Part 5: Driving Schedule Performance
In the first 4 parts of the Project Labor Management series, readers were introduced to the Project Labor Management Model shown below in Figure 1. The model was designed to serve as a visual framework for the various topics to be discussed in the series of articles. Beginning with recruiting and preparation of foremen, then creating the proper culture and maximizing foreman time at the workface, the articles intend to build on the work of Construction Industry Institute (CII) and CURT teams RT-330 and RT-370.
Figure 1. Melius Project Labor Management Model
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In Part 5, “Driving Schedule Performance,” the focus shifts to the two critical elements of craft labor productivity that must be managed. These elements are Labor Utilization Effectiveness and Labor Utilization Efficiency. These terms were defined in Part 1 of the Project Labor Management Series, “Overcoming the Labor Challenge.”
By “on-task,” it means the crew member is actively working on the assignment given to him or her. What variables affect productivity while a worker is “on-task"?
- Methods employed. This is ultimately a combination of experience and craft training, the latter of which can be used by Project Management to improve methods. Repetitive tasks using multiple crews can also benefit from an industrial engineering tool called a Time and Motion Study. This tool is sometimes mistaken for Activity Analysis but is a methods-based study. Activity Analysis (the tool that measures Labor Utilization Efficiency) involves random sampling measurement of worker activity to assess how the workforce spends its available productive time during the shift. Work methods are not considered in Activity Analysis.
- Quality and Proper Use of Tools/Equipment. When the tools and equipment being used are antiquated or otherwise not suited to the work being performed, it has a negative impact on worker effectiveness. If improper use is the issue, tool and/or equipment training is the answer.
- Quality of Materials. Cheaply made or improperly stored or handled materials also have a negative impact on worker effectiveness.
- Quality of Information. If plans or design documents are not accurate, even workers prepped with all the tools and materials can not be effective/productive.
While some of these variables are correctable, some are either too late to fix or would take considerable time and expense to fix. That brings us to the other side of the productivity coin as it relates to Project Labor Management, Labor Utilization Efficiency.
As described in Part 1, the work shift of any project can be looked at as alternating periods of available productive time and non-productive times. Beginning with safety meetings, line-out and mobilization of workers, through the structured breaks, clean-up and demobilization from the work areas, project management must facilitate a smooth flow with minimum transition points to optimize on-task time. The ultimate challenge of Project Labor Management can be characterized as how to optimize on-task effectiveness while maximizing on-task time. Proper staffing also impacts Labor Utilization Efficiency. Many contractors today, in an effort to mitigate the impact of the labor shortage will hire and retain more workers than needed early in the project. They justify it by saying those extra workers will be needed later and will be hard to recruit and hire once they leave. There is a cost paid for this strategy in reduced Labor Utilization Efficiency. Too many workers assigned to a task leads to a lower time on-task for the crew as a whole.While managing effectiveness involves issues that should primarily be addressed prior to mobilization, managing Labor Utilization Efficiency involves many variables that can be adjusted during execution to maximize the amount of available productive time. There are two primary benefits to managing Labor Utilization Efficiency during execution.
- Counters the effects of the craft labor shortage, a major emphasis of both RT-330 and RT-370.
- Improves schedule performance.
Think of the former as getting more on-task time from existing workers. Doing so is the equivalent of adding workers many contractors have struggled to recruit.
In terms of schedule performance, with time to market being a critical driver particularly on today’s mega-projects owners should be looking for any opportunity to aggressively drive schedule performance throughout the life of a project. In the field, measuring and improving Labor Utilization Efficiency is a strong complement to project controls earned value measurement. While the earned value measurement considers all impacts to productivity, Activity Analysis (the tool that measures Labor Utilization Efficiency) only measures how much available productive time is spent on-task and how the remaining available productive time is spent. It doesn’t consider other elements such as those highlighted under the Labor Utilization Effectiveness definition above. If any combination of these elements are not what they need to be, earned value measurement will indicate their impact in composite.
The ultimate challenge of Project Labor Management can be characterized as how to optimize on-task effectiveness while maximizing on-task time.
By focusing on Labor Utilization Efficiency, Project Management gets more daily production from its existing workers. This has never been more important than now with the ever-increasing craft labor shortage confirmed through numerous studies and reports from both CII and CURT and firms like McKinsey & Company. The high demand for construction labor has created a competitive labor market between projects. Many struggle to meet their hiring targets without creative and/or expensive means. Improving Labor Utilization Efficiency is a cost-effective way to get the most out of your existing craft workforce when hiring more is a challenge.
The focus of this article though is on the 2nd primary benefit which is improved schedule performance. Today’s advancements in integrated planning and procurement technologies should facilitate a higher level of worker effectiveness with proper planning information, tools, materials and equipment management. This improvement in resource access should also reduce labor delays related to those resources. However when looking at a typical project labor utilization profile, those type of delays (Material Delay, Tool & Equipment Delay, Permit Delay) while present on most projects do not represent a substantial percentage of the measured inefficiencies. By far, the categories of travel and personal delay, and most recently Internal Delay (a red flag for task over-staffing) typically dominate the list of inefficiencies today’s projects face.
Figure 2: Typical Project Productivity Profile
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By focusing on the critical few inefficiencies which are typically the frequency and duration of craft travel, as well as personal and internal delays, project management can maximize on-task time and push progress along faster. This is not to say these new technologies have little impact on Labor Utilization Efficiency. They just influence it in a different way. By having most of what will be needed for the week delivered to the work area, there is less need for the foreman to chase those things down. This increases Foreman Availability, a key strategy proven to increase Direct Activity.
A study referenced in Part 4 of this series demonstrates this linear relationship. While the study was focused on Foreman Availability, it does so for its direct correlation with increasing workers’ time on-task. The information was presented at the COAA (Construction Owners Association of Alberta) conference back in 2012 and voted as a best practice of the year for large contractors in 2012.
The relevance of this study to this series is that it provides a “before and after” assessment of project cost and schedule performance after improving key Labor Utilization Efficiency elements. Most historical data of this nature provides singular snapshots in time, not the before and after confirmation of improvement which requires 2 separate measurements of Labor Utilization Efficiency at different times to complete. In the study, Direct Activity (% of available time on-task) went from 36.9% of the shift in the baseline, to 38.4% after improvements were implemented. While this seems like a meager 4% (<2 percentage point) increase, on a large project such as the one being studied it makes a huge difference in productivity. While project management confessed there are many variables that impact productivity gain, in their mind increasing time on-task through increasing foreman availability was a major contributor to the gain. That gain manifested itself as better than planned earned value performance which in turn drove progress more swiftly towards completion as shown in the chart below.
Figure 3: Labor Utilization Efficiency Impact on Progress
This is the chart every Project Manager wants to see on their job. By this project team’s findings, once the baseline study was completed and action plans implemented, the project experienced better than planned earned value performance which led to better schedule and cost scenarios for the project. While there were other variables at play that supported performance improvement, Project Management acknowledged their focus on improving “time on tools” was a significant element in the turnaround.
By focusing on Labor Utilization Efficiency, Project Management gets more daily production from its existing workers.
Summary
As improved planning and procurement technologies continue to spread across the industry, the craft labor shortage worsens. These technologies allow construction crews to work more productively by providing most of the resources the crew needs for the week conveniently delivered to their work area. This should mitigate most of the issues surrounding information, tool, equipment and material delays, etc. What it doesn’t address is managing the labor component. In effect, these technologies remove a number of excuses for not being on-task. Craft Labor is its customer not a component of what's being managed with those technologies. Bottom line is if those individuals are not on-task, none of that material is getting installed.
That’s why baselining and improving Labor Utilization Efficiency is a cost-effective way to leverage existing craft labor resources. For large and mega-projects, even a 1% gain can shave weeks or even months off the schedule if those improvements are systematically implemented. For smaller time-driven projects like outages, these improvements can shave hours and days off the schedule. With today’s worsening labor shortage, taking a look and improving how well a project is managing available productive time can help project management get more from less, in effect providing equivalent workers when additional bodies are hard to recruit and hire. This drives progress forward at a faster pace.
Give the professionals at Melius a call to discuss your project variables. They will help you develop an appropriate plan for measurement and improving craft Labor Utilization Efficiency.