When making quick decisions, most people will react instinctively. The science of behavioural economics tells us that such decisions tend to be irrational and can result in significant losses, however they often exhibit known patterns. Construction, like sports competitions and battles, requires quick decisions to be made on-site, framed by unique contexts, often with insufficient information and under risk. Fiolet, Haas and Hipel explore the potential impact of such decisions. They focus on a particular behaviour identified in behavioural economics theory called “risk chasing.” Through a virtual experiment conducted with a group of North American construction project leaders, widely distributed in age, the authors discovered a tendency for them to chase risk, when projects are experiencing poor cost performance. This behaviour may be driven by normal human loss aversion. Ironically, like a gambler doubling down on the next bet, after a run of losses, risk chasing seeks to avoid further losses by making poorly-considered bets. As might be expected, the younger participants in the experiment were more likely to chase risk. Understanding where such behaviour occurs could lead to the development of means, such as training and use of hand-held ‘apps’, for avoiding the resulting losses. While this is intriguing, the authors have identified a number of limitations to their study and opportunities for further investigation. For example, impacts of scale, absolute values, various contexts and gender need to be explored, as well as the possibility of using real-world observations rather than results from structured, hypothetical experiments.
The best way to improve workflow reliability in Liquefied Natural Gas (LNG) projects is not only to shield assignments but also to remove construction constraints on-time. In order to actively perform constraint removal, Wang, Shou, Wang and Wu propose a hierarchical constraint management method, namely Total Constraint Management (TCM), which consists of a completed process for constraint lifecycle management from constraint modelling to removal. The constraint modelling module provides a global view of constraint relationships and interconnections, which is useful for identifying key constraints and calculating the delay impact of each constraint. The constraint monitoring module includes a small cycle of constraint tracking, status updating, and checking and action. Three loops of constraint management have been developed within the TCM framework, which are aligned with a project progressing from the initial planning stage to completion. Every delay impact can be assessed in an early stage, which leaves enough time for project teams to catch up. To illustrate the benefits of the proposed approach, the authors have applied the TCM framework to a lean simulation game of LNG compression. Duration was reduced by 28%, while no defective modules were found when compared with the conventional approach. Productivity was also improved, especially in the activities of off-site module manufacturing and module installation. This study enhances the role of constraint management within the current pull planning methods and extends its process beyond the look-ahead phase.
Bragadin and Kähkönen propose a schedule health assessment method for construction projects with the aim of improving the quality of the schedule and the scheduling process. They suggest that the quality level of a scheduling process and of a schedule can be measured through five key performance indicators: general requirements, construction process, schedule mechanics, cost and resources, control process. The authors identified 75 requirements from pertinent literature and existing standards to constitute these five KPIs. The health assessment of construction schedule can be estimated through the model. Relative weights of certain KPIs are applied in the whole project schedule development process, i.e. for the preparation of master schedules, the detailed schedules and for the control and updating of schedules. The authors apply the schedule health assessment method to a sample industrial case study, and provide schedule performance charts. The method has a new kind of connotation regarding the construction sector, with respect of the existing standards. In opposition to the legal connotation of most existing schedule health assessment methods, the authors suggest that their method might be used both for quality assessment by project supervisors and for guidance of the scheduling process by project planners. As the proposed method is performed through checklists, they suggest that it can be suitable for the majority of project management consultants and small and medium-sized enterprises in the construction sector.
Experience in other industries has shown that vast amounts of efficiencies can be gained from e-trading. For example, over the years, e-trading has evolved significantly and transformed the manufacturing and automotive industries to become sine qua non of their commercial interaction process. A vital ingredient of e-trading is the integration of trading parties’ back-end ERP systems. A fully integrated e-trading system supports inter-operation of data through electronic exchange of commercial information (eCIX) where different types of transactional information (including, but not limited to, product and pricing information, order, delivery and invoice data) is exchanged seamlessly amongst businesses and their back-end ERP systems. Through a case study implementation project, Pala, Edum-Fotwe, Ruikar, Peters and Doughty explore the challenges and barriers faced during eCIX deployment between a large UK contractor firm and ten of its supply chain firms. More specifically, the authors investigate the interface between software development and organizational functions assisting with the deployment. They captured and analysed data from multiple sources, including project development logs (the back-end software activities involving mapping, coding and implementation), meeting minutes, and project reports as well as observational data gathered through face-to-face and teleconferencing meetings, in order to shed light on reasons for delay and inactivity in each project. Their findings indicate that eCIX implementation is not an easy task as majority of projects took several years to finish while some did not even get the chance to reach the end. Project management issues account for the 87% of the projects’ duration while the remaining percentage was mostly taken by back-end development activities. Based on the case-study findings, the authors suggest several themes of critical success factors that include technical, coordination, integration and organizational factors for timely implementation of eCIX projects.
Estimating the number of “new” bidders for upcoming auctions, as well as the approximate size of the population of potential bidders, has important competitive implications in real-life bidding scenarios. Similarly, most bid tender forecasting models need to somehow handle the appearance of new bidders from whom there is no registered information concerning either their competitiveness profiles or the number of these “unpredictable” bidders. However, literature references to either of these two topics are very scarce, especially in the construction management context. Ballesteros-Pérez and Skitmore have developed a model for anticipating the proportion and number of these new bidders, which are useful for both open tendering (where the number of participants is unknown) and selective tendering (where the number of participants is generally known). A performance analysis of the deviations for the model, applied to set of London tenders, indicates that a multinomial distribution model will constitute a good alternative for situations in which the number of new bidders needs to be predicted, as well as for the number of previously identified bidders who are submitting more bids for the next auctions.