Few working people accept Karl Marx’s old saw that "productivity" means working longer and harder. Still, much of the construction industry hesitates to endorse important ideas introduced at about the time of Marx’s death. In the 1880s in the U.S., Frederick W. Taylor urged finding ways to work "smarter." More than a century later, the industry remains archaic in many of its practices, with too many construction officials suspicious about the value of measuring productivity on the jobsite.

Consider a recent experience of mine: While visiting a powerplant project, I listened to a familiar claim: "We’re giving it 100% and when we’re held up, it’s not our fault," a foreman told me as we reviewed what was wrong with the fast-track job. Not only was the job behind schedule and over budget with sketchy drawings, late deliveries of steel and conflicts between the plant’s owner, engineer and constructor. There was a pervasive mindset of, "Why change? We’ve always done it this way," even though the productive use of labor resources this time was barely 50% of available work hours.

SLIDE. According to U.S. Bureau of Labor statistics, construction labor productivity–meaning value added per work hour–has been on a slide for decades. That has happened even though labor-intensive construction productivity problems are at least 80% controllable. In manufacturing, by contrast, worker productivity has been going up steadily since Taylor’s 19th-Century contributions.

Heavy construction and industrial maintenance projects can improve dramatically when treated as production systems. But the productivity of such systems can be puzzling, what with unreliable and late information and the intrinsic variability of the construction process. Too often, inefficient use of labor is unwittingly hidden because project officials figure "productivity" by comparing progress to budget and schedule. Budgets and schedules are estimators’ best guesses, predicated on past–and surely less demanding–performance.

Meeting or not meeting budget or schedule tells us nothing about the cost-effectiveness of a construction sequence. Suites of software and information technology are useful tools, but the output they give us about actual-to-plan ratios on "productivity" cannot reveal the efficiency of a process nor how to improve it and update estimating databases.

Construction productivity is traditionally considered indirectly–and sometimes downright emotionally–after the fact and not as a key performance indicator. Very few construction professionals know how to manage the process to improve the bottom line. Efficiency, productivity and cost-effectiveness are not terms found in A Guide to the Project Management Body of Knowledge, by the Project Management Institute. I believe that a new business model is needed with a direct indicator of the value-added activity of labor.

Better productivity can go a long way toward offsetting higher wages and shortages of skilled workers. A facilities owner or constructor can improve results by controlling the construction process and staying the course, since it is only too human not to welcome new accountability. By working and managing "smarter," we can utilize labor resources better, and save time and money.

BOOST. In my experience, daily process measurement and analysis, combined with conventional contract-based project controls, can boost productivity considerably. Constant attention to removing roadblocks can make work convenient as well as and improve morale. (I learned how convenient in my first job, in a coal mine. With all necessary labor and materials ready and accessible, we produced; otherwise, we failed to meet our targets.)

Now, as a consultant, I use a quantitative method: the statistical sampling of craftwork activity. Based on probability theory, sampling was first used in the textile industry in the U.K. in the 1930s. Around 1940 in the U.S., W. Edwards Deming introduced sampling for statistical process-control to improve manufacturing quality and efficiency. During World War II, work sampling became a stock measurement technique of industrial engineers. In the 1980s, the Business Roundtable urged the use of sampling in construction. Unfortunately, most of the industry either ignored or never heard that advice. But other sectors, led by General Electric, went on to demonstrate the benefits of using "Six Sigma" initiatives to measure statistical deviations from perfection, to help reach goals of making error-free products.
(Photo Illustration by Nancy Soulliard for ENR)

Indeed, process improvement can reduce waste and improve profitability in extraordinary ways, as some leading-edge facilities owners are proving. Last year at a Construction Industry Institute conference, the Tennessee Valley Authority Fossil Power Group reported annual labor cost savings of $23 million with a 44% performance improvement since 1993, thanks in part to sampling.

Work-process analysis zooms in on how work is done. It does not require using a stopwatch or interrupting workers. Instead, and independently of cost-and-time estimates, an analyst collects workflow data and identifies system constraints. The resulting data can show, day by day, what proportion of labor hours are yielding added value and which are ending up wasted. By streamlining logistics and staffing more efficiently, managers and workers alike can give the lie to Marx’s dictum about working harder.

Hans Picard is the president of P+A Innovators Corp. in Cincinnati.
He may be emailed at pconsult@iac.net