Holmesglen Institute

Bachelor of Construction Management and Economics (BCME) (V14113) Bachelor of Building Surveying (BBS) (V14114) Bachelor of Facilities Management (BFM) (V14115)

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STUDENT NAME: STUDENT NUMBER: SUBJECT: ASSESSMENT ITEM TITLE LECTURER/TUTOR: DATE DUE / TIME:
EXTENSION: Applied for Y/ N Lachy Fenton

FEN09289382

BCME405 - Improving Contract and Cost Management Performance

Learning Trigger 1 Management Report - CPMC Scott Nelson 05.07.11
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EXECUTIVE SUMMARY
This management report investigates a number of management strategies developed and implemented in various industries, particularly the manufacturing industry. It analyses the merits of implementing Re-engineering, Total Quality Management, Lean Construction, Relationship Management, Supply Chain Management, Benchmarking and Procurement selection in a construction environment. The outcome of the report is that most strategies are applicable to construction but require a restructuring in order to appropriately achieve what they are designed to do. Additionally, due to the segmented nature of construction, a cultural alignment is needed between the multiorganisational facets to unify objectives, outcomes and success.

TABLE OF CONTENTS
EXECUTIVE SUMMARY ................................................................................................................................... 1 TABLE OF CONTENTS ...................................................................................................................................... 2 1.0 2.0 2.1 2.2 3.0 3.1 3.2 4.0 4.1 4.2 5.0 5.1 5.2 6.0 6.1 6.2 7.0 7.1 7.2 8.0 9.0 10.0 INTRODUCTION ....................................................................................................................................... 3 THE RE-ENGINEERING PROCESS ...................................................................................................... 4 BACKGROUND ............................................................................................................................................... 4 APPLICATION TO CONSTRUCTION ............................................................................................................... 4 TOTAL QUALITY MANAGEMENT ...................................................................................................... 5 BACKGROUND ............................................................................................................................................... 5 APPLICATION TO CONSTRUCTION ............................................................................................................... 6 LEAN CONSTRUCTION .......................................................................................................................... 7 BACKGROUND ............................................................................................................................................... 7 APPLICATION TO CONSTRUCTION ............................................................................................................... 8 RELATIONSHIP MANAGEMENT ......................................................................................................... 9 BACKGROUND ............................................................................................................................................... 9 APPLICATION TO CONSTRUCTION ............................................................................................................. 10 SUPPLY CHAIN MANAGEMENT ........................................................................................................ 11 BACKGROUND ............................................................................................................................................. 11 APPLICATION TO CONSTRUCTION ............................................................................................................. 11 BENCHMARKING .................................................................................................................................. 12 BACKGROUND ............................................................................................................................................. 12 APPLICATION TO CONSTRUCTION ............................................................................................................. 13 PROCUREMENT SELECTION ............................................................................................................. 14 CONCLUSION .......................................................................................................................................... 14 BIBLIOGRAPHY ................................................................................................................................... 15

1.0 INTRODUCTION
The following report identifies a number of management techniques that have been developed and successfully implemented throughout the world in various industries in particularly, the automotive manufacturing industry. The report looks at the success factors of these management strategies and the merits of their application to CPMC and the wider construction industry. Management strategies investigated in this report include: Re-Engineering Total Quality Management Lean Construction Relationship Management Supply Chain Management Benchmarking Procurement selection In order for CPMC to continue to expand on the success and growth that has been a reality for the company over the last 5 years of construction in Australia and in preparation to be recognised as a strong competitor overseas, a number of areas requiring improvement have been identified by senior management. Generally, a comprehensive review and evaluation of the way CPMC manage their projects will identify areas that require performance improvement that are essential in maximising continued success however research of strategies such as Re-engineering has indicated for a more holistic approach as it is considered to be significantly more beneficial. At this stage, senior management have identified the following areas requiring review: Maintaining and improving relationships with current clients particularly those clients that are considering plans to expand operations overseas (in the hopes of CPMC securing a decent foot-hold in overseas projects) The current approach to bidding for $15 - 100m projects adapted to improve the success rate for securing larger projects Alternative methods of entry into the market via more innovative contract arrangement in procurement Project team integration to ensure positive outcomes for all stakeholders It is intended that these identified areas are also to be developed for application to the overseas market as significant efforts and resources are being placed on breaking into this market over the next 12-24 months. It is hoped that the analysis of the available management strategies will provide insight on how to best develop a solution to CPMC identified problem areas.

2.0 THE RE-ENGINEERING PROCESS

2.1 Background Re-engineering, a concept spawned from Business Process Re-engineering or BPR was a very popular management technique that was widely used in the 1990s as advancements in Information Technology became readily accessible and businesses were being left behind. It was developed in response to organisations trapped in outmoded and outdated business processes and general ways of working (Valentine & Knights, 1998). This process takes a holistic approach to identifying and developing a tailored solution to achieve performance on all levels. Re-engineering holds the ability to not only identify existing issues but provides an opportunity to step back and discover an innovative approach which can lead to favourable outcomes. The idea of introducing Re-engineering is not to look for cost, time, or quality savings in current operations but to question why operations exist says (Love & Li, 1998). Re-engineering is particularly important for any company who are currently or predicting to experience change, whether diversifying into other markets or even downsizing into one niche market, any shift in function needs to reflect these changes in the way it operates at all levels. It is important to note, in order for Re-engineering to succeed with any substantial positive impact, it must be applied in a much broader sense, to the business as a whole without limiting it to individual elements of operation (Hall, Rosenthal, & Wade, 1993). It is for this reason that Re-engineering should be considered the backbone to other management strategies covered later in this report. 2.2 Application to Construction Inevitably, businesses evolve over time, new technologies and processes become available and if not addressed or implemented, a business can be left behind its competitors. The construction industry is no different in that it too is continuing to evolve as new materials, construction techniques, management styles and communication mediums become available to enhance construction efficiency, value and quality. BPR is a concept that can be applied using the same founding principles of business management and computer science roots to construction industry management, termed Construction Process Re-engineering (CPR) (Betts & Wood-Harper, 1994), CPR encourages innovative (re)thinking in construction business processes such as: Organisational structure (Love & Li, 1998) Information Technology (Betts & Wood-Harper, 1994) Contractual Documentation and Design (Betts & Wood-Harper, 1994) Tendering and Procurement Management (concurrent engineering) (Love & Li, 1998) Buildability and Constructability As mentioned by (Hall, Rosenthal, & Wade, 1993), In order to obtain a successful outcome from the review of areas identified in the introduction, the approach must be expanded to include strategies that are appropriate in providing a solution to not only identified problems

at hand but to encapsulate the real essence of any potential problems before they occur or preventing a reoccurrence of similar issues. The Re-engineering process is most effective if conducted in a scheduled manner with frequency depending on the nature of the changes. Similar to Re-engineering, Continuous Improvement (CI) or Kaizen can be used with emphasis placed on a select area of concern but as mentioned above by Hall, Rosenthal & Wade (1993), to achieve the most successful outcome, it is better if applied in a broader approach involving a complete overhaul. This head first approach is not without its risks and can have negative effects on employees if not correctly implemented (Hammer & Champy, 1993), unless in an environment where risks can be controlled and outcomes guided. If Re-engineering is not appropriate in a given circumstance, CI (Kaizen) may be a safer alternative. Applying the concepts of CPR to the CPMC organizational structure for example, Betts & Wood-Harper (1994) suggest that several jobs, tasks or roles within a business could be amalgamated to become one. Theoretically this is intended to reduce costs as well as encourage a broader understanding of a project via a greater individual accountability. While this may be a feasible option on smaller construction projects where the process is relatively simplistic and productivity of many workers is at times found dwindling, larger projects such as those engaged by CPMC require a diverse range of specialist skills on a larger scale, restricting the opportunity of this concept. With a higher risk found on CPMC projects in terms of complexity, sheer size, time factors and costs, attention to detail must be concurrently and consistently made to key areas so as to avoid oversight, which can result in significant implications found with later rectification. The concept of combining roles does however hold merit in less vital positions of CPMC but is restricted to the individual skills and education of each employee, placing the emphasis on the initial hiring and training process which is supported by Griffiths (1993). This concept of Re-engineering to combine job roles to increase productivity holds similarities with concurrent engineering principles and lean production methods in terms of labour, further information on these similarities can be found later in this report.

3.0 TOTAL QUALITY MANAGEMENT

3.1 Background Total Quality Management (TQM) as defined by AS/NZS ISO 8402:1994 is a management approach of an organization, centred on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction and benefits to all members of the organisation and to society. TQM concepts, while initially developed in the 1920s, came to the worlds attention after the Japanese and European manufacturing industries were considered to be world leaders in quality output in the 1970s and 1980s after their implementation of TQM, at this stage other countries started to take notice. These days TQM has moved beyond the narrow manufacturing based industries, it has found its place with leaders from a much broader range of industries and has evolved so much so that now it is considered the basis for competition (Hellsten & Klefsj, TQM as a management system consisting of values, techniques and tools, 2000).

The TQM concept was developed in response to poor worker motivational systems, the unproductive nature contributing to a poor quality output and lack of quality assurance inspection systems (Hillstrom & Hillstrom, 2002). Due to the core values of TQM identified by (Hellsten, The Springboard a TQM-based tool for self-assessment, 1997) including a focus on customers, management commitment, focus on processes, continuous improvements; TQM is now implemented as a means of maintaining a positive reputation and business survival in a competitive market. With the benefits of TQM identified as: Project performance (reductions in rework, waste) (Love, Edwards, & Sohal, 2004) and reduced delivery times (Bardoel & Sohal, 1999) Improvement of customer perceptions of the company (Bardoel & Sohal, 1999) and Client satisfaction (repeat clients) (Love, Edwards, & Sohal, 2004) Organisational competitiveness (success in bidding) (Love, Edwards, & Sohal, 2004) Improved relations with customers/suppliers (partnering) (Love, Edwards, & Sohal, 2004) Staff morale (training and education) (Love, Edwards, & Sohal, 2004) Improved measurement of performance (internal and external benchmarking) (Love, Edwards, & Sohal, 2004) It offers measurement of performance in: Customer satisfaction (timeliness, quality, service) (Bardoel & Sohal, 1999) Internal business processes (cycle time, quality, added value) (Bardoel & Sohal, 1999) Innovation and learning activities (ability to launch new products, create more value for customers and improve operating efficiencies) (Bardoel & Sohal, 1999) Financial results (cash flow, sales growth, operating income) (Bardoel & Sohal, 1999) Workplace role (employee involvement, training, work organisation, equity) (Bardoel & Sohal, 1999) 3.2 Application to Construction The adversarial nature of construction has been largely created as a result of time and cost overruns resulting in slanderous views of the construction industry from exogenous parties. With a change needed to rectify its standing, the construction industry can benefit from the application of TQM systems successfully used in the Japanese manufacturing and construction industries. The negative effects of competitive bidding resulting from the typical lowest bid selection criteria have done nothing to support both the development of relationships and achieving quality in the construction industry. This could be why the implementation of TQM in the Japanese market where competitive bidding is not used has been so successful (Abdul-Aziz, 2002). So the question is, how can the application of TQM succeed in the construction industry? (Bardoel & Sohal, 1999) Identified that for TQM to work effectively, the behaviour, attitudes and culture of those involved with the organization must be aligned with the TQM objectives.

With successful implementation dependent on the delivery of TQM policies to include a slow and steady approach across the board for longer term benefits, a commitment from all senior management to lead by example and the importance of including a link between information technology and quality systems. On construction projects involving multiple contracts, there are inevitably going to be difficulties in engaging all workers within this cultural alignment needed to achieve successful TQM as stated by (Bardoel & Sohal, 1999). From the above research, it has been determined that logically there is a sequence that must be followed to ensure TQM success in considering the following identified facts: Workers generally do not consider TQM to be of any great importance so this shift in attitude is required Revisiting the Organisational Structure and contractual documentation to ensure the responsibility for quality is owned will assist in this change of attitude In order to effectively monitor the success of TQM, open pathways of communication are required right from the early design stage, where clients, contractors, subcontractors and suppliers are encouraged to engage in design solutions this means revisiting Organisational Structure, Information Technology and Buildability to encourage open communication The move from competitive tendering with a greater emphasis on improving relationships and developing partnerships Revisiting Tendering and Procurement Essentially, this has identified that prior to the implementation of TQM, the previously identified advantages of Re-engineering (above) are required, revisiting: Organisational structure (Love & Li, 1998) Information Technology (Betts & Wood-Harper, 1994) Contractual Documentation and Design (Betts & Wood-Harper, 1994) Tendering and Procurement Management (concurrent engineering) (Love & Li, 1998) Buildability and Constructability With the clear benefits of implementing TQM principles to offer increased quality and efficiency, a reduction in waste, higher productivity and enhanced customer satisfaction (Waldman, 1993), the prior re-engineering process, although daunting is a worthy path to travel in order to succeed with TQM and in turn remain in competition.

4.0 LEAN CONSTRUCTION

4.1 Background Lean Production, a conceptual philosophy developed within the automotive manufacturing industry in the 1950s, if implemented correctly has the capacity to decrease costs, time and improve quality of output (O'Brien, 1996). The Lean Production philosophy is based on eliminating non-value adding activities during the process of production using management techniques and tools such as Kaizen (Continual Improvement), Just In Time management (JIT) and Total Quality Control (TQC).

Non-value adding activities are typically those that involve costs not directly or immediately related to improving value such as stockpiling materials, waiting or low employee productivity, defective works and general waste, the later being the largest contributor to nonvalue adding activities. Kaizen or Continual Improvement (CI) is the process of improving standards through small incremental developments to remain current and perform as best possible including the reduction of bottlenecks (Umble & Srikanth, 1990). JIT management is the concept of keeping inventories low, reducing stockpiling, over production and eliminating waste. For these tools to be successful it would involve effective management, strong lines of communication and relationships and of course an aligning organisational culture as discussed in the TQM chapter above. During the 1990s, after the emergence of a number of published books which explained the philosophy and advantages of Lean Production, it developed into mainstream workings and is now widely used by major manufacturing companies globally (Koskela, 1992). The Lean Production philosophy has and will continue to evolve over time. It has become a tailored approach to a broader range of industries. Further development has seen the emergence of Quality Function Deployment (QFD), a concept focused largely on achieving customer/client requirements and design for manufacture which is streamlining a somewhat modular approach to systems (Koskela, 1992). One thing is for sure, it will continue to evolve and be adopted in a greater number of industries for its merits in efficiency, cost and environmental savings. 4.2 Application to Construction Construction being considered by most as a unique product from project to project (Chew, Bresnahan, & Clark, 1990), it is important to overcome this thought process and move past its exclusivity in order to apply the concepts of Lean Production to construction (Lean Construction). By eliminating the unique elements of a project within control, standardization can prevail (Koskela, 1992). Research by (Koskela, 1992) has identified a number of findings within manufacturing industries that can be applied to the construction industry such as a reduction in variability and simplification by minimizing the number of steps and parts. (Koskela, 1992) goes on to comment that while emphasis is placed on process improvement it is important not to overlook the potential for innovation as new equipment may ensure less variability and new material may make a simplified process possible. Variability is inevitable in the production of multiple items, even if they are the same product. The concept of reducing variability is based on factors relating to wastage and other nonvalue adding process, such as time. Adopting a standardised method or process in combat to variability is difficult to apply to the ever-changing construction industry however it is entirely possible for a standardized solution to be developed in response a common problem or a singular project. A good example of where variability is minimised in the construction of high-rise buildings in Australia is the use of Slip Form in the creation of core concrete structures where the task of core construction is streamlined and is as close to a production line as possible. The application of minimising variability does not stop with Slip Form construction processes, it can also be applied with the concepts of JIT management. If communication and IT systems are effective, variability can be minimised in the processes of

ordering and the logistics of materials for site with considerable reduction in non-value adding processes. As identified by (Koskela, 1992) simplification by minimizing the number of steps and parts may include the following practical approaches: Shortening the flows by consolidating activities Reducing the part count of products through design changes (buildability) or prefabricated parts Standardizing parts, materials or tools Similarly, there is the presence of considerable prefabrication methods used in todays construction that essentially have the capacity to adopt the whole manufacturing lean production approach. Prefabricated concrete walls and flooring systems to the prefabrication of whole modular homes offer considerable advantages. Technology and innovation will inevitably advance and prefabrication on larger scale projects may advance to become the norm in modern building methods, only time will tell. Adopting the principles of Lean Production found in the manufacturing industry to construction, referred to as Lean Construction (LC) has many advantages. Considering the JIT management of LC, the advantages are significant in terms of day-to-day site construction systems including progress payments and availability of space. A reduction in stockpiling materials on site has many advantages to all participants. By implementing JIT management, stockpiling will become virtually non-existent, meaning progress claims can be rightfully paid without leaving contractors, sub-contractors out of pocket for any non-fixed materials on site. Additionally, JIT presents advantages in the way of reducing clutter on site with the stockpiling of materials, which often leads to double handling on sites with precious little space available. Additionally, ordering materials as they are required can account for a more accurate estimation of required quantities reducing general waste on site. In any case, in order for LC to be appropriately implemented and tailored to a construction project, a core process methodology must be followed. As identified by (Womack & Jones, 1996) and (Spear & Bowen, 1999) the process involves the following steps: 1. Value Determine and specify what is value based on customer/client requirements and expectations. 2. Value Stream Identify the value stream and remove waste 3. Flow - Make the product flow, it must be simple and direct 4. Connections - All communications must be direct and clear. Quality is interpreted as accuracy of information transmission (Fujimoto, 1999) 5. The process must be continually measured for areas of improvement continuous improvement.

5.0 RELATIONSHIP MANAGEMENT

5.1 Background Relationship management is about removing the negative and non-productive elements between stakeholders and focusing on enhancing trust, coordination and interdependence (Frodell, 2011). With trust being considered as the most crucial factor, it is developed by a

consistency in reliable performance, cultural alignment and interaction frequency (McAllister, 1995). By the very nature of the amalgamation of stakeholders, this consistency in reliable performance has been a driver in the development of strong relationships in all industries and has led to strong interaction frequency. Developing and maintaining relationships is important to break the mould with a resistance to accountability resulting from the segmentation of process flows with little regard for downstream impacts. The effective use of communication also has considerable weight in the success of relationship management. The quality, accuracy and delivery of information all have a direct impact on relationships. Depending on the accuracy and credibility of information, trust can either be developed or destroyed, severely impacting relationship outcomes. Not only the accuracy but also the delivery may have an impact on interpretation of information and therefore affect the quality level of service that is common in strong relationships (Krause, 1999). With the detrimental effect to the break down of relationships and significant costs in both time and money resulting from disputes, relationship management requires a culture resistance to disputes. One method identified by (Monczka, Petersen, & Handfield, 1998), the use of joint problem solving to effectively improve quality performance resulting in a winwin situation between parties, this is easily carried across in application to construction with ADR if required. 5.2 Application to Construction Due largely to the fragmented nature of the industry, constant criticisms of quality and productivity of the construction industry has highlighted the requirement for a review of management strategies. Research has showed many of these downfalls can be rectified by improving inter-organizational relationships to unify the process (Frodell, 2011). (Love, Edwards, & Sohal, 2004) Investigate the effects of the widely used competitive bidding process and the emphasis being placed on price rather than value. Consequently, this is a breading ground for project failures such as poor quality, mistrust, client dissatisfaction and a detrimental effect on developing long term partnerships needed to rectify criticisms identified by (Frodell, 2011). Relationship management also extends beyond external entities such as suppliers and subcontractors, it is also critical to project success within an organisation such as design and project teams. Effectively managing relationships between superintendent and principal, particularly in regards to coordination is required for the efficient transfer of information and advice required to timely achieve project programs. Procurement methods such as Alliancing, Partnerships and to some extent D&C offer the characteristics that incite the requirements of effective relationship management including trust, coordination and interdependence as mentioned previously. Sharing information, risks and a common goal results in a strong desire to collectively achieve positive outcomes. The application of relationship management to construction, as with any other industry is required to ensure progressive success.

As mentioned above, communication is also imperative to trust in relationships. In order for communication to be effective, it must be clear and concise, both formal and informal (Frodell, 2011). In the construction environment, the use of computer systems such as E-mail does not overrule the importance of informal communication paths such as face-to-face meetings where productivity is generally higher, interpretation issues and confusion is lower and joint problem solving systems can flourish.

6.0SUPPLY CHAIN MANAGEMENT

6.1 Background The definition of Supply Chain Management by the Council of Supply Chain Management Professionals (CSCMP) is that Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers and customers. In essence, supply chain management integrates supply and demand management within and across companies. Supply Chain Management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics management activities noted above, as well as manufacturing operations and it drives coordination of processes and activities with and across marketing, sales, product design, finance and information technology. To paraphrase, Supply Chain Management (SCM) is of major importance to companies on a sourcing, product flow, information flow and finances flow basis. It is the culminating of management and procurement of materials, information and finances from supplier to manufacturer to wholesaler to retailer to consumer. Effective SCM has the ability to reduce inventory needs making products available when required, similar to the merits of JIT management as discussed previously. SCM is an integral part in supply and demand and provides a link across companies providing business functions and processes forming the basis for a successful business model. Other aspects such as marketing sales, product design and information technology are also co-ordinated under a successful SCM. These days, in an age where IT plays a considerable role in assisting to push the boundaries of what can be achieved in business, sophisticated software programs are required to enable effective use of SCM to be a viable opportunity for competitive advancement. A system of sharing this data "upstream" (with a company's suppliers) and "downstream" (with a company's clients) can be instrumental in effective SCM strategies. The success of SCM lies predominantly in generation of strong and repeat business opportunities, the time/effort savings in establishing a strong supply chain. Similar to the partnership characteristics, the goal is to effectively work towards a win-win situation for all parties and to share in the success of the generated relationship by a deeper understanding of requirements of all parties. 6.2 Application to Construction It is interesting to compare the Honda automotive case study (see appendix 1) which implements a policy of selecting suppliers based on their competitiveness compared to those

principles identified by (Dyer & Singh, 1998) in developing relationships with suppliers based on more than competitiveness but on the merits of long term relationships and the extra service received from this relationship. Also relevant is the prioritization and exclusiveness in the selection of forming relationships with suppliers so as to not restrict options including cost savings but reserve partnerships with suppliers with those supplying scarce or high value products that are of significant importance for the buyer (Kraljic, 1984). An example of this in a construction setting may be found in the selection of suppliers for big ticket items such as concrete and prefabricated materials, where the service and quality is just as important if not more important than costs considerations commonly associated with competitiveness. The selection of suppliers for tiles or paint finishes may not be considered from a supply chain partnership perspective largely due to the fact these materials are readily available, with quality being more consistent and cost competition a more acceptable method of selection. As mentioned above, SCM considers the logistics of timing and location of receiving materials and labour. In order for the lean construction strategies such as JIT management to work effectively, the alignment of SCM within inter-organisational structure and culture needs to be matched. The fine line between JIT management being successful and failing miserably rests largely in the alignment of this shared culture, particularly when liquidated damages are significant if programme is affected as a result. Moving past the supply chain of materials and equipment, Human Resources SCM in construction is also applicable to the selection and management of labour, professional consultants, architects and even clients to some extent (Utomo, Hatomo, & Scott, 2010). Coordination of labour on site, coordination of advice and project vision and coordination of client expectation are all factors to be considered in the SCM process.

7.0 BENCHMARKING
7.1 Background Another management strategy reportedly made famous by the Japanese manufacturing industry (namely Xerox) in the 1980s, benchmarking (BM) has been used across a broad range of industries and is continually used today with varying degrees of success (Appelman, 1990). Essentially, benchmarking is a management tool used for measuring performance outcomes and pushing boundaries through continuous improvement to meet and exceed client/customer expectations. With regards to practical output, it is used to measure and assess both qualitative and quantitative issues. Organisational benchmarking (such as HR) is also focused on these issues but from more of an operational/strategic processes perspective. Benchmarking involves a logical process involving 5 fundamental steps (Jones, 2004), these are: 1. Preparation What and who to benchmark, benchmark, identify output requirements and determine data collection methods 2. Data collection and comparisons 3. Investigation - Analysis of the downfalls, determine improvement strategies 4. Implementation Plan how to implement and then implement improvement strategies 5. Monitoring Collect data and continually evaluate progress

Most importantly, step 5 monitoring, is imperative in the continual success of the benchmarking process. Essentially, the whole benchmarking process comes down to continuous improvement by providing a structured path to achieving success so the organisational culture framework and consistency with the benchmarking process will directly impact on its success. 7.2 Application to Construction Used in a broad range of industries including manufacturing where typically, time is used to measure performance against output, application of benchmarking to construction requires a more comprehensive and unique analysis. Benchmarking in construction should take two forms to encapsulate the broader approach required, these are Project Benchmarking which analyse the performance of a unique project using the alignment of client criteria and Internal Benchmarking which adopts the more generic approach to benchmarking in that it analyses the key performance indicators and the critical success factors required for business success. Project Benchmarking - Given the complexities of applying benchmarking to construction due to the variable nature of productivity, stated goals, objectives and basic output comparisons found with typical manufacturing industries, it is important to first simplify the benchmarking process by establishing a set of criteria relevant to construction (Lam, Chan, & Chan, 2004). Given the importance of customer input and satisfaction with construction projects, (Mohamed, 1996) has identified that firstly, you must ascertain for each value adding activity, a well-defined customer who ultimately sets the measures for process performance, with customer requirements clearly identified, consequent activities may then be structured and managed meeting the customers performance measures. This ultimately enhances customer involvement but defines expectations for the benchmarking unique to each project rather than a more generic benchmarking structure that may be used in manufacturing industries. Internal Benchmarking focuses more on the organisational achievements/failures in order to improve future outlook by comparing market leader(s). Internal benchmarking for construction companies can be applied in a more generic sense and will typically include an evaluation of key performance indicators (KPIs). KPIs within a construction organisation may include: Won vs. lost tenders Customer perspective which can be understood in the project benchmarking process Profits vs. losses on recent projects Financial stability Frequency of disputes Analysis of KPI strengths and weaknesses can then be used to compare to other market leaders in similar fields. Once comparisons have been made and performance goals have been set, the benchmarking process then requires a strategic path required to achieve these performance goals. With clear roles outlined in order to achieve these goals a frequent monitoring process must also be established to ensure progress is being achieved and thus the benchmarking process is effective.

8.0 PROCUREMENT SELECTION

With many procurement methods available in construction, the appropriate method selection has considerable weight on the outcome of a project. Traditionally, an architect designs and the contractor constructs this creating somewhat of a segmented characteristic with construction that research has showed is far from preferable and is falling out of favour with construction clients (Chan, 1996) and (Deakin, 1999). With a preference for a more integrated or package approach there are advantages with Design and Construct, Partnerships and Alliancing for the client and stakeholders alike. This consensus is reflected in the application of the strategies covered within this report which highlight a requirement for long-term relationships built on trust and an alignment of culture to successfully implement these strategies and in turn, has the ability to improve contract and cost management performance.

9.0 CONCLUSION
Due to the competitive nature of the construction industry, in order to keep up with competition, CPMC must achieve and exceed customer expectations in the construction industry and aim to become market leaders in the services on offer. To effectively obtain this status, the strategies discussed above are quintessential in the path to achieve global best practice. The majority of management strategies discussed in this report have been developed and utilised in the manufacturing industries. Although not designed for construction, they hold a strong value potential when applied to the construction industry. The report discusses the significant differences between construction and manufacturing industries including: A controlled environment in manufacturing The much documented adversarial nature of construction The segmented nature of construction Trust and dispute issues with construction With the differences between industries, it is important when adopting the strategies to a construction environment that the concepts are either applied to a standardized environment similar to manufacturing or adapted to suit the proposed purpose. For CPMC, the approach to achieve global best practice may begin with the assessment of KPIs of current practice using benchmarking methods. From this, strengths and weaknesses will be identified providing a framework for development using the strategies identified. This will then determine if a standardized environment may be created for application of some of the strategies or if they must be adapted to suit. Additionally, as mentioned a number of times previously in the body of this management report, the importance of cultural alignment is paramount to the successful implementation of the majority of these strategies, this may be achieved by a Re-engineering approach but is dependent on the intricacies of CPMC management desired outcomes.

10.0 BIBLIOGRAPHY
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