Benchmarking System for Evaluating Management Practices in the Construction Industry

This paper presents the results obtained for the initial application of a management evaluation system whose objective is to provide a continuous improvement tool for construction companies through benchmarking management practices. The outlined system seeks to support a benchmarking system that has been recently established in the Chilean construction industry by incorporating qualitative management aspects in addition to performance indicators. Different analyses were made to determine trends in the sector and to establish correlations between qualitative aspects coming from surveys and quantitative aspects coming from performance indicators. Thirteen construction companies participated in the initial application of the benchmarking system. A correlation analysis found that safety performance was strongly related to companies having superior planning and control, quality management, cost control, and subcontractor management policies. A factor analysis found that central office priorities focus on strategic management policies having longer-term competitive impact, while site management emphasizes tactical management dimensions having short-term impact. There is scope to elevate the profile of continuous improvement initiatives to strategic significance at the central office level.     

Benchmarking Studies on Construction Safety Management in China

This paper presents information by which to measure safety management performance on construction sites. In China, the conventional construction safety benchmarking approach is to assess safety performance by evaluating the physical safety conditions on site as well as the accident records, while no attention has been paid to the management factors that influence site safety. This paper is to identify the key factors that influence safety management and to develop a method for measuring safety management performance on construction sites. Based on the survey and interview data collected on safety management factors in 82 construction projects in China, the safety management index as a means to evaluate real-time safety management performance by measuring key management factors was developed. The quantified factors were compared with the commonly accepted physical safety performance index, which was derived from inspection records of physical safety conditions, accident rates, and the satisfaction of the project management team. Multifactor linear regression was conducted and the result indicates that safety management performance on site is closely related to organizational factors, economic factors, and factors related to the relationship between management and labor on site. Based on this benchmarking study, a practical safety assessment method was developed and then implemented on six construction projects. The results show that this method can be an effective tool to evaluate safety management on construction projects.     

Factors Affecting Engineering Productivity

Engineering performance has a major impact on subsequent project phases, such as procurement and construction, and thus, has the potential to affect the overall project outcome. This study utilizes metrics and a database from the Construction Industry Institute (CII) benchmarking and metrics program to investigate relationships between factors thought to affect direct engineering labor productivity during detailed engineering. Collaborating with industry practitioners, quantitative assessments were analyzed with industry input through various CII committee meetings and industry forums. Significant correlations are found between engineering productivity and project size, project type, project priority, and phase involvement. Correlations are also found between degree of modularization, funded front-end planning effort, and quality management and engineering productivity. These findings extend and, in some cases, contradict previous research.     

Management of Construction Firm Performance Using Benchmarking

In today’s highly competitive construction industry, there is a critical need for managers to continuously improve their firm’s efficiency and effectiveness. More specifically, managers need to know which performance measures are most critical in determining their firm’s overall success. Benchmarking, when done properly, can accurately identify both successful companies and the underlying reasons for their success. However, rigorous benchmarking within the construction industry still remains an embryonic field. This paper analyzes and critiques both the performance measures and metrics used traditionally in the construction industry and the benchmarking models developed to date for the industry. Based on the results of this analysis, benchmarking models using data envelope analysis are proposed that offer significant improvements over current models. The proposed models measure construction firm performance on a company-wide basis, foster trade-off analyses among various performance metrics, and tie the resources expended by construction firms to how well those firms perform overall. The models also provide managers guidance in determining how specific company resources can be reallocated to improve overall company performance.     

Scorecard Approach to Benchmarking Organizational Safety Culture in Construction

This paper promotes adopting the balanced scorecard tool to benchmark organizational safety culture in construction. It argues that this tool has the potential to provide a medium to translate the organization’s safety policy into a clear set of goals across four perspectives: management, operational, customer, and learning. These goals are then further translated into a system of performance measures that could effectively communicate a powerful strategic focus on safety to the entire organization. Four perspectives have been developed to represent all stakeholders, thereby ensuring that a holistic view of safety is used for strategic reflection and implementation. The paper argues that by selecting and evaluating the appropriate measures, in each perspective, requirements can be identified, and actions to the identified goals can be aligned and facilitated. The proposed balanced scorecard approach should therefore enable construction organizations to pursue incremental safety performance improvements. Work-in-progress is briefly reported to give insight into the potential applicability of this approach.     

Benchmarking Framework to Measure Extent of ICT Adoption for Building Project Management

This paper discusses a component of the research study conducted to provide construction organizations with a generic benchmarking framework to assess their extent of information communication technology (ICT) adoption for building project management processes. It defines benchmarking and discusses objectives of the required benchmarking framework and development of the framework. The study focused on ICT adoption by small and medium enterprises (SMEs) in the construction industry and with respect to SMEs it is important to understand processes, their indicators, and measures in the local context. Structure of the suggested benchmarking framework has been derived after extensive literature survey and a questionnaire survey conducted in the Indian construction industry. The suggested benchmarking process is an iterative process divided into four stages. It can be implemented at organization and industry levels for rating the construction organizations for ICT adoption and performance measurement. The framework has a generic structure and can be generalized and applied for other countries with due considerations.     

Benchmarking Productivity Indicators for Electrical/Mechanical Projects

Labor-intensive industries such as the electrical and mechanical trades are considered high risk due to the high percentage of labor costs. Because of this high risk, it is important for contractors in these industries to closely track labor costs on projects and compare these costs to industry benchmarks. In this paper, benchmark indicators for these industries are established on the basis of actual project data. These benchmarks include the relationship between the percent complete or percent time and cumulative work hours or cost, project size and duration, project size and average man power, project size and peak man power, and average versus peak man power. These relationships were developed using regression analysis. Man power loading charts and the related S-curves were developed from actual project data. The man power loading charts and the related S-curves are useful for resource planning and for tracking progress on a construction project. They can be used to show the cause-and-effect relationship between projects impacted by outside factors and normal labor productivity.     

Benchmarking, Benchaction, and Benchlearning: Rework Mitigation in Projects

The Australian government has issued several calls to improve the performance of the construction industry. A lack of available benchmark metrics has made it difficult, if not impossible, for organizations to identify areas to target for process improvement. A significant factor that has been found to contribute to poor organizational and project performance is rework. Using the results of a questionnaire survey, the paper presents and discusses a series of benchmark metrics for the causes and costs of rework for 161 construction projects. A generic framework for benchmarking rework at the interfaces of a project’s life cycle is proposed, and unstructured interviews are used to subject the proposed framework to validation by industry practitioners.     

Construction Productivity Improvement

Construction productivity has been on the decline in the last decade. The results are presented on a survey of the Engineering News‐Record 400 largest contractors to obtain their views on where productivity improvements would most help and to compare the trends with a similar survey carried out in 1979. Data were collected on the general company characteristics of the responding contractors, and on the contractors' opinions on potential areas for productivity improvement in the office and in the field. Findings indicate that immediate research should concentrate on improving marketing practices, planning and scheduling, labor‐management relations, site supervision, industrialized building systems, equipment policy and engineering design; and that governmental regulations have lost the immediate urgency attached to them in 1979.It is also recommended that similar surveys be conducted every 3 to 4 years to identify new trends and to steer research in the appropriate direction.     

Comparable Performance Measurement System for Construction Companies

The construction industry has mainly relied on financially focused performance measurements, and studies on performance measurement systems (PMSs) have been carried out at the project level. However, recently, the demand for performance evaluation and management at the company level has increased. A few previous efforts have aimed to develop a conceptual framework for company performance, but there have been few follow-up studies. From this perspective, we have developed an implementation model and practical methodology to measure and compare the performance of construction companies. First, our thorough qualitative and quantitative analysis was used to develop a set of indicators for performance measurement, and an analysis of the relative weightings of the indicators was carried out. Second, we calculated the performance score of construction companies using a study of 34 Korean construction companies. Finally, we carried out a performance evaluation and system analysis using the calculated performance scores and identified practical issues for the implementation of our PMS. Using the results of our analytical processes identified in this work, further research is suggested.     

Is Construction Labor Productivity Really Declining?

Macroeconomics data suggest that labor productivity declined significantly in the construction industry during the 1979–1998 period. However, microeconomic studies indicate the contrary. This paper critically examines the construction labor productivity macroeconomic data in the United States from 1979 to 1998 to determine their validity and reliability. Data collection, distribution, manipulation, analysis, and interpretation are reviewed and problems are identified. The paper also presents a comparison of construction and manufacturing labor productivity during this period. The main conclusion of the study is that the raw data used to calculate construction productivity values at the macroeconomic level and their further manipulation and interpretation present so many problems that the results should be deemed unreliable. The uncertainty generated in the process of computing these values is such that it cannot be determined if labor productivity has actually increased, decreased, or remained constant in the construction industry for the 1979–1998 period.     

Productivity Analysis of Construction Operations

An interactive system for analysis of construction operations is proposed. The analysis is carried out in the context of various work modules which address quantity development, resource definition, and production and cost analysis. The quantity work module generates quantities based on information available in the design documents. The resource definition module receives and stores data regarding the labor∕equipment combination to be used to execute work tasks. This module provides the user with a set of standard useful construction process models. For each construction operation to be analyzed, the terminal describes the standard models. The user makes input of a set of parameters for process keyname, quantity, work task durations, number of resources, production capacity of each unit, and cost per hour of each unit to the standard model to be used. Using input from the resource definition module, the productivity and cost analysis module generates production rates and unit costs based on process simulation using CYCLONE methodology.     

Benchmarking Initiatives in the Construction Industry: Lessons Learned and Improvement Opportunities

Benchmarking is a systematic process of measuring and comparing an organization’s performance against that of other similar organizations in key business activities. The lessons learned from other companies can be used to establish improvement targets and to promote changes in the organization. The benchmarking process can create a fertile ground for ideas, but only in a receptive environment; companies that share good practices and compare their performance against others benefit most. Recently, industry groups in several different countries have initiated benchmarking programs focused mainly on construction performance measures. This paper describes the scope of these initiatives and discusses the lessons learned and improvement opportunities that were identified in their design and implementation. This investigation is focused on four initiatives, carried out in Brazil, Chile, the United Kingdom, and the United States. This paper concludes by recommending some further directions on this research topic.     

Labor Productivity Drivers and Opportunities in the Construction Industry

The study of labor productivity in the construction industry is gaining increasing attention as the industry faces multiple problems related to its workforce. This paper presents the results of a survey instrument applied to determine the relative level of relevance of construction labor productivity drivers and opportunities. Owners, general contractors, electrical contractors, mechanical contractors, consultants, and others participated in this survey. Management skills and manpower issues were identified as the two areas with the greatest potential to affect productivity according to survey respondents. Surprisingly, external factors, which are often cited as a major cause for reduced productivity in the construction industry, were considered to be one of the least relevant productivity drivers. These results suggest that respondents consider the improvement of labor productivity within their reach and control rather than determined by external conditions.     

Latent Structures of the Factors Affecting Construction Labor Productivity

At any moment in time, a multitude of factors simultaneously impact construction productivity. Utilizing the knowledge of thousands of construction craft workers, the writers quantitatively analyzed the underlying structure of the factors affecting construction productivity and identified which factors the craft workers consider to be more relatively important as well. This research identified 83 factors affecting construction labor productivity through 18 focus groups with craft workers and their immediate supervisors on nine jobsites throughout the U.S. Next, a nationwide survey was administered to 1,996 craft workers to assess the impact of these factors on construction labor productivity. Principal factor analyses identified 10 latent factors to represent the underlying structure of 83 productivity factors. In addition, the relative importance of the factors’ impact on construction productivity was examined based on the crafts’ union status, trade, and position (craft worker versus foreman). The writers also compared their results to similar previous efforts, and more importantly, identified significant differences that may impact future productivity improvement strategies. This research will help industry and the research community better understand the factors affecting construction labor productivity and more effectively direct future efforts to improve its performance.     

Impact of Extended Overtime on Construction Labor Productivity

This paper presents an analysis of the impacts of extended duration overtime on construction labor productivity. The results show a decrease in productivity as the number of hours worked per week increase and/or as project duration increases. The research focuses on labor intensive trades such as the electrical and mechanical trades. Overtime in this research is defined as the hours worked beyond the typical 40 h scheduled per week. The paper begins by presenting the effects of overtime and the need for an updated overtime productivity model. Data for the quantitative analysis was collected from 88 projects located across the United States by means of a questionnaire. Various statistical analysis techniques were performed to develop quantitative relationship curves, including multiple regression, P-value tests, and analysis of variance.     

Learning Curve Models of Construction Productivity

Current research into learning curve models of construction productivity is presented. Five mathematical models are identified and each of these are used to model unit rates for 65 sets of data. The correlation between predicted and actual unit rates is determined, and on this basis, it is concluded that the best predictor is a cubic model. The often cited straight‐line model is only marginally adequate. The validity of the straight‐line model is further undermined by showing that the learning rate is not a constant value. Time data for erecting and setting 466 precast concrete floor planks is used to support the conclusion that the straight‐line model is not a reliable model for predicting future performance.     

Relationship between Changes in Material Technology and Construction Productivity

There have been substantial changes in both material technology and construction productivity over the past several decades. By analyzing the changes in both material technology and productivity among 100 construction activities from 1977 to 2004, this research examines the strength and types of relationships that exist within these two occurrences. Through analysis of variance (ANOVA) and regression analyses, the researchers found that activities experiencing significant changes in material technology have also experienced substantially greater long-term improvements in both their labor and partial factor productivity. The research did find that a stronger relationship exists between changes in material technology and partial factor productivity than in labor productivity. The research also found that changes in the unit weight of materials had a significant relationship to labor productivity, while changes in installation and modularity had a significant relationship to partial factor productivity. The research findings will help industry practitioners to better understand how they may leverage technology to improve construction productivity, while also helping researchers understand the theoretical relationships between technology and construction productivity.     

Measuring the Productivity of the Construction Industry in China by Using DEA-Based Malmquist Productivity Indices

Data envelopment analysis (DEA) measures the relative efficiency of decision-making units and avoids any functional specification to express production relationship between inputs and outputs. DEA-based Malmquist productivity index (MPI) measures the productivity change over time. In this paper, the MPI is used to measure the productivity changes of Chinese construction industry from 1997 to 2003. The results of analyses indicate that productivity of the Chinese construction industry experienced a continuous improvement from 1997 to 2003 except for a decline from 2001 to 2002. It is found that there are gaps in productivity development level among western, midland, eastern, and northeastern regions in the Chinese construction industry. The DEA-based MPI approach provides a good tool to support setting up policies and strategic decisions for improving the performance of the Chinese construction industry and promoting the sustainable development of the industry between different regions.