lower costs while increasing profitability? yes you can!
Post on 23-Feb-2016
35 Views
Preview:
DESCRIPTION
TRANSCRIPT
1 1www.conexpoconagg.com
Lower Costs While Increasing Profitability? Yes You Can!
Ted GarrisonNew Construction Strategies
Ted@TedGarrison.comwww.TedGarrison.com
800-861-0874
2 2www.conexpoconagg.com
What’s the Biggest Source of Lost Productivity?
Waste!
3 3www.conexpoconagg.com
Amount of Waste
Waste – 57%
Value Added 10%
Support Activity 33%
4 4www.conexpoconagg.com
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
5 5www.conexpoconagg.com
Chase Up™
How much time do you spend chasing people?
The 11th form of waste – Chase Up™!
6 6www.conexpoconagg.com
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?
7 7www.conexpoconagg.com
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?
8 8www.conexpoconagg.com
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?
9 9www.conexpoconagg.com
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?
10 10www.conexpoconagg.com
Chase-Up Syndrome™
• Cost, schedule, quality, & safety are a reflection of:
Reliability!
• Reliability to make and keep commitments, which allows
• Reliable planning and production
11 11www.conexpoconagg.com
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™!
12 12www.conexpoconagg.com
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!
13 13www.conexpoconagg.com
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?
14 14www.conexpoconagg.com
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?
15 15www.conexpoconagg.com
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
16 16www.conexpoconagg.com
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!
17 17www.conexpoconagg.com
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
18 18www.conexpoconagg.com
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!
19 19www.conexpoconagg.com
Category Root Cause Task ID Date
*1*1
*1
*1
*2*2*2*2
Root Cause – Case Study
20 20www.conexpoconagg.com
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)
21 21www.conexpoconagg.com
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!
22 22www.conexpoconagg.com
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%
23 23www.conexpoconagg.com
What Are Your Thoughts or Questions?
24 24www.conexpoconagg.com
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?
25 25www.conexpoconagg.com
Lower Costs While Increasing Profitability? Yes You Can!
Ted GarrisonNew Construction Strategies
Ted@TedGarrison.comwww.TedGarrison.com
800-861-0874
top related