The construction industry is in most countries not only an important source of employment directly and indirectly, but also undoubtedly constitutes one of its main economic engines, something that is clearly reflected in its percentage share in the PBI.
However, despite its importance in the economy, its development, especially with regard to the construction of houses or buildings, is overshadowed by resistance to change. While there have been significant evolutions regarding the types of materials used, fundamental advances in terms of new equipment, instrumentals, techniques and different and better software, business management and approach, very little progress has been made.
In part, the problem is due to the development of different theoretical frameworks that do not adequately contemplate their effective and efficient implementation. When it comes to indicators, these apart from being understandable must be easy to calculate, being able to count without major problems and inconveniences with the data to be used for their respective calculations.
On the other hand, a series of paradigms and theoretical frameworks limit and hinder the implementation of new ways of efficiently managing the company. When we talk about managing it efficiently, we are talking about putting aside traditional management attitudes to move on to making use of “lean” thinking, that is, the development of activities and processes in a “lean” way, which implies detection, prevention and systematic disposal of waste. Waste that in the construction industry can reach up to a representative percentage of 50% of the sale price. The question is how can it get so high? The answer is: very simple, customs have led to accepting, in traditional management companies, as normal amounts of man hours, materials and other resources,which are from the point of view of thinking "read" as unacceptable waste.
The disorder, the lack of organization and cleanliness, the lack of security, the lack of knowledge and consequent application of ergonomic principles by the workers, the accumulation of excess materials, the loss of tools, the breakdowns in the machines and the Large budgetary deviations are among others, issues considered as common or normal by managers and owners of construction companies, who charge such degrees of inefficiencies and unproductive costs on costs.
Well, in companies closely linked to economic cycles, the aforementioned has two serious consequences. In the first place, it is not usual to take full advantage of the good times of the economy to obtain a higher level of profitability, which on the other hand would serve as a cushion to help overcome the times of lean cows. Secondly, when bad times come, these companies used to using high prices as a way to cover inefficiencies and waste during times of high demand, are cornered by high costs and lower prices due to falling demand, not knowing how to really deal with such situations.
Another issue lies in the scant care for quality. The lack of brands means that it is not careful with it. A car that has a much lower value, and not to mention mobile phones (cell phones) have a great quality control, and not only for safety reasons, but because if the consumer's expectations are not met, they will not repeat the purchase such brand, and their complaints and disagreements would reach the ears of other consumers. But in the housing sector, and being these of much higher value, none of this exists. The structural calculations, the resistance of the balconies and the proper functioning of the elevators will be taken into account very well, but what about the humidity in the pieces, the bad finishes, the discoloration of the fronts, among many other issues.
A combination of problems tends to foster these kinds of attitudes. When managers and investors see each construction as an immediate objective in terms of results, when the workers give little importance and care to the good completion, and when all the factors are concentrated in the design and geographical location as a way to achieve an advantage monetary, little remains to support changes in the way a construction company is run more effectively. As such changes require a medium and long-term process aimed at properly training and training personnel at all levels and processes.
So it is much more difficult to find great leaders in the construction industry. This is a time of great change and the construction industry will not be able to stay away from change for much longer.
Although the United States and Japan, among others, may escape the average of the considerations, most of the countries register, as was said at the beginning of the presentation, very high charges for non-productivity. It is therefore focused in this direction in which this work is exposed, with the idea of making the processes and activities of this industry more efficient.
The classic problems
What do you hear most from managers?
Phrases like the following:
- Each project is a separate case. The working groups dissolve at the end of each project. It is an industry highly dependent on weather factors. Workers have very special behaviors. It is complex due to the characteristics of the processes to make effective controls. What It is valid for other types of activities, it is not valid here. We depend a lot on subcontractors, not being able to exercise optimal control over their activities.
Most of these and other problems stem from misunderstandings and inadequate knowledge of Total Quality Management or they are mere excuses for not using Quality Control methods. Consequently, a company that is capable of solving these problems has a great competitive weapon in this sector.
The origin of these problems has its roots, or reasons for being, in issues such as:
- The companies in this area are not exposed to international competition in most of the projects. The owners of the companies, as well as their managers, technicians and workers are strongly influenced by paradigms of what Alvin Tofler calls the Second Wave. The sector has seen a great evolution in the field of architectural design, materials engineering and new machinery, but not so in the field of management Administrative and accounting activities have not given life or enough energy to new forms The sector has been exposed to high levels of financial speculation.
What is proposed?
The fundamental objective is to see the subject in a radically different way than it has been done until now, for this we propose:
- An easy-to-understand methodology A work system based on a philosophy focused on quality, productivity and continuous improvement Make use of feasible application tools A flexible system adaptable to needs, resources, culture, risks and environment of each company.A way of working that guarantees concrete results.A series of tools and analyzes that allow achieving greater productivity and profitability.A holistic and systemic vision of the company is proposed.
The methodology in action
The central point that starts and serves as the basis for the Performance Constructive Management process is the Diagnosis.
We begin the Diagnosis with the identification and inventory of the indicators and ratios used and calculated by the company, verifying if they are calculated regularly, how often they are calculated, what elements are used for their calculation, how they calculate it, who is it the person responsible for their calculation, what is their evolution over time, what is the reason identified or not for the variations and what measures have been adopted. Here, then, we will already have a very important advance in recognizing the degree of importance that the company and its managers attach to measurements.
Within this diagnostic process we must verify that a series of ratios and indicators considered fundamental are calculated, and if they are not being calculated, proceed to their calculation and evolution over time.
The third aspect to consider in the diagnosis process is the survey of the company's management methodology, also verifying if the most modern techniques and systems in the field of Lean Construction are being applied.
Fourth, it is necessary to verify a series of indicators and indices related to different factors of productivity and waste.
Fifth step is to correlate the levels of profitability, waste and costs incurred to generate a monetary unit of income (sales) with the management methods, with the evolution of the environment and comparing them with the ratios shown by direct competitors (benchmarking).
Considering all these points, we are in a position to know what the state of the company is. From the knowledge of its lack of information or degrees of unproductiveness or wastes detected, the information systems are implemented or improved, and measures are generated to detect, prevent and systematically eliminate the different types of waste.
We thus fully entered the planning stage. It is about determining what are the main risks, needs, resources and possibilities of success of each measure. Based on this and depending on the socio-cultural framework of the company and its environment, determine which tools and work systems are the most suitable.
This planning must consider both the material and human resources necessary for the successful implementation of the PCM. In this sense, the formation and training of the members of the organization should be planned.
Once the action plan has been defined, it is necessary to proceed with the implementation and implementation of the various methods, systems and tools defined in the previous planning stage.
As the different work methodologies are being put into practice, the measurement and control process must be carried out in order to verify whether the expected results are being obtained.
The results of the measurements must be evaluated in order to carry out the respective adjustments aimed at improving the operation of the management system. From here, a new and continuous process begins, resuming planning and continuing with the reimplantation and adjustments of methods and systems aimed at continuous improvement of processes.
Now, how it differs from other systems. First of all, we start with indicators and ratios that are really measurable and easy to understand. Secondly, symptoms are detected and then the root causes are detected, that is, the true reasons that originate the company's departure, not only the first symptoms being left. Based on the real causes that give rise to the indicators, the best systems and methods adaptable to the real capacities and needs of the company are chosen and configured.
On the other hand, a preponderant rank is given to prevention, budgeting and design activities, since these activities end up having a high impact on the final cost of the works and therefore on the economic result of the same.
What new tools are used?
Tools are used although many of long-standing used, they are not so much in the construction industry. In many cases they are not even known in this economic activity.
- Horizontal AccountingAnalysis and Improvement of Added Value in ProcessesValue Analysis and EngineeringCost Reduction MatrixImprovement of Work MethodsStrategic Maps and Dashboards Six SigmaErgonomicsLean ConstructionCosting and Activity-Based ManagementObjective CostingDirection by ObjectivesIntegral LogisticsAnalysis and improvement of management by means of the 16-zeroes Statistical analysis and management improvement Paretian control Processes Five “S” (5S) Management tools (the classic 7 and the new 7) Total Productive Maintenance Systematic Adjustment System Learning Curve Taguchi Loss Function Constraints Analysis (TOC) Business Intelligence Benchmarking
Not each one of these tools will be exposed, which is reason for specific works destined to each one of them in particular. Rather we will expose the meaning and objective of its application.
It is essential and fundamental to start with the definition of quality control made by the glossary of terms of the Japanese industrial standard, considering it as the system of techniques designed to economically produce goods and services that meet the needs and requirements of customers.. It is from this important definition that the PCM is built.
In construction activities, a lot of time is wasted identifying the location of tools, which many times are not in optimal conditions for immediate use. To all this must be added the risks to the physical health of the operators. To cover this, improving the layout, location and cleanliness of the workplace, in such a way as not only to find the tools more quickly and easily but also the materials, is that the 5S is put into practice.
If the market price for a property with certain characteristics is known, and it is necessary to obtain a certain profitability, we are in a position to reach the Target Cost. And to achieve this we can and must make use of both Value Analysis (analyzing which characteristics are really valued by customers, and therefore they are willing to pay for them) and Value Engineering (aimed at evaluating processes, eliminating those not generators of added value within the construction process).
The budgeting of the works is not a minor issue. Budgeting a value and then being totally denied by reality can mean incalculable losses for the company. The question is: is this admissible? The answer is no. In a process of continuous improvement, the margins between budget and reality must be reduced by making use of various tools such as the Learning Curve, the SPC, the Taguchi Loss Function and management tools (the classic seven and the new). Whether it is that we have over-budgeted and therefore we have purchased or committed ourselves to excess amounts, or we have over-budgeted and we end up with construction costs much higher than the market, in both cases the company has to suffer losses.It is not permissible for professionals to continually and systematically make errors in calculations. For this, it is necessary to apply the Learning Curve evaluating the capacity for continuous improvement in the calculation of costs and quantities of hours and materials to be used.
Projects can be very different from each other, but the budgeting process is always the same and this must be systematically improved, only in this way can better control be carried out during the monitoring of the work, avoiding and correcting deviations in its development.
Construction workers are used to making great physical effort, which is why improving the way of carrying out activities both in the use of the body and in the selection or design of the best tools can significantly increase productivity, also reducing occupational diseases and levels of absenteeism. The tool for such analysis and improvement is what is called ergonomics.
Within the new postulates of quality it is no longer admissible to accept levels of 3 or 4 sigma, today we aspire to levels of six sigma and at least 5 sigma. The effect such failure levels have on customer satisfaction and waste levels is enormous. Achieving a six sigma level means incurring only 3.4 failures per million opportunities. Many construction companies deliver first-rate works, but it is worth asking how many reprocesses and hours of work and materials were wasted until the completion of the work in perfect condition. This is what the systematic application of the DMAMC process (Definition-measurement-analysis-improvement and control) points to. This process is essential in the application of the Six Sigma system.
A fundamental issue is the improvement of working methods, which consists of the systematic registration, analysis and criticism of existing forms of work, in order to develop and apply simpler and more efficient processes and procedures.
Through benchmarking we can identify those processes that our direct competitors, or companies engaged in other activities carry out more efficiently and effectively.
Mastery of Learning and Performance
Any company takes a great step forward when it makes the transition from the traditional Gaussian curve (said curve implies a normal distribution with the existence of maximum levels, minimums and a majority around the mean) to mastery in learning and learning. performance. Organizations take this step because they want to reduce operating expenses and increase profits. The quality movement has taught us to expect to “get it right the first time” in virtually every job category. The Gaussian bell is no longer acceptable. The fact that all employees in all major job categories within the organization are capable of achieving mastery of learning and performance is the new performance standard for the 21st century.
Conclusions
The selection of the most suitable tools and work methods for each construction company based on their needs, socio-cultural and economic-financial characteristics and the market where their activities take place, will allow significant improvements in their performance and competitive capabilities.
An action plan that has the support of Balanced Scorecards and budget improvement systems must make what is indicated in the previous paragraph feasible. For this, a diagnosis must be started. Diagnosis that constitutes the central component on which the rest of the process will continue. In this Diagnostic work it is essential to know what measurements are made, what their values are, and how they have evolved over time. Subsequently, the registered values must be correlated with the management and work methods, in order to determine the flaws in management and the effect that this has on quality, costs, productivity and profitability.
As a result of the application of the PCM system in construction companies in various markets, the following results have been achieved:
- An average reduction of the order of 20% in costs An average decrease of the order of 30% in execution times A 28% increase in customer satisfaction levels An average reduction of 65.40% in Accidents. An average increase of 72% in the satisfaction levels of the operators. An increase of the order of 45% (average) in the return on investment of the construction companies.
Bibliography
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