Construction management process reengineering performance
measurements
Min-Yuan Cheng1
Department of Construction Engineering, National Taiwan University of Science and Technology, Taiwan
Hsing-Chih Tsai2*
National Taiwan University of Science and Technology, Taiwan
Yun-Yan Lai3
Department of Construction Engineering, National Taiwan University of Science and Technology, Taiwan
Abstract
This study develops a construction management process reengineering performance
measurement (CMPRPM) model based on an application of business process
reengineering philosophy. Process operation time and customer satisfaction are used as
efficiency and effectiveness evaluation indices. The CMPRPM model applies queuing
theory to calculate process operation time in order to strike an optimal balance between
process execution demand and manpower service capacity. In order to achieve customer
satisfaction, customer demands are identified and a target attainability index is used to
calculate process effectiveness. After integrating efficiency and effectiveness evaluation
results, indices of process value (PV) and value improvement (VI) are proposed to allow
performance prior to and after reengineering to be measured and compared. The
proposed CMPRPM model addresses the performance of initial (“As-Is”) and significantly
reengineered (“To-Be”) processes to facilitate successful BPR implementation. Results
show that the construction industry stands to benefit significantly in terms of improved
BPR implementation results by adopting the model proposed in this paper.
Key Words: Construction management process reengineering; Performance evaluation;
Queuing theory; Process value, BPR
1 Min-Yuan Cheng Professor, Dept. of Construction Engineering, National Taiwan University of Science and Technology, Taiwan. Address: #43, Sec. 4, Keelung Rd., Taipei, Taiwan, R. O.C. 106, Dept. of Construction Engineering Phone/fax numbers: +886 2 27336596 / +886 2 27301074 E-mail address: [email protected] 2 Hsing-Chih Tsai Post Doctor, National Taiwan University of Science and Technology, Taiwan. Address: #43, Sec. 4, Keelung Rd., Taipei, Taiwan, R. O.C. 106, Ecological and Hazard Mitigation Engineering Researching Center Phone/fax numbers: +886 2 27301277 / +886 2 27301074 E-mail address: [email protected] 3 Yun-Yan Lai Master of Construction Engineering, National Taiwan University of Science and Technology, Taiwan. Address: #43, Sec. 4, Keelung Rd., Taipei, Taiwan, R. O.C. 106, Dept. of Construction Engineering Phone/fax numbers: +886 4 8511888#2241 / +886 4 8511270 E-mail address: [email protected] * Corresponding author: Tel. +886-2-27376663; Fax: +886-2-27301074; E-mail address: [email protected] (H. C. Tsai)
1. Introduction
Many businesses spend significant resources to implement new information technology
designed to improve operational performance. However, as efforts typically target
existing processes that are not ideally suited to address evolving operational and market
needs, resources are often wasted. While increasing organizational costs, anticipated
performance gains are not achieved. Businesses often pursue process reorganization to
overcome this problem. “Business process reengineering” (BPR) was first proposed by
Hammer [1]. Hammer defined BPR to address basic issue related to the reengineering
process in terms of costs, quality, services and speeds. The three primary applications of
BPR were defined by Hammer as process reorganization, information technology
implementation and organization redesign [2]. In these primary applications,
information technology (IT) represents a fundamental element of reorganization. When
IT is utilized, its relationship with BPR in construction projects should be developed and
potential IT factors must be addressed [3]. Consequently, considerations of process
innovation and organizational changes are essential for either BPR or business process
implementation (BPR) success. Engaging in BPR efforts can provide high rewards and
increase the likelihood of success; although risks of loss remain high if not properly
implemented.
The potential for BPR in the construction industry should take into consideration core
issues of concern to participants, who include clients, designers, suppliers, specialists and
contractors, in order to help formulate objectives within an integrated strategy [4,5]. The
effective scope of BPR should also be identified [6]. Brown and Marston [7] described
how successful BPR lead to successful improvement efforts at the Tennessee Department
of Transportation by focusing on the project-development process for new construction.
Abdul-Hadi et al. [8] described 29 prioritizing barriers in their investigations of the Saudi
Arabian construction industry, which were ranked according to order of difficulty and
importance to BPR implementation success. An evaluation method for business
improvement should be developed to reduce risks associated with the BPI process and
increase the likelihood of BPR success. Predicting quantitatively the effect of an
improvement approach facilitates model construction better [9]. The balanced scorecard
philosophy also provides an alternative to develop business process evaluation methods
[10,11].
This paper discusses the application of BPR in the construction industry. The queuing
theory is employed to quantify the process operation time, which is important for the
Construction Management Process Reengineering Performance Measurement Model
(CMPRPM). Finally, target achievement matrices are defined to evaluate BPR
performance improvement. A construction company was selected as a case study to test
and verify the CMPRPM model.
2. Model Knowledge
2.1 Business Process reengineering
BPR, a strategy-driven organizational initiative designed to improve and redesign
business processes, includes four major steps. These are process representation, process
transformation, process valuation, and process redesign.
2.1.1 Process Representation
In process reengineering, one of the most difficult and important tasks is to identify and
describe a company’s current process. Accurately describing the categorized operational
process is an essential first step in the reengineering program. Process representation
develops a systematic definition for processes to assist companies to clarify and define
current management processes. Two major sub-steps in this stage are clarification and
process selection for reengineering.
2.1.2 Process Transformation
The transformation process mainly represents the application of the conducted
operational analysis and process modeling. The primary purpose of operational analysis
is to define a processes operational category and hierarchical structure. Process
modeling is used to provide a comprehensive explanation of the relationship between
operations. Many different methods and techniques, including IDEF, eEPC, Petri Nets,
System Dynamics, Knowledge-based Techniques and Discrete-Event Simulation, can be
used for modeling business processes in order to provide an understanding of potential
improvement scenarios. The eEPC (extended event-process chain) technique employed
in this study is composed of events and processes. Process modeling tools should be able
to develop As-Is and To-Be models of business processes, which represent, respectively,
existing and alternative processes. BPR seeks first to define and understand the current
As-Is business process and then, after modeling and analysis, formulates the future To-Be
business process.
2.1.3 Process Evaluation
As reengineering activities focus on outdated and inefficient processes in order to make
changes that achieve the greatest impact, prior to execution, the present process must be
reviewed to locate process barriers in order to ensure their targeting in process redesign.
Process value (PV), used to evaluate process performance, can be viewed from either of
the following two perspectives: (1) efficiency per unit of cost or (2) efficiency per unit of
time. Time is an important factor that impacts upon cost as, the longer a process takes to
accomplish, the higher the financial price demanded. Evaluating performance to identify
problematic areas related to these perspectives provides essential references that can be
used to develop and implement a successful process reengineering strategy.
2.1.4 Process redesign
The process redesign effort must also include a review of current business operations.
Analysis results derived from the process evaluation model can be used to identify major
process defects. Satisfaction of customer demands provided by the process and the
requirement of adding new activities can then be identified and determined based on
operation target attainability. Because, in general, higher effectiveness requires higher
costs, decreasing costs may potentially decrease process effectiveness. Therefore, when
evaluating process value, managers must trade off between effectiveness and efficiency to
pursuance suitable strategies for companies.
2.2 Queuing Theory
Queuing theory is a theme explored in Operations Research. As its name implies,
queues, or work loads, awaiting server processing represent the main objects of Queuing
theory interest [12]. The theory was first developed in “The Theory of Probability and
Telephone Conversation” by a Danish engineer, A. K. Erlang, in 1909, when it was
employed to study telephone system traffic loads. After World War II, queuing theory
was widely applied to various practical applications (e.g., computer networks, telephony
systems, the Internet, industrial production lines) in various fields (e.g., hospitals, banks,
airports, gasoline service stations). The common link between the various applications
and fields that apply queuing theory is that they all deal with customers who join a queue
to wait for some desired service. Identifying the point at which offered services and
waiting customers achieve some specific balance and optimizing the benefits of such
represent the core objectives of queuing theory. The four components of queuing theory
include: arrival pattern, service pattern, queue discipline, and system capacity. Arrival
pattern typically describes the arrival time of two contiguous customers in the queue and
service pattern describes one or more servers. Service time is defined as the length of
time required for a customer to receive a particular service. Both arrival and service
times are characterized by distribution functions. Queue length represents the length of
the queue in which customers wait. Queue discipline represents the order of who should
be served first and may be defined by several discipline regimens, including first
come/first served (FCFS), last come/first served (LCFS), and service in random order
(SIRO). System capacity represents queuing area / service facility capacity limitations.
For example, while queuing at a gasoline service station, both the queuing area and
service capacity are limited. However, system capacity limitations are usually ignored in
queuing theory application. The symbol for queuing theory is usually represented by
Kendall’s Notation, which is composed of the five letters A/B/X/Y/Z, in which A means
arrival time, B represents service time, X is the number of servers, Y is the allowable
capacity for customers, and Z represents the adopted queuing discipline. Distributions
for A and B are usually defined as Markovian distributions (M), Deterministic (D),
Erlang-k distributions (Ek), and General Independent (in order to discriminate between A
and B, GI is used for A, and G for B). When Y is set at “infinite” and Z at FCFS, the
queuing model can be denoted by A/B/X.
Buzacott [13] proposed using queuing theory as a facility for BPR performance
evaluation. Queuing theory can explore the practical impact on system structures that
derive from the radical changes effected by BPR.
3. Construction Management Process Reengineering Performance Measurement
(CMPRPM) Model
This paper employs BPR in the construction industry and evaluates the performance of
such in implementation. The CMPRPM model, developed to quantify BPR performance,
will be introduced in the following sections.
3.1 Factors of CMPRPM
Efficiency and effectiveness are the two major factors associated with CMPRPM.
Efficiency is evaluated by the amount of resources input in relation to the output result.
Effectiveness is the degree to which a target has been achieved with resources applied.
After interviewing managers, reductions in process operation times that make projects
more efficient were identified as the principal expectation of this group with regard to
reengineering. Process reengineering is highly customer-oriented to satisfy internal and
external customer needs. Internal customers comprise employees, whose needs include
reduced work loads, improved work efficiency and higher engineering quality. External
customers include employers (e.g., owners), whose needs include efficiency, productivity
and quality. In this study, efficiency is evaluated by the process operation time of As-Is
and To-Be processes, and effectiveness is evaluated by customer satisfaction after
reengineering. Therefore, process operation time and customer satisfaction represent two
major factors of concern in this paper which will be discussed in the following sections.
3.2 The process operation time factor
For a business, the operation process is something like a queuing sequence, in which
work and documents queue for execution. A reasonable operation process and suitable
resource allocation strategy greatly impact upon efficiency. This study employed
queuing theory to evaluate the process operation times of As-Is and To-Be processes for
reengineering performance evaluation (see Fig. 1). In data analysis, estimates of
expected values and variances were calculated for intervals associated with, respectively,
biding projects, successful bids, subcontracts, and process service rates.
<Insert Fig.1 here>
3.2.1 The selected queuing model: the GI/G/1 model
To evaluate the process operation time a queuing GI/G/1 model was employed [14].
GI/G/1 was selected for reasons including: 1) there was no suitable distribution form
available capable of describing appropriately the arrival rate distribution of biding projects,
successful bids and subcontracts and 2) there was no suitable distribution form available to
measure service rates. Therefore, authors chose a general distribution to describe
distributions and assumed one server for this study. It was further assumed that arrival
and service rates were both independent and identically distributed. The allowable
capacity of customers, Y, was set as infinite and FCFS was adopted for Z.
3.2.2 Process operation time evaluation
The process operation time evaluation model includes two parts. The first task
evaluates the average process operation time required for each project, which, when
summed, can be used to evaluate total process operation time. During project execution,
each project departure impacts greatly upon the arrival of the next contiguous project in
the queue. The coefficient of variation (COV) of a project’s departure is the other value
that must be determined. This parameter was termed the departure rate, where the ith
project’s departure rate equals the (i+1)th project’s arrival rate (see Fig. 2).
<Insert Fig. 2 here>
The ith project is executed when the (i-1)th project has departed (Di-1) and ith project
has arrived (Ai). While the ith project execution time is Si, the time of the ith project’s
departure (Di) is:
iiii SADD += − ),max( 1 (1)
The server is idle during periods when the (i-1)th project has departed but the ith project
has not yet arrived. Conversely, when the next project arrives and the current project is
still executing, a queue will be formed (see Fig. 3). The total time of ith project Ti can be
expressed as:
iii
iiiii
iiii
ST
SAAAD
SADT
+−=
+−−−=
+−=
+−
+−−−
+−
][
)]([
][
1
111
1
τ
(2)
<Insert Fig. 3 here>
In the equation above, τi denotes the arrival interval of the ith and (i-1)th projects and []+
means that only plus quantities will be accepted and negative values will be treated as zero.
τi is equal to (Ai-Ai-1). When Di-1 is less than Ai, or Ti-1 is less than τi, the server is idle.
Server idle time Ii can be represented as:
+−−= ][ 1iii TI τ (3)
When project queuing takes place, servers will handle the next project immediately as
soon as the service needs of the preceding project have been fulfilled. Therefore, the
value of Ii is zero, i.e. the server is not idle. Equations of (2) and (3) yield the following:
iiiii STIT +−=− − τ1 (4)
Assuming that i approximates an infinite value, the system will be under steady-state,
i.e. E[Ti]=E[T] (in which E[] denotes expected value). Substituting this assumption into
equation (4):
][E][E][E][E][E STIT +−=− τ (5)
]E[][E][E SI −= τ (6)
An alternative to equation (4) can be expressed as:
iiiii TIST τ−=−− −1 (7)
And squaring both sides of the above equation:
iiiiiiiiiiii TTISTSTIST ττ 122
1222 2)(22 −− −+=−−−++ (8)
To take the E[] of equation (8). Because Ti-Si and Si are independent, E[(Ti-Si)Si] =
E[TiSi-Si2] = (E[Ti]-E[Si])E[Si]. Therefore, E[TiSi]=E[Ti]E[Si]+var[Si]. While Ti-Si>0,
Ii=0. Because Ti-Si is a non-negative quantity, (Ti-Si)Ii is equal to zero.
][E][E2][E][E]var[2][E][E2][E][E][E 122
1222
iiiiiiii TTSSTIST ττ −− −+=−−++ (9)
The steady state of equation (9) is:
][E])[E][E(2
][E][E][E][E2][E])[E][E(2
][E][E]var[2][E]E[222222
SS
ISSS
ISST +−
−+−=
−−−+
=τ
τττ
τ (10)
In equation (10), E[I2] represents the key to calculating E[T]. However, the exact
solution of E[I2] remains unsolved. The approximate solution is an alternative that can
be chosen. In the equation below, R is a non-negative random variable and X is greater
or equal than zero:
22
22 ])[(E
][E][E]})[{(E ++ −=− XR
RRXR (11)
According to equation (11), E[I2] can be approximated as:
22
22
12
22
12 ][E
][E][E]])[(E
][E][E[E]]})[{(E[E][E i
i
iii
i
iiii ITTI
τ
ττ
τ
ττ ≥−≥−= +
−+
− (12)
The steady state of above equation can be expressed as:
222 ][E)1(][E ICI a+≥ (13)
Substituting equation (13) into equation (10), E[T] can be expressed as:
][E)1(2
)2(][E222
SCCT sa +−
+−≤
ρλρρρ (14)
where Ca is the coefficient of variance (COV) of the project arrival interval τ, ρ is the time
usage rate, Cs is the COV of the project execution time S, and λ is the project arrival ratio.
22
][E]var[
τ
τ=aC (14)
][E][E
τρ
S= (15)
22
][E]var[
SSCs = (16)
][1τ
λE
= (17)
A parameter Cd is also defined to denote the COV of project process departure. A
parameter ∆i is used to describe the duration between the (i-1)th project’s departure and
the ith project’s departure, which can be expressed as:
iiiiiiiiiii SISTSDADD +=+−=+−=−= +−
+−− ][][Δ 111 τ (18)
][E][E τ=∆ (19)
]var[]var[]var[ SI +=∆ (20)
2222
2
22 )1(
][E][E
][E]var[
sd CIC ρρτ
+−−=∆
∆= (21)
From equation (12):
22222
22 )-1)(1(][E][E
][E][E][E ρτ
τ
τ+=≥ aCII (22)
22222 )1( sad CCC ρρ +−≥ (23)
Through the equations above, the process operation time of a project can be calculated
in forms of expected values and variances.
3.3 The customer satisfaction factor
3.3.1 Evaluation process for customer satisfaction
The satisfaction of customer needs is the primary objective of process reengineering.
To this end, the functional target of the process should be customer oriented. In addition,
the level to which the existing process already attains this objective should be assessed to
identify existing problems and improvement goals. Using the quality function
deployment method, this study transforms company policy and customer concerns into
process targets. The target attainability matrix is proposed to examine the attainability of
customer satisfaction for measuring process effectiveness. Main evaluation process steps
are described as follows (see Fig. 4):
<Inset Fig. 4 here>
(1) Definition of operational strategy and company policy
A company’s operations can be viewed as a serial composition of processes, with each
process required to achieve certain targets. In this framework, it is essential to consider
company policy in tandem with the targets of each process in order to accomplish overall
company policy objectives. Before analyzing the process, a company’s operation policy
must first be defined. Inclusion of policy demands when setting process targets is also
essential to the realization of a company’s operational strategy and customer needs.
(2) Identification of internal and external customers
Direct customers are mainly parties that participate in the process, with the final
customers (i.e., acceptors of the final products of a process) generally referred to as
consumers. Applied to construction companies, owners are typically the final customer.
Internal customers are those who actually participate in a process, while external
customers are the consumers who accept the final products of a process. As the targets
of customer satisfaction, customers must first be identified in order to determine their
needs.
(3) Surveying customer requirements
Customers’ requirements must be considered when setting process targets. Based on
the internal and external customers identified above, customer requirements may be
established by interviewing managers and experts.
(4) Determination of process targets
To meet various customer demands, a process must be able to allocate appropriate
resources to where they are wanted. The process targets deployment (PTD) method
developed in this study is used to transform customer demands into process targets.
Process target components may be determined following PTD analysis.
(5) Analysis of the relative importance of process targets
The relative importance weight evaluation matrix is used to identify the relative
importance of process targets. Index j in the matrix relates to customer demand and
index i relates to target components. The corresponding number rij represents the
relationship between customer demands and target components (rij: 1, 3, 5). The value of
rij correlates positively with the degree to which target component i is able to meet
customer demand j. Questionnaire and interview results are quantitated into the
emphasis degree pi (pi: 1~5). The relative importance Wi is calculated by equation (24),
related to m customer demands and n target components. A higher Wi denotes that the ith
component has a more significant effect on customer satisfaction.
∑∑
∑
= =
=
×
×
= n
i
m
jjij
m
jjij
ipr
pr
W
1 1
1 (24)
<Insert Table 1 here>
(6) Target achievement analysis process
A quantitative method was used to calculate the achievement of each process target and
a process target achievement matrix was proposed to evaluate overall target achievement.
Firstly, the relative importance Wi of target components in Table 1 was used in this step.
Based on each process target, the attainability of the kth operation for the ith process target
Aik (Aik: 0~5) was evaluated by the senior managers, with the higher the Aik, the more
specific contribution that target component i makes on operation k. The ith operation
target attainability OAi achieved by the process activities could be calculated following Aik
evaluation. The target attainability TA and the degree of contribution Ck endowed by kth
operation were also identified. A higher OAi denotes higher operation target
achievement; a higher Ck means higher contribution of the operation; and higher degree of
target attainability with higher value of TA (see Table 2). The equations for calculating
OAi , TA, and Ck were demonstrated as follows, as they relate to n target components and g
process operations.
∑=
×=g
kikii AWOA
1 (25)
∑=
=n
iiOATA
1 (26)
∑=
×=n
iikik AWC
1 (27)
<Insert Table 2 here>
(7) Process comparisons
The As-Is and To-Be processes were all evaluated using this procedure to identify
improvements in customer satisfaction. With the process operation time evaluation, the
proposed CMPRPM model was determined a practical method by which to evaluate
efficiency and effectiveness.
4. A CMPRPM case study
A real-world BPR case executed by a construction company (Company “A”) is
presented in this paper to confirm the feasibility of the CMPRPM model. The CMPRPM
model was applied to assist Company A to reengineer its construction planning process
and to evaluate the efficiency and effectiveness of the newly designed process.
4.1 Data collection
The original organization structure of Company A is described in Fig. 5. The
historical data, reviewed for a period spanning May 1999 to February 2001, provided
statistical information on 21 biding projects, 8 successful bids, and 127 subcontracts
(which provided the expected values and variance of arrival interval for this case) (see
Table 3). Service rates for biding/contracting, budgets, and subcontracting processes
were included. The original As-Is biding/contracting process procedure are listed in
Table 4; budget process in Table 5; and subcontracting process in Table 6.
<Insert Fig. 5 here>
<Insert Table 3 here>
<Insert Table 4 here>
<Insert Table 5 here>
<Insert Table 6 here>
4.2 Construction management process reengineering
After BPR implementation, the organization structure of “Company A” was
reengineered as shown in Fig. 6. The To-Be bidding/contracting process procedure is
listed in Table 7; budget process in Table 8; and subcontracting process in Table 9 with
the expected values and variances.
<Insert Fig. 6 here>
<Insert Table 7 here>
<Insert Table 8 here>
<Insert Table 9 here>
4.3 Efficiency evaluation
The efficiency of construction management process reengineering is evaluated through
a comparison of process operation times represented by As-Is and To-Be processes. The
total process operation times of biding/contracting, budget and subcontracting processes
are calculated in this section, with As-Is and To-Be execution times used to evaluate BPR
implementation. In the following, the first two procedures of As-Is biding/contract
process are calculated as an example for process operation time calculation using queuing
theory (GI/G/1 model).
The first procedure of the As-Is biding/contracting process is “Reports for biding
evaluation” (the first procedure in Table 4).
In Table 3, the arrival interval between two biding projects is expected to be 160.13 hrs,
with a variance of 22440.55 hr2. From Table 4, the service rate associated with the first
procedure is 8.38 hrs with a variance of 13.15 hr2. The COV of the first procedure
arrival interval Ca can be calculated as: Ca2=22440.55/160.132; the COV of the first
procedure execution time equals Cs=13.15/8.382; and time usage rate equals
ρ=8.38/160.13. Using equation (14), the process operation time for the first procedure
can be calculated as:
[ ] ( )( ) [ ]
96.15
38.8)
13.16038.81(
13.16012
38.815.13
13.16038.8
13.16055.22440)
13.16038.82(
13.16038.8
E12
2E
22
2
2
222
≤
+−
+−≤
+−
+−≤ SCCT sa
ρλρρρ
(28)
The departure of the first procedure is denoted in the form of Cd as:
786.0
)38.815.13()
13.16038.8(
13.16055.22440)
13.16038.81(
)1(
22
22
22222
≥
+−≥
+−≥ sad CCC ρρ
(29)
The second procedure taken from Table 4, “Auditing the evaluation reports (Manager of
planning dept.)” has a process operation time E[T] and Cd calculated as:
[ ] ( )( ) [ ]
62.15
62.8)
13.16062.81(
13.16012
62.815.8)
13.16062.8(786.0)
13.16062.82(
13.16062.8
E12
2E
22
222
≤
+−
+−≤
+−
+−≤ SCCT sa
ρλρρρ
(30)
553.0
)62.815.8()
13.16062.8(786.0)
13.16062.81(
)1(
2222
22222
≥
+−≥
+−≥ sad CCC ρρ
(31)
The total process operation time may be calculated after evaluating all As-Is
bidding/contracting process procedures (see Table 10). All of these As-Is and To-Be
processes can be evaluated, with the evaluations of total process operation time treated as
an index of efficiency evaluation (see Table 11).
<Insert Table 10 here>
<Insert Table 11 here>
4.4 Effectiveness evaluation
The effectiveness of construction management process reengineering can be evaluated
by the customer satisfaction using target attainability TA in equation (26). During this
evaluation process, internal customers and external customers must first be identified,
where owners and subcontractors are defined as external customers and CEOs, vice
presidents, managers and team leaders are defined as internal customers. After
interviews and questionnaire surveys, customer demands used to form the relative
importance matrixes Wi of the bidding/contracting (see Table 12), budgets and
subcontracting processes are summarized. After Wi is formed, 6 process attainability
matrixes can be established according to Table 2. The process attainability matrix of the
As-Is biding/contracting process is shown in Table 13. Finally, 6 target attainability TA
values can be obtained to represent an index of customer satisfaction / effectiveness (see
Table 14).
<Insert Table 12 here>
<Insert Table 13 here>
<Insert Table 14 here>
4.5 Summary
CMPRPM validity has been established and supported by the results obtained in the two
previous sections. To combine results, normalization should be adopted in which all
evaluation values are normalized by As-Is quantities. For such, we define two
parameters, i.e., process value PV and value improvement VI, as such:
normalized
normalized
timeprocessTotalTimeProcessonSatisfactiCustomer TAPV == (32)
IsAs
IsAsBeTo
−
−− −=
PVPVPVVI (33)
PV represents an index of BPR implementation performance, with a higher PV
correlating with a lower process operation time value, which should deliver higher
customer satisfaction. VI denotes a ratio of To-Be process improvements after BPR
implementation. The results show a dramatic and positive improvement in To-Be
processes (see Table 15). This indicates that BPR is applicable to the construction
industry and that paying appropriate attention to BPR implementation is essential for
construction management.
<Insert Table 15 here>
5. Conclusion
In implementing BPR, the ability to evaluate reengineering performance is a key to
construction management process reengineering success. This paper proposed a
CMPRPM model that integrates efficiency and effectiveness estimators applicable to
construction industry needs and employs queuing theory to estimate process operation
time to evaluate efficiency. The queuing theory is a highly suitable and significant tool
for process operation time evaluation due to its allowing of dual conditions, i.e., an idle
service and customer queuing mechanism. A target attainability matrix was employed to
evaluate customer satisfaction achievement in order to evaluate effectiveness based on
prior relative importance and operation target attainability. These two estimators
quantify crucial factors as impersonal indexes for construction management process
reengineering performance evaluation. Concepts of process value and value
improvement were proposed for overall evaluation of the CMPRPM model. It is
essential that both efficiency and effectiveness should be considered in any evaluation of
process execution performance or To-Be process optimization in order that business
managers can clearly view differences between As-Is and To-Be processes. Such is
essential to facilitating a successful BPR. Therefore, the model proposed in this paper
should serve as a valuable tool with which to facilitate BPR implementation in the
construction industry.
References
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List of figure captions:
Fig. 1. Procedure of process operation time evaluation.
Fig. 2. Project process queue.
Fig. 3. Servers idle verses projects queue.
Fig. 4. Customer satisfaction evaluation procedure.
Fig. 5. Company A Organization prior to BPR.
Fig. 6. Company A organization after BPR.
Data collection
eEPC diagrams of As-Is and To-Be processes
Selected queuing model
Data analysis
Evaluating process times
Total process times of As-Is and To-Be processes
Performance evaluation of As-Is and To-Be processes
Fig. 1. Procedure of process operation time evaluation.
Fig. 2. Project process queue.
DiDi-1
Ai
Si
Ti
Departure of projects
Arrival of projects
ProjectsQueue
Servers Idle Time
DiDi-1
Ai
SiTi
Departure of projects
Arrival of projects
Time
Fig. 3. Servers idle verses projects queue.
Definition of operationalstrategy and company policy
Identification of internal and external customers
Surveying of customers’ requirements
Determination of process targets
Analysis of the relative importance of process targets
Target achievement analysis process
Process ccomparisons
Fig. 4. Customer satisfaction evaluation procedure.
Fig. 5. Company A Organization prior to BPR.
Fig. 6. Company A organization after BPR.
List of table captions:
Table 1. Relative importance weight matrix.
Table 2. Total process attainability matrix.
Table 3. Expected values and variances of arrival intervals.
Table 4. Service rate for the As-Is biding/contracting process.
Table 5. Service rate for the As-Is budget process.
Table 6. Service rate for the As-Is subcontracting process.
Table 7. Service rate for the To-Be biding/contracting process.
Table 8. Service rate of the To-Be budget process.
Table 9. Service rate for the To-Be subcontracting process.
Table 10. Process operation time for the As-Is biding/contracting process.
Table 11. Process operation time for As-Is and To-Be processes.
Table 12. Relative importance of biding/contracting process.
Table 13. Process attainability matrix for As-Is biding/contracting process.
Table 14. Target attainability TA of As-Is and To-Be processes.
Table 15. Process reengineering evaluation.
Table 1. Relative importance weight matrix.
Target components Component 1 Component 2 Component 3 … Component n pj
Demand 1 1 1 … 3 Demand 2 3 3 … 3 5 Demand 3 3 5 … 4
…
…
…
… rij …
…
Cus
tom
er
dem
ands
Demand m 3 1 … 5 3 Wi 0.12 0.13 0.09 … 0.17
Table 2. Total process attainability matrix.
Target components Component 1 Component 2 Component 3 … Component n
Wi 0.12 0.13 0.09 … 0.17 Contribution of
operation Ck
Operation 1 2 2 4 … 1 0.96 Operation 2 4 0 3 … 3 0.85 Operation 3 3 1 1 … 4 0.63
…
…
…
…
Aik …
…
Operation g 0 1 2 … 1 0.42 OAi 1.25 0.66 0.96 … 0.13 TA
Table 3. Expected values and variances of arrival intervals.
Arrival interval Biding projects Successful bids Subcontracts Number of Samples 21 8 127 Expected value (hr) 160.13 457.50 20.11 Variance (hr2) 22440.55 77320.83 702.73
Table 4. Service rate for the As-Is biding/contracting process.
Procedure items Expected value (hr) Variance(hr2)
Reports for biding evaluation 8.38 13.15 Evaluation report auditing (Manager of planning dept.) 8.62 8.15 Preliminary bid examination (Vice president ) 5.48 4.86 Establishing cost items 1.10 0.22 Quantities survey 106.48 1987.04 Check unit price 87.38 266.45 Total cost estimate 17.43 38.76 Fill quotation table 2.81 1.46 Survey quotation table (Manager of construction dept.) 6.33 8.53 Review quotation table (Vice president) 12.29 7.31 Determine biding price (CEO) 12.10 4.29 Adjust item unit prices 2.19 1.16 Make bid proposal 1.67 0.43
Table 5. Service rate for the As-Is budget process.
Procedure items Expected value (hr) Variance(hr2)
Input items and quantities of contracts 1.63 0.34 Check quantities 220.76 1449.08 Unit price analysis 100.75 353.07 Check unit price 124.13 171.84 Calculate preliminary budget 0.01 0.00 Check preliminary budget 0.01 0.00 Survey budget (Manager of construction department) 45.75 119.36 Review budget (Vice president) 25.25 15.36 Determine budget (CEO) 24.38 29.98 Check contract quantities 18.75 56.21 Check contract unit price 103.75 341.07 Check contract total price 0.01 0.00 Survey contract budget (Manager of construction department) 39.38 54.27 Determine contract budget (Vice president) 23.00 25.43
Table 6. Service rate for the As-Is subcontracting process.
Procedure items Expected value(hr) Variance(hr2)
Plan construction items for subcontracting 3.44 5.83 Select subcontractor candidates 2.56 0.66 Identify materials requested for quotation 4.68 1.57 Arrange quotations 1.71 0.68 Evaluate quotations through price competition or negotiation 14.85 16.42 Audit subcontractors 5.15 8.13 Re-certification audit for subcontractors 2.50 0.37 Determine selected subcontractors and subcontract costs 1.74 0.31
Table 7. Service rate for the To-Be biding/contracting process.
Procedure items Expected value (hr) Variance(hr2)
Access biding documents 9.00 18.86 Call Meeting for biding or not and discuss division of labor 1.38 0.13 Access cost estimate system 1.13 0.34 Calculate quantities and input into system 128.38 3195.13 Unit price analysis 9.19 2.57 Check unit price 124.13 171.84 Estimate total cost 0.01 0.00 Call meeting for total cost 1.38 0.13 Adjust cost in system 0.20 0.00 Make bid proposal 1.88 0.41
Table 8. Service rate of the To-Be budget process.
Procedure items Expected value (hr) Variance(hr2)
Input items and quantities of contracts 0.88 0.13 Check quantities 202.75 1449.07 Check unit price 2.38 0.13 Calculate preliminary budget 0.01 0.00 Output budget, group by items 0.01 0.00 Check execution and contract budgets 18.75 12.50 Determine execution and contract budgets 13.75 12.50
Table 9. Service rate for the To-Be subcontracting process.
Procedure items Expected value (hr) Variance(hr2)
Output subcontract lists from system 0.10 0.01 Identify materials of requested for quotation / e-mail to selected subcontractors 5.15 0.97 Study and arrange quotations (MS Excel format) 0.08 0.00 Conduct price competition / negotiation and input results into system 14.69 12.23 Determine selected subcontractors and subcontract costs 0.88 0.17
Table 10. Process operation time for the As-Is biding/contracting process.
Procedure items Queuing
time (hr)
Execution
time(hr)
Process
time(hr)
Reports for biding evaluation 7.58 8.38 15.96
Audit evaluation reports (Manager of planning dept.) 7 8.62 15.62
Preliminary bid examination (Vice president ) 3.94 5.48 9.42
Set up cost items 0.73 1.10 1.83
Survey quantities 45.38 53.19 98.57
Check unit prices 44.97 87.38 132.35
Estimate total cost 1.51 17.43 18.94
Fill quotation table 0.18 2.81 2.99
Survey quotation table (Manager of construction dept.) 0.4 6.33 6.73
Review quotation table (Vice president) 0.71 12.29 13
Determine biding price (CEO) 0.6 12.10 12.70
Adjust item unit prices 0.09 2.19 2.28
Make bid proposal 0.07 1.67 1.74
Total process operation time 332.13
Table 11. Process operation time for As-Is and To-Be processes.
Bidding/contracting
process
Budget
process
Subcontracting
process
As-Is process time (hr) 332.13 724.45 71.74
To-Be process time (hr) 214.10 201.38 33.65
Table 12. Relative importance of biding/contracting process.
Target
Components
Customer
Demands M
arke
t con
ditio
n co
ntro
l
Abi
lity
for c
ontra
ct e
xecu
tion
Acc
urat
e ca
lcul
atio
n
Inte
grat
ed p
roce
ss in
form
atio
n
Det
aile
d co
nstru
ctio
n in
form
atio
n
IT im
plem
enta
tion
Effic
ienc
y
Info
rmat
ion
of su
bcon
tract
ors
Acc
urat
e bu
dget
Allo
wab
le p
rofit
Del
imita
tion
deci
sion
-mak
ing
Emph
asis
deg
ree,
p i
Lower cost 5 5 1 1 5 5 5 Contract execution 5 3 5 External Owner No extra cost 3 3 5 3 5 5 Accurate quantity 5 3 3 5 5 Suitable work load 3 3 1 Detailed unit price information 5 5 3 5 3 4 Information for biding 3 5 1 3 Date of biding expiry 5 5 3 5 1 1 4 Market condition information 5 5 3 Resources of subcontractors 3 5 3 Simplified process 5 3 3 3
Planning
section
Reasonable biding budget 3 5 3 1 1 3 5 5 Information for biding 5 3 3 Accurate cost and profit 3 5 1 1 1 5 5 5 Date of biding expiry 5 5 3 5 1 1 4
Construction
Immediate biding information 5 2 Information for biding 5 3 4 Simplify certification process 3 3 5 2 Acceptable profit 3 5 1 1 5 5 5
Vice
Immediate biding information 5 2 Information for biding 5 3 4 Simplify certification process 3 3 5 2 Decision-making authorization 3 5 5 3 Acceptable profit 3 5 1 1 5 5 5
Internal
CEO
Immediate biding information 5 2 Wi 0.11 0.03 0.17 0.08 0.10 0.12 0.05 0.07 0.16 0.08 0.04
Table 13. Process attainability matrix for As-Is biding/contracting process.
Target components
Mar
ket c
ondi
tion
cont
rol
Abi
lity
for c
ontra
ct e
xecu
tion
Acc
urat
e ca
lcul
atio
n
Inte
grat
ed p
roce
ss in
form
atio
n
Det
aile
d co
nstru
ctio
n in
form
atio
n
IT im
plem
enta
tion
Effic
ienc
y
Info
rmat
ion
of su
bcon
tract
ors
Acc
urat
e bu
dget
Allo
wab
le p
rofit
Del
imita
tion
deci
sion
-mak
ing
Con
tribu
tion
of o
pera
tion,
p i
Wi 0.11 0.03 0.17 0.08 0.10 0.12 0.05 0.07 0.16 0.08 0.04 Reports for biding evaluation 0 1 0 1 3 0 0 0 0 0 0 0.41
Auditing the evaluation reports 0 2 0 0 1 0 0 0 0 0 0 0.16
Preliminary bid examination 0 2 0 0 1 0 0 0 0 0 0 0.16
Set up the cost items 0 1 0 0 0 0 0 0 3 3 0 0.51
Quantities survey 0 1 4 0 0 3 3 0 4 4 0 1.86
Check unit price 4 1 0 0 0 0 0 3 4 4 0 1.32
Total cost estimate 0 0 0 0 0 0 0 0 1 1 0 0.16
Fill the quotation table 0 0 0 0 0 0 0 0 0 0 0 0.00
Survey the quotation table 0 3 0 0 0 0 0 0 0 4 0 0.09
Review the quotation table 0 3 0 0 0 0 0 0 0 4 0 0.09
Determine the biding price 0 3 0 0 0 0 0 0 0 4 0 0.09
Adjust unit price of items 0 0 0 0 0 0 0 0 0 0 0 0.00
Make the bid proposal 0 0 0 0 0 0 0 0 0 0 0 0.00
OAi 0.44 0.51 0.08 0.08 0.50 0.36 0.15 0.21 1.92 1.92 0.00 TA=6.8
Table 14. Target attainability TA of As-Is and To-Be processes.
Bidding/contracting
process
Budget
process
Subcontracting
process
As-Is TA 6.8 11.2 7.9
To-Be TA 11.6 13.4 9.4
Table 15. Process reengineering evaluation.
Normalization
To-Be
Processes
Normalized
Process Time
(Efficiency)
Normalized Target
Attainability
(Effectiveness)
Process
Value
Value
Improvement
Biding/contract process. 0.64 1.71 2.67 1.67
Budget process 0.28 1.20 4.29 3.29
Subcontracting process 0.47 1.19 2.53 1.53