NICMAR

TRACKING OF RESOURCES

IN

ENTERPRISE RESOURCE PLANNING

Submitted by:

AMRUTA HANAMSHET Roll No. 233005

MANIKANDAN M C Roll No. 233038

MANU S. MURUGAN Roll No. 233040

SHRITI VIJAYAN Roll No. 233072

A Thesis submitted in partial fulfilment of academic requirements for the

award of Post-Graduate Diploma in Advanced Construction Management

PGPACM XXIII BATCH 2009-11

NATIONAL INSTITUTE OF CONSTRUCTION

MANAGEMENT AND RESEARCH

HYDERABAD

TRACKING OF RESOURCES IN ENTERPRISE RESOURCE PLANNING

PGP ACM XXIII 2009-11

NICMAR

TRACKING OF RESOURCES

IN

ENTERPRISE RESOURCE PLANNING

Submitted by:

AMRUTA HANAMSHET Roll No. 233005

MANIKANDAN M C Roll No. 233038

MANU S. MURUGAN Roll No. 233040

SHRITI VIJAYAN Roll No. 233072

A Thesis submitted in partial fulfilment of academic requirements for the award of Post-

Graduate Diploma in Advanced Construction Management

PGPACM XXIII BATCH 2009-11

NATIONAL INSTITUTE OF CONSTRUCTION

MANAGEMENT AND RESEARCH

HYDERABAD

CERTIFICATE

This is to certify that the research thesis titled, Tracking of Resources in Enterprise

Resource Planning

is a bonafide work of:

Ms. Amruta Hanamshet, Roll No. 233005,

Mr. Manikandan M.C, Roll No. 233038,

Mr. Manu S. Murugan, Roll No. 233040 and

Ms. Shriti Vijayan, Roll No.233072

in partial fulfillment of academic requirement for the award of the Post Graduate

Diploma in Advanced Construction Management. This work is carried out by them

under my guidance and supervision.

Date: Signature of Guide

Place: Hyderabad Prof. K. P. Reghunath

NICMAR, Hyderabad

..

Prof. K. R. Ramana

Dean

NICMAR s CISC

DECLARATION

We declare that the thesis titled, Tracking of Resources in Enterprise resource

Planning is a bonafide work carried out by us under the guidance of

Prof. K. P. Reghunath. Further, we declare that this has not formed the basis of award

of any degree, diploma, associateship or other similar degree or diploma and has not

been submitted anywhere else.

Signature Name: Amruta Hanamshet Roll No: 233005

Signature Name: Manikandan. M. C. Roll No: 233038

Signature Name: Manu S. Murugan Roll No: 233040

Signature Name: Shriti Vijayan Roll No: 233072

Date:

Place:

CONTENTS

Acknowledgement viii

Abstract

x

Chapter 1. Introduction 1-2

Chapter 2. Profile of the Company 3-6

2.1 SHAPOORJI PALLONJI COMPANY LIMITED 3

2.1.1 EMAAR-MGF Boulder Hills Residential Apartments 4

2.1.2 Lemon Tree and Red Fox Hotels 5

2.1.3 CMC-TCS Synergy Park 6

Chapter 3. Research Problem 7-8

3.1 Problem Identification 7

3.2 Objective 7

3.3 Scope of the study 7

3.4 Significance 7

3.5 Methodology 8

3.6 Data Processing 8

3.7 Limitations 8

Chapter 4. ERP 9-16

4.1. EVOLUTION OF ERP 10

4.2. CHARACTERISTICS OF ERP 11

4.3. FEATURES OF ERP 12

4.4. COMPONENTS OF ERP 13

4.5. NEED OF ERP 13

Chapter 5. Productivity 17-50

5.1. PRODUCTIVITY MEASURES AND MEASUREMENTS 18

5.2. TECHNIQUES TO IMPROVE PRODUCTIVITY 20

5.3. MANAGEMENT S ROLE 21

5.4. PRODUCTIVITY STANDARDS & THUMB RULES 23

5.5. FACTORS AFFECTING PRODUCTIVITY 30

5.6. TECHNIQUES TO IMPROVE PRODUCTIVITY 33

5.6.1. WORK STUDY 33

5.6.2. METHOD STUDY 34

5.6.3. WORK MEASUREMENT 35

5.7. LABOUR PRODUCTIVITY 37

5.7.1. LABOUR PRODUCTIVITY CONTROL 38

5.7.2. LABOUR PRODUCTIVITY ACCOUTING METHODS 38

5.7.3. LABOUR ACCOUTING SYSTEM 39

5.7.4. CAUSES OF LOW LABOUR PRODUCTIVITY 40

5.8. MATERIALS PRODUCTIVITY CONTROL 43

5.8.1. ACCOUNTING FOR CONSTRUCTION MATERIALS 44

5.8.2. MATERIAL WASTAGE ANALYSIS 44

5.8.3. CAUSES OF EXCESSIVE WASTAGE 45

5.9. EQUIPMENT PRODUCTIVITY CONTROL: 47

5.9.1. FACTORS AFFECTING PRODUCTIVITY OF MACHINES 47

5.9.2. ACCOUNTING EQUIPMENT PRODUCTIVITY 48

5.9.2.1. DAILY EQUIPMENT DEMPLOYMENT ACCOUNTING 49

5.9.2.2. WEEKLY EQUIPMENT PRODUCTIVITY SHEET 50

5.9.3. EQUIPMENT PRODUCTIVITY ANALYSIS 51

Chapter 6. DELAYS 52-57

6.1. INTRODUCTION 52

6.2. STRAINS IN CONSTRUCTION INDUSTRY 54

6.3. EXCUSABLE AND NON EXCUSABLE DELAY 56

Chapter 7. Analysis 58-65

7.1. Root 58

7.2. Identify 59

7.3. Procedure 61

7.4. Observations 62

7.5. Work Study 63

Chapter 8. Conclusion 66

Chapter 9. Suggestions 67-73

9.1. Man Management 67

9.2. Machinery Management 67

9.3. Materials Management 69

References 74

ACKNOWLEDGEMENT

This research thesis is a team work and the satisfaction that accompanies the successful

completion of this task would be incomplete without the mention of the following people

who made it possible. We take this opportunity to express our gratitude to them.

We express sincere gratitude to our guide Prof. K. P. Reghunath, for his valuable

guidance, constant motivation and advice. We thank him for being instrumental in

making this thesis a great success.

We sincerely thank Dr. Mangesh. G. Korgaonker, Director General, NICMAR, Prof.

K. R. Ramana, Dean, NICMAR, Hyderabad, Prof. Rajiv Gupta, Head ACM,

NICMAR, Hyderabad and Prof. S. V. S. Rajaprasad, Coordinator, ACM 23rd Batch,

NICMAR, Hyderabad for their support and all the facilities and help provided by them

for the completion of this thesis work.

We would like to thank Ms. Aziz Unnisa Tayyaba, AGM HR, SPCL,

Mr. Venkateswara Rao, AGM Projects, SPCL, Mr. Santhosh, DM Projects, SPCL,

Mr. Govind Sharma, Manager Projects, SPCL, Mr. Abhishek Sharma, DM Projects,

SPCL, Mr. Purna Narendra, DM Projects, SPCL and all other employees of SPCL,

who had contributed and extended their help in all forms to bring this thesis to life by

providing the necessary data.

Special thanks to Mrs. Kavitha, Librarian, NICMAR, Hyderabad for granting access to

journals and magazines and reference materials.

We profoundly thank the entire faculty of NICMAR, Hyderabad for all their help

towards carrying out our project.

We are grateful to all the non- teaching staff members of NICMAR Hyderabad. We also

thank all our beloved friends for their cooperation and inspiration.

ABSTRACT

Construction industry is one of the major industries today. Especially in our country it

occupies the second place after agriculture providing employment to people.

Unfortunately this industry hasn t been granted the status of an industry and hence lies

unorganized. In enterprise level planning, the resources are distributed to the various

projects as per requirements before the commencement of the projects. This comes under

macro level planning. There is also distribution of resources periodically, which comes

under micro level planning. Even though the planning is perfect, there are conspiracies

and problems with allocation of resources at site during micro level planning and

efficient usage of the allotted resources to the optimal extent. The critical resources are

considered and studied to identify the delays, areas of efficiency wastage and resource

wastage. The thesis deals with the problems of loss in efficiency of resources which is

directly or indirectly related to enterprise level planning, site planning, resource

efficiency i.e., productivity, delays etc. The planned and executed data along with

productivity values of various resources can be utilized for this analysis. A real estate

enterprise, SPCL Hyderabad is considered for study in the thesis with three sites in and

around Hyderabad. We will try to study the existence of resources which are less

productive, though the planned work is achieved on time. The productivity of critical

resources in all the three sites is calculated and the site with the maximum productivity is

studied. The work procedure of this site is taken into consideration and compared with

the rest of the sites. The study of productivity is simply not the measurement of

efficiency; rather it is more related to the concept of effectiveness of handling the

resources throughout their use in the project.

1. INTRODUCTION

Construction is a key industry in Indian economy. Almost half of India s planned

expenditure is directly or indirectly going to this industry. Therefore an attempt made at

economizing the expenditure in this sector can give a boost to the economy as a whole.

The spurt of construction activities, now-a-days shows the importance of this sector even

otherwise. That is why people now-a-days begin to introduce the concept of productivity

in construction industry. Therefore any attempt at economizing the resources, which are

precious in supply and value, can definitely lead to miracles and people started thinking

about increasing productivity of resources in this sector.

Productivity is the amount of goods and services produced by a productive factor in a

unit of time. It is not equivalent to performance. The productivity may be high, however

with low performance, due to automatic machinery, which paces the work. Productivity

is a term with multidimensional meanings, although it is most commonly associated with

labour effectiveness in industry. In broad sense productivity is the ratio of output to

some or all the resources used to produce the output (input). The input of construction

industry consists of land, capital, labour, equipment, materials and time.

The study of productivity is simply not the measurement of efficiency, rather it is more

related to the concept of effectiveness and therefore productivity drives must consist of

getting the output to input to increase. For those who are unemployed, employment

opportunities can be made to increase the productivity. By introduction of the concept of

productivity the cost of productivity can be minimized and that it has got enormous

importance now-a-days.

The greater the productivity of the firms making things, greater are the opportunities of

producing them abundantly and cheaply in quantities and at prices which will meet the

requirements of every family in the community. Increased productivity makes it possible

to pay good wages to employees, provide satisfactory dividends to stockholders and to

sell products and services at low prices.

2. PROFILE

2.1. SHAPOORJI PALLONJI COMPANY LIMITED

Shapoorji Pallonji Company Limited (SPCL) has been one of India s foremost

construction company for the past few decades. The contribution made by this company

to the economy by the way of infrastructure and real-estate development is immense.

The areas of construction are widely diversified such as Transport, Water supply and

Irrigation, Buildings, Industry and the Environment. Throughout the period from its

inception in construction field, the company has consistently met exact standards in the

execution of its projects. Shapoorji Pallonji Constructions are not limited to India; they

have stormed the Middle East including Muscat, Dubai, Abu Dhabi, Qatar and also

Guyana in South America.

Shapoorji Pallonji Company is also the oldest and the largest construction company in

India. It was the first Indian construction company to get ISO 9001 certification.

Shapoorji Pallonji is a name synonymous to quality, reliability and integrity.

The sites taken for study under SPCL include EMAAR-MGF Boulder Hills, Lemon Tree

and Red Fox Hotels and CMC-TCS Synergy Park in Hyderabad.

PROJECT SITE DETAILS

2.1.1. EMAAR-MGF Boulder Hills Country Club-Residential Apartments

Boulder Hills Golf and Country Club is a world-class leisure and residential community

spread out over approximately 531 sprawling acres. It has been envisioned as a

complete, self-contained township spread around an 18-hole championship golf course

where every home is designed to the most demanding international standards

Developed by Emaar MGF for Emaar Hills Township (P) Limited and Boulder Hills

Leisure (P) Limited, Joint Venture between Emaar Properties and Andhra Pradesh

Industrial Infrastructure Corporation, the estate is one of the most picturesque in the

country with tree-lined streets and water bodies

Client : EMAAR MGF Land Pvt. Ltd

Design Consultant : Smallwood Reynolds, Stewart, Stewart International Ltd.

(SRSS)

Structural Consultant : SS Infrastructure Development Consultants Pvt. Ltd

Start Date of Project : 4th August 2008

End Date of Project : 3rd February 2011

Type of Contract : Cost plus basis

Contract Value : Rs.400 crores

2.1.2. Lemon Tree and Red Fox Hotels

Lemon Tree is India's first and largest chain of moderately-priced, full-service hotels,

designed for the budget-conscious business and leisure traveler. Growing at an incredible

pace, Lemon Tree Hotels is expanding across India. An Upscale, Full Service,

Affordable Business Hotel in the Heart of Hyderabad's Major IT Hub, HITEC City with

267 stylish and spacious rooms and suites are specially designed to create a premium in-

room experience.

Each Lemon Tree Hotel has about 125 smartly furnished rooms with facilities designed

for safety, security, hygiene and comfort. Each hotel also has rooms carefully designed

for physically challenged guests, ensuring greater safety and comfort

Lemon Tree Hotels is a fresh, cool and sparkling experience with zest, India s finest

chain of full service, business and leisure hotels, at an unexpectedly reasonable price.

Red Fox Hotels offers a world class product-service mix, at extraordinary prices which

will make it a compelling alternative to local small hotels and guest houses.

Client : Cyber Hills Developers Pvt. Ltd

Architect : The Guild of Architects

Structural Consultants : M/s Vintech Consultants

Total Project Cost : Rs.69.62 Crores

Project Duration : 22 Calendar Months + 45 days Mobilisation

No. of Floors : Basements -3Nos, Ground, Upper Ground, Service,

First to Eleven Floors and Terrace Floor

2.1.3. CMC-TCS Synergy Park

The Synergy Park, which is located in Gachibowli, is the largest TCS facility in

Hyderabad. Built over an area of 50 acres with a capacity of 8,000 people, the campus

was being built in two phases, the first phase was already operational, while the

construction of phase two commenced in April 2008.

Synergy Park was an approved Special Economic Zone (SEZ) and will serve global TCS

customers in Industry segments like Telecommunications, Media and Entertainment,

Government, Healthcare and Life Sciences, Hi-tech, Manufacturing, Retail, as well as

Banking and Financial Services, with a focus on technology areas like enterprise

solutions, assurance and infrastructure, as well as IT services.

3. RESEARCH PROBLEM

Construction industry has become a major industry today. Especially in our country it

occupies the second place after agriculture providing employment to thousands of

people. Unfortunately this sector hasn t been granted the status of an industry and hence

lies unorganized. In spite of all this, any person operating in this sector would essentially

strive for better returns. By better returns profitability is assured and in this context

productivity plays an important role. Owing to its importance the present study tries to

track productivity of manpower, material, equipment and calculate the cost incurred

from them.

3.2. RESEARCH OBJECTIVE

The overall objective of the study is to track productivity of critical resources and

calculate the cost incurred from them. It points out the areas of lesser efficiency

involving critical resources and the corresponding losses, which accumulates to higher

value in the course of the project. Further the study will try to go in detail about

increasing the productivity of the same.

The role of an enterprise in controlling the productivity is also studied.

3.3. RESEARCH SCOPE

The study is based on data available from construction sites chosen in Hyderabad, their

accuracy, relevance and validity in analysis.

3.4. RESEARCH SIGNIFICANCE

The study is essentially a Research and hence the result will be beneficial to the

construction firm and the people working in the area of productivity of resources.

3.5. RESEARCH METHODOLOGY

The study requires primary data which includes planned data and actual data which is

collected from the construction sites. The sites selected for the study are EMAAR-MGF

Boulder Hills Golf and Country Club-Residential Apartments, Lemon Tree and Red Fox

Hotels and CMC-TCS Synergy Park of an enterprise Shapoorji Pallonji Company

Limited.

As mentioned earlier the areas of study are the critical resources in construction i.e.,

Manpower, Material and Machinery.

The primary data collected are Daily Progress Reports, Labour Muster, Material

registers, Equipment log sheets, etc. Site visits will be a strategy to survey the

productivity. After having collected all the relevant and sufficient required data, the data

is tabulated and the required factors are calculated and compared. From the results, we

study the performance of various sites.

3.6. DATA PROCESSING

Appropriate methodology and theoretical constants are adopted for the analysis of data.

3.7. LIMITATION

The efficiency calculated may also depict some losses and delays those created by

sources other than resources.

It is not sure that the data acquired from site depicts the actual conditions, because

always there are adjustments for the purpose of billing and related works.

The onsite conditions may not be the same during execution of similar activities.

4. ENTERPRISE RESOURCE PLANNING

ERP (Enterprise Resource Planning) is an industry term for the broad set of activities

supported by multi-module application software that help a manufacturer or other

business manage the important parts of its business, including product planning, parts

purchasing, maintaining inventories, interacting with suppliers, providing customer

service, and tracking orders. ERP can also include application modules for the finance

and human resources aspects of a business. Typically, an ERP system uses or is

integrated with a relational database system.

ERP is a software infrastructure that helps to manage the different parts of a company or

business. The aim is to improve the co-operation and interaction between all the

departments such as the products planning, purchasing, manufacturing, sales and

customers service department. In brief, it is the planning of the 4M s- Man, Money,

Machines and Materials.

The deployment of an ERP system can involve considerable business process analysis,

employee retraining and new work procedures.

Enterprise resource planning (ERP) was originated in the manufacturing industry. It

provides a general working environment for an enterprise to integrate its major business

management functions with one single common database so that information can be

shared and efficient communications can be achieved between management functions.

Enterprise Resource Planning (ERP) is now being hailed as a foundation for the

integration of

organization wide information systems. ERP systems link together entire organization s

operations such as accounting, finance, human resources, manufacturing and

distribution, etc. Moreover, they also connect the organization to its customers and

suppliers through the different stages of the product or the process life cycle.

The construction industry is a highly fragmented industry. It needs to communicate on a

large scale with other related businesses such as material and equipment suppliers,

vendors, subcontractors and clients. ERP systems are being used by construction

companies to improve responsiveness in relation to customers, strengthen supply chain

partnerships, enhance organizational flexibility, improve decision making capabilities

and reduce project completion time and lower costs. These information systems are

designed to integrate and partially automate many of the company s business processes

such as human resources, financial management, manufacturing, procurement,

construction, operations and maintenance. The goal of ERP is to support one time entry

of information at the point where it is created and to make it available to all the

participants within the organization.

4.1. EVOLUTION OF ERP

In today s business environment, there has to be much greater interaction between the

customers and manufacturers. This means that, in order to produce goods tailored to

customer requirements and provide faster deliveries, the enterprise must be closely

linked to both suppliers and customers. In order to achieve this, improved delivery

performance, decreased lead times within the enterprise and improved efficiency and

effectiveness, manufacturers need to have efficient planning and control systems that

enable very good synchronization and planning in all the processes of the organization.

Today, however the challenge is intense and requires a strong integration across the

value chain.

4.2. CHARACTERISTICS OF ERP

An ERP system is not only the integration of various organization processes. Any

system has to possess few key characteristics to qualify for a true ERP solution.

These features are:

a) Flexibility: An ERP system should be flexible to respond to the changing needs

of an enterprise. The client server technology enables ERP to run across various

data base back ends through Open Data Base Connectivity (ODBC).

b) Modular and Open: ERP system has to have an open system architecture. This

means that any module can be interfaced or detached whenever required without

affecting other modules. It should support multiple hardware platforms for the

companies having heterogeneous collection of systems. It must support some

third party add-ons also.

c) Comprehensive: it should be able to support variety of organizational functions

and must be suitable for a wide range of business organizations.

d) Beyond the Company: It should not be confined to organizational boundaries,

rather support the on-line connectivity to the other business entities of the

organization.

e) Best Business Practices: It must have a collection of best business processes

applicable worldwide.

f) Simulation of Reality: ERP system must simulate the reality of business

processes on the computers. In no way it should have the control beyond the

business processes and it must be able to assign accountabilities to the users

controlling the system.

4.3. FEATURES OF ERP

The major features of ERP and what ERP can do for the business system are:

a) ERP facilities company-wide Integrated Information System, covering all

functional areas like Manufacturing, Selling and distribution, Payables,

Receivables, Inventory, Accounts, Human resources, Purchases etc.

b) ERP performs core corporate activities and increases customer service and

thereby augmenting the corporate image.

c) ERP eliminates most of the business problems like material shortages,

productivity enhancements, customer service, cash management, inventory

problems, quality problems, prompt delivery etc.

d) ERP allows automatic introduction of latest technologies like Electronic Fund

Transfer(EFT), Electronic Data Interchange(EDI), Internet, Intranet, video

conferencing, E-Commerce, etc

e) ERP bridges the information gap across the organization.

f) ERP is an effective solution for better Project Management.

g) ERP not only addresses the current requirements of the company but also

provides the opportunity of continuously improving and refining business

processes.

h) ERP provides business intelligence tools like Decision Support System

(DSS), Executive Information System (EIS), Reporting, Data Mining and

Early Warning Systems for enabling people to make better decisions and thus

improve their business processes.

i) ERP provides for complete integration of systems not only across the

departments in a company but also across the companies under the same

management.

4.4. COMPONENTS OF ERP

To enable the easy handling of the system the ERP has been divided into following core

subsystem

a) Asset management

b) Bill of materials

c) Capacity requirement planning

d) Financial accounting

e) Logistics

f) Master scheduling

g) Material requirement planning

h) Purchasing

i) Sales and marketing

j) Shop floor control

4.5. NEED OF ERP

Realizing the requirement of the user organizations, some of the leading software

companies have designed, Enterprise Resource Planning software, this will offer an

integrated software solution to all the functions of an organization, such as:

a) Complete integration of systems across the departments in a company as well as

across the enterprise as a whole.

b) Effective solution for better Project Management.

c) Better customer service

d) Automatic introduction of latest technologies

e) Expertise database.

ERP systems could be used in the construction industry for the following general

purposes:

1. To improve responsibilities in relation to customers

2. To strength supply chain partnerships

3. To enhance organizational flexibility

4. To improve decision-making capabilities

5. To reduce project completion time and cost

The following benefits could be gained by implementing the ERP systems:

1. Provide an integrating working environment.

2. Enable automation

3. Availability of information from field level until the management level

4. Integration in applications in any departments

5. Flexibility and facility to standardizing process or to accommodate changes and

globalization.

6. Achieve balanced people, process and technology changes across all areas.

7. Apply planning and program management practices throughout the program life

cycle of a project.

Disadvantages of implementing the ERP systems:

1. High implementation cost. It can range from some hundred thousand dollars in

small companies to a billion dollar for large multinational companies (these

numbers including training and consulting).

2. Delay on return on investment. The benefits of ERP may not be shown until after

companies have had it running for some time

While developing the e-resource ERP for Construction Industry, core functional areas

such as Project Monitoring and Control, Sales Management, Tendering, Bill of

Quantities, Purchase and Supplier Management, Onsite Engineers Portal, Material

Management, Labour and Contractors Management, Accounts Management and Human

Resource Management have been given extra care and prominence.

All activities right from pre-construction stage to post construction stage can be captured

and monitored. Management can access and manage onsite activities from anywhere

anytime. Independent Estimates can be generated for each task based on respective

quantities. Estimating is facilitated by system prompted activities. All different activities

can be defined as different assemblies. Associated with each assemblies are bill of

quantities, labours, turnaround time for completion.

Benefits at a glance:

1. Comprehensive cost estimation while maintaining a detailed and reliable cost

history centrally.

2. Estimation through the use of central libraries, historic cost records and time and

materials worksheets.

3. Review of the engineers estimate of probable cost; produce a proposal bid item

list for inclusion in the bid documents.

4. Issue prime contracts, subcontracts, purchase orders, potential change orders, and

change orders, then release these items to accounting for review, approval, and

use.

5. Access subcontract and PO status, initial and revised totals, pending and

approved changes, and amounts invoiced, retained and paid.

6. Access pre-designed reports and inquiries or design your own.

7. Readily configured Master tables and items for infrastructure projects (such as

fixed asset types for construction equipment).

8. Creation of projects based on receipt of tenders and creation of tender responses.

9. Creation of budgets based on detailed BOQ-based project estimation.

5. OVERVIEW OF PRODUCTIVITY IN CONSTRUCTION INDUSTRY

Construction Industry has become a major industry at present. Since the business is for

profit essentially every firm in this sector, tries to maximize profits. One of the way

through which profit can be increased is through applying the concept of productivity to

the cost of production. Owing to its importance the present study tries to track delays due

to various aspects especially manpower, material, equipment and calculate the cost

incurred from them.

The Construction Industry is an essential contributor to this process of development.

Roads, dams, irrigation works and other construction works are the physical foundations

on which development efforts and improved living standards are established. More than

forty percent of the national plan outlay directly goes to the construction sector. This

itself is an evidence that any attempt at increasing the efficiency of this giant sector can

definitely create miracles

Construction Industry is a key industry in an economy. Almost half of the India s plan

expenditure is directly going to this industry. Therefore any attempt at economizing this

expenditure in this sector can give boost to economy as a whole. That is why people

now-a-days began to introduce the concept of productivity in construction industry too.

This construction process associated with construction is also complex, influenced by

technology and by externalities such as government regulations, weather, economic

conditions etc and by various environmental factors. One of the most contentious areas

in construction claims is the calculation or estimation of lost productivity.

Unlike direct costs, lost productivity is often not tracked or cannot be discerned

separately and contemporaneously. As a result, both causation and entitlement

concerning the recovery of lost productivity are difficult to establish.

Compounding this situation, there is no uniform agreement within the construction

industry as to a preferred methodology of calculating lost productivity. There are, in

fact, numerous ways to calculate lost productivity. Many methods of calculation are

open to challenge with respect to validity and applicability to particular cases thus

making settlement of the issue on a particular project problematic.

Growing consensus among contractors indicates that measuring and monitoring

productivity are essential for improving productivity. Numerous systems for monitoring

and measuring productivity are commercially available, as are many proprietary systems,

yet a large number of today s firms do not apply these techniques. Key among the

reasons for not doing so is an inability or unwillingness to grapple with the complexity

and support costs associated with traditional cost system approaches

The most powerful motivator for broader application of productivity measurement

concepts by construction firms is self-interest. They must be convinced that productivity

measurement techniques can increase their profitability.

5.1. PRODUCTIVITY MEASURES AND MEASUREMENTS

PRODUCTIVITY

Productivity is a term that has a number of different meanings. Although it is most

commonly associated with labour effectiveness in industry, in a broad sense productivity

is the ratio of output to some or all of the resources used to produce the output.

Productivity =output/input. Labour productivity may be defined as output per unit of

time or output per labour hour .

Labour productivity = units produced / hours of work.

Capital productivity = output / capital input

Material productivity = output / materials input.

In recent years there has been a much keener understanding of the meaning of

productivity efficiency. This is coupled with a greater understanding that only through

the economic health of all industrial organization can come the progressive national

prosperity which will vitally affect the standard of living of the whole nation.

Productivity in its broadest sense is the quantitative relationship between what we

produce and the resources which we use. There is a clear and distinct difference between

production and productivity. It is quite possible to increase the volume of production and

yet decrease the productivity.

In seeking higher productive efficiency, therefore, we are concerned, not simply with

increasing output from the same or smaller use of our resources of all kinds.

Productivity may be high, however with low performance, due to automatic machinery,

which paces the work. Productivity is expressed by factors known as productivity

indices. Productivity indices to be meaningful must be based on reliable data, and to be

useful must be made up of controllable elements. High productivity is the intensive use

of scarce resources (converting input into output). Inappropriate methods of measuring

will result in faulty productivity indices, unsatisfactory standards and labour disputes.

The index expresses the efficiency of the factor productivity

EFFICIENCY = OUTPUT / INPUT

The factors affecting the productivity of each organization are many and no-one factor is

independent of others. The importance to be given to the productivity of each of the

resources depends on the enterprise. In industries where labour costs are low compared

with the capital invested in plant and equipment, better use of plant or materials may

give the scope for cost reduction.

5.2. TECHNIQUES TO IMPROVE PRODUCTIVITY

Productivity control aims at ensuring the efficient utilization of the input resources of

men, materials and equipment and forecasting changes in productivity of these direct

resources. The efficient utilization of resources is accomplished by identifying the causes

of their wastage at the project site with a view to minimize these wastages. The causes of

wastage are located by analysing variances between standard and on-site actual

productivity.

The methodology used of controlling each of the productivity parameters is similar. It is

divided into four stages, i.e. defining the control purpose, measuring the actual

performance, computing productivity performance variances and identifying causes or

these variances and applying corrective measures as necessary. Though it is difficult to

replace skilled workers by machines, the corrective remedial actions include but are not

limited to the following:

Replacing unskilled labour by machines, wherever feasible, in jobs like loading,

unloading, shifting, bar cutting etc.

Using appropriate and efficient tools as equipments.

Constantly improving the methods of production.

Increasing productivity through improved working conditions and incentives.

Implementing job oriented financial incentive schemes.

Training workers to overcome the initial learning period.

5.3. MANAGEMENT S ROLE IN PRODUCTIVITY IMPROVEMENT

Getting better results by productivity improvement is the most important task of all

managers, whatever their level in the company. Without some measurable productivity

objective, neither the organization nor the individual manager has a sense of direction.

Planning if done at all proceeds without any definable goal control cannot be exercised

because there is no method for measuring performance against plan. The extent to which

resources are made productive becomes the primary test of the manager s ability as well

as the standard by which we can compare the performance of organization.

The improvements resulting from better management are not so easily identified and

quantified; however, the failure to apply good management can result in loss.

Current situation: Companies are also making individually a lot of studies on

productivity so as to assess the performance of the unit collectively and to check whether

the targets are being achieved or not. Periodic determination of productivity indices can

only help to lay down plans for future targets and goals.

The main resources categorizations in construction are:

Manpower

Material

Machinery

Good project management in construction must vigorously pursue the efficient

utilization of labour, material and equipment. Improvement of labour productivity should

be a major and continual concern of those who are responsible for cost control of

constructed facilities. Material handling, which includes procurement, inventory, shop

fabrication and field servicing, requires special attention for cost reduction.

The use of new equipment and innovative methods has made possible wholesale changes

in construction technologies in recent decades. Organizations which do not recognize the

impact of various innovations and have not adapted to changing environments have

justifiably been forced out of the mainstream of construction activities.

With a strong technological base, there is no reason why the construction industry cannot

catch up and reassert itself to meet competition wherever it may be. Individual design

and/or construction firms must explore new ways to improve productivity for the future.

Of course, operational planning for construction projects is still important, but such

tactical planning has limitations and may soon reach the point of diminishing return

because much that can be wrung out of the existing practices have already been tried.

What is needed the most is strategic planning to usher in a revolution which can improve

productivity by an order of magnitude or more. Strategic planning should look at

opportunities and ask whether there are potential options along which new goals may be

sought on the basis of existing resources. No one can be certain about the success of

various development options for the design professions and the construction industry.

However, with the availability of today's high technology, some options have good

potential of success because of the social and economic necessity which will eventually

push barriers aside. Ultimately, decisions for action, not plans, will dictate future

outcomes.

5.4. PRODUCTIVITY STANDARDS and THUMB RULES

TOOLS AND PLANT STANDARD S FOR PRODUCTION

Working-costs of tools and plant

Working cost of plant is made up of:

(a) Standing cost (owning cost)

(b) Operating cost

STANDING COST

For working out the standing cost of plant, the straight line method is used, which

assumes that profits from use of the plant pay for the interest on the capital costs.

OPERATING COST

The operating cost of plant will have to include for cost of fuel, lubricating oil and

grease; maintenance, repair, spares, and renewal of tires; insurance and license fees in

construction with use of the plant, if any; and the operator s (and/or attendant s) pay.

The total operating costs (on the basis of the working days) per year are worked out, and

divided by the number of working days yield the operating cost of the plant per day.

Operating cost should be worked out from the records maintained for each different type

of plant. Information in table below may be taken as indicative.

The average plant working days per year are worked out on the assumption that the plant

works for 8hrs per working day, and also take into account that some types of plant

usually remain idle during certain part of the year.

HIRE CHARGES

1. If the plant is considered for hiring out to third parties, the build-up for hire

charges should be worked out as follows:

2. Standing cost per year worked out

3. Interest on capital outlay at bank rate

4. Cost of repairs and renewals per year

5. Salary of operator(and/or attendant) per year

The sum of (1) to (4) divided by the number of average working days per year will yield

the basic hire charge per day. To this, depending on the terms of hire agreement the cost

of fuel/oil/lubricants will have to be added. On the net figure so arrived at, a further

addition of 10% for profits would seem reasonable.

LABOUR CONSTANT

The labour constants are intended to represent reasonable times for the items of work

described. It should be noted that:

1) Operatives, materials and plant are assumed to be already on site and travelling to

and from the site, access and delivery of materials should be allowed for

separately;

2) Times for providing ladders, scaffolding and plant, etc. are indicated below and

allowance is therefore only rarely made in the other work groups;

3) No allowance has been made for pre-inspection of the work;

4) Times quoted are for one-off maintenance work and do not allow for economies

gained from repetitive work.

It has been assumed that in some trades one craft operative and one labourer, or a

plumber and apprentice always work together. In some instances this might not happen.

However, it is thought that the overall labour allowance reflects the total labour required

whether the work is carried out by a single operative, or two. The craft operative s time

is considered to be the lead time, i.e. the time given for a labourer working with a craft

operative is the same as the craft operative s time.

FORMWORK AND CENTERING

Formwork after initial fabrication can be used between 6 to 16 times again where

repetitive operations are possible. The labour (and material) constants vary widely with

the\number of repetitive operations possible in the same or other sites of work. Very

often, for non-repetitive odd shapes/sizes the constants will have to be worked out for

single use.

Three operations are involved, i.e initial fabrication for first use, fixing in place for the

first and each subsequent reuse, and stripping/ cleaning/ preparing for each reuse. On an

average the labour time for fixing is about 40% more than the time for initial fabrication,

and labour time for stripping/ cleaning/ preparing for reuse is about 30% less than the

time for initial fabrication.

Where readymade steel forms and props are used as in the case of soffits of slabs, very

negligible time will be required in initial fabrication for the marginal/ odd areas and the

number of reuses will be several times more than the possible reuses of timber/ plywood

formwork.

When using a combination of plywood, timber scantlings, ballies and steel clamps/bolts

the labour constants expressed in terms of materials used can be taken as follows for a

labour team of one carpenter and 4/5th mazdoor (representing 5 carpenters and 4

helpers).

MATERIAL FIRST USE SUBSEQUENT

USE

Plywood 0.33 hrs per sq m 0.16 hrs per sq m

Timber scantlings 20 hrs per cum 10 hrs per cum

Props 0.15 hrs each 0.10 hrs each

The labour constants given below are for each sq m of the area of formwork in contact

with concrete and include for fabricating, erecting, propping, stripping, cleaning and

reusing and take into consideration 16 uses after initial fabrication. They are not

applicable for readymade steel forms.

ITEM LABOUR CONSTANT IN

DAYS Foundation, column base, plinth beam 0.13

Column shafts other than curved on plan 0.25

Ditto 0.38

Walls 0.25

Beams 0.30

Slabs 0.23-0.07

Staircases 0.30

REINFORCEMENT FOR CONCRETE

The labour for providing reinforcement in following locations consists of two main

operations and the labour time required for them is in following proportion:

Cut to required size and bend to shape 50% - 47%

Place in position and tie with M.S wire 50% - 53%

Following labour constants are applicable for cutting, bending, fabricating, placing in

position and tying with M.S wire at each intersection, reinforcement using plain round/

deformed/ tor steel bars.

DIA OF BARS IN MM LABOUR CONSTANT IN DAYS

6 1.00

1.19

8 0.94

1.13

10 0.75

0.88

12 0.63

0.75

16 0.50

0.69

18 0.47

0.66

20 0.44

0.63

22 and above 0.39

0.56

The term productivity conveys different meanings to different people. Some regard

productivity and production capability as synonymous terms. Many link productivity to

mean workers output capability; they express productivity as work quantity produced

per man hour of input.

In construction context, resources productivity is the physical output per unit of planned

effort. More work done with the same input implies higher productivity, and less work

done shows lower productivity than the planned productivity. Standard output or planned

productivity is the predetermined planned output under normal working conditions,

whereas, actual output or actual productivity is what is achieved during implementation.

Resource productivity variance = standard productivity - actual productivity

Resource productivity index = actual productivity / standard productivity

Physical resource inputs at the construction project site include men, material and

machinery. These inputs produce outputs in the form of work. The success of a project

depends upon the performance of these input resources. The various productivity

parameters, which need to be controlled in construction projects, are labour productivity,

equipment productivity and material productivity.

1) Workers productivity is defined as the quantity of work done per man-hour or

crew-hour.

Workers job productivity = work done units/effort in man hours or crew

hours

2) Equipment productivity stands or quantity of work done per equipment hour.

Equipment job productivity = work done units / effort in man hours

3) Material productivity denotes quantity of work done per unit material.

Material standard quantity = quantity of work planned per unit of material

Productivity control aims at ensuring the efficient utilization of the input resources of

men, materials and equipment and forecasting changes in productivity of these direct

resources. The efficient utilization of resources is accomplished by identifying the causes

of their wastage at the project site with a view to minimize these wastages. The causes of

wastage are located by analysing variances between standard and on-site actual

productivity.

The methodology used of controlling each of the productivity parameters is similar. It is

divided into four stages, i.e. defining the control purpose, measuring the actual

performance, computing productivity performance variances and identifying causes or

these variances and applying corrective measures as necessary. Though it is difficult to

replace skilled workers by machines, the corrective remedial actions include but are not

limited to the following:

Replacing unskilled labour by machines, wherever feasible, in jobs like

loading, unloading, shifting, bar cutting etc.

Using appropriate and efficient tools as equipments.

Constantly improving the methods of production.

Increasing productivity through improved working conditions and

incentives.

Implementing job oriented financial incentive schemes.

Training workers to overcome the initial learning period.

5.5. FACTORS AFFECTING PRODUCTIVITY

The computation of production efficiency factors depends upon numerous variables,

which affects productivity under actual job condition at the site. These variables vary

from project to project and with place and time. Some of the typical factors affecting the

productivity efficiency are given below.

1. WORK COMPLEXITY

A simple, familiar work is easier to execute than unfamiliar, complex work.

2. REPETITION OF WORK

While the first time execution of an unfamiliar works needs extra effort and results in

low output, the skill acquired in the process, when utilized over a period of time to

execute similar works, improves the productivity rate, especially when the crew of

workers is the same.

3. QUALITY CONTROL

Sensitive projects, like the construction of nuclear reactor calls for stringent quality

control demands frequent inspections which involve elaborate documentation and are

time consuming. They increase the non-productive time of the workers.

4. EQUIPMENT-INTENSIVE TASKS

The construction task that can be performed wholly or partly with equipment include

excavating, handling, transporting, filling, compaction, grading ,hoisting, fabricating,

pre-casting, erecting, plastering, finishing, paving, trenching, cable laying, pipe laying

and so on.

The construction equipment executes work speedily. The equipment intensive tasks are

less susceptible to productivity changes than the labour-intensive ones.

5. SUPERVISION

A supervisor manages his assigned technical work as well as the workers under him. The

accomplishment of task economically and on schedule mostly depends upon the

competence of supervisor, which in turn, affects the workers productivity. An efficient

and effective supervisor can get a higher productivity from workers.

6. CLIMATIC AND WEATHER CONDITIONS

Generally, under average weather conditions, with temperature varying from 40-70

degrees Fahrenheit and relative humidity of 60%, workers continue working at the same

productivity level. But, extreme weather condition and seasonal changes, like extreme

hot or cold climate, high humidity and strong winds and rains affect both productivity as

well as the work performance.

7. LABOUR AVAILIBITY

Labour productivity also depends upon the employment opportunities available in the

market. If jobs are in plenty and labour is scarce, labour productivity tends to become

less. During a slum in the construction market, labour is easily available while there is a

dearth of jobs. In such situations, employers can afford to be selective, as hiring and

firing of workers become easy. In a scarce job situation, the overall productivity

improves, since the employers can then select suitable labour.

There is also a tendency among labour to move to high-value, large-sized projects, since

they offer them longer service, better job opportunities and more stability.

8. ROLE OF MANAGEMENT

Project management has a key in planning and controlling productivity. It is responsible

for specifying the weekly target of work to be accomplished by the workers as well as

how the work is to be executed and using which resource. Productivity is bound to suffer

if the management fails to fulfil its role and obligation effectively and fails to conduct

pre-work preparation.

9. WORKING METHOD

Work procedures causing unwanted movements and efforts.

10. CARELESS WORKMANSHIP

Poor workmanship leading to scrap and rework.

11. SAFETY STANDARDS

Insufficient safety measures and failure to observe safety standards.

5.6. TECHNIQUES TO IMPROVE PRODUCTIVITY

5.6.1. WORK STUDY

Work study was widely know for years as time and motion study , but with the

development of the technique and application to a very wide range of activities it as felt

by many people that the older title was both too narrow and insufficiently descriptive.

Work study is generic terms which are used in the examination of human work in all

aspects, and which lead systematically to the investigation of all the factors which affects

the economy of the situation being reviewed, in order to effect improvement.

Work study is divided into two main areas,

Method study

to improve the way work is done.

Work measurement

mainly to fix a standard time for doing various

operations.

5.6.2. METHOD STUDY

The systematic recording and critical examination of existing and proposed ways of

doing work, as a means of developing and applying easier and more effective methods

and reducing costs.

The basic approach of method study is to follow a simple 7 step procedure:

SELECT The work to be carried out

RECORD All the relevant facts

EXAMINE The facts critically

DEVELOP The most effective method

INSTALL That method

MAINTAIN By regular check

ACT To continually improve the method

METHOD STUDY CHARTS AND DIAGRAMS

(1) OUTLINE PROCESS CHARTS shows ORDER OF PROCESSES

(2) FLOW PROCESS CHARTS

MULTIPLE ACTIVITY CHARTS shows DURATION AND TIME

(1) FLOW DIAGRAMS show TRAVEL/MOVEMENT

(2) STRING DAIGRAMS

(1) TEMPLATES shows POSITION/LAYOUT

(2) MODELS

5.6.3. WORK MEASUREMENT

Work measurement is the second part of work study; this part is divided into following

techniques,

1. Time studies

2. Activity sampling

3. Synthesis

4. Analytical estimation

Each of the above plays a different role in making the result of the work study available

to management, which can be used in the guest of information and which assists in

maintaining a degree of control of an organization.

5.7. LABOUR PRODUCTIVITY

Labour productivity achieved at the site for a given work provides a measure of the

labourer s efficiency. It shows the total time for which the labourer was employed at

work, the time he was productive on work and the time he remained unproductive.

Studies carried out at construction sites reveal that the labourer s productive work time

varies from 50-70% of his total employment time, and the remaining time is wasted or

various reasons such as idle waiting, unnecessary travelling, late starting, early quitting,

unscheduled breaks, and delays in the receipt of tools, materials and work instructions.

Labour productivity can be improved by cutting down such unproductive time of

labourers. The control process involves accounting of actual productivity, comparing the

actual with the standard, analysing the causes for variations between actual and standard,

and finally taking corrective measures to improve productivity.

It defines the quantity of work done per man-hour or crew hour

Workers job productivity = Work done units/Effort in man-hour

Workers job productivity variance = Standard productivity - Actual productivity

For example, if a potter has been producing 30 plates an hour and improved methods of

work enable him to produce 40 plates an hour, the productivity of that man has increased

by 33 per cent.

5.7.1. LABOUR PRODUCTIVITY CONTROL

Labour productivity achieved at the site for a given work provides a measure of the

labourer s efficiency. It shows the total time for which the labourer was employed at

work, the time he was productive on work and the time he remained unproductive.

Studies carried out at construction sites reveal that the labourer s productive work time

varies from 50-70% of his total employment time, and the remaining time is wasted or

various reasons such as idle waiting, unnecessary travelling, late starting, early quitting,

unscheduled breaks, and delays in the receipt of tools, materials and work instructions.

Labour productivity can be improved by cutting down such unproductive time of

labourers. The control process involves accounting of actual productivity, comparing the

actual with the standard, analysing the causes for variations between actual and standard,

and finally taking corrective measures to improve productivity.

5.7.2. LABOUR PRODUCTIVITY ACCOUTING METHODS

The labour accounting system is designed to serve many purposes. It enables the

computation of accurate payment to the labours. It provides data for the evaluation of

labour productivity of various tasks and it facilitates the estimation of labour costs of

work executed.

5.7.3. LABOUR ACCOUTING SYSTEM

Labour accounting system provides the information and record keeping needs of all the

project departments, especially those of personnel, accounting, costing and planning.

The inputs necessary for labour productivity accounting are

1. The Time-keeper s daily time records,

2. The foreman/supervisor s daily labour employment record and

3. Weekly productivity report

This data is processed by the labour productivity centre to determine the actual labour

productivity, the labour forecast and the labour costs.

5.7.4. TYPICAL CAUSES OF LOW LABOUR PRODUCTIVITY

There can be many assignable causes for variations in actual productivity from the

standard productivity. It is the moving average of the actual productivity that indicates

the extent of variations from the standard productivity. One of the causes of variations

between actual and standard productivity is due to incorrect estimation of standard

productivity.

However, low productivity at the steady state level can be broadly attributed to the low

morale of the workers, poor pre-work preparation by the supervisors and the directional

failure of the project management.

a) Unproductive time.

It can be due to:

Rework of defective work done.

Waiting for material, equipment and/or instructions.

Absence from work by workers.

Other reasons.

Frequent changes in the scope of work and work methodology.

Conflicts between supervisors and workers.

b) Workers low morale

This can result from:

Non fulfillment of employment terms and conditions by the management.

Insecurity of employment.

Sub standard working conditions.

Frequent transfers.

Frequent changes in the scope of work and work methodology.

Conflict between supervisors and workers.

c) Poor pre-work preparation by supervisors

The lack of preparation for the execution of the assigned work prior to commencement

can result in inefficient handling of resources due to:

Excess workers employed for the task.

Insufficient instructions for the execution of work.

Incorrect sequencing of work activities.

d) Directional failures of the project management

These include:

Failure to set performance targets.

Failure to make provisions for timely resource support.

Failure to provide feedback.

Failure to motivate workers.

It is never feasible to eliminate all the causes resulting in low productivity. Mere

increase of labour may result in increase in production but it may not necessarily

improve productivity.

Workers productivity can be increased in many ways. Some of the typical down-to earth

approaches are given below:

Reduce unproductive time by constantly reviewing and minimizing

causes contributing to unproductive time.

Replace labour by appropriate equipment which is economically feasible.

Substitute inefficient working tools by appropriate efficient tools.

Improve method of executing work remembering that there is always a

better way of doing a task.

Improve working condition.

Employ competent supervisors.

5.8. MATERIALS PRODUCTIVITY CONTROL

Wastage of materials can take place during the procurement process, storage, and during

utilization.

Wastage during procurement can result from one or more of the following main causes.

Buying materials of wrong specification.

Buying more than the actual requirements.

Unnecessary buying of items to cater for unrealistic and unforeseen eventualities.

Untimely buying of short lived materials.

Improper and unnecessary handling of materials.

Wastage during operation and storage can occur due to the following reasons:

Damage and breakage during handling

Deterioration due to incorrect storage, incorrect maintenance, short-shelf life,

losses due to fire and thefts and exposure to extreme climatic conditions.

Some unavoidable wastage is inherent during utilization, but it is the excessive wastage,

which is of concern to the management. Excessive wastage during the utilization stage

affects the productivity adversely, and consequently results in extra costs. Productivity

control aims at minimizing wastage in usage. Productivity control at the construction

responsibility centre level can be broadly divided into accounting for materials,

analyzing usage variance to determine the cause of wastage and implementing measures

to minimize wastage.

5.8.1. ACCOUNTING FOR CONSTRUCTION MATERIALS

This system documents the materials data. It provides the details like procurement status,

inventory for the incoming works, issue of materials to the site, material costs, etc. it

helps in availability of right quantity and quality of materials at the required time and

place. It also aims at minimizing wastage.

Some accounting systems are:

a) Materials stock accounting

b) Material issue and returns accounting

c) Monthly stock taking

5.8.2. MATERIAL WASTAGE ANALYSIS

The first step in material wastage analysis is to quantify standard quantity and type of

direct material needed for each work item. The actual material consumed for each work

item can be complied from the material issues and return notes transacted between

supervisors and stockholders. In case of materials delivered directly to the construction

site by the suppliers, such as ready-mix concrete from the site batching plant or

fabrication steel for from the site casting yard, aggregate from a crusher, the supplier s

delivery note along with the materials return note can be used to determine the quantity

consumed for a given work item. These issue slips and delivery notes, when

consolidated from the start to completion of the work items/activity, can give the

quantity of materials consumed. The difference between the standard material required

and the materials actually consumed indicates the excess from the accepted materials

wastage standard prepared at the time of estimation.

Materials usage variance

= Standard acceptable material wastage - Actual materials wastage.

5.8.3. CAUSES OF EXCESSIVE WASTAGE

The main reasons for excessive material wastage during usage can be attributed to one or

more of the following:

a) Excess-quantity estimation.

b) Shortage in delivery.

c) Theft and pilferage.

d) Breakage and damage during handling.

e) Lack of pre-work preparation and coordination.

f) Improper accounting and poor storekeeping.

g) Negligent and careless attitude of the supervisors.

h) Unforeseen circumstances like accidents, fire, etc.

i) High rate of deterioration due to long storage at the place of work.

j) Over-issues from the central stores and failures to return unused surplus

materials.

Some of the preventive measures to minimize the wastage includes the use of proper

handling and transportation of equipment, minimizing unnecessary shifting, setting up of

proper and secure storage areas, correct accounting of materials, fire precaution,

improvements in the process of construction, and the education and training of staff and

workers to ensure productivity improvement.

Factors affecting productivity of materials:

1. At design stage

least consumption assumed

Plant and machinery are purchased such that consumption is economical

2. At operation stage

Use of correct process

Ensure proper operation

Proper handling and storage

Savings in imports

Minimize wastage

3. Others

Political, frequent changes in specs., delays in issue of drawings, co-ordination,

experience, etc

5.9. EQUIPMENT PRODUCTIVITY CONTROL:

In construction, some tasks are labour intensive, some predominantly employ equipment,

and some use a combination of both, i.e. labour and equipment while the actual work

done and the associated labour is accounted for by the foreman concerned, the

equipment productivity control is undertaken to determine its equipment time, the output

achieved and its productivity at site. The main object of equipment productivity control

is to minimize the wastage in utilization.

5.9.1. FACTORS AFFECTING PRODUCTIVITY OF MACHINES

COMMON CORRECTION FACTORS

1. Soil factor, (MUTIPLY)

a) Easy Dig(loam, sand, gravel)-1.0

b) Medium Dig(common earth) -0.85

c) Hard Dig(stiff slay, soft clay)0.67

2. Swell factor for in place volume conversion, (DIVIDE)

a) Common earth -1.2

b) Sand and gravel-1.1

c) Clay(dry)-1.3

3. Working efficiency, (MULTIPLY)

a) 60 Min- 1.00

b) 55 Min - 0.92

c) 50 Min- 0.83

d) 45 Min- 0.75

e) 40 Min- 0.67

4. Swing factor (FOR EXCAVATION)

Angle of swing(Degrees) 45 60 75 90 120 150 180

Factors 1.25 1.15 1.05 1.0 0.90 0.80 0.70

5. Load factor (FOR EXCAVATION)

Side casting - 1.0

Loading in vehicles - 0.8

5.9.2. ACCOUNTING EQUIPMENT PRODUCTIVITY

In equipment productivity accounting, stress is laid on tracking the employment time

operating, expenditure and corresponding quantity of work accomplished for each major

item of equipment. This accounting approach can enable a contractor to account for each

equipment s expenditure as direct cost and to evaluate its productivity. The following

paragraphs outline the basic approach of counting the productivity of capital equipment.

Two accounting documents of interest to the planning cell are the daily equipment

employment account and weekly equipment productivity account. Generally data

relating to daily employment time and operating expenses is recorded in the equipment

logbook.

The following are some of the accounting systems:

a) Daily equipment employment accounting

b) Weekly equipment productivity sheet

5.9.2.1. DAILY EQUIPMENT DEMPLOYMENT ACCOUNTING

Equipment time card is the basic document for accounting each equipments employment

time and the corresponding work performance. For each equipment, the time card format

generally follows the layout of labour time card, and each card can be suitably modified

where it is necessary to meet the information requirement. This time card remains with

the operator of the equipment and is filled up by the respective foreman or supervisor

employing the equipment for work. The quantity of work executed column provides the

important information for completing productivity data, and if quantity measurement

takes time, the work quantity column can be filled up later on after the completion of

activity by the respective foreman. Further for cycle time calculation, if necessary, either

the time card can be modified or an additional suitably designed time sheet can be used

for collecting cycle time data. The daily equipment time card, at the end of work sheet is

handed over by the equipment operator to the equipment cost centre. In particular, the

fuel consumption is generally calculated by measuring the quantity needed to fill the fuel

tank. If the equipment starts work with full tank, then

Fuel consumption = additional fuel needed to fill the tank

=fuel tank capacity-balance fuel in tank

5.9.2.2. WEEKLY EQUIPMENT PRODUCTIVITY SHEET

The equipment sheet provides the information of the actual productivity of equipments

for a given job. It shows the equipments particulars, the nature of work done, booking

time, waiting time, repair time and the serviceability condition of the equipment. The

time lost when the equipment is not utilized is shown under the waiting time of

serviceable equipment, and under repair in case of breakdown of equipment at the site of

work. The waiting time can be further sub divided into avoidable waiting time and

unavoidable waiting time, and the reason for the waiting can be written on the reverse of

time card. The equipment productivity can then be summarized at the end of each week

in the form of weekly information productivity sheet.

For the effective functioning of equipments in the site, following records should be

maintained:

History sheet of equipments major repairs.

Equipments periodical maintenance record.

Equipments employment history since purchase and monthly operating hours

consumption records.

Operator s records.

Do s and don ts for equipment operation.

5.9.3. EQUIPMENT PRODUCTIVITY ANALYSIS

Generally, the equipment productivity at site differs from standard productivity. In the

initial stages actual productivity is less then the standard productivity. It gradually

improves provided the equipment remains in serviceable condition. However, the

equipment performance depends upon many inherent variables.

This includes equipment serviceability conditions, effect of terrain access to work site,

working space restrictions, working conditions, working timing, logistics and equipment

vendor support and so on.

Some of the controllable factors, which effect equipment productivity adversely, are as

follows.

Insufficient preparation.

Lack of continuity of task.

Inadequate operators

skill.

Lack of effective supervision.

Non availability of maintenance, repair facilities and spares.

Poor equipment management, especially lack of preventive maintenance

measures.

Accidents

Equipment productivity can be improved by suitably matching machines with the job,

employing experienced operators and competent maintenance staff, adopting corrective

measures for work execution, employing service-worthy machines, enforcing proper

maintenance measures and having an effective plant manager.

6. DELAY IN CONSTRUCTION PROJECTS

6.1. INTRODUCTION

Construction activities in any society consume a great chunk of its resources and in turn

create greater magnitudes of resources. It can be looked upon as Infra-structure activity

of any civilization. Parties beginning with friendly relations are at each other s neck and

the mood often is to demand Pound of Flesh . This leads to Differences and Disputes .

DELAYS IN CONSTRUCTION PROJECTS:

1. Scope of work getting modified during execution.

2. Delay in revised drawings and design.

3. Government policy for labour providing minimum money due to which labours

skill and productivity is decreasing.

4. Natural calamities like continuous rain, seasonal changes i.e during summer

labours are reluctant to work on top floor.

5. Sudden breakdown of machinery.

6. Delay in availability of skilled/unskilled labour.

7. Delay in availability of materials.

8. Financial issues like if there is delay in issue of money to contractor by client.

9. Socio-political issues. Ex: Telangana.

10. Forecasting future data from past data w.r.t resources, time, quality, cost.

11. Degradation of labours skill.

SOURCES OF ELEMENTS OF DISPUTES

The problems posing disputes are related to the following areas.

1. Changes include Additions, Alterations, Variations, and Deletions.

2. Delays and suspension.

3. Different Site conditions.

4. Unjust enrichment by owners.

From the above sources the delay and suspension is the major or can be called as critical

reason for dispute.

CONSTRUCTION AND CIVILISATION

Construction activities in any society consume a great chunk of its resources and in turn

create greater magnitudes of resources. It can be looked upon as Infra-structure activity

of any civilization. To-day we know of different civilizations through the degree of

level of construction they managed- the pyramids, both of Egyptians and Incas, Athens

and Rome, have construction as the measuring rod of their achievements. Construction

is in a way synonymous with Civilization.

With growing commercialization of human activities, construction too came to be a

major commercial activity. Stakes became high as technology advanced. Huge

construction projects have become common. Large Roads and Rails systems are taken

up. Almost all rivers are harnessed. All sources of energies are tapped. Huge urban

centers have sprung up. Increasingly more and more people are getting engaged in

construction and allied Industries all over the world.

6.2. STRAINS IN CONSTRUCTION INDUSTRY

In such a giant industry, we have a lot of strains due to peculiarly irrational Risk-sharing

arrangement coupled with its competitive character. Thus to-day, we have increasing

disputes and differences arising out of contractual relations between contractors and

owners whether owners are individual, firms or public. Construction contracts have very

sensitive arrangement of weaving many different agencies to perform various obligations

to execute the job as close to one conceived as possible.

Because of complexity of such interwoven responsibilities, superimposed by statutes,

monitored by environmentalists, exposed to vagaries of nature and uncertainties of

markets, it could be a miracle if any construction project can come out without getting

greatly distorted on Time-money or concept scale. All distortions induce strains. Parties

beginning with friendly relations are at each other s neck and the mood often is to

demand Pound of Flesh .

This leads to Differences and Disputes . There is one more important observation.

There is progressively stiff increase in cost money. Projects were delayed in past but

over the delayed period money s value remained steady so no big burden was felt. Now

with cost of money becoming so high rising upwards, time has become a sensitive issue.

The rate of inflation erodes the profit of Contractor and hence longer he has to stay,

more sensitive he becomes to Time factor and gives up in end putting Delay-Damages

Claims.

DELAYS

Owners and contractors have one common objective: To complete the project in Time

and within Budget. It is failure of this objective of Time which leads to failure of

Budget and ultimately gives rises to Disputes. Time is indicated invariably as of

essence to the contract. There are circumstances compelling extension of time which is

granted but Time does mean money. It is when the question of money as compensation

comes up, there come up several disputes.

Often owners pre-estimate their delay losses and name a sum recoverable from the

contractor to meet Delay Damages. This provision is called Liquidated Damages for

delay. Contractors do not find any such clause on their side and are made to dispute for

their claims. Delays could be caused by one or more of the following agencies.

1. Owners and his team-mates.

2. Contractor and his team-mates.

3. Nature, i.e. Cause of force majeure type.

4. Byelaws or through impact of socio-political nature.

However for the subject of this study, it will be proper to restrict our inquiry to the two

agencies who are parties to the contract viz. the owner and the contractor.

Between these two, delay can occur due to various causes such as

1. Defects in documents/design/decision.

2. Incompetence of parties to cope up with the changes.

3. Differing site conditions.

4. Attitude of any one or both the parties.

On types of Delay, we have the following types.

a) Excusable and non excusable delay.

b) Critical and non critical delay.

c) Concurrent delay.

6.3. EXCUSABLE AND NON EXCUSABLE DELAY

Contract lays doom areas of obligations. Failures to meet obligations, give rise to the

other party to excuse or not to excuse the delay.

The consideration to excuse would be

a) Non foreseeable situation.

b) Non critical in impact.

c) Concurrent with party s delay.

In general the most common Non Excusable delays are caused due to following causes

1. Ordinary and foreseeable weather conditions.

2. A subcontractor s delays.

3. The contractor s failure to adequately manage and coordinate the project site.

4. The contractor s financing problems.

5. The contractor s failure to mobilize quickly enough.

6. Delay by the contractor in obtaining materials.

7. Poor workmanship.

Executable Delays could be as follows:

1. Labour disputes.

2. Unusual delay in deliveries.

3. Unavoidable delays.

4. Compensable delays.

5. Unforeseen delays in transportation.

6. Other causes beyond the contractor s control.

NON EXCUSABLE DELAYS: BY CONTRACTOR

1. Lack of competence and skill for the job.

2. Inadequate deployment of labour-force.

3. Insufficient financial resources.

4. Failure to supply proper equipment.

5. Bad workmanship-removal and replacement delays.

7. ANALYSIS

7.1. ROOT OF THE THESIS

In most of the sites, we have observed at least one gang of labours of any

contractor with no work, though the scope for work or new work is plenty.

Equipments lay idle because of repairs or there is no works to be carried out,

though the scope for work or new work is plenty.

Material wastages like scrap, improper maintenance, small small cumulative

wastages, etc.

All these lead to increased fixed cost which are not evident at start, but are

cumulative hidden costs till the completion of the project and doesn t reflect a

proper site planning and management.

Immediate problems may be like pressure from contractor demanding work for

idle resources.

Increased fixed cost is from more idle time leading to reduced productivity.

This issue is taken as the objective of our thesis.

We have tried to study the existence of resources which are less productive,

though the planned work is achieved on time.

For more visible and promising results, we have taken for study, three sites in an

enterprise, where the resources are handled in the same manner as determined by

the enterprise.

The critical resources (in terms of cost or time) are studied and their productivity

compared within the sites, to identify the site with optimum and efficient work

procedures.

7.2. IDENTIFY

MEN

1. Planned quantity- From DPR

2. Achieved quantity- From DPR

3. Theoretical quantity- From Standard Specifications and thumb rules

Compare all these values and identify performance

MATERIAL

1. Periodic audit

2. Adjust as per outcome

MACHINERY

Log sheets

PRODUCTIVITY

1. Achieved vs theoretical

Gives efficiency, idle time and other related problems involved

Related to resources involved

2. Achieved vs planned

Gives problems involved in estimate done before execution

Related to planning engineer, his experience and expertise

SOLUTION

MEN

a. Plan

b. Preview and modify

c. Activity splitting

d. Optimization and/or standardization

e. Segmenting all activities i.e., whole project to various contractors

MATERIAL

a. Manage

b. Audits

c. Outsource

d. Reconciliation

MACHINERY

a. Outsource i.e., Hire

b. Audits

c. Review and modify schedule

7.3. PROCEDURE

Calculate total count of labours, work done, material used, etc

Calculate productivity

Identify site with high productivity

Study work procedure

MONTHLY PLANNING

Fix concrete quantity or masonry quantity

We can get shuttering quantity, steel quantity, earth quantity, block, brick or

plaster quantity etc., from the related drawings

This idea studied in this thesis should be followed in the day to day execution as a part.

In mass constructions, the study may fail due to imbalance between quantity and time.

Also the study will become project based and not conclude to a result expected.

Hence we have chosen SPCL.

All the three sites have similar skeletal frame, hence there is no contradiction in

comparing the same.

Residential, hotel and office building in an enterprise studied

Though these are different in purpose, in construction point of view, all are similar. The

difference turns in when the finishes come into work.

7.4. OBSERVATIONS

All skilled work forces is given with a gang of helpers, But it s not constant

throughout the work, hence we can say that somewhere there is a deficit or

excess of helpers. It gives way for the need to develop a thumb rule for each

skilled work force and to be followed in execution.

CONTRACTOR LABOUR

Stress and risk goes on CONTRACTOR

SUPPLY LABOUR

Stress and risk goes on client

The activities fitting and shuttering are tail to head linked activities, but still the

productivity of carpenters and fitters are not proportional.

EMAAR-MGF Boulder Hills Country Club-Residential Apartments

o Productivity of carpenters is 4.96

o Productivity of fitters is 0.22

Lemon Tree and Red Fox Hotels

o Productivity of carpenters is 4.16

o Productivity of fitters is 0.07

CMC-TCS Synergy Park

o Productivity of carpenters is 3.98

o Productivity of fitters is 0.10

The ratios of productivity of carpenters to fitters obtained from the three sites

suggest that EMAAR-MGF Boulder Hills Country Club-Residential Apartments

has the higher resource productivity, less idle time and so on.

7.5. WORK STUDY IN THE LEADING SITE and

SUGGESTIONS

These are some of the reasons which affect productivity. It is also an inference from the

work study conducted and interview with the planning engineer, materials in charge and

machinery in charge at site.

a) Unproductive time.

It can be due to:

Rework of defective work done.

Rework was done for various faults during execution which includes

dismantling the faulty portion.

Poor quality checks are one of the reasons

Waiting for material, equipment and/or instructions.

Steel and plywood are the major items which have to be procured well in

advance to prevent delays and thus reduce the waiting time. The

procurement is also is dealt by the head office due to huge costs.

Proper inventory management for the stores has to be adopted.

Cold joints have to be prevented. Concreting should be done in a single

pour.

Absence from work by workers.

Proper payments and incentives are needed.

Other reasons.

Force majeure

Local and political problems

Frequent changes in the scope of work and work methodology.

Change in drawing

Addition in scope of work

Conflicts between supervisors and workers.

Good relationship between supervisors and workers is needed.

b) Workers low morale

This can result from:

Non fulfillment of employment terms and conditions by the

management.

Demand of workers should be met with by the management.

Insecurity of employment.

Proper incentive schemes have to be adopted.

Sub standard working conditions.

Cleanliness at site should be maintained.

Frequent transfers.

It reduces the efficiency of the worker.

Frequent changes in the scope of work and work methodology.

Conflict between supervisors and workers.

c) Poor pre-work preparation by supervisors

The lack of preparation for the execution of the assigned work prior to

commencement can result in inefficient handling of resources due to:

Excess workers employed for the task.

Proper resource planning is required for each task before hand.

Insufficient instructions for the execution of work.

Guidelines have to be provided and checklists have to be made to

ensure proper working procedures on site.

Incorrect sequencing of work activities.

Planning and scheduling of the work needs to be done to avoid

delays.

d) Directional failures of the project management

These include:

Failure to set performance targets.

Periodic review should be done.

Failure to make provisions for timely resource support.

Competency mapping by feedback from fellow colleagues should

be done.

Failure to provide feedback.

Feedback of all the employees of the organization should to be

done by the HR department.

Failure to motivate workers.

This results in loss of productivity and increase in the idle time of

the workers.

8. CONCLUSION

As per the analysis results of the thesis, we have arrived at the result that there are some

resources which exist with less than required productivity. This is adding to unwanted

payments, wastage of time and money, etc. Some reasons leading to this problem may be

poor planning, poor identification of scope, poor productivity of predecessor resources,

etc. Regular, periodic and standardized measures are being followed in eliminating such

losses in productivity and in turn cost of material and machinery by audits, reconciliation

and other means. But when it comes to man power, no standard procedures are followed

to reduce related losses.

9. SUGGESTIONS

9.1. MAN MANAGEMENT

1. Proper thumb rules should be designed for skilled labours and helpers

2. Idle labours should be identified by devising various log sheets

3. Ratio of linked activites should be monitored periodically to check any less

productivity of related labours.

9.2. MACHINERY MANAGEMENT

General suggestions to improve the working efficiency of plant and equipment:

1. Establish at site, workshop and store for maintenance of equipment and store of

spares.

2. Maintain list of mobilized plant and equipment with its rating / capacity and there

current running status.

3. Prepare daily deployment schedule of different plants and machineries at site

based on construction schedule for the month.

4. Conduct routine / periodic check and maintenance of machine by the

maintenance staff.

5. Maintain record for all spares.

6. Record daily hours of actual operation, downtime hours, activity-wise output,

manpower and fuel consumption etc in log book.

7. Take corrective measures, if fuel / oil consumption is found more than limit.

8. Record the details of machine breakdown, if any, and conduct the breakdown

analysis to prevent the recurrence of breakdown.

9. Ensure in advance, the suitable approach for movement and smooth operation of

machine.

10. Review and Re-check the planning for the next day from concern engineer.

Satisfactory performance of equipment needs proper maintenance, it includes servicing,

inspection and adjustment, small repair in the field, major repairs and overhauls in main

workshops and proper care of laid-up machines. Supervision is a vital aspect of

maintenance; another one being the upkeep of records. Unless the records are maintained

the validity of benefits of maintenance could not be asserted.

As per ISO standards, equipment department should maintain the following records

Monthly Equipment report(for owned and hired)

Daily report (Usage, fuel consumption, repair)

Equipment wise, Activity wise Production wise report for direct equipments

Equipment wise manpower engagement report

Equipment breakdown report

Machine history

Operators welfare report etc

Goal s of maintenance activities

Less maintenance cost, as less manpower and fewer parts are required for

planned shutdown than for breakdowns.

Fewer major repairs.

To prevent abrupt breakdown and reduce unplanned maintenance work.

To improve the life span of machines; their parts and components.

Improve safety conditions.

9.3. MATERIALS MANAGEMENT

To implement for large inventory systems becomes rather cumbersome because each

item requires management of order cycle and quantity. The inventory control problem is

greatly simplified as only a few groups rather than many items will have to be

controlled. This method is the ABC analysis. Generally, each construction project starts

with zero material stock and after the left outs are disposed off; it ends up with zero

stock. Ideally each construction activity prior to commencement should have zero stock,

during execution, there should be working stock sufficient for a very short period and

should get replenished regularly as soon as it is about to get finished, and finally it

should end up with zero stock when the activity is completed. But such an ideal stocking

policy is rarely feasible with construction projects, as the material need for each activity

have to cater for lead times necessary to procure materials, build up sufficient working

stock, hold safety stock, and at the same time, exercise economy in procuring materials.

All this results in material stock build up at project site.

ABC ANALYSIS:

It is a basic analytical management tool

It enables management to place efforts where the results will be greatest.

This technique is popularly known as Always Better Control.

This technique tries to analyze the distribution of any characteristic by money

value of importance in order to determine its priority.

Applications of this technique:

Inventory Control

Criticality of items

Obsolete stock control

Purchase orders

Receipt of materials

Inspection

Store-keeping

Verification of bills

Advantages of ABC analysis

Helps in rationalizing the number of orders and reduce the overall inventory. Even

though overall purchase orders are the same, the average inventory can be reduced

substantially.

Limitations of ABC analysis

Over reliance on this method tends to overlook the VED nature of items in the

inventory.

Items on the border line of the ABC classification need to be scrutinized for

placing them under A/B or B/C.

In the face of frequent fluctuation of price of the items accurate data needs to be

maintained for working out the cost of each item.

VED CLASSIFICATION:

VITAL-ESSENTIAL-DESIRABLE

Focus: To determine the criticality of an item. Mainly useful for the purchase

department.

VED - Action Plan

VITAL

maintain large stock of inventory.

ESSENTIAL

An In-between policy

DESIRABLE

Minimum stock is enough

SDE CLASSIFICATION:

Scarce-Difficult to Obtain-Easy to Obtain

Focus: Availability

Useful for the procurement department, vital to the lead time analysis, helps in

determining purchasing strategies.

SCARCE

items in short supply.

DIFFICULT

items which might be available in the indigenous market but

cannot be procured easily, items from distance places, un-reliable suppliers

EASY

items which are easily available, possibly from the local markets

F-S-N CLASSIFICATION:

Fast Moving

Slow moving

Non-moving.

Focus: Inventories

Useful for: Stores department and inventory control. Enables the adoption of the

right type of inventory policy to suit a particular situation. Also useful for

controlling obsolescence.

Categorization is based on value, criticality and usage.

To determine the number of months lapsed since the last transaction the date of

receipt or the last date of issue is taken whichever is later.

Fast Moving items: most inventory models are aimed at managing the fast

moving goods, which exhibit a regular consumption pattern.

Slow Moving items: Many spare parts come under this category, they require

different management approach, (see below).

Non-moving items: Optimal stock disposal rules rather than inventory

provisioning rules are to be determined.

After all, there is quality manual designed and distributed to each and every site. It is not

followed completely. We suggest that the document should be used to work in all facets

of execution and attain complete gain from the resources with reduced losses in time and

money.

REFERENCES

1. Construction Project Management, Second edition, by K. K. Chitkara

2. CPWD Specifications, rate analysis, 2007

3. Lecture notes on Material Management, by Prof. Rajiv Gupta

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