With the recently released "Job Summary" report, it's now easy to track average production, average production window, and average production rate at higher levels of aggregation.
These terms are defined as:
- Average production: This is the average of the sum of material transaction tons per job production plan. In the Job Summary report, this is "Tons (Actual Avg)".
- Average production window: This is the average of the difference between the latest and earliest material transaction per job production plan. In the Job Summary report, this is "Prod Hours Avg".
- Average production rate: This is the sum of the production divided by the sum of the production windows. In the Job Summary report, this is "Tons / Prod Hour".
To boost production, you can either increase the production rate or increase the production window. While this is obvious, our experience is that operations teams spend insufficient focus on these specific metrics as it relates to benchmarking, planning, innovation, and performance management.
In fact, there is significant variance on these metrics between crews, contractors, and other attributes.
The following statistics are based on asphalt-only jobs in 2022 with more than 150 tons per productive segment (non-patching) grouped by contractor.
The average production varies greatly.
And so does the production window and production rate.
The reason for the variance might be fundamental, or it might be cultural and addressable. If it's addressable, the financial benefits could be substantial.
Increasing the production window from 6.0 hours to 7.5 hours (+25%) would yield the same production increase as increasing the production rate from 120 to 150 tons per hour (+25%). Increasing both metrics simultaneously to this degree would compound (+56%).
We recommend these management actions to ensure that production is maximized to the extent possible:
- Regularly (at least weekly) review average production, average production window, and average production rate with your management team.
- Brainstorm opportunities to increase the production window and production rate for every job.
- Benchmark with peers to uncover specific ideas that might be portable.
- Quantify the financial impact of maximizing the production window and production rate given your crew cost per hour (straight and overtime), fixed time per crew day, fixed cost per equipment day, opportunity cost of additional crew days, etc.
We've created a preset named "Year-to-date asphalt production, window, and rate by month" in the Job Summary report to get you started with your analysis.
As always, if there is anything that XBE can do to help you achieve your goals in this area, please let us know.
Founder & CEO, XBE