At a Glance
Upon completion of this Renoir project with a client in the property industry, the following results were seen:
- An increase in direct labour workforce productivity, peaking at 139% compared to historical performance levels
- Re-alignment of its management structure and the application of better clarified and more consistent job roles
- Capture of actual achievement against hundreds of separate activities to provide a much more solid and accurate basis for future tendering
- Subsequent increased quantities, allowing delay in the construction schedule to be reduced
Background
Our client’s real estate development is a prestigious and unique development by a major investment company in the heart of the city’s regeneration area. The development encompasses a hotel, around 200 exclusive apartments, a leisure complex, 200 high-end retail outlets, and swimming pools. The basements have the capacity to accommodate 2,500 cars. Our client was awarded a mechanical, electrical and plumbing contract which made up approximately half of the overall project value.Â
The Challenge
The client was not making money because of high labour costs and did not know the underlying reasons. It was proving almost impossible to match up the current performance with the tender submitted, due to a lack of granularity in operational reporting.
Renoir Consulting was engaged for a period of just over 1 year, with the agreed upon deliverable to increase the client’s direct labour productivity, measured through a detailed evaluation of quantities produced at a pre-defined rate, versus the man-hours paid to deliver those quantities.
What We Did
Together with the Renoir team of consultants, led by a Senior Project Manager, five technically qualified engineering staff members were seconded full-time from the Client Organisation, to establish a joint, dedicated Productivity Team.
A comprehensive series of Ratio Delay sampling studies was carried out across all areas of the site during the initial four weeks. Through this tried and trusted statistical methodology, whereby teams of workers were observed at 5-minute intervals throughout a number of working days, underutilised periods were identified and provided a profile of the typical working day.
The observations collected indicated weaknesses in the disciplines of the workforce, and the extent to which key working times were adhered to. These observations also gave an indication of the proportion of available labour hours actually being applied to productive activity and therefore established an expectation for the improvement targeted.
A parallel workstream assessed the knowledge and skills of the supervisory levels on site, and the extent to which these key players understood their role, and from this, a series of training modules were developed.
With these two approaches, levels of both efficiency and effectiveness could be assessed. The project objectives were to:
- Improve Direct Labour Productivity by 25%.
- Provide the appropriate control tools, planning methodologies, required KPIs and the appropriate review disciplines throughout the management structure to allow the benefits to be generated in a sustainable manner.
- Train Foremen and Charge Hands in all aspects of the Management Control System, as well as sessions on correct supervisory behaviours.
- Train Site Engineers and Supervisors to improve their understanding of target-setting and the necessary control and follow-up to ensure the plan was delivered
Implementation
The Productivity Management System set up was based on the collection and collation of primary data from Time and Quantity Reports, completed by all Foremen to highlight actual daily performance versus plans on an individual team level.
Independent validation of the data was continually performed against the timekeeper’s records for man-hours consumed, and by Site Engineers daily to verify the quantities. This ensured proper management actions could be taken with the knowledge that the information provided was correct.
Each task was allocated a task rate, such that planning could be focused on providing the optimised amount of manpower to deliver the work. Meanwhile, all management was trained to understand and use the Task Rates and planning methodologies to drive performance upwards.
Continuous coaching by the Renoir team of Foreman and Site Engineers in the workplace several times each day to understand performance was on track, with swift corrective action taken where this was not the case.
The Weekly Productivity Management Meeting was initiated to review results at a senior level and to agree on the next necessary actions.
Productivity KPIs were introduced in the form of a performance dashboard, highlighting where the labour was being deployed along with productivity performance levels by area, by Construction Manager, and by individual Foremen.
This facilitated the identification of best practice, and training was carried out to raise the performance levels of previously individuals who were performing less well. The Productivity Team also ensured a comprehensive schedule each week of follow-ups was prepared based on the productivity results and areas of need.
Results
Overall, at the end of the project, productivity had risen consistently and significantly. The project also generated a major cultural change across the Client Management team in understanding the drivers of real productivity, to the extent that striving for productive performance has become routine.
The capability to establish and operate the tools and concepts introduced will allow these important new skill sets acquired to be transferred to future projects, as management is re-allocated to their next assignments.
Boost labour productivity with aligned performance management.
