1
PROCESS IMPROVEMENT
TOPIC 3
Griffith University
Dr Rodney Stewart
Necessity for efficiency improvement
in construction industry
Gross Domestic Product
(GDP) of a Westernised
Economy

improvement 2.5% increase in GDP
Current Construction Practice
•Traditional delivery
system
•Fragmented industry
•Conflicting interests
•Unsatisfactory
performance
•Much needed
improvement
2
Business Process Re-engineering
“the fundamental rethinking and radical
redesign of business processes to achieve
dramatic improvements in critical,
contemporary measures of performance”.
Hammer & Champy 1993
BPR BPR
Characteristics of Re-engineering
Re-engineering
Fundamental Radical
Dramatic Process
BPR BPR
Characteristics of Re-engineering
AFundamental
n Fundamental look at what is the core business
of a company
•Why are we here?
•Why do we operate the way that we do?
n Understand the nature of their business
BPR BPR
3
Characteristics of Re-engineering
ARadical
n A considerable departure from the usual or
traditional approach
•“How can we redesign the process so that
waste is eliminated?”
•Not “How can we minimise materials
wastage on site?”
• e.g. Lean construction process-decrease waste in
both the design and construction process
BPR BPR
Characteristics of Re-engineering
ADramatic
§ A successful re-engineering strategy should
be quantum leap forward
§ Process of reengineering never cease
§ Constant and incremental
• Companies benefits from reengineering:
§ In deep trouble
§ Trouble is brewing ahead
§ Keen and aggressive
BPR BPR
AProcess
nPrimary concern of re-engineering
•Redesigning of a process
•NOT redesigning the organisational
structure of departments or units
nProcess redesign
•Fundamental
•Radical
•Dramatic
Characteristics of Re-engineering
BPR BPR
4
Characteristics of Re-engineering
Risk
Impact / degree of
improvement
Process improvement/
“tidying”
Process improvement/
“tidying”
Process Redesign Process Redesign
Process
Re-engineering
Process
Re-engineering
BPR BPR
Existing flows of people,
information and materials are
mapped and streamlined by
identifying opportunities for
eliminating dead-ends, ad hoc
activities and duplication
Find short-cuts in the process,
identify more user friendly way
Re-establish process to meet the
business objectives
Process Re-engineering
n The re-engineering philosophy calls for
improving the process through:
E Reconfiguring traditional tasks
E Simplifying operations
E Reducing number of specialists
E Using a multi-skilled work force
BPR BPR
Re-engineering Methodology
The initial stage
AContext
• Cultural change
• Strategic decision of political nature
• Changing attitude, behaviour and point of reference
• Top down approach –initiate at the highest level
BPR BPR
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Re-engineering Methodology
The initial stage
A Organisational structure
†Leader –CED or MD
†Process owner –head office level (not site or
project level)
†Steering committee –small group of senior
management
†Reengineering team –multi-disciplinary group
(CM & IT)
†Reengineering champion –individual responsible for
developing reengineering techniques and tools within
the company and for achieving synergy across different
re-engineering projects.
BPR BPR
Re-engineering Methodology
The planning stage
Identify Objectives
Develop indicators of
success
Consider alternative
strategies
Develop and select
programmes
Resolve customer needs and business
objectives
Develop indicators of success
Process
re-engineering
Continuous
improvement
or
Select
§BPR –embark fundamental change
§Programme of finetuning
BPR BPR
Re-engineering Methodology
The implementing stage
• Effective management of fundamental
change
• Human factors: feelings, attitudes, values,
behaviour, commitment and personal
qualities (open minded)
BPR BPR
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Reengineering Methodology
The implementing stage
§ Several jobs are combined into to one
§ Workers makes decisions
§ The steps in the process are performed in a natural order
§ Process have multiple versions
§ Work is performed where it makes the most sense
§ Checks and controls are reduced
§ A case manager provides a single point of contact
§ Hybrid centralised / decentralised operations are prevalent
BPR BPR
Construction Process
Re-engineering
“A customer-focused approach to
progressively develop an integrated
project delivery process focusing on
optimising predictability and enhancing
the value of the final product”
CPR CPR
Construction Process Re-engineering
n Driving force
– A customer- and market-driven change initiative
– Clients create and maintain the momentum through CPR
implementation
n Major players
– Every project participants
n Features
– Unambiguous routes, rules and roles being
communicating across all level of the project
CPR CPR
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Construction Process Re-engineering
§ Positive involvement of customers at the early
project stage
§ Strong commitment by designers, consultants
and contractors
§ An effective communication cycle
§ Quality assurance
§ Innovation
§ New approaches to improve construction output
CPR CPR
Key principles of a successful
implementation of CPR
§ Specify and realistic objectives
§ A well defined project scope
§ Explicit communication to help capture customer
requirements and translate them into
implementation plans
§ Flexibility embodied in the process
§ Win-win incentives
§ Enduring working relationships
§ Performance measurement
§ Automation and information technology
CPR CPR
T40 Research Project
• Reengineering study in the Australian
construction industry
• Objective: reduction process time by 40%
• Team: 3 major contractors, 2 major
services suppliers, 2 key consultants, and
CSIRO (the Australian national research and
development organisation).
• Motorola (USA) as the facilitator
CASE CASE
8
The T40 Project
n T40 provides a new look to current
delivery system
n T40 promotes re-engineering the process
to achieve
•Substantial reduction in time
•Substantial improvement in cost & quality
CASE CASE
Proposed T40 Processes
nAgreed common goals
nRe-engineered activities
nWorkforce commitment
nPartnering with clients
nElimination of tendering phase
CASE CASE
Traditional process hierarchy
CASE CASE
Customer
Architect
Contractor
L1
subcontractor
L2
subcontractor

Need
perception
Goals
fragmentation
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T40 solutions
CASE CASE
Customer
Architect
Structural engineer
Contractor
L1 subcontractor
L1
subcontractor
L2
subcontractor
Need
perception
Goal focus
PILOT STUDY
Study Nature
•Typical tenancy fitout work package in office building
Objectives
•Examine current practice in terms of sequence, skills,
equipment, etc.
•Apply new concepts to highlight the potential for time
reduction.
•Develop guidelines for the application of the reengineering concept.
CASE CASE
Study Findings
§ Potential savings of 25% of the overall time duration.
§ Possibility for more time savings through process
redesign.
§ Major rework causes are design changes and quality
deviations.
§ Larger work modules can lead to more time savings.
§ Minimum co-ordination exists between trades.
CASE CASE
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Study Recommendations
• Reduce the share of non value-adding activities
• Increase output value
• Reduce variability
• Reduce cycle times
• Simplify the process
• Increase output flexibility
• Increase process transparency
• Focus control on the whole process
• Build continuous improvement
• Balance flow and conversion improvement
• Benchmark
CASE CASE
Information Technology & Construction Process
Re-engineering: A Recursive Relationship
• What is Information Technology?
• What is Construction Process Re-engineering?
Two (2) different approaches to CPR
•an “in-house”operation; or
•an agent to change the way business is
conducted
IT IT
Current Status
• Acknowledging the
role of information
flow in construction.
• IT is a major enabler
of Process Reengineering
IT IT
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Recursive Relationship
Information Technology
Capabilities
Construction Process
Re-engineering
How can IT support re-engineered processes?
How can processes be improved utilizing IT?
IT IT
Utilizing IT to Re-engineer
• The need to Change
• Each process has a
structure and
boundaries
• Re-engineered
operations should be
designed around their
outcome.
IT IT
Utilizing IT to Re-engineer
Business
Strategy
Existing
Process
(A)
Re-engineered
Process
Innovations
Existing Enabler
Process
(B)
Existing
Process
(C)
IT
Capabilities
IT IT
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IT as Enabler
• Selected IT applications
– EDI
– Integrated Database
– Shared Database
– CAD Conferencing
• IT is rarely effective
without simultaneous
cultural and
organisational changes
IT IT