Maintaining a high-level of jobsite productivity is one of the most important activities for any foreman, superintendent, or project manager. By using the four pillars of productivity, the productivity levels of any construction crew, on every construction project can be increased.   

When production rates drop on a construction jobsite, money is lost, and often cannot be recovered. On the other hand, when production rates are monitored closely, and improved upon constantly, profits are earned and a company will gain a competitive advantage. How can jobsite productivity be enhanced? One ways is by utilizing the four pillars of productivity.

Getting productivity out of a crew breaks down into four key areas: materials, tools and equipment, information, and goals. How well you execute all four of these will determine the overall productivity of your crew. The systems you set up in your company to guarantee these four areas are managed effectively will determine the success of your company.

Let’s take a closer look at these four areas, and what you can do today to start increasing your productivity tomorrow.

Defining the Four Pillars

1.  Materials: This is priority number one, but luckily, materials are also relatively easy to manage and set up systems for. If the crews do not have materials, they cannot install anything. Making sure all materials are on the jobsite and that they are getting to the work areas for the crews to install in an efficient manner are what should be focused on.

2.  Tools and Equipment: This is a simple enough concept, as no tools equals no production. This is not a place any construction crew wants to find themselves at! Therefore, ascertain that the crews have all the tools they need and that the tools are easily accessible. Do a quick analysis to see if the higher cost of the tool will offset the savings in labor.

3.  Information: If people have materials and tools, then the only thing they need to get started with installation is the information about what, where, and how they will be doing the installation. This is the area where pre-planning comes in as a critical tool. You will never be able to achieve 100 percent in this area, which is why you need to be constantly working on improving what information you have, and how you communicate it to the crews.

4.  Goals: If your crew has the proper materials, tools, and information, you might wonder what’s left. Adding in goals can improve production by 10 percent or more on a consistent basis, so this pillar should not be overlooked. Don’t underestimate the power of setting goals for the crew on a daily and weekly basis. Look at tying small rewards to meeting certain production goals throughout the entire work process. If an activity is budgeted to take a crew three days of work, offer them all a steak dinner if they finish in two. You will be amazed at how many times they will earn that steak dinner.

Good jobsite productivity really is that simple! There is no reason to make it more complicated. Every project management process in your company, every activity that you do every day should be able to be categorized into one of these four pillars. If they aren’t, you need to ask yourself whether it is really necessary.

Remember that good productivity means a competitive advantage, more work, good profitability, and more opportunities for everyone in the company. It’s a win/win situation!

DAVID BROWN is the Founder and President of D. Brown Management, a consulting and management firm that helps construction companies improve profitability. See www.dbrownmanagement.com for more information and to sign up for a free newsletter. 

Maintaining a high-level of jobsite productivity is one of the most important activities for any foreman, superintendent, or project manager. The first step to increasing—and maintaining—jobsite productivity levels is to understand what all the fuss is about.

When production rates drop, a project can lose money. Without proper documentation, these losses cannot be recovered. Worse yet, if production rates are left at a lower level, and a company adjusts their estimating to match their production rates, the company will become uncompetitive in the marketplace.

On the other side of the coin, if production rates are monitored closely, and improved upon constantly, then the company will gain a competitive advantage in the market, and any impacts will be seen immediately, when they can be dealt with. Many factors affecting productivity are well within our control, but many more factors are generally out of our control.

Here, we’re going to explore what productivity is and how it is measured.

What is Productivity?

Quite simply, productivity is a measure of how much of something is produced for a given amount of resources.

Productivity is related to job costing, but is typically more detailed in that it captures both the quantity of installation AND costs for a specific period of time.

Job costing systems typically capture costs at such a “big picture” level that it is impossible to get accurate production numbers out of them.

Job costing systems also typically run a minimum of one week behind, so by the time you could get any useful productivity information out of them—it is likely too late.

How Productivity is Measured

Productivity is expressed as a ratio between units produced or installed and
resources used.

A very simple calculation example is a trenching operation where production could be expressed in feet per day. Typically one of the numbers, either resources or units, is set to “1,” and that is typically expressed as the second part of the equation, as in the different examples below:

• 310 Feet Per Day

• $4.62 Per Foot

• 32 Fixtures Per Day

• 0.25 Hours Per Fixture

• $12.76 Per Fixture

The following table shows some typical Units and Resources used in productivity measurements:

PRODUCTION UNITS	RESOURCES
• Each • Linear Feet • Square Feet • Cubic Feet • Cubic Yards • Tons	• Schedule – Weeks, Days, Hours • Manpower – Hours, Crew Days • Equipment – Weeks, Days, Hours • Cost – Total, Variable

Production Rates at Extreme Detail

A great example of production rates are the labor units used in the bidding of construction projects. These rates have been determined through very detailed cost accounting on a variety of construction projects.

There are several companies that assemble this type of cost data. Some are industry specific such as NECA (www.necanet.org), while others hit the broad construction market such as RS Means (www.rsmeans.com).

While this level of detail is required for accurate bidding, it is impractical to track job costs or production in the field at this level of detail.

Measuring Production in the Real World

You have to find a balance between labor units used for estimating, which are too detailed, and the job costing system, which is too broad and provides information that is too late.

A realistic production measurement timeframe needs to happen on a daily basis, at a maximum, in order to provide actionable feedback. These should also be summarized by the week to even out high-production and low-production days, as well as taking into account when setup and pre-fabrication is done to support higher production over the following days.

Production Rates are Relative

Production rates are relative. They mean nothing if they are not compared to something else.

The typical comparisons are:

• Estimated: If your production rate exceeds the rates you estimated the project by, you are making money. If not, then you are losing money. It is critical to know this on a daily basis so you can make corrections. If you are unable to attain the estimated productivity rates, then the feedback needs to get back to the estimators so they can adjust the production rates they estimate jobs at. Overestimating productivity on a bid CANNOT be made up for with more volume!

• Past Production: Comparing your current production rates to your past production rates on the same or other projects is the best way to determine if you are being impacted or if the new installation method is working.

• Industry Standards: This information is hard to attain, but with a little work, you can gain a lot of information and set benchmarks for your production. The importance of comparing your production with the rest of the industry is that if you can exceed that production, you will gain a competitive advantage, which equals more work, more profits, and more opportunity for everyone. The opposite is also true.

One other area you can compare production rates is between crews and even crew members. This will clearly show the wide variation between a top producer, an average producer, and a bottom producer. You can use this information to help share ideas about production, and in turn, raise the overall average. Having this data widely available takes care of a lot of people management problems because it makes it obvious where people really rank.

By understanding what productivity is, how it is measured, and by monitoring production rates closely, a company can increase their jobsite productivity level, and therefore, create a strong competitive advantage in the marketplace. It’s worth the effort!

	DAVID BROWN is the Founder and President of D. Brown Management, a consulting and management firm that helps construction companies improve profitability. Headquartered in Northern California, the company provides a full scope of general management solutions to construction clients nationwide, including strategy, planning, operations, field productivity, workflow, financial management, technology, and marketing.
As always, ask any questions and comments are always welcome. You can post them here or send an email to david@dbrownmanagement.com. Reader comments and questions will become future posts.

By recognizing and solving conflicts quickly, an organization can save thousands upon thousands of dollars annually. The key is to focus on efficiency in the pre-planning stage, and then to follow through until project completion.  

Identifying and solving problems expediently within any business should be of the utmost importance for all levels within a company. After all, the quicker a problem is solved, the less time and money is lost. Beyond the monetary benefits, a workplace that runs smoothly and stomps out issues quickly tends to have happier employees and far more satisfied customers and/or clients overall.  

This is true across all industries, but construction is one of the most challenging because we work in essentially an “un-controlled” environment that is constantly changing. Establishing processes, inserting controls, and creating standards is much easier in the relatively controlled environment of manufacturing, where the facility can be designed around efficiency. When the same or similar things are built over and over, unexpected problems are less likely to arise.

With construction each jobsite, the manufacturing environment, is created from scratch for each project. Because of this, the possibility of problems emerging within the jobsite that will affect the cost of the project is magnified exponentially.

The big opportunity in construction to save money on a project is to very efficiently plan the work. Not only will efficiently planning the work save time, it will reduce the possibility of common problems emerging, and that will save money over the course of the project.

Focusing on pre-planning projects and improving efficiency for a subcontractor is critical to the overall success of any construction project. Understanding the cost of problems within the construction industry, and on the jobsite in particular, is the first step. Learning how to recognize these problems at the earliest possible stage, and correct them, will save valuable dollars per project, and over the course of a year, these savings can add up big.

The Cost of Problems

Prolems are not usually recognized until you are right in the middle of them.  At this point, the problem will cost about 30 percent of the original cost to fix, so if you are in the middle of a $1,000 piece of work, and discover a problem, it will cost about $1,300 before you are done.  In the worst case, when problems are discovered after the work is complete, it will cost up to 80 percent to fix. This is lost money, and at this point, there is no way to recover it.  Think about something as simple as a beam that conficts with the HVAC ducting above the ceiling.  Finding it on the drawings and making corrections to either the structural or the HVAC fabrication or both will cost a lot less than finding the problem out when you are installing the HVAC ducting. 

Therefore, it’s easy to see that the focus needs to be on spending whatever resources are necessary to identify and solve problems before the middle of construction. 

Construction and Problems

Constructing a project is challenging; it is very messy. The number one thing to remember is that there will always be problems. Problems are a fact and they need to be factored into your plans far before day one on the jobsite.

Problems are often amplified on construction projects because of the separation of the design functions from the construction functions.

Architects, engineers, and design consultants are often forced into “low-bid” contracts, and the pressure to constantly deliver lower prices means cutting out on coordination between engineering disciplines, eliminating detail drawings, cutting down on elevations, minimizing plan-checking, peer reviews, etc.

All of the cost-cutting on the design side means that fewer and fewer conflicts are caught at the design stage, and are then left for the contractors to figure out. While problems cannot be eliminated, by focusing on pre-planning, they can be reduced.

The quicker conflicts are recognized and overcome, the more successful your project will be. By focusing first on pre-planning, then on efficiency, and then on quickly identifying and solving problems, your organization will save, at a minimum, thousands of dollars annually.

DAVID BROWN is the Founder and President of D. Brown Management, a consulting and management firm that helps construction companies improve profitability. See www.dbrownmanagement.com for more information and to sign up for a free newsletter. 

This is a pretty common question that we hear frequently and I just heard it again last week.  We are big fans of knowing daily and weekly production rates so that action can actually be taken. 

If you can’t identify a problem immediately there is little chance of actually fixing it before the financial damage is already done. 

The next thing that comes up is that comes up is:  “Our projects perform within budgets consistently – isn’t that enough?”

Again, our answer is relatively simple here – probably more of a format of answering a question with a question:  “You are making your budgets; that is fantastic!  Are you sure that you are making as much money as you can on your projects and it is not that your budgets are just on the conservative side?”

Anyone who has come from the field and has taken an honest, objective look at field knows that there is a very wide variation between “peak production” days and other days. 

Some will consider this “just a fact” of construction but I prefer to think about the opportunity.

If you can limit the deviation between best and worst production days, share best-practices and increase average productivity just slightly then you have the ability to substantially change the profitability and competitiveness of a construction company. 

We start getting people to focus on production by discussing the four “Profit Levers” that are factors in job costs.  A common theme that comes up when talking to project teams throughout the country is that they think and talk about job costs and budgets in relatively simple terms.  

Accounting programs support this thinking by reporting on costs versus budgets and highlighting variances – that is the end result but if you don’t focus on the individual drivers in a timely manner you can’t ever hope for much improvement. 

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Method:  The method chosen for installation – for example, when trenching you could choose benching, sloping or using shoring.  You may also choose a trenchless (directional drilling) installation.  Each method has different production levels and costs associated with it.  During the estimating phase specific installation methods are chosen for each activity.  During the pre-planning of the project adjustments to these methods may be made.  Production target rates and the project budget are based on the method.  Changing methods may lower or increase costs but a change in method should not be considered the same as a production increase or decrease. 

Procurement:  The amount actually paid for a product or service.  Getting pipe for $2.50 per foot versus $3.10 per foot is an example of procurement management.  Average labor cost increases or decreases are also examples of procurement.  Though these will lower costs they are distinct from quantity or production variables.  Even if the procurement leads to securing a piece of equipment cheaper than estimated this is still not considered a production management item. 

Quantity:  This is a huge variable and feedback to the estimator is very important because variations have big effects on profitability but are also relatively simple to fix through take-off methods.  It is very dangerous to lump quantity into production.  These are two very distinct parts of the estimate process and feedback must come back separately in order to truly refine the process.  The key is looking at a task and figuring out a common unit to view as a quantity.  For some tasks such as trenching this may be simple (linear feet) but for other tasks such as electrical branch rough-in this may be more challenging because of all the different sizes and types of conduit involved.  It is on these tasks that are more difficult (such as electrical branch) that it is even more likely that the quantity take-off process can be refined to be more in-sync with operations. 

Production:  The actual rate a crew produces at.  For example getting a backhoe crew to completely install 300 feet of 4” sewer laterals in an 8 hour day is better than having the same crew installing 250 feet in the same 8 hour day.  There are a lot of variables involved in making this comparison so it is important to eliminate as many variables as possible.  The first variable we eliminate is cost variations by establishing average labor and equipment rates based on the estimate and inclusive of a standard mobilization charge spread over 5 days.  Whether this cost number is a little high or a little low it will allow comparison between days.  The second major variable is in the work complexity.  The laterals on one day may be deeper, shorter or the ground may be harder than those done on the next day.  Production tracking is the most challenging of the variables but also the one with the biggest opportunity for increased profitability (or losses.) 

When systems are put in place to monitor each of these variables separately and when your project team starts discussing these four profit levers while pre-planning the project, during construction and in the post-job review your overall profitability will increase significantly. 

Since field productivity is the biggest variable cost for contractors we will dive into these even more in future posts.  As always if you have any questions you would like addressed in future posts please email david@dbrownmanagement.com. 

This is a pretty common question that we hear frequently and I just heard it again last week. 

We are big fans of knowing daily and weekly production rates so that action can actually be taken.