By Bill Goodman
Maintaining a high level of productivity on the job site is one of the most important activities for any project manager, superintendent or foreman. When production rates drop on a construction site, money is lost and often cannot be recovered. On the other hand, when production rates are monitored closely and improved upon constantly, profits are earned, and a company will gain a competitive edge or advantage over the competition. How can a construction site’s productivity be enhanced? One way is by utilizing four basic anchors of productivity.
Getting productivity from your subcontractors and your own work force breaks down into four key areas: materials, tools and equipment, information and goals. How well you execute all four of these areas will determine the overall productivity of your work force. The systems you set up in your company to guarantee that these four areas are managed effectively will lead to the success of your business.
Defining the four anchors –
- Materials. These are priority number one, but luckily, materials are also relatively easy to manage and set up systems for. If the workers do not have materials, they cannot install anything. Making sure all materials are on the construction site and that they are getting to the work areas for the workers to install in an efficient manner are what should be focused on. Other factors for managing this efficiently include ensuring that the correct quantities of materials are on hand and the protection and securing of them from theft and damage. Have the proper means for protecting and securing materials in place prior to their delivery.
- Tools and Equipment. This is a simple enough concept–no tools equal no production. This is not a place any construction professionals want to find themselves at! Therefore, ascertain that the crews will have all the right tools they need and that the tools are easily accessible. Do a quick analysis to see if the higher cost of the tool will offset the savings in labor. Also ensure that the tools are being protected and secured when not in use. Perform daily inspections checking for proper operation, damage and/or missing parts. Replace defective tools immediately and remove from the job site. Also have a plan to have back up tools on hand in the event of a key tool breaking down.
- Information. If people have materials and tools, then the only thing they need to get started with installation is the information about what, where and how they will be doing the installation. This is the area where pre-planning is critical. You will never be able to achieve 100 percent efficiency in this area, which is why you need to be constantly working on improving what information you have and how you communicate it to the workers. Often times the general contractor can cause inefficiency due to lack of information; however, make sure you do your part by being productive and confirming that everyone has all current information and/or data.
- Goals. If your workers have the proper materials, tools and information, you might wonder what’s left. Adding in goals can improve production by 10 percent or more on a consistent basis, so this anchor should not be overlooked. Do not underestimate the power of setting goals for the job site on a daily and weekly basis. One method of reinforcing this is to establish a communication board (a dry erase marker board) located in the job trailer or in a weather protected display on the job site. The daily or weekly goals should be listed on the dry erase board and updated constantly. If the goals for the week were out-performed, try offering small rewards for exceeding the goals or expectation. Small rewards for the work site could include a catered lunch, movie tickets or gift cards to a nice restaurant.
Good jobsite productivity really is that simple. There is no reason to make it more complicated. Every project management process in your company and every activity that you do every day should be able to be categorized into one of these four anchors. If they aren’t, you need to ask yourself whether they are really necessary. Remember that good productivity means a competitive edge over the competition, better work, profitability and a satisfied client that will want your company for their next project.
William Goodman, Senior Project Manager for Triune, is a highly accomplished, multi-talented project manager with over 30 years of construction experience. He encompasses excellent skills in preparing schedules and managing job costs, budgeting, contract negotiation, design-build and pre-construction services.
The Punch List is Triune’s proprietary blog for discussing issues and providing insight specific to the commercial construction industry. Copyright 2013 TMV, LLC (Triune). Any and all rights reserved.
You have an agreement, but have you dealt with the operational aspects?
By Vince Fudzie
This is the third and final part of a series that discusses what to consider in choosing a partner, what needs to be in your agreement and how the venture will operate.
As mentioned in the last posts, many joint venture agreements often neglect to incorporate operational details (i.e. how the venture will operate on a daily basis). Once a project begins, the parties simply start working on the project with little guidance other than the high-level legal jargon included in the joint venture agreement. Again, there are bound to be disputes on any agreed upon procedures. Your venture is likely to experience numerous, unnecessary bumps in the road.
The obvious way to avoid many of these bumps is by anticipating and agreeing on a plan of action before you encounter them. The more both parties can anticipate potential issues unique to construction ventures and agree in advance on how to handle them, the quicker they can be dealt with. For example, if the president of your partner’s company sticks his head into a preconstruction meeting for 15 minutes, is he able to charge his time to the project?
At a minimum, the following issues should be discussed for inclusion in a quasi-operating agreement that supplements the venture agreement. It doesn’t matter if it is a page of bullet points or a lengthy narrative, an operating agreement needs to be useful in guiding the decisions and actions of the venture.
- What are the management powers of the parties?
- What are the requirements for certain decisions (i.e. majority vs. unanimous)?
- When and how will a party be liable to the other for acts or omissions?
- What notice is required from the other party when an issue arises?
- Is there an informal means of resolving disputes?
- Should operational activities continue even while in dispute?
- What are the requirements of parties to keep disputes confidential?
Preconstruction and General Conditions
- How will preconstruction costs be accounted for?
- What costs will be included in general conditions?
- What portion of employee burdens will be included in the job costs?
- Will there be limits to employee related expenses such as computers, software, etc.?
- Will home office overhead be allocated to the project?
- What meetings do we need and what are the objectives?
- Who will be required to attend a particular meeting?
- What will be the frequency of the specific meetings?
- Who will be responsible for taking meeting minutes?
- What portion of the overall labor will be supplied by each party?
- Will employees working on the project be evaluated by both parties?
- What is the procedure for removing an underperforming employee?
- If an employee is removed, should the replacement come from the same party?
- What books will be kept and by whom?
- Who will have the right to access books and records?
- How much time does the knowledgeable party have to answer related questions?
- Who is responsible for submitting periodic reports to Federal and State governments?
I am sure that if you take a moment to think about potential issues, you will come up with many more; however, the issues noted are the one that typically come into play in our ventures.
Obviously, any legal document created by lawyers is going to include a number of other provisions that are needed in your agreement, but you should pay particularly close attention to the ones listed. As always, check with competent legal counsel before entering into any legally binding agreement.
Vince Fudzie MBA, CPA, CIRA, is the Managing Member of Triune. Founded in 1997 with headquarters in Dallas, Triune is a leading, integrated design-build, general contractor in the Southwest region of the country.
The Punch List is Triune’s proprietary blog for discussing issues and providing insights specific to the commercial construction industry. Copyright 2013 TMV, LLC (Triune). Any and all rights reserved.