Performance Assessment of Construction Companies Integrating Key Performance Indicators and Data Envelopment Analysis
Publication: Journal of Construction Engineering and Management
Volume 136, Issue 5
Abstract
The web benchmarking systems broadly used in the construction industry (CI) are designed to provide results based on key performance indicators (KPIs). No insights concerning organization overall performance and improvements targets are available. This research aims to fulfill this gap using data envelopment analysis (DEA) as a method to complement the information provided by a set of KPIs. The methodology proposed is useful to all organizations involved in benchmarking routines. To enable a more realistic assessment of CI companies, two types of DEA models were used, one allows factor weights to vary freely and the other includes weight restrictions. These models assign an efficiency score to each organization, identifying efficient organizations and providing performance improvements targets for the others. To enable suggesting targets for all organizations, expert opinion was used to specify virtual units which were included in the efficiency assessment to define a practical frontier located beyond the productivity levels of the original DEA frontier. Based on a sample of 20 Portuguese leading contractors, the Portuguese web benchmarking system for CI, icBench, was used to demonstrate the advantages of integrating the DEA method with KPIs benchmark scores.
Get full access to this article
View all available purchase options and get full access to this article.
References
Allen, R., Athanassopoulos, A., Dyson, R. G., and Thanassoulis, E. (1997). “Weights restrictions and value judgments in data envelopment analysis: Evolution, development and future directions.” Ann. Operat. Res., 73, 13–34.
Bassioni, H. A., Price, A. D. F., and Hassan, T. M. (2004). “Performance measurement in construction.” J. Manage. Eng., 20(2), 42–50.
Camp, R. (1989). Benchmarking: The search for industry best practices that lead to superior performance, ASQC, Milwaukee, Wis.
Castro-Lacouture, D., Medaglia, A. L., and Skibniewski, M. (2007). “Supply chain optimization tool for purchasing decisions in B2B construction marketplaces.” Autom. Constr., 16, 569–575.
Charnes, A., Cooper, W. W., and Rhodes, E. (1978). “Measuring efficiency of decision making units.” Eur. J. Oper. Res., 2(6), 429–444.
Cherchye, L., Moesen, W., Rogge, N., and Puyenbroeck, T. (2007). “An introduction to ‘benefit of the doubt’ composite indicators.” Soc. Indic. Res., 82, 111–145.
Cooper, W. W., Seiford, L. M., and Tone, K. (2006). Introduction to data envelopment analysis and its uses, Springer, New York.
Costa, D. B., Formoso, C. T., Kagioglou, M., Alarcón, L. F., and Caldas, C. H. (2006). “Benchmarking initiatives in the construction industry: Lessons learned and improvement opportunities.” J. Manage. Eng., 22(4), 158–167.
Dyson, R. G., Allen, R., Camanho, A. S., Podinovski, V. V., Sarrico, C. S., and Shale, E. A. (2001). “Pitfalls and protocols in DEA.” Eur. J. Oper. Res., 132, 245–259.
Egan, J. (1998). “Rethinking construction, the construction task force.” Rep. Prepared for the Deputy Prime Minister, Dept. of Trade and Industry, London.
El-Mashaleh, M., O’Brien, W. J., and Minchin, R. E. (2006). “Firm performance and information technology utilization in the construction industry.” J. Constr. Eng. Manage., 132(5), 499–507.
El-Mashaleh, M. S., Minchin, R. E., and O’Brien, W. J. (2007). “Management of construction firm performance using benchmarking.” J. Manage. Eng., 23(1), 10–17.
Kuosmanen, T. (2002). “Modelling blank data entries in data envelopment analysis.” EconWPA Working Paper in Econometrics, No. 0210001, Wageningen Univ., Wageningen, The Netherlands.
Lee, S., Thomas, S. R., and Tucker, R. L. (2005). “Web-based benchmarking system for the construction industry.” J. Constr. Eng. Manage., 131(7), 790–798.
Lovell, C. A. K. (1995). “Measuring the macroeconomic performance of the Taiwanese economy.” Int. J. Prod. Econ., 39, 165–178.
McCabe, B., Tran, V., and Ramani, J. (2005). “Construction prequalification using data envelopment analysis.” Can. J. Civ. Eng., 32, 183–193.
Moreira da Costa, J., Horta, I., Guimarães, N., Cunha, J. F., Nóvoa, H., and Sousa, R. S. (2007). “icBench:A benchmarking tool for Portuguese construction industry companies.” International Journal for Housing Science and Its Applications, 31(1), 33–41.
Portela, M. C., and Camanho, A. S. (2007). “Performance Assessment of Portuguese Secondary Schools.” Working Paper in Economics, No. 07/2007, Universidade Católica Portuguesa, Porto, Portugal.
Ramírez, R. R., Alarcon, L. F., and Knights, P. A. (2004). “Benchmarking System for Evaluating Management Practices in the Construction Industry.” J. Manage. Eng., 20(3), 110–117.
Sowlati, T., and Paradi, J. (2004). “Establishing the ‘practical frontier’ in data envelopment analysis.” Omega-The International Journal of Management Science, 32, 261–272.
Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 136 • Issue 5 • May 2010
Pages: 581 - 594
Copyright
© 2010 ASCE.
History
Received: Oct 8, 2008
Accepted: Aug 27, 2009
Published online: Sep 1, 2009
Published in print: May 2010
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.