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CHAPTER 1

INTRODUCTION
1.1Background
Productivity is one of the key components of every companys success and
competitiveness in the market. Productivity translates directly into cost savings
and profitability. A construction contractor stands to gain or lose, depending on
how well his companys productivity responds to competition. Construction
companies may gain advantage over their competitors by improving upon
productivity to build projects at lower costs; yet, most contractors do not
systematically and properly address this strategic issue or evaluate its impact on
the projects profit. It is no longer sufficient to outbid a singular, neighboring
contractor because many companies compete nationally and/or internationally
for construction contracts. Contractors must strive to improve productivity
continuously or risk losing important contracts. A company has the ability to
increase its competitiveness through enhanced productivity by raising the level
of value-added content in products and/or services more rapidly than
competitors. The concept of productivity is importantly linked to the quality of
input, output, and process. Productivity is also a key to long-term growth. A
sustainable improvement in productivity, when associated with economic growth
and development, is that productivity generates noninflationary increases in
wages and salaries. A productive industry also may be profitable, allowing for
growth and innovation while having a positive effect on society. For example,
productivity improvement in the housing construction market may contribute to
the supply of more affordable housing; however, sometimes the very nature of
construction industry makes the productivity concept a complex one, due to such
variables as small firm sizes, low profit margins, industry fragmentation,
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environmental issues, limitations on the supply of skilled labor, and other


resources.
Despite the importance of the productivity concept, productivity enhancement in
construction has been overlooked for decades. While the manufacturing industry
drew benefits from proven production management techniques, the construction
industry lagged due to insufficient research in the area of productivity. Methods
for improving construction productivity to assist managers in identifying
productivity barriers and offer solutions were limited. For example, in an
ergonomic field study performed at an IBM Corporation manufacturing plant, a
$1.7 million savings at modification costs of $16,000 was realized. The study
was performed with the dual objective of improving the manufacturing yield in
the production of electronic circuit board panels and increasing operator comfort
and job satisfaction. In contrast, there are few studies of enhanced productivity in
the construction industry.
The ultimate purpose of construction is to build and building is done by foremen
and laborers onsite while the remainder of the organization supports the project
and its workforce.
According to Oglesby (1989), construction operates like a professional sports
organization in many respects, where much effort goes into supporting the
players on the field. Likewise, construction operation takes place onsite and that
workplace is where productivity may be improved.
Improvement in construction productivity is not possible without identifying
factors that influence productivity. Previous studies regarding productivity
indicate that a broad range of factors affect productivity. The factors that
influence productivity may be separated into three factors: industry-related,
labor-related, and management-related. Some of the productivity factors at
industry-level include governmental interference, regulation burdens, local
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unions, and politics. Some of the factors that are labor-related include
motivation, experience, skill, and training. Some of the management-related
factors include planning and direction of project. This study addresses labor and
management-related factors.
1.2Objective of Study
The objective of this study is to highlight the importance of the various factors
that affect productivity and outline them in simple and affordable manner to be
utilized as powerful control tools for project managers to enhance profit.
The objective is intended to be accomplished as follows:
1- Consideration of productivity parameters of previous studies and retrieving
list of productivity factors.
2- Performing a survey of construction practitioners to measure their perception
of productivity factors and gain better insight of construction productivity.
3- Formation of productivity evaluation checklist from the review of literature.
1.3Organization of Research
The first chapter provides background information about the importance of
productivity in the construction industry. The objective of the study is included
in Chapter One as well. The second chapter provides an overview of the
productivity concept and productivity measurement methods/techniques, and
describes factors that influence productivity of construction projects. Chapter
Three provides information about the methods and procedure of study used to
achieve the stated objective. It provides background information of research
methodology. Chapter Four presents the results of the survey and discussion of
the results. The last chapter involves the conclusion. It offers recommendations
for future research in the area of construction productivity.
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