Construction management process reengineering performance ...

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)

mailto:[email protected]




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)


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)


(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.






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.





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).



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).




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.


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.

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based on balanced scorecard, Jisuanji Jicheng Zhizao Xitong/Computer Integrated

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Prentice-Hall, New Jersey, 1993.

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.


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.


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.


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.


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

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