How to Conduct Productivity Analysis in Construction

You can’t compete if you can’t do the job more efficiently than the guys down the street. Executing productivity analysis in construction helps your leaders see exactly where your job site teams come up short.

Knowing where you’re losing time and money will help you put a finger in the dam and plug the leak on this project, leading to better planning and prep in the future.

What does that mean? What should companies be measuring? Read on to learn all the basics of analyzing job-site productivity.

Before measuring labor productivity, it’s important to understand it. Like a lot of industry buzzwords, most people don’t know what the f@%k it means. Luckily, the American Society of Civil Engineers (ASCE) clarifies the difference between production and productivity.

Production is a measure of accomplished quantities of work (i.e., what got done) with no reference to input. For example, production would be placing 10 linear feet (LF) of wire. Production does not address the number of labor hours expended to complete that work (i.e., the work it took to get it done).

By contrast, productivity is a measure of effort expended to accomplish a particular scope of work. To put it simply, Total Output/Total Input = Productivity

For example, if it takes 1 labor hour to install or pull 10 LF of wire, the productivity is 10 LF of wire per labor hour. The ratio of planned to actual productivity is referred to as a productivity factor or productivity index.

When measuring productivity, the ASCE recommends comparing the labor hours spent to the work completed in those same hours. Comparing your team’s input to their output in that way allows you see exactly what is being generated by each labor hour.

Companies can use different methods to measure the quantity of completed output, including:

• Money spent to date
• Time spent to date
• Rules of credit
• Physical units if they can be reliably measured, including things like length of pipe placed, sheets of drywall hung, volume of concrete poured, etc.
• Earned value, meaning the percentage of progress completed or revenue earned.

It’s important to note that these various approaches can yield different results, even on the same project, especially if there’s a delay in reporting progress from the site.

Some teams report labor hours more frequently than progress because payroll is a regular need. So, if the hours are out of whack compared to the job-progress updates, your productivity measurement might be disappointing or, even worse, inaccurate.

Garbage in, garbage out.

It’s important to match the measure of the work accomplished and the hours invested for the same time period. You can’t get accurate results if you’re comparing info that doesn’t line up! (Pro tip: Having the right tools for regular reporting can solve that problem!)

Companies usually collect the information and data necessary to calculate productivity through a variety of common project control procedures and software. These tools combine and calculate labor hours, labor costs, material costs, equipment costs and quantity tracking.

It’s important to create a culture that values productivity data and collecting the information to calculate it. Allocate the resources to collect, analyze and understand that data rather than simply adding it to the already full workloads of existing team members; it’s an investment that will pay off hugely in the long run.

Training people to do these jobs, and possibly hiring new employees, is part of the process. That may include investment in software and other technology (such as dedicated tablets) to create a robust program of productivity analysis in construction.

Sources of information for productivity analysis may include:

• Time-and-material reports
• Quality control and inspection reports
• Daily-progress reports
• Payroll records
• Ad hoc reports and notes
• Payment requisitions
• Photographs and videos
• Diaries and witness statements

All this information should be collected and entered into the analysis tool while it’s still fresh in everyone’s mind. Don’t let the sun set on data collection! Foremen and supervisors should set aside 15 to 30 minutes at the end of each workday to check on progress made, document any problems that interrupted progress (late deliveries, delayed inspections, etc.) and any steps that might help improve progress.

Keep those records at least until the project is done. Ideally, the company should be able to use all that data and analysis to help plan and predict future productivity, as well as wrap up any loose ends at the end of the project.

If you don’t already have software that helps your team track productivity, templates like this one can help collect the basic information for productivity analysis in construction.

Once collected, data should be sorted and stored by project or even sub project to spot problems specific to each one. Storing all the data together will make it hard to see those individual issues.

But getting too granular with sorting and storing will make data collection more difficult and costly, make it more likely that information gets miscoded, discourage people from using the system and not provide a big enough picture to solve problems. The right tools collect enough data in the right ways to give a team the best results and ROI for the time and money spent collecting it.

If construction-sector productivity were to catch up with the productivity improvements of the total economy, it would add about 2% to the global economy: an estimated $1.6 TRILLION. Knowing where improvements can be made is a solid first step in that improvement. Stay tuned for more about the tools that can help your company get there.

Still need some help identifying construction-productivity issues affecting your business? No problem. Download your FREE copy of the “Not Your Grandpa’s Construction Business Plan” to get started.