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 fully coordinated 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 the good and the bad. 

Early identification is a trainable skill and a workflow process including checklists


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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The first step for contractors improving their management of changes on a project is simply earlier identification. This starts with a better definition of what a change really is, and then setting standards within your company around that definition.
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All construction projects will run into some degree of problems. It is how the project team chooses to manage these problems that ultimately determines the outcome of the project.