How can Construction Productivity be Improved: Part One: Topics 1 thru 15

For more than 30 years I have been a Senior Project Manager, Construction Director & Chief Estimator involved with 100’s of mid-sized & large EPC Oil / Gas, Power, Industrial & Pharmaceutical Projects in the USA & around the world. A topic that interests me and one that I frequently get asked my opinion on is: How can “Construction Productivity be improved”, the following is my observations comments on this important subject.

Let’s accept that the FEED Cost Estimate and the follow on Control Estimate is appropriate and has captured the  total Scope of the CAPEX Project, and that the Construction Productivity values that were used in these estimates were reasonably thought out and were correct at the time of the estimating effort. For an example of this let’s assume that the construction work on an Industrial type CAPEX project was estimated at 1,000,000 direct man-hours, if the labor rate was $50 / hour this would equate to a construction labor cost of $50 million, if the estimated man-hours were exceeded by 5% to 1,050,000 man-hours due to “poor productivity” then the Owner or the Contractor could be looking at an overrun of $2.5 million, if the estimated man-hours were exceeded by 15% then an overrun of 150,000 man-hours or $7.5 million, this of course would impact the completion date and increase the CAPEX project direct, in-direct and possibly the construction management costs. So the question is how Construction Productivity be improved. The following are some of my thoughts and ideas, please feel free to comment or add to them.

1.      Re-visit and confirm that FEED and Control Estimates: fully gauge that the correct productivity values and the risks and challenges the project execution faces were correctly captured in the latest cost estimate.

2.      Scope Definition: ensure that the most all-inclusive activity of defining the overall project work effort, scope and project objectives are mapped out and captured in the latest estimate, ensure that the current estimate is fully document and use as a control tool during the projects execution.

3.      Front End Engineering: Early in the Engineering Phase, compile 30 day and 90 day Project Front-End Planning Schedules indicating the milestones that need to be met to achieve the projects end date and continue this effort during project execution.

4.      Eliminate Engineering Changes: Minimize / Take avoiding action on engineering / detailed design changes, if possible “freeze the design”.  

5.      Engineering Standardization: Utilize repetitiveness where possible in the facilities detailed design and construction phase.

6.      Unfinished design / Engineering deliverables: this issue is the cause of many change orders and field modifications and delays. It is essential that the Engineering / Detailed Design and Procurement effort (deliverables) be appropriately completed to facilitate and meet major construction milestones related to major equipment, tagged items and bulk materials deliveries and installation. Delays related to late Detailed Design documents undeniably is a main culprit of initiating field construction delays and negatively impacting construction productivity. 

7.      Execution Team: Owner companies should choose the best Project Management team that is available, granting them full authority to execute the project that meet the Owners goals and intentions, around Safety, Cost and Schedule.

8.      Execution Strategy / Plan: Fully communicate / document Project Execution Strategy / Plan for the following phases (A) Detailed Engineering, (B) Procurement, (C) Construction (D) Contracting Philosophy and (E) Hand Over to Plant Operations.

9.      Communications: Improved communications on the EPC project(s) will improve productivity at the construction site. Informing the construction field force of the current status of the project, number of days to project completion etc. Failure to communicate the projects current status and any important construction issues can impact field production and overall motivation.

10.  Modularization / Pipe Fabrication: Modularization, Pre-assemblies & Pipe Fabrication: Endeavor to move as much of this scope that is practical, it is possible to move as much 75% of the ISBL / OSBL piping scope to specialist fabrication vendors, allow the fabrication vendors to purchase the piping material. Use modularization as a key ongoing construction approach / practice. The primary goal of modularization is that it moves skilled construction and supporting field in directs away from the construction site into dedicated fabrication shops, quality, safety and production can be significantly improved with this approach.

11.  Owners Consultants / Representatives: Locate appropriate, experiences and qualified EPC Consultants to assist, review and support the Owners Management Execution Team.

12.  Competent Site Management: Select positive and proactive Construction Management and Field Engineers, Superintendents and General Foremen.

13.  Improving Field Labor Work Conditions: Optimize the projects work environment, pay scales, work rules, per diems, safety requirements, training opportunities and site temporary facilities to attractive to draw motivated skilled and unskilled workers to the project.

14.  Supervisor / Forman to Worker Ratio: The most productive Construction Worker to Supervisor / Foreman / Ganger ratio is between 1 to 7 and 1 to 12, ratios above this can be detrimental to the installation effort.

15.  Change Rooms / Wash Areas / Lunch Rooms / Lunch Tents: Make sure there are enough facilities located around the jobsite, ensure they are cleaned every day, this will minimize down time, provide adequate water coolers / dispensers for the workers and consider allowing food lunch trucks on the jobsite.

I invite your comments and other issues that could possibly assist in improving construction productivity.

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Contact: John G. McConville CCP – Operations Director – Compass International

Telephone in USA: (609) 577 4505