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UNIT RATE VARIABILITY IN EGYPTIAN CONSTRUCTION PROJECTS

Conference Paper · April 2007

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AICSGE 6, ‫مؤتمر االسكندرية الدولى السادس‬
Structural Engineering Dept., ‫للهندسة االنشائية والجيوتقنية‬
Faculty of Engineering, ‫قسم الهندسة االنشائية‬
Alexandria University 15-17April 2007 ‫كلية الهندسة جامعة االسكندرية‬

UNIT RATE VARIABILITY IN EGYPTIAN CONSTRUCTION

PROJECTS
H. A. ELSHAKOUR AND R. H. ABDEL-RAZEK
Construction Engineering and Utilities Department, Zagazig University, Zagazig, Egypt
M. A. ELHAMID
Banha Higher Institute of Technology, Banha, Egypt

ABSTRACT: In recent years, lean construction principles have received much

attention as new ways to improve construction performance and labor
productivity. One of the most important lean construction principles is reducing
unit rate variability in construction projects. In this paper, this principle is
examined to show the impact of variability of labor productivity on project
performance. Using labor productivity data collected from 11 construction
projects involving masonry works in Egypt, the baseline productivity, the project
management index, and the coefficient of productivity variation (CV) are
calculated. The baseline productivity and project management index identify the
best and worst performing projects. On the other hand, labor productivity
variability is calculated using the coefficient of productivity variation. 27% of the
studied projects (three projects) have CV values < 65. These projects were the
best performing projects. Seven projects (64% of the studied projects) were
poorly managed and performed. These projects have CV values > 100. The
correlation between variability in labor productivity and performance was also
examined statistically. The correlation coefficient was calculated as 0.879. This
result leads to the conclusion that reducing the variability in daily productivity
is strongly correlated to performance improvement.

Keywords: Construction Productivity, Variability, Lean Construction.

INTRODUCTION

There have been numerous attempts over the years to measure and
improve labor productivity in construction industry. Milestones researches
and studies in the field of construction productivity in Egypt include Abdel -
Razek1,2,3, Abdel-Razek et al. 4, Abdel-Razek and McCaffer 5, Abd Elshakour 6,
and Abdel-Hamid7. Productivity improvement is the key to improve the labor
standard of living, the construction companies' profitability, the construction
industry flourishment, and indeed the nation wealth.
Poor management and other factors can cause unnecessary
changeability in construction conditions that leads to variable performance.
In recent years, lean construction principles have received much considera -
tion as a new way to improve construction performance and labor productiv -

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ity. In this paper, lean construction principles are demonstrated. On e of
these principles is reducing variability in production rate. According to
Thomas et al. 8, reducing variability in labor productivity will result in
improved labor performance. This principle is examined to show the impact
of variability of labor productivity on project performance.
The objectives of this paper are:
a. To list and explain briefly the various lean construction principles, and
b. To examine the relationship between unit rate variability and project
performance.

DEFINITIONS AND BACKGROUND OF LEAN CONSTRUCTION

The word lean was defined by Howell 9 as "Give customers what they
want, deliver it instantly, with no waste." The term "lean" was coined by the
research team working on international auto production to reflect both the
waste reduction nature of the Toyota production system and to contrast it
with craft and mass forms of production 10.
Craft production produces a customer product one at a time using highly
skilled workers and simple and flexible tools 11. The flexibility that craft
production provides is an advantage, but it is achieved at a cost. Mass
production produces large volumes of standardized products using semi -
skilled workers and expensive, single-purpose machines 11.
In contrast to the above stated definitions of craft and mass production,
lean production combines the advantages of craft and mass production. It
provides volumes of a variety of products at a relatively low cost by using
resources of multi–skilled workers at all levels of organization and highly
flexible, increasingly automated machines 11. Lean production aims at
eliminating waste. According to Koskela 12, wastes include overproduction,
waiting, transporting, too much machining (over processing), inventories,
moving, and making defective parts and products. Howell10 defined waste as
failure to meet the unique requirements of a client.
Lean construction is a new way to manage construction. Lean
construction results from the application of a new form of production
management to construction 10.

TRADITIONAL PRODUCTION AND LEAN CONSTRUCTION

Conceptual Basis of Traditional Production Philosophy

Traditional production philosophy (Figure 1) may be outlined as follows 12:

a. A production process is a conversion of inputs to an output.
b. The conversion process can be divided into sub processes, which also are
conversion processes.
c. The cost of the total process can be minimized by minimizing the cost of each
sub process.
d. The value of the output of a process is associated with costs (or value) of
inputs to that process.

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 Material, labor Products
Production process

Subprocess A Subprocess B

Fig. 1. Conventional view of a production process (Koskela12).

Conceptual Basis of Lean Construction Philosophy

The lean construction system saw production as a flow of material,

information, equipment, and labor from raw material to the product Fig. 2.
In this flow, the material is processed (converted), it is inspected, it is
waiting or it is moving. These activities are inherently different. Processing
represents the conversion aspect of production; inspecting, moving and
waiting represent the flow aspect of production 12.

Mov Wait Proces Inspec- Mov Wait Proces Inspect

-ing -ing -sing A tion -ing -ing -sing B ion

Scrap

Fig. 2. Production as a flow process: simplistic illustration. The shaded boxes represent non value-
adding activities, in contrast to value-adding processing activities (Koskela12).

LEAN CONSTRUCTION PRINCIPLES

Lean construction principles relate to a broader objective, which is to

reduce the wasteful activity in a process as a way to improve the value -
adding content. Addressing this objective should reduce cycle time and
improve throughput 8. According to Koskela 12, Ballard and Howell 13:17,
Tommelein 18 and Thomas et al. 8, the principles of lean construction include:
a. Practice just-in-time (JIT),
b. Use pull-driven scheduling,

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c. Reduce variability in labor productivity,
d. Improving flow reliability,
e. Eliminate waste, and simplify the operation, and
f. Benchmark.
The following sections describe briefly these principles.

Just-In-Time (JIT)

What is JIT? What is its relevance for the development and

implementation of lean construction theory and practice? Manufacturi ng JIT
is a method of pulling work forward from one process to the next "just -in-
time"; i.e. when the successor process needs it 15. One benefit of
manufacturing JIT is reducing work-in-process inventory, storage place and
thus working capital. An even greater benefit is reducing production cycle
times, since materials spend less time sitting in queues waiting to be
processed.

Pull-Driven Process Management

The main objective of a "pull-driven" approach is to produce finished

products as optimally as possible in terms of quality, time, and cost, to
satisfy customer demand. To pull means that resources' wait time in queues
should be minimized 18.

Reduce Variability in Labor Productivity

According to Thomas et al. 8 variability in productivity appears to be a

good determinant of good and poorly performing projects. Thus, the goal of
lean construction as stated by Thomas et al. 8 should be to improve
performance by reducing variability in labor productivity.

Improve Flow Reliability

Improving flow reliability means to make sure that adequate resources

are available at the right time 8. One of the most common problems in
construction is the inability of the contractor to deliver materials and/or
other resources at the right time and the right place 19,20. According to
Thomas21, by improving the reliability of flows, better labor and cost
performance can be achieved.

Eliminate Waste and Simplify the Operation

Waste can be eliminated by removing unnecessary or non-value-added

steps from the conversion technology. Removing constraints or disruptions
improves the activity cycle time whereas removing unnecessary steps
improves the subtask or method cycle time 8.

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Benchmarking

Benchmarking may be defined as "a systematic and continuous

measurement process; a process of continuously measuring and comparing
an organization's business process against business leaders anywhere in the
world to gain information which will help the organization to take action to
improve its performance" 22,23.

MEASURES OF VARIABILITY AND PERFORMANCE

Because lean construction has received much attention in recent years

as a new management way to improve labor performance, one objective of
this paper as demonstrated earlier is to examine and demonstrate (if any) the
variability of labor productivity in construction projects in Egypt. Using
productivity data collected from 11 construction projects in Egypt during the
period 1/3/2004-23/7/2004, the relationship between variability in labor
productivity and project performance will be shown. Table 1 shows the
characteristics of the studied projects. Variability in labor productivity is
measured by variations in daily productivity levels over the course of a
project and tested using the coefficient of productivity variation. The baseline
productivity and the project management index (PMI) provide a measure of
project performance. These indexes are illustrated in detailed below.

Baseline Productivity

The baseline productivity is the best performance a contractor can

achieve for particular design. The baseline productivity for each project can
be calculated by applying the following steps to the daily productivity values
for each project 24:
a. Determine the number of workdays that comprise 10% of the total
workdays observed.
b. Round this number to the next highest odd number; this number should
not be less than 5. This number, n, defines the size of (number of
workdays in) the baseline subset.
c. The contents of the baseline subset are the n workdays that have the
highest daily production or output.
d. Calculate the sum of the workhours and quantities for these n workdays.
e. The baseline productivity is the workhours divided by the quantities
contained in the baseline subset.
Because disruptions and lack of resources reduce construction output,
the baseline subset from which the baseline productivity is calculated
contains days when there are little or no disruptions and the resources are
readily available. From Figure 3 if there are adequate resources, no
disruptions, and an appropriate conversion technology is applied, then the
input-output ratio or baseline productivity is affected only by design
complexity. The values of baseline productivity of the studied projects are
calculated and shown in Table 2.

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 Table 1 Characteristics and classifications of the studied projects

No. Project Name Type of Project Work Start date End Location
days date
1 Elmona Residential & 19 11/4/04 13/5/04 Zagazig
project Commercial
2 Elaboor Residential 21 1/5/04 26/5/04 Elaboor
village
3 Shalik Mall Residential & 19 1/3/04 24/3/04 Zagazig
Commercial
4 Elzhour Residential 40 13/3/04 4/5/04 Zagazig
project
5 M.Hassan Residential 22 5/4/04 3/5/04 Zagazig
project
6 Elaboor Residential 39 1/3/04 29/5/04 Elaboor
project a
7 Elaboor Residential 31 11/3/04 29/5/04 Elaboor
project b
8 Elaboor Residential 42 13/5/04 23/7/04 Elaboor
project c
9 Elaboor Residential 34 16/5/04 12/7/04 Elaboor
project d
10 Oraby project Commercial 16 11/5/04 31/5/04 Zagazig
11 Elkodda Residential & 16 3/3/204 23/3/04 Zagazig
project Commercial

Resources Disruptions (Inhibitors)

Labor Congestion Sequencing
Material Weather Rework
Equipment
Tools Work method
Information Inputs Outputs
Support Design complexity
services

Fig. 3. Factor- resource model (Thomas et al.8).

Project Management Index

Thomas and Zavrski 24 defined project management (PMI) as:

PMI = (Cumulative productivity – Baseline productivity) / Baseline (1)

productivity

Where, the cumulative productivity is a measure of the overall effort required to

install the work.
Total workhours (hr)
Cumulative productivity (hr/m2 ) = (2)
Total quantities (m 2 )

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 The PMI is a dimensionless parameter that reflects the contribution of
project management to the cumulative labor performance on the project. The
lower the PMI, the better was the project management’s influence on overall
performance. Higher numbers are indicative of poorer labor performance.
The PMI values for studied projects are calculated and summarized in Table
3 and presented in Fig. 4. PMI values of the studied projects range from
0.202 to 4.23. From Fig. 4, seven projects (i.e. about 64% of the studied
projects) have PMI values > 0.5 and three projects (i.e. about 27% best
projects) have PMI values < 0.4.

Table 2 Baseline productivity of the studied projects

No. Project name Baseline Productivity Cumulative Total Total Work

(wh/m2) Productivity Work Hours
(wh/m2) Days
1 Elmona project 0.572 0.695 19 519
2 Elaboor village 0.472 0.721 21 614
3 Shalik Mall project 0.540 0.979 19 577
4 Elzhour project 0.628 0.990 21 782
5 M.hassan project 0.497 0.708 22 556
6 Elaboor project a 0.624 1.016 39 1,397
7 Elaboor project b 0.434 0.899 31 1,737
8 Elaboor project c 1.186 3.757 42 2,789
9 Elaboor project d 0.628 1.770 34 1,686
10 Oraby project 0.648 1.345 16 641
11 Elkodda project 0.456 0.689 16 891

Variability in Daily Productivity

Figs. 5 and 6 illustrate variability in daily labor productivity for two of the
studied projects, namely project no. 8 and no. 11. The variability in daily
labor productivity for each of the studied projects can be illustrated in the
same way and can be calculated by using the following equation 8:

Variation (Vj ) =
 (urij - baseline productivity j ) 2 (3)
n

Where ur ij = the daily productivity (unit rate) for workday i on project j, and n
= the number of observed workdays on project j.
The variation Vj for different projects cannot be compared directly unless
the baseline productivity values are the same. Therefore, the coefficient of
variation 8 can be calculated as:

Vj x 100
Coefficient of Variation (CVj ) = (4)
(Baseline Productivity) j

Where CV j = coefficient of variation for project j.

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 The values of CV of studied projects range from 38.23 to 217.73. The
higher the CV, the more the project experienced abnormal workdays 8. The
CV values of studied projects are summarized in Table 4 and presented in
Fig. 7.
Fig. 4 showed that projects no. 8, no. 9, and no. 10 have PMI values >
1.00. Fig. 7 showed high variability in daily productivity in these projects.
On the other hand, project no. 1 with PMI value of 0.202, project no. 2 with
PMI value of 0.411, and project no. 11 with PMI value of 0.386 were
considered as best performing projects because PMI values are very small.
Fig. 7 showed minimal variability in daily productivity in these projects.
Thus, Projects that have good labor performance based on the project
management index also exhibit minimal variability in daily productivity
values.
Table 3 Project management index (PMI)

No. Project Name Project Management Index (PMI)

1 Elmona project 0.202
2 Elaboor village 0.411
3 Shalik mol project 0.722
4 Elzhour project 0.638
5 M.hassan project 0.347
6 Elaboor project a 0.645
7 Elaboor project b 0.765
8 Elaboor project c 4.23
9 Elaboor project d 1.878
10 Oraby project 1.154
11 Elkodda project 0.386

4.5 4.23

4
Project Management Index

3.5

2.5
1.878
2

1.5 1.154
1 0.722 0.765
0.638 0.645
0.411 0.347 0.386
0.5 0.202

0
1 2 3 4 5 6 7 8 9 10 11

Project

Fig. 4. Project management indices.

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 8

Daily Productivity (wh/m2)

7
6
5
4
3
2
1
0
0 5 10 15 20 25 30 35 40 45
Work Day

Fig. 5. Variability in daily productivity for project no. 8.

Daily Productivity (wh/m2)

6
5

3
2
1

0
0 2 4 6 8 10 12 14 16 18

Work Day

Fig. 6. Variability in daily productivity for project no. 11.

Table 4 Coefficient of productivity variation (CV)

Proj. Project Name Coeff. Of Productivity

No. Variation (CV)
1 Elmona project 38.23
2 Elaboor village 62.26
3 Shalik mol project 102.48
4 Elzhour project 108.6
5 M. hassan project 99.34
6 Elaboor project a 106.63
7 Elaboor project b 108.53
8 Elaboor project c 217.73
9 Elaboor project d 195.7
10 Oraby project 111.883
11 Elkodda project 53.02

MG-9
 250

217.73
Coefficient of productivity variation

195.73
200

150

108.6 108.53 111.883

102.48 106.63
99.34
100

62.26
53.02
50 38.23

0
1 2 3 4 5 6 7 8 9 10 11

Project

Fig. 7. Coefficient of productivity variation (CV).

RELATION BETWEEN CV AND PMI

The coefficients of productivity variation and project management indices

for studied project are given in Table 5. These values are also plotted in
Figure 8. The statistical correlation coefficient between the CV and PMI is
also shown in Table 5. The implication of the above analysis is that the
variability in daily productivity is more highly correlated to project
performance. Variability in labor productivity is a good determinant of good
and poorly performing projects.

Table 5 Values of CV & PMI of the studied projects

Project Project Coeff. of 1 Elmona

No. Project Management Productivity project
Name Index (PMI) Variation (CV) 1
Project Name
2 Elaboor village 0.411 62.26
3 Shalik mall project 0.722 102.48
4 Elzhour project 0.638 108.6
5 M.hassan project 0.347 99.34
6 Elaboor project a 0.645 106.63
7 Elaboor project b 0.765 108.53
8 Elaboor project c 4.23 217.73
9 Elaboor project d 1.878 195.7
10 Oraby project 1.154 111.883
11 Elkodda project 0.386 53.02
Correlation All project 1 0.879
coef.

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 project management index 4.5
4
3.5
3
(PMI)

2.5
2
1.5
1
0.5
0
0 50 100 150 200 250
Coefficient of productivity variation (cv)

Fig. 8. Relationship between PMI and CV

CONCLUSION

This paper examined one of the most important lean construction

principles, namely reducing variability in labor productivity. Using labor
productivity data from masonry activities on 11 construction projects, the
project performance indicators and the unit rate variability were calculated.
The project performance indicators include baseline productivity and project
management index (PMI). They can identify the best and worst performing
projects. PMI values of three projects are found to be very small (PMI < 0.4).
Thus, about 27% of all studied projects are performing well. Seven projects
have PMI values > 0.5. Thus, about 64% of the studied projects are the
poorly performing projects.
The variability in labor productivity were calculated and compared with
project performance. Variability in the daily productivity data was found to
be an important delineator between good and poorly performing projects.
Three projects (27% of the studied projects) have CV values < 65. These
projects were best projects. Seven projects (64% of all studied projects) were
most poorly managed. These projects have CV values > 100. The correlation
between variability and performance was also examined statistically. The
correlation coefficient was calculated as 0.879.
The results of this study seem to support the work of recent lean
construction authors. The results showed that lean management concept
does work and is an important tool for project and construction
management. Further research into other lean construction principles
should be applied in order to improve labor productivity and overall project
performance.

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