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Labor Productivity Improvement

in Construction Projects Using WBS & OBS Integration

 

FEATURED PAPER

Essam Mohamed Lotfi, PMP, CCP

Abu Dhabi, UAE

 


  1. ABSTRACT

Abu Dhabi is one of the cities in GCC where the Construction field is booming very fast; this technical paper is intended to show the effects of labor productivity on construction projects profits, the factors which result in productivity loss and how to improve productivity using WBS & OBS framework. The author seeks to illustrate how loss productivity will affect direct labor cost which may result in reducing project profits by using Earned Value management (Accomplished man-hours). Upon applying earned value calculations, the negative deviation from planned man-hours will be analyzed and root cause of productivity loss and how it may affect the direct labor cost. Hence establish WBS & OBS integration matrix to recover this loss. Examples and figures used in this report are adopted from On-going construction project within Abu Dhabi city and estimated productivity rates are limited to this project only. The results of this study will show the effect of establish WBS & OBS integration matrix to monitor the project performance and improve the labor productivity by assigning works to appropriate organizational units using right combination between Responsibility assignments’ matrix and organizational breakdown structure by identifying the individual responsibility for performing the work.

  1. ITRODUCTION

Labor productivity is one of the most vital challenges during construction projects life cycle (Productivity is critically important in construction projects, both large and small. Construction contractors are typically paid for work completed in place that conforms to the terms of the contract. This is sometimes referred to as pay item work and is generally true whether the contract is lump sum/firm fixed price, cost reimbursable, target cost, unit cost or pay item work or as a percentage of Previously defined categories of work often referred to as a schedule of values or bill of quantities. That Is, unlike automotive manufacturers, construction contractors are rarely paid on the basis of the entire Completed product. And, unlike craft labor, construction contractors are rarely paid by hours of labor. Therefore, productivity is related to project cash flow and profitability. Refer AACE International Recommended Practice No. 25R-03).

It was noticed that most project managers can’t achieve either planned labor productivity or their organization strategic plans in this regard. Failure in achieving required or planned labor productivity may affect the direct labor cost and incurred huge losses to the project. In most of construction projects if the standard and or planned productivity rates are compared to actual accumulative accomplished productivity it may shows that the actual productivity is less than planned due to many circumstances’ illustrated later in this technical paper, which means that the actual manpower used to accomplished specific task is greater than the planned that should be used for the same task and this may escalate the labor direct cost and may affect the planned budget of the project, this can be cleared if simple Earned Value management is applied which will show that the project till specific period of its life cycle is over budget.

This difference of labor productivity may be because of lack of duly supervision and or non availability foundation to assign work to appropriate organizational units to ensure right combination between project works and responsibility assignment matrix and organizational breakdown structure, Hereinafter this technical paper goal is to show how to achieve the labor productivity improvement using proper methodology to analyze the weakness of labor productivity and how to improve it as well. In this technical paper the actual accomplished labor productivity will be compared to standard and or planned productivity rates to analyze the deviation and its reasons then study the effect of using WBS & OBS integration matrix to ensure that each work package will have a single point of responsibility which will be used as main objective of controlling direct labor cost and to identify the individual responsibilities for performing the work to monitor the project performance.

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About the Author


Essam Mohamed Lotfi

Abu Dhabi, UAE

 

 

Essam Lotfi, PMP, CCP is ELV Projects Manager, BSc. in Electrical Engineering, Power Distribution through Zagazig University, Egypt since 2001. He has pursued and achieved his certificates in Project Management (PMP®) from PMI-USA since 2013, and certificate in Cost Management (CCP®) from AACE International since june-2014. Essam has 15 years extensive hands on experience in various aspects of projects and project management within maintenance, power distribution networks, monitoring and supervision, and construction projects as well.

He has volunteered at PMI-Global Congress EMEA-2014 – Dubai during 5th to 8th May 2014. He has made technical presentations at PMI-AGC 15th International conference –Bahrain 19th to 21st January 2015; the 54th AACEi-SF Bay Annual Western Winter Workshop, Lake Tahoe, Nevada, USA; and the 55th AACEi-SF Bay Annual Western Winter Workshop, Indian Wells, CA, USA. He has authored and co-authored papers previously published in the PM World Journal and now contained in the PM World Library at https://pmworldlibrary.net/authors/essam-lotffy/

An independent project management, cost engineering and cost control consultant and instructor, Mr. Lotfi can be contacted at [email protected]