Towards a New Understanding of the Construction Industry and the Nature of Its Production

Sven Bertelsen1 & Rafael Sacks2

1MSc, Consulting Engineer, External Lecturer, Danish Technical University, Roennebaervej 10, app 108, 2840 Holte, DK Denmark, Phone +45 4542 4705,
2Senior Lecturer, Faculty of Civil and Env. Engineering, Technion – Israel Institute of Technology, Haifa 32000, Israel Phone +972-4-8293190,


Looking around, there is no doubt that the poor performance of today’s construction industry is a global phenomenon. This leads to reflections on the nature of the industry itself and its project performance compared to the situation before World War II. Have the projects and or the industry changed for the worse? And if so, why? And how can it be changed back again – if getting back is desirable? This paper looks at the industry and the projects from flow and complexity points of view and observes that the whole industry forms one very complex and dynamic network, whose nature and behaviour is poorly understood. It applies two basic rules to the complex network: the economic driver of service industries that demands optimization of resource utilisation, and the fundamental rule of queuing theory that relates waiting time and/or buffers to capacity utilisation rates. Taken together, these rules begin to provide an understanding of this network and its behaviour that offers a reasonable explanation for the industry’s performance.


Complex networks; Construction management; Flow; Stalemate; Subcontractors; Variability.



Bertelsen, S. & Sacks, R. 2007, 'Towards a New Understanding of the Construction Industry and the Nature of Its Production' In:, Pasquire, C.L, C.L. & Tzortzopoulos, P., 15th Annual Conference of the International Group for Lean Construction. East Lansing, Michigan, USA, 18-20 Jul 2007. pp 46-56

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