By Brian Lightner, Lean & Quality Control Manager
Productivity is a mathematical equation: Productivity = Output/Input. But if it’s really that simple, then why does the construction industry have so much trouble accurately measuring and tracking productivity? The solution lies in Lean thinking. The following example is based on a true story and magnifies the difference that Lean methodology makes in project efficiencies.
Here’s an actual process chart from a door frame installation:
The cycle time is 52 minutes – 13.3% better than the estimate of 1 per hour. Using the definition of productivity, that’s 1.125 units of output per 1 hour of work. Measured in dollars, let’s use 200 door frames x $80.00 per hour in labor costs. That’s $90.00 dollars of output produced versus $80.00 of input.
But to accurately understand the rate at which that value is added, we need to apply a few lessons from Lean thinking. Firstly, better understand the process and the implications about how value is produced. The red bars include all the time – waste and value both. This includes waiting for information, dealing with inadequate tools, and trying to install the frame in a stud wall that led to an unnecessary 26- minute delay.
Here’s the same process after implementing Lean thinking:
With waste eliminated, the cycle reduces to 16 minutes! Productivity is now 3.75 units of output per labor hour, or $300.00 of output versus $80.00 of input. That is almost a 400% improvement, considering only direct costs and value and not the additional capacity created now that the same work is completed in ¼ the time. Ready to think Lean yet?