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Construction Productivity
NNCA – The Business of Construction Workshop
Matt Knight, Managing Director, Productivity & Growth Services
GO Productivity
Agenda
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Who is GO?
Productivity in the North
Lean Construction
Principles
Action items
Who is GO Productivity?
• We help companies realize the power of productivity and the
incredible role it can play in improving operations, from the top floor
to the bottom line.
• As non-partisan ‘trusted advisors’ or coaches we work to build the
internal capacity within organizations
• Work with partners to address productivity challenges including
operations, innovation, leadership & collaboration
• Non-profit organization, industry board led
As of October 1, 2011, Productivity Alberta was established as a
private, not-for-profit corporation
As of October 1, 2014, GO Productivity is a national private, notfor-profit corporation
How do we see productivity?
We see ‘productivity’ as being made up
of operational excellence, innovation and
leadership combined with a collaborative
culture and the strategic integration of
these elements
• The means to extend the resourcefulness of your business
• About unleashing the potential of people, resources, and time
• About working SMARTER – not harder
Productivity = Resourcefulness
Productivity Is NOT Necessarily About…
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Downsizing
Eliminating jobs
Replacing people with machines
Short-term improvements
Cost-cutting initiatives
Productivity Is Actually About…
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Meeting customer needs
Making work more satisfying for all
Increasing profits
Using less effort, space, equipment,
time
Why does productivity matter to
Nunavut & Northwest Territories?
• Slowing investment in mining and downturn in commodity
prices
• Growing competition from outside of the North
• Attraction, retention and shortage of skilled labour
• Multi generational workforce
• Lack of investment in technology, innovation & growth
• Increasing costs of transportation
• Access to new markets
• Working in the business not on the business
• Quality & safety
All these factors impact our ability
to compete and to be productive
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Productivity and the North
• Yukon, N.W.T. and Nunavut had a labour productivity decline
in 2013 (for the third year in a row)
– Still one of the strongest labour productivity rates in the county
• N.W.T. GDP increase by 3.5% in 2013
– Business gross capital formation up 14.8% driven by construction and
investment in non-residential structures
– Drop in labour is led by declining mining industry (35% of GDP), and
diamond industry maturation and declining production
• Nunavut GDP increase by 11.2% in 2013
– Relatively small economy size and operations like the Meadowbank
gold mine, and construction of Mary River iron ore site (increase in
non-residential structure)
– Labour productivity declined by 1.3% as more were hours worked
relative to GDP increase
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Business Sector Productivity (Labour) – 2013
(Real GDP per Hour Worked, 2007 constant dollars)
75.5
76.5
79.2
Nunavut
69.6
71
NWT
74.8
70.4
69.3
68.6
Alberta
48.7
48.1
48
Canada
-5
5
15
25
35
2013
45
2012
55
65
75
85
2011
Source: Statistics Canada – GDP at basic prices
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Productivity Levels in N.W.T. Industries 2013
(Labour Productivity (chained (2007) dollars per hour)
68.0
68.3
Total economy
164.7
Mining & Oil & Gas
179.2
96.6
94.6
Information Services
117.8
125.7
Utilities
209.1
198.8
Real Estate
63.3
60.9
Finance & Insurance
59.7
52.5
Manufacturing
98.0
98.1
Wholesale
47.0
50.1
PSTS
Construction
39.9
52.5
42.1
42.5
Agriculture
57.3
58.8
Transportation
39.9
45.5
Retail
Accomodation & food
15.7
17.1
2013
2012
PSTS: Professional, Scientific and Technical Services
Source: Statistics Canada. Table 383-0029 - Labour productivity and related variables by business sector industry, consistent with the North
American Industry Classification System (NAICS) and the System of National Accounts (SNA), provinces and territories, annual, CANSIM
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About Lean
Eliminate Waste
Create Value
Customer
Cash, time & Space
Lean construction is not the same as lean production
(it’s is bigger then that!)
Source: The Machine that Changed the World by Womack, Jones & Roos
Why Lean won’t work in construction
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We are too busy
Lean is just for manufacturing
We don’t make cars
Lean won’t work for us
We are different (and special)
We tried that
We make enough money
We don’t need to change
The importance of Lean in construction
40%
labour
cost
62 -83
Minutes
Average
waiting time
of trades
ranged from
62 to 83
minutes per
shift
3.13% 19%
Material
movement
contributed
to 40% of
labour costs
Rework on
average is
3.13% of
overall total
cost (and as
high as 19%)
Source: University of Michigan and Construction Industry Institute
Principle 1:
Define the customer value
Importance of Voice of the Customer
• What will customers pay for? After all they “pay the
bills”, so understand their needs
• Without customers, there is no business
• Customers define the “playing field”
• To be more profitable, you have to convince your
customers to…
– Buy more of your product or service
– Pay more for your product or service
– Serve their needs more efficiently
Customers can be in many places
Materials
Step 1
Step 2
Product
Step 3
Service
Revenue
Stakeholder
Internal Customers:
External Customers:
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• Sales
• Engineering
• Manufacturing
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Supplier
Management
Shareholders
Employees
Buyers
Users
Dealers & Distributors
Bystanders
Government Agencies /
Regulatory (indirect)
Principle 2:
Capture the value (chain)
Lean helps us to see waste
Waste in Construction
Waste in Manufacturing
Source: Construction Industry Institute
Principle 3: Make it ‘flow’
Tools to make it flow
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Modular Construction & Pre-fabrication
Collaboration & Integrated Project Delivery (IPD)
Scheduling and Pull Planning
Building Information Modeling (BIM)
Work placement & Kanban
Takt time and level loading
Principle 4: Make it better
Tools to make it better
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Find and remove the waste (always)
5S (Sort, Set in Order, Shine, Standardize, Sustain)
Standard work (SOP)
DMAIC or PDCA (Plan-Do-Check-Act / Deming cycle)
A3 Methodology / problem solving
Principle 5: Rinse & Repeat
Summary
Principle 1:
Define the
customer value
Principle 5:
Rinse & Repeat
Principle 4:
Make it better
Principle 2:
Capture the
value (chain)
Principle 3:
Make it ‘flow’
Won’t happen over night – try, try, try
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Lean is about Continuous Improvement:
Don’t accept that failures “just happen”
Look for trends and root causes and fix them.
Working around problems or planning buffer time
into work is a waste – don’t accept it!
• Tough on issues – not people
• Optimize the project not the parts
Take back to site (or office)
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Lean won’t happen overnight
Start with the small stuff – think 1% improvement
You can’t contract behavior
Mistakes are ok*
Get the right people (fit and values)
Measure, measure, measure
Concepts over tools
Questions & Discussion
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