Production Rates Variance

Would it be useful to attempt to define "productivity factors" for each country, so that rates for one country can be converted to those for another? I have seen that approach used in estimating text books, usually with USA representing 100%. The problem ay of course be that such factors will probably vary dpending on the type of work.

Hi Colin,

That looks like a good idea. We could categorise the works into major heading types and make an initial start on that front.

Also, once these inter-country rates are organised within the database, it would be possible to calculate and show the variances by country. I don’t think it would be difficult to "ask around" the various countries for certain specific, or popular activities in order to build up these statistics.

Can you lay your hands on the USA info you mention - a book reference / fax / email ?

I am working on this inter-country data with a couple of guys, but the scripting work is not complete, so the data has yet to uploaded to the web.

Regards.

Jake I'll see what I can exhume from my text book collection... Colin

I have a couple of text books from my chemical engineering background including sections on estimating.
Neither reference deals with international variations in labour productivity, but refer to productivity variations in differing regions of
USA.

The first textbook is by Peters & Timmerhaus: "Plant Design and Economics
for Chemical Engineers", 3rd Edition (1980), published by McGraw-Hill
[there are probably more recent editions - I haven’t checked]
It gives a table of "Relative Labor rate and productivity indexes in the chemical and allied products industries for the United States (1975-1976).
These in turn were derived from "Chem Week" magazine.
The index values were calculated by dividing the rate and productivity parameters for each region by the weighted average value of all the regions. Tables of these two indices enabled the relative costs of construction labour to be calculated in different parts of the USA.

The second textbook is more recent (1995). Published by Marcel Dekker, it is by Pablo F. Navarrete and is titled "Planning, Estimating and Control of Chemical Construction Projects". Under the heading "Labor Productivity" (P267), Navarrete says" Labor Productivity is always a major concern to the estimator. Variations of up to 100% between two specific sets of
circumstances are not unusual."
Under the sub-heading "Factors Affecting Productivity" on the same page, Navarrete, quoting a US study in the early 1980s, stated "that, to a large extent, poor labor productivity is the result of inadequate management practices. Conversely, the risk of poor productivity can be minimised by effective project management." The book includes a Qualitative table of Factors Affecting Productivity. It lists 18 parameters (eg, Contracting Approach, Contract Size, Schedule, Supervisor Quality) and gives examples of each parameter’s value (qualitatively) corresponding to Poor Productivity and Good Productivity.
Under the sub-heading "Basis of Construction Hours" Navarrete states that "Labor productivity should be measured against consistent standards.
Everybody talks about Gulf Coast productivity and of using Gulf Coast unit hours in their estimates. Yet everybody seems to have a different set of Gulf Coast Unit Hours. In real life, many contractors have their own units and modify them periodically to reflect actual experience."
Under the sub-heading "Productivity Adjustments", Navarrete lists adverse conditions and corresponding multipliers to be applied to the initial estimated hours.

For example,
CONDITION     MULTIPLIER     COMMENTS
Bad Weather     1.05          More effect on schedule than productivity
Second Shift     1.10          Apply only to work on second shift
Retrofit or      1.20-1.40     Apply only to work specifically affected congested area

So from the above I conclude that using area productivity factors to adjust manhour estimates from one region of a country (or from one country) to another is risky!

Hope this info is of some use...
Colin Cropley PMP

individual countries is better as there is marked variance within regions such as SE asia and differing weather patterns

I believe the rates should be applied by country, but also indicate which industry the rates apply. Rates applied to the construction industry possibly differ to other industries? I don't know as I only work in building construction, but have noticed some of the existing rates in PP database are different to what I would apply in construction. Maybe the basis of the rate needs to be included as well. Its alway difficult when using unfamiliar rates to understand if it applies to your situation.

Two US references that would be worth checking out are:

1. Building Construction Cost data, 60th Annual Edition, 2002, RS Means Catalog No. 60012, ISBN 0-87629-620-7

2. 2002 National Construction Estimator, 50th Edition, Dave Ogershok, ISBN 1-57218-108-7

Both come with estimating CD-ROMs and cover all data for residential, commercial, and industrial construction

Hope this is a help.

Bruce Mercer, PMP