The costs of rework

insights from construction and opportunities for learning

Peter E.D. Love*, Jim Smith, Fran Ackermann, Zahir Irani, Pauline Teo

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

5 Citations (Scopus)

Abstract

During the production of artefacts in construction, there is a likelihood for errors to be committed, which may need to be rectified so that they conform to defined contractual requirements and standards. In doing so, this initiates a process of rework, which is a problem that the industry has incessantly aimed to redress for decades with limited success. Rework is a ‘known-unknown’, but there remains a high degree of uncertainty about its costs. Such uncertainty occurs as there is a proclivity for the costs associated with rework to be largely ignored, concealed or considered to be normal function of operations. This paper presents the results from the first longitudinal and in-depth study of rework costs in construction. Based on a sample of 19,605 rework events derived from 346 construction projects delivered by a contractor between the years 2009 and 2015, it was revealed that their mean yearly profit over the period of analysis was reduced by a staggering 28%. In addition, 88 (0.45%) of the total 19,605 rework events accounted for 34% of the total costs that were incurred. The complete cost data for 98 of the 346 projects was made available, which enabled a mean rework cost of 0.39% of contract value to be determined. The research provides construction organizations with an improved understanding of the nature and likelihood of rework costs enabling them to move from a position of being a ‘known-unknown’ to becoming a ‘known-known’. Being able to ‘anticipate what might go wrong’ and ensure that risk management and controls are put in place throughout the construction process will contribute to their dynamic capability.

Original languageEnglish
Pages (from-to)1082-1095
Number of pages14
JournalProduction Planning and Control
Volume29
Issue number13
DOIs
Publication statusPublished - 3 Oct 2018

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Costs
Rework
Risk management
Contractors
Profitability
Industry
Uncertainty

Cite this

Love, Peter E.D. ; Smith, Jim ; Ackermann, Fran ; Irani, Zahir ; Teo, Pauline. / The costs of rework : insights from construction and opportunities for learning. In: Production Planning and Control. 2018 ; Vol. 29, No. 13. pp. 1082-1095.
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The costs of rework : insights from construction and opportunities for learning. / Love, Peter E.D.; Smith, Jim; Ackermann, Fran; Irani, Zahir; Teo, Pauline.

In: Production Planning and Control, Vol. 29, No. 13, 03.10.2018, p. 1082-1095.

Research output: Contribution to journalArticleResearchpeer-review

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