction spending is down (read more  here) and there are a lot of service providers chasing fewer projects. If you are interested in more construction economic data,  click here.

We believe it is more important to delve in deeper into what is happening in the industry as many of these changes will affect projects starting in the next 1 to 5 years. Many firms have responded by cutting their ranks, both superficially and through deeper cutbacks.

Yet, as we talk to several of our colleagues in the business, we find it amazing that very few firms have actually taken steps to change the way they do business. Here are three items to consider:

• Since 1960, general business productivity has increased by 100%, while construction productivity has remained flat (for more information  click here).
• Overall, the construction delivery methodology has changed little in the last century (for more information  click here).
• Construction is a human capital intensive business. A savvy management team, coupled with skilled and educated labor is essential to ensuring a successful project. We are on the verge of a construction labor shortage with fewer professionals and tradespersons entering than leaving (for more information,  click here).

These issues make it apparent that the construction industry is ripe for innovation. We must innovate in order to survive, but by and large the industry is doing very little to achieve any sort of innovation. We at Helios are taking a more proactive approach. We have made several process improvements to the way we have done business in order to remain competitive. Here are a few areas we are working on:

• Increased uses of preassembled components where possible. Boeing does not stick build airplanes, so why do we continue to stick build buildings? We are working with several of our subcontractors and vendors to prefabricate building components where practical to reduce costs, speed up construction durations and increase quality of the end product. We are working on a pilot project to develop 10 energy efficient affordable single family homes in Chicago (for more information,  click here) that take advantage of several prefabricated components to reduce delivery times and save money.
• Leveraging technology to change our procurement methods and delivery methodologies. Roughly 25% of construction costs are commodity type materials, however, most construction businesses continue to procure them through an antiquated stream of middlemen. On the other end of the spectrum, there are increasingly more building systems with a high degree of complication in their design, procurement and installation that require a substantial level of upfront planning and coordination to properly install. The traditional method of design-bid-build is not well suited for these systems. We also use technologies such as BIM (Building Information Modeling) to help integrate all building components which allows us to see how commodity products and complex systems integrate in a completed building.
• Deploy new technologies to streamline our operations. We have made, and continue to make, substantial investments to improve the way we do things.

We are using 2d and 3d modeling tools to assist with preconstruction activities such as cost estimating, life cycle costing, value engineering and systems coordination and integration. We are also in the process of going nearly paperless for our field operations, improving our ability to communicate with all project stakeholders, while helping improve field productivity.

We have utilized the methods above to help increase our field productivity and reduce our overall project costs by 5% - 7%, while improving the quality of the finished product and the speed in which we deliver it. We have a ways to go, but we are moving ahead with implementing other improvements in the coming year to further reduce costs and increase value for our clients.