Improving Workforce Productivity Through Crew-Centered Construction

The retirement of older workers, the job losses predicated by the economic downturn and the perception of construction work as a “last choice”all point to a shortage of qualified craft professionals at a time when demand for massive upgrades to infrastructure, industrial facilities and commercial space is on the horizon. There is no doubt of the need to attract, recruit and train large numbers of new construction workers—an effort that will require the collaboration of community colleges, high schools, trade associations and individual employers. In the meantime, another way exists to defer the impact of this pending shortage of workers: dramatically improve the use of the current construction workforce.

The opportunity for workforce productivity improvement continues to be under-appreciated and largely undetected. Even as sophisticated project controls, new forms of contracts and innovative technology have flourished, construction productivity has steadily declined since 1964.

It is important to examine how the physics of production and the variability of construction operations affect overall project performance. “Factory Physics, Foundations of Manufacturing” by Wallace Hopp and Mark Spearman is a good place to start. In laymen’s terms, the authors’ law of variability implies that if there is an environment of changed conditions, interruptions, disruptions and a lack of dependable inflow of assembly inputs, a production system will accommodate this variability by accumulating a lot of inventory, having more workers or equipment than necessary, or taking longer to complete product cycles.

The law of variability plays out in simple construction operations, such as laying storm pipe. In case of hitting rock, a jobsite leader may assign the crew a bigger backhoe than what normally would be used. Because of the impracticality of the supplier delivering each piece of pipe as the crew needs it, a stockpile of material resides onsite. And because of the uncertainty with which mass cuts and fills are completed, no pipe laying is started until nearly all upstream work is completed.

A high degree of variability is common on most projects, and virtually every construction operation is dependent on an upstream operation. This combination of dependence and variability has the potential to make the overall flow of work extremely unpredictable.

How Big of a Problem Is This?
During the early 1990s, Glenn Ballard and Greg Howell, founders of the Lean Construction Institute, determined only 54 percent of scheduled weekly crew assignments were completed as planned (percent of planned complete or PPC). Subsequent research regarding the relationship between labor performance budgets and PPC indicated that productivity went up as PPC went up and that crews were achieving 95 percent of their estimated productivity at 50 percent PPC. In other words, productivity estimates assumed a PPC of just slightly better than 50 percent. If the law of variability holds true, this implies companies are staffing construction operations with excess capacity and assigning durations with more time than would be required if variation was radically reduced.

American Infrastructure
, Worcester, Pa.,discovered just how much excess capacity was going undetected by conducting 125 PotentialZones™ over a five-state area. PotentialZones are a production planning and control process developed to enable project leaders and engineers to experientially learn how to plan for and execute construction operations that achieve real breakthroughs in performance. They enable a project team to calculate the potential production capacity for a construction operation, then plan for the execution of the work in detail, and finally provide immediate analysis for further improvements of the operation as work starts.

After sorting through the results of each operation in all 125 PotentialZones, the average potential production rate that had been achieved and sustained during the entire study exceeded estimated rates by a factor of 4.29:1. Thus, in 125 operations (including pipe laying, dirt moving, concrete forming and pouring, precast erection and asphalt paving), the average production rate American Infrastructure achieved and sustained exceeded estimated rates by more than four times. Most startling was that virtually every operation would have “made budget” without anyone knowing it was capable of an average of 4.29 times more production. Note: Virtually all the projects on which these operations took place were competitively bid and profitable.

Just as a PPC of 54 percent changed Ballard’s and Howell’s understanding of project planning reliability and workflow predictability, 4.29:1 outlines the difference between acceptable and potential operational effectiveness and efficiency. As Ballard’s later research indicated, productivity rates are estimated to accommodate all that variability while still achieving estimated production rates. American Infrastructure revealed excess crew capacity of more than four times what was required to achieve estimated production rates. Much of that excess capacity was the buffer Hopp and Spearman describe in their law of variability.

The most significant issue is not the size of the opportunity for performance enhancement, but the fact it likely is going unnoticed using conventional “detect and correct” project controls. No matter how detailed and sophisticated labor cost reporting and project scheduling software packages are, they cannot detect excesses in capacity, durations and work in process if a 54 percent PPC variability is built into the very budgets or durations they are measuring against. Also, they cannot detect the excess capacity if the historical data on which productivity rates are based is drawn from previously inefficient or ineffective work at the crew level.

A Vision for Daily Crew Production

Just as the energy industry has turned to new resource recovery techniques to extract oil and gas, the construction industry must use new and unconventional ways to mine excess workforce capacity. Along the way, the industry must create production environments that assure newly hired and trained craft professionals feel safe, well utilized and important to the success of each project.

The mining of excess crew resource capacity will require more than measuring PPC. Studies indicate that delay-free work is not necessarily efficient work. It is not uncommon to find weekly PPC increasing as it becomes more of an important project metric simply because “Last Planners” reduce the volume of planned work for the week, sometimes at the behest of their supervisors. Additionally, leaders and supervisors may take“waste walks” to projects looking for examples of waste. These tools can be useful, but often end up being part of a company-wide “whac-a-mole” exercise that rarely results in lasting and continuous improvement.

Recovering excess workforce capacity requires a new focus on continuous improvement and compounding learning, as well as visionary, steadfast and consistent leadership. The work at the crew level is the final expression of project leadership and company management. To truly improve it in a lasting way requires changes in focus, culture and organizational competence. In short, it’s hard work.

In his book “Toyota Kata,” author Mike Rother states, “There are perhaps only three things we can and need to know with certainty: where we are, where we want to be and by what means we should maneuver the unclear territory between here and there. And the rest is supposed to be somewhat unclear because we cannot see into the future.”

For many construction organizations, the current condition of their projects is low PPC and large buffers of work in process, crew resource capacity and schedule durations—nearly all of which are going undetected. To determine where they want to be, contractors need a crew-centered vision that describes the condition of the production management on their projects. The vision of crew-centered construction is project production perfection—something that can be easily envisioned but never achieved. In other words: Every day, every crew will complete its daily crew assignment and production goal effectively and efficiently without incident or defect, all within a safe working environment.

The Pursuit of Daily Crew Production Flow
The first and most painful step in the pursuit of daily crew production flow is to conduct a candid and thorough audit of the company’s current project production management. This requires getting out in the field and actually observing, documenting and analyzing the work at the crew level,and the quality of crew work assignments, work areas and assembly processes. It also requires determining the reliability and predictability of the workflow as parades of crews perform their work. The audit also should include observation of project planning facilities and the production planning and control regimen project leaders employ as they prepare their production plans for the upcoming week.

A crew-centered project production vision is the North Star by which a pursuit of operational perfection is charted. Comparing the current condition of a company’s existing production system to this production vision reveals the gap between “where we are” and “where we want to be,” which in turn defines the length and scope of the journey in the pursuit of excellence.

Determining how the firm will navigate that gap will vary depending on the nature of the contractor and the work it performs. For example, a self-performing general contractor has a much different challenge than a third-tier subcontractor. Consequently, it is important to first describe the means by which overall performance on a typical construction project is improved. 

Next, develop system that routinely ensures the creation of quality daily production assignments and goals for each crew, high-quality work areas in which that work will be done, and an effective and efficient assembly process employed by the crew as work is completed.  Each of these requires a unique combination of production planning, preparation and management. Additionally, the lack of any one of these three conditions will nearly always result in variability and unpredictability.

The following project production system is a five-component planning and control system that processes and transforms the inputs of a package of contract documents and an estimate into a continuous stream of daily crew assignments, work areas and assembly processes. This system breaks the project down as the level of detailed understanding and planning is increased and as “MakeCertain!” tasks are completed. As a system like this is deployed and improved, it eventually will ensure daily crew production flow. 
  • Pre-construction production planning. Pre-construction planning occurs within most companies, but the initial effort often is related to risk and tasks such as schedules and contracts. Instead, pre-construction production planning should entail a process of identifying critical operations and major chunks of work (value streams) requiring special planning early in the life of the project. It presupposes the need to perform initial production planning of key operations to attain calculated or engineered durations and supply needs that can be fed into the initial project schedule, purchase orders and subcontracts. Within this step, leaders create a production planning calendar and define and schedule the required production planning meetings of all key operations and value streams.
  • Value stream production planning. In this step, leaders define the sequence and flow of operations within a major production unit or a series of operations, leading to the accomplishment of a major project milestone. The plans define the sequence, batch size, initial production rates and “completion requirements” of all operations and the manner in which work will be completed and turned over to successor operations. Using as-late-as-possible scheduling techniques, individual operation start dates and buffers between operation completions are established.     
  • Operation production planning. The outputs of value stream production planning become the inputs to operation production planning.In other words, the details of individual operation production plans are finalized in response to the calculations of operation engineering and the flow requirement of production engineering. Final details include the definition of specific safety and quality requirements, detailed workzone diagrams depicting flow and material movement, specific sequential production goals and the identification of remaining “MakeCertain!” tasks required to assure production control. The resulting individual daily crew production goals are then pulled onto the assured production planning and control boards, where they will be refined in preparation of the assignment to a crew.
  • Assured production planning and control. All “MakeCertain!” tasks are completed within a two- to three-week window as crew assignments work their way through the look-ahead production schedule and ultimately are pulled onto a weekly production plan, which is then monitored and adjusted slightly each day as the events of the week unfold. Within this critical step, production planning and production control merge as the final sequence and production goal of each assignment are finalized. As work unfolds during the week in which the assignments are issued, the completion of each assignment is monitored and minor adjustments are made.   
  • Implementation and follow through. By the time an individual crew assignment is issued, a tremendous amount of production planning and control effort has been expended. However, there is no real assurance that the work will start and continue as planned. Using tools such as before-and-after action reviews, first-four-hours leadership support, purposive discovery by an operation engineer, and root cause analysis and problem solving, every effort is made to get the operation started right and to learn from the start-up how to better plan and control future operations. In this way, implementation and follow through assures both immediate production “control” and a continuously refreshed “learning library” from which future projects can be planned and controlled. 
Note that this production system is designed to prevent uncertainty and assure production as planned. This “prevent and assure” model of production management is in total contrast to traditional“detect and correct” project controls. The deployment of a production system similar to the one described above can only be the responsibility of the project’s general contractor or construction manager.

Within this system, prime and first-tier subcontractors are responsible for collaborating in all appropriate production planning meetings, completing the details of their own operation production plans and ensuring appropriate representation at daily end-of-shift meetings.  To the best of their ability,second- and third-tier subcontractors should actively contribute to production planning activities as well. Without the structure and collaboration of a production system, the odds of significantly improving the productivity of the work at the crew level will be nearly impossible.

The pursuit of daily crew production flow requires visionary leadership, a willingness to learn, a combination of patience and persistence, and real collaboration. And, it must be done incrementally so project leaders, foremen and craft professionals do not feel like they are expected to drink from a fire hose. It must start at the project level and then work its way into the project hierarchy of both general contractor and subcontractor field managers.

Click here to read Part 2 of this article on deploying a project production management system.

Michael H. Casten is founder of Construction Concepts, Greensboro, N.C. For more information, email mcasten@constructionconcepts.org. Much of this article is proprietary and has been permissibly reprinted from Casten’s copyrighted material.