The highlights of Norb Slowikowski’s profitability directives comprise Part I & II of this four-part series. The second half of this series features information from Cecilia Padilla on how technology supports the path to organization and accelerates reaching the goal of maximizing profitability. The second half will focus on:
- creating processes that ensure alignment between the office and the field;
- implementing key job controls in every phase of the overall project;
- applying job cost management techniques to increase profitability; and
- using technology to leverage current, consistent, and accurate information to keep a project on track and to maximize the opportunity for profit.
Slowikowski maintains that contracting organizations that follow the practices listed above will gain numerous benefits, including reducing costly mistakes, increasing communication and collaboration, saving time and money, and ultimately increasing the profitability of projects.
Processes for Alignment
Construction productivity directly impacts profit. Construction managers are feeling the pressure to do more with less. Numerous books and articles have been written discussing how benchmarking, reengineering and quality management are applied to the construction industry. While all these initiatives have merit, there is one area of focus that has a direct impact on productivity and is achieved at a relatively low cost: alignment between the office and the field. Alignment helps teamwork become a reality. The proper alignment of a contractor’s operations is essential to effectively support the field and to ensure that key job controls are in place for each phase of the construction process.
Contractors view processes, whether they are manual or automated, as the foundation on which every phase of a job is supported. Every contractor has numerous processes including estimating, project management, field operations, warehousing, distribution, and back office support such as accounting and purchasing. While these processes exist, are they aligned in the most effective manner to support the end goal of minimizing waste and maximizing profits?
An example of how misalignment can be damaging to productivity would be to consider the contractor that put automation tools on the desks of the office staff. Estimators have onscreen blueprints, draftsmen have computer-aided design tools, and so on. Everything is computerized, modern and efficient. In the field, however, the project manager walks around with a clipboard, taking notes and working from printed reports that were generated days ago. The project manager sends status notes via email after returning to the trailer. The recipient in the office has to input the notes into the computer systems. While everyone is working to the best of their ability with the given tools, there’s a huge disconnect in the company’s processes. As a result, the flow of information throughout the organization is hindered, which is harmful to productivity.
Contractors must create a consistent way of doing things so everyone is following the same processes. When there is a breakdown in the flow of information from one area in the construction process to the next, the result will be lost productivity and increased costs—and that translates to reduced profits.
Key Job Controls
Contractors intuitively know they must be organized to run the business smoothly. Organizing a construction job requires dividing up work among crew members; assigning work and providing clear instructions for carrying out assigned activities; linking up the field with a support system; defining the project manager’s role in supporting the jobsite foremen; and planning and anticipating ongoing needs for jobsite productivity. To complete the organizing process, it’s important to have key job controls in place across all phases of a project to ensure that the jobsite work flows smoothly from beginning to end and that the general contractor’s expectations are met.
Without key job controls, the project begins to manage you. A control is an agreed time for the project leaders to come together, update each other and synchronize plans. A control could be a meeting or a document, such as a percent complete report that allows a project manager or foreman to understand if project milestones are being met satisfactorily.
There are four phases to the construction process:
- startup following the bid award;
- job prep and planning;
- job-in-progress; and
- completion and closeout.
Each phase requires controls, specific information to be shared, and processes to help assure that an effective and efficient job is carried out.
Phase 1: Startup Following the Bid Award
- Job Information Package: Every foreman should receive a comprehensive job information package from the project manager before any job-related meetings are conducted. Foremen will use this information to move forward with the job without constantly calling the office, as well as maintaining organization on the jobsite.
- Blueprint and Estimating Review Meeting: The project manager and the foremen review both the job plans and the estimates to discuss any confusion, concerns or necessary action items that need to take place.
- General Contractor Meeting: The project manager meets with the general contractor so they can align expectations and eliminate any confusion that might lead to work disruptions later.
- Key Job Responsibilities: Everyone must understand their responsibilities and expected results and standards by which they are measured by. There is an accountability checklist to ensure employees are executing their key responsibilities effectively and efficiently.
Phase 2: Job Prep and Planning
- Pre-Job Planning Meeting: The project manager shares project-related information with key participants. The group reviews the project information and develops tactical plans on how to execute day-to-day activities to minimize potential disruptions and delays.
- Walk the Jobsite: After the pre-job planning meeting, it’s beneficial for those same meeting participants to visit the jobsite to get a better understanding for the job, develop questions and modify their individual tactical plans as necessary.
- Contractors’ Responsibilities: Approximately a week before the job starts, the project manager and the foremen have another meeting to go over three key pieces of information for each contracted organization: the scope of work, quality specs for the job and the contractors’ responsibilities as outlined in the contract.
Phase 3: Job-In-Progress
This is the longest phase because it includes a lot of interaction among the project manager, the foremen and the general contractor’s superintendent through the job progression.
- Jobsite Visit Report: The project manager visits the jobsite to resolve issues and exchange information with the foremen. The tool to facilitate this visit is the jobsite visit report, a checklist of items to be reviewed on the job.
- Daily Huddle: Every morning before work begins, the foremen should hold a daily huddle with the crew to enhance teamwork by discussing the goals for the day, reviewing safety issues and obtaining input.
- Look-Ahead Plans: The foremen should be documenting all tasks that will be performed within the week, including the end-of-week projection goal. The plan also will include materials, equipment and labor that are needed to complete the budgeted activities, hours and costs to get the job done.
- Labor Budget: Managing the labor budget back to the overall project estimated hours is extremely important. The project manager must use consistent labor codes to assign and track task hours against. These codes provide feedback to both the office and the estimators to improve the estimation process.
- Status Reports: Status reports are the means for tracking overall productivity of the project. The office needs information from the field to determine the profitability of the job as it progresses. An effective jobsite reporting system will include a daily log, a weekly job progress report, a daily jobsite report, an expense report for jobsite materials purchases and a fieldwork order for handling extra work requests. Extra work should not proceed without the written authorization of the general contractor.
- Materials Checklists: Ensure all materials arrive on to the jobsite according to schedule, in the right amount and the right type, and that there is a stocking plan for the job with a corresponding general contractor-approved lay-down area for the materials.
Phase 4: Completion and Closeout
- The Punch List: Foremen need to develop a punch list while the job is still mobilized with the general contractor’s superintendent and project manager. The punch list items should be completed within a time frame agreed upon with the superintendent, who will sign off on the list to verify that all items were completed satisfactorily. The approved punch list is sent to the project manager.
- Demobilization Inventory: As the project nears an end, the foremen will conduct a final job walk-through to ensure that all equipment is ready to be returned to the shop or warehouse. A final inventory of tools, equipment, and materials will be taken and reviewed with the superintendent, who will help determine what will be returned to the warehouse and what items will be disposed of on the jobsite. The foremen will compare the final inventory to the initial tool and equipment inventory to account for all discrepancies to maintain cost controls.
- Customer Post-Job Review: Upon job completion, the project manager will conduct a post-job review with the general contractor to obtain positive and negative feedback on the project. If the project manager wants to work on more projects with the general contractor, this review helps the project manager make improvements to avoid repeating problems on future jobs.
- Internal Post-Job Review: The project manager will conduct a post-job review meeting with employees . This is an opportunity to analyze everything that transpired during the job, and to determine what was done right, what problems existed and what must be done to correct issues going forward.
What to Expect in Part IV
Aligning the office and the field to create processes is key to success. Knowing how to implement key job controls in every project phase will enable accuracy and efficiency. The final installment in this four-part series will dig deeper into job cost management techniques and technology assets leveraged to increase profitability.
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