Labor Productivity Principles

Stop Slowing Down Your Labor Productivity: Why More Workers Makes You Slower

Jason is really excited about this podcast. He teaches this a lot and he’s been able to give the case studies and some of the graphs now to people he’s taught. He wants to give full credit to the Scrum course from Scrum Inc. The Scrum course that Felipe Engineer does for a lot of this information. This is where he first received this.

Jason really likes Scrum and the system because it anchors us back to true scheduling and builder techniques. If you haven’t done the Scrum course from Felipe Engineer, please go do so. Jason didn’t fully understand scheduling until he learned about Scrum.

The question is: are you slowing down your labor productivity? Because if you are, we need to stop and we need to help each other and learn from each other and get this fixed. Here’s some conflict. You are hurting your labor productivity and you need to stop.

The Dice Game That Proves Variation Kills Productivity

If you’ve ever played the simulation Parade of Trades, you know that there’s an opportunity to roll ones, twos, threes, fours, fives, and sixes on your die. When you play this game, you use a die. Whatever you get on your roll is your capacity, your manpower. You get to move, whether you’re playing Parade of Trades or the Elevate Construction or Lean Takt invention called Takt Towers. Whatever you roll is how much work you get to complete based on how much work is available.

There are different scenarios where you have different dice. One dice might say one, two, three, four, five, six. The other one might be three, three, three, four, four, four. The other one might be one, two, two, three, three, six. It might be one, one, two, five, six, six. Let’s take the most realistic one: one, two, three, four, five, six. When you roll that, sometimes you get sixes and sometimes you get ones. And the variability, the variation in that system makes teams go slower.

When you play the simulation, you go through the exercise and everybody’s able to reflect: oh my gosh, the dice where it was three, three, three, four, four, four, they finished at $17 million. And the one, two, three, four, five, six finished at like $26 million. The differences were the increase in labor. The one, two, three, four, five, six had 380 units of labor. The three, three, three, four, four, four had like 286 units of labor. So it was a lot less. And the inventory levels are similar.

What we are able to reflect on is that when we have more variation in the speed that everybody’s going, the more manpower and materials you have, which means the longer the project takes and the more it costs. So then you compare it to the overall cost. The three, three, three, four, four, four, like Jason said, that’s $17 million. The one, two, three, four, five, six, that’s like $24 million. And then the time: the three, three, three, four, four, four, you finished in 19 weeks. The one, two, three, four, five, six finished in 21 or 23 weeks. It was longer and it costs more money.

So then you think about this correlation and what it means to us. What it means is we have to get everybody working at the same speed at the same distance apart. Flow and the creation of flow, even if you’re going at a medium speed, will always finish the project faster and will always be the least cost because you have right sized inventory levels, material inventory levels, and you have right sized manpower.

Pushing vs. Building Capacity: Two Opposite Approaches

Jason loves that analogy. Secondly, when they went over to meet with Marco and Janusz with Tachting in Germany, they played these Takt simulations, the best one in the world in his opinion. When there was a lot of dependency and a lack of flow, there were certain behaviors that humans engaged in. When there was flow, there were certain behaviors they engaged in.

There’s a book called The Bottleneck Rules and Jason really enjoys that book. What it talks about is creating capacity versus pushing. If you think about a bottle, a hot sauce bottle like Tapatio, if you think about a bottle with a small bottleneck, there’s two things you can do. You can push harder behind the bottleneck, which will create more pressure and more dependency. Or you can increase the bottleneck. You can widen the actual bottleneck.

In construction, so many times we just start pushing through that bottleneck instead of creating capacity. Jason created two scenarios reflecting on this. A project engineer called him the other night and was asking advice. He said “Hey, the team that I’m working with, they have an hour long scheduling meeting where nine people meet every day. We’re nine weeks away from the end. All they do is talk about the schedule and update the CPM. And they’re all running frantic. How do I survive in this environment?”

Jason said “Okay, you as a project engineer, you’re probably supposed to be focusing on materials, punch list, quality installation. You focus on your role and doing your role really well. Don’t start running around, freaking out, acting busy like everybody else does when things like that happen. Create capacity.” That got Jason’s mind visualizing these two scenarios.

The first scenario, which is what the industry does, is pushing. This is where you roll ones and sixes. You do this by:

• Throwing manpower at the problem or the project
• Throwing money at the problem or the project
• Throwing materials at the problem or the project
• Making workers work too fast and too long
• Working with unsafe and unclean conditions
• Working with too much dependency
• Working with not enough time
• Having too large or too small batch sizes
• Having an improper sequence and moving start dates up without preparation
• Running around and looking frantic and busy just because you want to show your boss you care

This is what pushing looks like. Excess manpower slows you down. Excess money slows you down most of the time. Excess material slows you down. Making workers work too fast slows you down. Working with unsafe and unclean conditions slows you down. Working with too much dependency, meaning you’re not getting everybody working at the right distance apart at the same speed, that’ll slow you down. Having not enough time in the schedule will freak everybody out and have them start pushing so it will slow you down. Having too large or too small of batch sizes which creates dependency will slow you down. Having the improper sequence. This is what most people do to attempt to improve their project conditions and it just won’t do it.

Now on the build capacity side, rolling threes or threes and fours, this is what you would do:

• Focus on removing roadblocks
• Installing it right the first time
• Aligning procurement so that procurement can be there on time
• Keeping a consistent rhythm and beat
• Keeping the project clean, safe, and organized
• Improving team health and stability
• Taking more time to prepare and make work ready

On the pushing side, we’re always just trying to move people forward without preparation. On the build capacity side, we’re keeping things on a rhythm and taking the time to prepare so we can build it right the first time. You can be on the build capacity side or you can be on the pushing side. Jason really likes this visual.

Why Agile Projects Have 42% Success vs. 26% for Traditional

The reason Jason opens with this is because throwing excess manpower and materials at a problem or a project rarely helps. And it’s the first thing that people do. In construction when somebody’s like “Oh, we got to focus on production, we got to go faster, we’ve got to recover this project,” it’s like because all they have is a hammer, everything looks like a nail. They start throwing these additional resources at the problem and it just takes longer and slows things down.

Let’s talk about some data. This is from Jim Johnson from the Standish Group Chaos Report 2018. On average, Agile projects have a 42% success rate compared to only 26% for traditional projects from 2013 to 2017. When you look at the shakeup, the success rate for traditional projects is very low. We’re talking about 74% not successful. 21% are absolute failed projects. 53% are challenged and finished behind schedule and stretched the team.

When you start to involve true Scrum, when you start to involve true lean principles, pull, Takt time, then you’re increasing your percentages at a minimum by another 26%. If the whole industry right now just listened to the advice that the industry has, let alone advanced Takt planning, let alone advanced lean concepts, let alone the book This is Lean from Nicholas Modig, we could have a success rate of at least 42% and only have 50% projects have difficulty and only 8% projects fail.

You might not think that that additional roughly 25% is a big deal, but Jason does. Then you add in Takt time, you add Takt time planning, concepts like This is Lean, true Scrum, Last Planner done right, and your percentages are going to skyrocket through the roof.

Team Consistency Matters More Than Team Size

When we look at the impact of adding manpower versus just keeping level manpower levels and level material inventory levels, when we talk about the amount of tasks that are able to be complete basically on time, on a scale of zero to 80, five different scenarios show the amount of tasks that can be completed by different teams depending on the consistency of their manpower levels or their team composition varies greatly.

When less than 50% of the team is consistent, they only get 38 tasks done on average. When 50 to 70% of the team composition or manpower composition is consistent, they can get around 48 tasks done on average. When 70 to 85% of that team composition or manpower is consistent, then you’re somewhere around 58. 85 to 90% consistent, then you’re up to like 70 tasks. When it’s above or equal to 95%, then you’re at around 75 tasks on average that can be done. That’s going from 38 tasks to 75 tasks on average. You want more tasks completed in a time duration. What you need to do is keep your team composition or your manpower fairly consistent.

So that’s one principle: you don’t want organizational or socialized debt or crew debt, which is when you have to onboard someone, do additional training, get people accustomed to cultural norms, team norms, politics, gaining trust. When you create variation in team composition, you have to do all those things. You have to onboard, train, get people used to cultural norms, absorb them, make sure that trust is gained, go through the five behaviors of a team.

Brooks’s Law: Adding People Makes Projects Take Longer

There’s something else called Brooks’s Law, which says that when you take manpower levels above what’s needed, so you’re in the excess zone, then the return on investment diminishes and the project will slow down. That’s especially true at the end of the project and it costs more money. When you look at team sizes, you have to consider that as team sizes increase, then the costs increase as well.

For instance, when you look at the productivity or the return on investment, what you earn versus what you spend: If you have a team size of two, the time it takes to complete a task might be somewhere around 12 months, then your cost is going to be pretty low. Team size of four, you might get your project done in maybe 10 months and your cost is still fairly low. Team size of six, your time is actually somewhere around nine to eight months and your cost is fairly reasonable and your choice is productive from a time standpoint in comparison to your cost.

Now you go into a team size of 10 and it’s going to take like 17, 16, 17 months and your costs have doubled. You get into a team size of 17 and it’s going to take something like around the same time, 16, 17 months, and now your costs have quadrupled and now your costs have exceeded the amount of time or the return on investment for the time it took you to complete that task.

My point is: two, four, six, 10, 17. Two took 13 or 14 months. Four took 10, 11, 12. Six took nine or 10. Ten people on the team took 16 or 17. Seventeen people took 16 or 17.

But when you look at two, four, six, 10, and 17 on a team size, when you’re talking about costs: two is low, four is low, six is about the average. When you go from six to 10, you double your cost. When you go from 10 to 17, you double your cost again, which quadruples it from the original ideal team size, which is around four to six people. Brooks’s Law says that as you add people, excess people to a team, it will take more time and it will cost more. The source is from a study of 491 projects at www.qsm.com/process.

Context Switching and Communication Saturation

The other one is context switching. When you have more teams who are onboarding and doing training and absorbing and adapting to cultural norms, team norms, politics, and gaining trust in team behaviors, it might take that worker a week to get through that process. The context switching from going to what they were doing to this new team is astronomical.

It might take a human being to adapt into a new environment and cultural norm four to seven days. It might take a crew a half day or a day or a day and a half to reorient to a new task. And at a minimum it takes you 15 to 30 to 45 minutes to change your focus within context switching. Know that anytime you take a consistent team with a consistent focus out of their focus and flow, there’s context switching.

The other thing is the deteriorating team communication or what’s called communication saturation. If you have three people on a team, there’s three communication pathways. Four people on a team, there’s six communication pathways. Five people on the team, there’s 10 direct communication pathways. Six people on the team, there’s 15 direct communication pathways.

As you add more people to the team, you are actually increasing the complexity of communication and it slows you down and makes you lose productivity. The last one Jason wants to talk about is when you have multiple projects and you’re not able to focus. This is from Gerald M. Weinberg, 1992, Quality Software Management Systems Thinking.

When you have multiple simultaneous projects because you have larger crew sizes and more people on those crews, then your productivity diminishes. If you have one project, you might be at 100% efficiency or focus time. When you have two projects, you’re down to 80%, which means there’s 20% waste. Three projects, you’re down to 20% for each project, 60%, which means 40% is waste. Four projects, you’re at 10% capacity for all four at 40% with 60% waste. When you have five projects, you’re able to be 5% focused on each project, which means you’re down to 75% waste.

The bottom line here is for labor: when you add excess labor and materials, you slow down because you have to keep team size consistent to reduce crew and organizational debt, focus on one piece or one process flow, maintain a proper ratio of time to cost versus team size, reduce the complexity of communication among teams, focus and stay in a consistent flow and not lose the productivity that comes from simultaneous projects, avoid the need for overtime which after four to nine weeks can exponentially slow you down, and allow crews to be 100% productive.

One more time: keep crews consistent, make sure you have the right team size, reduce the complexity of communication, reduce organizational team or crew debt, increase your focus by keeping the right project focus, reduce overtime, and reduce the effects of Brooks’s Law which says that as you add manpower you will slow down your productivity in your project, especially at the latter part of the project.

Let’s build capacity and consistency and stop pushing and throwing manpower, throwing money at it, throwing materials at it, making workers work too fast, workers work on unsafe and unclean conditions with too much dependency, not enough time with too large or too small of batch sizes in an improper sequence. That’s the principle and what Jason’s asking everybody to do is to move over into the create capacity side and understand labor productivity in its truest form.

Jason’s not saying he knows everything. He’s just saying as he’s learning these things, he’s realizing that in the construction industry, there are things like Nicholas Modig talks about flow efficiency and resource efficiency. There are the labor productivity principles we learned from Scrum. There are the production laws we learned from manufacturing. Why didn’t we know these 20 years ago? Why didn’t somebody bring them up 25 years ago? Why didn’t somebody teach him 15 years ago? This is ridiculous.

These are true principles. Jason can testify that they’re true. Our current condition is we’re not using them. His challenge to you is let’s use them and let’s share them so that the next generation of construction workers and builders and leaders do not have to go through the same struggle that we had to go through where we’re like “Yeah, let’s increase production. Let’s do this. Let’s go faster” and just not knowing anyway, shape or form how to do it. If your project needs superintendent coaching, project support, or leadership development, Elevate Construction can help your field teams stabilize, schedule, and flow.

FAQ

Q: Why does adding more workers to a project make it slower?

Brooks’s Law says that as you add excess people to a team, it will take more time and cost more. Study of 491 projects shows: team size of six takes 9 months at reasonable cost. Team size of 10 takes 17 months and costs double. Team size of 17 takes 17 months and costs quadruple. When you add more people you increase communication complexity (6 people = 15 communication pathways), create crew debt from onboarding and training, cause context switching that takes 4 to 7 days to adapt, and lose focus across multiple simultaneous projects.

Q: What’s the difference between pushing and building capacity?

Pushing is throwing manpower, money, materials at the problem, making workers work too fast and too long, working unsafe and unclean, too much dependency, not enough time, wrong batch sizes, improper sequence, moving start dates up without preparation, running around looking frantic. Building capacity is focusing on removing roadblocks, installing right the first time, aligning procurement, keeping consistent rhythm and beat, keeping project clean safe organized, improving team health and stability, taking more time to prepare and make work ready. On pushing side you’re moving people forward without preparation. On build capacity side you’re keeping things on rhythm and taking time to prepare to build it right the first time.

Q: How does team consistency affect productivity?

When less than 50% of the team is consistent, they only get 38 tasks done on average. When 95% or more of the team is consistent, they get 75 tasks done on average. That’s going from 38 tasks to 75 tasks just by keeping team composition consistent. When you create variation in team composition you have to onboard, train, get people used to cultural norms, absorb them, gain trust, go through the five behaviors of a team. This organizational or crew debt slows you down dramatically.

Q: What does the dice game teach about variation and flow?

The dice that rolls one, two, three, four, five, six (high variation) finished at $26 million with 380 units of labor in 23 weeks. The dice that rolls three, three, three, four, four, four (low variation, consistent flow) finished at $17 million with 286 units of labor in 19 weeks. When you have more variation in the speed everybody’s going, the more manpower and materials you have, which means the longer the project takes and more it costs. Flow at medium speed always finishes faster and costs least because you have right sized inventory levels and right sized manpower.

Q: Why do Agile projects succeed more than traditional projects?

From 2013 to 2017, Agile projects had 42% success rate compared to only 26% for traditional projects. Traditional projects: 74% not successful, 21% absolute failures, 53% challenged and finished behind schedule. When you involve true Scrum, lean principles, pull, Takt time, you increase percentages minimum 26%. Add Takt planning, This is Lean concepts, true Scrum, Last Planner done right and percentages skyrocket. You could have 42% success, 50% with difficulty, only 8% failures instead of current state.

On we go.