Problem-Resolution Cost Pyramid - Earlier is Always Better

An easy way to visualize the cost of problem resolution at different stages of construction is with this pyramid.

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To illustrate this we will use a common example of a commercial kitchen equipment plan not being coordinated fully with the electrical plans.  

Field Productivity: Problem-Resolution Cost Pyramid. Example of the electrical power plan not matching the kitchen equipment drawings. Before starting work the impact would be 1X, During and requiring rework, 3X. After completion causing delays and major rework the problem could easily cost 10X. Learn to identify problems early and mitigate.

A piece of equipment requiring a dedicated circuit is shown on the panel schedule but not the power plan so it was easy to miss in the estimate.  When the problem is identified determines the total cost of fixing the problem:

  • Before - some plastic conduit run under slab, some wire and a couple hours (max) of time.  
  • During - more expensive metal conduit run overhead and 6-8 hours of time.
  • After - remobilization time to the work area, protection for finishes, working above hard lid ceiling, etc. plus the customer is likely frustrated.  

The cost of the problem is the cost of the problem (1X).  Finding it ahead of time minimizes the costs and maximizes customer satisfaction.  Finding it during construction will cost about 3X and after construction 10X+.  

What systems do you have in place to find problems early? Create a checklist by phase of work that helps identify potential problems early.

How many problems did you have last month that could have been found earlier? Study all your RFIs and Change Orders for the last month. Could they have been identified sooner? Put those items on your checklists (above). Repeat each month with your top PM, Estimator, and Field Leader. You will be surprised at how quickly you improve profitability and customer satisfaction while lowering stress. Contact us to schedule time to talk about how we have approached this in the past. We will freely share all lessons-learned both good and bad. 


Labor Productivity
Field labor is the often the biggest variable on a construction project - making it the biggest risk and opportunity....

Labor Productivity
Field labor is the often the biggest variable on a construction project - making it the biggest risk and opportunity....

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Breaking a construction project down into manageable tasks is the foundation for effective purchasing, detailing, prefabrication, production tracking and productivity improvements. How effective is the tasking part of your project planning process?
Profitability Trends
When you are looking at your scoreboard, remember that industry average benchmarks and single points in time only tell part of the story.
Lean Principle - People First > Process > Tools
To maximize productivity a contractor must focus on their people, processes and technology tools as an integrated system with a hierarchy. This is not a linear process and should be looked at as a continuous PDCA cycle.