Managing and Controlling Construction Productivity by eub67638


									10                        FINDING A GREAT DANCE PARTNER: SELECTING AN ALLY

Managing and Controlling
Construction Productivity
Scott L. Kimpland

                          IN BRIEF

                            Contractors can improve productivity by setting up specific processes for pre-job planning,
                            communicating during the job, measuring performance, and encouraging employee


Scott Kimpland is a
                                      o effectively manage productivity    This step is best accomplished by having a
director of FMI. He                   in a construction company, man-      cross-functional team — including repre-
provides quality- and                 agement must start by identifying    sentatives from estimating, project manage-
productivity-related                  the variables, processes, and        ment, operations management, and field
management                                                                 management — that is involved in creating
                          management activities that impact produc-
consulting services to
                          tivity. These key “productivity drivers” typi-   a flowchart for a project control system for
contracting companies
of all sizes. He is       cally fall into one or more of the following     your company. A simplified example of a
particularly skilled in   major categories:                                project control system is outlined in Exhibit 1.
fostering employee
                           • Planning processes                                 After developing the flowchart, the next
commitment to
                                                                           step is to break down the macro level ac-
developing a plan to       • Communication processes
increase company                                                           tivities and begin defining the exact pro-
productivity and           • Measurement and feedback processes            cesses and tools required to perform each
profitability. (813-                                                       of these critical activities.
636-1263; e-mail:          • Employee involvement processes.
                               These four categories all focus on con-
                          trollable variables that are at least strongly   Pre-Bid Evaluation
                          influenceable by contractors.                         Many contractors are guilty of chasing
                              Within these categories, contractors         volume, as opposed to chasing margin. In
                          must then identify and define the specific       many cases, the thrill of getting a new job is
                          management processes required to effec-          far more motivating than the effort required
                          tively control projects. A logical approach      to manage an existing project. Contractors
                          to defining these processes is to start at a     that chase volume often impact productivity
                          macro level by defining the critical pro-        by the type of work that they target and
                          cesses within the major phases of a project.     ultimately acquire. It’s common sense that

                   MANAGING AND CONTROLLING CONSTRUCTION PRODUCTIVITY                                           11

project requirements that are different than      meeting is the first step in pre-planning a
the contractor’s area of experience or ex-        project. Any time a project is passed from         Contractors
pertise are likely to affect productivity in a    one person to another, the chance exists for       that focus
negative way. Contractors that focus their        key issues to get dropped between the              their mar-
marketing and sales efforts on the types of       cracks. Therefore, when a new project              keting and
projects with which they have a history of        team member is introduced or involved in a         sales efforts
high productivity are likely to be more pro-      project, it’s absolutely critical to have a de-    on the types
ductive. Conversely, contractors that take        fined process to ensure that relevant infor-
                                                                                                     of projects
anything that comes their way, regardless         mation is passed along. The easiest way to
of historical performance, are more likely        do this on a consistent basis is to develop a
                                                                                                     with which
to be less productive. The choice of mar-         standard checklist or agenda for the hand-         they have a
kets or projects to chase is a strategic          off. An example of a download meeting              history of
decision that is totally within the contrac-      checklist is provided in Exhibit 4. Much like      high produc-
tor’s control.                                    a pilot uses a pre-flight checklist to get the     tivity are
    One way to collect data for developing        plane off the ground safely and effectively,       likely to be
an effective strategy is to create a history of   an estimator should use a similar tool when        more pro-
projects, put them into a simple spread-          passing a project along to a project manag-        ductive.
sheet, and sort by each variable to deter-        er. This step will eliminate the risk of vital
mine performance trends by variable. An           information getting filtered or lost, as well as
example of a spreadsheet format is offered        ensure that project managers know as
in Exhibit 2.                                     much as they can prior to starting projects.
                                                  If the information transfer at this point is
     Another helpful tool in the pre-bid eval-
                                                  incomplete, the information will be even less
uation is a list of objective and subjective
                                                  complete by the time it reaches the field.
criteria (see Exhibit 3) to use when deter-
                                                  With incomplete information, productivity in
mining whether to bid on a project. Prior to
                                                  the field will certainly suffer.
allocating estimating resources, senior man-
agement representatives from estimating,
project management, and field operations
                                                  Pre-Job Planning Meeting
should rate the project based on the crite-
ria. If the total of the evaluations is above a   Between Estimator, Project
certain predetermined amount, then bid on         Manager, and Field Manager
the project. If the total of the evaluations is   Field managers and crews are often sent
less than the predetermined minimum, not          out to mobilize projects with little or no in-
bidding on the project may be the best            formation about the job. Then, when the
business decision.                                project fails to meet budget, schedule, or
                                                  quality expectations, they are criticized for
                                                  poor performance or poor productivity. In
Download Meeting from                             many cases, field managers and their crews
Estimator to Project Manager                      are set up for failure from day one.
Depending on how the contractor is orga-               Probably the single most important
nized, the download meeting from estimator        thing a contractor can do to impact produc-
to project manager may or may not be a            tivity is to foster pre-job planning that in-
critical process. In companies where esti-        volves field managers and solicits their
mating is a separate position and function        ideas. A poorly prepared field manager is
from project management, the download             an unproductive field manager. Similar to

                                   THE CONTRACTORS MANAGEMENT JOURNAL # NOVEMBER 1999

                 the download process that was described          planning stops, productivity will suffer
Scheduling       earlier, pre-job planning involves handing       quickly. The typical foreman in the con-
and plan-        off information to the field manager, as well    struction industry plans ahead, in detail,
ning are two     as solicitation of creative ideas to beat the    about four to eight hours. As a result of the
completely       budget or schedule.                              small planning window, many avoidable
different             Proper pre-job planning should start        delays and emergencies occur that impact
activities. It   with a good checklist, developed by the          productivity. In many cases, field managers
                                                                  put together a schedule that identifies up-
is possible      field managers, not the estimators or
                                                                  coming tasks and activities. However, field
to develop a     project managers. Exhibits 5 and 6 illustrate
                                                                  managers often fail to develop the plan to
schedule         a pre-job planning checklist and a flowchart
                 outlining how the pre-job planning process       achieve this schedule.
without a
                 could work. The checklist should include a            Scheduling and planning are two com-
plan, but it     list of tangible items that need to be provid-   pletely different activities. It is possible to
is impossi-      ed to the field manager some time prior to       develop a schedule without a plan, but it is
ble to devel-    the actual meeting, as well as a list of dis-    impossible to develop a plan without first
op a plan        cussion items to be reviewed in the meeting.     having a schedule. Said differently, a plan
without first         At the time of the pre-job planning         goes well beyond a schedule, which simply
having a         meeting, it’s extremely important that the       identifies tasks and time frames. A plan an-
schedule.        field manager has already reviewed the           swers the basic but important questions of
                 plans, budget, and preliminary schedule so       how the schedule will be achieved, what
                 he or she can show up at the meeting with a      resources (labor, tools, equipment, and ma-
                 list of questions or concerns. If the meeting    terials) will be required, and what informa-
                 is the first time the field manager has seen     tion is needed.
                 the job, the field manager probably will not          Another challenge that exists in the in-
                 be able to contribute quickly. In addition,      dustry is the aversion to documentation in
                 the pre-job planning meeting should be a         the field. Field managers often are uncom-
                 collaborative effort between the estimator,      fortable, and sometimes untrained, in using
                 project manager, and field manager to de-        documentation tools (pencil and paper, lap-
                 velop the best approach to the job. Often,       tops and e-mail, etc.). However, it is practi-
                 estimators and project managers use this         cally impossible to do a good job of plan-
                 meeting to “tell” field managers everything      ning without capturing the plan on paper.
                 they need to know. This method of one-           The argument of “I can do it in my head” is
                 way communication is typically ineffective       invalid for the following reasons:
                 and fails to capitalize on field managers’
                 experience. This approach is often referred      • No one else can see the plan if it’s in
                 to as the “dump and run” method of hand-           someone’s head.
                 ing off a project.                               • When the person with the plan in his or
                                                                    her head is not on the job, nothing pro-
                 Short-Interval Planning                            ductive is likely to happen.
                 Assuring that the field manager is involved      • The level of accountability to a plan in
                 in a thorough and complete pre-job plan-           someone’s head is much lower than the
                 ning process is a good start to impacting          level of accountability when the plan is on
                 productivity. However, if that is where the        paper.

                   MANAGING AND CONTROLLING CONSTRUCTION PRODUCTIVITY                                        13

• With the complexity of projects and the        interval planning process work.
  number of variables that field managers             One way to measure the impact or val-       When only
  focus on daily, very few of them have the      ue of short-interval planning is to measure      the foreman
  ability to keep track of everything in their   incoming calls to the shop for materials,        establishes
  heads. Something is likely to slip through     tools, and equipment. This measurement           the plan and
  the cracks.                                    works particularly well in a company that        goals for
    With that said, the challenge becomes        self-performs much of its work and has a         the crew,
developing a standardized short-interval         centralized shop that supplies and supports      the crew
planning process that is simple and effec-       the field operations.                            has very
tive. For the process to work, you must               Incoming calls for resources can be         little “buy-
start with a list of questions that field man-   tracked as “planned calls” if a minimum of       in.” There-
agers have to answer each week. These            some lead time is provided. Twenty-four          fore, if the
questions should only focus on things they       hours may be a good place to start. Any
                                                                                                  plan fails or
need to think about or need support from         call that comes in for resources with fewer
                                                                                                  the goals
someone else to handle. These questions          than 24 hours of lead time should be
should then be developed into a format that      tracked as “emergency calls.” By measur-         are not
captures the plan with the answers. Exhibit      ing these calls, you can produce and share       achieved,
7 provides an example format for a short-        a simple graph, similar to the one shown in      the crew
interval plan.                                   Exhibit 9, on a monthly basis. Sharing this      did not fail,
     After developing the format or layout       graph with the people that can impact it will    the foreman
for the plan, give thought to when the plan      increase awareness and ultimately increase       did.
should be completed, who needs to be in-         the percentage of planned calls.
volved in the process, and how information
in the plan will be communicated to the ap-
propriate people. By answering these ques-
                                                 Daily Planning (Foreman’s
tions, a flowchart or description of the pro-
cess can be developed, similar to the            Daily Huddle) Between
example provided in Exhibit 8.                   Foremen and Crews
     To ensure that the short-interval plan-     The “Foreman’s Daily Huddle” is a formal
ning process is used on a consistent basis,      planning process used by the best foremen
two things must happen. First, compliance        in the industry. The Foreman’s Daily Hud-
with the process must be measured. Typi-         dle requires the foreman to take three to
cally, the activities that top management        five minutes before starting work every day
measures are those that get done. Monitor-       to meet with the crew to create a plan for
ing field managers and reporting their com-      the day, communicate the plan, and look for
pliance is critical to making the process        ideas from the crew to improve quality,
work. Also, the plans must get shared with       productivity, and safety on the job. The
project managers on a weekly basis, and          basic philosophy behind the Foreman’s
project managers must be responsive to the       Daily Huddle is that the team, not just the
resource needs and questions in the plans.       foreman, should be involved in establishing
If field managers simply complete the plan       the plan and goals for the day. When only
and turn it in without any response, support     the foreman establishes the plan and goals
or feedback, the process quickly becomes         for the crew, the crew has very little “buy-
just “another piece of paperwork.” Project       in.” Therefore, if the plan fails or the goals
managers are key in making the short-            are not achieved, the crew did not fail, the

                                  THE CONTRACTORS MANAGEMENT JOURNAL # NOVEMBER 1999

               foreman did. After all, it was the foreman’s          The Foreman’s Daily Huddle is rela-
One of the     plan, not the crew’s! The reasons that the        tively quick and simple. When foremen call
most power-    Foreman’s Daily Huddle works are:                 the entire crew together each morning, they
ful, yet       • Teams will always identify and solve
                                                                 ask several questions to get the crew in-
overlooked       problems better than any person will. Re-
                                                                 volved in the planning process. The ques-
productivity     lying completely on the foreman to see
                                                                 tions should include the following:
drivers is       and plan everything on the job will cause       1. What do you see that would allow us to
job cost or      your company to miss opportunities for             be more productive on this job?
production       improvement seen by crew members.
feedback.        Four sets of eyes are always better than        2. Based on what you will be working on
                 one!                                               today, how much should we target to
                                                                    get produced? (This should result in
               • If crew members have no input into de-             specific and measurable quantities, not
                 veloping the plan and establishing the dai-        a response of “as much as we can by
                 ly goals, they will have very little account-      quitting time.”)
                 ability in carrying out the plan or achieving
                                                                 3. Are there any resource problems with
                 the goals.
                                                                    tools, equipment, materials, etc.?
               • Everyone wants to be a winner and con-          4. Does anyone have any safety or quality
                 tribute to a winning team. No one wakes            concerns that we can change or cor-
                 up in the morning with the intention of            rect?
                 going to work to fail. Contrary to what              After collecting this input, the foreman
                 many people believe, money is not the           and crew should agree to the production
                 most powerful motivator. Behavioral sci-        target and any actions they need to take to
                 entists have conclusive evidence that indi-     improve quality, productivity, and safety.
                 cates that having the opportunity to be         The foreman should write this plan down in
                 involved and feel like part of a team is a      a daily log. At the end of the day, or the
                 very strong motivator. The Foreman’s            next morning, the foreman and crew should
                 Daily Huddle makes everyone on the              evaluate how well they followed the plan
                 crew responsible for looking for opportu-       and addressed action items. Keep in mind,
                 nities for improvement in the areas of          you won’t achieve the production targets
                 quality, productivity, and safety — a           every day. If the targets are challenging, yet
                 responsibility traditionally held only by       attainable, your crew will probably produce
                 foremen.                                        better than the plan 50 percent of the time
               • It teaches people to think! In the tradi-       and produce less than the plan 50 percent
                 tional construction environment, the fore-      of the time. If the plan is being achieved
                 man “tells” crew members what they are          more often than this, the production targets
                 going to do, how much they are going to         may not be challenging enough. If produc-
                 do, and what resources they are going to        tion targets aren’t hit more than half of the
                 use to do it. This type of one-way com-         time, the goals may be too unrealistic.
                 munication never teaches crew members
                 to think on their own. Therefore, very few
                 new “thinkers” are developed, and the
                 crew has trouble functioning without the

                   MANAGING AND CONTROLLING CONSTRUCTION PRODUCTIVITY                                           15

                                                 are often lengthy, detailed, confusing, and
Job Cost or Production                                                                             Since esti-
                                                 downright painful to look at. They often are
Feedback                                         produced on reams of “green bar” comput-          mators typi-
One of the most powerful, yet overlooked         er paper with multiple pages, lines, and col-     cally spend
productivity drivers is job cost or              umns. In many cases, the accounting               little, if any,
production feedback. In many cases, field        department designs the reports with little or     time in the
managers are sent to jobs with little or no      no thought about what a field manager             field, and
discussion of how the job was estimated,         needs or wants to look at. Therefore, much
                                                                                                   projects are
the number of labor hours per phase, or the      of information is produced that is ignored or
production rates assumed in the estimate. In     goes unused. The solution to this problem is
                                                                                                   never con-
the absence of clearly communicated pro-         simple. Figure out a way to make the job          structed ex-
duction expectations, productivity will never    cost or production feedback into a graphic.       actly like
be maximized. Behavioral scientists have         As the old saying goes, “a picture is worth       estimators
proven that without measurement or feed-         a thousand words.”                                see them on
back, performance will always suffer. Said           The graphic may be as simple as the           paper, it is
differently, the score of the game is what       example in Exhibit 10. This feedback              critical to
motivates people to play, and everyone           graphic simply shows the percent of the           have a good
wants to “light up the scoreboard.” There-       labor budget used by phase compared to            process for
fore, the first step in using feedback as a      the completion percent of the phase. De-          providing
productivity driver is to share the produc-
tion expectations during the pre-job plan-
                                                 pending on the type of construction per-          constructive
                                                 formed, the exact format of the graphic may       feedback
ning phase of a project. Getting field man-      be different. Field managers can help
agers’ buy-in to these expectations also is                                                        from the
                                                 provide ideas for what would be most
critical and may involve getting production      effective.
                                                                                                   field to
rates and input from them during the esti-                                                         estimators.
mating phase. If this is not always practical,        The other powerful aspect of the
having field managers re-budget the project      graphic feedback is that it can be shared
after award is another strategy. In this re-     with crew members, without disclosing
estimate, the total dollars cannot be            confidential pricing and cost information. It
changed but can be reallocated to different      simply provides feedback on how the crew
items or phases within the project depend-       is performing relative to the expectation or
ing on how the job will actually be con-         estimate.
structed in the field. This re-estimating pro-
cess is time-consuming but is very effective
in creating buy-in and having field managers     Post-Job Review
thoroughly understand projects on paper          Learning from past experiences is yet an-
prior to hitting the field.                      other opportunity to positively impact pro-
    After providing the expectations up          ductivity on future jobs. However, it is not
front, field managers must see feedback, or      uncommon to hear contractors make the
the actual score of the game, throughout the     comment, “That’s the same mistake we
project. Depending on the level of detail        made on the last job.”
that is tracked and shared, the format for           Since estimators typically spend little, if
providing this feedback can be critical. With    any, time in the field, and projects are never
the sophistication of many job-cost sys-         constructed exactly like estimators see them
tems, the reports generated from the system      on paper, it is critical to have a good

                                  THE CONTRACTORS MANAGEMENT JOURNAL # NOVEMBER 1999

     process for providing constructive feed-
     back from the field to estimators. This pro-
     cess is often completed through an effective   With many external factors impacting the
     post-job review meeting. To be effective,      industry, the need to change is inevitable.
     post-job review meetings should follow a       Successful contractors of the next decade
     consistent format or agenda, like the one      will focus their efforts on managing the con-
     provided in Exhibit 11. The meeting should     trollable variables within their businesses.
     include the same participants who were         By having well-defined and understood
     involved in the pre-job planning meeting. A    processes for planning, communication, and
     facilitator outside of the project team may    project management, they will be able to
     be necessary to keep the meeting focused       train new project managers and field man-
     on facts and avoid a meeting based totally     agers more efficiently, provide tighter con-
     on opinions and emotions.                      trol over productivity, and ultimately be-
                                                    come lower-cost producers.
          Once the lessons learned from each
     project are captured, they should be shared
     with all other estimators, project managers,
     and field managers. These lessons learned
     make great topics for periodic internal
     training sessions.



Project Control System



Historical Data Spreadsheet


Pre-Bid Evaluation Criteria

                     MANAGING AND CONTROLLING CONSTRUCTION PRODUCTIVITY                                                   19


Download Meeting Checklist

                                                                   Date of                             Date of Download
   Job Name
                                                                   Award:                              Meeting:
   Estimator                                                       PM:

        TA N G I B L E S T O B E P R O V I D E D T O P M P R I O R T O D O W N L O A D M E E T I N G              NOTES
   1.   Estimated set of plans, specs and drawings
   2.   Estimator's documentation
        - Quotation folder
        - Estimate
        - Back-up folders
        - Correspondence with owner, GC, architect,
          engineer, subs, and suppliers
        - Proposal
        - Established T&M or billing rates
        - Take-off notes, write-up or overview
   3.   Schedule
   4.   List of project team contracts and phone numbers
        - Owner               - Subs
        - GC/CM               - Engineer
        - Vendors             - Architect
                         DOWNLOAD MEETING DISCUSSION ITEMS                                                        NOTES
   1.   Review of estimated drawings and estimator's assumptions
        - Alternates and addendums
        - Value engineering suggestions and
   2.   Inclusions and exclusions
        - Temp wiring           - Temp control
        - Fire alarm             - Coring
        - Excavation
   3.   Review of pricing and lead time for major packages

   4.   Special deals or agreements with vendors

   5.   Special deals or agreements with owner/GC/CM

   6.   Review of rates carried in estimate

   7.   Review of schedule

   8.   Pre-purchased or owner-supplied items

   9.   Bond requirements

   10. Targeted date and time for Pre-Job Planning Meeting with foreman

                                        THE CONTRACTORS MANAGEMENT JOURNAL # NOVEMBER 1999


Pre-Job Planning Checklist

  Job Name                                            Date of                        Date of Download
                                                      Award:                         Meeting:
  Estimator                                           PM:                            Foreman:


     E timated se of of plans, specs, and drawings
  1.1.sEstimated tset plans, specs and drawings                4. edule wit mil milestones
                                                            4. SchSchedulehwithestones

     E timator's no es                                         5. Permits
                                                            5. Permits
    3. Start-up kit
  3. Start-up kit

                                     PRE-JOB PLANNING MEETING DISCUSSION ITEMS

     1. Scope of work                                           4. Material issues
        • Review of plans and specs                               • Delivery schedule
        • Inclusions and exclusions                               • Special deals with vendors
            • Temp wiring                                         • Buying responsibilities
            • Fire alarm                                          • Material quality requirements
            • Temp control                                        • Material handling and storage require-
            • Coring                                              ments

            • Excavation                                        5. Tool and equipment issues
        • Value engineering and potential areas of                • Special requirements
         cost savings
        • Updates, addendums, and alternates                    6. Mobilization issues
        • Discussion of take-off method                           • Trailer/office
        • Site conditions                                         • Phones/fax

     2. Project team issues                                     7. Administrative issues
        • Personalities and past experience                       • Billing requirements
        • Task assignments for project team                       • Coding requirements
        • Shop contact                                            • Change order process

     3. Labor issues                                            8. Schedule-related issues
        • Estimated man-hours by code (optional)                  • Scheduling responsibilities
        • Crew size                                               • Liquidated damages
        • Manpower request process                                • Critical milestones
        • Coordination with other trades                          • O.T. restrictions/requirements

                            THE CONTRACTORS MANAGEMENT JOURNAL # NOVEMBER 1999


Pre-Job Planning Progress Flowchart



Foreman’s Short Interval Plan



Short Interval Planning Process Flowchart



Planned Calls to Shop Resources – A Measure of the Quality of Field Planning


Example Job Cost Summary



Post-Job Review Meeting Agenda


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