What Is A KPI In Construction?

In this blog, we’re going to explore KPIs that are essential for construction projects and which ones are truly valuable. You’ll learn to identify the KPIs that matter most, how to use them effectively, and which ones might not be as critical. Just like a human’s pulse indicates overall health, there are key indicators that reveal the “pulse” of your project. Let’s dive into it!

What is a KPI in Construction?

A KPI in construction is designed to measure certain metrics that reflect the performance of the project. These can be categorized into leading indicators and lagging indicators. Leading indicators help you take preventative actions before problems arise, while lagging indicators assess the outcomes after the fact. Although both are important, focusing on leading indicators can prevent issues before they become major problems.

Common Leading Indicators in Construction

Here are some common leading indicators in construction:

• Cost performance
• Schedule performance
• Quality performance
• Safety metrics
• Productivity and efficiency numbers
• Customer satisfaction metrics
• Sustainability-related metrics

These KPIs help provide a holistic view of how your project is progressing in real time.

Useless KPIs in Construction

Not all KPIs are created equal. Some, like those tied to the Critical Path Method (CPM) and float tracking, may not add much value to your project. These are often part of traditional project management, but they can be overly complex or just not relevant. Instead of focusing on outdated metrics, it’s better to concentrate on KPIs that truly drive project success.

Why You Should Avoid Managing Budgets vs. Investments

A common pitfall in construction management is focusing solely on cutting costs and managing the budget. While reducing unnecessary expenses is important, it’s equally crucial to invest in areas that improve project outcomes—such as worker training, site conditions, and pre-construction efforts. For instance, cutting the pre-construction budget might save money upfront, but it could lead to costly overruns and delays later.

KPIs That Matter: Key Indicators for Project Success

Let’s talk about the KPIs that will genuinely predict project success. These include:

1. Quality Indicators

• Point of Release: Tracks the progress of trade partners from pre-mobilization to final inspection.
• Number of Pre-Construction Meetings: Ensures all required pre-construction meetings are held and result in quality checklists.
• Percentage of Crews Installing According to Quality Checklists: Tracks how well crews adhere to quality standards.

2. Schedule Indicators

• Remaining Buffer Ratio: Measures how much buffer time remains compared to what was initially planned.
• Roadblock Removal Average: Tracks how quickly obstacles are identified and removed before impacting work.
• Successful Handoff Percentage: Measures how smoothly trades hand off work between zones.
• Percent Plan Complete (PPC): Tracks the percentage of promised tasks that were completed on time.

3. Financial Projections

• Gross Profit: Tracks overall project profitability.
• Contingency: Measures how well contingency funds are managed.
• Risk and Opportunity: Identifies potential financial risks and opportunities for profit.

4. Buyout and Procurement

• Buyout Log: Tracks whether trades are contracted on time with all required insurance and permissions.
• Procurement Log: Measures the success rate of material procurement and tracks any items that are delayed.

5. Team Health

• A healthy team is essential for project success. Using a team health assessment tracker can help measure team morale and overall well-being.

Conclusion: Stay Ahead with the Right KPIs

Tracking the right KPIs allows you to take corrective action and ensure the success of your construction project. By focusing on leading indicators and prioritizing investments over budget cuts, you can avoid common pitfalls and deliver outstanding results.