093 Productivity Measurement

PRODUCTIVITY PRODUCTIVITY MEASUREMENT MEASUREMENT

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PRODUCTIVITY MEASUREMENTPRODUCTIVITY MEASUREMENT Manufacturers measure productivity Manufacturers measure productivity

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

Current assets are: Current assets are: cash cash account receivable account receivable market securitiesmarket securities inventoriesinventories

PRODUCTIVITY MEASUREMENTPRODUCTIVITY MEASUREMENT Current liabilities are:Current liabilities are: debts debts bank overdrafts bank overdrafts tax payabletax payableWork Sampling and Labour ProductivityWork Sampling and Labour Productivity Work sampling is a technique that Work sampling is a technique that

measures the time workers on site measures the time workers on site spends in various categories of spends in various categories of activities, such as direct work, activities, such as direct work, transporting materials or waiting.transporting materials or waiting.

WORK SAMPLINGWORK SAMPLING Work sampling is a technique that Work sampling is a technique that

is based on statistical sampling is based on statistical sampling theory. theory.

The objective of work The objective of work sampling is:sampling is:

to evaluate work sampling as a to evaluate work sampling as a surrogate variable for measuring surrogate variable for measuring construction productivity.construction productivity.

WORK SAMPLINGWORK SAMPLING This is achieved by measuring the This is achieved by measuring the

correlation between crew output, and correlation between crew output, and the direct work category of the work the direct work category of the work sampling.sampling.

To show how the selection of To show how the selection of categories of activity affect the categories of activity affect the accuracy of work sampling.accuracy of work sampling.

To investigate the best method of To investigate the best method of monitoring trends.monitoring trends.

WORK SAMPLINGWORK SAMPLING During the work sampling During the work sampling

technique, observations are technique, observations are made of each worker’s move made of each worker’s move at a particular instant and at a particular instant and recorded.recorded.

The worker’s activity is then The worker’s activity is then divided into 3 categoriesdivided into 3 categories

1.1. direct work direct work 2.2. supportive worksupportive work3.3. delaydelay

WORK SAMPLINGWORK SAMPLING

Typical definitions used to describe Typical definitions used to describe these three categories are:these three categories are:

Direct work, includes productive Direct work, includes productive actions taken by the worker.actions taken by the worker.

Supportive work includes Supportive work includes supervision, planning and travel supervision, planning and travel time.time.

Delay, includes waiting for other Delay, includes waiting for other trades to finish work, or late start, trades to finish work, or late start, early finish on site.early finish on site.

WORK SAMPLINGWORK SAMPLING

Direct work does not necessary Direct work does not necessary correlate with unit rate correlate with unit rate productivity.productivity.

A higher percentage of direct work A higher percentage of direct work time does not necessarily mean a time does not necessarily mean a high level of unit rate productivity.high level of unit rate productivity.

This is because of variations in This is because of variations in skill levels amongst workers, skill levels amongst workers, sample work methods used, kind of sample work methods used, kind of tools or machinery or weather tools or machinery or weather conditions.conditions.

WORK STUDYWORK STUDY

Work-study consists of 2 main Work-study consists of 2 main components: components:

1.1. method study method study 2.2. work measurementwork measurementWork-studyWork-studyWork-study is used when siteWork-study is used when sitemanagers want a detailedmanagers want a detailedAalysis of productivity on site.Aalysis of productivity on site.

WORK STUDYWORK STUDY

by itself work-study is not by itself work-study is not sufficient to measure the level sufficient to measure the level of productivity on site. of productivity on site. Therefore it is needed to carry Therefore it is needed to carry out:out:

1.1. method study method study 2.2. work measurementwork measurement

METHOD STUDYMETHOD STUDY

Method study can also be Method study can also be described as a method that described as a method that is used to analyse and is used to analyse and reduce ineffective methods reduce ineffective methods or costs.or costs.

There are several steps by There are several steps by which this can be achieved, which this can be achieved, these steps are as follow:these steps are as follow:

Step one:Step one: Define problemDefine problem

METHOD STUDYMETHOD STUDY

Step two:Step two: Record all factsRecord all facts Step three: Analyse all data Step three: Analyse all data

recordedrecorded Step four: Propose appropriate Step four: Propose appropriate

course of actioncourse of action Step five:Step five: Put proposal into actionPut proposal into action Step six:Step six: Monitor the changes Monitor the changes

mademade

METHOPD STUDYMETHOPD STUDY

-The objectives of method study are as -The objectives of method study are as followfollow::

is to improve the use of materials; is to improve the use of materials; manpower and equipment;manpower and equipment;

to improve processes and procedures;to improve processes and procedures; to improve the layout of the to improve the layout of the

construction site;construction site; to improve the design of tools and to improve the design of tools and

equipment;equipment; to improve frequent plant breakdown;to improve frequent plant breakdown;

METHOPD STUDYMETHOPD STUDY to reduce errors and mistakes;to reduce errors and mistakes; to reduce unnecessary work;to reduce unnecessary work; to improve the work environment;to improve the work environment; to reduce fatiguing work;to reduce fatiguing work; to reduce shortage of resources;to reduce shortage of resources; to have full control of all activities on to have full control of all activities on

site;site; to reduce delays on site, including to reduce delays on site, including

delays made by sub-contractors;delays made by sub-contractors; to reduce site congestion;to reduce site congestion;

WORK MEASUREMENTWORK MEASUREMENT

Work measurement is a method, which Work measurement is a method, which uses time study to find out how long it uses time study to find out how long it should take to complete a task.should take to complete a task.

It is defined in BS 3138:1969 as a It is defined in BS 3138:1969 as a technique designed to measure the technique designed to measure the time required for a skilled worker to time required for a skilled worker to fulfil a task at a defined level of fulfil a task at a defined level of performance/pace.performance/pace.

The aim of work measurement is to The aim of work measurement is to record procedures and produce record procedures and produce standard time for a given task on the standard time for a given task on the site.site.


ProcedureProcedure Step 1- Select the work to be Step 1- Select the work to be

measured.measured. Step 2- Define the method being Step 2- Define the method being

used and the job elements.used and the job elements. Step 3- Measure the quantity of the Step 3- Measure the quantity of the

work and assess the rating.work and assess the rating. Step 3- Calculate the standard time Step 3- Calculate the standard time

including all allowances.including all allowances. Compile and issue the allowed time Compile and issue the allowed time

with a job specificationwith a job specification..


Standard ratingStandard rating Observers are well trained to be able to Observers are well trained to be able to

recognise the conditions of standard recognise the conditions of standard rating.rating.

Observers must be able to assess to the Observers must be able to assess to the nearest 5 points the degree to which a nearest 5 points the degree to which a worker’s observed speed and worker’s observed speed and effectiveness vary from the 100 concept.effectiveness vary from the 100 concept.


Normal or Basic Time= Observed Normal or Basic Time= Observed Time X Observed Rating/ Standard Time X Observed Rating/ Standard RatingRating

Relaxation allowancesRelaxation allowances


Activity samplingActivity samplingActivity rating= No of observed Activity rating= No of observed

active x100/ Total no. observedactive x100/ Total no. observed Ineffective time= (No of productive Ineffective time= (No of productive

observation x100) / Total no. of observation x100) / Total no. of observationobservation

IMPROVING BUSINESS RESULT IMPROVING BUSINESS RESULT THROUGH BENCHMARKINGTHROUGH BENCHMARKING

BENCHMARK AND BENCHMARKINGBENCHMARK AND BENCHMARKING The Construction industry as a whole The Construction industry as a whole

has been slow to follow other has been slow to follow other industries in adopting benchmarking.industries in adopting benchmarking.

There are two groups of contractors. There are two groups of contractors. from medium sized firms in the from medium sized firms in the

National Contractors Federation.National Contractors Federation. Larger players in the major Larger players in the major

contractors group. contractors group. Formed benchmarking clubs with a Formed benchmarking clubs with a

view to compare and exchange data.view to compare and exchange data.


Productivity measurement and Productivity measurement and benchmarking are important in benchmarking are important in improving construction productivity.improving construction productivity.

Benchmarking (productivity Benchmarking (productivity measurement) has been successfully measurement) has been successfully adopted by the Swedish export adopted by the Swedish export industry for a long time.industry for a long time.

To make comparisons with To make comparisons with competitors or other units in the competitors or other units in the same group.same group.


This enables the management This enables the management team to invest in new technology team to invest in new technology and machinery to improve the and machinery to improve the level of productivity.level of productivity.

To establish trends of To establish trends of performance and make performance and make comparison with the standardised comparison with the standardised benchmarks.benchmarks.


The idea of benchmarking The idea of benchmarking process on the other hand is process on the other hand is to compare the activity of to compare the activity of one company with activities one company with activities of the best of other of the best of other companies.companies.


Benchmarking is a continuing Benchmarking is a continuing process that opens the process that opens the organisation to new and radical organisation to new and radical ideas, and can play a pivotal ideas, and can play a pivotal role in improving effectiveness.role in improving effectiveness.


Independent Project Analysis Inc Independent Project Analysis Inc (IPA), a major project (IPA), a major project management benchmarking management benchmarking company in the United States company in the United States and in Europe concluded that at and in Europe concluded that at least 20 billion dollars was least 20 billion dollars was wasted on repeated work, wasted on repeated work, change of direction and change of direction and inefficiency each year.inefficiency each year.

IMPROVING BUSINESS RESULT THROUGH IMPROVING BUSINESS RESULT THROUGH BENCHMARKINGBENCHMARKING

Benchmarking can fall into Benchmarking can fall into several main categories:several main categories:

internal benchmarkinginternal benchmarking external benchmarking with external benchmarking with

competitors and non-competitorscompetitors and non-competitors

IMPROVING BUSINESS RESULT THROUGH IMPROVING BUSINESS RESULT THROUGH BENCHMARKINGBENCHMARKING

one-on-one or data based one-on-one or data based benchmarkingbenchmarking

domestic benchmarkingdomestic benchmarking global benchmarkingglobal benchmarking qualitative benchmarkingqualitative benchmarking quantitative benchmarking.quantitative benchmarking.

delaysupportivework

directwork

WORKSAMPLING

‘Sales return oncapital employed’

OR‘Profit to assets ratio’

PRODUCTIVITYMEASUREMENT

Current assets are:cash,

account receivable,market securities,

inventories

Current liabilities are:debts,

bank overdrafts,tax payable,

Work-study consists of 2main components:

method study,work measurement,

IMPROVINGBUSINESS RESULT

THROUGHBENCHMARKING

Make comparisons withcompetitors or other

units in the same group.Data based

benchmarking,Domestic benchmarking,

Global benchmarking,Qualitative benchmarking,

Quantitativebenchmarking.

Quantitativebenchmarking

Go to Cost control(119 &120)

Manufactoring

Construction

093 Productivity Measurement

Engineering