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Planners shouldn’t labor over time budgets

Nov. 3, 2021
Doc Palmer says a simple estimate is enough to assign work to crafts and create weekly schedules for boosting productivity.

We can humongously simplify making labor time estimates for work orders. In the Maintenance Planning and Scheduling Handbook, I state the fourth principle of planning as “Planners use their experience and skills along with file information to determine time estimates for work orders. The time estimate should be a reasonable idea of what a capable technician might require to complete the proposed job without any unusual problem.”

I might have simply said “Essentially, planners make perfect time estimates by guessing!” Let’s talk about Management by Objective (MBO), the objective of planning and scheduling, the objective of time estimates, and tackling this objective with estimating labor hours on work orders, perfectly.

Famous management guru Dr. Peter Drucker introduced Management by Objective (MBO) to the world and notably stated, “Management by objective works-if you know the objectives. Ninety percent of the time you don’t” (from brainyquote.com).

MBO is a critical concept for any activity in life. Let’s say we need new clothes. We then decide to get into the car and drive to the store. But according to Dr. Drucker, most folks get in the car first and then try to decide where to go and why. Never has this misstep been truer than for planning and scheduling. And a key part in planning and scheduling involves estimating labor hours.

Better job plans to support scheduling

The primary objective of planning is to make better job plans over the years so craftspersons can do better work over the years. This better work includes knowing better what to do, how to do it, and having the right crafts, parts, tools, and other arrangements at hand. Forget any notion of having “perfect” job plans so craftspersons can “perfectly” execute work “the first time.” That notion simply encourages beating up on planners for missteps. Instead, we should run a Deming Cycle of continuous improvement where planners give head starts and save helpful feedback to give better future head starts.

In addition, an important secondary objective of planning is to support scheduling. The primary objective for scheduling is to help us complete more work than we would normally complete, an ultra-critical concept. We can dramatically increase our productivity by 50%, simply by starting each crew with a 100% fully-loaded schedule and achieving between 40% and 90% schedule compliance. (Under 40% schedule compliant means we are ignoring the schedule and don’t get the productivity pop. More than 90% compliant mean we are not truly loading the schedule and we don’t get the pop.)

Palmer's Planning Corner

This article is part of our monthly Palmer's Planning Corner column. Read more from Doc Palmer.

To support these objectives, what do we need in the way of labor time estimates? Surprisingly, we simply need something “good enough” to assign work and create schedules. Forget any notion that we need nuclear science, quantum-level accurate time estimates. Fortunately, the objective of planning is NOT to create accurate time estimates because really accurate time estimates are really difficult to make. Anybody that has ever worked on plumbing in their own house knows that. The actual time might go way under or over the estimate. Nonetheless, a simple judgment of time by a somewhat seasoned planner is all we need. The planner can consult other persons or history if they want, but essentially the planner makes a guess of how much time the job might take (1) for a craftsperson who generally knows what to do, and (2) if nothing goes seriously wrong—two major assumptions for sure. The planner does not know which craftsperson will be assigned or unerringly what the job will require. But while these estimates have great statistical variance from the actual time, they generally have a statistically normal distribution.

That means that while individual job estimates are way out of whack, a week’s worth of work probably is about a week’s worth of work. Voila! That’s all we need: something to help us truly fill up weekly schedules so we can get the 50% pop in productivity. (The estimates also help supervisors somewhat assign daily work, but they need to be out in the field directing traffic in the daily churn anyway.)

Quickly making simple time judgments meets our objectives for planning and scheduling. We can use such estimates to run the Deming Cycle on more of the new work coming to have better plans and support scheduling to get the productivity bump. We cannot afford to become bogged down in taking two hours to precisely estimate how long a two-hour job might take. And taking two hours to estimate the time still would not produce a more accurate estimate!

Planning and scheduling traps

Let’s discuss a couple of not-so-obvious traps. One trap is evaluating planners on the accuracy of their time estimates, planned versus actual. Honestly, the only way a planner can a have great score is by generally giving too much time for each job. Then Parkinson’s Law (the amount of work assigned expands to fill the time available) cripples productivity because later we do not assign or schedule as much work as we should. Another trap is using historical times or the average of historical times for particular jobs. We must consider whether past work was being scheduled through full weekly schedules. If not, the actuals are probably too high, again because of Parkinson’s Law. Fortunately, high schedule compliance of more than 90% can reveal both of these traps.

What were we trying to achieve with the time estimating? (Why did I walk into this room?) We do not need super accurate estimates to accomplish our objectives. A simple judgment (a guess) on the part of a planner is usually all we need. Don’t bog down trying to make each time estimate perfect in itself. Blast more of the new work through the Deming Cycle to allow improving more plans to do better work over the years. Support the scheduling function in time to have fully loaded schedules to get the big productivity bump. Get busy on the right stuff for the right purpose. Simpler time estimates are perfect for what we need. Have a great plant!

This story originally appeared in the November 2021 issue of Plant Services. Subscribe to Plant Services here

About the Author: Doc Palmer
About the Author

Doc Palmer | PE, MBA, CMRP

Doc Palmer, PE, MBA, CMRP is the author of McGraw-Hill’s Maintenance Planning and Scheduling Handbook and as managing partner of Richard Palmer and Associates helps companies worldwide with planning and scheduling success. For more information including online help and currently scheduled public workshops, visit www.palmerplanning.com or email Doc at [email protected]. Also visit and subscribe to www.YouTube.com/@docpalmerplanning.

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