Benchmarking for Quality Management & TechnologyBenchmarking and improving construction productivitySherif Mohamed

Article information:To cite this document:Sherif Mohamed, (1996),"Benchmarking and improving construction productivity", Benchmarking for Quality Management &Technology, Vol. 3 Iss 3 pp. 50 - 58Permanent link to this document:http://dx.doi.org/10.1108/14635779610149151

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Users who downloaded this article also downloaded:Jaideep Motwani, Ashok Kumar, Michael Novakoski, (1995),"Measuring construction productivity: a practical approach",Work Study, Vol. 44 Iss 8 pp. 18-20 http://dx.doi.org/10.1108/00438029510103310Albert P.C. Chan, Ada P.L. Chan, (2004),"Key performance indicators for measuring construction success", Benchmarking:An International Journal, Vol. 11 Iss 2 pp. 203-221 http://dx.doi.org/10.1108/14635770410532624G. Anand, Rambabu Kodali, (2008),"Benchmarking the benchmarking models", Benchmarking: An International Journal, Vol.15 Iss 3 pp. 257-291 http://dx.doi.org/10.1108/14635770810876593

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Benchmarking and improvingconstruction productivity

Sherif MohamedSchool of Engineering, Griffith University, Gold Coast Campus,

Queensland, Australia

IntroductionThe ever-rising customer requirements and expectations have increaseddemands for continually introducing improvements in the cost, timing andquality of the construction output. As world competition intensifies, leadingconstruction organizations throughout the world continue to be more active inenhancing their competitive position by improving their performance. Thus,setting new operating targets and standards for national markets. Thisdynamic mechanism and the well-known fierce national competition haveraised the awareness of performance measurement (benchmarking) among themajority of construction organizations.

During the 1990s there has been considerable interest in benchmarking inmanufacturing and other service industries. The successful implementation ofbenchmarking is reflected in the large number of publications which addressthe concept, application and limitations of benchmarking[1-4]. Asmanufacturing has been a reference point and source of innovations inconstruction over the years, it is no wonder that construction researchers lookedto the benchmarking tool for guidance to measure construction performance.

Investigating and verifying the applicability of manufacturing productionand managerial concepts to construction has always been a challenge. Typicalexamples are concurrent engineering, lean production, total qualitymanagement, quality function deployment, computer integration, automation,and many more. These concepts have been imported from manufacturing witha view to implementation in construction[5-8]. While some of these conceptshave enjoyed a reasonable degree of success in construction, many others havenot. This is mainly dependent on how effective the concept under investigationis in accommodating existing differences in manufacturing and constructionoperating environments. The benchmarking concept is no exception. In the firstinstance, it is quite an appealing tool for measuring and improving theconstruction performance. However, the industry seems to be reluctant to adoptit. This is attributable to the following:

• Misunderstanding of the benchmarking concept; for many practitionersit simply means measuring everything.

• Confusion surrounding what is required to take up a benchmarkingexercise: what to measure? how is it measured? against what shouldthese measurements be compared?

Benchmarking for QualityManagement & Technology, Vol. 3 No. 3, 1996, pp. 50-58.© MCB University Press, 1351-3036

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• Unavailability of data mainly because the structure of the constructionprocess does not allow data associated with field-based operations, to becollected readily.

• Application of benchmarking seems to require radical changes in theway information is handled and documented.

• Lack of relevant conceptual models to support and guide data collection.The above demonstrates that considerable work is required to fully utilize thebenchmarking concept into construction. This paper is an attempt to introducesome guidelines on the application of benchmarking to construction. It presentsand discusses a three-level framework for improving construction productivitythrough benchmarking. It should be noted that this paper is not intended toproduce a working framework which can be used to benchmark theperformance of a construction organization or project. Rather the emphasis ison understanding how the benchmarking concept can be related and adapted tothe unique working environment of the construction industry.

Benchmarking constructionThe focus of benchmarking in manufacturing is the ability to meet customerrequirements and to adopt innovative practices regardless of their source. Dataavailability has a major contribution to the success of benchmarking inmanufacturing. Over the years, manufacturing organizations have developedmeasures to assess their performance. Typical measures usually involved timeas the measuring basis. In so doing, organizations collected data regarding thedifferent procedures performed to deliver the output to be measured. In somecases, and to account for any data unavailability, data was obtained from otherorganizations with common process steps[4].

In construction, however, benchmarking is not a straightforward task due toboth the very nature of the industry which lacks solid data gathering and theremarkable fluctuation in productivity. Benchmarking attempts in constructionis bound to face certain difficulties such as incomplete or non-existent data.Even if data is well recorded and retrievable, it would be highly dependent onthe special characteristics of the project, e.g. size, type and budget. Therefore, itis difficult to use it effectively as a basis for comparison. The structure of theindustry with its temporary nature in organizing the construction process,where a number of organizations get involved in designing and constructing asingle project, adds to the complexity of the benchmarking task.

Benchmarking only works if consistent methods of measuring theperformance of operations can be developed and introduced. Currently, suchmethods do not exist in the construction industry. The majority of the relativelylimited number of studies devoted to construction productivity andperformance measurement is concerned with identification of sources of delays,rather than with analysis of measuring systems and techniques[9].

In the face of the absence of data and measuring methods, it becomes clearthat another dimension has to be given to the benchmarking form, as currently

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applied in manufacturing, before it can be applicable to construction. Thisdimension is presented and discussed in this paper, in the form of the following:

• Internal benchmarking – where a construction organization aimstowards identifying improvement areas within its structure throughcomparing its business operations with those of others who do it better,thus setting new targets to meet.

• Project benchmarking – where a construction organization assesses theperformance of projects in which it is involved with an aim to meetcustomer requirements, measure productivity rates, validate andmaintain its estimating databases.

• External benchmarking – where the industry as a whole attempts toincrease its productivity through making tools and techniques,developed and successfully used by other industries, applicable toconstruction.

Internal benchmarkingInternal benchmarking is the examination of an individual organization’scurrent processes and practices. Naturally, performance indicators depend onthe organization’s line of business, but useful indicators can include: customerperspective (service, cost, quality), business evaluation (market share,successful/failed tenders, conflicts), and financial stability (turnover, backlog).These measurements can be used in identifying the organization’s strengthsand weaknesses before proceeding with the comparison of its performance tothat of other direct competitors.

An organization launches its benchmarking campaign to improve itsperformance and business competitiveness. As in any business process, therewould be a number of non-value-adding activities embedded within the process,i.e. activities that consume time and/or cost, without adding value to theprocess. Through benchmarking, these activities can be identified and, at a laterstage, eliminated, leading the way to a more efficient business practice.Processes targeted by the internal benchmarking exercise must be in line withthe organization’s overall strategic business objectives to avoid wastingbenchmarking efforts.

A critical prerequisite to successful benchmarking is the commitment to theexercise from all levels of the organization, especially the top management levelwho have the authority to implement and integrate the benchmarking resultsinto the organization. Other levels have to be flexible in the preparation forchanges in job functions and resources allocation. Those most affected by thebenchmarking results must be empowered to use these results as a positivechange agent[10]. This is a necessary step to achieve an essential change toprocesses and optimum performance improvement.

This level of benchmarking represents a major step towards establishingwell-defined measures and measuring systems within the organization to betterunderstand its own processes, resources (human and technical) and functions(operational). The main elements of internal benchmarking are shown in Figure 1.

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Once these measures are established, the organization embarks upon the secondphase of benchmarking – the comparison phase.

After determining where the areas for greatest improvement are, the issue ofselecting a “best-practice” organization becomes the target; who is best andwhat do they do? At this stage, ultimate care should be taken to account for thedifferences in operating environments, levels and quality of service betweenorganizations. This is a fundamental point to avoid being overwhelmed, if theorganization taking up benchmarking does not enjoy a high calibre ofperformance on the national level.

For those organizations which are considered to be the national industry leaders,they have to measure their performance against world-class competitivestandards. Otherwise, any chance of improving national industry standards willdiminish. These organizations usually have a reasonably effective system thatcan guide and support the benchmarking exercise. Nevertheless, the systemmust be maintained in a way that allows for continuous benchmarking, thusensuring the organization’s competitive advantage.

The road to best practice is not a short one. It starts with the organizationexploring its operating system. Then it proceeds to benchmark its performanceagainst that of another organization who does it best, in order to generateimprovement opportunities to increase the organization’s productivity andcompetitiveness. A more advanced stage along this road is identifyinginnovative practices which can secure an organization’s place amongst the best-practice forum.

Project benchmarkingThe second level of benchmarking is the measurement of performance ofprojects in which the organization is involved. This level reflects the uniqueness

Figure 1.Main elements of

internal benchmarking• Compare output against who does it better

Preparation Processselection

Processdescription

• Ensure management commitment and staffflexibility

• Has to be a value-adding process and in line with overall strategy

• Understand input resourceswork sequence and output

Processmodification

Processcomparison

Processimprovement

• Reduce the share of non-value-adding activities

• Implement changes and monitor output

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of the construction working environment where different organizations aretemporarily “joined” together to form what can be best described as an“informal” project team for the duration of a construction project. Traditionally,performance measurements have been in terms of complying with completiontime and allocated budget. This benchmarking exercise is desirable, but is,however, highly dependent on the project characteristics, e.g. degree ofcomplexity, performance of other key participants, and most importantly, thetrends of the industry, i.e. the performance of the industry as a whole.

Current Australian attempts at benchmarking construction have focused onmeasuring the time performance of projects. Walker[11] identified usefulindicators for benchmark measures and major factors that affect constructiontime performance while the Construction Industry Institute Australia (CIIA)focused its benchmarking efforts towards the preconstruction phase. TheCIIA[12] found that project management team and project communication arethe most important aspects that determine performance.

The above two research studies laid out the foundations for benchmarkingconstruction performance. However, they did not provide any practicalmeasuring systems by which organizations can compare and assess their ownperformance as well as the overall project performance. The need for suchsystems is clear to achieve the desired benefits of project benchmarking. For anefficient project benchmarking process, these systems have to be developed andintroduced to capture the project performance at selected stages of its lifetimeand independently of its size, budget, type, location, etc.

The process of project benchmarking is essential for supporting theorganization’s internal benchmarking exercise; the performancemeasurement(s) carried out throughout the lifetime of various projects wouldserve as an effective gauge for the success/failure of the actions taken in thelight of the internal benchmarking recommendations.

Irrespective of its line of business, what should a construction organizationconsider when taking up project benchmarking? To answer this question, let usassume that the organization under investigation has been awarded a contractfor a project that aligns with its overall strategy. Throughout the differentstages of the project, the organization attempts to perform a twofold task: first,to carry out the assigned “to be done” work to meet customer expectations aswell as contract specifications (being on schedule, on budget, etc.); and second,to deliver the “already done” work while meeting its own profit goals andwithout the need for pursuing legal claims after the completion of the project.

For a proper benchmarking of the organization’s performance during theexecution of the first part of the task, each value-adding activity within theprocess has to have a well-defined customer, i.e. the next user, who sets themeasures for the process performance. For each selected activity, relevantcustomer requirements must be clearly identified at the earliest possible stageso that sub-activities can be designed, managed and performed with the aim ofsatisfying these requirements. Once the customer is satisfied with the outcome,work then proceeds to the next activity.

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Adopting such a sequence will not only ensure systematic customerinvolvement, but will substantially simplify the task of project benchmarkingas it will give rise to simple and clear measures for the organization to meet.Whenever practical, these measures should cover both quantitative andqualitative issues. For example, and in addition to the well-known time, cost andquality measures, there can also be additional measures such as the number ofqueries raised by the customer, technical changes after final submission, designvariations to suit site conditions or disputes at the hand-over stage.

Efficiency of site operations is a good example for project benchmarkingfrom the design team’s perspective. The more construction knowledge andcontractor experience that is implemented into the design stage, the higher thedesigner’s performance rate is. Therefore, performing a constructabilityanalysis can be used in benchmarking the designer’s performance against themeasurements/criteria specified by the next user, i.e. the contractor.

To benchmark the second part of the task, the organization should establisha set of project benchmarking measures to trace the performance against itsown expectations and initial estimations. Provided the organization carried outits pre-contract estimations correctly, extra care should be taken to detect any“holes” that may arise during execution resulting in the reduction of theassumed profit margin. One of the most common holes that exists inconstruction practice is reworking incomplete tasks; redoing activities. Thisundesirable feature puts considerable pressure on the organization in the formof direct additional costs and lost time, which could have been avoided if thingswere done correctly in the first place.

Any designed set of measures, as required and needed by the organization’sdiscipline, should be simple enough to be “built-in” within the process allowingaccurate and representative measurements to be taken. These measures wouldinitially help detect the errors leading to rework and ultimately lead to theirprevention in similar future projects. It is worth noting that a proper qualityassurance (QA) application in construction does help reduce design andconstruction errors. However, it does not allow for performance measurementsto be taken. To illustrate this type of benchmarking, the size of the rework cycleexperienced in current practice, as well as the role of design and constructionteams in its detection, measurement and correction, are discussed below.

As far as it is known, there has never been any systematic attempt to observerework cycles in construction. Sources of quality deviations have beeninvestigated by Burati et al.[13] who indicated that rework cost is a significantportion of the total project cost. Cooper[14] reported that the design of largeconstruction projects may require up to two and a half cycles of rework to “getit right”. These findings clearly give an indication of the large amount of timeand cost associated with rework in construction.

Furthermore, it is widely believed that current quality measures are notadequately implemented within construction organizations. Consultants andcontractors who use inspection to achieve desirable project outcomes, aim atdetecting and correcting deficient results. Inspection not only consumesresources and time but also does not improve working procedures. Therefore,

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inspection can be seen as a non-value-adding activity which ideally should beeliminated from the construction flow process[5].

Design and construction professionals (e.g. architects, engineers, projectmanagers, etc.) have a thorough understanding of the technical, managerial andoperational aspects related to their project areas. The basis of their judgement,during the project lifetime, is highly dependent on their personal knowledgeand past experience. This experience is rarely being captured “as it happens” ordocumented into the organization records for future use. That is where projectbenchmarking should come in recording the performance in terms ofproductivity rates, allocated resources and cost analysis.

A feedback link should be established by the organization undertakingbenchmarking to examine how the actual performance-cost rates compare towhat was actually assumed at the estimating/planning phase. This is anessential link for assessing current performance during construction, thusenabling the organization to decide on effective actions to be performed tomaintain the planned schedule and cash flow. This proposed link would alsoprovide invaluable information to the estimators/planners.

The above discussion highlights the deficiency in current understanding ofproject benchmarking. It demonstrates that project benchmarking should notbe merely focused on investigating the project progress and then comparing itto the planned schedule and allocated budget, as widely believed and practisedby many researchers in this area. However, it calls for constructionorganizations to take the initiative in monitoring their own performance duringthe time of their involvement in the projects, in both a quantitative andqualitative sense so that a true performance picture can be obtained.

External benchmarkingThis level of benchmarking is mainly concerned with the selection andimplementation of managerial and technological breakthroughs, developed byother industries, to generate significant improvement in constructionproductivity. Although external benchmarking may not provide constructionorganizations with immediate benefits, it is still considered an important toolfor identifying improvement areas in performance standards that constitute theorganization’s business framework. In external benchmarking, there is anobvious benefit in introducing innovative processes into traditionally-performed operations.

Productivity is the most important issue in any industry. In the last decade,industries like manufacturing and electronics have achieved remarkably highproductivity through integrating design and production processes. Approachessuch as simultaneous engineering, team design and rapid prototyping proved tobe successful in linking both processes together[15]. To a large extent, designand construction processes are still carried out in what can be described as “theway they have always been” with noticeable disunity between them. In themajority of construction projects, engineers are consulted once the architecturalplans are completed while contractors become involved after most of thedrawing details and specifications are set. The temporary relationship between

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the client and architect extends to a large degree covering other project keyplayers. This type of short-lived relationship does not help create a stimulatingenvironment for increasing productivity and enhancing value[16].

By comparison, other industries have succeeded in establishing a muchhealthier and more competitive environment in which companies endeavour toproduce what seems to exceed customer requirements. These companies alsostrive to optimize their production activities to gain a larger share in the market.Thus it is clear that there is a need to benchmark other industries in an attemptto incorporate, subject to practicality, the best in the construction industry.Construction practitioners and researchers should select tools and techniquesthat have potential to be adaptable to the construction working environment.

On the selection of a tool or technique, its implementation should beinvestigated under the current features of construction practice to determine itsimpact on productivity. Impact assessment in an assumed “perfect”environment will almost certainly receive a negative reaction from the industry,especially when the implemented tool or technique requires major changes inthe associated features of the process. Gable et al.[17] state that practitionerstend to be more receptive to new ideas and their adoption when these ideas donot originate in their own industry.

Nevertheless, the well-demonstrated effectiveness of such tools in otherindustries necessitates external benchmarking. An appropriate level of externalbenchmarking is bound to give rise to effective tools that may solve, or at least,ease some of the inherent problems the construction industry is facing.

ConclusionThe success of benchmarking in manufacturing and service industries hasdrawn the attention of construction practitioners and researchers to its meritsin measuring and ultimately improving the industry’s performance. In order toimprove the construction performance, it is essential to have accurate andrepresentative measurements reflecting current practice, trends andproductivity. This paper has examined the application of benchmarkingconcept to construction on three levels – internal, project and external.

On the road to imitate best practice, construction organizations should beeffectively taking up internal benchmarking to gain a thorough understandingof how they do business and how their customers evaluate their services. Forefficient internal benchmarking, allowance has to be made for the differences inoperating environments, levels and quality of service to avoid wasting effort.Organizations are urged to be actively involved in project benchmarking toassess their performance, measure their productivity rates and validate theircost-estimation databases. Also, organizations have to be more open tobenchmark what has been successful in other industries and assess if it isadaptable to construction.

Finally, benchmarking should be seen as an integrated part of an ongoingprocess aiming at improving construction productivity. A fully implementedbenchmarking environment within the industry, as suggested herein, will

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significantly improve the quality of decision making related to design andconstruction processes.

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