Measuring Productivity in the Construction Industry

1
Measuring Productivity in the Construction
Industry
Canadian Construction Association 87th Annual
Conference Cancun, Mexico March 7, 2005
2
Why Measure Productivity?
3
What is Labour Productivity?

• Productivity Output / Input
• (e.g. Earned hours / Worked hours)
• Or the reciprocal
• Productivity Input / Output
• (e.g. Manhours per unit produced)

4
Hypothetical Tender

• Labour 40
• Materials 40
• General Conditions
• Indirect Costs 10
• Overhead 5
• Profit 5
• Total 100

• Largest cost component
• Most volatile
• Most critical to control

5
Hypothetical Tender

• Labour 40 45
• Materials 40
• General Conditions
• Indirect Costs 10
• Overhead 5
• Profit 5
• Total 100

A 12.5 overrun in the labour component
6
Hypothetical Tender

• Labour 45
• Materials 40
• General Conditions
• Indirect Costs 10
• Overhead 5
• Profit 0
• Total 100

Wipes out all profit!
7
Factors Affecting ProductivityMCA - Labour
Estimating Manual - 1986
8
Common Factors Impacting Labour Productivity
9
Common Causes of Labour Overruns

• Internal
• Poor planning management of work
• Rework errors
• Bad estimate
• Lack of training
• Morale problems
• Staff turnover
• Material equipment availability

10
Common Causes of Labour Overruns

• External
• Overtime
• Changes
• Crowding
• Trade Stacking
• Weather
• Site Access

These factors seldom occur in
isolation
11
Quantifying Productivity Losses
12
Crew OvermanningU.S Army Corps of Engineers,
Modification Impact Evaluation Guide, 1979
13
Effect of Congestion (Crowding) on Labour
EfficiencyU.S. Army Corp of Engineers
"Modification Impact Evaluation Guide" - July 1979
14
Effects of OvertimeUS Army Corps of Engineers -
1979
15
Summary of Overtime Curves
16
Impact Due to Change Orders
17
Productivity Effect of Temperature and Relative
Humidity
18
Information To Manage By
19
Work Breakdown Structure
20
Output Earned Manhours
21
Input Worked Manhours This Period
22
Input vs. Output
23
Job Tracking
24
Performance Index
25
Recovering Productivity Losses Through Claims
26
Three Basic Approaches

• 1. Total Cost Claim
• 2. Industry Charts
• 3. Measured Mile

27
Differential Productivity Calculation
28
Calculation of Loss of Productivity
Total Actual Manhours 419,201
MHs Would-Have-Been Manhours 300,793
MHs (857,262 sq. ft./2.85 sq.ft./MH) Loss of
Productivity 118,408 MHs or
28.25
29
Why Measure Productivity?

• You cant correct a problem if you dont know it
  exists
• By the time the job is over, youve lost the
  money
• You will have current information to manage and
  control your project
• You should correct losses arising from internal
  problems
• You may be able to recover losses arising from
  external causes