Construction Labor Productivity: Part 2: Adopting and the ROI of Technology in the Field

ICT and SNIPS Magazine recently sponsored a webinar on the Construction Labor Productivity: How These Construction Managers Use Labor Tracking to Save Money, Build Success.

We had Guy Gast, President of The Waldinger Corporation – Iowa Division, and David Francis, CTO of ICT on hand for a discussion on this topic. In addition, Guy discussed the findings and objectives of recent reports issued by the New Horizons Foundation and the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA).

Interviewed by Emell Adolphus, Editor of SNIPS Magazine, this four-part series covers many of the highlights of their discussion divided into the following topics:

  • Part 1: Benefits of Productivity Tracking
  • Part 2: Adopting and the ROI of Technology in the Field
  • Part 3: Process and Best Practices
  • Part 4: Impact of Implementing COVID-19 Protocols

You can listen to the complete webinar here.

Part 2: Adopting and the ROI of Technology in the Field

Emell:

What sort of criteria do you think is important when it comes to adopting technology like ICT Tracker into the field? What do you measure as a president and as the leadership?  

Guy: Number one: I can’t do business without it. That is critical. Number two, is it easy? We say in our service businesses “make it easy”, and we are referring to making it easy for our customer. And in technology, that’s critical to me. How easy is it for our customer? That’s the field foreman. Is it easy for him to use? Does it require him to do anything more? Because if I don’t make it easy for him, it won’t be effective. Number three, do I need it because I need to retain or recruit talent. Let’s face it, a lot of young foreman and a lot of young people in our industry rely on and value technology to do business so if I want to pretend that we don’t need it, I have a whole cast of folks out there saying, Guy, I want to be the cool place that has it.

It’s not just about the traditional return on investment. Some of this is a return on the human capital. I’ve got a lot invested in quality talent, in field and office leadership, I need them to have great tools to work with. Additionally, do we have the ability in the company to support the technology?

We have other work processes that may be affected. If I am buying new technology, do I have the back of house support for it in accounting or purchasing or at other levels of the business? With technologies, you have got to say, “I have a whole different decision matrix or why would we buy or not buy it”?

David: The thing is you already have some of that technology in your shop, and in your offices and people just need to start leveraging it. That is the piece I have always seen over the years. There is a lot of cool tech out there, but you have to justify its cost. You must keep the young guy stimulated because you get them with some great ideas, and they want to just run a gun.

When I look at technology, it must have a plan, we need to have goal metrics, we need to have a champion to lead the process. If not, that is where these things die.

Guy: David, to your point, we have seen that the champion is important. You have also got to be in it for a while. Because it’s not just going to settle into work. You have got to have a follow-up plan, and you’ve got to have ongoing training, and programs and support. You must stay committed to the technology until you’ve got it etched in stone.

David: It’ll continue to change too, right?

Guy: Yeah, I like the way David thinks because I left out one key point. At some point you have to say, and I heard this from a guy years ago, are we getting more stuff up in the air? I mean, at the end of the day, the question is, did we get more stuff up in the air? Will the technology help me get there?

David: I think the biggest thing I’ve seen is all these silos of technology. With every contractor I’ve worked with, I just walk across the other side and ask, “What are you doing over there. And why are you doing that?” And discover we could use that, or it would be handy to have.

My last job in the field was to get the engineering department detailing and the shops working together. We are designing in a silo and must redraw and detail again. The fab shop would ask, “Why the heck did you build it like that?” Those are the simple things that you take for granted. You have all these tools and technology in place, but you don’t have your team working together.

I also ask, do we really have to have this product? Is its cool technology or is this really something that is going to improve our process? Is going to make us money? That is really what it is about, and my takeaway has always been, when people put estimates on the cost of technology, they need to understand the true cost for implementation.

You need to start treating it like a tool and tracking it like a tool, charge it up to a job like a tool. I mean, all those things, everyone acts like computers are these amazing, crazy things and but at the end of the day it is just a tool.

It is also a simple conversation to leverage technology you have already spent money on. You can spend money on technology that makes sense and not keep on trying to plug in a new widget to fix the problem of something that you’ve already got the answer to.

 

Takeaway: ICT Tracker is easy to adopt in the field and leverages technology you already have such as BIM models and tablets.

Construction Labor Productivity: Part 1: Benefits of Productivity Tracking

ICT and SNIPS Magazine recently sponsored a webinar on the Construction Labor Productivity: How These Construction Managers Use Labor Tracking to Save Money, Build Success.

We had Guy Gast, President of The Waldinger Corporation – Iowa Division, and David Francis, CTO of ICT on hand for a discussion on this topic. In addition, Guy discussed the findings and objectives of recent reports issued by the New Horizons Foundation and the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA).

Interviewed by Emell Adolphus, Editor of SNIPS Magazine, this four-part series covers many of the highlights of their discussion divided into the following topics:

  • Part 1: Benefits of Productivity Tracking
  • Part 2: Adopting and the ROI of Technology in the Field
  • Part 3: Process and Best Practices
  • Part 4: Impact of Implementing COVID-19 Protocols

You can listen to the complete webinar here.

Part 1: Benefits of Productivity Tracking

Emell: One of New Horizon’s research studies was on productivity tracking and making the connection to technology. Could you tell us a little bit about what was the motivation of conducting that research study? How were contractors tracking productivity before?

Guy: It was discovered that there are various levels of sophistication contractors were using. All sorts of methods such as tracking production by pounds of installation, some by pieces, some by square feet, and some by lineal feet. So, the purpose of the research was to determine what is really going on in the country. What are the trends? Was it based on size of contractor or by types or methods?

What we discovered is there are a lot of ways of capturing time – I call it time and attendance. How many hours have we posted, but not necessarily how productive are we? The purpose of the research was to get people to start thinking more about improving their methods of labor tracking and more particularly productivity tracking. Not just installation effort.

The study states that all sorts of things can contribute to potentially a loss of 17.9%. Why is that important? Well, because frankly, a very small needle move on labor is a big move on the bottom line. If we lost 10% of production on labor, we might lose the entire margin on the job and to the converse, if we improved labor production by 10%, we would probably double our margin. So, it was a paramount issue because at the Foundation, we generally say, “Give contractors a chance to grow”, but if you cannot grow you can’t protect the bottom line right now in these difficult times.

Emell: When you are talking about calculating productivity loss, are we comparing a job to another job such as, “It used to take us this amount to complete this type of job, and now it’s taking us this long”. Is that how you are calculating productivity loss?

Guy: That is certainly one way. I think one of the challenges is in the construction industry there is such a variable environment for performance. We may say these jobs are similar, but we may have a different foreman, you may be working with a different a general contractor, a different construction manager, different architect, and our partners in the industry are other MEP trades partners may be different. The weather may be different to geography. So, two buildings that look similar, theoretically, could potentially have similar production rates. But just the mix of the people on the crew and the circumstances of job management can drive a variance of as much as 25% or 30% for similar work. So, unfortunately relying on these historical numbers and reality is what we are counting on. But, in our everyday business it is based on “What was our estimate?”

Most of our productivity measurement, for a large part of the industry that we surveyed along with foundation research, was based on trying to figure out what is my cost to complete? This is because we are driven by our business model which asks, “What’s my financial statement look like?” It is more important for us figure out how much is left to do. But, by default we start with how much have we spent?

So, if we measure hours to complete that is one way but we couldn’t figure out if we are ahead or behind because the hours posted to the activity don’t always tell you what percent complete you are. An example: I might have spent half the hours on a task – I may have done all the material handling, I may have done all the hanger layout, hanger installation and I got a big pile of stuff on the floor all shook out and ready to go but, I haven’t put up a piece of duct yet. By that point I probably spent 25% of the labor that the estimator figured for that floor or area.

So, there is a big disconnect between some of our systems of estimating and some of our methodology for measuring in place production. And again, we may be keeping score of the hours spent but are we really measuring how productive was the crew relative to what we estimated?

That is where I think David’s talking about easier capture with ICT Tracker. Estimating systems are unit-based. We estimate that a terminal device takes an hour to an hour and a half to install and ductwork is so many feet per day, or pounds per day – whatever our basis is, but, that foreman out there is putting the terminal box duct work together and hanging it as an assembly. He is not hanging a box as an independent element. So, our methodologies in the industry don’t align estimating and field performance. That makes it challenging.

 

Takeaway: Know your percent complete and match to your estimates in real-time with ICT Tracker.

AU 2020 – A new way to connect!

I have either been attending or helping to market Autodesk University for over 20 years and this is the first time we will not be all together sharing, learning and networking in person.

AU 2020 has gone virtual and for the first time it is FREE to attend. But, the same level of content from industry and technical experts is not diminished. Once again, AU contains classes and sessions for anyone in the Autodesk community.

ICT is no exception. We have our own David Francis offering a session as described below:

The ROI of Technology in Construction

One of the biggest challenges to a contractor is understanding the value of certain technology and the cost benefits. Technology is not a tangible item like a tool, so it can be hard to get people in management to see the benefits.

The goal of this presentation is to discuss all the facets of technology cost and understand how to identify and push technology within your company.

Key Learnings:

  • Discover and learn about actual immediate and long-term costs associated with technology.
  • Review labor costs associated with software purchases for training, learning curve, customization, and maintenance.
  • Learn about presenting value and efficiency gains with hardware and software purchases and upgrades to your company.
  • Discover how a company typically handle technology costs and the roadblocks that prevent implementation.

ICT will also be hosting a Virtual Trade Show booth in the Expo and welcome you all to visit us there.

AU 2020 starts next Tuesday, Nov 17th runs until Friday, Nov 20th. To learn more and register, visit AU 2020.

Tracking is More Than Just Pictures

Every day we see announcements about some new way to determine the progress being achieved, or not achieved on the job site. Many of those emails, posts, etc. are introducing ways to capture info through scanning or 3D imagery. It is really “cool” technology, but what information does it really provide?

Photos can show you something has been installed, but can it also tell you if it has been connected and tested? Photos can’t show how many man-hours it takes to complete specific tasks and if they’re ahead or behind on schedules. Tracking labor costs to schedules can directly impact costs. Pictures only show the status of an installation at one point in time.

Pictures are great, but does it truly tell you percent of complete, or calculate earned value? You have a choice!  

Read Complete White Paper Here

Avoid a Cash Flow Crisis: How Contractors can Capture Payments

Managing payout applications for payment has always been a complex and frustrating process for contractors as it directly impacts cash flow.

Chief Economist for the Associated Builders and Contractors (ABC), Anirban Basu, recently stated, “ABC’s survey data indicates that we are in the early stages of a nonresidential construction spending downturn. With few exceptions, declines in backlog have begun to accelerate across all markets and regions.”

This white paper discusses the impact and steps to consider to improve your payout app process and the questions all contractors should be asking. One way is to explore technology to help document and verify with real-time data.

Read Complete White Paper Here

Time is Ripe for BIM

A very interesting and insightful article written by Donna Laquidara-Carr of Dodge Data & Analytics, shows how contractors up & down the supply chain stand to gain the most from a further commitment to tech.

The latest research from Dodge Data & Analytics on building information modeling (BIM) focuses on mechanical, electrical and plumbing (MEP), and heating, ventilation and air conditioning (HVAC) contractors. It reveals that these contractors have embraced BIM and are seeing extraordinary value from its use. However, it also demonstrates that a major challenge for many of these contractors is a lack of commitment to BIM use by other key parties involved in a project. 

The study also examines the benefits of having an integrated workflow for structural and MEP systems, which is based on sharing model information throughout design, detailing, fabrication and installation.

Hmmm. sound familiar? As you know, ICT Tracker can help to facilitate the sharing and leveraging of BIM data today!

Read Donna’s full article here.