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Lower Costs While Increasing Profitability? Yes You Can!. Ted Garrison New Construction Strategies Ted@TedGarrison.com www.TedGarrison.com 800-861-0874. What’s the Biggest Source of Lost Productivity?. Waste!. Amount of Waste . Value Added 10%. Waste – 57%. Support Activity 33%.

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lower costs while increasing profitability yes you can

Lower Costs While Increasing Profitability? Yes You Can!

Ted Garrison

New Construction Strategies

Ted@TedGarrison.com

www.TedGarrison.com

800-861-0874

amount of waste
Amount of Waste

Value Added 10%

Waste – 57%

Support Activity 33%

10 types of waste

Defects – anything that doesn’t work

Waiting –Liska report says 20% of loss productivity

Over production– storing in warehouse or estimating errors

Transportation – unnecessary loading or moving materials

Motion – searching for stuff

Over processing– duplicate forms or unnecessary reports

Inventory – unused stuff only clutters work space

Untapped employee creativity– potentially the worst

Stress/Over burden – it just zaps our energy

Unevenness/variation – destroys long-term productivity

10 Types of Waste
chase up
Chase Up™

The 11th form of waste – Chase Up™!

How much time do you spend chasing people?

reliability
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?

chase up1

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?

Chase-Up™
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?

Chase-Up Syndrome™
chase up syndrome1

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?

Chase-Up Syndrome™
chase up syndrome2

Cost, schedule, quality, & safety are a reflection of:

Reliability!

Reliability to make and keep commitments, which allows

Reliable planning and production

Chase-Up Syndrome™
chase up syndrome3

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™!

Chase–Up Syndrome™
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!

Example
example1

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”, HOWdo we measure the “Reliability of People to make and keep commitments” objectively?

Example
example2

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?

Example
example3

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

Example
slide16

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!

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

Identify the Problem Case Study
slide18

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!

slide19

Root Cause – Case Study

Category Root Cause Task ID Date

*1

*1

*1

*2

*2

*2

*2

*1

slide20

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)

applying the application

Weekly/daily production control & commitments

After 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!

Applying the Application
review of cri chase up

Of 10 slab preparations committed to be completed:

6 are 100% completed – 4 are 95% completed

CRI = Actual # completed/Total # committed to

6/10 = 60%

A measure of reliability to:

Make & keep commitments

To plan & execute: “Did you do what you said you were going to do?”

Not a measure of productivity or production

What do you think is the average CRI on a non-lean project when first measured?

55%

Review of CRI & Chase-Up™
final thoughts
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?
lower costs while increasing profitability yes you can1

Lower Costs While Increasing Profitability? Yes You Can!

Ted Garrison

New Construction Strategies

Ted@TedGarrison.com

www.TedGarrison.com

800-861-0874