If the industry is to improve its processes, Key Performance Indicators are the way forward, writes Brian Moone
KEY Performance Indicators are a crucial tool for industry if it is to learn about Best Practice and improve the respective processes within construction. Indeed, KPIs hold the key to engaging in Best Practice.
If we do not measure performance we have no idea where we are under-performing and no barometer by which to compare performance with competitors or other industries - or even ourselves. That's why there is a whole family of KPIs for the various sectors of the construction industry. It is also why there are different levels of KPIs and benchmarking systems, which allow businesses to measure their work effectively.
It is also important to understand that the industry KPIs are a starting point - they must not be judged too harshly. Many organisations are not involved in the KPI data-gathering exercise, just as many organisations have yet to engage in Best Practice or adopt any of the Rethinking Construction principles advocated via the M4I demonstration projects. By starting to measure, however, they can compare themselves with those who are engaging in Best Practice and ask: 'Why are we not doing so well?'
It's marvellous that the Rethinking Construction demonstration projects are clearly outperforming the industry as a whole - for the third time in succession M4I demonstration projects have significantly out performed the industry averages against all the KPIs.
And M4I projects have shown a year-on-year improvement in site safety - reported levels of reported accidents are nearly 50 per cent better than the industry average. Productivity has risen too - fewer defects, mean less reworking and projects are completed within agreed timescales. And the demonstration projects enjoy lower costs than the year before.
These projects are actively applying Best Practice to their day-to-day operations. They are proof that Best Practice works and it is satisfying that the Construction Best Practice Programme's message is bearing fruit. The M4I KPIs demonstrate the real business benefits of engaging in Rethinking Construction principles.
The sooner the industry recognises that the methods employed on these projects are the way forward, the sooner our industry will become world class - but first the industry has start measuring its processes.
The message that KPIs work and that more firms must engage in them is crucial. We now have a mass of evidence that shows how organisations throughout the UK's construction supply chain are using KPIs to benchmark their performance, to establish and communicate targets and to check that desired levels of performance have been achieved.
Use of KPIs and benchmarking are commonly specified in contracts, especially to underpin the public sector, where organisations are seeking top quartile performance and provide evidence to Best Value audit teams. Many contractors have told us that without providing objective evidence of their performance through use of KPIs they cannot win work from clients who are becoming more performance-conscious.
In short, clients demand measurement and KPIs enable organisations to gauge their continuous development. More importantly, KPIs act as a stepping stone towards the real business benefits of engaging in Rethinking Construction principles. To find out more about KPIs, visit www. kpizone. co. uk for specific information, or have a look at www. cbpp. org. uk.
Brian Moone is director of the Construction Best Practice Programme