Al Naboodah Case Study
Al Naboodah manages 28,000 employees and 4,400 items of plant and equipment with Kronos
PROJECT BENEFITS
• Monthly payroll processing time cut by 75% – a saving of 36 weeks each year
• Payroll errors reduced
• Sophisticated costing analysis for labour, plant and equipment
• Assisted in reducing the site monthly costs reports from three to four weeks post month-end to one week
• Wages paid earlier
• Duplicate employee records removed
• Biometric verification eliminates fraudulent clocking
• Reduction in administrative staff
Al Naboodah
Category: Manufacturing
Business Type: Construction
Employees: 28,000
Products: Workforce Central
Over the past thirty years, Al Naboodah Construction Group (ANCG) has built up an extensive portfolio of construction projects for high profile private sector and government clients in the Gulf. ANCG has achieved its success using cutting edge construction techniques and a highly skilled workforce. The many landmark projects completed by ANCG include royal palaces, office and residential complexes, airports, roads and highways and luxurious villas which affirm the company’s position as one of the leaders of innovative construction and quality projects in the region.
Proven system
With over 28,000 hourly-paid labourers and 4,400 individual items of plant and equipment at a number of ANCG sites in the UAE, the company urgently needed a workforce management system that would enable it to manage such a vast workforce and plant and equipment strength, effectively. One of ANCG’s partners, South African based Group 5, had implemented Kronos throughout its operations in Africa and the Middle East, and was confident of the system’s capabilities and enthusiastic in recommending it to ANCG.
Deep knowledge of construction industry
Further investigation confirmed to Paul O’Flaherty, Acting CE and CFO, ANCG, that Kronos has wide-ranging experience in the construction industry and offered a scalable and flexible solution which would fulfil ANCG’s requirements and prove reliable in the dry and dusty desert conditions. Furthermore, with Kronos being an accredited partner of JD Edwards, the ERP system employed across ANCG, it offered an opportunity for seamless integration. Paul O’Flaherty explains: “ANCG needed a workforce and plant and equipment management system that would record the working hours of our extensive workforce and items of plant and equipment being used on site, ensuring we were able to process the payroll and plant billing quickly and accurately. The system also needed to be able to cope with employees who had varying degrees of literacy. Kronos was able to do this and so much more.”
Prior to Kronos being implemented, ANCG recorded each site worker’s hours and the plant and equipment’s hours using paper timesheets. Once the timesheets were signed off by an administrative timekeeper, paycode categories were added and the documentation was passed to the payroll department where the information was manually keyed into a time-keeping system (a similar process was in place to record and bill items of plant and equipment to the sites). Procedures were in place to ensure that all hours were allocated and costed before the documentation reached payroll and accounts, but this was a lengthy process and resulted in a high level of errors when pay was processed and plant was billed and long delays before wages were paid. In addition, monthly site costs were taking three to four weeks post month end to be finalised for further analysis by the sites.
Streamlined employee records
There are nine companies that make up ANCG which meant added complexity in maintaining accurate records of staff as some transferred between the companies to work on different sites and were listed on more than one company payroll. Once Kronos was installed, ANCG was able to move to one employee database which, once synchronised with the JD Edwards payroll system, ensured only one record existed for each employee. This meant that all the hours worked were logged to the correct individual. Kronos also ensured employees who left ANCG were identified on the database once the final wage payment was made. This had proved difficult to manage before Kronos was implemented.
Faster payroll preparation
ANCG is committed to ethical conduct and social responsibility and these values are reflected in its relationships with its employees. With Kronos in place, ANCG was not only able to reduce the length of time it took to prepare the payroll by three weeks - which meant that wages were paid to its staff on the 8th of each month rather than the 28th - but it also enabled labourers to be paid by bank card rather than cash. Both of these initiatives were very well received by the workforce. Kronos also enabled ANCG to reduce the number of administrative timekeeper staff employed to monitor the workforce on each site to a minimum, as the system captured all the necessary information.
Valuable management tool
With 250 Kronos 4500™ biometric terminals installed across ANCG’s sites, the workforce now registers all hours worked using a biometric finger scanner for verification. Using this data, ANCG is able to accurately cost all labour activity and then produce productivity reports by activity on a site-by-site basis. “In construction, the major costs are labour and materials and in this economic climate it is vital to be able to monitor these elements accurately. ANCG can now track labour costs on a weekly basis and link them back to the original tender, allowing analysis of projected and actual costs, says Paul O’Flaherty. “In fact, we have extended the time recording process to include plant equipment which means that that the operating time of machinery can also be monitored for costs and fed into the analysis. This gives ANCG exact costs for each activity – concrete formwork for example – creating a very valuable management tool.”
Tighter labour control
“A project manager can now run his labour report for the day and identify the total number of masons present to deal with a concrete pour. If extra labour is needed, it can be brought in immediately to avoid any delay or downtime, both of which push our costs up,” comments Paul O’Flaherty. “The level of detail that Kronos has given us across both our labour and plant billing is excellent. Very few construction companies are able to offer this degree of sophistication and we are delighted with the benefits it has brought us.”
Tighter plant and equipment control
With such a large fleet of internally owned plant and equipment it is imperative that all hours worked are booked and recorded. This enables the plant and equipment management team to assess the productivity of each plant item, manage the maintenance of equipment better and assist with capital expenditure planning. It also ensures that sites can more accurately track the actual usage of plant and equipment against tendered amounts.
Challenges
As with all implementations, change management was a challenge. This was made more complex due to the multi-lingual and multi-racial workforce which is characteristic of the UAE, the strict regulatory controls which hamper seamless connectivity and the fairly low level of computer literacy.
All these challenges were overcome through committed leadership from the Al Naboodah family and senior management. During the next year, ANCG intends to expand the use of Kronos to assist in the enhancement of productivity reporting.