The application of data envelopment analysis to the benchmarking of construction performance in australian and american high-rise buildings

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Abstract

The measurement of construction performance is a vexed problem. Despite much research effort, there remains little agreement over what to measure and how to measure it. The problem is made even more complicated by the desire to benchmark national industry performance against that of other countries. As clearly construction cost forms part of the analysis, the mere adjustment of cost data to an 'international currency' has undermined past attempts to draw any meaningful conclusions. The aim in this paper is to develop a method for benchmarking construction projects on the basis of their integrated time, cost and quality performance, and test it using what is understood to be one of the largest collections of construction project data ever assembled across two sample countries: Australia and the United States. The research draws on 337 high-rise projects of 20 storeys or more, completed between 2003 (i.e. 5 years pre-GFC) and 2012 (i.e. 5 years post-GFC), throughout the five largest cities in Australia and the United States, representing two-thirds of the known population of such buildings in these locations. Performance outputs of construction efficiency and construction complexity are selected to enable projects to be ranked and mapped via data envelopment analysis to identify potential instances of best practice worthy of further investigation. Furthermore, using a four-quadrant model to aid interpretation, it is clear that obtaining best practice in both efficiency (i.e. construction speed) and complexity (i.e. product sophistication) is very challenging and often mutually-exclusive. The use of a four-quadrant model combined with DEA provides context to the analysis. The scales for CE and CC applied in this research render the majority of projects to the 'normal (typical)' quadrant, demonstrating that fast construction speed and high product sophistication are often mutually-exclusive. This is a significant wake-up call for the industry and highlights the marked difference between 'business-asusual' and achieving 'best practice'.

Original languageEnglish
Pages (from-to)55-75
Number of pages21
JournalInternational Journal of Construction Management
Volume13
Issue number3
Publication statusPublished - 2013

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Data envelopment analysis
Benchmarking
Costs
Industry
Best practice
Construction project
Sophistication

Cite this

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title = "The application of data envelopment analysis to the benchmarking of construction performance in australian and american high-rise buildings",
abstract = "The measurement of construction performance is a vexed problem. Despite much research effort, there remains little agreement over what to measure and how to measure it. The problem is made even more complicated by the desire to benchmark national industry performance against that of other countries. As clearly construction cost forms part of the analysis, the mere adjustment of cost data to an 'international currency' has undermined past attempts to draw any meaningful conclusions. The aim in this paper is to develop a method for benchmarking construction projects on the basis of their integrated time, cost and quality performance, and test it using what is understood to be one of the largest collections of construction project data ever assembled across two sample countries: Australia and the United States. The research draws on 337 high-rise projects of 20 storeys or more, completed between 2003 (i.e. 5 years pre-GFC) and 2012 (i.e. 5 years post-GFC), throughout the five largest cities in Australia and the United States, representing two-thirds of the known population of such buildings in these locations. Performance outputs of construction efficiency and construction complexity are selected to enable projects to be ranked and mapped via data envelopment analysis to identify potential instances of best practice worthy of further investigation. Furthermore, using a four-quadrant model to aid interpretation, it is clear that obtaining best practice in both efficiency (i.e. construction speed) and complexity (i.e. product sophistication) is very challenging and often mutually-exclusive. The use of a four-quadrant model combined with DEA provides context to the analysis. The scales for CE and CC applied in this research render the majority of projects to the 'normal (typical)' quadrant, demonstrating that fast construction speed and high product sophistication are often mutually-exclusive. This is a significant wake-up call for the industry and highlights the marked difference between 'business-asusual' and achieving 'best practice'.",
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