Recently Envision was asked to address the Civil Engineering students at Queensland University of Technology (QUT) on the subject of driving Construction Project Efficiency with data from a Lean perspective.
The Envision co-founders, Dr Adrian Smith and Hugh Hofmeister with their collective experiences responded to a need in the market when they started out, back in 2010.
The analogy between oil and data is credited to Clive Humby in 2006. Clive is a British mathematician who established Tesco’s Clubcard loyalty program. Humby highlighted the fact that, although inherently valuable, data needs processing, just as oil needs refining before its true value can be unlocked.
Since then, the analogy has been widely used in marketing materials to bring attention to the value of data and the potential economic impacts the control and use of data can have.
An important aspect of the analogy that is often overlooked, is that data (like oil) needs refinement before it can be usefully interpreted. And that refinement (or processing) must occur quickly enough for the insights to be useful when acted upon.
It is much more important to know that your project is not achieving the target cost or production rates daily than monthly because there is time to react and change work practices. This is especially true if you are running a large construction project that is spending more than $1M per day – you want fast feedback.
Construction data – much more than drawings and documents
Construction data is far more than simply drawings and documents. While these are important and communicate intent, there are many other types of data.
Consider these examples which might occur on a daily or even hourly basis.
- Actuals (start and finish dates)
- Site attendance records
- Site supervisor diary
- Weather records
- Equipment engine run hours
- Weigh-bridge records
- Material delivery dockets
- Material test results
- Truck count sheets
- GPS and Telemetry from fixed and mobile plant
- Safety inspections
- Progress records (quantity, rule of credit, …)
- Unplanned project events (scope, site conditions, material defects, equipment breakdowns, …)
Simply converting paper data or documents into a scanned digital rendition will only solve some problems. What we need to do is capture the contained data in a structured form, that can be easily transmitted and interpreted.
Because of the wide variety of data formats, significant human effort is required to gather, enter and process the above data. Furthermore, the above data can represent conflicting information that requires human effort to resolve.
Unfortunately, the effort required to generate the information can be so large that we lose sight of the need to use the information to make better project decisions.
Using this data we routinely need to generate construction information such as:
- Daily cost and production rates
- Accrued costs
- Percentage complete
- Actuals (start and finish dates)
- Earned value and other metrics like CPI and SPI
- Progress claims
- Commercial notices and claims …
And furthermore, we combine the above data and information together to generate internal and external reports.
At Envision we are seeing new construction projects every week and are helping these project teams grapple with data and information challenges. Overwhelmingly we see paper dockets, paper timesheets, paper diaries and reporting spreadsheets as the standard tools that many teams are working with.
Paper has obvious limitations and in that the data must be transcribed into an electronic system. While this takes time, it also limits the speed in which this data can be used, reviewed and enriched for other purposes.
The humble site docket
The paper docket typically used on sites involving subcontract workforce might seem best captured as paper, then passed to a supervisor for approval, then passed to an admin person to enter into the cost control system and then passed to site engineers for entry into a progress spreadsheet.
However, a docket is actually the source of many other pieces of information and supports a wide range of downstream processes.
- Start time, End Time, Breaks
- Prestart checks
- Company, Date, Unique identifier, …
- But the humble docket supports a wide range of downstream processes including:
- Record of attendance on site, accrued cost, approval of work, material placement, …
- Safety exposure hours, completion of prestart checks, …
- Physical progress (load counts, amount of material moved, …)
So when a docket is captured electronically, it enables these processes to occur in almost real-time instead of waiting to be passed between teams. When accumulated, these inherent delays mean that the information being gathered is less valuable because it is less current.
Spreadsheets have been long understood as a huge risk for large businesses, but they have become ubiquitous for many industries, including construction.
Research shows that over 90% of spreadsheets contained errors and 23% contained serious errors. This is because it is very difficult to find and fix errors. Hence calculation errors are commonplace, but still, Engineers rely upon them for everyday work – even when alternatives exist.
Thedocuments these risks and details significant errors that have resulted. A couple of interesting examples include:
- Vote counting in a Malaysian election
- Financial reporting to London stock exchange
- Misinterpretation of human genome data
Information decay and decision delay
The combined effect of slow and unreliable information is that the time taken to make a decision is delayed. In isolation, a delay of 7 days may not be significant, but when this becomes the norm and is happening for the majority of data being captured from the site, it becomes a constant drag on decision making.
As a result, decisions are made based on anecdotes or gut feel, instead of being informed by data. When we make decisions based on instinct and gut feel, we become more susceptible to cognitive bias. Some common examples that affect our decisions include:
- Confirmation bias – our tendency to search for and favour information that confirms our beliefs while simultaneously ignoring or devaluing information that contradicts our beliefs.
- Availability heuristic – a common mistake that our brains make by assuming that the examples which come to mind easily are also the most important or prevalent things.
- Anchoring – our tendency to stubbornly cling to a number once we hear it and evaluate all other offers based on that previous number, even if that isn’t the most relevant bit of information.
- Sunk cost fallacy – once we’ve invested time and/or money in something, we become vastly less likely to abandon it, even once it should be clear that the project will ultimately fail.
- Survivorship Bias – our tendency to focus on the winners and try to learn from them while completely forgetting about the losers who are employing the same strategy.
Data-driven decision making
Being informed by data help be objective about the decisions we make and minimises the effect of confirmation bias.
A great example of using data to inform decision making in demonstrated in the film “Moneyball” in which the process for selecting baseball players is challenged using a data-first approach instead of the traditional gut feel approach.
If you’re not familiar with, Michael Lewis details the surprising success of the small-market baseball team, the Oakland Athletics, which competes against large-market teams with much deeper pockets such as the New York Yankees or Boston Red Sox.
In order to maximize his player budget (a fifth of the size of larger teams’ budgets), Oakland A’s General Manager, Billy Beane, broke with tradition and applied an analytical approach to baseball’s flawed and subjective scouting system. His staff drafted young, inexpensive players and obtained unwanted, affordable veterans with high on-base percentages as well as unorthodox pitchers who generated a lot of ground outs. Using statistical analysis known as sabermetrics, the Oakland A’s were able to level the playing field and proceed to outsmart and outperform much richer teams. All of the MLB teams had access to the same data; however, the Oakland A’s identified inefficiencies in how the data was being used and capitalized on them.
Another fantastic example of a work practice that uses data to inform decisions is from the father of Lean Thinking – W. Edwards Deming.
Deming was an American Mathematician who pioneered the use of statistics in manufacturing process control and continuous improvement helped revolutionize the Japanese manufacturing industry post World War 2 using the Plan-Do-Check-Act cycle. Born from this work is the Toyota Production System and Lean.
The health care industry has tackled these issues over recent years and anyone who has visited the hospital may have noticed the transformation to digital medical records. The construction industry may be able to leverage some of these learnings.
Principles for improving data capture
Here are some guiding principles that can help improve your data maturity:
- Capture electronically close in person, place and time
- Plan the master/reference data to align with how the project performance is to be measured and align with the financial system.
- Use reference codes/identifiers/geolocation for resources (people, equipment, materials, companies) to allow easy cross-referencing
- Express data in self-describing formats where possible
- Exchange data in neutral file formats – avoid proprietary file formats
- Agree a “source of truth” for core data like budgets, people, equipment, …
- Organise and store for ease of accessibility
- Favour less high-quality data over more unreliable data
- Balance detail (granularity) against the cost of capture
- Convert data into information and drive decision making
Tackling the above challenges is not easy, especially in an environment where systems are fragmented and each party in the supply chain is not always incentivised to share information freely.
Projects that have converted the above process into a digital process by applying the above principles realise significant benefits. Not only in the administration effort saved, but also in having transparency of accrued costs available for performance analysis usually by the next day.
A project team that adopts a data-driven mindset and starts using that information to inform decisions will naturally improve project performance.
The data we collect (and the way we collected it) is an asset and can be used to improve the productivity of projects. We already have the capability and existing technology to collect and refine the data into useful information. What we need to is to challenge the old habits for data collection and processing and to get smarter about what we do.
Refining our construction data relies on being able to process and link with other information so that we can make informed decisions.
At Envision, our clients are seeing significant dividends from digitising their construction timesheets. The more we talk with a range of project and business stakeholders across the construction industry, the more we’re seeing this as a huge area of improvement potential. Some of the people who influence decisions around technology adoption may not have frontline experience, so we’ve put together this summary of the fundamentals of construction timesheets to help build a baseline of understanding.
Fundamental one: time clocks and attendance records aren’t timesheets
Time clocks and attendance records perform functions like recording when specific people arrive at and leave a site. Depending on the process used, they might record who is on site at all times (ie entry/exit rather than solely clock on/off records). Start and end times generated also may not be the same as a person’s start and end time for payroll (eg you might arrive 15 minutes before your scheduled start from which you will be paid). Timesheets, in contrast, record the quantum of work performed against a specific job/costed activity. They are normally used to drive payroll, as well as job costing and performance reports. Both have distinct roles and, when they are both in use, cross-referencing them is a powerful way to identify errors such as missing timesheets and incorrectly recorded timesheets, and verify actions such as payroll and subcontract payments.
Fundamental two: contract types and delivery models influence need
The approach to capturing time from a contractor’s perspective depends on the contract type and delivery model. Timesheets are generally required for staff, direct workforces, labour hire, and hire plant and labour on day dockets. As an example, if a project’s delivery model is largely subcontract lump sum and schedule of rates, the need for timesheets will likely be basic. However, this may change if a project presents considerable risk exposure to the contractor or client if schedule completion milestones are missed, like on large oil and gas and mining projects where the cost of missed production is high. It’s critical to match timesheet processes, and the level of detail captured, to each project’s contract type and delivery model.
Fundamental three: many stakeholders use timesheet data
After a little digging, it’s amazing to see just how many stakeholders are involved in the timesheeting process and/or who typically uses timesheet data. Some of these include:
- Individual workers – they need a record for payment and a fast, simple process.
- Subcontractors – they need a record of their workers’ time to pay them and submit end-of-month progress claims, and need easy access and reliable records to ensure payment.
- Supervisors – they need to check and approve hours worked, ensure costs are allocated to the right activities, get feedback on their team’s performance, maximise their field time to keep their project on track, ensure their people get paid and avoid IR issues…and the timesheet process needs to be fast and simple.
- Engineers – they approve the allocation of costs to the right activities, monitor performance across their scope and forecast job costs based on past performance and forward projections.
- Project managers – they monitor scope performance, ask questions on exceptions and guide corrective actions to keep their project on track.
- Payroll – they track leave, and pay staff and workforce their entitlements and allowances.
- Contracts administrators – they verify subcontractor progress claims, approve appropriate payments and determine accrued costs that haven’t yet hit the finance system.
- CFO – they need accountability and certainty around who is getting paid what, and they need an appropriate audit trail to drive verification and responsibility.
- HSE – they track safety exposure hours worked and safety performance statistics.
- Commercial – they require quantified and verified records to substantiate claims for variations and extensions of time.
- Project controls – they require quantified records for performance reporting.
- Estimators – they require quantified records of time required to perform various activities for comparison against estimating norms to improve competitive estimating on future jobs.
With these fundamentals in mind, manual processes present major risks to projects and leak a significant amount of value (either lost time to perform value-adding tasks or avoidable costs etc). Here is the core difference between typical manual processes and digital processes.
A typical manual process
A typical digital process
In reality, while the digital process sounds simple, the devil is in the detail. Paper seems very forgiving, with minimal validation rules and a human to interpret records. It is also infinitely flexible as it can be routed through different hands to record and extract data. And it seems easy and fast in the first instance. Successful adoption of a digital process requires solid upfront thinking and a simple, intuitive solution that is fast for all stakeholders to use. Then it can remove the need for duplicate timesheet records held in disconnected systems by those diverse stakeholders. We’ll share more on considerations for selecting digital construction timesheet solutions soon.
If you’ve moved from manual, paper-based timesheets to digital ones, we’d love to hear about your experiences. If you’re intrigued, we suggest you map your own process as you might be surprised at the admin waste and data delay waste for all of those stakeholders involved. And please get in touch if you’d like to know more about our offer in digital construction timesheets.
Based on projects I’ve been involved with, I’d say the answer to whether the construction foreman’s paper diary is dead, is a resounding…no.
While we’re seeing a growing trend in the desire for electronic diaries and digital workflows, the default is still typically a paper-based system – unless a project’s leaders drive digital. Research conducted by McKinsey suggests the construction industry is second lowest only to agriculture and hunting when it comes to digital uptake.
What’s the purpose of the foreman’s diary?
In Australia alone, the value of avoidable waste from disputes in the construction industry tops $7 billion (see this CRCCI study). That’s an insane figure considering the massive push for efficiencies. One of the keys to avoiding disputes is early notification of issues that may lead to time and cost impacts (see this analysis).
Here enters the foreman’s diary. It’s a key source of what’s happening at the workface and a powerful communication tool for raising issues with project leaders via engineers and project managers who read these records daily.
The foreman’s diary is also a critical tool in the unfortunate circumstance a claim moves into a dispute. That’s because it’s a record of what has happened from the perspective of the client, contractor and subcontractor – recording key facts such as resources on site for the day, work performed, performance observations, key issues and delays, directions given, weather etc. These records support a court assessment regarding the amount that should be paid by one party to another for work delivered.
Why transition to digital?
1. Faster communication and easier search capability
Digital records are available and searchable as soon as they are created. Rather than wait to the end of a day, or the next shift, for a manual, paper report, everything from Events to photos to progress updates are available immediately. This improves communication between a team, enabling earlier identification of issues and faster mitigation…reducing time and cost impacts.
While digital records add immense value during the delivery of a project, if a dispute arises, they also support significant savings by avoiding the need for claims consultants to go through paper records and convert them to digital records. The records are captured as the work is done, meaning they are ready and available from the outset as an as-built record of the project.
2. Better recording consistency with earlier identification of missing records
With paper diaries, missing or poor quality records are not identified until they are actually required, which can be as late as a dispute situation. This is generally because those records are filed in a site office but not used by anyone downstream. This means they’re not that visible to a project team.
A digital foreman’s diary is easily built into the daily and weekly communication processes of a project and is highly visible to everyone, particularly project leaders. Just one benefit is that missing and poor quality record keeping are very quickly picked up.
3. Richer records
Paper diaries typically don’t include photos and GPS-tracked, time-stamped records. It’s true that a picture tells a thousand words. With today’s technology, including smart phones, there is no reason why diaries shouldn’t be supported by rich photos that are tagged to issues, Events, Activities, the work breakdown structure, team commentaries, GIS information and more.
There are many digital solutions available in the market, from apps as simple as Evernote to specialised construction diary applications.
Naturally, I’m most familiar with Envision’s diary solution. We’ve developed and deployed this across major infrastructure and resources projects. Through this, I’ve seen the content of digital diaries being actively used during delivery – and by many more stakeholders than traditionally possible with paper diaries…in ways, you would have never considered. Digital diaries are supporting the daily workflow of:
- Project engineers
- Construction managers
- Project managers
- Commercial managers
- Contract administrators
To find out more about how Envision can help your site record keeping, check out this video:
Ennova partnered with industry leading construction companies to present productivity findings from recent projects at the annual Lean Construction Conference. Ennova showcased results from the recent QCLNG project that demonstrated significant reductions in schedule (timescale) and cost, and an overall improvement of around 30% in labour productivity.
The results were discussed at two sessions:
- Robert Turner – Group Manager, Controls and Planning, Leighton Contractors
- Hugh Hofmeister – Head of Projects, Ennova
- Robert Turner – Group Manager, Controls and Planning, Leighton Contractors
- Hugh Hofmeister – Head of Projects, Ennova;
- Grant Puttergill – Project Controls Manager, QGC
- Mark Leader – Project Cost Manager, QGC
- Chris Barber – Project Services Manager, QGC
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