Critical Differences Between Productivity and Efficiency

By John Kenney, Cotney Consulting Group.

Productivity and efficiency are not interchangeable words. In order to correctly analyze your company’s performance, be sure to understand their differing meanings.

When I am reviewing a client’s operations, I am often asked, “Aren’t productivity and efficiency the same thing?" Overtime, these words have been confused with one another and used repeatedly to mean the same thing in conversation. However, there are crucial distinguishments between the two that are important to know if you are to correctly analyze your operations' performance.

Productivity is the output per unit of time, and efficiency is the best possible output per unit of time: i.e., doing things correctly. When you do your tasks correctly, you will hit your maximum level of efficiency and productivity.

For example: If Joe and his six-person crew install 100 squares of a roof in a 10-hour day while Mike and his six-person crew install 80 squares of roofing in the same 10-hour day, it may look like Joe's crew is the more productive; that would be true if all things considered were equal. But if Joe's crew did not complete everything as they went and required another half day to finish the 100 square section's flashings, Mike's crew would be 34% more efficient. Mike's team is clearly more efficient than Joe's, which connects directly to their actual productivity. Ultimately, they are more productive than Joe's team, which would be easily missed if you only observed squares' raw productivity.

If we take the above example and forecast that over one year and assume both average crews’ costs are the same, Mike's crew efficiency would put over two hundred thousand dollars to your bottom line. Crew efficiency is not the only area you should be focusing on to add dollars of profit to your P&L. The following are other areas you should be focusing on.

Improve your decision-making and management workflow

A considerable part of your roofing projects' project management is minimizing nonproductive activities that cost your company additional expenses and cause delays. These non-favorable activities include looking for missing project data, dealing with conflict resolution, and correcting mistakes that should have been avoided. To improve the efficiency of your roofing projects, below are some tips to reduce nonproductive activities.

• Review the flow of your decision-making process. Take a close look at your daily site activities and operations. Review how the decision-making flows starting from when it first surfaces. Reviewing your current strategy will allow you to identify areas where you can improve and speed up your workflow creating a more efficient operation moving forward.

• Measure the current level of productivity. With data, your management team can pinpoint flaws in the workflow and streamline the operation. Creating a performance-based incentive program to reward your crew members and supervisors who meet and beat project budget benchmarks encourages an efficient project workflow.

• Establish an efficient communication procedure. Slow decision making stems from a lack of a proper communication system and creates issues. Multiple projects spread out geographically, and key decision-makers often located back in the home office compound the situation. Find ways to eliminate delays in communicating with upper management in real-time. Also, set regular meetings (huddles) where your key decision-makers can ask and answer questions, brainstorm ideas, and review projects' progress.

Manage your worksite and embrace technology

Construction and, most importantly, roofing contractors lag behind most industries in terms of adopting new technologies. According to recent industry studies, the construction/roofing industry is second only to agriculture to be the least digitized in technology use. Industry leaders are starting to recognize that technology can be transformational in terms of efficiency, yet over 60 percent surveyed still use manual and paper processes.

Technology provides a roofing contractor with a competitive advantage. From estimating and planning your roofing projects to managing your entire administration process. Automation will be the roofing industry's future, so you need to leverage them before you are left behind.

Listen to all your team members and provide the right training

On-site employees will provide a better insight into improving your roofing site processes' efficiency compared to upper management working off-site. They have a wealth of first-hand knowledge regarding which equipment works efficiently or which techniques work best. It is essential to conduct regular face-to-face meetings with your team members to ask about workplace issues to get input.

Involve your experienced workers in the planning phase. Early on, involving them will allow them to detect flaws in the plan before it becomes a more significant issue.

Your managers need to ensure that employees are thoroughly explicitly trained for the job. Training is vital for efficiency as it addresses the daily site activities that mount up and contribute to project delays and additional costs if done inefficiently.

Roofing supervisors need the right management skills and techniques to be able to lead their foreman or subcontractors. You should train all your employees to install new systems or operate new equipment to perform them smoothly. Most importantly, companies must train employees to do tasks most safely without exceptions.

Data management

Data is a powerful tool in the hands of someone who knows how to manage and interpret it. The roofing industry is throwing away 95% of the information it produces. This means that valuable knowledge is thrown out of the window daily, and many mistakes will inevitably be repeated. You must learn to collect and interpret the data and provide your field operations with valuable feedback. Using a robust data management process will allow you to understand the operational process better and ensure that your future projects will have less costly mistakes and be more profitable.

To sum it all up, boosting your efficiency on site is very challenging. However, with the right plan and steadfast effort, you can take your roofing company's efficiency management game to the next level. Digital tools provide terrific assistance with that, and you can assure that your work will be done in a timely, precise and more profitable manner.

Learn more about Cotney Consulting Group in their RoofersCoffeeShop® Directory or visit www.cotneyconsulting.com.

Original article source: Cotney Consulting Group