The power of metrics in the Construction Industry

Apples and pears, both are a part of the category “Fruit”. Can we compare them? The weight of an apple and a pear might be comparable. Still, the nutrients per gram will differ since we are talking about two different types. Therefore, this comparison will not give relevant information about the performance of the apple, neither for the pear. In benchmarking too, it is important to think about which projects and which variables can be compared with each other. 

For instance, constructions built in different areas might have various performances because of local circumstances. Even when constructions are made in the same environment, and they look comparable, the details of the construction might have significant differences.

In this blog, we will elaborate on selecting the right metrics for benchmarking in the construction industry, which will lead to an improvement of your cost estimation, cost management and cost control.

Why is it important to define metrics in benchmarking?

The definition of metrics not only include the information on metrics that are to be used for benchmarking but also on how they are measured. A clear description of the metrics is important for the following three reasons:

1. In benchmarking, relevant metrics should be compared to each other to determine which procedures or activities need improvement. Therefore, a good assessment of metrics should be executed.

2. The definition of the metrics should include how the variables are measured and how the information of the variables is collected. If there is a lack of information, the same variable might consist of different information on different projects. Then a comparison between these projects will result in a wrong conclusion about the performance, which might result in adaptations of procedures, when indeed not required.

3. To generate valuable information about the performance of a project, enough metrics should be included in the benchmarking procedure. Not too few and not too many. Each metric that is included in the process should have the aim to improve the performance of the company.              

Examples of metrics to benchmark in the construction industry

Common metrics in benchmarking are cost and schedule. However, these metrics are not enough to identify the causes of loss in productivity and effectiveness. Since one of the goals of benchmarking is to improve the performance, it is important to include other metrics in the procedure as well.

Some metric examples for the construction industry are:

– cost per functional unit
– carbon dioxide emissions
– construction costs per squared meter Gross Internal Area
– wall to floor ratio
– construction ratings

For all the metrics – the ones mentioned above and the ones you define yourself – it is important to include not only the direct costs but also the indirect costs as the indirect costs are especially a key feature in the construction process.

Conclusion

In conclusion, a clear definition of benchmarking metrics is required to get useful information from the benchmarking procedure. If the goal of benchmarking and the used metrics are not clearly defined, or when they are not matching with each other, the process of benchmarking will hardly give you the valuable information to improve your project performance.

Are you looking for ways to improve benchmarking within your company? Then don’t hesitate to contact us.