Working models

The industry is grappling with measurement and benchmarking. I meet construction managers that are involved in measurement and benchmarking and wondering why and others that have not yet started and are worried they are falling behind.

I also know of organisations that are measuring upwards of 125 key performance indicators! Their staff complain bitterly about measurement overload and that nothing ever seems to happen with the figures. But, there are also good examples of benchmarking leading to improvement in business performance - three are described below.

One national contractor identified categories of waste in their business - things such as: subcontract non-recoverable extras, materials wastage, defects rectification, legal fees for sorting out claims and agency labour used to help recover delays.

The rationale was that none of this adds value for the customer or to the contractors business and as such is waste. It estimated the amount of all this waste to establish a starting figure and then as part of a wider improvement programme measured the cost of these categories over a period of 18 months.

The measurements were intended to be taken at site level to promote improvement at source and also to encourage benchmarking or comparison between sites and across regions. After 18 months the organisation is on track to eradicate a significant proportion of the waste and in doing so is improving its service to customers and its business returns.

Another contractor measured the number of full skips for each new house. At the start of its programme each completed unit produced 2.5 skips of waste. As the skip content was mixed the average waste transfer cost was £290. Total waste transfer costs were approximately £250,000 for the company's yearly output of 350 completed houses. Its first improvement action involved segregating the waste into separate skips - mainly bricks/ blocks, plasterboard and timber. It also used front-loading compactors to reduce the bulking of plasterboard and packaging. These improvements reduced the number of skips per completed unit to 1.5. Waste transfer costs were cut substantially due to the separation of contaminated and inert materials.

The company then changed the basic house design to timber-frame with pre-made floors and factory-insulated panels. Also in-situ timber was pre-cut to length prior to site delivery. These improvements reduced the waste produced to an average of one skip per unit. Finally, the company arranged internal studs and ceiling heights to be modular with plasterboard panels, this reduced the waste to half a skip per unit.

A housebuilder managed to cut the waste per new house from 2.5 skips, which cost £250,000 a year, to 0.5 skips — making a considerable saving

The third example is of a local authority in the North East that has developed a computerised management system to measure and improve service provision. The customers, mainly residents and local businesses, are asked to score their satisfaction from one to 10 for services received from the local authority.

Service categories include repairs and maintenance of dwellings, street cleaning and ground maintenance. Scores and feedback are fed into a database as they are generated. The information is sorted by ward, service category and provider; it can also be presented graphically at regular intervals.

The system shows where improvements are required and enables the customer's viewpoint to be clearly transmitted to the council. After nearly a year in use, perceived customer satisfaction is dramatically improved and customers, contractors, the direct labour workforce, councillors and best value auditors are embracing the system.

In his book, The Tyranny of Numbers, David Boyle makes the point that 'one changes what one is counting merely by counting it'. He tempers this proposition with the need for human judgement, common sense and intuition when acting on the data. He also raises concern over the cost of collecting and processing all this information and the danger of doing little else.

So, what does all this mean for the construction manager grappling with measurement and benchmarking? Drawing on Boyle's comments, my own experience and the above successes, the following may help:

• view measurement and benchmarking as a performance management tool
  
• keep the measures simple, few in number and make sure you measure the right thing
  
• combine measurement and benchmarking with an improvement programme
  
• involve the people who are doing the work - get them to embrace measurement as an improvement tool
  
• have a target for the desired improvement and establish intermediate milestones
  
• regularly communicate progress, acknowledge and celebrate success