Efficiency and Variability

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From the desk of Gene Lilly:

Welcome to the inaugural edition of the Gene Lilly Newsletter. Our goal is to share thought-provoking concepts, articles, or ideas. Feel free to share with a friend, colleague, or coworker as you see fit. Our goal for this Newsletter is to provide an appetizer of information, and then let you decide if you would like to follow the link and learn more.

Also – we want this to be simple and to the point. To borrow from one of our favorite weekly newsletters, Farnam Street, – “No Spam. No Politics. No Fluff. No Noise.


Construction, Efficiency, and Production Systems

Our first article is written by Brian Potter on the Construction Physics Substack. It takes us to one of the most important concepts of construction, efficiency.

Construction is a difficult business due in part to variability. Changing projects, people, locations, and climates all lead to the reality that the same exact project is rarely built twice. Coupling this with tight margins it is no wonder that poorly managed construction companies routinely fail. Retained profits are a great insulator against enterprise failure. Becoming more profitable with the same amount of risk can be accomplished through refining operations. Pursuing efficiency and reducing variability can lead to more predictable profits.

Efficiency should become a pinnacle of focus for any organization. Nobody is pleased with cost overruns due to poor planning or disorganized materials. One concept of efficiency that should be discussed among the team is the cost of setup. As you can see in the following article, the process of construction has a couple of phases, of which one can be excruciatingly slow, and the other extremely fast. The company is many times only paid for the outcome of the fast phase. The author uses the example of a pneumatic nail gun. The process of setting a framing nail takes less than a second. The process of layout, squaring, and plumbing a wall will take much longer. Even longer if someone must walk across the job site to retrieve more lumber or collated nails. The project slows and the margin slowly deteriorates. How do we make sure to efficiently layout our materials and supplies? Can we pre-fab products in our shop? Are there more efficient tools for our already strained labor force? This is one simple example, but it can be shared across many disciplines. How do we do more of what we get paid for, and minimize doing what we don’t? How do we control our workflow so that “less experienced” staff have minimized opportunities for costly errors? 
Construction, Efficiency, and Production Systems – Brian Potter, via Substack

One caveat to this discussion is that efficiency can be pursued with objects and processes, not with personal relationshipsEffectiveness should be pursued with people. Always allow plenty of time to communicate with your people, project owners, and associates. In the war for talent, taking time to listen to your people is a proven path to success. 

– Tom

2022 AGC Annual Convention

Join us at the AGC Annual Convention February 16-17 at Embassy Suites in Lincoln. Gene Lilly Surety Bonds and Woods | Aitken Law Firm will be discussing supply chain issues and material price escalations in a breakout session on February 17 at 1:30 P.M. 

Gene Lilly is also the sponsor for the PAC Auction on Wednesday evening from 7:00 – 9:00. Come support the AGC Highway Improvement PAC by donating or bidding at the auction!

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