Companies in the business world are constantly concerned with improving their bottom line—increasing the rate of return on investment, improving the ratio of profit to revenue, or simply increasing total profit. Using programs with buzzword titles such as productivity improvement, total quality management, re-engineering, time-based competition, horizontal management, downsizing, and right-sizing, they reorganize, trim staffs, invest in training, automate, computerize, and otherwise do whatever is considered necessary to optimize or maximize the company’s performance and beat the competition. But, whatever the name of the program, the goal is the same; spend less to make more money or spend less to provide the same or better service.
Cost Control is the effective application of professional and technical expertise to plan and control resources, costs, profitability and risks. Simply stated, it is a systematic approach to managing costs throughout the life cycle of any enterprise, program, facility, project, product, or service.
Productivity is related to the variables that may occur on projects as it relates to:
- Sociological (area) factors
- Location factors
- Human factors
- Field organization and management factors
- Accounting and estimation formats
The Construction Industry
For production-type activities, this translates into reducing worker and equipment hours per unit of output—i.e., boosting productivity.
For support and professional activities, it means improving efficiency.
For all activities, it includes reducing waste of time, materials, and equipment.
A comprehensive treatment of inefficiencies and suggestions for improvement, specifically on the construction site, but also some of which are applicable in all environments, has been identified and includes:
- Labor/contract disputes
- Meetings
- Personality issues: owner-engineer-contractor
- Late material/installed equipment deliveries
In essence, it means improving the organization’s overall results.
- Analyze worker productivity and performance.
- Identify ways to increase productivity, improve performance, and minimize waste in the workplace.
- Inefficiencies inherent in the design and operation of the work place
- Individual inefficiencies
- Non-contributing (wasted) time by individuals
- Waste of materials, supplies, and services (misuse, overuse, loss)
- Waste of equipment (abuse, misuse, loss).
- Functions that no longer add value to the organization’s output. In the past, management focused on productivity improvement as the key to reducing costs and/or improving the bottom line.
Last, but not least
The goal of every organization is to promote performance and productivity.
An organization’s best course of action is to ensure that the organization does whatever is necessary for each team player to be “the best they can be.” That means eliminating or minimizing conditions within the organization that limit performance and productivity, as well as creating conditions that support them. This includes providing education, training, support, and a positive team environment. It also requires empowering individuals to take ownership of their work and giving them the tools and resources they need to succeed.
Ultimately, an organization should strive to provide an environment of growth and development for its employees.