CoatingsPro Magazine - January 2022
Contractor’s Corner
John Kenney 2021-12-28 22:08:45
Productivity vs. Efficiency: They’re Different and It Matters
Often, when working with clients reviewing their operations, I am asked, “Productivity and efficiency: Aren’t they the same thing?” These words have been repeatedly used incorrectly over time and are often confused because people think they mean the same thing. There are critical differences between the two that you should know to analyze your operation's performance correctly.
Productivity is the output per unit of time, while efficiency is the best possible output per unit of time (i.e., doing things correctly). When you do your tasks correctly, you will hit your maximum level of efficiency and productivity.
For example, if Joe and his six-person crew install 100 squares of a roofing system in a 10-hour day while Mike and his six-person crew install 80 squares of a roofing system in the same 10-hour day, it may look like Joe’s crew is the more productive. That would be true if all things considered were equal. But if Joe’s crew did not complete everything as they went and required another half day to finish the detail sections, Mike’s crew would be 34 percent more efficient than Joe’s. This efficiency connects directly to their actual productivity. Ultimately, although Mike’s crew finished fewer squares in the day, the team is more productive than Joe’s. This would be easily missed if you only observed the raw productivity of installing the squares.
When you do your tasks correctly, you will hit your maximum level of efficiency and productivity.
If we take the example and forecast that over one year and assume that both average crews cost the same, Mike’s crew efficiency would add more than $200,000 to the bottom line.
The message is clear: Crew efficiency is not the only area that you should be focusing on when looking to add dollars of profit to your profit and loss (P&L) statement. The following are other areas you should be focusing on, too.
Improve Your Decision Making and Workflow
A considerable part of your projects’ management is minimizing nonproductive activities that cost your company additional expenses and cause delays. These nonfavorable activities include looking for missing project data, dealing with conflict resolution, and correcting mistakes that should have been able to be avoided. To improve the efficiency of your projects, here are some tips to reduce nonproductive activities:
• Review the flow of your decision-making process. Take a close look at your daily site activities and operations. Review how the decision-making flows — starting from when it first surfaces. Reviewing your current strategy will allow you to identify areas where you can improve and speed up your workflow, creating a more efficient operation moving forward.
• Measure the current level of productivity. With data, your management team can pinpoint flaws in the workflow and streamline the operation. Creating a performance-based incentive program to reward your crew members and supervisors who meet and beat project budget benchmarks encourages an efficient project workflow.
• Establish an efficient communication procedure. Slow decision making stems from a lack of a proper communication system, and it creates issues. Multiple projects spread out geographically and key decision makers often located back in the home office compound the situation. Find ways to eliminate delays in communicating with upper management in real time. Also, set regular meetings (aka huddles) where your key decision makers can ask and answer questions, brainstorm ideas, and review projects’ progress.
Manage Your Worksite; Embrace Technology
The construction industry and, more specifically, roofing contractors lag behind most industries in terms of adopting new technologies. According to recent industry studies, the construction/roofing industry is second only to agriculture in being the least digitized in technology use. Industry leaders are starting to recognize that technology can be transformational in terms of efficiency, yet more than 60 percent surveyed still use manual and paper processes.
Technology can provide a contractor with a competitive advantage — from estimating and planning your projects to managing your entire administration process. Automation will be the construction industry, and specifically roofing sectors’ future, so you need to leverage them before you are left behind.
Listen to the Team and Provide Training
Compared to upper management working offsite, on-site employees will provide better insight into improving the efficiency of your project site processes. These on-site employees have a wealth of first-hand knowledge regarding which equipment works efficiently or which techniques work best. It is essential to conduct regular face-to-face meetings with your team members to ask and get input on workplace issues.
Involve your experienced workers in the planning phase. Involving them early on will allow them to detect flaws in the plan before it becomes a more significant issue.
Your managers need to ensure that employees are thoroughly and explicitly trained for the job. Training is vital for efficiency as it addresses the daily site activities that mount up, and training contributes to project delays and additional costs if done inefficiently.
Coating supervisors need the right management skills and techniques to be able to lead their foremen or subcontractors. You should train all your employees to install new systems or operate new equipment so they can perform their tasks smoothly. Most importantly, especially on roofing and other at-height jobs, companies must train employees to do tasks most safely without exceptions.
Data Management
Data is a powerful tool in the hands of someone who knows how to manage and interpret it. The roofing industry in particular is throwing away 95 percent of the information it produces. This means that valuable knowledge is thrown out of the window daily, and many mistakes will inevitably be repeated.
You must learn to collect and interpret the data and provide your field operations with valuable feedback. Using a robust data management process will allow you to understand the operational process better and ensure that your future projects will have fewer and less costly mistakes and be more profitable.
To sum it all up, boosting your efficiency on site is very challenging. However, with the right plan and steadfast effort, you can take your coating company’s efficiency management game to the next level. Digital tools provide terrific assistance with that, and you can rest assured that your work will be done in a timely, precise, and more profitable manner.
JOHN KENNEY has more than 45 years’ experience in the roofing industry. He started his career by working as a roofing apprentice at a family business in the Northeast U.S. and moved in to operating multiple Top 100 Roofing Contractors. As Chief Operating Officer of Cotney Consulting Group, Kenney is intimately familiar with all aspects of roofing production, estimating, and operations. During his tenure in the industry, he ran business units associated with delivering great workmanship and unparalleled customer service while ensuring strong net profits for his company prior to joining Cotney Consulting Group. For more information, contact: John Kenney, jkenney@cotneycl.com.
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