Chris Hendrickson, Tung Au have written a pretty useful textbook on "Project Management for Construction". You can buy it at Amazon for $150, or you can read it online. The link here is for chapter 4 of the text, covering labor, material and equipment utilization.
It's a good read for anyone constructing a building or product. I found a lot of principles to be relevant to software construction. It seems like building analogies are usually pretty useful in examining our own management practices.
That said, this chapter is also very relevant for anyone in the building trades trying to figure out how to squeeze profit out of construction contracts in today's market. Let's face it, the real estate market is still pretty tough. Residential home starts are starting to make a rebound, but commercial real estate still has a lot of excess capacity. The Seattle Times today reported a 21% vacancy rate in downtown office space, the highest ever recorded. The scary thing is that there are still more projects that have to be completed. There's just no turning back at this point.
So how do you save your shorts if you're a contractor in this environment?
One way is to be fanatical about your productive labor yield, which Hendrickson and Tau define as "the ratio of direct labor hours devoted to the completion of a project to the
potential labor hours". The critical success factor to increasing productive labor yield is to minimize non-productive activities. The authors site an example R. Tucker indicating that the typical project has only 40% of its total labor time doing anything productive. Here are the numbers:
- Productive time 40%
- time 40%
- delays 20%
- Inefficient work
- methods 20%
- Labor jurisdictions and other work
- restrictions 15%
- Personal time 5%
Reducing administrative delays and finding more efficient work methods can add 40% labor productivity directly to the bottom line of your project. Here's a short list of factors that Hendrickson and Tau attribute to non-productive time:
- Indirect labor required to maintain the progress of the project
- Rework for correcting unsatisfactory work
- Temporary work stoppage due to inclement weather or material shortage
- Time off for union activities
- Absentee time, including late start and early quits
- Non-working holidays
So how can you reduce administrative delays and find more efficient work methods? Utilizing the latest technology is one way to make work methods more efficient. Using mobile apps on a smart phone instead of paper creates real-time communication that is structured and efficient. Capturing information digitally reduces labor required for administrative support. All of these improvements can significantly reduce the "indirect labor required to maintain the progress of the project" and better information in the field can increase quality so there is less rework.
Visit the Construction category of the GoCanvas application store to see how technology might help your team improve productive labor yield and make money as the economy improves.
Link to original article is here.