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Construction
Measuring the invisible logistics
A key performance indicator for managing performance
construction logistics performance
Fei Ying 1921
Department of Built Environment, Auckland University of Technology,
Auckland, New Zealand, and Received 23 November 2016
Revised 13 June 2017
John Tookey and Jeff Seadon Accepted 17 June 2017
Auckland University of Technology, Auckland, New Zealand

Abstract
Purpose – Construction logistics is an essential part of Construction Supply Chain Management for both
project management and cost aspects. The quantum of money that is embodied in the transportation of
materials to site could be 39–58 per cent of total logistics costs and between 4 and 10 per cent of the product
selling price for many firms. However, limited attention has been paid to measure the logistics performance at
the operational level in the construction industry. The purpose of this paper is to contribute to the knowledge
about managing logistics costs by setting a key performance indicator (KPI) based on the number of vehicle
movements to the construction site.
Design/methodology/approach – A case study approach was adopted with on-site observations and
interviews. Observations were performed from the start of construction until “hand-over” to the building owner.
A selection of construction suppliers and subcontractors involved in the studied project were interviewed.
Findings – Data analysis of vehicle movements suggested that construction transportation costs can be
monitored and managed. The identified number of vehicle movements as a KPI offers a significant step
towards logistics performance management in construction projects.
Originality/value – This research paper demonstrates that framework of using vehicular movements meet
the criterion of effective KPI and is able to detect rooms for improvements. The key findings shed valuable
insight for industry practitioners in initiating the measurement and monitor “the invisible logistics costs and
performance”. It provides a basis for benchmarking that enables comparison, learning and improvement and
thereby continuous enhancement of best practice at the operational level, which may accelerate the slow SCM
implementation in the construction industry.
Keywords Logistics, New Zealand
Paper type Research paper

Introduction
The construction industry is a project-based industry where each project is unique. This
uniqueness has a direct influence over the utilisation of logistics and material
transportation. Each project presents a logistical exercise customised to fit its operations.
Since the industry does not elect where it conducts its productive activities, it therefore has
to move where the work is. Construction logistics is thus an essential part of Construction
Supply Chain Management (CSCM), for both cost and project management. It has been
found that transportation is the single largest element of logistics cost (Bowersox et al.,
2007). Considering that materials usually account for 30–50 per cent of the cost of a building
project (Fellows et al., 2002), transportation costs represent approximately 39–58 per cent of
the total logistics costs resulting in between 4 and 10 per cent of the product selling price for
many firms (Coyle et al., 2003a, b). The transportation costs of material hence represent a
substantial percentage of the cost profile of the construction industry. Therefore, a small
percentage cut in transportation costs could bring a sizable increase in profits.
Benchmarking: An International
However, there is inadequate awareness of construction logistics efficiency in Journal
New Zealand (Ying et al., 2015). This is reflected by decisions on choosing suppliers and Vol. 25 No. 6, 2018
pp. 1921-1934
quantities of materials being normally made by evaluating the quoted “cost as delivered” © Emerald Publishing Limited
1463-5771
per unit. With the logistics cost embodied in material cost, there is no easy way of DOI 10.1108/BIJ-11-2016-0176
BIJ identifying how much cost is attributed to inefficient logistics. Furthermore, few researchers
25,6 have addressed the measurement of construction logistics (Wegelius-Lehtonen, 2001;
Bassioni et al., 2004). As noted by LeBoeuf (1985), “what gets measured gets done. What gets
measured and fed back gets done well. What gets rewarded gets repeated”. Addressing the
construction logistics costs embedded in the material price will enable industry engagement
to improve logistics performance.
1922 Key performance indicators (KPIs) are widely used internationally to measure the
performance of the construction industry (The KPI Working Group, 2000). In New Zealand,
a series of KPIs based on those developed in the UK have been measured over five years.
Ten KPIs endorsed by the government address both project and company performance.
These KPIs focus on construction cost, construction time, predictability of cost and time,
defects, client satisfaction, safety, profitability and productivity (Constructing Excellence (NZ),
2008). Although the government intends to endorse a broad set of practical indicators, there is
no KPI to address the performance of logistics costs and efficiency. Considering the sizable
expenditure involved in transport related activities, it is therefore paradoxical that there is no
appropriate KPI to measure logistics performance in the construction industry.
The aim of this paper is to propose that vehicle movements to the site can be used as KPI
in monitoring and improving logistics performance. The focus is to measure transportation
costs at both project and company level. The theoretical perspectives underpinning the
performance measurement are discussed in subject sections, providing a debating platform
for an appropriate KPI to assess construction logistics. To demonstrate the application of a
proposed KPI, a case study of a commercial project in major New Zealand city is assessed.
The major findings of the project offer insights into addressing the challenges of measuring
and monitoring “invisible” logistics performance and costs.

Performance measurement in construction logistics

Construction logistics
Logistics is the umbrella term covering materials management and physical distribution
(Gattorna and Day, 1993). Logistics management research is classified into three broad
perspectives: competitive strategy, firm-focussed tactics and operational efficiencies
(Ganeshan et al., 1999). The construction industry is generally concerned with aspects of
daily operations, which are typically operational decisions reflecting day-to-day operations
( Jang et al., 2003). A sensible division of logistics functions for a construction site is to divide
them into supply logistics and site logistics, as presented in Figure 1.
Supply logistics are related to activities in the production process, including the supply
of materials, equipment, and human resources for various parts of construction
(i.e. substructure). Site logistics are related to physical flow, such as planning, organising,
directing and controlling on-site processes. The management of handling systems, safety
equipment, site layout, defining activity sequence and resolving conflicts among various
contractors regarding to the on-site jobs are all part of site logistics (Silva and Cardoso,
1999). At a construction site, various elements undertake the material flow such as crane
and hoist, on-site storage, and waste management. Materials delivery on site is the interface
of supply logistics and site logistics.

Performance measurement
Measurement of logistics is an important step to improving performance. Performance
measurement is a process of quantifying the efficiency and effectiveness of past actions, while
a performance measure is a parameter used to quantify the efficiency and/or effectiveness
of past actions (Neely et al., 2002). In the early 1990s, project success was considered
to be linked to performance measures, which in turn were linked to project objectives.
 Material Flow Equipment Crane
Construction
Shell
Storage logistics
performance
Procurement

Distribution
Furnishings
Supplier

Waste

Factory
Management
Construction Site

Hoist 1923
Interiors Services
Loading
Information Flow
Substructure

Supply Logistics Site Logistics

Delivery
on Site
Figure 1.
Various firms Construction logistics
process
Source: Adapted from Jang et al. (2003)

At the project level, success was measured by the project duration, monetary cost and
project performance, the so called project management “iron triangle” (Atkinson, 1999).
In addition to these basic criteria, researchers advocated that measures for construction
project success should also include project psychosocial outcomes (such as participants’
satisfaction level, and safety), time-dependent dimensions, and perspectives of stakeholders
(i.e. owner, developer, contractor, user and the general public) (Pinto and Pinto, 1991;
Shenhar et al., 1997; Lim and Mohamed, 1999).
Previous studies indicate that performance measurement has a notable effect on the
development and effectiveness of benchmarking (Anderson and McAdam, 2004; Costa et al.,
2006). This is mainly because tracking performance identifies uncompetitive management
practices which promote investigation of changes. It is claimed that measuring the supply
chain is the basis of developing it (Sillanpää, 2012).
The purpose of KPIs is to enable measurement of project and organisation performance
throughout the construction industry (The KPI Working Group, 2000). KPIs are general
indicators of performance that focus on critical aspects of outputs or outcomes. As indicated
by Formoso and Lantelme (2000), management with a reluctant attitude is a major barrier in
performance measurement implementation. The reluctant attitude may be caused by extra
effort in data collection, difficulty in data analysis, and data not used in project management
decision making (Wegelius-Lehtonen, 2001; Costa et al., 2006; Horstman and Witteveen,
2013; Vogl and Abdel-Wahab, 2015).
For performance measurement to be effective, there are several criteria for selecting a KPI.
First, only a limited, manageable number of KPIs is maintainable for regular use. Having too
many and/or too complex KPIs can be time and resource consuming. Second, data collection
has to be as simple as possible (Chan, 2001). Another essential criterion of a KPI is that it can
translate practices and measures into practical knowledge and make it possible to identify and
adopt superior performance standards (Costa et al., 2006). Moreover, performance measures
are used to measure and improve the efficiency and the quality of the process, and identify
opportunities for progressive improvements in process performance. Competent KPIs shall be
able to measure and monitor the practice (Wegelius-Lehtonen, 2001). To address the
characteristics of construction projects that involved many tiers of contractors on the site,
capable KPIs focus at both firm level and project level (Wegelius-Lehtonen, 2001).
BIJ However, the construction firms do not usually have continuous data collection systems
25,6 for logistics measures (Vogl and Abdel-Wahab, 2015). In New Zealand, the practice in
industry is in line with this claim (Page and Norman, 2014). Research points toward the fact
that the construction industry does not effectively address, or have the skills to solve,
logistics problems. At present, the lack of knowledge is masked by a lack of immediacy in
recognising that there is a problem at all. It is recognised that major barriers about
1924 awareness of logistics costs include invisible logistics costs, disconnect between investment
in construction logistics and benefit, and no recorded data relating to logistics performance
(Blumenthal and Young, 2007; Omar et al., 2009).

Proposed framework
To address these issues, a framework using vehicle movements to a construction site is
proposed to measure project logistics performance, as presented in Figure 2. The main
consideration is that material deliveries to the construction site initially link the supply logistics
and site logistics, as Figure 1 indicates. The total numbers of vehicle movements could be
influenced from a range of factors such as planning, ordering and material flows that under the
category of logistics management strategy adopted on the site. The efficiency of site
management, such as loading bay and crane operation, has impact on the vehicle movements.
A well-planned crane operation would speed up material and plants unloading and thus reduce
the vehicle waiting time. Using vehicle movements as a KPI can also lead to the measurement
of tangible costs, such as transportation and logistics costs. If the project logistics performance
is maximised at the site in accordance with the site condition and contractors’ circumstances,
the total number of vehicle movements is postulated to be the minimum.

Research methodology
The guiding purpose of this study was to contribute to the knowledge about measuring logistics
performance by setting a KPI using the number of vehicle movements to the construction site.
The focus of the work was on identification of the main performance aspects measured by the
total numbers of vehicle movements. It also sought to understand why vehicle movements can
be used as a KPI, as well as questions of how to use the vehicle movements in improving

Loading Bay Crane

Management Operation

Site Management
Logistics Performance

Productivity Transportation
Tangible Costs

Performance Costs

Vehicle Movements

Environmental Logistics
/Social Impact Costs

Logistics Strategy
Figure 2.
Vehicle movements Planning Ordering
Materials/
as a KPI Plants Flows
logistics performance. A case study with a qualitative and quantitative approach was used as Construction
this approach is appropriate when the research problem requires understanding of complex logistics
phenomena that are not controlled by the researcher and when the research questions have a performance
how and why nature (Yin, 2009). To effectively analyse the relevance of using a logistics KPI,
interviews, documents and observations were used as the research method.
It is important to select a critical case that can explicitly demonstrate. The choice of a
commercial project in the largest city (by population and area) in NZ reflects typical 1925
problematic issues for construction logistics which critically demonstrates the
“how-problem” (Yin, 2003). The case study described in this paper was a commercial
project hosted by a university located in central Auckland, implying special requirements in
terms of logistics and physical distribution. Auckland is notable for its “Urban Sprawl”
(Dixon and Dupuis, 2003; Ministry for the Environment, 2005). The city also has a
substantial reliance on road transportation since public transport system has historically
not kept up with population growth needs. The $100 million project consisted of a 13 level
tower block with a rooftop plant room surrounded by a lecture theatre and student facility.
The new construction integrated several existing buildings on campus. The construction
had three stages: ground works, structure and fit out. The contract was fixed price, with the
client being allowed certain flexibility in the scope without extra charge.
Data were collected through interviews with the main contractor, subcontractors and
their suppliers and on-site observations. The indicator of using vehicle movements as a KPI,
as shown in Figure 2, was used as guidance for interviews. Questions about each aspect (site
management, tangible costs, logistics performance and logistics strategy) were posed. The
respondents were practitioners involved in procurement of materials and plant processes in
the supply chains of the studied case. The procurement process included ordering, planning,
supplying and delivering the materials to the site. The respondents were chosen for their
specific knowledge and position to provide relevant information about the process.
The participants’ characteristics are summarised in Table I. The participants were
categorised into three groups: main contractor (5.6 per cent), subcontractor (68.5 per cent), and
material supplier (25.9 per cent). A majority of participants were from the first tier subcontractor
list, since the first tier subcontractor procure and deliver a significant percentage of materials.
Material supplier firms were chosen from the major suppliers of the first tier subcontractors.
The objective of the interviews was to enhance knowledge of how vehicle movements’
process appears and how it was arranged. In addition, the interviews focussed on how the
contractors related to the others in the supply chain. These interviews provided insight into
occurrences of the challenges of inefficiency in construction logistics. The participants were all
skilled in their particular fields. However, the process and vehicle delivery pattern of their firms’
deliveries was not well documented. This lack of documentation made systematic analysis
problematic. Therefore, the need for the on-site observation of vehicle movements emerged, as
supply chain levels closer to the project level tended to be more adept at retaining knowledge and
experience with issues at the operational level than those removed from project level operations.
On-site observations were performed during construction, as well as during weekly
coordination meetings held between the main contractor and its subcontractors. These were
documented through notes, photographs and audio recording. The depicted scenes gave an

Characteristics Category Number Percentage

Participants Main contractor 3 5.6

Subcontractor 37 68.5
Material supplier 14 25.9 Table I.
Total 54 100 Participants’ profile
BIJ opportunity for participants to reflect on specific situations in retrospect. As noted by Scott
25,6 and Garner (2013), observing behaviour gave opportunities to make sense of a larger
context and draw conclusions that the individual subjects might have had difficulty
noticing. Extensive observations were also made on the construction site to confirm
information given by the respondents; the on-site observations also enabled information
gathering that the participants were unable or unwilling to fully disclose in interviews.
1926 Special attention has been paid to the numbers and patterns of vehicle movements, since
it was expected that appropriate interventions to improve construction logistics could be
identified through analysing these elements. The vehicle movements were recorded by the
gates-person on the site. Details such as delivery company name, date, time, truck type,
materials, and activities were noted on printed tables. These details were then transferred to
electronic documents and analysed using MS Excel and MS Access.
These data were analysed as a whole, reduced to focus on the main objective of the
project and then presented in a synthesised form.

Key findings
The main aim of this paper is to contribute to the knowledge of setting vehicle movements
as a KPI to manage logistics performance. The key findings section of the paper is focussed
on how construction logistics performance can be improved and monitored in practice
by assessing vehicle movements to the site at the project and subcontractor level.
The framework for measuring construction logistics must be able to improve and monitor
the performance at both project and subcontractor level, while meeting other criteria for
effective KPIs. The findings in this paper thus reported in two parts, at project level and at
firm (subcontractor) level.

Case results at project level

For the period of construction, the total number of vehicle movements to the observed site
was approximately 6,300. These vehicles were from 257 difference firms. Vehicle
movements were recorded in total for 334 days over 58 weeks. The different project stages
and particular construction processes had profound signatures in the types, numbers and
frequency of delivery vehicles entering the site.
Vehicles arrived at the site were classified in four categories, small (short and light
two-axles vehicle, such as car, van and utilities), medium (short towing three to five axles
vehicle, such as car with trailer), large (medium and heavy vehicle, 5.5–14.5 m with two to four
axles), and very large (long and heavy vehicles, 11.5–19.0 m with three to six axles)
(Austroads, 2006). Among the vehicles that arrived at the site, 31 per cent were small vehicles,
while large vehicle types dominated transportation (66 per cent) as presented in Figure 3.

Very Large
1%

Small
31%

Figure 3. Medium
Arrived vehicle Large 2%
classification 66%
During the project stages of ground works and structure, 77.2 per cent of vehicles into the Construction
construction site consisted of heavy vehicles with more than three axles. During the fit-out logistics
stage, in contrast, it was observed that smaller vehicles (vans and utilities) arrived remarkably performance
more often (41 per cent) than in previous two stages (22 per cent).
Analysing the vehicle movements to the site, each subcontractor’s delivery can be easily
sorted, with the details of vehicle type. By knowing the subcontractors’ depot address, the
approximate travelling distance can be determined (Figure 4). Most depots supplying the 1927
project were within 11–20 km of the site (55 per cent). Multiplying distances by deliveries for
each firm gives an accumulated road travel distance of 220,000 km for the project (i.e. an
average of 35 km, round trip, per delivery). It can also be seen by analysing the vehicle
movement that being a heavily “inbound” industry, significant numbers of vehicles
(86 per cent) were unloading materials or equipment at the site, as shown in Table II.
Furthermore, the data of vehicle movements show that, in terms of transport
distribution, of all vehicle movements observed, 80 per cent were classified as material
delivery and 19 per cent as construction waste and diverted materials removal. The ratio
approximated to 4.2 materials delivery journeys to one waste removal journey. It was
observed that the logistics of building materials and C&D waste were not integrated and the
vehicle movements for both material delivery and C&D waste removal were sub-optimal.
The field observation established that considerable numbers of materials’ delivery vehicle
movements (more than 45 per cent) were empty runs on their return journey and 35 per cent
of C&D waste removal vehicle movements were empty runs on their arrival journey.
Compared to a similar study carried out in South Africa (Shakantu et al., 2008), it appears
that the ratio at the observed site is higher than for the counterparts in South Africa. During
the construction process, some of the waste removal vehicles arrived at the site with empty
bins and exchanged full bins taking them to either landfills or the company’s recycling
plants. It could be speculated that the implementation of a reverse logistics strategy is the
reason for a higher ratio in the current study. However, the empty runs for both delivery and

Firm Count (Distance to site)

60% 55%

50%

40%

30% 27%

20%
Figure 4.
9% 9%
10% Firm count in
accordance with
0% distance to site
1–10 km 11–20 km 21–30 km >30

Loading pattern Numbers of vehicles Percentage

Unload 5,925 86
Load 358 5
Load and unload 487 7 Table II.
Labour only 120 2 Vehicle loading
Total 6,890 100 pattern
BIJ waste removal vehicles are largely the result of the failure by the construction industry to
25,6 back haul. Thus, it in turn highlights the potential for integration of materials and waste,
which would ultimately improve the logistics efficiency.
Similarly, the time of delivery was analysed using the same data. Figure 5 illustrates
deliveries occurring throughout the day and appears to be multimodal and skewed normal.
The histogram also shows that almost one-fifth of arrivals occur before 8:00 a.m. while
1928 55.8 per cent of the arrivals occur during either in the early morning (8:00 a.m. to 10:00 a.m.)
or early afternoon (12:00 a.m. to 2:00 p.m.). Indeed, vehicle arrivals on delivery points
start after 6 a.m. and increase rapidly before peaking at the time interval between 9 a.m. and
10 a.m. then taper down as time passes creating a strongly skewed distribution. In the
studied project, 67.8 per cent of delivers took place before midday.
The deliveries were most carried out from 8 a.m. to 11 a.m. (38.2 per cent), which overlaps
with the peak time of city traffic from 7 a.m. to 9 a.m. These truck movements not only put
an extra burden on the existing congested city traffic, but also reduce logistics efficiency.
Anecdotally, some truck drivers complained about the tight space for manoeuvring in the
city roads during peak traffic. These construction vehicle movements impose negative
economic, social and environmental impacts by adding to the problems of congestion and
environmental pollution.

Case results at firm (subcontractor) level

In the case study, it was observed that logistics efficiency varies considerably between
different materials in accordance with their supply chains. Depending on the characteristics,
construction materials can be categorised into four representative supply chains,
make-to-stock (MTS), assemble-to-order (ATO), make-to-order (MTO), and design-to-order
(DTO) (Stavrulaki and Davis, 2010). It was observed that the order driven “pull” type
materials (MTO, ATO and DTO) were delivered with high efficiency, normally just-in-time
( JIT). However, materials falling in the manufacturing driven “push” category (MTS) were
delivered with a relatively low efficiency.
The main reason for the high efficiency of “pull” type construction materials delivery
was to avoid damages and losses on the site. Building materials often require large storage
area, which is often unavailable on site. Inner city buildings typically utilise almost all the
available sites. In addition, storage facilities on site are generally temporary structures or

14.0%
13.1%
12.7%

12.0%
11.3%
10.8% 10.6%

10.0% 9.4%
8.8% 8.9%

8.0%

6.1%
6.0%

4.2%
4.0%

1.8%
2.0% 1.4%

0.5%
Figure 5. 0.1% 0.1% 0.1%
0.0%
Vehicle arrival time 05:00– 06:00– 07:00– 08:00– 09:00– 10:00– 11:00– 12:00– 13:00– 14:00– 15:00– 16:00– 17:00– 18:00– 19:00– 20:00–
06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00
compounds with limited protection from weather conditions. The conditions in which the Construction
materials are stored often leads to damage from ingress of water and movement of people, logistics
plant and equipment. Theft of stored materials is also common. The damage and loss of performance
material from site, is euphemistically called “shrinkage”. For materials in the MTO, ATO
and DTO categories, long lead-times are often normal. If shrinkage does happen, it will
cause major delay to the project programme. Therefore, the majority of items in the “pull”
category, for example structural steel and curtain wall panels, were delivered in JIT manner 1929
to avoid the prolonged storage on site and possible damage. These materials were mainly
scheduled for delivery during the weekly coordination meetings, and a confirmed delivery
window was allocated by the site manager to secure crane availability. Thus,
pull-transported construction materials were delivered with reasonable efficiency.
Five firms with the highest number of vehicles entered the site are shown in Table III.
Among these companies, three firms provided materials/services in the “pull” category with
mainly JIT delivery (labelled A, B, D in Table III). The deliveries of the other two companies
(C and E) were done both JIT and ad hoc, depending on the materials.
Vehicle movements of each subcontractor were then further analysed to measure various
aspects of logistics performance. In this paper, the data of ready-mix-concrete (Supplier A)
are used to demonstrate that vehicle movement can be set as KPI to measure transportation
costs and manage logistics performance, as it has the highest number of vehicle movements.
Figure 6 illustrates the delivery time carried out by Supplier A. The deliveries were mostly
carried out during 2 p.m. to 3 p.m. (135 of 988 deliveries), and 9 a.m. to 11 a.m. (127 and
116 deliveries, respectively). The diagram indicates that supplier A attempted to avoid the
peak times of city traffic. Further interviewing suggested that supplier A was very cautious
about concrete pouring time. They coordinated with the main contractor before each

Company Numbers of vehicle movements

Ready-mix-concrete supplier A 988

Excavation subcontractor B 462 Table III.
Waste management subcontractor C 285 Vehicle arrival
Concrete masonry subcontractor D 265 number
Mechanical service subcontractor E 230 (top five firms)

160

140 135
127

120 116
108
Number of Arrival Vehicles

102
100
88
84
80
68 69

60
46
40

16
20 14
Figure 6.
6
2 3 4
Vehicle arrival time –
0
05:00– 06:00– 07:00– 08:00– 09:00– 10:00– 11:00– 12:00– 13:00– 14:00– 15:00– 16:00– 17:00– 18:00– 19:00– 20:00– supplier A
06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00
BIJ pouring day and tried to avoid traffic peak hours delivery. It is not surprising since
25,6 ready-mix-concrete is a time sensitive product.
The data for vehicle movements of Supplier A also provides the fleet categories, as
illustrated in Figure 7. The majority of the vehicles were the concrete mixer trucks
(96 per cent). Small vehicle travelling was mainly caused by a company technician who
monitored the concrete pouring or collected testing samples.
1930 In the construction industry, the choice of material was primarily made on the basis of
lowest per unit cost “as delivered”. The cost of transportation was not isolated, and thus
cannot be measured. Using data recorded at the site of vehicle movements, the “invisible”
transportation costs for each firm and the whole project were able to be identified:
X
i
CostTransportation ¼ COi  Di
n¼1

where CostTransportation is the total transportation costs, COi is the vehicle operating cost of
the ith trip, Di is the distance between the site and the depot of the ith trip.
The vehicle operation costs vary with the size of the vehicle. For example, using the data
for the ready-mix-concrete supplier, 952 large vehicles and 36 very small vehicles were made
into the site. The concrete plant is located 4.1 km away from the construction site, giving
8.2 km for a round trip. There is no data for concrete mixer truck operating costs in
New Zealand; the counterparts in the USA were adopted for this research (Zagula et al., 2012).
The estimated operating cost for a concrete mixer is approximate $9.2/km, which includes
fuel, maintenance, accident repair, road call, drum chipping and driver’s wages. Similarly, for a
small vehicle, estimated operating cost is $1.2 covering standing costs, fuel, tyres, service and
registration. Hence, the transportation costs for Supplier A for this project is $112,495.
The total amount of concrete supplied to the project is 4,865 m3, costing $1.05 m. Accordingly,
it is calculated that the transportation costs are 10.8 per cent of the product selling price.

Discussion
The main aim of this paper was to propose using vehicle movements as a KPI for
monitoring and improving logistics performance, considering that KPIs are seen to be
essential to measure and control construction performance.
The research has highlighted the vehicular movements meet all criteria as an efficient
KPI. It is evident that the proposed indicator is simple and well designed to establish a
project logistics performance measurement system and incorporate the measures into the
project routine. Vehicle movement data collected in the case study included names of
delivery companies, date, time in, vehicle type, and name of material/plants delivered.
This limited data can be collected in a glance by the gate-person. It is not complicated or

4%

Figure 7. 96%
Vehicle classification –
supplier A
Concrete mixer truck Small vehicle
time consuming to record the data. At the studied project, the gate-person wrote down all Construction
this information on a printed table which specified all the required data. It was not much of a logistics
burden, since vehicles normally stopped at the gate for instructions about where to unload/ performance
load the materials and plant.
Data analysis in this project demonstrates that measures can be translated into practical
knowledge effectually by using a simple spreadsheet. Since the indicator focusses on data at
the operational level, the interpretation of the data is straightforward and highly applicable 1931
to site management. Also, the proposed measurement is relevant to management in their
daily work and is a means for continuous performance improvement on projects.
The translation from practices and measures into practical knowledge makes it possible for
the management team to identify and adopt a best performance standard.
Based on the empirical analyses and the generic body of knowledge concerning logistics
and supply chain management, the key findings indicate the construction logistics
management practices in the studied project would be regard as “traditional” in that they
are typically uncontrolled, disruptive and uncoordinated, which confirms the pressing need
of setting up construction logistics performance measurement scheme. These traditional
practices are mainly caused by industry related issues. The construction industry is a
project-oriented industry with many players. All major players, such as main contractors,
subcontractors, and material suppliers, look at the logistics process from their own point of
view. The congested delivery time slot is evidence that there was not much communication
or coordination regarding logistics among the subcontractors and material suppliers.
From the logistics process aspect, the studied project can be seen as independent project
stages with different actors without a common goal. Thus, implementing performance
measurement provides an opportunity for benchmarking and performance control.
The case study’s key findings suggest that the indicator of using vehicle movements as a
KPI is suitable to measure logistics performance. The indicator not only monitors and
measures the performance by counting vehicles from different firms at different time slots, but
also indicates areas for improvement by illustrating vehicle movement patterns and loading
patterns. This is reflected in the peak hour delivery and the inadequate integration of delivery
and C&D waste removals. Furthermore, it measures logistics performance at both project and
firm level. Implementing such an indicator has a beneficial effect on all firms involved in a
project. By applying accurate information, each firm is able to calculate its transportation
costs, which are not observed and controlled, hence invisible, in traditional practice. These
calculations may provide first-hand information for benchmarking logistics costs that have
been largely ignored by the construction industry. The indicator also assists to establish a
cause and effect relationship. As opposed to traditional KPIs, the indicator provides insight on
the underlying drivers of performance. This is achieved by tangible and intangible inputs to
leading performance measures that can be used to predict logistics performance, which may
offer industry guidance on how to improve performance. Equipped with the information, such
as peak delivery time, firms can evaluate the busiest delivery hours at the site and schedule
deliveries accordingly to avoid long waiting times. The findings also give a snap shot of the
interface between site activities and various material and plant supply chains, which is
essential in CSCM (Vrijhoef and Koskela, 2000).

Conclusions
This paper has discussed initiatives to develop a performance measurement indicator for
benchmarking logistics performance in construction projects. Vehicles delivering materials
and removing waste at the construction site physically link the supply logistics and site
logistics. Vehicle movements thus could reflect the potential issues in both types of logistics.
Using the numbers of vehicle movements as a KPI, the evidence provided in the case study
demonstrates the indictor can effectively and efficiently describe and monitor site logistics
BIJ performance. This study has pointed out benefits and opportunities for taking initiatives
25,6 and implementing such a KPI.
The work presented here assesses the ability of vehicle movement as a KPI in
measuring the “invisible” transportation costs. In this project, the transportation costs of
ready-mix-concrete, which is JIT delivery, is around 10 per cent of the material selling
price. It is reasonable to assume that the entire project transportation costs would be much
1932 higher than this number, since the majority of the contractors delivered materials ad hoc.
The potential improvement for construction logistics, potentially at least 3 per cent of the
project material selling price (means of 4–10 per cent indicated in Coyle et al., 2003a, b),
is consequently considerable.
To our knowledge, this is the first significant study to investigate logistics performance
measurement using the number of vehicle movements at the operational level, examining
the project as a whole and each firms involved. The suggested KPI will provide a valuable
tool to manage construction logistics performance and costs. Further research will focus on
optimising vehicular movements to improve performance and reduce costs. These may
include set up a vehicle unloading quota for each firm, consolidating material transportation
from various companies, and utilising reverse logistics. However, these measures of
reducing vehicular movement would only be viable once the current movements are known
and benchmark is set.
The analysis confirmed that the procedure for data collection and analysis is objective
and simple. The main contractor applied the proposed indicator in a subsequent project
providing evidence that this indicator functions well in monitoring and controlling logistics
performance on a construction site. However, it is noticeable that there are some limitations
concerning its implementations and further promotion to the industry. The most
noteworthy issue is lagging analysis. At the studied site, the data were recorded on paper by
the gate-person, and then scanned and emailed to the researcher on a monthly basis. The
data were then input into a spreadsheet for further analysis. This delayed analysis process
defeated the real-time controlling and performance improvement that a KPI should provide.
Future study will concentrate on developing a digital clipboard for the gate-person to enter
vehicle movements with minimal effort. A digital clipboard will not only provide accurate
data entry but also make real-time analysis possible.

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Corresponding author
Fei Ying can be contacted at: fei.ying@aut.ac.nz

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