Estimate projects then execute the projects when they are awarded. That is the process within most companies, probably including yours.
You estimate a project. Bid for it. Hopefully win it. Then execute the project. Hopefully make a lot of profit.
Then the next project you start from scratch with an estimate and so on.
The problem with this approach is the lack of learning in the company. The estimators are not involved in the execution. Therefore, they often lack practical experience. If they make use of past experience it is in a copy past fashion. We did this production in the past, so should be doing the same production for this new project. There is no deeper understanding of why the results were as they were. Let alone incorporating the experiences in estimating tools.
Great companies have a cycle.
They estimate, execute, then optimize.
The estimating and optimizing is done by the same team of people. This allows them to learn in practice how the dredger is performing. What part of the estimate is correct, which part isn’t? How can they adept their estimating tools such that the estimate would have been correct?
The knowledge these people have about the dredging process increases over time. It is a virtuous cycle that keeps improving the estimates and the capabilities for optimizing the production.
Project teams are often too busy with day-to-day activities. Making sure the project goes ahead as planned. They don’t have the time or lack the theoretical knowledge to optimize the production on board the dredger. Having people especially for this job helps a great deal.
How to create the missing link
The first step and often biggest hurdle is to actually send the estimators to the project for which they made the estimate. This is mostly seen as an unnecessary expense, because the results are not always immediately clear. But in the long run it is the only way to increase the competitiveness of your company.
Once there the estimators should write a report answering several questions in detail:
- Where was the estimate correct, where was it wrong and why?
Concluding the estimate was 10% too high is not enough. Detailed means an answer like: The discharging production was estimated 10% too high, because the expected particle size was Dmf 300 µm instead of Dmf 200 µm. For example. The more detailed the better.
- Was the error in the estimating tool? If so, how does it need to be adjusted to prevent future errors?
The goal here is to anchor the experience gained in the estimating tool, thereby preventing other estimators from making the same error.
The reason for writing the report is that other estimators can read it years from now and still learn from it. It forces the writer to be concise and really think about what they are doing. And lastly it allows managers to see the results of the investment of sending estimators to the project.
We are trying to help contractors such as yourself to get better long term results. For this I need your help. Please answer this question in below comment box:
How could we help to create this missing link in your company?
To your long term great results,