Masonry Magazine December 2002 Page. 40
Improving Productivity
# Five Ways to Improve Productivity at the Construction Site
Michael P. Rollage, CPA, CVA, ABV
Principle, McCrory & McDowell LLC
Pittsburgh, Penn.
In the current environment, contractors are hard pressed to find ways to gain a competitive advantage and improve slim profit margins. In any given geographic area, construction labor, material and equipment costs are essentially the same. One of the few opportunities to improve the bottom line is to increase productivity.
Increasing productivity benefits a contractor in several ways:
* Projects are completed more quickly
* Project cost is lowered
* The contractor can submit more competitive bids
* The project can be more profitable
Studies show that workers on a construction project are unproductive for 50 percent of their time on site. Waiting eats up more than half of an employee's unproductive time and about one-third of total project time. It can wreck a schedule and reduce the contractor's profits.
Some studies indicate that a third of waiting periods result from factors under management's control. By improving management practices, a construction company can therefore reduce waiting time significantly. Let's take a look at a $1 million construction project, for which direct labor costs typically account for about $400,000. Labor that is unproductive half the time costs the construction company $200,000, with nothing to show for it. If a construction company could improve its management practices, it could see one-third of that $200,000, or $66,667, drop straight to its bottom line. Or it could lower its bids and win more projects.
Besides long periods of waiting, there are many other drains on productivity at the construction site, including:
* Poorly planned materials management
* Cleaning up the job site
* Materials waste and theft
* Accidents
* Substance abuse
* Redoing substandard work and completing client punch lists
Improving site productivity is easy to pose as a strategic objective, but not so easy to achieve given the complexity of the construction process. There are five major ways, however, that a construction company can improve its productivity:
# 1. Analyze the entire construction process in detail.
A construction company should analyze each phase of its process to determine what the barriers are to improving productivity. It should begin by measuring key factors and setting benchmarks and goals for improvement. For example, the company can carefully observe the percentage of productive and nonproductive time at a site. By comparing projects, the company can determine why one project was more productive than the other. For instance, perhaps productivity always slides when a certain piece of equipment is used. The company can set a goal for using the equipment more efficiently, and then provide the training the crew needs to reach the goal.
# 2. Do better planning.
There will never be a magic solution that eliminates all work changes, but better planning will mitigate the impact of work changes and also eliminate the unnecessary waits that result from imprecise planning. For example, if you don't order material to arrive at the date it is needed, the crew will be forced to wait until the material arrives.
But just to say we need to do better planning isn't good enough. You also need to develop a measurement for determining how accurate the current planning process is, plus develop a realistic benchmark for improvement.
# 3. Train your supervisors and the crew.
An important key to improving productivity is to train the crew - especially construction supervisors, whose knowledge and skills can make or break a project