In a book dedicated to informing practitioners on howto achieve benchmarking and best practice, it is satisfying to be able to report on the work being carried out by this project. It is recommended that anyone wanting to discover more about the techniques described in subsequent chapters should contact the Construction Best Practice Programme (see section 8.4.3 of Chapter 8). Prior to doing this, it will be useful to the reader to have some knowledge about what this programme purports to do, and how it carries out its work.9
The emergence of the Construction Best Practice Programme in November 1988 came under the auspices of the Construction Industry Board (CIB).10In July 1997 the Minister for Construction at
the Department of the Environment, Nick Raynsford, announced the desire of Government to work with industry through CIB to develop an initiative which would achieve the following objectives:
. Create the desire for improvement by publicising the activities of successful construction organisations
. Showthe benefits that are possible through improved practice . Provision of a first point of contact for construction organisations
wishing to attempt to improve
. Identify, publicise and support the implementation of business improvement tools, techniques and advice
. Provide a means by which communication is effectively facili- tated between those organisations that wish to improve and those organisations that possess the experience and knowledge of howto achieve this objective
. Disseminate research which shows the potential for improve- ment and benchmarking in the construction industry supply chain
In pursuance of these objectives, the Construction Best Practice Programme offers the following programme services.
Information line
There are a number of fact sheets which provide introductory material which can be obtained via telephone enquiry or directly through the website (see section 8.4.3)
IUKE±construction company visits
This collaborates with the Inside UK Enterprise Scheme which the Department of Trade and Industry operates, and seeks to provide an `open door to understanding current best practice in some of the best construction enterprises' (quoted from Construction Best Practice Programme literature, date unknown). These visits operate in the following way:
(1) A host organisation provides access to outsiders in order to understand howthey are applying any aspect of improvement or best practice.11It allows such organisations to be recognised as being a leader in the application of the initiative being demonstrated.
(2) Visitors derive benefit from being able to see in action the
initiative being carried out within the host organisation and, in particular, being able to talk to those directly involved about howit may be possible to attempt a similar initiative in their own organisation.
(3) By being involved in these visits, the Construction Best Practice Programme is `able to provide a barometer of the industry's current thinking on best practice'.
Workshops
These are provided by the Construction Productivity Network, and aim to promote the sharing of knowledge and understanding of the range of tools and techniques that exist to assist in achievement of improvement.
Case studies
These relate to so-called `levers of change' that have been adopted by the Construction Best Practice Programme. As such they are usually provided in the form of a leaflet which is intended to provide a synopsis of howa case study organisation implemented an improvement initiative, what benefits they have enjoyed and howit is possible for any other organisation to try to adopt a similar approach.
Advice signpost services
One of the descriptions that have been applied to the Construction Best Practice Programme is that it acts as a `sort of dating agency ± they help you find the right partner'. This analogy is verified by literature provided by the programme (undated and no pagination):
This service directs enquirers to companies who can give direct advice on best practice and associated business improvement opportunities. Helpdesk staff identify the enquirer's needs and then direct them to contacts who are competent to provide the right level of advice.
Champions for change
This is a forum that exists whereby senior members of organisations engaged in the implementation of best practice share their expertise with others.
Construction Best Practice in Action
This is a tool provided on a CD-Rom basis that seeks to provide practical advice to a small organisation on howit might be possible to improve performance.
Best Practice clubs
A number of these exist throughout the country, usually with the specific purpose of enabling representatives from different organi- sations to exchange advice and guidance in the use of improvement tools and techniques.
As the Construction Best Practice Programme explains, its role is not to tell any organisation what it should do or how it should do it.
As is usually the case with any new management concept, many consultants exist who will attempt to do this (at a cost of course).
The Construction Best Practice Programme aims to provide encouragement and assistance to those who wish to apply improvement techniques to their own organisation. As the next section describes, one of the most recognised and effective ways of doing this is by the use of what are known as Key Performance Indicators.
1.6.1 The key performance indicators
Chapter 5 provides a detailed explanation of critical success factors and key performance indicators (KPIs). The former are the state- ments of how improved business practice must be achieved if an organisation is to be able to attain its mission. The latter are the means by which an organisation can measure the progress being made to ensure that the critical success factors are being achieved.
In these sentences the word organisation is used in its widest sense, and in particular, to include a society or body of mem- bers. Therefore, the British construction industry can be collec- tively considered as being an organisation made up of many small members, all of which exist for their own particular pur- poses. However, the construction industry ± like any industry ± is usually believed to act collectively to ensure that all of its mem- bers obtain maximum benefit. It is precisely for this reason that the Department of Transport and the Regions (DETR), through its Minister for Construction attempts to co-ordinate the efforts of all those involved in construction.12 As previously discussed,
one of the main recommendations to emerge from the authors of Rethinking Construction was that the industry should `put in place a means of measuring progress towards its objectives and targets towards improvement' (Construction Industry Task Force, 1998: p. 18). Such measures would therefore be the KPIs that could be used to judge howeffective construction was being in implementing the sort of improvement envisaged in Rethinking Construction. Indeed, as the DETR explains in its pub- lication KPI Report for The Minister for Construction,13 the impor- tance of KPIs is that they allowthe `measurement of project and organisational performance throughout the construction industry' (DETR, 2000: p. 7). As the DETR argues, the informa- tion that such KPIs generate makes it possible for clients and
`supply chain' organisations to effectively engage in benchmark- ing `towards achieving best practice' (DETR, 2000).
There are ten KPIs that are currently being used. These are now discussed in turn.
(1) Client satisfaction ± product. This measures the satisfaction level of a client with the finished product they received and uses a ten-point scale where ten is highest.
(2) Client satisfaction ± service. This measures the satisfaction level of a client with respect to the service they received from the consultants or main contractor they employed (as in (1), a ten-point scale is used).
(3) Defects. This measures the `condition of the facility' at the time of hand-over with respect to defects and uses a ten-point scale in which:
10 = Defect-free
8 = There are `some defects' but which have no `significant impact' on the client
5 = There are defects, some of which have `impact on the client'
3 = There are `major defects' which have a `major impact on the client'
1 = The facility is `totally defective'
(4) Safety. This measures the reportable accidents per 100 000 employees. An accident is defined as being reportable by the Health and Safety Executive if it results in death, major injury or over three days sickness to employees, those who are self- employed or members of the public.
(5) Predictability ± cost. There are two elements to cost:
(a) Design, which is defined as being `actual cost at available for use less the estimated cost at commit to invest,14 expressed as a percentage of the estimated cost at com- mit to invest'.
(b) Construction, which is defined as being `actual costs at available for use less the estimated cost at commit to construct,15 expressed as a percentage of the estimated cost at commit to construct'.
(6) Predictability ± time. There are two elements to time:
(a) Design, which is defined as being `actual duration at commit to construct less the estimated duration at commit to invest, expressed as a percentage of the esti- mated duration at commit to invest'.
(b) Construction, which is defined as being `actual duration at available for use less the estimated duration at commit to construct, expressed as a percentage of the estimated duration at commit to construct'
(7) Construction time. This is the normalised time (a statistical method which takes account of location, function, size and inflation) to construct projects when a comparison is carried out from year to year.
(8) Construction cost. This is the normalised cost (see (7)) for definition of normalisation) of projects when taken in com- parison from year to year.
(9) Productivity. This is the measure of the average value that has been added by each employee (total value is turnover less all costs subcontracted to, or supplied by, other parties).
(10) Profitability. This is the amount left prior to tax and interest as a percentage of sales.
According to the Construction Best Practice Programme, anyone can use these KPIs. Therefore, clients, designers, consultants, con- tractors and subcontractors can consider howtheir organisations compare to the data that will have been collected from a large number of organisations by the Construction Best Practice Pro- gramme in the preceding year. As such, the use of such compar- isons enables organisations to consider the following:
. The progress made in particular areas of their business
. The potential for implementing initiatives for producing improvement
. The need to do more than simply measure KPIs
A crucial feature of the concept of benchmarking is the need to understand processes, and in so doing seek alternative ways of carrying out the day-to-day activities which are fundamental to completion of the overall corporate objectives (see Chapter 5). As this book will stress, whilst measurement is probably the most essential part of carrying out benchmarking, it is important to understand what the measures are and how effective they might be in producing improvement. It is for this reason that attention needs to be drawn to the last of the above bullet points which strongly implies that the outputs of measurement should not be considered to be the only activity. There is a danger in thinking that merely because your organisation is better than others competing in the same sector, that will be enough.
Benchmarking is a management tool that can allowany organisation to consider what it does and how it achieves it in comparison to any other organisation, regardless of the fact that it may operate in a sector which is entirely unrelated to construction.
If there is a desire to improve the capability of an organisation radically the most effective way of doing this will be to compare it against the `best in the business'. As the authors of Rethinking Constructionsuggest, a construction organisation should not simply aim to be as good as any other construction organisation, but should aim to use benchmarking as a tool to `drive improvement up to
``world class'' standards' (Construction Industry Task Force, 1998:
p. 13). World class is an expression that has been used in this chapter to imply that an organisation is accepted as being the `best in the business'. Organisations that achieve the accolade of being world class will normally have won an award demonstrating their commitment to excellence. The award that exists in the UK is the EFQM (European Foundation for Quality Management) Excellence Model (described in Chapter 7). The working group who wrote the KPI Report for The Minister for Constructionstate that:
. . . the most effective tool for analysing all aspects of an organi- sation's operations is the EFQM (Business) Excellence Model promoted in the UK by the British Quality Foundation. This enables comparison with other firms and other industries.
(DETR, 2000: p. 8)
The remainder of this book is dedicated to explaining howany organisation can develop sufficient expertise and competence to use the principles of benchmarking to implement improvement com- parable to organisations that are acknowledged as being the best in the world.