094 productivity measurement

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PRODUCTIVITY MEASUREMENT

PRODUCTIVITY MEASUREMENT

A high level of productivity can be achieved if the following factors are managed properly on construction sites and at the head office. These are as follow:

Pre-construction activities Site/project manager Characteristics Management Factors Resource Management Management Systems

PRODUCTIVITY MEASUREMENTLabour CharacteristicsWaste on siteDelay and disruptionMotivating FactorsHygiene FactorsManufacturers measure

productivity using the notion of ‘sales return on capital employed’ or ‘profit to assets’ ratio.

PRODUCTIVITY MEASUREMENTThese are used as a measure of

success for business efficiency and some managers use this as a measure of productivity.

Some of the formulas used by managers to measure the level of their success, profitability or output are listed below.

Current (liquidity) ratio = Current asset Value/Current liabilities

PRODUCTIVITY MEASUREMENTCurrent assets are:Cashaccount receivablemarket securitiesinventories. Current liabilities are:Debtsbank overdrafts

PRODUCTIVITY MEASUREMENTtax payableand other expenses. For the purpose of this Power Point, productivity is defined as:

The ratio of output/input The output is the final product and the input is all the resources used.

PRODUCTIVITY MEASUREMENTThe resources may be:LandMaterialsMachineryToolsmanpower The output is higher for firm(a) whencompared with firm(b) with thesame amount of input,a>b in terms of productivity.

PRODUCTIVITY MEASUREMENTor the same output is achieved

but with a lesser inputthen the productivity is

considered to be high for that firm.

Other methods of measuring productivity are described below

The advantages or disadvantages of them are mentioned.

PRODUCTIVITY MEASUREMENTBaseline

The baseline is an estimate of the best productivity level that a contractor can achieve during the construction work on a particular work.

The baseline presents actual performance (disruption to the work is minimal or none at all).

It is a function of the design complexity (Thomas et at, 1999).

PRODUCTIVITY MEASUREMENTEfficiency is defined as:The ratio between useful

outputs compared to input Within the construction industry

‘input’ includes a wide range of different resources such as:

PRODUCTIVITY MEASUREMENT labour material plant and finance ‘Output’ is the final product,

which may be a simple Housing Development or a more complex project such as a nuclear plant.

PRODUCTIVITY MEASUREMENT Units of input and output are generally

different This problem can be overcome to some

extent by the use of monetary units. The ratio of value or profit to cost could be

used as an indicator of efficiency, since V/C= (P+C)/C=1+P/C+ ….. V = Value C = Cost P = Profit

PRODUCTIVITY MEASUREMENTThis ratio cannot be used to compare efficiency between different sites because:

it depends on the contractor’s judgement;

it cannot be defined in absolute terms.

PRODUCTIVITY MEASUREMENTCost Control is one of the most

important objective in Construction Management and Construction Scheduling.

The actual control is achieved through the ultimate decision of the manager that something should be done differently and the translation of that decision into practice. The elements of a cost control system are:

Observation and collection of information;

PRODUCTIVITY MEASUREMENTComparison of observation with

base line or benchmark or benchmarking

0ther desired standard.Corrective action to be taken if

necessary ASAP.A construction cost control

system should enable the management team to observe current cost levels.

PRODUCTIVITY MEASUREMENTBe able to compare them with a standard plan or norm.

To take immediate corrective action to keep cost within the budget.

Most construction cost control systems should have an immediate response mechanism.

PRODUCTIVITY MEASUREMENTThe best cost control system AVAILABLE provides information on what was happening last week or last month.

In construction projects some activities finish in a week or a month.

PRODUCTIVITY MEASUREMENTNo action could be taken if the

performance of such activities was reported a month later.

In case of smaller projects, sometimes cost overrun is assessed at the end of the project.

PRODUCTIVITY MEASUREMENTThere most be a method to report

to the management the cost overrun for each activity as it happens,

Software’s such as ‘asta’ shows the cumulative cost of the project,

There is no method of estimating cost overrun for a small project such as:

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PRODUCTIVITY MEASUREMENT1. Short term scheduling and control.

2. Project Cost model. 3.Quantitative schedulingFor more detail on these three cost control go to Cost control PPTs

PRODUCTIVITY MEASUREMENT

Descriptive analysis-continue

An investigation into 32 casestudies with 16 cases with highproductivity and another 16 withlow productivity.All housing developments.It was also important to find out if a finished project was built within their budget.

To see how the net rate for each activity was derived.

If it was met at the end of the process.

A formula was derived to measure the productivity loss or gain for each selected activity for several case studies.

PRODUCTIVITY MEASUREMENTThe Formula enables managers to

monitor and find out why productivity has been low for a given project activity.

If managers specifically know where and by how much there was a loss or gain in productivity it would become easier to remedy the causes of productivity decline

PRODUCTIVITY MEASUREMENTThey can pursue successful strategies for maintaining high productivity levels.

From collected information managers can re-adjust the Net rate (Bench mark).

Gross rate for their future pricing.

PRODUCTIVITY MEASUREMENTThis is very time consuming and a

software based on these formula must be designed.

This technique will aid a firm to have a stronger edge for bidding lower for a job.

Will help them to remain more competitive.

The formula can be demonstrated as:

PRODUCTIVITY MEASUREMENT Let MD=Cost of Material /unit A =% allowed for material wastage in

the schedule of rate. X=% actual recorded waste after

completion of the job. Productivity change relating to wastage

is measured: by the difference between the expected

level of waste on site as normally scheduled in SPONS or LAXTON’s price book

and the actual recorded waste after the completion of the job.

Total material cost per unit rate=MD [A-X] EC= Estimated time for Craft to carry out a unit rate of a job. HC= Hourly rate for a Craft Operative

HL= Hourly rate for a Labour Operative EL= Estimated time for a Labour to carry out a unit rate of a job.

AC= Actual time for Craft to carry out a unit rate of a job. AL= Actual time for a Labour to carry out a unit rate of a job. PR (Loss/Gain)=MD [A-X] + {(EC . HC)+ (EL . HL)}-{(AC . HC)+ (AL . HL)}

Or PR (Loss/Gain) =MD [A-X] + HC(EC- AC)+ HL(EL- AL) PR=Productivity loss/gain per unit rate.

O

Total Productivity loss/gain (for a given activity)= Productivity loss/gain for a given unit per hour x Quantity of that activity

OR = PR x TQ Labour Productivity (Pi) for time period i=WHi /Qi WHi = Total work hours charged by the crew for time period of i Qi = Quantity of work placed during period i in unit rate

PRODUCTIVITY MEASUREMENT

AC = a EC (1+Σ xi) and similarly AL = a EL (1+Σ xi) xi = % of influential factors such as weather, crew size, absenteeism, machinery, accidents on site, etc.

•With the aid of a mathematical formulas labour and craft productivity for a number of activities on construction site is calculated. •These tables enable managers to see which activities were completed within the budget/on time,

PRODUCTIVITY MEASUREMENTand allow them to evaluate the quality of the completed work.

Tables entitled ‘Productivity measurement tables shown below.

also gives the level of productivity loss or gain for selected case studies.

PRODUCTIVITY MEASUREMENT The success or failure of a project is

measured by considering whether a project has met its targets.

However, it was also important to find out if a completed project was built within their budget.

and to see how the net rate for each activity was derived.

and if it was met at the end of the process.PRODUCTIVITY MEASUREMENT CASE 1STEP-1 (next page)

Step 1-pull information from bill of quantity

Net Rate

Gross Total Total Total Total Total Time

Total Time

Total Cost

Total Cost

Total Time

Total Time

Total Cost

Total Cost

Unit

(£) Rate Quant-

Quant-

Cost Cost Est- Est- Est- Est- Act.- Act.- Act- Act-

(Est-) (Act-) (Est-) (Act-) Craft Labour

Craft Labour Craft Labour Craft Labour

(£) (£) (£) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) 64.5

5 72.94 160 - 1167

0 - 464 688 3257.3 3969.7

5 - - - - M2

57.29

64.73 130 - 8414.9

- 63.75 315.9 447.15 1822.75

- - - - M2

40.81

46.12 225 - 10377

- 506.25

393.75

3553.9 2271.95

- - - - M2

35.24

39.82 410 16326

- 922.5 451 6475.95

2602.25

- - - - M2

13.91

15.98 440 - 7031.2

- 638 484 4478.75

2792.7 - - - - M2

5.04 5.69 1125 - 6401.3

506.25

258.75

3553.9 1492.95

- - - - M2

3.99 4.5 785 - 3532.5

196.25

102 1377.7 588.55 - - - - M2

26.88

30.37 90 - 2733.3

- 90 54 631.8 311.6 - - - - M2

Net Rate

Gross Total Total Total Total Total Time

Total Time

Total Cost

Total Cost

Total Time

Total Time

Total Cost

Total Cost

Unit

(£) Rate Quantity

Quantity

Cost Cost (Est-) (Est-) (Est-) (Est-) (Act.-)

(Act.-) (Act-) (Act-)

(Est-) (Act-) (Est-) (Act-) Craft Labour

Craft Labour Craft Labour Craft Labour

(£) (£) (£) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs)

64.5 72.94 114 - 8315. - 330.6 490.2 2320.8 2828.4 - - - - M2

Step 2-carry out calculations-use Dr F.Dejahang’s Formulas.

Productivity measurement table-related to case no.1

CRAFT/LABOUR

PRODUCTIVITY

CASE NO.1 POOR

Total MD =Cost of material

Waste Waste Craft Optve

Craft Optve

Labour Labour

Productivity Loss or Gain £

Total loss/Gain =PR x TQ

Unit

3x3 Bed House-2 Story level

Quantity (TQ)

Delivered to site

(Estimate)

(Actual)

Hrs Hrs Hrs Hrs- PR=MD[A-X]+HC(EC-AC) +HL(EL-AL)

LOSS £

Description-Activities

(Act-) % % (EC) (AC) (EL) (AL)

SUPERSTRUCTURE

Facing Brick P.C £350 PER 1000 /Common Block

156 31.14 5% 6.50% 2.55 2.58 1.95 1.97 -0.9 -140 M2

Common Brick/Block

264 18.88 5% 6.50% 2.25 2.26 1.75 1.76 -0.47 -124 M2

Internal Walls-LWC Block

282 8 5% 7.00% 1.45 1.47 1.1 1.12 -0.38 -107 M2

Internal Walls-Plastering-13mm thick

708 1.71 5% 6.50% 0.45 0.45 0.23 0.23 -0.03 -24 M2

Internal Finish-Ceiling finish-set

504 0.47 5% 6.50% 0.25 0.25 0.13 0.13 0.47x (-0.02) 4 M2

Wall Tiling-152x152

75 14.5 5% 6.50% 1 1 0.6 0.6 1.71x (-0.02) 22 M2

COST CONTROL-AOA

1 3 82 11 15

12

0

0

14

14

40

40

4

55

43

43

47

47

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55

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61DU=14 DU= DU= DU= DU=54

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47

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59

14

45

45

6

55

55

13

70

70

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43

46

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45

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10

59

66

16

26

DU=4

DU=1

DU=1

3

DU=2

DU=1

DU=1

DU=1 8

DU=1

DU=4

DU=3

DU=2

DU=2

PRODUCTIVITY MEASUREMENT

PRODUCTIVITY MEASUREMENT Design of project control software, Based on the mathematical formulas

mentioned above, ACTIVITIES 1-2, 2-3, 3-4, 1-12, 1-9, ….To measure Items such as: Time (increase/decrease), Cost (increase/decrease), Labour (increase/decrease), Material (Material

waste-increase/decrease) Machinery (efficiency

increase/decrease).

PRODUCTIVITY MEASUREMENTCompare Actual completion time for

Activities 1-2, 2-3,..agonist allocated time for Activities 1-2, 2-3,

Compare Actual completion cost for Activities 1-2, 2-3,..against allocated cost for Activities 1-2, 2-3,

Compare Actual waste allowed(%) for Activities 1-2, 2-3,..against allowed waste (%) for Activities 1-2, 2-3,

Step 1-pull information from bill of quantity

Productivity measurement table-related to case no.1

CRAFT/LABOUR

PRODUCTIVITY

CASE NO.1 POOR

Total MD =Cost of material

Waste Waste Craft Optve

Craft Optve

Labour Labour

Productivity Loss or Gain £

Total loss/Gain =PR x TQ

Unit

3x3 Bed House-2 Story level

Quantity (TQ)

Delivered to site

(Estimate)

(Actual)

Hrs Hrs Hrs Hrs- PR=MD[A-X]+HC(EC-AC) +HL(EL-AL)

LOSS £

Description-Activities

(Act-) % % (EC) (AC) (EL) (AL)

SUPERSTRUCTURE

Facing Brick P.C £350 PER 1000 /Common Block

156 31.14 5% 6.50% 2.55 2.58 1.95 1.97 -0.9 -140 M2

Common Brick/Block

264 18.88 5% 6.50% 2.25 2.26 1.75 1.76 -0.47 -124 M2

Internal Walls-LWC Block

282 8 5% 7.00% 1.45 1.47 1.1 1.12 -0.38 -107 M2

Internal Walls-Plastering-13mm thick

708 1.71 5% 6.50% 0.45 0.45 0.23 0.23 -0.03 -24 M2

Internal Finish-Ceiling finish-set

504 0.47 5% 6.50% 0.25 0.25 0.13 0.13 0.47x (-0.02) 4 M2

Wall Tiling-152x152

75 14.5 5% 6.50% 1 1 0.6 0.6 1.71x (-0.02) 22 M2

carry outcalculations-useformulas (ACTUAL)

Informationfrom bill of quantity(ESTIMATION)

Net Rate

Gross Total Total Total Total Total Time

Total Time

Total Cost

Total Cost

Total Time

Total Time

Total Cost

Total Cost

Unit

(£) Rate Quant-

Quant-

Cost Cost Est- Est- Est- Est- Act.- Act. - Act - Act-

(Est-) (Act-) (Est-) (Act-) Craft Labour

Craft Labour Craft Labour Craft Labour

(£) (£) (£) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) 64.5

5 72.94 160 - 1167

0 - 464 688 3257.3 3969.7

5 - - - - M2

57.29

64.73 130 - 8414.9

- 63.75 315.9 447.15 1822.75

- - - - M2

40.81

46.12 225 - 10377

- 506.25

393.75

3553.9 2271.95

- - - - M2

35.24

39.82 410 16326

- 922.5 451 6475.95

2602.25

- - - - M2

13.91

15.98 440 - 7031.2

- 638 484 4478.75

2792.7 - - - - M2

5.04 5.69 1125 - 6401.3

506.25

258.75

3553.9 1492.95

- - - - M2

3.99 4.5 785 - 3532.5

196.25

102 1377.7 588.55 - - - - M2

26.88

30.37 90 - 2733.3

- 90 54 631.8 311.6 - - - - M2

Net Rate

Gross Total Total Total Total Total Time

Total Time

Total Cost

Total Cost

Total Time

Total Time

Total Cost

Total Cost

Unit

(£) Rate Quantity

Quantity

Cost Cost (Est-) (Est-) (Est-) (Est-) (Act.-)

(Act.-) (Act-) (Act-)

(Est-) (Act-) (Est-) (Act-) Craft Labour

Craft Labour Craft Labour Craft Labour

(£) (£) (£) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs) (Hrs)

64.5 72.94 114 - 8315. - 330.6 490.2 2320.8 2828.4 - - - - M2

1 3 82 11 15

12

0

0

14

14

40

40

4

55

43

43

47

47

55

55

61

61DU=14 DU= DU= DU= DU=54

44

58

9

44

47

7

55

59

14

45

45

6

55

55

13

70

70

17

43

46

5

45

59

10

59

66

16

26

DU=4

DU=1

DU=1

3

DU=2

DU=1

DU=1

DU=1 8

DU=1

DU=4

DU=3

DU=2

DU=2

Network Programming(AOA)-ESTIMATION

GanttChart-ACTUAL

GanttChart-ESTIMATION

1 3 82 11 15

12

0

0

14

14

40

40

4

55

43

43

47

47

55

55

61

61DU=14 DU= DU= DU= DU=54

44

58

9

44

47

7

55

59

14

45

45

6

55

55

13

70

70

17

43

46

5

45

59

10

59

66

16

26

DU=4

DU=1

DU=1

3

DU=2

DU=1

DU=1

DU=1 8

DU=1

DU=4

DU=3

DU=2

DU=2

Network Programming(AOA)-ACTUAL

LABOURYESNOMATERIALS(wastage)

YESNO

MACHINERYYESNO

COST OVERRUN(YES)

COSTOVERRUN(NO)

COST OVERRUN(NO)

YES A

A

Carry outcalculationsuse formula(ACTUAL)

Productivity measuremen t table-related to case no.1

CRAFT/LABOUR

PRODUCTIVITY

CASE NO.1 POOR

To tal MD =Cost of material

Wa ste Waste Craft Optve

Craft Op tve

Labour Labour

Productivity Loss or Gain £

Total lo ss/Gain =PR x TQ

Unit

3x3 Bed House-2 Story level

Quantity (TQ)

Delivered to s ite

(Estimate)

(Actual)

Hrs Hrs Hrs Hrs- PR=MD[A-X]+HC(EC-AC) +HL(EL-AL)

LOSS £

Descrip tion-Activities

(Act-) % % (EC) (AC) (EL) (AL)

SUPERSTRUCTURE

Facing Brick P.C £ 350 PER 1000 /Common Block

156 31.14 5% 6.50% 2.55 2.58 1.95 1.97 -0.9 -140 M2

Common Brick/Block

264 18.88 5% 6.50% 2.25 2.26 1.75 1.76 -0.47 -124 M2

Internal Walls-LWC Block

282 8 5% 7.00% 1.45 1.47 1.1 1.12 -0.38 -107 M2

Internal Walls-Plastering-13mm thick

708 1.71 5% 6.50% 0.45 0.45 0.23 0.23 -0.03 -24 M2

Internal Finish-Ceiling finish-set

504 0.47 5% 6.50% 0.25 0.25 0.13 0.13 0.47 x (-0.02) 4 M2

Wa ll Tiling-152x152

75 14.5 5% 6.50% 1 1 0.6 0.6 1.71 x (-0.02) 22 M2

SITE ENGINEERS

MANAGEMENT

CHIEF EXECUTIVE

LOWPRODUCTIVITYCOST OVERRUN

HIGHPRODUCTIVITY

COST OF MATERIALS31.145% WASTE ALLOWED6.50% WASTE EXPERIENCED31.14(6.50-5)=31.14X1.50=£46.7146.71X156=7286.76THE ESTIMATED COST FOR THIS ITEM=7286.76-46.71=7240.05

Total MD =Cost of material

Waste Waste

Quantity (TQ)

Delivered to site

(Estimate)

(Actual)

(Act-) % %

156 31.14 5% 6.50%

264 18.88 5% 6.50%

282 8 5% 7.00%

708 1.71 5% 6.50%