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Frontiers of Engineering Management    2021, Vol. 8 Issue (3) : 442-455     https://doi.org/10.1007/s42524-020-0108-2
RESEARCH ARTICLE
Requirements in performance measurement systems of construction projects from the lean production perspective
Karina B. BARTH(), Carlos T. FORMOSO
Building Innovation Research Unit (NORIE), Universidade Federal do Rio Grande do Sul, Porto Alegre 90040-060, Brazil
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Abstract：

Performance measurement (PM) generates useful data for process control, facilitates communication between different sectors, and helps to align efforts on the most important aspects of the business. Thus, PM plays a key role in the management of projects and organizations. PM is also important in the implementation of lean production principles and methods, such as reducing the share of nonvalue-adding activities, increasing process transparency, building continuous improvement into the process, and benchmarking. Moreover, the adoption of the lean production philosophy requires changes in PM. Despite its importance, limited studies have been conducted on the use of PM systems for assessing the impact of lean production programs in construction projects. In addition, studies on how lean companies (or projects) use performance measurement and to what extent the indicators adopted reflect the result of actions that have been undertaken are limited. This study proposes a set of requirements in PM systems of construction projects from the perspective of lean production and a taxonomy of performance metrics for lean production systems. Five empirical studies have been carried out on construction companies from South America involved in the implementation of lean production systems. The scope of this investigation is limited to the construction projects as production systems rather than PM at the level of construction organizations.
Keywords performance measurement      lean construction      production management      continuous improvement      metrics     
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Karina B. BARTH
Carlos T. FORMOSO
引用本文:   
Karina B. BARTH,Carlos T. FORMOSO. Requirements in performance measurement systems of construction projects from the lean production perspective[J]. Front. Eng, 2021, 8(3): 442-455.
网址:  
https://journal.hep.com.cn/fem/EN/10.1007/s42524-020-0108-2     OR     https://journal.hep.com.cn/fem/EN/Y2021/V8/I3/442
Traditional construction project management Lean construction project management
① In process control, performance is measured at the output (or input), and deviations to standards must be detected for correcting processes (Koskela and Howell, 2002). This assumption encourages the minimization of variance rather than continuous improvement (Bourne et al., 2000). ① A PM system should provide not only the necessary data for process control but also information that can be used as a reference for process improvement and learning (Pavlov and Bourne, 2011). This premise indicates that the root causes of deviations must be identified to ensure that problems can be eliminated (Koskela and Howell, 2002).
② Performance measures can be used to align efforts and resources to the most important aspects (or strategic objectives) of the business (Lantelme and Formoso, 2000). ② Apart from strategic goals, measures should also focus on lean goals, such as elimination of waste, reduction of variability, and improvement of value generation (Koskela, 1992).
③ PM systems must be used to disseminate challenging and feasible goals in the company (Hall et al., 1991). ③ In addition to the dissemination of goals, PM should point out shortcomings, which can be regarded as sources of creative tensions for continuous improvement (Spear and Bowen, 1999).
④ Effective information flows must be used to provide communication between different managerial levels and departments (Hall et al., 1991). ④ Apart from being disseminated through information flows, performance measures should be made available in information fields (i.e., sets of visual devices), in which invisible process attributes are made visible to several people (Koskela, 1992).
Tab.1  Role of PM systems
Karlsson and Åhlström (1996) Sánchez and Pérez (2004)
Category Example of metric Category Example of metric
Elimination of waste Value of rework in relation to sales Elimination of waste Inventory rotation
Continuous improvement Number of suggestions per employee and year Continuous improvement Percentage of employees’ suggestions implemented by the company
Zero defects Workers take out and adjust defective parts – –
Just-in-time Production run time between setups Just-in-time delivery Percentage of items delivered just-in-time by suppliers
-Pull instead of push Number of process stages that are pulled in relation to the total number of stages –
Multifunctional teams Percentage of employees working in teams Multifunctional teams Percentage of employees working in teams
-Decentralized responsibility Number of functional areas under the responsibility of teams – –
-Integrated functions Number of different indirect tasks performed by teams –
-Vertical information systems Number of areas contained in the information given to employees -Flexible information systems Number of monthly meetings involving top managers and employees
– – Supply chain integration Average length contract with key suppliers
Tab.2  Categories and examples of performance metrics proposed for lean production systems
Company A Company B Company C Company D Company E
Company size Large Large Small Large Medium
Main activities Construction and real estate development for middle- and upper middle-class residential markets Services and integrated solutions in the construction of industrial buildings and offshore platforms Construction and real estate development for middle- and upper middle-class residential markets Construction and real estate development for lower-, middle-, and upper middle-class residential markets Development and construction buildings for private clients (mostly industrial and healthcare projects)
Main characteristics Considered as a benchmark in lean construction, started lean implementation in the 1990s Multinational company, started lean implementation in complex projects (e.g., offshore) 7 years ago Family-owned company, started lean implementation less than 4 years ago Started lean implementation less than 3 years ago Worked mostly as a contractor in a wide range of projects, started lean implementation 15 years ago
Main lean practices adopted Last Planner
Kanban
5S
Prototyping
Visual management
Standardized work		 Last Planner
Kanban
Multifunctional teams
Visual management
Standardized work
Value stream mapping		 Last Planner
Visual management
Task completion control
Takt-time planning		 Last Planner
Visual management
5S
Task completion control
Takt-time planning		 Last Planner
Production system design
Visual management
Takt-time planning
Prototyping
Tab.3  Description of the five companies
Requirements Company A Company B Company C Company D Company E
Direct alignment with high goals P T P P P
Combine leading and lagging indicators T T P T P
Provide meaningful and timely feedback to users T T T T T
Promote improvement and learning T T P T P
Create local control systems P P N N P
Be flexible and updated from time to time T P P N N
Tab.4  Adoption of requirements in the design of PM systems
Indicators Company A Company B Company C Company D Company E
Last Planner metrics ´ ´ ´ ´ ´
Effectiveness of Last Planner implementation ´ ´ ´
Daily OTP (on-time performance) ´
Task diminishment and WIP control ´ ´
Number of Kaizen ideas ´
Gemba walk wastes ´ ´
Control of batch completion rhythm ´ ´ ´ ´
Batch adherence control ´ ´
Cycle time ´ ´
Integrated safety and production control ´ ´
Tab.5  Indicators used by the five companies to support the implementation of lean practices
Fig.1  Example of a tool used for controlling unfinished work and WIP.
Fig.2  Example of a heatmap for controlling WIP.
Fig.3  Example of a chart monitoring the rhythm of different processes.
Fig.4  Example of a chart monitoring batch adherence.
Core principle or concept Performance measures
Continuous improvement and collaboration Number of Kaizen ideas
Gemba walk wastes
Waste elimination Task diminishment and WIP control
Gemba walk wastes
Process reliability (production planning and control) Last Planner metrics
Daily OTP
Task diminishment and WIP control
Rhythm deviation
Batch completion rhythm
Batch adherence control
Cycle time
Safety (resilience) Percentage of safe work packages, percentage of safety work packages completed, number of near misses
Tab.6  Classification of indicators according to lean principles or concepts
Categories of metrics Examples of metrics
Categories related to lean production goals Waste elimination Cost of rework in relation to sales
Number of wastes identified in Gemba walks
Value generation Degree of customer satisfaction
Number of customer complaints
Categories related to lean production means (principles) -Process reliability
-Time reliability Last Planner metrics
Batch completion rhythm
Batch adherence control
Task diminishment
Quality reliability Number of batches without defects
Percentage of defective products
Slack control Inventory rotation
Amount of WIP
Number of items delivered just-in-time
Supply chain integration Degree of participation of suppliers in early project stages
Integration of suppliers in internal managerial processes
Resilience (safety) Percentage of safe work packages
Number of near misses
Continuous improvement and learning Number of Kaizen ideas
Cost reduction resulting from Kaizen initiatives
Collaboration and empowerment Number of suggestions per employee
Number of decentralized control tools (e.g., Kanban)
Tab.7  Taxonomy of performance metrics in lean production systems
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