Measuring Productivity in the
Construction Industry
Canadian Construction Association
87th Annual Conference
Cancun, Mexico
March 7, 2005
Why
Measure
Productivity?
What is Labour Productivity?
Productivity = Output / Input
(e.g. Earned hours / Worked hours)
Or the reciprocal:
Productivity = Input / Output
(e.g. Manhours per unit produced)
Hypothetical Tender
Labour
40%
Materials
40%
General Conditions
& Indirect Costs 10%
Overhead
5%
Profit
5%
Total
100%
•Largest cost
component
• Most volatile
• Most critical
to control
Hypothetical Tender
Labour
40%
Materials
40%
General Conditions
& Indirect Costs 10%
Overhead
5%
Profit
5%
Total
100%
45%
A 12.5%
overrun in the
labour
component
Hypothetical Tender
Labour
45%
Materials
40%
General Conditions
& Indirect Costs 10%
Overhead
5%
Profit
0%
Total
100%
Wipes out all
profit!
Factors Affecting Productivity
MCA - Labour Estimating Manual - 1986
Factors
1. Stacking of Trades
2. Morale and Attitude
3. Reassignment of Manpower
4. Crew Size Inefficiency
5. Concurrent Operations
6. Dilution of Supervision
7. Learning Curve
8. Errors and Omissions
9. Beneficial Occupancy
10. Joint Occupancy
11. Site Access
12. Logistics
13. Fatigue
14. Ripple
15. Overtime
16 Season and Weather Change
Minor
Average
Severe
10%
5%
5%
10%
5%
10%
5%
1%
15%
5%
5%
10%
8%
10%
10%
10%
20%
15%
10%
20%
15%
15%
15%
3%
25%
12%
12%
25%
10%
15%
15%
20%
30%
30%
15%
30%
25%
25%
30%
6%
40%
20%
30%
50%
12%
20%
20%
30%
Common Factors Impacting
Labour Productivity
Common Causes of Labour
Overruns
Internal:
•
•
•
•
•
•
•
Poor planning & management of work
Rework & errors
Bad estimate
Lack of training
Morale problems
Staff turnover
Material & equipment availability
Common Causes of Labour
Overruns
External:
•
•
•
•
•
•
Overtime
Changes
Crowding
Trade Stacking
Weather
Site Access
These factors
seldom occur
in isolation
Quantifying Productivity
Losses
Crew Overmanning
U.S Army Corps of Engineers, Modification Impact Evaluation
Guide, 1979
% Total Crew Efficiency
100
80
60
40
20
0
0
20
40
60
80
% Crew Size Increase Above Optimum
100
Effect of Congestion (Crowding)
on Labour Efficiency
U.S. Army Corp of Engineers "Modification Impact Evaluation Guide" - July 1979
% Labour Loss to Inefficiency
20%
15%
10%
5%
0%
0%
5%
10%
15%
20%
% Crowding
25%
30%
35%
Effects of Overtime
US Army Corps of Engineers - 1979
Summary of Overtime Curves
Impact Due to Change Orders
Effects of Change Orders on Productivity: Civil and Architectural Work
45%
% LOSS OF PRODUCTIVITY
40%
35%
30%
25%
20%
15%
10%
Reference: Impact of change orders on construction productivity, Moselhi, Leonard, and Fazio
Canadian Journal of Civil Engineering, Volume 18, 1991
5%
0%
0%
10%
20%
30%
40%
50%
60%
% CHANGE ORDERS
CHANGES ONLY
CHANGES PLUS ONE OTHER CAUSE
CHANGES PLUS TWO OTHER CAUSES
70%
PRODUCTIVITY IN %
Productivity Effect of Temperature
and Relative Humidity
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
5% RH
15% RH
25%RH
35% RH
45% RH
55% RH
65% RH
75%RH
85% RH
95% RH
-20 -10
0
-20 °C
10 20 30 40 50 60 70 80 90 100 110 120
-10 °C
0 °C
10 °C
20 °C
EFFECTIVE TEMPERATURE IN °F
30 °C
40 °C
Information To Manage By
Work Breakdown Structure
Equipment
Conduit
Wire
Fixtures
Overall
Exterior
0.0
2.0
2.0
1.0
5.0
Basement
30.0
10.0
10.0
1.0
51.0
Ground Floor
0.0
3.0
3.0
5.0
11.0
Second Floor
0.0
3.0
3.0
5.0
11.0
Penthouse
15.0
2.0
2.0
3.0
22.0
Overall
45.0
20.0
20.0
15.0
100.0
Output: Earned Manhours
Equipment
Conduit
Wire
Fixtures
Overall
Estimate
% Complete
Earned MH%
Estimate
% Complete
Earned MH%
Estimate
% Complete
Earned MH%
Estimate
% Complete
Earned MH%
Estimate
Earned MH%
Exterior
0.0
0.0
0.0
2.0
50.0
1.0
2.0
50.0
1.0
1.0
50.0
0.5
5.0
2.5
Basement
30.0
20.0
6.0
10.0
50.0
5.0
10.0
50.0
5.0
1.0
50.0
0.5
51.0
16.5
Ground
Floor
0.0
0.0
0.0
3.0
10.0
0.3
3.0
10.0
0.3
5.0
0.0
0.0
11.0
0.6
Second
Floor
0.0
0.0
0.0
3.0
5.0
0.15
3.0
5.0
0.15
5.0
0.0
0.0
11.0
0.3
Penthouse
15.0
0.0
0.0
2.0
0.0
0.0
2.0
0.0
0.0
3.0
0.0
0.0
22.0
0.0
Overall
45.0
6.0%
20.0
6.5%
20.0
6.5%
15.0
1.0%
100.0
19.9%
Input: Worked Manhours This
Period
Period 3
Name
Category
Hours
J.Smith
Foreman
35
A.Jones
Journeyman
35
B.Harris
Journeyman
30
S.Webb
Apprentice
35
…
…
…
…
…
…
Total
900
Input vs. Output
Progress
Total Previous
Period
Total To Date
This Period
Equipment
4.00
6.00
2.00
Conduit
2.00
6.45
4.45
Wire
2.00
6.45
4.45
Fixtures
0.00
1.00
1.00
Overall Progress
8.00
19.90
11.90
WBS Category
Overall Manhours Worked this Period
900
Manhours per 1% job progress
75.6
Bid Manhours Per 1% Progress
100
Performance Index
1.32
Job Tracking
Period
1
2
3
4
5
6
7
8
9
10
Planned Progress This Period
5.0
10.0
10.0
10.0
15.0
15.0
10.0
10.0
10.0
5.0
Planned Cumulative Progress
5.0
15.0
25.0
35.0
50.0
65.0
75.0
85.0
95.0
100.0
Planned MH This Period
500
1000
1000
1000
1500
1500
1000
1000
1000
500
Planned Cumulative MH
500
1500
2500
3500
5000
6500
7500
8500
9500
10000
Actual Progress This Period
2.0
6.0
11.9
20.1
20.0
10.0
5.0
5.0
10.0
10.0
Actual Cumulative Progress
2.0
8.0
19.9
40.0
60.0
70.0
75.0
80.0
90.0
100.0
Actual Manhours This Period
400
800
900
1200
1500
1600
1500
1000
1500
1000
Actual Cumulative Manhours
400
1200
2100
3300
4800
6400
7900
8900
10400
11400
Actual MH Per 1% Progress
This Period
200.00
133.33
75.63
59.70
75.00
160.00
300.00
200.00
150.00
100.00
Cumulative MH Per 1%
Progress
200.00
150.00
105.53
82.50
80.00
91.43
105.33
111.25
115.56
114.00
Performance Index This Period
0.50
0.75
1.32
1.68
1.33
0.63
0.33
0.50
0.67
1.00
Cumulative Performance Index
0.50
0.67
0.95
1.21
1.25
1.09
0.95
0.90
0.87
0.88
Planned Performance Index
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Performance Index
1.40
1.20
Performance Index
1.00
0.80
0.60
0.40
Cumulative Performance Index
Planned Performance Index
0.20
0.00
1
2
3
4
5
Period
6
7
8
9
10
Recovering Productivity
Losses Through Claims
Three Basic Approaches
1. Total Cost Claim
2. Industry Charts
3. Measured Mile
Differential Productivity Calculation
AFFECTED PERIOD
Productivity 2.18
NORMAL
PERIOD
AFFECTED
PERIOD
Productivity
2.86
Productivity
2.59
2.44
2.22
2.27
2.01
2.84
2.93
2.57
2.58
2.62
2.08
SQ.FT./HR.
PRODUCTIVITY
2.81
JUNE
JULY
LOSS OF
PRODUCTIVITY
23.6%
AUG
SEPT
OCT
MAY
JUNE
JULY
AUG
Overtime
4.45% (no o/t)
Manpower
Level
203
FW/Cond.
Ratio
0.040 (est. 0.038)
Boxes
0.010 (est. 0.009)
Quantity
over 23% of total
(200 opt.)
Productivity 2.86 sq.ft./hr
SEPT
OCT
LOSS OF
PRODUCTIVITY
9.4%
Calculation of Loss of Productivity
Total Actual Manhours
419,201 MH’s
Would-Have-Been Manhours
(857,262 sq. ft./2.85 sq.ft./MH)
300,793 MH’s
Loss of Productivity
118,408 MH’s
or
28.25%
Why Measure Productivity?
• You can’t correct a problem if you don’t
know it exists
• By the time the job is over, you’ve lost the
money
• You will have current information to
manage and control your project
• You should correct losses arising from
internal problems
• You may be able to recover losses arising
from external causes