Advancements in technology are defining the modern era, and along with that comes a need for a change in culture. With each new development, companies, and even whole industries, are considering how they can we utilise new technology to gain an edge on their competitors to reach customers first.

It seems that in just two decades, cars have gone from basic 4-wheeled vehicles to borderline spaceships! Say what you will about Elon Musk, but one thing that can’t be denied is Tesla has pushed automotive consumer technology to the limit. Tesla vehicles are controllable via the Tesla app, which lets Tesla owners manoeuvre their car from pretty much anywhere in the world! Tesla is also bringing autonomous driving into the mainstream.

The automotive industry has seen massive technological steps taken over the past 20 years, especially when compared to the construction industry. Although technology has had its impact on each industry, the culture change in the automotive industry compared to construction is what really sets these two apart. In fact it is a key factor in the automotive industry seeing a 208% increase in productivity from 1999 to 2019. Looking even deeper, from 1995 to 2017, the UK sector productivity compound annual growth rate (CAGR %) for the automotive industry grew nearly 4% while construction fell just over 2%.

By looking at Just-in-time (JIT) processes and both industries’ tightly integrated supply chains, we can see how each industry has gone its separate way.

JIT processes involve producing and delivering goods at the exact time they are needed, making the product there and then for the customer, rather than producing and storing large quantities for future sales. This approach allows for greater efficiency and cost savings, as well as reducing the need for large amounts of storage space, such as warehouses.

For the automotive industry, this approach reduces the risk of delays and disruptions, which was very apparent during the early stages of the chip shortage when resources were low. Although the industry was hit with a supply shortage, JIT manufacturing meant they didn’t have half finished cars sitting around in warehouses.

A tightly integrated supply chain refers to the close coordination and collaboration between different companies and suppliers throughout the production process. This allows for greater flexibility and responsiveness, as well as reducing the risk of delays and disruptions. By integrating suppliers, manufacturers and distributors in the supply chain, the automotive industry is able to optimise the production process, reducing lead times and costs.

While technology does play its part in accelerating these processes it isn’t the main driver. We think it lies more with the culture adoption between the industries. By contrast, the construction industry has been slow to adopt these practices, and as a result, productivity has remained relatively low.

This need for a culture change isn’t just national, it’s international. According to Haig Partners, an auto dealership based in the USA: “nearly 30% of US new car sales last year were completed online. Before the pandemic, less than 2% of vehicles were purchased digitally”. This massive difference shows how the industry has had to change its culture and has adapted to the world around it. The way in which the industry has to meets the evolving needs of customers has changed, and it will continue to do so in the future, it is something that has to be very closely managed.

On the flip side, the construction industry isn’t changing its culture. It is often described as adversarial, seemingly refusing to adapt to the world around it. Whereas the automotive industry has used collaboration and tightly integrated supply chain to increase productivity, the construction industry is firmly fixed in its roots, sticking to contracts to ensure delivery and relying on late payments to suppliers at the expense of productivity and collaboration.

It goes without saying that paying for work or supplies is a must, but by not having the flexibility of their automotive counterparts, they’re setting themselves up to fail by having poor relationships with stakeholders and initiating a negative cycle of late payments. This can lead to delays and disputes, which in turn can lead to further financial difficulties for all parties involved.

At the end of 2022, construction company Laing O’Rourke hired Chetan Kotur as its new technology chief. His previous role was Head of Products for Asia Pacific at electric car manufacturer Polestar. The new direction of technology in the construction industry is very exciting to see, and by bringing automotive experts across into the field, we are sure to see even more advancements coming our way.

The advancements in the automotive industry’s culture have allowed it to adapt to the modern world and grow year-on-year, whereas the construction industry has failed to do so.

Field management software also plays a crucial role in each industry, allowing them to better track and manage their projects. Here at Okappy, we are lucky to work with multiple construction companies. Our field service management software is connecting thousands of companies to clients, employees and subcontractors. If you are looking to streamline your processes, get in touch with the Okappy team today and find out how we can help.

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