With increased regulatory requirements driven by the government of India (RERA 2016, GST, de-monetization, etc.) and a recent economic slowdown driving intense competition, construction firms in India needed to look within operations for every opportunity to improve their margins.
The Business Challenge
Focus on material utilization to improve operating costs by at least 10%.
An early review of building materials cost pointed to cement Grade 43, as the candidate for material utilization improvement.
We then carried out an even more detailed review with this company’s engineering team to ensure that baseline utilization adhered to design parameters with no compromise to safety requirements. This team then got their hands dirty (literally!) by spending time at the site, observing, and going on to list more than a dozen root causes impacting excess utilization.
Through the focused use of Six Sigma statistical tools (Pareto Chart, Control Charts, Hypothesis testing, etc,) we worked with the client to identify the statistically significant few causes and coached the construction team to do everything they could to mitigate them.
50K USD in savings
A 12% reduction in operating costs
The team was also able to implement a robust monitoring system with a 4 step proprietary scorecard, dashboard, visual trigger, and control tower to ensure focus on improvement activities. The team revisited baselines on a quarterly basis.
Monitoring tools created:
Scorecard: A monthly performance tool to monitor track the Engineer’s work and performance versus losses incurred. This enables the right support to be provided to the respective personnel.
Dashboard: Key parameters are monitored to address abnormalities.
Visual Trigger: A trigger system linking physical site multi-level activities with severity scores linked to performances.
Control Tower: Real-time, on-demand information which provides project visibility to management, then enabling better project control.
As a result of these coordinated changes, the company also experienced a larger cultural transformation. Soon this company formed its own continuous improvement team drive ongoing change work and sustain business performance gains.