Subcontractor Evaluation and Management Framework for Strategic Partnering

Recently, main contractors have shifted their attitudes about subcontract procurement to more strategic and long-term partnering philosophies. The objective of this study was to present a framework for subcontractor evaluation and management to help main contractors develop more strategic and productive relationships with their subcontract partners. As the strategic performance feedback model, the balanced scorecard concept was adopted with modification. A case study was also conducted to evaluate the framework with subcontracting strategy, performance indexes, weighting, evaluation of subcontractor performance data, and feedback methods. The research results obtained can be useful as a guideline of subcontractor management for long-term partnering and also to enhance overall productivity within the construction supply chain.     

Key Performance Indicators for Strategic Healthcare Facilities Maintenance

The salient phases in a facility’s service life that are most decisive for the effectiveness of its facilities management (FM) are the preliminary design, construction, and maintenance. The effectiveness of facilities is vastly affected by decisions pertaining to the strategy of the organization that owns or uses the facilities. The goal of this study was to develop key performance indicators (KPIs) for strategic FM that will provide a conclusive approach towards the facility’s service life conditions. Parameters were developed by means of field surveys and statistical analyses, and were validated by means of case studies. The research resulted in a series of 11 KPIs for strategic healthcare FM, which can be classified into four categories: development, organization and management, performance, and maintenance efficiency parameters. The study proposes age and occupancy coefficients as essential parameters for the assessment of large healthcare facilities needs, as an effective measure for long term facility maintenance planning, and for measuring FM effectiveness. The paper stresses that strategic healthcare facilities management must integrate quantitative performance, manpower, and maintenance indicators.     

Capturing Safety Knowledge Using Design-for-Safety-Process Tool

An organization must strive to maintain its most valuable resource, knowledge, in order to be more productive and competitive. One of the steps to manage the knowledge is to capture contents of the knowledge. In construction site safety, success in capturing the tacit knowledge of safety officers is of paramount importance; however without a good mechanism, this process might be difficult due to time and hazard perception constraints. This paper discusses research in a design-for-safety-process tool, which aims at: (1) capturing safety knowledge from safety engineers about construction safety hazards and the safety measures required; (2) assisting a safety engineer to identify safety hazards in construction projects and determine the safety measures required; and (3) training students and inexperienced safety engineers in identifying safety hazards and the measures required. In this paper, the first objective is discussed.     

Strategic-Operational Construction Management: Hybrid System Dynamics and Discrete Event Approach

A significant number of large-scale civil infrastructure projects experience cost overruns and schedule delays. To minimize these disastrous consequences, management actions need to be carefully examined at both the strategic and operational levels, as their effectiveness is mainly dependent on how well strategic perspectives and operational details of a project are balanced. However, current construction project management approaches have treated the strategic and operational issues separately, and consequently introduced a potential conflict between strategic and operational analyses. To address this issue, a hybrid simulation model is presented in this paper. This hybrid model combines system dynamics and discrete event simulation which have mainly been utilized to analyze the strategic and operational issues in isolation, respectively. As an application example, a nontypical repetitive earthmoving process is selected and simulated. The simulation results demonstrate that a systematic integration of strategic perspective and operational details is helpful to enhance the process performance by enabling construction managers to identify potential process improvement areas that traditional approaches may miss. Based on the simulation results, it is concluded that the proposed hybrid simulation model has great potential to support both the strategic and operational aspects of construction project management and to ultimately help increase project performance.     

Owner’s Role in Construction Safety: Guidance Model

The practices implemented by owners that were associated with better project safety performances were described in a companion paper. This paper will expand on those research findings and present a model that evaluates the impact of different owner practices on project safety performance. Four indices were established which quantitatively describe the project characteristics, the selection of safe contractors, the contractual safety requirements, and the owner’s participation in safety management. Analysis of variance and linear regression were conducted to evaluate the combined effects of different owner practices on project safety performance as measured by the total recordable injury rate (TRIR). Results show that project safety performances were closely associated with all the indices except the index to describe the selection of safe contractors. The linear regression model explained 42.6% of the total variance of the TRIR. A scorecard to evaluate the owner’s involvement in construction safety was developed to serve as a practical means of conducting an assessment and predicting project safety performance. The owner’s involvement can favorably influence project safety performance by setting safety objectives, selecting safe contractors, and participating in safety management during construction.     

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.     

Development and Initial Validation of Sustainable Construction Safety and Health Rating System

This paper presents a study to develop and validate a sustainable construction safety and health (SCSH) rating system. The rating system provides an opportunity to rate projects based on the importance given to construction worker safety and health and the degree of implementation of safety and health elements. A Delphi survey using an expert panel of 12 experienced safety and health professionals representing different sectors of the construction industry was employed to develop the SCSH rating system. The study resulted in a rating system consisting of a total of 50 safety and health elements organized into 13 categories. Each category contains safety and health elements which carry credits based on their effectiveness in preventing construction worker injuries and illnesses. The rating system was initially validated based on data from 25 construction projects and found to accurately represent the safety performance of large projects. The SCSH rating system can be used as an effective tool to develop and plan construction safety and health programs and evaluate the potential safety performance of construction projects.     

Success/Failure Factors and Performance Measures of Web-Based Construction Project Management Systems: Professionals’ Viewpoint

This paper presents the results of an empirical study conducted to refine the writers’ previous findings on potential factors that may influence performance of commercial Web-based project management systems (WPMSs) and potential measures that might be used to assess performance of such systems. Data used in this study were obtained from 39 professionals who had practical experience with WPMSs in construction projects. The results of the study confirm 42 factors that can potentially affect performance of WPMSs and 36 measures that can be used to evaluate such performance. These 42 factors are categorized into four distinct groups: characteristics of the project, the project team, the service provider, and the specific WPMS system used in the project. The 36 measures reflect performance of WPMSs in six different perspectives: strategic, schedule/time, cost, quality, risk, and communication. Findings presented in this paper can be used by researchers as a starting point for future research in the area of WPMS implementation and performance evaluation and may be used by practitioners in the industry as a useful guide to increase the likelihood of a successful WPMS adoption.     

Improved SWOT Approach for Conducting Strategic Planning in the Construction Industry

Strength, weakness, opportunity, and threat (SWOT) analysis has been in use since the 1960s as a tool to assist strategic planning in various types of enterprises including those in the construction industry. While still widely used, the approach has called for improvements to make it more helpful in strategic management. The project described in this paper aimed to study whether the process to convert a SWOT analysis into a strategic plan could be assisted with some simple rationally quantitative model, as an augmented SWOT analysis. By using the mathematical approaches including the quantifying techniques, the “maximum subarray” method, and fuzzy mathematics, one or more heuristic rules (HRs) are derived from a SWOT analysis. These HRs bring into focus the most influential factors concerning a strategic planning situation, and thus inform strategic analysts where particular consideration should be given. A case study conducted in collaboration with a Chinese international construction company showed that the new SWOT approach is more helpful to strategic planners. The paper provides an augmented SWOT analysis approach for strategists to conduct strategic planning in the construction industry. It also contributes fresh insights into strategic planning by introducing rationally analytic processes to improve the SWOT analysis.     

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.     

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 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.     

Predictive Tool for Estimating Accident Risk

This paper presents a predictive tool that uses safety factors to estimate accident risk for processes commonly employed on construction sites. The tool is demonstrated in the context of the utility-trenching process. Based on expert surveys, preplanning, supervision, and training are identified as critical safety factors needed to predict accident risk when evaluating safety performance related to trenching operations. Preplanning has a greater impact on excavation tasks than supervision and training, while conversely, supervision and training are more important during the pipe installation phase of trenching operations.     

Decision Making in Flexible Mine Production System Design Using Real Options

Large multifaceted capital projects, such as those in the mineral resource industry, are often associated with diverse sources of both internal and external risks and uncertainties. Risks can cause delays to the planned schedule of a project, add a significant cost, and greatly influence its profitability. Uncertainties can be associated with project risks, as well as with opportunities that can develop throughout the project’s lifecycle. Having the ability to plan for these uncertainties, by incorporating flexible alternatives into the system design, is increasingly recognized as critical to long-term corporate success. This paper advances the knowledge needed to incorporate flexibility in systems engineering and management for both practitioners and researchers. Flexibility is defined in this paper as the ability of a system to sustain performance, preserve a particular cost structure, adapt to internal or external changes in operating conditions, or take advantage of new opportunities that develop during a mine’s life cycle by modifying operational parameters. By engaging in planning for flexible production systems, the effects of risk on a particular project value can be examined, project volatility can be calculated, and potential flexible mining alternatives can be evaluated. Once identified, a real options valuation provides a strategic decision-making tool for mine planners to determine the value of incorporating flexible alternatives into the mine plan. This paper demonstrates that flexibility can become an equal partner among the parameters controlling the decision-making process for underground engineering construction systems, followed by industry practitioners. It presents a methodology in mine production system design by introducing flexibility into design through the application of real options valuation techniques. Real world case studies related to flexible planning and design of construction and production systems in underground hard rock mines are presented.     

Why Contracts: Evidence

Contracts are a ubiquitous part of the architecture, engineering, and construction industry. Despite this, they are poorly understood by practitioners and academics. This paper empirically tests a conceptual model of the contract that seeks to improve our understanding of contracts. This model argues that the contract should be viewed as a managerial tool that provides the structure within which we accomplish the project tasks. The choice of the appropriate contract facilitates a process that allows the parties to achieve superior performance. The model views the contract as a multidimensional instrument that addresses three critical questions: (1) what is the structure of the organizational relationship between firms; (2) what is the disposition of risk and reward for involvement in the project; and (3) how will conflicts between firms be resolved? This paper empirically examines the first two dimensions. In order to address these distinct but intertwined questions, theories from Transaction Cost Economics and Agency Theory are brought to bear. The results of the study suggest that the conceptual model explains some of the variation in project performance, and therefore holds promise as a strategic management tool.     

工程项目中的安全生产管理案例分析

结合大冶有色金属股份有限公司阳极炉改造工程安全生产管理实例,分析了建立工程建设项目中安全组织保证体系、实行施工安全措施、制定安全应急预案的重要性。     

Strategic Group Analysis in the Construction Industry

The aim of strategic group analysis is to determine whether clusters of firms that have a similar strategic position exist within an industry or not. Findings of strategic group analysis may further be used to investigate the performance implications of strategic group membership. The objective of this paper is to identify the possible strategic groups that could exist within the Turkish construction industry by using a theoretical framework applicable for the construction industry and alternative statistical cluster analysis techniques. The achieved results pinpoint the existence of three clusters and significant differences between the performances of firms in each cluster. All of the firms in the strategic group that have the highest average performance utilize a quality differentiation strategy and have the necessary resources and capabilities that give them the opportunity to differentiate their services from others. Also, they use a systematic approach and have a collaborative environment for strategic decision making. Findings of strategic group analysis can be used by professionals to understand the current strategic position of a firm within the competitive environment and formulate strategies to shift to a better performing cluster.     

Model for Predicting Financial Performance of Development and Construction Corporations

Performance forecasting is central to aligning an organization’s operations with its strategic direction. Despite the panoply of approaches to performance predictions, relatively few published studies address model development of financial performance predictions for the construction industry. By analyzing the preceding relationship between financial and economic variables and financial performance, this paper proposes an innovative approach to predicting firm financial performance. First, hypothesis tests using data for 42 development and construction corporations listed in the construction sector of the Taiwan Stock Exchange between 1997 Q1 and 2006 Q4 uncover useful relationships between financial performance and financial and economic variables. Second, based on these relationships, a three-stage mathematical modeling procedure is used for cross-sectional model estimation, which is subsequently refined to create firm-specific financial performance-forecasting models for four sample firms. The out-of-sample forecasting accuracy is evaluated using mean absolute percentage error (MAPE). The results show that the cross-sectional model explains 78.9% of the variation in the cross-sectional performance data, and the MAPE values in the forecasting models range from 9.54 to 19.69%.     

Reliability and Stability Buffering Approach: Focusing on the Issues of Errors and Changes in Concurrent Design and Construction Projects

This paper proposes a new buffering approach, reliability and stability buffering, as a means to reduce uncertainty caused by errors and changes, in particular, when concurrent design and construction is applied to an infrastructure project. The proposed buffering provides a proactive mechanism to protect the planned performance of a project with a flexibly located and systemically sized buffer. For its implementation, the reliability and stability buffering is incorporated into a dynamic design and construction project model, which simulates the impacts of errors and changes on design and construction performance and evaluates the effectiveness of the proposed buffers. Applying this buffering approach into the infrastructure project in Massachusetts, this paper concludes that (1) the amount of hidden errors and latent changes was reduced; (2) the flexibly located and distributed buffers helped identify the predecessors’ errors and changes in concurrent design and construction; (3) the impacts of hidden errors and changes were minimized, preventing their ripple effect on the succeeding activities; and (4) the quality of the coordination process was increased. Thus it shows great potential to protect design and construction performance against uncertainty in concurrent design and construction delivery of civil infrastructure projects. Such benefit obtained from the proposed buffering should be relevant to researchers and practitioners because it provides the base for future investigation for the strategic utilization of schedule buffers in an uncertain environment as well as the guideline for their effective use in practice.     

Planning for Civil Engineering Applications of Information Technology

Providers of civil engineering infrastructure face increasing pressure to apply information technology. Unfortunately, technology's rapid evolution renders it easy to acquire expensive equipment that quickly becomes obsolete. In response, this paper outlines a systems analysis planning approach that focuses on the long-term goals of engineering managers. Using the case study method, the strengths and weaknesses of a relatively new technology, the World Wide Web, are mapped to the goals of a key civil infrastructure user, a transit provider. Six strategic areas are identified where the Web can have a high impact on the delivery of transit services: attracting greater advertising revenue, improving the image of the service, improving services for existing patrons, attracting other market segments, educating customers, and facilitating electronic commerce. The value of this goal-oriented planning application is that uncommon but practical transit initiatives are identified, several of which would have been undiscovered had a more traditional technology-oriented approach been employed. The significance of this approach is that one makes better investments rather than simply better justifications for existing projects.