A Guide to Improving

Construction
Productivity

1
Table of Contents

The state of construction productivity 3

How the industry measures productivity 5

The Total Productivity Metric 8

Technology’s role in productivity 13

Production tracking insights 18

2
01
The state of
construction
productivity
vv

The world
spends $10 of projects take
trillion on 61% longer to complete
than scheduled
construction-
related goods
and services
every year.
But productivity is still lower than of construction
other sectors. 70% projects go over
budget
(2017 data from Mckinsey Global
Institute)

4
vv

Why does
construction
productivity < 1%
look so low?
It’s hard to measure—and
the industry doesn’t typically
invest in new tech to manage of revenue is used
projects digitally.
for R&D tech

5
02
How the industry
measures
productivity

6
Micro productivity vs. Macro productivity
In construction, there are two types of productivity: micro and macro.

Micro productivity Macro productivity

The output of one company (or Looks at the industry overall from a
even one project), including: large sample of projects, including:

Total profits Labor

Resources used Capital

VS. Energy
Completion time
Material

Service

Manpower

Quantities

Equipment

7
Acceptable productivity metrics
Two metrics are widely accepted in construction, but don’t tell the whole
story: Labor Productivity Metric and Project Productivity Metric.

Labor Productivity Metric Project Productivity Metric

Labor Productivity Project Productivity

=
Quantities Installed
=
Cost for Construction

Working Hours Working Hours

Doesn’t consider Doesn’t consider

Different types of jobs and Where costs come from, how
job specialties many hours they take up

8
03
The Total
Productivity
Metric

9
Total Productivity
Metric (TPM)
This metric combines all the factors we
discussed before, but also considers how
different each task and job is.

It measures six types of input across four project

phases.

TPM inputs and definitions

• Labor input: manpower
• Owner cost: expenses that aren’t labor,
materials, or energy
• Material input: materials used in the actual
structure
• Capital input: rental and equipment costs
• Energy input: energy put into a project
• Construction project indirect cost: parking,
housing, temporary structures, and utilities
10
How do you
calculate TPM?
Phase 1.

Planning and • Labor

• Owner Cost
design

Phase 2.
• Labor
Procurement • Owner Cost

• Labor
• Material
Phase 3.
• Capital
Construction • Energy
• Indirect Cost
• Owner Cost

Phase 4. • Labor
Commissioning • Energy
and start-up • Owner Cost

Divide by total output

The Total Productivity Metric

11
 1. Calculate Input
$80,000 Labor
$100,000 Owner Costs

Example
$40,000 Materials
$60,000 Capital
$30,000 Energy
+$20,000 Indirect Costs
You have to build a 20-mile
$330,000 Total Input
stretch of highway.

To calculate the Total

Productivity Metric, add up all
2. Divide by Output
the input factors.
$330,000 Total Input
20 Miles
Then, divide that number by
the end result output (in this
case, 20 miles).
3. Outcome

$16,500 per mile

12
 The risk with TPM One way to lower risk?
BUT
TPM is accurate because it factors in
Accurate field data collection
many different inputs.
(And swapping from pen and paper to
However, any missing or incorrect
software makes it easier to achieve.)
information can easily skew
your results.

13
04
Technology’s
role in
productivity

14
Accurate data,
better results
Field reporting is essential to
calculating productivity. Keeping a
clean log of jobsite updates can also
prevent surprise delays or errors.
Easier said than done—but easier
done with technology.

15
vv

01. Make reporting easy for

your field crews

02. Less manual entry (and

Why switch human error)

to software? 03. Track all your data (and

progress) in one place—
and share it to win bids

04. Make data-driven

decisions to do more
efficient projects

16
Features to look for in a production
tracking software

Time Cards Materials Equipment

How much was

For both crews and Usage hours and
used or installed,
individuals days on-site
and where

Cost Codes Real-Time Insights

Customizable ways Visibility into all the

to attribute the work data at a glance
17
05
Production
tracking
insights

18
Stay on time,
and within
budget
When you have real-time jobsite
data at your fingertips, you can make
better decisions for your projects.
And deliver them on time and within
budget.

Better collaboration is only a few

clicks away.

19
Compare cost
codes and
performance
Having access to digital field data
means you can compare cost codes
and see what’s working (or not) with
enough time to take action.

These insights are invaluable for

improving not only an individual
project, but potentially all projects
for the company, too.

20
“
“If we have a bad week on a labor code, we’ll
see the projected productivity start to drift away
from the budget. Most people who don’t have
this level of insight will just keep on doing the
same thing again and again until someone sees
it on a financial statement … and by then, it’s too
late.”

– Todd F., VP of Pre-Construction Planning at J.W.

Danforth

21
Production
tracking made
easy
Give your crews an easy-
to-use tool in the field.
With Raken’s mobile app,
they can quickly record
quantities and usage.
Plus, they can attach
photos and videos for
more visibility.

22
Better insights,
better
decisions
With the information delivered right
to the office, you gain better visibility
into how the project is pacing, and
can make incremental changes in
real time to ensure you maximize
profitability.

23
Ready to get productive?
Track Your Productivity

rakenapp.com | 866-438-0646
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