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Theft in construction

30/3/2017

Image courtesy of Simon Howden at FreeDigitalPhotos.net

One of our projects located in a remote area of a foreign country required twenty thousand cubic meters of concrete, which was produced from our concrete mixing plant on site. We transported the cement for the concrete in bulk from a factory six hours drive from the site, using two of our own cement tankers. We couldn’t seem to get cement delivered fast enough and the project was constantly delayed due to shortages.

Our cost reports showed we were losing money on concrete materials. The project team claimed the loss was because the client had requested more cement in the concrete and we would claim the additional costs from the client. The months went past and the continued to increase. Eventually, the project team undertook a reconciliation of concrete materials (something that should have been done from the start of the project) and found that more than half a million dollars of cement was unaccounted for.

Further investigation found that when our drivers returned to the project site with a load of cement they made a detour, stopping off and discharging the cement from one of the tanker’s compartments, which they then sold. In fact, a third of every load of cement was being stolen from the truck en-route to the site.

Not only was there the direct cost of the stolen cement, the project also had insufficient cement due to every truck only delivering two-thirds of what they should have, and the trucks taking a couple of hours longer on each return journey because of the detour to unload cement.

By implementing suitable controls we were able to prevent further theft of cement and never ran short of cement again. But obviously, we were never going to recover the losses we had already incurred.
The many forms of theft on construction projects
Theft on construction projects takes many guises. Project sites can employ hundreds and even thousands of people from diverse backgrounds. Some of these employees are employed directly by the contractor while many are employed by subcontractors and suppliers working for the contractor. But often the client has their own workers on the project and they also even employ other contractors. Project sites can sometimes be difficult to secure as they can cover large areas and ongoing work can prevent the erection of permanent fencing. Equipment and deliveries are constantly entering and exiting premises.

However, theft takes a multitude of forms and includes lots of white-collar crime. In fact, fraud often accounts for more theft than the direct theft of materials.
Some forms of theft on construction include:

Theft from the site which could include; equipment, tools, materials. Sometimes the theft is even items that have already been built into the project, such as electrical cable, which often causes damage to other items, and additional work to reinstall and repair the damages.
Theft of delivery trucks – equipment and material are stolen from delivery trucks while they are parked at rest stops on the way to the project.
Suppliers short delivering materials – this could include not delivering the quantities on the delivery note. I have regularly caught suppliers short delivering concrete and concrete materials.
Suppliers invoicing for materials that weren’t delivered or double invoicing for the same item or charging more than the agreed rate on the order.
Subcontractors invoicing for work they haven’t done or charged more than the agreed price.
The unlawful use of company assets – for example, employees using equipment for their own projects either at home or where they are reimbursed directly by another client.
Employees depositing payments meant for the company into personal bank accounts. We even had one accountant open a bank account with a similar name to our company so that they could direct clients to pay their invoices into this account.
Employees accepting bribes to falsify payments and accounts.
Employees falsifying travel and petty cash claims so they are paid more than they are entitled to.

The true cost of theft
When we have theft we often only consider the direct cost of replacing the item. But the cost is often more than this. The cost may include:

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This article was first published on the ClockShark website. To visit this website and continue reading the article click on the link above.
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To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:
'Successful Construction Project Management: The Practical Guide'
'Building a Successful Construction Company: The Practical Guide'
'Construction Claims: A Short Guide for Contractors'
'Construction Project Management: Tips and Insights'
'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

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© 2017 This article is not to be reproduced for commercial purposes without written permission from the author.

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Are you ready for your project meeting?

23/3/2017

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Image courtesy of Ambro at FreeDigitalPhotos.net

Construction projects should have regular meetings between the client and the contractor. A written record, or minutes, should be kept of these meetings.

Project meetings are usually an opportunity for project progress to be discussed and various issues to be raised, discussed and hopefully resolved.

The agenda on these meetings could include:

Safety including recording incidents, concerns and possible risks.
Project progress measured against the approved project construction schedule.
Outstanding information including construction drawings, design information and drawing approvals.
Project delays including the reasons for the delays and the action being taken to catch up the lost time.
The status of outstanding Request for Information (RFI’s or Engineering Queries).
Quality concerns and outstanding inspection or test results.
Progress valuation submissions and their payment.
The status of variation claims. What claims have been submitted, their value or impact, and whether they have been approved.
Potential claims that either the contractor or the client may have.
General information and concerns.

Other items that could be included are; commissioning, potential delays, outstanding documentation and punch lists (snag lists).

The contractor’s Project Manager should:

Go to these meetings well prepared with the information requested from the previous meeting, if not already provided.
Ensure that the minutes of the previous meeting is a fair reflection of what was discussed and if necessary raise corrections.
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How we can improve quality in construction

16/3/2017

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Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Why do we have poor quality in construction?

Recently I wrote an article ‘The True costs of Poor Quality Construction’ and how poor quality results in many hidden costs that contractors don’t fully understand.

Many readers took the time to comment on the article and I am grateful for their feedback. Several people blamed the client for squeezing the contractor to provide a cheap price. There were other comments that clients were lowering the quality bar and were more accepting of poor quality. Now there is no doubt that in some cases clients award the contract to the contractor with the cheapest price – irrespective of whether the contractor has the experience, resources or knowledge to deliver a quality project. Disconcertingly, some also pointed out that in some countries corruption of the tender process also lead to unsuitable contractors being awarded projects they weren’t capable of delivering to the required standards. Further corruption meant that the client’s representatives ignored the poor quality. Some contractors just aren’t capable of producing a quality project and clients should take responsibility for appointing incapable contractors who then produce poor quality work. But ultimately contractors are responsible for producing quality work that satisfies the project standards and specifications, irrespective of what their price was. A contractor who blames their keen price for their poor quality is unacceptable.

A client who accepts poor quality because they think that is the norm or can’t be bothered to ensure their contractor produces good quality deserves to live with a poor-quality project. But they are doing the construction industry a disservice and they’ll probably be the first to blame the contractor when things go wrong.

I published another article ‘Does Anyone Care about Quality Anymore’ which explored the decline of service and quality and what we as customers and clients could do.
There should be no excuse for poor quality work.

Why do contractors produce poor quality work?
There are many reasons for poor quality work which includes:

Failing to employ people who have the required skills, and not training employees. Some contractors employ people because they are the cheapest, and in some cases just to fill a vacancy. Few checks are made to ensure the person has the required skills or that they’ll be a productive member of the team. Most construction companies are poor at mentoring and training their people. They think it’s a waste of money, that the person will want a pay increase when they acquire additional skills, that the person will be more employable elsewhere and leave the company, or that the company will inevitably have insufficient work and they’ll have to terminate the newly trained person. Yet, I’ve had immense success training people, not only has productivity increased, but quality has improved, people have become more motivated and clients have become more pleased with our work. Yes, there will be some workers that will leave and there will be some workers that expect pay increases. Yet, if every construction company was training people the whole industry would become more skilled and there would be less shortage of skilled people and construction quality would improve.
Not insisting that employees produce good quality work. Far too often Project Managers and Supervisors ignore poor work. They either don’t see it, they hope the client won’t notice, or they are so focussed on finishing the work that they ignore poor quality in the rush. This is totally unacceptable. Workers who are allowed to produce poor quality will continue to produce poor quality on that project, as well as on projects in the future. Poor quality work sets a poor example which others will follow. Never walk-by poor quality work without correcting it. Equally important is to compliment people for good quality work.
Management don’t have the required skills and knowledge to know what good quality work is. Unfortunately some managers have poor training and skills and have developed their careers working for companies with a culture of poor quality. They don’t know what acceptable quality is. We owe it to our inexperienced staff to mentor them correctly. Project Managers and Supervisors that except poor quality shouldn’t be tolerated.
Failing to understand the specifications and standards. Some Project Managers fail to read the project specifications, or don’t understand the specifications.
Inadequate planning. Planning should start before work begins. Planning involves selecting the best construction methods and ensuring that the contractor has the right resources with the required skills to carry out the construction activities when they are needed. Planning also means allowing sufficient time for the tasks.
Contractors don’t have pride in their work. Far too often employees don’t take pride in their work.
Contractors employ subcontractors and use suppliers purely based on them providing the cheapest price and not whether they can produce the desired quality. Contractors depend on their subcontractors and suppliers who are often an integral part of the success of their projects. Far too often suppliers and subcontractors are used who don’t have the experience, skills or the resources to produce quality work.
Contractors failing to institute a proper quality management system. A good quality management system is one that provides the means to check and record the quality of the work, and is a system to record defects and ensure they are repaired in the correct manner and aren’t repeated. However the quality system does not take away the duty of employees to do the work correctly in the first place, and it also doesn’t mean that because something has been ‘ticked-off’, checked, or signed-off that it is in fact correct. Qualified people have to check that all the work meets the specifications and the quality standards.
Poor communication. Employees, subcontractors and suppliers must understand what is required from them and what the quality standards and specifications are. Sometimes contractors don’t understand the client’s expectations and standards.
Company management isn’t focussed on good quality work, rather only concerned with profits. Construction companies require a culture of good quality which spans the whole company from management to every worker and across all departments.
Contractors fail to learn from their mistakes. Often contractors repeat the same mistakes on the project and again on the next project. It is important that we learn from our mistakes (and from our successes) so that mistakes aren’t repeated. It’s important to find the reasons for poor quality and mistakes and develop solutions to avoid the same thing happening again.
People aren’t accountable. No one admits they were careless or that they produced poor quality. There is often an excuse – normally that they were too rushed, the client needed the work done urgently, or that they weren’t given the right tools or resources. Our employees must be held accountable and the person responsible for the poor work should be the person who fixes the problem. It’s poor practice to have someone else, a snagging (punch-listing) team fix up other employees’ poor work. Make someone demolish their poor work and redo it, and they’ll seldom repeat poor work. It’s embarrassing to be bashing down work that you’ve just completed!
Employees rely on quality managers and advisors to ensure work is to the correct standard and quality. I’ve had on several occasions engineers and supervisors blame the quality manager for their own poor quality work. Quality managers and advisors should be there in an oversight role only and to ensure that the quality system and paperwork is implemented correctly. The supervisor and engineer responsible for the work are still responsible for the quality of the work.
Laziness. Unfortunately some in the industry are just too lazy and couldn’t be bothered to produce good quality work. These people should be booted out the industry.

Conclusion
It is possible to produce good quality work. However it takes skilled people and commitment from all parties to ensure that the work satisfies the specifications and meet the quality standards. Contractors who produce poor quality work will be punished, it will ultimately cost them more, and their reputation will suffer.
We all need to take pride in our work. We should never accept poor quality work and service, and we all should be training and mentoring the next generation.
What will you do to ensure good quality work on your project?

This article is adapted from information in the author’s popular books: 'Successful Construction Project Management: The Practical Guide' and 'Building a Successful Construction Company: The Practical Guide' and 'Construction Project Management: Tips and Insights'
'Construction Claims: A Short Guide for Contractors' has just been published. These books are available on Amazon and other online book stores.
Paul publishes articles regularly on LinkedIn and his website.

Paul writes regular articles for other websites, gives lectures, mentors, and is available for podcasts and interviews.
© 2017 This article is not to be reproduced for commercial purposes without written permission from the author.

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Another 10 ways to improve construction productivity

8/3/2017

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Image courtesy of Mister GC at FreeDigitalPhotos.net

In our post ’10 tips to to improve productivity on your project' we discussed how simple improvements in the way we do things on our construction projects can improve productivity. Even a 5% improvement in productivity could improve our profits by 20%. Have you put in place some of those tips and have they made a difference on your project?

In this article, I discuss another 10 simple steps we can implement on our projects that will further improve productivity.
#constructionprojectmanagement #productivityinconstruction

Another 10 tips to improving productivity in construction

Fatigue management – construction is hard work, yet management often expects their workers to work long hours. Frequently projects are under pressure to be completed by the agreed contractual dates so projects work extended hours. But often these extra hours are counterproductive – especially when workers have to work long days, day-after-day. People aren’t machines and they need a rest. I found that after 9 hours the production of our crews rapidly fell off. Working 9.5 hours and our production was probably the same as 9.25 hours. 10 hours was like 9.5 hours. Work 12 hours every day and by the end of the week, the production in a day is probably only equivalent to 8 hours of work. Of course, on top of the lower productivity we are paying penalty or overtime rates – not only are we paying more but we are getting less! If you have to work extended hours make sure it’s only key people and that it doesn’t become a daily occurrence. A more economical alternative may be to employ more people and even introduce a second shift.
Adverse weather – rain and extreme temperatures all play havoc with productivity. Projects need to take poor weather into account. This might require working shorter shifts, scheduling tasks to happen when they are least likely to be impacted by the poor weather, taking more frequent rest breaks, ensuring that workers can take their rest breaks sheltered from the impacts of the weather and supplying workers with suitable protective gear. In the heat of summer, it may help to start work earlier in the morning. Extra costs to mitigate the effects of the poor weather may well be offset by improved productivity. Sometimes in extreme weather, it may pay to shut the project down and send the team home until more favourable weather returns. The little bit of production achieved during these bad weather events is seldom worth the cost, risks, personal aggravation and effort of working through the bad weather.
Not working the full shift – I’m sure we’ve all experienced workers arriving at their designated work areas 5 or 10 minutes after the start of their shift. Then, 5 minutes before the tea break workers start leaving the work area and head back to the canteen or rest area. After the tea break, everyone is slow to head back to work again. This is repeated at the lunch break. At the end of the shift remarkably everyone is cleaned up and queued-up to leave the project exactly on time. All in all, workers could be working 30 minutes less every day than they should. But often the 5 minutes stretches to 10 minutes and the 30 minutes creeps to 60 minutes. In an 8 hour day that means for every 10 workers you need to employ another worker to make up the lost time. But if your team isn’t productive for the full duration of their shift it also means that the equipment isn’t productive.
Unbalanced teams – all too often we see construction crews standing around waiting for access to their work area. They’re waiting for the previous trade to complete their work. Carpenters are waiting for scaffolders, iron workers are waiting for carpenters, concreters are waiting for reinforcing to be fixed. Even on some earthworks projects we see trucks stacked up waiting to be loaded, or excavators standing idle waiting for trucks.
Poorly planned construction project sites – When last did you take a long hard look at how work was happening on your project? How long does it take for workers to walk to the toilets or to fetch materials and equipment from the stores? Can equipment and vehicles move easily around the project? Poorly planned roads, storage areas, project facilities and offices can quickly add minutes to every activity.
Congested work areas – too many workers and too much equipment in a small area cause delays. Workers have to stand down due to safety issues while machines and other workers complete their tasks. The correct scheduling of activities is important to avoid congestion. In some cases, it can be helpful to work for some crews on a second shift to reduce congestion.
High absenteeism – absenteeism is caused by a number of factors including a lack of discipline, poor worker morale, lack of work ethic which is sometimes influenced by cultural factors, excessive consumption of alcohol and lack of transport. When key workers are absent (such as crane operators) it often means others in the crew dependant on them can’t complete their work. Absent workers also cause teams to be unbalanced and put additional work-loads on the rest of the team. It’s important to investigate reasons for absenteeism and take action to reduce it to the minimum.
A high turnover of personnel – when employees leave the project before their contract is complete it leaves a vacant position which has to be filled. If this is a key role it impacts the rest of the team which are dependent on them. Teams become unbalanced. It could take days or weeks to find a replacement who often has to go through a costly and lengthy process to access the project. Once the replacement arrives they have to find their feet and their place in the team and it could take a few days before they are operating efficiently. A high turnover of employees needs to be investigated and where possible reduced.
Is your customer impacting your productivity? Sometimes contractors don’t notice how their customer’s activities are impacting their productivity. This could be due to the customer making multiple changes to the work, issuing information late, failing to grant timeous access to the work area, or not responding immediately to queries. Poor quality information also impacts progress. In addition the customer’s workers or subcontractors could be working in the same area or their operations could be delaying the contractor. Sometimes the customer’s workers or subcontractors damage completed work which has to be repaired.
Poor safety – some contractors view safety as an impediment to their work and a drag on productivity. However poor safety practices adversely affect productivity. Injuries and accidents negatively impact productivity since key people and pieces of equipment may be put out of action. Management has to investigate accidents which take time away from their other duties. Accidents lead to poor morale which impacts productivity. Unsafe projects can be shut down. Workers sometimes can’t perform their tasks effectively because of the unsafe methods they are using.

Improving construction productivity will pay dividends

Don’t let poor productivity cost your project time and money. Take the time to have a good hard look at the way your employees and your project is operating. Is the team working as efficiently as it should be? If it isn’t what can be done to improve efficiencies?

The steps outlined above won’t cost more money and demand very little extra effort, and yet they can dramatically improve the profitability of your project.
Please give us your ideas to improve productivity on our construction projects.

#constructionproductivity #constructionmanagement #contractors

This article was first published on the ClockShark website.
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Do you want to learn how to manage construction projects successfully

"A very readable and extremely practical guide for construction professionals. Honestly, this book is damn readable. It's more practical than I thought." (Reader Amazon.com)

To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:
'Successful Construction Project Management: The Practical Guide'
'Building a Successful Construction Company: The Practical Guide'
'Construction Claims: A Short Guide for Contractors'
'Construction Project Management: Tips and Insights'
'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

Order your books from Amazon
Order your books from Amazon UK
© 2017 This article is not to be reproduced for commercial purposes without written permission from the author.

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How to avoid giving bad projects as presents

2/3/2017

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Image courtesy of Mister GC at FreeDigitalPhotos.net

Will your customer be satisfied with their project?
Children in many parts of the world will be getting excited that Christmas is near. Time to receive presents. I’m sure we all remember receiving presents as kids – whether for Christmas, a birthday or another holiday occasion. There’s always the anticipation of what we’ll get, and the excitement of unwrapping the present. Some adults still get excited at the thought of receiving a present. Tearing open the paper to see what we got. But all too often disappointment follows! It’s not that new train set or computer – just some boring socks, or maybe another multi-hued tie? Or, if it is a new computer, it isn’t the model we wanted? Then there are the presents that don’t fit, those that break after the first few uses. Some gadgets and toys require loads of batteries and they are more expensive to run than they were to purchase. Sometimes even when we get the present we were hoping for we become bored with it and it eventually lies forgotten at the back of the cupboard or ends up on the trash pile.

How often are we disappointed when we open our presents?

When your customer receives their completed project they’ll be just as excited. Will that excitement be followed by disappointment, just the same as that little child who didn’t receive the present they were really hoping for?

What will your customer receive when they get their completed project?
It’s important that our customers are happy with their project. Disappointment will linger long after the customer moves in – sometimes even for the life of the project. It’s often the contractor that will be blamed for this disappointment. This disappointment may lead to the customer withholding money, calling the contractor back to rectify defects and problems and the customer not using the contractor on their future projects. In some cases the customer may even institute legal action against the contractor, and of course, in almost all cases the customer will harm the contractor’s reputation by telling everyone how disappointed they were with their project and the contractor.

So what will your customer receive?

Will they get a quality product? Customers expect they’ll receive a quality product that will be free from defects and will comply with all the specifications and standards. Moreover, they’ll expect a product that looks good. Contractors need to ensure that they implement quality controls and employ people with the requisite skills to deliver what their customer is expecting.
Will they receive value for money? This is complicated, and customers have differing expectations of what’s value for money. It’s important to understand your customer – what is their notion of value for money? In many cases, it’s necessary to explain the cost of processes and materials. Often contractors deliver good value but customers still feel that they have been robbed. Customers want to believe that they’ve been treated fairly, that they’ve received a good deal or a bargain price.
Will they be hit with additional construction costs in the form of claims and variations? Sometimes contractors submit variations claims at the end of the project and customers receive an unpleasant surprise when the project costs more than they were expecting. It’s important that the contractor works with the customer to minimise extra costs and continually communicates with their customer so there aren’t any unexpected surprises at the end of the project. Inevitably there will almost always be extra costs, but a good contractor will manage the variation claim process in such a way that their customer will understand these extra costs and pay them with minimal fuss.
Will the project be completed on time? You don’t want your customer to be like the little child that didn’t get their present at Christmas. You don’t want to be that Christmas Grinch who took Christmas away! Picture the disappointment when there’s no present on the designated day. Make sure your customer receives their project by the contractual completion date. If there are delays communicate with the customer so they aren’t surprised when the project is finished late. Work with your customer to minimise delays. Ensure that the customer understands how their actions can delay the project.
Will the contractor still be working on the project completing defects long after the project is handed over? Far too often projects are completed and yet the contractor’s employees remain long afterward attending to defects. The customer wants to be rid of the contractor and able to use their project as they expected and not inconvenienced by construction work, or have sections of the completed project closed to rectify defects and be tripping over construction tools, equipment, and materials. It’s a bit like receiving a present that’s missing a few parts and can’t be used as expected!
Will they have ongoing maintenance costs? Contractors shouldn’t include materials and equipment in the project that could have ongoing maintenance and repair issues – that continually break down. Customers expect to receive a product that will work. No child wants to receive a present that breaks on the first day – picture the disappointment and tears.
Will the project perform as expected? A new homeowner expects to turn the heater on and have a warm home in winter, they expect to turn the air-conditioner on in summer and have a cool house. The owner of a new process facility expects the facility to deliver a quality end product in the quantities that the facility was designed to deliver. Anything less will be a disappointment. Where contractors have a hand in designing and specifying products they should ensure these will deliver what the customer is expecting. A failure of even a small portion of the project will lead to disappointment.
Will they be proud to own the project? .....Continue Reading......

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Theft in construction

Are you ready for your project meeting?

How we can improve quality in construction

Another 10 ways to improve construction productivity

Another 10 tips to improving productivity in construction

Improving construction productivity will pay dividends

Do you want to learn how to manage construction projects successfully

How to avoid giving bad projects as presents

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