What Is Downtime Costing You?

Q:

We are a concrete contractor on large poured-in-place structures. We have around 100 people (down from 200 last year) on our field crew and typically have three to four jobs going at all times. With the economy forcing us to bid jobs at near cost, what can we do to improve our field productivity?

Rudy Espinoza, VP

Stout Concrete Structures

A:

I’m sure there’s a little room to improve your field productivity. Send your project manager out to the field for a few days. Have him watch the crew and look for areas to increase their effectiveness. For example, watch the start times, finish times, breaks and lunch times. For every minute your 100 men don’t start or finish working per your company standards, you lose 1.67 hours per day which equals 417 hours per year at $50/hour equaling $20,875 per minute lost per day. Wow! If they waste ten minutes per day, that adds up to over $100,000 from your bottom-line!

What other ways can your crews be more efficient? Look at downtime, equipment usage, material procurement, materials ready and available when needed, wasted effort, mistakes, training, standing around time, smoking breaks, cell phone calls and wait time for their foreman to get them the information they need. Also ask your field crew for ideas to make the jobs go faster. Let them give you confidential ideas you can review and implement.

Now is a great time to improve your crew and get them working more efficiently. If they won’t increase their productivity, find some new blood to re-energize their efforts. Put someone in charge of saving your company money and give them an incentive to make it happen. The investment of time and money will be well worth the effort.

Q:

We are a roofing contractor for commercial buildings. I have four crews and two project managers. Some of them follow the company procedures when it comes to getting change orders signed, while others don’t. Over the last few years, we’ve had many completed jobs in which the customer wouldn’t pay us for work we did that their superintendent asked us to do. What should we do to get everyone on the same page?

William Brody

Weathertight Roofing

A:

The reason your people don’t follow the rules is because you don’t make them follow the rules. When they don’t get an approval signature before they have your crews do extra work for your customers, what happens to them? Is their pay reduced, do they get reprimanded or do you take the unpaid work out of their year-end bonus? No consequences = no accountability. In football, when a player intentionally doesn’t follow the playbook, he gets benched or cut from the team. It’s the coach’s responsibility to get every player following the same plays. This requires training, follow-up and inspection. When you let people off the hook without consequences, you are tolerating poor performers. This causes them and the other excellent performers to disrespect you.

The solution is simple. Develop a clear standard for handling change orders, how to price them, the procedure for getting them signed before extra work is started and the documentation required. Then get everyone together to train them on what you expect. Get everyone to agree to the new rules. And then tell them there are NO exceptions unless an emergency situation happens that is life threatening. If and when someone doesn’t follow one of the rules after this session, ask them what they were thinking and why they decided the rule didn’t apply to them. At your next manager’s meeting, have that person explain the situation to the group and get input from all of their peers. The choice is yours: Everyone follows your company standards, or nobody follows the rules.

Construction Business Owner, November 2009