Enhancing Productivity in the Bhutanese Construction Industry

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Enhancing Productivity in the Bhutanese
Construction Industry
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Overview

• Productivity?
• Measurement of Productivity
• Benefits of Improved Productivity
• A Productivity Movement nearby.
• Productivity In construction sector
• Features of Bhutanese Construction Industry
• Factors affecting productivity in construction
  sector
• Improving Productivity in Construction Sector
• Recommendations.

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What is Productivity?
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• Productivity is a state of mindan attitude
  that seeks the continuous improvement of what
  exists. It is a conviction that once can do
  better today than yesterday and that tomorrow
  will be better than today
• European Productivity Agency ( 1959)

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• Productivity is a mental attitude that leads to
  practical action, resulting in real improvement
  for everyone
• Japanese Productivity Centre

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• Productivity is an attitude of mind that
  strives for and achieves the habit of
  improvements, as well as the systems and the set
  of practices that translate the attitude into
  action
• National Productivity Board, Singapore

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• Output measures how much we produce
• Productivity measures how much we produce per
  unit input
• So Higher the productivity, more production per
  unit input

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Productivity Measurement
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Why Productivity Measurement?

• Measurement is the first step that leads to
  control and eventually to improvement.If youcant
  measure something, you cant understand it.If you
  cant understand it, you cant control it.If you
  cant control it, you cant improve it
• James Harrington

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Productivity Ratios

• Labour Productivity VA/No. of Employess
• Labour cost competitiveness VA/labour cost
• Capital Productivity VA/fixed assets
• Profitability Operating Profit/Operating
  Capital

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Labour Productivity

• High Ratio Signifies
• Efficient labour and management
• High capital investment
• Favourable price and demand for products
• Positive work attitude
• Good labour management relations
• Low Ratio Signifies
• Unfavourable manning levels
• Inefficient work cycles

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Labour Cost Competitiveness

• High Ratio Signifies
• More competitive in terms of labour cost
• low wage rate
• efficiency and effectiveness plus reasonable wage
  rate
• Low ratio signifies
• uncompetitive situation
• low levels of efficiency and effectiveness
• high wage rates unmatched by efficiency

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Capital Productivity

• High ratio signifies efficient asset utilisation
• Low ratio signifies
• inefficient asset utilisation
• over-investment in fixed assets

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Profitability

• High ratio signifies
• Favorable returns on investment
• Effective strategies on pricing, marketing, cost-
  efficiency
• Low ratio signifies
• New investments yet to generate returns
• Ineffective strategies on pricing, marketing,
  cost- efficiency

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Benefits of higher productivity

• Better Goods and Services at competitive prices
  and higher sales
• Optimal use of resources
• Effectively implement new innovations

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Productivity Movements
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Singapore Productivity Movement ( From 1981)

• Awareness Stage - 1981 till 1985
• Action Stage 1986 till 1988
• Ownership Stage 1989 till 1990
• Impact
• Average Annual GDP Growth ( 81 2001 ) 7.20
• Average Annual Productivity Growth ( 81 00)
  3.8

Per Capita ( S) Ave. Monthly Earnings(
S) Labour Force ( Million) Home Ownership Life
Expectancy
1981 2000 11067 37433 736 2819 1.15 2.12
63 92 73yrs 78 yrs
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In Asia

• Japanese Productivity Movement
• Asian Productivity Organisation
• Japan productivity Centre for Social- Economic
  Development and World Confederation of
  Productivity Science

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Tools for Productivity Improvement
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• A national policy on productivity improvement
• The whole process is top-down
• Industry Involvement
• everybody has a role and should be committed
• Education and training of workers continuous
  learning
• Educate workers for employability with an
  innovative mindset
• Creativity and innovation
• Skills enhancement

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• Proper communication skills
• Process Management skills
• Good Housekeeping
• Use of ICT technologies
• Elimination of Wastes
• Etc.

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Productivity in Construction Sector
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Features of Construction Industry

• Construction industry different from the
  manufacturing industries.
• Competition from within and outside REALITY -
  Construction industry is a Global Industry and we
  need to pull up our socks.
• Accidents, late completions, poor quality,
  increasing costs etc.
• Efficient construction Industry allows the
  building of more hospitals, roads and schools
• Limited Studies of Productivity in Construction
  Sector like Business Roundtable studies( US) of
  1970s.

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Elements of a Construction Project

• Timeliness right time for the aspects of
  project conception, planning, designing till
  project closeout This means scheduling
• Quality of plans, estimates, designs and the
  finished facility and all its elements
• Safety - an accident free project site, AND
• Productivity translated to work accomplished
  at a fair price with a reasonable profit to the
  contractor
• All are Inter-related

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Actors in a Construction Project

• The Owner Who requires the facility and
  provides the fund
• The Architect, Designers and Utility Engineers
• The Finance
• The Contractor
• The Local Government
• Supervisor
• Labourers

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Productivity Benefits To the Owner

• Lower Costs
• Shorter Construction Duration
• Better value for Money
• High return on Investment

An increase in labour productivity of 25 in a
typical project of 5m for 12 months, the
construction time reduces by 2½ months ( 10),
costs by 300k ( 6) assuming labour comprises
of 30 of the total cost and the contractors
profit margin remains unchanged
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Productivity Benefits to the Contractors

• More competitive edge and satisfied customers
• Higher turnovers and increased profits

A 25 increase in labour productivity would
increases a contractors profit between 2½ to 4
times
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Productivity Benefits to the nation

• Efficient use of capital
• Greater incentives to invest
• More jobs
• Economic prosperity

Total turnover of construction industry in UK is
62bn , 25 increase in labour productivity would
result in a national savings of 3.5bn enough to
build 70 hospitals ( 5 millennium domes) a year
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Productivity Benefits Everybody
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Factors affecting construction Productivity
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Management

• Planning and Scheduling
• Organisation and supervision
• Human Factors including motivation
• Site Layout
• Information System

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Technological

• New and improved construction materials
• Innovation, methods and technologies
• Equipment utilization

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Regulatory

• Local and central govt. rules and regulation
• Codes and Standards

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Workface labourers and craftsmen

• Motivation
• Training and skills improvement
• Absenteeism/turnover and mobility
• Temporary work assignments
• Overtime
• Motivation, incentives

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Engineering Design

• Standardisation
• Constructability
• Errors/omissions in plans and specifications
• Design complexities
• types of contracts

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Others

• delays and change orders
• Seasonality
• quality requirements
• economic conditions
• safety requirements
• Site conditions
• Accidents
• Attitude of work force
• Impractical QA/QC tolerances
• Temporary facilities
• Funds

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Bhutanese Construction Industry A Scenario

• Contribution to GDP more than 12
• Dominated by Public construction hence lead
  role in its development to be taken by the
  Government
• Labour intensive - Labour, mostly unskilled and
  very mobile
• No management systems, owner as well as
  contractor
• Scope for mechanization
• Lack of research facilities
• Small building materials industry

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Improving Productivity in Construction Sector
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Use of Modern Management techniques

• Business Roundtable studies of 1970s crticised
  the construction sector for its slow acceptance
  and use of modern management methods to plan and
  execute projects
• Every actor should improve their performance by
  developing project goals and working towards
  their fulfillment
• Use available management systems and techniques
  to make construction managers more effective

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Proper Planning

• Planning begins from the day a project is
  conceived
• To develop an overall plan providing a general
  outline of work using bar or flow charts
• To develop contingency plans if the original plan
  fails
• Detailed planning for work execution at the task
  level

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Planning Tools

• Site Visits
• Estimation
• Use of CPM for Planning, Scheduling and Control
• Physical Models
• Pre-planning the worksite
• Materials management
• Assigning Management responsibilities
• Use of Job-assignment sheets

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Constructability

• Optimum Integration of Construction Knowledge
  and experience in planning, procurement and field
  operations to achieve over-all project
  objectives
• Cooperation between the suppliers, planner,
  architect, designers and the builders
• Prefabrication materials joined to form a
  component of a final installation
• Preassembly prefab. Components, materials
  joined to form a subunit of a complete
  installation
• Modularisation
• Mitigate the adverse effects of site location
• better use of specialised design, building or
  process technology
• offer indoor and assembly line conditions
• reduce no. of workers and skills required at
  site

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Improve Labour Productivity

• Labour, materials cost and fixed or time related
  cost including plants are of similar magnitude.
  Yet the difference between the best and worst
  sites is upto 5times greater than any other
  costs.
• Provide skills training
• Enough tools in working order
• Motivation through incentives, and other
  programs
• Good supervision
• Use of man-hour targets and controls on actual
  labour
• Safety programs

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Communication

• Establish clear lines of Communication
• Coordination among the contractor and his team
  members
• Coordination between the owner and his
  representative
• Cooperation between the parties
• Communication can be oral, non-verbal or written
• Pre-construction conference
• Project Meetings
• Discuss with all the affected parties about the
  project and get required approvals beforehand

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Preconstruction conference

• Who should attend Responsible representatives
  of the contractor and owner, designer, architect
  and major suppliers and the finance division
• What to discuss?
• Introduce members of the project team and to
  establish the project communication schedule
• To review the job schedule prepared by the
  contractor
• To set up change order procedures
• To list all initial questions on the design and
  drawings
• to ascertain likely labor or materials problems
• to establish how non-contracted services will be
  authorized and charged
• to describe temporary facilities for the project
  and establish parameters for their use.

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Project Meetings

• Regularly scheduled meetings will facilitate
  orderly and cost effective construction and
  completion of the project
• Who? - Owner and Contractor Representatives,
  Engineers and site supervisors
• How often ? Weekly, and as and when required
• What to discuss? - specific list of follow up
  tasks with assigned responsibilities, discuss a
  two week look ahead schedule and update at each
  meeting, keep and distribute in advance of each
  meeting a running log of outstanding items, have
  current information on changes requested, changes
  approved, approved drawings and related project
  updates at each meeting.
• Take Feedback from the workers, and incorporate
  for improvement

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Engineering Design

• Follow the prescribed standards and codes
• Ensure constructability
• Plans and Specifications should be workable
• Drawing legible
• Construction materials available
• Appropriate Construction technologies

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Waste elimination

• Waste Anything other than the minimum amount
  of equipment, materials, parts space and workers
  time which are absolutely essential to add value
  to the product/project
• Waste can be due to
• Over production/Over supply
• Waiting/delay
• Transportation
• Processing
• Inventory
• Motions
• Defects
• Apply principles of lean construction

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Housekeeping at the Site

• Bhutanese construction Sites normally
  unorganized, materials improperly located and
  stacked, tools and machineries randomly located
• Proper housekeeping leads to proper workplace
  organisation and discipline and leads to
  improvement
• Use 5s
• 1. Seiri sort out unnecessary items in the
  workplace and discard them
• 2. Seiton Arrange necessary items in good
  order so that they can be easily picked for use.
  A place for everything and everything in its
  place

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• Seiso Cleaning your workplace. Cleaning is
  checking
• Seiketsu Maintain high standards of
  housekeeping and workplace
• Shitsuke Train people to follow good
  housekeeping disciplines

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Quality

• Have people with the right skills and knowledge
• Have the right materials and equipment
• Conform to standards and Specifications
• Create a culture of getting things 100 right
  the first time

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Safety

• Accidents are a liability to the owner and the
  management because of compensation etc.
• Have a safe working place
• Studies have indicated that high safety at site
  normally gives security for the workers to
  perform well, hence higher productivity.
• Conform to safety standards and regulations
• Use safety equipments like gloves, helmets, etc

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Use of ICT

• ICT can be used in the following
• Planning and designing
• Scheduling
• Materials and personnel management
• Use of these tools reduces manpower requirement
  and in the long run improves productivity

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Getting People Involved

• Develop an acceptance of productivity
  improvement- concept.
• Organise productivity improvement teams ( quality
  circles) for a project
• Organise workers level productivity improvement
  efforts
• Educate workers and train for skills improvement
• Motivate people, productivity is top down and
  never bottoms-up

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Productivity Improvement drive

• Organise a productivity improvement drive in the
  construction sector
• MoWHS to spearhead along-with agencies like CAB,
  MoLHR etc
• Establish a committee to develop consensus on
  productivity programmes and activities and
  develop a framework on productivity in
  construction
• Adopt best practices from abroad

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Recommendations

• Develop productivity improvement strategies and
  activities for planning and goal setting
• Start Using modern management tools in
  construction
• Agree to provide a safe and healthy working
  environment
• Encourage proper house-keeping at construction
  sites
• Conduct Pre-construction conference and project
  meetings for all projects to enhance
  communication
• Devise a system of initiating and approving
  change orders in construction sites
• Encourage pre-fabrication, pre-assembly and
  modularisation of construction components
• Improve labour productivity through skills
  training, and involving them in productivity
  improvement programs
• Eliminate wastes
• Use appropriates materials, equipments and
  technologies

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Tashi Delek