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Tags: Blog Contest, cost, Estimating Software, productivity
A quick and effienct way for any project to reduce cost and be more productive is to change the method of closing projects and collecting lessons learned. This can be accomplished by:
1. Collecting lessons learned during weekly/monthly team meetings and entering them into a Lessons Learned database or spreadsheet.
2. Having the SMEs or leads contribute to the lessons learned when they happen and not wait until they are off of the project or can’t be found (on another project or left the department/company).
2. Define fiscal close, physical close and adminstrative close prior to the end of the project so that the team understands what ‘project close’ really means and when these different types of close happen.
Time (money) can be saved in the current project by folllowing these suggestions and other projects have the benefit of lessons learned as they happen which increases better productivity.
Reducing costs and increasing productivity are the goals of any well managed project but how does one make sure you are always getting the most “bang for your buck”? Believe it or not, it is possible to do this by working with three key groups, Estimation, Production and Accounting. Estimation is reponsible for getting new projects. By getting feedback from field savvy personnel and keeping up with the latest techniques, tools and equipment, estimators can help to minimize oversights in their quotes. When doing the project, Production helps by seeing if tasks can be combined to save time and money. Having a good safety program minimizing the lost work time, which results in increased production costs and delays on the project schedule also helps. Accounting helps by monitoring how bills are paid. Can money be saved if the bills are paid quickly? Or can a lump sum be split into smaller periodic payments? Having all three groups work together will ensure the lowest cost, best producivity and most important of all, a satisfied customer.
Striking a good balance between reducing costs and providing a quality product to your customer is often difficult in the construction industry. There are such varying levels of quality, especially on those items that are installed below grade, behind a wall, etc. Even when the management of a project has good intentions, what’s getting constructed in the field can often fall short of these intentions.
Because of this, I believe good communication with field personnel is key. Determining what work items absolutely cannot be compromised in terms of QAQC, and what items are less important, can help reduce costs in the long run. Ideally everything would be constructed with perfect quality. However, if every item is treated as equally critical, then nothing is truly critical.
No one can predict the exact cost or time outcome of each individual future project. However, if estimates and schedules are consistently prepared on the basis of actual experience captured and measured as processes the net outcome will lead to corporate success. The key is to capture core business data at a level that is both useful and practical. Then to use tools that apply control charting, Monte Carlo simulation and regression analysis to gain knowledge and reduce variation in process limits.
Bottom line is if your processes are stable with measured capability, then the overall outcome is predictable. If you consistently provide a reasonable probability of success, you will succeed. Also, if you change (improve) a process it becomes a process shift, defined with new independent measures.
From our pint of view and with methods used on our region -mainly central america- we have found that constructability analysis cope with reallistic schedules, prove to be the best methods to reduce costs.
You have to be aware, that normally we dont have all the resources normally availble on other regions such as North America. We struggle to find a 150 ton crane…maybe there are 5 or 6 on the complete region. So imagine the pressure these put on schedules and planning efforts.
Other major concern is lack of standarization. Each contractor uses a different method, tool, system in order to control costs, administer change orders -if its ever administered ar all- And to make matters worst, we also found that foreing companies who develop projects on do not take into account local regulations, available resources, weather conditions, financial issues related to local operations and construcatbility issues on theyre schedules.
In the end there is opportunity to make profit at this region, but there is also a lot of financial resources that goes thru the cracks, just because good cost engineering practices are not followed or implemented.
I guess all the above does not apply to all regions of the world, but at least it will provide a feeling of what we have to go thru…
PS. On the bright side human resources and labor are not so expensive, and well prepared engineers are eager to get exposed to latest technologies and tools, both on the field and at administratives level.
Most projects that require project management are complex. In order to reduce the costs and increase the productivity of a complex project, we need to focus on both of these aspects constantly and track them in a consistent and EASY way. Many organizations find tracking costs and productivity is difficult because they haven’t got 1) a system to track them in, or 2) don’t know the right metrics to track (a methodology like Six Sigma might help here) or 3) don’t want to change their existing process in order to track costs or productivity (eg: “our workers aren’t going to report that info to us daily”). So often costs aren’t tracked at the detailed task level.
So, 3 steps to increasing productivity and costs are:
1) An organization must change their culture and make productivity and costs a true priority.
2) A tracking system should be put in place, one that make tracking fairly easy for anyone to do
3) Track costs and productivity constantly and be honest in reporting the results,
The preferred method in the south to increase productivity and reduce costs is to threaten the crews and don’t pay the subs, the productivity software option is what the “other guys” do to be competitive.
Moving away from excel spreadsheets, whiteboards, and sticky notes is how most companies operate today as sad as that sounds. Having\Forcing a standard company wide “system” that promotes good communication, organizes process’s across all company disciplines, and allows collaboration between employee’s and or all vested interests of a project would by itself achieve reduced costs and increased productivity.
Or, in a simpler framework the idea to hire a gun wielding foreman with a lingerie model assistant could achieve some interesting productivity results, but most likely not reduce anyone’s costs.
I hope my competition chooses the last simpler option!
Most production inefficiencies are caused by not having the right personnel, equipment or material in the right places at the right time. The only way to reverse this is to plan. If you plan for sequence and plan for timing, you can plan for production.
Most tasks are not completed from start to finish without interruption, yet they’re usually estimated as if there will be no interruptions. Be honest about those starts/stops and anticipate them. Only then can you look at how to eliminate or reduce them.