DOI: 10.14457/tu.the.2019.758
title: Performance indices development for Thai construction industry using system dynamics modelling

description: The construction industry is the largest section of the global economy. The development of the construction industry brings together the development of other industries. Although the industry is the main pillar for the development of a country, there are several problems while trying to improve its performance. This is due to the nature of the industry, such as high fragmentation, instability, low productivity, poor quality control, and lack of standards. To measure construction performance, it is necessary to establish a set of indicators that match the company’s strategies. The selected criteria may differ from firms to firms, and countries to countries. Such indicators as time, cost, quality, safety and health, client satisfaction, environment, financial performance, people, information, technology, and innovation are found crucial in improving construction performance. Those factors, however, have influences on each other, making it hard to plan for the long–term performance improvement. Moreover, there is a need for the construction company to assess its current performance level, and plan to progress through to higher levels of maturity. This study, therefore, aims at developing the construction performance index (CPI) to be used to assess the current performance maturity level, and suggest areas for long-term improvement. Key factors affecting construction performance are extracted and confirmed through the exploratory factor analysis. The interactions among them are examined utilizing the structural equation modelling technique. The dynamics model of the CPI is then developed to achieve the CPI. This index is used together with the performance maturity levels, to assess the current level of maturity, and plan for the long-term performance improvement of the company. The results reveal 10 key factors affecting construction performance, namely 1) Time, 2) Cost, 3) Quality, 4) Safety and Health, 5) Client Satisfaction, 6) Environment, 7) Financial Performance, 8) Internal Stakeholder, 9) External Stakeholder, and 10) Information, Technology and Innovation. It was found that the 10 key factors directly and indirectly influenced each other. They are used for a questionnaire survey development to collect data for Thaiconstruction industry. The collected data are screened and performed with the exploratory factor analysis to confirm key factors affecting construction performance with their associated items. The results extract 10 key factors with “People” factor separated into factors. The dynamics model of the CPI is developed based on the 10 key performance factors. The CPI, developed through the dynamics model, is used to assess a current level of performance maturity. The simulation results show that the construction company is in the first level of maturity at the beginning years. With support from management, the company progresses through to higher levels, and reaches the highest level of maturity, level 6, in 12 years. The developed dynamics model is also examined with various management attempts to improve construction performance, and the results confirm that management commitment is needed to successfully implement the performance improvement program.Alternative strategies are performed with the developed dynamics model to effectively plan for performance improvement in the long-term. The results suggest the construction company to pay extra effort in time-, stakeholder- , safety and health- , and customer- related areas, as they assist the company to achieve high performance maturity levels in short period of time. The dynamics model of the CPI brings insights into key factors affecting construction performance, as well as their interrelationships. Construction companies can use the developed dynamics model to effectively plan for their performance improvement to achieve higher levels of maturity in the long–term. This proves the contribution of the study to the world–wide construction industry.