Construction

Productivity
Productivity Measurement and
Benchmarking
Productivity
 By popular definition productivity simply refers to the general
efficiency of an organization or individual

 The output of any aspect of production per unit of input

 Economic measure of output of a worker, machine, or an entire

national economy in the creation of goods and services to produce
wealth

 In the business world, productivity measures investment in capital,

such as buildings, machines, raw materials & in labour against the
profits from the sale of the product
Productivity
 A company that most minimizes input and maximizes output has the
highest productivity

 A total concept that addresses the key elements of competition i.e.

innovation, cost, quality and delivery

 Should be viewed as value adding in addition to optimizing

 Construction is a labour intensive process

 Manpower is one of the productive resources in construction

 Construction productivity largely depends upon human performance

 Reliable measures of productivity is output per work-hour being

achieved by workers
Why is Productivity Important?
 Extremely vital performance measurement tool within the
construction industry

 Due to size of construction industry productivity trends

carry immense consequences for the economy as a
whole

 Productivity growth is important to an individual

enterprise, an industry or an economy

 Construction industry accounts for 3 – 8% of the GDP in

most countries
Why is Productivity Important?
 Productivity improvement in construction industry may
have a significant impact on improving GDP

 Productivity growth is the key determinant of

international competitiveness in the long term

 Improving relative productivity growth improves a

country’s competitive position

 The construction industry – most challenging and

demanding still many opportunities for productivity
improvement
Factors Affecting Construction Labour Productivity
 Project uniqueness

 Technology

 Management

 Labour organization

 Real wage trends

 Construction training
Factors having adverse effect on productivity
 Overtime and or Fatigue
 Errors and omissions in plans and specifications
 Multitude of change orders
 Design complexity and Design completeness
 Stacking of trades
 Dilution of supervision
 High accident rate
 Jurisdictional disputes
 Work rules and restrictive work practices
 Availability of skilled labour
 Reassignment of manpower from task to task
 Material location – above ground level/above floor level
 Adverse temperature or weather
 Inadequate lighting
 Regulations of various types
 High absenteeism
 High turnover
 Material shortages
 Ground water level
 Attitude of the workforce
 Crew size and composition
 Economic conditions & level of unemployment
 Size and duration of the project
 Timeliness of decisions
 Impractical QA / QC tolerances
 Uncontrolled breaks
 Time of the day & day of the week
 Inadequate temporary facilities: parking, change / rest rooms etc
Quality and Productivity
 Folklore True Relationship
 Outmoded relationship Modern view of Relationship

Quantity
Quantity
Quality Quality

Improvement of Process – TQM

Other Benefits
Leads to greater uniformity of
product Better competitive position
Reduces mistakes and rework Happier people on the job
Reduces waste of manpower, More jobs
machine,time and materals
Improved morale
Increases output with lowered cost
Quality and Productivity
 Deming’s Quality Chain Reaction

Customer
Satisfaction
Quality Market Share
Prices

Costs

Profits

Productivity

Improve Quality Costs decrease because of less rework, Productivity

fewer mistakes, delays, snags, better improves
use of machine, time and materials
Productivity and Safety
 Worldwide – construction industry produces more injuries than other
industries

 Construction industry – often criticized for poor performance (low

productivity, waste, health and safety problems)

 Strongest relations exist between work organizational factors,

working conditions & health & absenteeism

 Research shows that occupational safety and health improved (less

health complaints and less accidents) when working conditions and
work organization ameliorated

 Improving safety improves productivity

Methods of Improving Productivity
The following factors can lead to the improvement in productivity:
 Training programs for labour
 Incentives in contract for good performance
 Enough tools in working place and proper planning
 Optimizing site facilities
 Availability of resources
 Competition between crews, areas or shifts
 Good supervision and optimum manpower
 Short interval scheduling
 Innovative materials and equipment
 Time lapse film analysis for critical activities
 Cost reporting and work sampling of critical activities
 Time and motion studies to improve efficiency, reduce
fatigue and work smarter
 Safety programs
 Use of precast and prestressing concrete elements
 Critical path method of planning, scheduling and control
 Value engineering
 Worker motivation programs
 Constructability review of design
 Standardization
 Preplanning activities
 Effective utilization of sub-contractors
Productivity Calculation
Inputs Output
Work hours Value of work (Rs)
Quantities
Conversion Factor
Equipment
Rupees
Materials
Energy
Capital
Models of Productivity
 Economic Model
TFP = Total Value of Output / Total Value of Input

= Output (Rs) / Input (Rs)

Where TFP is the total factor productivity and

Input = Labour + Material + Equipment + Energy + Capital

Project Specific Model (Construction)

Productivity = Output (Activity unit) / Input (Rs) = Sq. mts / Rupees
Activity Oriented Model
 Measured in terms of Labour Productivity
 Can be measured in two ways:
 a) Output / Input or b) Input / Output
 Input can be in terms of Cost or Man hours and
Output can be in terms of Unit of work performed
 Generally the second model i.e. Input / Output is
used to measure the productivity but again the
choice depends on the monitoring party
Input and output being the same the productivity
comparison depends on the following factors
 Size of the Job
 Material Availability
 Schedule of Activities
 Connection or interlinking of activities
 Support operations
 Location
Therefore a comparison of productivity can only
be made if the conditions are similar and also
the activities are similar.
Major causes leading to poor productivity
 Congestion
 Sequencing
 Lack of materials

A high variability in the unit productivity value is

an indication of poor productivity and a low
variability indicates good productivity
Productivity Benchmarking
 Benchmarking is a systematic process of searching for the best
practices, innovative ideas and highly effective operating procedures
that lead to superior performance

 Purpose of Benchmarking
 a) Analyze the operations to
 - Identify the critical cost components and areas for improvement
 - Reduction in the cycle time of activities

 b) To get knowledge of the competition & industry leaders

 c) To incorporate the best of the best – learn & emulate the best
 d) To gain superiority over competitors
Types of Benchmarking
 Internal
- Comparison among similar operations within
one’s own organization
 Competitive
- This is comparison to the best of the direct
competitors
 Functional
- Comparison of the methods with the companies
with similar processes in the same function
outside one’s country
Types of Benchmarking
 Generic
- Comparison of work processes to others who
have innovative, exemplar work processes
 Cooperative
- Contacting the best in class firms and asking
them for knowledge sharing
 Collaborative
- A group of firms sharing knowledge about a
particular activity
Benchmarking Roadmap

Determine what to
Benchmark Identify Performance Gap
and Reasons for it
Determine Key Factors to
be measured
Develop Action Plan to
Meet And Exceed
Develop Data Collection
Methodology
Integrate Plan into
Collect Data Business Practices

Improvement
Identify Foremost Practices
Within and Outside Companies
Benchmarking Scope

 Products and Services

 Business Processes

 Performance Measures
Performance Indicators
 Benchmarking is essentially for continuous
improvement of any organization

 Parameter for benchmarking should be based

on Key Performance Indicator (KPI)

 There can be many KPI’s in the construction

industry to measure the job performances
Key Performance Indicators
A few major ones are listed below
 Cost
 Scheduled Duration
 Quality Labour
 Scope of work Productivity
 Procurement
 Construction Rework
 Planning Material Wastage
 Engineering Design Equipment
 Operational Health & Safety Activities at
 Sub-contracts planned rate
Labour Productivity Study
 The study focused on evolving a framework for
benchmarking Labour Productivity for building projects in
India
 Data were collected from 39 sites through questionnaire
and from 12 buildings project through personal
interviews
 The sites were located in Mumbai, Bangalore, Chennai,
Hyderabad and Delhi
 Labour productivity for these activities is benchmarked
by comparing productivity levels both within and among
the regions
 Observed productivity at national level is compared with
the international levels
Benchmarking in Context of Construction Industry

Major portion of buildings project cost consists of

the following activities
 Concreting
 Formwork
 Masonry
 Reinforcements
Labour productivity can be benchmarked very
well based on these four activities
Concrete productivity in various regions in India

Regions Productivity (cum/manday)

Mumbai 2.97
Bangalore 0.85
Chennai 0.79
Hyderabad 0.99
Delhi 0.49

India Mean
Productivity cum/manday 1.22
Comparison of Concrete Productivity with
International Standards
Country M’hr/cum cum/M’day
US 1.00 8.02
England 1.50 5.35
China 3.69 2.17
Netherlands 1.24 6.47
Japan 1.29 6.22
Korea 1.26 6.36
Saudi Arabia 1.88 4.27
Turkey 2.32 3.44
India 2.69 2.97
Labour Productivity for Formwork
 Depends on factors like:

- Type of Formwork system used

- Quantity of formwork used
- Type of Structure
- Shifting methods
- Labour skills
- Resource availability
- Safety and other issues
Formwork productivity in various regions in
India
Regions Productivity (Sqm/Manday)
Mumbai 1.42
Bangalore 1.90
Chennai 2.19
Hyderabad 1.65
Delhi 1.10

India Mean
Productivity Sqm/Manday 1.7
Formwork productivity in various countries
Country M’hr/Sqm Sqm/M’day
US 0.82 9.79
England 1.23 6.53
China 3.02 2.65
Netherlands 1.01 7.90
Japan 1.05 7.59
Korea 1.53 7.77
Saudi Arabia 1.54 5.21
Turkey 1.90 4.20
India 4.71 1.70
Labour Productivity for Masonry
Depends on factors like
- Size of Block
- Method of shifting
- Lead and shift
- Labour skill
- Type of Structure
- Safety and other issues
Brick masonry productivity in various countries
Country M’hr/cum cum/M’day
US 2.35 3.40
England 3.53 2.27
China 8.70 0.92
Netherlands 2.92 2.74
Japan 3.03 2.64
Korea 2.96 2.7
Saudi Arabia 4.42 1.81
Turkey 5.48 1.46
India 6.35 1.26
Labour Productivity for Reinforcement
• Depends on the factors like
• Diameter of bar
• Bar bending schedule
• Quantity of reinforcement
• Method of transport
• Availability of bar bending and cutting machine
• Skill of labour
• Type of Structure
• Safety
Reinforcement productivity in various regions in
India
Regions Productivity (Kg / Man Day)
Mumbai 108
Bangalore 86
Chennai 82
Hyderabad 79
Delhi 56

India 90.5 (Mean)

Conclusions
 Construction productivity levels in India are low
compared to international levels
 The reasons identified for low productivity
included less degree of mechanization,
conventional practices, lack or training and low
focus on productivity by management
 The data used in the study is from large
companies executing large building projects.
There is a need to study the productivity levels in
other types of projects
Thank You