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Lower Costs While Increasing Profitability? Yes You Can!. Ted Garrison New Construction Strategies [email protected] www.TedGarrison.com 800-861-0874. What’s the Biggest Source of Lost Productivity?. Waste!. Amount of Waste . Value Added 10%. Waste – 57%. Support Activity 33%. - PowerPoint PPT Presentation
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1 1www.conexpoconagg.com
Lower Costs While Increasing Profitability? Yes You Can!
Ted GarrisonNew Construction Strategies
800-861-0874
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What’s the Biggest Source of Lost Productivity?
Waste!
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Amount of Waste
Waste – 57%
Value Added 10%
Support Activity 33%
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10 Types of Waste
1. Defects – anything that doesn’t work
2. Waiting –Liska report says 20% of loss productivity
3. Over production – storing in warehouse or estimating errors
4. Transportation – unnecessary loading or moving materials
5. Motion – searching for stuff
6. Over processing – duplicate forms or unnecessary reports
7. Inventory – unused stuff only clutters work space
8. Untapped employee creativity – potentially the worst
9. Stress/Over burden – it just zaps our energy
10. Unevenness/variation – destroys long-term productivity
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Chase Up™
How much time do you spend chasing people?
The 11th form of waste – Chase Up™!
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Reliability
Which weighs heavier on a project in terms of reliability?
The reliability of people to make and keep promises?Or
The reliability of stuff?
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Chase-Up™• One of my radio guests, Ed Anderson, coined the
expression – Chase-Up™! NCS Radio (www.NCS30.com) interview: www.jackstreet.com/jackstreet/WCON.AndersonE2.cfm
• He defines Chase-Up™ as “the act of checking over and over again the progress of a commitment or promise by either contacting other people, or directly inspecting the works to determine the progress.”
• Some call it: follow-up, inspecting, expediting• How much time are you wasting?• What could you do with that saved time?
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Chase-Up Syndrome™
• Day-in and day-out, what is the average % of your time spent chasing the progress of commitments made to you? ________
• What % of your time is spent being chased by others? ________
• Obviously this is so important that everyone has been formally trained on how best to chase-up. So, what are the top three best practices of Chase-Up™ taught in your class?
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Chase-Up Syndrome™ • Let’s say we can reduce Chase-Up™ by 10%• If average worker earns $75,000 – that equals a
$7,500 savings per worker or increased profitability • If you have 10 people – you could eliminate one
• What are you going to do with all that extra time?• Be more productive?• Improve planning to reduce the schedule?• Improve quality?• Are you satisfied with your safety progress?
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Chase-Up Syndrome™
• Cost, schedule, quality, & safety are a reflection of:
Reliability!
• Reliability to make and keep commitments, which allows
• Reliable planning and production
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Chase–Up Syndrome™
• Chase-Up™ adds no value!• We can agree that some external discipline
(chasing) must be applied – but how much?
• If Chase-Up™ doesn’t guarantee lower costs, faster schedules, higher quality, improved safety, what does it guarantee?• Higher costs and we don’t even know how much
more because we don’t measure Chase-Up™!
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Example• Ten slabs need to be placed first thing Friday
morning!
• Your electricians have agreed to complete all imbedded slab work by close of business Thursday!
• Electricians lied – they hid a buffer!• You lied because you asked for it sooner than you needed!• This creates inefficiency!
• Which crews would require the most Chase-Up™?
You don’t know!
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Example• Compare 2 subs: one 40% reliable, the other
90%
• Which one do you chase the most?
• On a typical project, how long does it take to establish a contractor’s reliability?
• Would it be worthwhile to reduce that time to days, and to be able to measure it objectively?
• If “YES”, HOW do we measure the “Reliability of People to make and keep commitments” objectively?
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Example
• We had 10 slabs to get ready
• Of those, let’s say 6 were completed 100%
• The remaining 4 were 95% complete
• Did they meet their commitment – yes or no?
• Therefore, their CRI (Commitment Reliability Index) is:
60%Is this a fair evaluation?
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Example• How do we normally pay people?
• Earned value – which is measure by productivity• EV = $9,800 • [6 x $1000 x 100% = $6000] + [4 x $1000 x 95% = $3800] =
$9800
• Let’s turn things on its head and ask: • What if we paid people based on reliability first and
productivity second?
• Do you think that would change performance?• Reliability payment: $6000• [6 x $1000 x 100% = $6000] + [4 x $1000 x 0% = $0] = $6000
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CRI (Commitment Reliability Index) – Case Study
Before action was taken on learning• CRI trend was slightly positive – 45% to 48%• Variance around trend line significant
Tells us we are not very reliable, but doesn’t tell us what to do!
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Identify the Problem Case Study
• If someone doesn’t meet his commitment get them to define the reason in as few words as possible
• This isn’t a reprimand – it’s about identifying the problem
• Chart the problems in a histogram
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Chart the Problem – Case Study
Tells us we are not very good at planning & coordination, but
doesn’t tell us what to do about the problems!
Pareto Principle indicates 20% of the issues will cause 80% of the problems!
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Category Root Cause Task ID Date
*1*1
*1
*1
*2*2*2*2
Root Cause – Case Study
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Commitment Reliability Index (CRI) Case Study
CRI trend was slightly positive (45% - 48%)
Variance around trend line is sizable and trend lag on the low side (less reliable)
CRI trends very positive (49% to 84%)Variance around trend line is less than before , and trends on the high side (more reliable)
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Applying the ApplicationWeekly/daily production control & commitmentsAfter getting weekly commitment – need to capture
daily actions
Monday Morning: What are you going to do this week?
Tuesday Morning: Did you do what you said you were going to do yesterday?• If not,
• Then why not in as few words as possible• Categorize (weather, planning, coordination, materials…)
• What are you going to do today?
Repeat process the rest of the week!
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Review of CRI & Chase-Up™
1. Of 10 slab preparations committed to be completed:• 6 are 100% completed – 4 are 95% completed
2. CRI = Actual # completed/Total # committed to• 6/10 = 60%
3. A measure of reliability to:• Make & keep commitments• To plan & execute: “Did you do what you said you were going to do?”
4. Not a measure of productivity or production
5. What do you think is the average CRI on a non-lean project when first measured?
55%
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What Are Your Thoughts or Questions?
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Final Thoughts• Planning is critical for improved performance
– but without reliability it’s impossible to plan• Most people are trying to do their job - so
help them to remove the obstacles to doing their job
• Get rid of or avoid those that don’t want to fix the reliability issues
• This is something you can implement immediately and get immediate results
• So what’s stopping you?
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Lower Costs While Increasing Profitability? Yes You Can!
Ted GarrisonNew Construction Strategies
800-861-0874