benchmarking kpi's

Dr f Dejahang (BSc CEng, BSc (Hons) Construction Mgmt, MSc, MCIOB, PhD)

006006BENCHMARKIBENCHMARKI

NGNG*(KPI’s)*(KPI’s)

http://www.cpi-team.com

mailto:[email protected]

http://www.cpi-team.com/

BENCHMARKING-KPI’SBENCHMARKING-KPI’S


A KPI Masterclass provides training on the principles of performance measurement.

The benefits of using the UK-EU-USA Construction Industry KPIs.

Each KPI Masterclass includes examples of how leading organizations have used KPIs.

BENCHMARKING-KPI’SBENCHMARKING-KPI’SIdentify non productive items in the use of

best practices and project management performance.

Identify reasons for lack of productivity (root causes).

Go to KPIs success factor and high productivity Power Point for further information & Benchmarking P1 Power Point.

BENCHMARKING-KPI’SBENCHMARKING-KPI’SDevelop an action plan (select best

practices to reduce shortfall); Integrate best practices into the

project delivery process; Adopt benchmarking as part of a

continuous improvement program;Develop a process model; Monitor progress.

BENCHMARKING-KPI’SBENCHMARKING-KPI’SThe National Research Council

(NRC) completed a planned 3-year review and assessment -U.S. Department of Energy

Publication of Progress in Improving Project Management at the Department of Energy: 2003 Assessment (NRC, 2004).

BENCHMARKING-KPI’SBENCHMARKING-KPI’SIn that final assessment report,

the Committee for Oversight and Assessment of U.S. Department of Energy Project Management made following suggestions:

The committee suggests 30 possible performance measures in four sets:


Program- and department-level input/process measures.

Assess the total resources provided for all projects within a programme or department.

Assess the degree to which programme- and department-wide goals for projects and their management are met.


From CT must be deducted: any additional work; Alterations; Based on calendar days. The following three factors are used forcalculating the KPI: the date of start-up of the

construction phase;


the actual handing-over the project to the client (day);

the alterations that have been agreed with the client;

or have been caused by external factors or by the client;

In both cases, the alterations are expressed in calendar days.

BENCHMARKING-KPI’SBENCHMARKING-KPI’SIf the work takes longer

than anticipated; the KPI will be greater

than 100%;KPI will be less than

100% if the work is completed faster than anticipated.

There are 4 factors for calculating the KPI:

BENCHMARKING-KPIsBENCHMARKING-KPIsActual construction time includes: Remedy work (defects) in relation to planned

construction time;this KPI expresses the relationship between the

actual construction time (including defects liability period), if any;

and the expected construction time; For this case KPI for “Actual construction time

in relation to expected construction time”, the expected construction time includes alterations expressed in calendar days.

BENCHMARKING-KPI’SBENCHMARKING-KPI’SThe KPI is calculated as a percentage,where 100% corresponds to the actual

construction time being identical to the expected construction time;

If the realised construction time is longer than expected;

Therefore, the KPI will be greater than 100%.

The KPI will be less than 100% if the work is completed ahead of the anticipated time.

BENCHMARKING-KPI’SBENCHMARKING-KPI’SRemedial work to defects during the first

year after handing overThe KPI includes only the defects

remedied in the first year following handing over, based on man-hour consumption.

Some clients set the defect liability for less time such as 6 month.

Other extra works or additional services after the first year .

BENCHMARKING-KPI’SBENCHMARKING-KPI’SIf it has been agreed that these additional

services may be carried out after handing over they are not included in the KPI.

The man hours used to remedy defects in connection with the one-year inspection are included as an estimated figure.

The KPI is expressed in man hours worked and measured against the contract sum.

BENCHMARKING-KPI’SBENCHMARKING-KPI’SAccident frequency-CDM This is accomplished by the calculating of two

rates:1. Incidence rate; 2. Accident frequency rate.

Incidence Rate Give the number of accidents for 1000

employees and is used to take into account variations in the size of the workforce:

Incidence Rate = Number of Accidents X 1000Numbers Employed


Accident frequency-CDMThe revised detailed guidance notes which

accompany CDM 2007 entitled 'managing health and safety in construction.

Listed by the Health and Safety Commission ((the Approved Code of Practice (ACoP)) was approved in February 2007.

CDM 2007 and ACoP came into force at the beginning of April 2007.

BENCHMARKING-KPI’SBENCHMARKING-KPI’SContribution ratioBenchmarking System comprises

selected types of costs incurred by a contracting company.

Earnings- KPIs are calculated on the basis of a proportion of the total costs incurred by a contracting company on a contract.

BENCHMARKING-KPI’SBENCHMARKING-KPI’SThe contribution ratio (basic package),It is calculated on the basis of the

contractor’s turnover on the contract. It corresponds to the sum of the payments

he has received from the client. To the above figure should be added

payments such as:extra works additional services

BENCHMARKING-KPI’SBENCHMARKING-KPI’SExclude from above: income from interest income from sale of scrap materials salary cost small assets other direct and indirect production costs

and overhead costs. Some of these costs are included in the

benchmarking system’s optional packages.

BENCHMARKING-KPI’SBENCHMARKING-KPI’SLabour productivityLabour productivity is defined as the value

added on the project.It is measured against the total number of

man hours worked by contractors and subcontractors contractors.

This productivity indicator will subsequently constitute the project’s labour productivity.

BENCHMARKING-KPI’SBENCHMARKING-KPI’SThe value added on the project areconsidered as: the value added to the raw materials,building materials and components

used from the time they are purchased to the time they are ”sold” in the form of the finished construction project.


The presentation of the productivity indicators is carried out at different levels such as:

sector company project and contract level.

Benchmarking KPIs

Benchmark

1. Time 2. Cost 3. Quality 4. Safety 5. Client/Customer

satisfaction 6. Other

1. Consider Activities

with low ( KPIs), 2. Consider a process

model first, 3. Consider what to

benchmark from the process model First, Second,

4. Define the measures, 5. Develop: (data

collection methodology)

6. Collect data, 7. Domestic-Global

Develop an action plan

(select best practices to reduce shortfall),

Integrate best practices into the project delivery process,

Adopt benchmarking as part of a continuous improvement program.

Monitor progress,

benchmarking kpi's

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