How to Increase Productivity for Greater Profitability By: Ted Garrison [email protected]www.TedGarrison.com 800-861-0874 Host of New Construction Strategies Radio www.NCS30.com Follow in Twitter @TedGarrison (c) 2014 New Construction Strategies Tuesday, January 28, 14
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How to Increase Productivity for Greater ProfitabilityHow to Increase Productivity for Greater Profitability By: Ted Garrison [email protected] 800-861-0874 Host of New Construction
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Transcript
How to Increase Productivity for Greater Profitability
Day-in and day-out, what is the average % of your time spent chasing the progress of commitments made to you? ________
What % of your time is spent being chased by others? ________
Obviously this is so important that everyone has been formally trained on how best to chase-up. So, what are the top three best practices of chase-up taught in your class?
If average worker earns $75,000 – that equals a $7,500 savings per worker or increased profitability • If you have 10 people – you could eliminate one
What are you going to do with all that extra time?• Be more productive?• Improve planning to reduce the schedule?• Improve quality?• Are you satisfied with your safety progress?
Chase-up adds no value!• We can agree that some external discipline (chasing) must be
applied – but how much?
If chase-up doesn’t guarantee lower costs, faster schedules, higher quality, improved safety, what does it guarantee?• Higher costs and we don’t even know how much more because we
don’t measure chase-up!
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Example
You are scheduled to pave a road starting first thing Friday morning!
The underground contractor has agreed to complete the ten drains by close of business Thursday!
• Underground contractor lied – they hid a buffer!• You lied because you asked for it sooner than you needed!• This creates inefficiency!
Which crews would require the most chase-up?
You don’t know!
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Example
Compare 2 subs: one 40% reliable, the other 90%
Which one do you chase the most?
On a typical project, how long does it take to establish a contractor’s reliability?
Would it be worthwhile to reduce that time to days, and to be able to measure it objectively?
If “YES”, HOW do we measure the “Reliability of People to make and keep commitments” objectively?
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Example
The underground contractor had 10 drains to finish
Of those, let’s say 6 were completed 100%
The remaining 4 were 95% complete
Did they meet their commitment – yes or no?
Therefore, their CRI (Commitment Reliability Index) is:
60%Is this a fair evaluation?
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Example
How do we normally pay people?• Earned value – which is measure by productivity• EVM = $9,800 • [6 x $1000 x 100% = $6000] + [4 x $1000 x 95% = $3800] = $9800
• Let’s turn things on its head and ask: • What if we paid people based on reliability first and productivity
second?
Do you think that would change performance?• Reliability payment: $6000• [6 x $1000 x 100% = $6000] + [4 x $1000 x 0% = $0] = $6000
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CRI (Commitment Reliability Index) – Case Study
Before action was taken on learning• CRI trend was slightly positive – 45% to 48%• Variance around trend line significant
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Tells us we are not very reliable, but doesn’t tell us what to do!
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Identify the Problem – Case Study
If someone doesn’t meet his commitment get them to define the reason in as few words as possible
This isn’t a reprimand – it’s about identifying the problem
Chart the problems in a histogram
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Chart the Problem – Case Study
Tells us we are not very good at planning & coordination, but doesn’t tell us what to do about the problems!
Pareto Principle indicates 20% of the issues will cause 80% of the problems!
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Category Root Cause Task ID Date
*1*1
*1
*1
*2*2*2*2
Root Cause – Case Study
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Commitment Reliability Index (CRI) – Case Study
CRI trend was slightly positive (45% - 48%)
Variance around trend line is sizable and trend lag on the low side (less reliable)
CRI trends very positive (49% to 84%)Variance around trend line is less than before, and trends on the high side (more reliable)
Tuesday, January 28, 14
Applying the Application
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Tuesday, January 28, 14
Applying the Application
Weekly/daily production control & commitments
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Tuesday, January 28, 14
Applying the Application
Weekly/daily production control & commitments
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Tuesday, January 28, 14
Applying the Application
Weekly/daily production control & commitments
Monday Morning: What are you going to do this week? Today to meet the week’s schedule?
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Tuesday, January 28, 14
Applying the Application
Weekly/daily production control & commitments
Monday Morning: What are you going to do this week? Today to meet the week’s schedule?
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Tuesday, January 28, 14
Applying the Application
Weekly/daily production control & commitments
Monday Morning: What are you going to do this week? Today to meet the week’s schedule?
Tuesday Morning: Did you do what you said you were going to do yesterday?
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Tuesday, January 28, 14
Applying the Application
Weekly/daily production control & commitments
Monday Morning: What are you going to do this week? Today to meet the week’s schedule?
Tuesday Morning: Did you do what you said you were going to do yesterday?• If not,
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Tuesday, January 28, 14
Applying the Application
Weekly/daily production control & commitments
Monday Morning: What are you going to do this week? Today to meet the week’s schedule?
Tuesday Morning: Did you do what you said you were going to do yesterday?• If not,
• Then why not in as few words as possible
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Tuesday, January 28, 14
Applying the Application
Weekly/daily production control & commitments
Monday Morning: What are you going to do this week? Today to meet the week’s schedule?
Tuesday Morning: Did you do what you said you were going to do yesterday?• If not,
• Then why not in as few words as possible• Categorize (weather, planning, coordination, materials…)
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Tuesday, January 28, 14
Applying the Application
Weekly/daily production control & commitments
Monday Morning: What are you going to do this week? Today to meet the week’s schedule?
Tuesday Morning: Did you do what you said you were going to do yesterday?• If not,
• Then why not in as few words as possible• Categorize (weather, planning, coordination, materials…)
• What are you going to do today
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Tuesday, January 28, 14
Applying the Application
Weekly/daily production control & commitments
Monday Morning: What are you going to do this week? Today to meet the week’s schedule?
Tuesday Morning: Did you do what you said you were going to do yesterday?• If not,
• Then why not in as few words as possible• Categorize (weather, planning, coordination, materials…)
• What are you going to do today
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Tuesday, January 28, 14
Applying the Application
Weekly/daily production control & commitments
Monday Morning: What are you going to do this week? Today to meet the week’s schedule?
Tuesday Morning: Did you do what you said you were going to do yesterday?• If not,
• Then why not in as few words as possible• Categorize (weather, planning, coordination, materials…)
• What are you going to do today
Repeat process the rest of the week!
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Tuesday, January 28, 14
Review of CRI & Chase-Up
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Tuesday, January 28, 14
Review of CRI & Chase-Up1. Of 10 slab preparations committed to be completed:
• 6 are 100% completed – 4 are 95% completed
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Tuesday, January 28, 14
Review of CRI & Chase-Up1. Of 10 slab preparations committed to be completed: