Improving Performance Through Measurement: The Application of Lean Production and Organisational Learning Principles

Elvira Lantelme1 & Carlos T. Formoso2

1MSc, PhD candidate at the Federal University of Rio Grande do Sul (UFRGS), Building Innovation Research Group (NORIE), Brazil, e-mail: lantelme@cpgec.ufrgs.br.
2PhD., Associate Professor at the Federal University of Rio Grande do Sul (UFRGS), Building Innovation Research Group (NORIE), Brazil, Visiting Scholar at the University of California at Berkeley, USA, e-mail: formoso@vortex.ufrgs.br

Abstract

Performance measurement is an essential element of production management. It provides the necessary information for process control, and makes it possible to establish challenging and feasible goals. It is also necessary to support the implementation of business strategies. Despite the fact that construction managers recognise the importance of performance measurement, it has not been widely implemented in this industry. Most managers still make decisions mostly based on their intuition and common sense, and on a few broad financial measures which are no longer adequate in today’s competitive environment. In the Lean Construction theoretical framework, performance measurement plays an important role in terms of providing process transparency. It makes visible attributes that are usually invisible, and helps the employees to see how they are performing, creating conditions for decentralised control to be implemented. A number of studies have investigated the use of measures for evaluating the impact of improvement programs in production systems. However, few them are concerned with the problem of implementing measurement systems in organisations. Although choosing the right measures is important, it is also necessary to enable people to use measures in their routine work, so that root causes of problems are identified and corrective action implemented. This article proposes a number of guidelines to implement performance measurement systems in construction firms, considering both the lean construction theoretical framework and organisational learning principles. This study is based on the development of a system of performance indicators developed for the construction industry in Brazil, and also on a number of interviews carried out with managers who have been involved in the implementation of measures in their companies.

Keywords

Performance measurement, organisational learning, lean construction

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Reference

Lantelme, E. & Formoso, C.T. 2000, 'Improving Performance Through Measurement: The Application of Lean Production and Organisational Learning Principles' In:, 8th Annual Conference of the International Group for Lean Construction. Brigthon, UK, 17-19 Jul 2000.

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