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  1. 1. Hashemite University The Impact of Scheduling Decisions on Productivity Construction Planning and Scheduling Shaha Maiteh, Tamara Ta'amneh 2014
  2. 2. Abstract Factors affecting construction in were disclosed in previous studies carried out by the authors, which confirmed that the construction industry has experienced productivity problems in many countries. The objective of this paper is to identify factors that should be focused upon, when productivity improvement is to be initiated. To do so, 34 project managers working in the construction industry completed a structured questionnaire survey and the factors were ranked according to their perception of their levels of influence and their potential for improvement based on their overall experience in managing projects in the industry. To supplement the questionnaire data, in depth interviews were conducted with some project managers. We will focus in this report on two important factors which are Working overtime, increasing Workforce (Crowding). This study is intended to create the foundation for further study of construction productivity measurement and improvement, which aims to lead to overall productivity improvement.
  3. 3. Table .1 Critical factor influencing the construction industry Rank Factors Influence ranked score Potential ranked score Total CFI score RII 0 1 2 3 4 5 0 1 2 3 4 1 Lack of material 0 3 5 2 8 16 0 1 14 14 5 358 0.405 2 Incomplete drawing 0 2 3 10 12 7 0 1 13 14 6 330 0.373 3 Incompetent supervisors 0 3 7 7 10 7 0 2 11 14 7 329 0.372 4 Lack of tools and equipment 0 4 4 10. 12 4 0 1 12 16 5 309 0.350 5 Absenteeism 0 3 11 10 8 2 0 2 10 19 3 307 0.347 6 Poor communication 0 2 9 12 4 7 0 3 11 13 7 301 0.340 7 Instruction time 0 1 8 11 9 5 0 1 11 16 6" 299 0.338 8 Poor site layout 0 5 7 8 10 4 0 1 13 14 6 298 0.337 9 Inspection delay 0 0 6 14 10 4 0 1 13 19 1 294 0.333 10 Rework 0 6 5 12 7 4 0 1 12 15 6 291 0.329 11 Occasional working overtime 1 2 11 11 7 2 0 4 7 18 5 266 0.301 12 Change orders 0 2 7 13 11 1 0 5 13 13 3 265 0.300 13 Tools/equipment breakdown 0 5 8 13 6 2 0 1 13 15 5 261 0.295 14 Specification and standardization 1 6 9 8 7 3 0 2 11 16 5 261 0.295 15 Interference fromother trades or other crew members 0 3 12 12 5 2 0 1 18 11 4 245 0.277 16 Workersturnover and changing crewmembers 0 2 16 11 4 1 0 6 9 13 6 233 0.264 17 Scheduled working overtime 2 6 9 12 4 1 1 2 11 15 5 226 0.256 18 Safety (accidents) 0 10 12 6 1 5 0 3 10 16 5 220 0.249 19 Poorsite conditions 0 5 4 13 7 5 2 6 19 6 1 207 0.234 20 Changing of foremen 2 6 12 10 2 2 0 4 11 14 5 204 0.231 21 Overcrowding 0 8 9 7 7 3 0 9 16 6 3 190 0.215 22 Shift work 7 5 7 11 3 1 5 5 7 14 3 182 0.206 23 Weather 1 5 15 9 2 2 7 11 12 4 0 114 0.129
  4. 4. Table ofContent Abstract ………………………………………….………… Table of Content …………………….……….……..……… Introduction ………………………………………….…….. Working Overtime...…………………………………..…… Increasing the Workforce (CROWDING).………………. Summary and Conclusion…………………..……………… References……………………………………………………
  5. 5. Introduction As a contractor undertakes a construction project, he or she begins to make decisions that are intended to contribute to the efficient delivery of the final constructed facility to the owner. These decisions ideally take into account the impact that given strategies will have on the project costs, schedule, and quality. This requires the decision maker to be cognizant of the impact that his or her directives will have on the overall project. While very little is published on the relationship among project costs, schedules, and quality, it should be clear that there are often very close associations between them. Many decisions made regarding the schedule are those intended to reduce the duration of selected activities. While the rationale for these decisions may appear logical at first glance, they may have adverse impacts on other aspects of the project, especially in terms of productivity.
  6. 6. Working Overtime A common response to the need to accomplish more work in a smaller time frame is to have workers work overtime. The workers are already on site and they simply need to be informed of the need to work additional hours each day or to work on the week- ends. What will the impact be on productivity if workers are asked to work overtime? Perhaps, if they are asked to work overtime for two or three days, the adverse impact may hardly be noticeable or may be nonexistent. However, it is generally accepted that working overtime for an extended period of time adversely impacts productivity. While little has been published on this topic, some have used the following formula to predict the productivity impact of working overtime for an extended period: Eff (%) = 100% — 5 [(days — 5) + (hours — 8)] % Where: Elf = Worker efficiency based on 100% for a regular 40-hour week. days = Number of days worked per week. hours = Number of hours worked per day. While generic in its format, the equation does give some insight into the impact that overtime can have on worker productivity/other considerations have to be taken into account before placing heavy reliance on the equation. For example, since setting up an operation consumes a considerable amount of time, it would seem logical that the overtime should first be applied to the existing workdays rather than adding another workday to the schedule.  If workers carpool, the impact of having; some workers working overtime may have an adverse impact on morale.  If workers commute considerable distances to get to the work site, there will be additional considerations. By examining the above formula, one can get a quick glimpse of the impact of overtime on labor productivity. Based on the formula, the associated efficiencies have been determined for given overtime schedules (see Table.1). Note that the normal 40- hour workweek has been defined as the benchmark for 100% efficiency.
  7. 7. For example, if 12 hours are worked each day for seven days per week (84 hours per week), the efficiency drops to 70%. For this scenario, it can be said the productivity of this 84-hour workweek is equivalent to working 58.8 hours at 100% efficiency. In addition to the drop in productivity, the decision maker must also evaluate the impact of this scheduling decision on the costs of wages. Obviously, in an 84-hour workweek, more than half of the time will be worked at premium wages. Table.1 IMPACT OF SCHEDULED OVERTIME ON LABOR PRODUCTIVITY Hours/Day Days/Week Hours/Week Efficiency (based on 40 hr.) Effective Fir./Week 8 5 40 100% 40 9 5 45 95 42.75 10 5 50 90 45 11 5 55 85 46.75 12 5 60 80 48 8 6 48 95 45.6 9 6 54 90 48.6 10 6 60 85 51 11 6 66 80 52.8 12 6 72 75 54 8 7 56 90 50.4 9 7 63 85 53.55 10 7 70 80 56 11 7 77 75 57.75 12 7 84 70 58.8 Example: A contractor employs a workforce of 20 workers on a construction site for a private owner. The workers are paid an average wage of $12.00 per hour. Because of slippage in the schedule, it now appears that the project will not be completed on time, and there is a liquidated damages provision of $1,000 per day for every day that the project is extended beyond the contractual deadline. The contractor is now contemplating working 12 hours per day for five days each week. If the contractor expects to make up or shorten the project duration by ten days, is this a viable option?
  8. 8. Considerations: By using the formula on overtime or by referring to the information in Table.1, it is easy to determine that the 60 hours worked each week per worker will be at a level of productivity achieved with 48 hours of work (using a 40-hour workweek as a baseline). Thus, if the 20 workers are assigned to this same work schedule, the project duration will be reduced by eight hours or one day for each week of such work. Therefore, it will take ten weeks to reduce the schedule by ten days. What Is the Cost of Overtime? Since the average wage of the workers is $12.00 per hour and since any work hours above 40 hours are paid at an overtime rate of $18.00 (assuming time and a half), it can be determined that the premium pay, the overtime portion of the base wage, is $6.00 per hour for 20 hours each week, or $120.00 per worker. The cost of the overtime pay for the entire workforce is $2,400 per week. From this, the contractor might very well conclude that each day that the duration is shortened will cost $2,400 (the cost of the overtime portion of the wage). What Is the Cost of Lost Productivity? It must be realized that working 60 hours each week nets only 48 hours of regular per- formance. The contractor's estimate assumed one hour of production for every hour worked. This means that there are 12 hours of regular work hours lost each week per worker, which equates to $144 per week per worker, or $2,880 for the 20 workers. Another way of examining the production and overtime cost issue is to simply look at the additional labor costs incurred each week. Since the contractor will be paying straight time wages for 40 hours and time and a half for 20 hours, this is essentially the same (in terms of costs) as incurring a straight time labor wage cost for 70 hours. Since only 48 hours of production are realized, it can be said that the contractor loses 22 hours of wages each week that are attributable to the overtime cost and the lost productivity. The 22 hours at straight time would cost $264 ($12.00 X 22) per worker each week. This equates to a weekly cost of $5,280 for the crew of 20 workers. Note that this is the same as the sum of the overtime cost of $2,400 and the lost production of $2,880. Thus, at a cost of $5,280, the contractor can avoid a liquidated damages charge of $1000. What Are the Savings? When compared to the liquidated damages of $1,000 per day, it appears that the added cost of overtime and the lost production far exceeds the cost of damages. If the numbers were a little closer, as they might be if there was a five-person crew only, some additional considerations should be addressed.
  9. 9. For example, every day that the project duration is shortened will also reduce the number of days that the equipment and staff will be required on the project. The superintendent might be paid $1,000 per week, resulting in an additional savings of $200 per day. Depending on the type of equipment being used on the site, there will be additional savings, especially if the equipment is rented or could be utilized on another site. There are certainly other considerations that are difficult to quantify. For example, the company's reputation might be bolstered if it can deliver the project on time, and this might be beneficial for being awarded future contracts. INCREASING THE WORKFORCE (CROWDING) Working overtime may be desirable in situations where a quick response is needed or where training costs for certain skills are high. However, a contractor may also decide to add extra workers to the workforce. In some cases, this added workforce may be asked to work on a second shift. On new construction projects, this may not be explored due to the requirements for additional lighting and the lack of supervisory or managerial personnel for the second shift. If additional workers are employed on the regular shift, it stands to reason that some complications can arise, especially if the workforce is increased by a significant amount. When additional workers are hired on a construction site, management must consider the impact that these workers will have on the existing resources. For example, is there an adequate supply of hand tools and various pieces of equipment? It would be foolish to double the crew size for concrete placement without also increasing the supply of concrete vibrators and screeds. If the resources can be provided, the next consideration is the impact that the additional workers on the site might have on labor productivity.
  10. 10. This possible reduction in productivity can be attributed to the crowding that can occur in a work area, shown in the following formula: Eff (%) = 115% — 15 (size of expanded workforce/size of normal work force) % Where:  Eff = Worker efficiency based on 100% for a normal workforce. From this formula, the productivity can be computed when workers are asked to work under conditions of crowding (see Table .2). Table.2 THE IMPACT OF CROWDING ON LABOR PRODUCTIVITY Relative Size of Workforce Relative Productivity Normal %100 10% above Normal 98.5% 2 Times Normal 85% 3 Times Normal 70% 4 Times Normal 55% 5 Times Normal 40% 6 Times Normal 25% Based on the computed impacts of crowding on productivity, it can be seen that a 10% increase in the crew size will have only a minor impact on worker productivity. Often, the evaluation should not be based on the total workforce but rather on the actual work being done. For example, if a project has 100 workers and 10 additional pipefitters are hired, the impact on productivity, as assessed with the use of the crowding formula, will be small. However, the impact might be quite adverse if the pipefitters are assigned to a work area where 2 pipefitters were already working. This would result in 12 workers in an area previously occupied by 2 workers.
  11. 11. The impact will be compounded if crew stacking occurs. This will occur when concurrent activities are scheduled for the same location as a result of a change or where some type of project compression is required. Crew stacking is not specifically addressed by the above formula because it is focused primarily on an increase in crew size. If other crews are also forced to work in the same area, productivity will be com- promised further. This loss in productivity will arise from crews competing for access to the same doorways and passageways, and they may also compete for the use of the same tools or power sources. In some cases, their productivity will be compromised simply through the inability to store materials or tools conveniently and to move freely. Such crew stacking conditions might require crew sizes to actually be reduced. Example: A specialty contractor employs a workforce of 20 carpenters on a construction site who are paid an average wage of $12.00 per hour. The carpentry work is running behind schedule and the contractor is being faced with a liquidated damages provision of $1,000 per day for every day that the carpentry work is extended beyond the contractual deadline. The contractor would like to explore the possibility of increasing the workforce to 30 carpenters. If the contractor expects to make up or shorten the project duration by five days, is this a viable option? Considerations: By using the formula on crowding, it is computed that the 50% increase in the number of carpenters will result in a level of productivity that is 92.5% that to be expected in a 40-hour workweek. Normally, the 20 workers would each accomplish 40 hours of work each week for a total of 800 productive hours per week for the entire crew. With the additional workers, the productivity level per worker will be reduced to 37 hours each week per worker, or a total of 1,110 productive hours per week for the crew. From this, it is determined that the 30 workers will reduce the schedule by 0.38 week ((1110-800)/800), or 1.94 days for each week that is worked. If the additional ten carpenters are employed for three weeks, the carpentry work will be reduced by more than five days. What is the Cost of Lost Productivity? Working with the additional carpenters, the workforce will have 37 productive hours each week. Thus, the contractor will lose three productive hours for each carpenter each week, which equates to 90 hours lost each week for the entire crew, or 270 hours over a three-week period. This will cost the contractor $3,240 in lost production over the three-week period.
  12. 12. What Are the Savings? By working a crew of 30 workers, the schedule will be shortened by five days. When considering the liquidated damages of $1,000 per day, it is apparent that $5,000 will be saved in liquidated damages by employing the additional ten workers. Of course, there are other considerations. Are the additional carpenters as skilled as the 20 already on the project or are they relatively unskilled and unfamiliar with the company? This will dictate to a large extent whether the formula to compute productivity is even realistic. The assumption in the formula is that the additional workers are of the same skill level as the existing crew. If the added workers are less skilled than the existing carpenters, the productivity will probably be well below 92.5%. The specific job site conditions will also impact the productivity of the workers. Judgment will need to be exercised when considering the addition of workers to a crew. For example, suppose an office building is being constructed. Production losses might be minimal if an additional crew is brought in to perform drywall installation. The drywall crews would probably be assigned to install drywall in different rooms. Thus, there would probably be a minimal adverse impact on productivity. If the additional workers are assigned to perform work in the same location as the existing workers, the impact on productivity could be considerable. For example, suppose two plumbers are installing plumbing fixtures in a bathroom. If two additional plumbers are assigned to assist with the installation of these plumbing fixtures, the impact on productivity could be considerable. There may be instances in which the cramped conditions could result in even less work being performed with the additional workers. The unique conditions at the job site and the specific tasks being performed will dictate the reliability of the formula for computing productivity with the addition of workers.
  13. 13. Conclusion In this report we have found that there have been construction productivity problems, and disclosed the most significant factors affecting construction However, various suggestions were raised in order to improve productivity by alleviating the effect of adverse factors. Improvement of an organization's productivity should now be focused on, since this will not only make an organization more profitable, but also increase its chance of survival in the industry, especially as there is very high competition due to the economic crisis. If improvement in many organizations' productivity can be facilitated, overall construction productivity will also be improved. Therefore, using this report as a foundation, future studies will concentrate on productivity improvement.
  14. 14. Reverences  Critical Factors Influencing Construction Productivity ,The Journal of KMITNB., Vol. 14, No. 3, Jul. - Sep. 200  Partnering in construction: a critical review of issues, problems and dilemmas, MIKE BRESNEN1 and NICK MARSHALL2, Warwick Business School, University of Warwick, Coventry CV4 7AL, UK, 2Complex Product Systems Innovation Centre, Centre for Research in Innovation Management, University of Brighton, Falmer, Brighton BN1 9PH, UK,Received 16 December 1998; accepted 18 March 1999 Construction Management and Economics (2000) 18, 229±237  Construction Planning and Scheduling, 3rd edition, Jimmie W. Hinze, July 2007, Publisher: Prentice Hall.