By Steve Jones and Donna Laquidara-Carr
In 2016, Dodge Data & Analytics partnered with the Lean Construction Institute on a groundbreaking study examining construction project performance from a building owner’s perspective. We asked owners to consider two specific projects as they answered questions in a survey: one that they considered a “typical” project in terms of its performance based on schedule, budget, safety and quality, and one that they considered to be their “best” project based on these criteria. The owners were asked about the differences they experienced in performance on the four main measures, and then were asked about the kinds of practices they engaged in on each. This allowed us to determine two things: the gaps in performance between typical and best projects that are common in the construction industry, and the practices that most frequently correlate with better project performance.
The gaps in project performance are, in fact, dramatic. Nearly one quarter (24%) of best projects finished ahead of schedule compared to only 6% of typical projects, and almost half (46%) of best projects finished under budget compared to only 10% of typical projects. On the other hand, almost two thirds (61%) percent of typical projects finished behind schedule, and nearly half (49%) of typical projects completed over budget.
Understanding these gaps in performance is critical because they demonstrate the degree to which standard practice in the construction can reasonably be expected to improve. To be able to advance, though, requires that project teams understand which practices are most frequently correlated with greater project success.
The study identified several best practices, but we want to particularly highlight two. The first also confirms the findings of many Dodge Data & Analytics studies that demonstrate that good project performance is correlated with early project team integration. In this study, we found that over three quarters (76%) of best projects engage key stakeholders (owner, architect, general contractor and major trades like structural, mechanical, electrical and plumbing contractors) before or during conceptualization. On the other hand, nearly half (42%) of typical project did not engage these key stakeholders until design development or later. In addition, the study also found correlations between the use of collaborative delivery methods, such as construction manager at risk and integrated project delivery, and improved project performance.
The other best practice is the use of several lean techniques. Approaches like co-location/big room, target value design and A3 thinking were used five to six times more on best projects than on typical ones. Last Planner System® was also used twice as frequently on best than on typical projects. These findings present compelling evidence that lean approaches improve project performance. In addition, the projects on which a relatively high number of lean practices were employed were also demonstrated to be three times more likely to complete on schedule and two times more likely to complete on budget.
Thus, all of these findings suggest that taking a collaborative, lean approach can have a measurable, meaningful impact on improving project performance.
: Dodge Data & Analytics is North America’s leading provider of commercial construction project data, market forecasting & analytics services and workflow integration solutions for the construction industry. Building product manufacturers, architects, engineers, contractors, and service providers leverage Dodge to identify and pursue unseen growth opportunities that help them grow their business. On a local, regional or national level, Dodge empowers its customers to better understand their markets, uncover key relationships, size growth opportunities, and pursue specific sales opportunities with success. The company’s construction project information is the most comprehensive and verified in the industry. Dodge is leveraging its more than 125-year-old legacy of continuous innovation to help the industry meet the building challenges of the future. Learn more at www.construction.com.
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