Practical Methodology to Identifying and Quantifying Productivity Losses: Stakeholder Responsibilities and Liabilities.

Introduction

In complex industrial projects such as Oil & Gas or hydropower, productivity losses are not just a simple hazard: they are very high-impact risks. Identifying, quantifying, and correctly allocating these losses is essential to maintain profitability, protect contractual interests, and ensure timely project completion. Yet, these tasks often involve methodological, contractual, and technical challenges (Micheal Vallez, Klanac & Nelson, 2004).

This guide offers a rigorous approach, based on three decades of field experience and supported by solid academic sources, to diagnose productivity losses, quantify them, and manage the associated responsibilities.

A. Understanding the Sources of Productivity Losses Frequent Factors Observed on Site

1. • Oil & Gas: Multi-contractor interference, unplanned production shutdowns, rigid HSE management.

2. • Hydropower: Extreme topographical conditions, delays in the supply of imported materials, increased environmental pressure.

2. Quantification Methodology: Toward a Hybrid and Contextualized Approach.

Why is it complex?

Losses are neither linear nor uniform. They vary depending on the intensity, duration, and accumulation of delays. Micheal Vallez, Zhao, & Dungan (2018, 2019) highlight the difficulty of modeling this dynamic.

Proven methods: Measured Mile Analysis Comparison between an "undisturbed" baseline period and a "disturbed" period. Requires accurate data on actual progress.

Forecast vs. Actual Productivity Curves Powerful visual tools if production monitoring is well structured.

Overall Construction Productivity Index Developed by Braglia et al. (2020), it provides a systemic view of project performance, beyond isolated tasks.

3. Stakeholder Responsibilities and Obligations

1. In Oil & Gas, failure to meet deadlines for the supply of critical modules (skids, prefabricated units) can lead to massive losses.

2. In Hydropower, delays due to land disputes or environmental permits can paralyze the entire construction site.

4. Claims and Loss Justification

1. Prepare a solid claim

2. • Based on contemporary evidence (site logs, daily reports, time-stamped photos).+

3. • Supported by comparative analyses or independent studies.

4. • Accompanied by clear financial traceability (labor, equipment, collateral impacts).

5. 🔁 “Poorly substantiated claims often end up rejected or drastically reduced” (Klanac & Nelson, 2004).

5. Strategic Thinking and Expert Methodology 

• My personal analysis methodology is based on four axes:

• 1. Break down the causal chain of losses: what was the first triggering event?

• 2. Cross-reference contractual responsibilities: who was supposed to do what at that moment?

• 3. Measure the actual impact on productivity: in man-hours, physical progress, and cost.

• 4. Classify the losses: Direct? Indirect? Compensable? Foreseeable? 🎯 This method differentiates avoidable losses from contractually compensable losses.

6. Sector Developments and Outlook

According to Hoehne & Russell (2018), the industry is reluctant to reinvest in productivity for three main reasons: • Market volatility • Subcontractor fragmentation • Profit margins too thin to invest in innovation To counter this, the increased use of digital tools, digital twins, and Lean methods is becoming essential. Real-time monitoring via connected systems will enable a proactive response to productivity drifts.