The cost of rework: Finding the key to improving productivity in construction

A 2005 study found that, on average, 12 per cent of a project’s value was lost to rework. In an industry that struggles to make returns of more than three per cent, this should be shocking. Yet I find that the actual response is either incredulity or resignation.

It seems that we simply accept the nature of construction as such. However, there are a growing number within the industry that see a focus on reducing rework as a unique opportunity.

Technology is significantly changing the way we work. We now have tools to identify, record and resolve errors more efficiently than ever.

Consider design error for a moment: broadly accounting for 40 to 60 per cent of all construction error and difficult to identify until the element is built or installed on the project.

Although the adoption of Level 3 BIM (Building Information Modelling) is still some way off, I have seen it in action and I’m hugely encouraged, both by the speed of design turnaround across contributing design teams and the elimination of clashes.

The move from paper records to a digital format is gaining in pace and could be transformative.

However, another significant change is going under the radar. The move from paper records to a digital format is gaining in pace and could be transformative. If data-rich information such as NCRs (non-conformance reports), snags, inspection and test records and much more are captured digitally, trending and analysis can be carried out almost immediately.

Such data is already giving project managers powerful insights, allowing them to best mitigate the risk of error and therefore rework on their projects. But however useful the technology has grown, it is unlikely to overcome the cultural challenges underpinning the identification of construction borne error.

Construction borne errors are pervasive. The average frontline operative is unlikely to highlight issues without incentives or at least a positive cultural backdrop. In fact, as was found with nursing in the medical profession, it’s likely the ability to deal with errors quickly and effectively (without having to report them) is viewed as badge of honour.

Also, today’s typical contractual agreements can often create a culture that supresses the reporting of error, as contractors are concerned that their openness could lead to delays in payment.

A project that seems to be bucking this trend is Crossrail. Now in its final stages of construction and commissioning, it is on time and on budget.

From the start, Crossrail identified rework as major opportunity, with potential for between three per cent and 12 per cent of retained revenue. Most of Crossrail’s major projects were procured under a target cost, shared pain and gain contract.

A sense of urgency around identifying of NCR’s has substantial advantages as the accountability is more acute and the problem can be satisfactorily resolved

Defining parameters so that non-conformance reports had to be submitted quickly for it to be considered as cost reimbursable, in effect, encouraged all errors to be quickly reported.

A sense of urgency around identifying of NCR’s has substantial advantages as the accountability is more acute and the problem can be satisfactorily resolved before other layers of work further complicate the issue. It was a clever way to cheaply offset risk while fostering positive collaboration among the many contractors.

A recent academic paper took the case study of an AU $375m Sydney-based water infrastructure alliance, also a pain and gain contract. After two-and-a-half years, the project was running behind schedule by an average of three weeks due to rework and about AU $1m in manager and supervisor costs had been accrued managing rework.

The alliance decided to turn its focus specifically to rework, the results of which was a successful conclusion with the owner receiving the assets on time.

Quality and the reduction of rework is a remarkable opportunity for contractors and clients alike. We have the technology. It is up to us to push that positive message across the industry.

Seán Connolly is the quality leader at Expanded, a Laing O'Rourke company