haks79

I came up with something interesting and started noticing improvement: plotted a chart that shows: Labor cost / (Revenue - material cost x material margin) since labor cost had a fixed and a variable part it is always changing with projects and taking the material cost and it's margin out of the equation showed the real return on labor. it doesn't really prove efficiency but may be effectiveness against proposals and estimation!

I am not sure if this is the right forum to discuss this but no harm. We have an oilfield fabrication workshop and having difficulty in finding a magic number that would tell us our efficiency at any point in time. The end goal is to know at each point in time - depending on how many projects we have - how many welders do we need. Our projects vary in complexity and we do not want to rely on estimation to measure efficiency. That is already in place but who knows if estimation is efficient? We are trying workpacks to improve but it is not the answer we are looking for. The best way would be a ratio of manhours spent per Kg but that is difficult to measure as mentioned each project is different in complexity. Another thing we are trying is to measure at the end of the month the cost of labour / revenue excluding material cost. This measure is not fast enough! Any suggestions?