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There is a constant battle in the construction industry for contractors to remain competitive and at the same time, increase their profit margins. From a contractor’s perspective, it can be argued that labor productivity is the single most influential dynamic factor in creating cost savings and increasing profits. Labor productivity can be impacted by many factors. Some factors are under the control of the contractor, while other, such as weather, are not.
The construction industry represents one of the largest sectors of the United States economy with a total value of $530 billion per year. Because labor costs typically account for about one-third to one-half of the construction cost, it is important to study the factors affecting labor productivity. Contractors in labor-intensive work, such as electrical contracting, could see even greater profitability from monitoring and improving their construction crew productivity. Previous research indicated that the average construction tradesperson spends 33 percent of his/her time performing noncontributory work (ineffective), and 33 percent on essential but nonproductive contributor work such as reading plans and erecting scaffolding.
That means that only 33 percent of the tradespeople’s time is spent performing work that generates income for the contractor (effective work). Measuring the impact on productivity will allow the contractor to gain greater control over profitability, adapt to accelerated scheduling, and meet the increased demand brought upon by the construction industry.
One cause of a decrease in productivity can be attributed to stacking of trades. Also known as overcrowding, the idea of stacking of trades considers the total number of craftsmen from all trades working in a given area. The worker density (square feet/worker) depends upon the available net working area and the number of workers from all crafts. The net working area is the total floor space minus any unusable portions, such as a production line, elevator shaft and permanent fixtures.
The stacking of trades describes project conditions where multiple tradespeople are working simultaneously in a single work area. It is a frequent secondary effect of multiple contractors using overmanning in response to schedule acceleration, although it can also occur under normal schedule conditions. Having too many workers in a single area decreases the work area available to each craftsman. Construction requires that a craftsman have his/her tools and materials in close proximity, along with enough room to maneuver and work. Stacking creates congestion and crew interference, and negatively affects productivity.
Research at the University of Wisconsin-Madison has addressed this topic and the general conclusion is that a minimum of 200 to 250 square feet is needed per construction worker for full productivity depending upon the complexity of the work. To more accurately estimate the productivity impacts, data was gathered from several electrical contractors and worker density (square feet/worker) was plotted against percent lost efficiency as seen on the graph shown on page 118.
This graph shows an increase in lost efficiency as the worker density decreases. According to the data collected, there is 0 percent lost efficiency at a worker density of 191 square feet per worker and a 50 percent loss of efficiency at a worker density of 90 square feet per worker. It is important to note that this model applies only to projects that range in size from 2,000 man-hours to 150,000 man-hours and where worker density is between 90 and 191 square feet per worker.
When preparing a bid, the contractor typically assumes that all work will be put into place with minimal interference from other tradespeople. There are several options that a contractor can enact to combat the productivity implications of stacking of trades. These options include modifications of: 1) the schedule of work, 2) the crew size, 3) the hours of construction, and 4) the methods of construction. The contractor cannot, however, avoid all productivity losses resulting in stacking of trades.
In order to quantify and qualify the effects of stacking of trades, it is important to look at the factors influencing the development of stacking of trades and the results of this development.
Through a survey conducted on members of the National Electrical Contractors Association (NECA) by the Construction Engineering and Management Department at the University of Wisconsin-Madison, qualitative data was collected to determine the root causes of stacking of trades and the effects of this practice on the contracting industry.
The surveyed contractors identified the following fundamental causes of stacking of trades:
• Project acceleration
• Project delay
• Change orders
• Poor planning
• Change in scope of work
The contractors also stated that prior to construction, past scheduling practices of general contractors and the type of work to be performed indicated a high likelihood that stacking of trades would develop at some point in the project. When asked to assign a percent stacking of trades to a project duration broken up into four quartiles, the contractors cited nearly half of this development occurring in the final quartile of construction and almost one-third occurring in the third quartile. It should be noted that in a well-planned and managed projects, the final quartile is considered the “run-down” period where the contractor can reduce its work force. In contrast, in projects that suffered from stacking of trades, the final quartile is characterized by higher-than-normal peaks of all trades.
The data also revealed that the practice of stacking trades affects size of work area, work sequencing, coordination of work force and scheduling. Finally, from a qualitative analysis, contractors identified several factors entitling them to some level of compensation: working in restricted work space, working out of planned work sequence and/or increases in the amount of crew idle and wait time.
In an ideal construction setting, each contractor would be given the opportunity to conduct their specific work without interference from other tradespeople. The reality is that contractors must minimize the impacts of stacking of trades through careful planning and implementation of construction project sequencing. Perhaps the most important factor in minimizing or eliminating the impact of stacking of trades is project coordination practices and planning and scheduling. Project coordination is the number one responsibility of the general contractor and construction managers.
To develop good coordination process, the general contractor and/or construction manager should track subcontractors’ performance and limit the delay due to changes affecting fieldwork. It is also recommended that the development of construction schedule should be a collective effort between the general contractor and its subcontractors. An interactive scheduling practice where the schedule is developed with all subcontractor participation is recommended.
Additional recommendations for electrical contractors to minimize the impact of stacking trades include prefabrication to eliminate field assembly, and, if possible, the use of a second shift. However, effective use of a second shift requires electrical contractors to handle loss of efficiency resulting from overlapping the first and the second shift. This can be accomplished by asking the foreman of the first shift to stay one hour longer and the foreman of the second shift to come one hour earlier or assign completely different tasks in different location and different tools and materials to the second shift.
In addition, careful review of work sequencing and construction methods is additional methods for electrical contractors to effectively deal with the pitfalls associated with stacking of trades. By understanding the causes of stacking the trades and creating a methodology to inhibit its effects on labor productivity, electrical contractors will be able to maintain competitiveness within the construction industry without sacrificing profitability.
HANNA is a professor at the University of Wisconsin-Madison, author of several productivity studies, a consultant and an expert witness. He can be reached at 608.263.8903 or by e-mail at [email protected].