LITHKO CONTRACTING LLC
STRUXI labor productivity software helped Lithko Contracting save thousands of dollars and hours in labor spending per year.
Lithko needed to find a cloud-based construction software solution that digitized manual time collection and coding — a problem plaguing productivity in the construction industry.
STRUXI labor productivity software allowed Lithko to eliminate time-consuming, error-prone manual data entry, resulting in savings of over 68,000 hours in labor per year and 5% in annual labor costs per year across their entire business.
Lithko is a market-leading, full service commercial concrete contractor specializing in the execution of walls, tilt-ups structural frames, slabs, super flats, site work, foundations and pre-construction services.
“STRUXI increased productivity to do higher value stuff. It's a combination of hard and soft savings that's scalable."
Ryan Hale, CIO and Director of Strategic Initiatives
LITHKO CONTRACTING LLC
A LITTLE BACKGROUND
The Cost of Construction Waste
It’s no secret that labor productivity is a major challenge facing the construction industry. On average, large projects take 20% longer to complete and those large projects cost 80% more than planned. (Rajat Agarwal, Shankar Chandrasekaran, and Mukund Sridhar, Imagining Construction’s Digital Future. McKinsey & Company, June 2016.)
Plus, labor productivity inefficiency affects construction contract profitability — as a project experiences overruns, it hurts operating margins and construction companies make less per project as a result.
The productivity problem stems largely from the lack of adoption of new technologies, which have disrupted and revolutionized other industries like manufacturing, leaving the construction industry behind every industry save agriculture. (McKinsey & Company Global Institute Industry Digitization Index, 2015)
of construction companies still use paper plans.
of construction professionals manually prepare daily reports.
of projects came within 10% of their original deadlines since 2017.
of construction companies use mobile apps on projects.
LITHKO’S LABOR PRODUCTIVITY CHALLENGE
Lithko needed to find a cloud-based productivity software to streamline manual time collection and coding.
Lithko attended a road show, where they visited jobsites and business units to understand the pain points of their stakeholders. The issue that kept coming up was the way time and quantity was collected per worker and cost code: while work on the jobsite was executed, superintendents and/or project managers spent their mornings keying data into spreadsheets across their 16 locations and then the office administration re-keyed all that data into Penta Technologies’ ERP system.
This manual process was causing a lot of unnecessary administrative work every day, on every job, from the same people that Lithko would rather have planning and executing jobs.
For America’s second largest concrete contractor, that worked out to 16-20 thousand lines of data that had to be manually entered every week to execute critical payroll and accounting tasks.
Hale knew there was a digital solution to this problem, and he wanted to find it.
“In addition to the efficiency savings, if we can eliminate the rounding of hours, we could see a 3-5% cost savings — that would mean millions to the bottom line, given that we spend ~$175 million on labor per year.”
“In addition to the efficiency savings, if we can eliminate the rounding of hours, we could see a 3-5% cost savings — that would mean millions to the bottom line, given that we spend ~$175 million on labor per year."
- Ryan Hale, Lithko Contracting LLC
COLLABORATING TO FIND A DIGITAL SOLUTION
Hale informed our team that the existing Penta mobile productivity application didn’t suit Lithko’s needs because there wasn’t an easy way to clock workers in. Due to this feature gap, Hale & Lithko were prepared to go with a competitive offering.
Meeting this critical challenge, we engaged our development teams and got to work. “Any opportunity to work with a progressive contractor and receive real rapid iterative feedback is a 24k gold opportunity as a construction technology vendor,” relates Bill Wagner, President of STRUXI and Penta Technologies.
Since the skilled labor work force is Lithko’s biggest asset in the field, we wanted to reduce the administrative time the superintendent spends on time tracking and allocation activities, and give them that time back to plan and oversee the execution of the work.
We focused on integration and flexibility in our approach, emphasizing our relationship component with our customers to craft unique solutions that fit seamlessly into existing workflows, removing the hurdle of adoption.
Based on Lithko’s specific feedback, we developed a beta software solution that integrated with Lithko’s ERP and allowed workers in the field to more accurately and easily log time, foremen to allocate costs, and management to view the data in the back office.
PUTTING THE SOFTWARE TO THE TEST
Hale and his team at Lithko handpicked a team willing to give the new technology a fair shake to pilot the program — not always an easy feat in construction. The project was a new parking structure at a hospital in Fort Thomas, Kentucky.
The setup was simple: Hale and his team mounted a tablet inside the door of the jobsite trailer. The tablet was loaded with STRUXI's new digital timeclocking software.
Each worker was given a QR code label to stick to their hard hat. When they arrived on the jobsite, they simply scanned their label using the tablet to clock in.
They utilized the same process for clocking out at the end of the day.
In the jobsite office, the superintendent was able to see the data come into the Penta Time, Equipment and Productivity (TEP) software, where he could allocate the time to various cost codes. He could also make sure the data looked accurate and correct any mistakes that were made, like a worker forgetting to clock out at the end of a shift.
Hale and members of his team were on-site every day for a week as the system was implemented on the jobsite, but found that after about a week, they weren’t needed anymore.
“Everyone found the system was just super simple to use,” says Hale. “We thought we’d need two iPads mounted and we’d have a line out the door of guys waiting to clock in, but everyone moved quickly, and we realized we just needed one. It’s that easy.”
The superintendent also found the system easier to use, as he had real-time access to timeclock data and could instantly allocate time from the job trailer computer. As for the workers, they no longer needed to write anything down — they just hold their hard hat up to the iPad, scan their code, and get to work.
“In addition to the cost savings from rounding errors, we have 150 project superintendents that have to enter in the paper timesheet data every day. If we can save them even a half an hour per day by automating the process, that’s 75 hours per day they can spend better planning projects. It increases productivity to do higher value stuff, and it’s a combination of hard and soft cost savings that’s scalable," said Hale.
“In addition to the cost savings from rounding errors, we have 150 project superintendents that have to enter in the paper timesheet data every day.
If we can save them even a half an hour per day by automating the process, that’s 75 hours per day they can spend better planning projects. It increases productivity to do higher value stuff, and it’s a combination of hard and soft cost savings that’s scalable."
THE INITIAL RESULTS
While the projected cost savings of using STRUXI were substantial, the cost savings that Lithko experienced in the pilot of the software took it to another level. Instead of saving the site superintendent 30 minutes per day of entering data and assigning job costs, it saved him almost an hour — at scale, this could lead to nearly 150 superintendent work hours per day.
In addition, while Lithko projected that eliminating universal start and end times would save a projected 3-5% in annual labor costs, the STRUXI pilot trended toward the high side of that estimate.
When expanded to all of Lithko’s projects, STRUXI will potentially save Lithko millions per year in labor costs alone.
BOOTS ON THE GROUND SHAPE THE FUTURE OF SOFTWARE FOR HARD WORK
With the pilot program exceeding Lithko’s expectations, Lithko began a full-scale STRUXI beta rollout. And despite the challenges of the COVID-19 pandemic, the company pressed on with the implementation based not only on the potential for cost-savings, but also based on the popularity of the tool on-site.
The expanded userbase offered our product development team invaluable feedback on features and functionality.
That feedback paired with on-site visits by the our team to evaluate the effectiveness of the tool helped inform the future development roadmap for the product to ensure it truly meets the needs of a working jobsite, unlike generic software tools that aren’t developed exclusively for the construction industry.
“Lithko has rolled the solution out across 15 jobsites with ~500 workers, and we’re working towards having 3,000 Lithko team members using STRUXI every shift,” said Wagner. “This project really showcases the advantage of being a scrum agile development company: we’re able to react to the industry’s needs offering a tool that has been truly built from the ground up to meet the hardworking demands on the construction industry."
"This project really showcases the advantage of being a scrum agile development company: we’re able to react to the industry’s needs offering a tool that has been truly built from the ground up to meet the hardworking demands on the construction industry."