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Productivity analysis of steel works for cost estimation of public projects in

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KSCE Journal of Civil Engineering (2012) 16(1):1-7 Construction Management
DOI 10.1007/s12205-012-0812-5
www.springer.com/12205

Productivity Analysis of Steel Works for Cost Estimation of

Public Projects in Korea
Seokheon Yun*, Hunhee Cho**, Yongho Tae***, Bangryul Ahn****,
Sung-Hoon An*****, and Youngki Huh******
Received March 20, 2009/Revised February 9, 2011/Accepted April 7, 2011

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Abstract

The steel fabrication and installation works in a steel-structured building project account for 20% of the entire construction cost. In
estimating construction costs, a few parameters are more significant than work item productivity. However, the Standardized
Productivity (SP) of steel works presented in Poom-Sam, which is the standardized estimating guide system used in the public sector
in Korea, has rarely been updated since its establishment in the 1970s. In order to update and improve its structure and figures, 15
construction sites and 5 steel fabrication shops were visited over a period of two years. From the study, it was found that the structure
of Poom-Sam was rather complex and outdated and that the average SP of the works analyzed from the research was approximately
85% of the current SP. Moreover, the effect of the productivity differences on total construction cost was approximately 10%. The
productivity improvements and amended Work Breakdown Structure (WBS) are attributable to the technology advancements in
equipment and construction methods over the past two decades. The results of this study will improve the reliability and accuracy of
cost estimation in steel works.
Keywords: steel works, productivity analysis, cost estimation, standardized productivity
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1. Introduction Resource-based estimation, which is an object-based method,

Costs related to steel fabrication and installation in a steel-
structured building in Korea is approximately 20% of the total
building cost, which makes the accurate estimation of such
fabrication and installation (termed “steel works” in this paper)
one of the critical factors for ensuring a project’s success. There
are four approaches to determine the cost of public construction
works in accordance with The Act on Contractors to which the
Government is a Party (enacted on January 15, 1995, last revised
on February 29, 2008) in Korea: estimation using actual prices of
previous transactions, resource-based estimation, historical-cost-
data-based estimation, and the appraised value method based on
quoted prices. Among these, the first method is suitable for
calculating only the material cost, and the last one is used only
when it is impractical to use prices under the abovementioned
provisions. Therefore, the other two methods are commonly
used in practice.
determines the cost by multiplying the unit price with each
quantity of labor, material, and overhead cost from Standardized
Productivity (SP), namely Poom-Sam, which is the standardized
estimating guide system that is used for public sector projects in
Korea. In addition, the historical-cost-data-based estimation
method determines the cost based on figures that are drawn by
statistically analyzing a number of contract prices obtained from
previous similar projects. The prices determined by the above
two methods are compared, and the method that yields a lesser
value is used to make an appropriate estimation in the public
sector.
Poom-Sam was first introduced in the early 1960s, and it has
been used for predetermining the construction costs of public
projects. The estimation based on Poom-Sam becomes the
budget for the projects, and it is used as one of the key criteria for
selecting contractors. Furthermore, considering that taxpayers
fund public projects, it is rather crucial for Poom-Sam to provide

*Member, Associate Professor, Dept. of Architectural Engineering, Engineering Research Institute, GyeongSang National University, Jinju 660-701,
Korea (E-mail: gfyun@gnu.ac.kr)
**Member, Associate Professor, School of Civil, Environmental and Architectural Engineering, Korea University, Seoul 136-713, Korea (E-mail:
hhcho@korea.ac.kr)
***Member, Research Fellow, Cost Engineering Research Center, Korea Institute of Construction Technology, Goyang 411-712, Korea (E-
mail:yhtae@kict.re.kr)
****Research Fellow, Cost Engineering Research Center, Korea Institute of Construction Technology, Goyang 411-712, Korea (E-mail: brahn@kict.re.kr)
*****Assistant Professor, Dept. of Architectural Engineering, Daegu University, Gyeongsan 712-714, Korea (E-mail: shan7208@hanmail.net)
******Member, Associate Professor, Dept. of Architectural Engineering, Pusan National University, Busan 609-735, Korea (Corresponding Author, E-mail:
ykhuh@pusan.ac.kr)

−1−
 Seokheon Yun, Hunhee Cho, Yongho Tae, Bangryul Ahn, Sung-Hoon An, and Youngki Huh
the most reliable information that can maximize the accuracy of
cost estimation of projects. Poom-Sam consists of three chapters
on Civil Works, Building Works, and Mechanic and Utility
Works, and provides detailed figures of materials, labor, and
equipment required to complete a unit of work. It also provides
thorough guidelines for users to enable the predetermination of
costs for public construction projects.
However, Poom-Sam has rarely been updated since its estab-
lishment, and thus, it has raised several issues with regard to pra-
cticability. In particular, the SP of steel works presented in Poom-
Sam is often said to be impracticable because it presents relati-
vely over estimated productivities and has rarely been updated.
Furthermore, the productivity data was based on outdated tradi-
tional construction methods, which hardly accommodated recent
technologies and equipment. The historical-cost-data-based esti-
mation that was introduced in 2004 is also rarely used because it
only accumulates only a few data samples. Therefore, the steel
works estimation largely depends on quotation; however, this
method lacks objectivity, and has become a target of independent
audit as well as the Board of Audit. Therefore, the most effective
solution to the problem is to improve and update the productivity
information presented in Poom-Sam.
In this study, major steel work items were investigated, and
their current construction methods and productivities were
analyzed and compared with the SP presented in Poom-Sam. In
addition, the construction cost was simulated based on real steel
work cases in order to analyze the effects of productivity changes
on cost.
To analyze productivity, major steel work items were selected
by referring to the work breakdown structure in Poom-Sam, and
15 construction companies and 5 steel factories were interviewed
and surveyed for a period of two years. In order to analyze their
productivity and construction methods, a systemic data collec-
tion form was developed. In terms of data collection for the con-
struction sites, detailed work schedules and daily work reports
related to steel works were investigated. For the steel factories,
the equipment performance, work crews, work processes, and
daily work reports were studied. After analyzing the amended
Work Breakdown Structure (WBS) and collected productivity
data, a case study was finally conducted to examine the effects of
the changes of real-life productivities on the construction costs of
two projects. In this paper, productivity is defined as work-hours
(wh) divided by the quantities installed or fabricated. The pro-
ductivity is commonly referred to as the unit rate (Thomas et al.,
1999).
2. Literature Review
2.1 Previous Productivity Studies
Previous productivity studies have mainly focused on topics
such as the definition of productivity in the construction industry
or works and factors affecting productivity. It is difficult to
define a standard productivity measure because most companies
use their internal systems, which are not standardized (Park et
−2−
al., 2005). Moreover, numerous factors influence construction
productivity. Researchers have concluded that it is difficult to
obtain a standard method for measuring construction productiv-
ity because of project complexities and the unique characteristics
of construction projects (Oglesby et al., 1989). The uniqueness
of construction projects and their non-repetitive operations make
it difficult to develop a standard productivity definition and
measure (Sweis, 2000). Although a few researchers have at-
tempted to develop common definitions and standard product-
ivity systems, these are not based on the consensus of academia
and industry (Park et al., 2005).
Moreover, studies on productivity also exist. O’Connor and
Huh (2006) collected and analyzed the crew production rates of
highway bridge works, mainly in order to improve the contract
time estimation. Niemelä et al. (2002) studied the effects of work
environment on labor productivity in a storage-building project.
Thomas indicated the quantitative effect of the fabricator on
labor productivity and analyzed the impact of material delivery
practices and weather conditions on labor productivity in struc-
tural steel erection activities (Thomas et al., 1999; Thomas and
Sanvido, 2000). Proverbs et al. (1999) reported the productivity
rates used by contractors and planning engineers for a specific
concreting operation at the site levels of three European national
construction industries from Germany, France, and the UK.
A few studies have also examined long-term productivity
changes in the industry, and have reported that technology − in
particular, equipment technology including hand tools and ma-
chinery − had marked an impact on productivity. Allmon et al.
(2000) found that technological advancement was the main
reason for increased long-term labor productivity. Goodrum and
Haas (2002) examined the productivity data for the 1990s that
was published in the USA and found evidence to suggest that
equipment technology changes resulted in improvements in
productivity. More recently, Kim (2008) analyzed the contribu-
tion of innovation on productivity and growth in Korea and
indicated that economic growth is related to R&D efficiency.
According to his study, R&D expenditure contributed 0.53%~
1.31% of GDP growth per year for the period between the 1970s
and the early 2000s. Thus, it can be assumed that the productivity
of steel works has improved by at least 117.2%~147.8% over the
last three decades.
As stated above, previous studies have concentrated on the
definitions or measurement methods, factors, and a few experi-
mental analyses. Considering that one of the main purposes of
productivity studies is to identify the manner in which producti-
vity changes influence construction costs, it is significant to col-
lect and monitor productivity and analyze the impact of updates
in productivity changes on construction costs. This is particularly
important in Korea where SP is the main standardized method
and guideline for estimating construction costs in the public sector.
2.2 The Standardized Estimating System in Korea (Poom-
Sam): Steel Structure Works
The productivity data of steel works presented in Poom-Sam is
KSCE Journal of Civil Engineering
 Productivity Analysis of Steel Works for Cost Estimation of Public Projects in Korea

Table 1. Breakdown of Structure of Steel Works in Poom-Sam 2.3 Standardized Productivity Data in Japan and the USA
Code Description The productivity data from Japan and the USA was investigat-
71. General Information of Materials ed. In Japan, construction cost is estimated by Bugakari, which is
711. Steel frame weight estimation the standardized productivity data and cost estimation guideline
712. Steel subframe rate of public building construction (MLITT, 2007). Japan’s steel
72. Steel frame Fabrication & Installation works section is divided into structural steel, subsidiary steel, and
721. Steel frame fabrication in plant steel erection, and it provides only productivity data. The Precast
722. Steel frame installation on site Concrete (PC) plate installation fastener, sleeve, stairs, and deck
723. Deck plate installation
724. Stud bolt installation & Steel subframe fabrication and installation plate categories are not presented. Although Bugakari’s overall
73. Safety Facility Installation & Dismantling formation is similar to that of Poom-Sam, it has only 10 practical
74. Lifting Equipment
items and is updated annually.
In the USA, unlike Korea and Japan, the government does not
741. Equipment installation and dismantling
742. Steel frame lifting and installation release standardized productivity data; however, private data
743. Rail installation for ceiling-mounted crane such as RS Means are widely used. RS Means steel works infor-
75. Cutting mation is included in RS Means Building Construction Cost
751. Steel plate cutting Data and RS Means Metric Construction Cost Data Division 5-
76. Welding Metals, and provides cost as well as productivity information
761. Gas welding (Waier et al., 2008). The daily output presented in RS Means is
762. Electric arc welding the average production by one work team for eight hours per day
77. Fire-Resistant spraying for steel frame under normal conditions. Although the crew-based productivity
78. Lightweight steel frame installation data is easy to understand because it reflects the work process,
the unit-based productivity data in Poom-Sam or Bugakari is
based on the data in Japan’s Bugakari. Steel Works are largely useful when calculated but difficult to comprehend.
categorized into general materials information, steel fabrication,
and installation. In terms of work items, Steel Works consist of 3. Usage of Poom-Sam and its Drawbacks
Welding (gas/electric arc), Cutting (manual/auto), Erection,
Deck plate installation, and Fire-resistant spraying, as shown in The steel works section in Poom-Sam consists of 8 major
Table 1. items and 12 sub-items. A survey conducted in this study found
Despite several revisions of Poom-Sam, the section for steel that only 42% of these items are being used frequently. More-
work neither provides practical guidelines nor is it regularly over, a few items were being used frequently only because of the
updated. The data for Steel erection and Deck plate installation owners’ requests and not because of either their reliability or
was last updated only in 1989, while that for Tower crane instal- convenience. Therefore, to some extent, the usage rate is less
lation was added in 1989. Fire-resistant spraying for steel than 40%. Steel frame erection, Fire-resistant spraying for steel
frames, Lightweight steel frame installation, and Stud bolt frame, and Steel frame fabrication and installation were found to
installation categories were first introduced in 1994, 2002, and be frequently used items (Fig. 1), because their categories are
2003, respectively. simple enough to apply to practice, whereas Cutting and Welding

Fig. 1. Current Usage Status of Steel Works’ Work Items Presented in Poom-Sam

Vol. 16, No. 1 / January 2012 −3−

 Seokheon Yun, Hunhee Cho, Yongho Tae, Bangryul Ahn, Sung-Hoon An, and Youngki Huh

were found to be rarely used items because of their complex
formation and outdated productivity data.
The survey results indicated that the SP presented in the steel
works section is not practically useful because of the following
three reasons. First, it has little reliability. It employs outdated
material and equipment and is rarely updated. For example,
although the main operating equipment in the current steel works
is a tower crane, instead of presenting the tower crane data, the
SP presents the data of “guy derricks,” which is no longer used.
Second, the WBS of Poom-Sam is rather complex and often
excessively subdivided. For instance, the Welding and Cutting
categories are itemized by the following three factors: thickness,
fire diameter, and oxygen pressure. Therefore, it is unrealistic to
collect accurate productivity data and apply them in real life.
Third, the explanations provided by Poom-Sam are ambiguous
to apply in particular cases. The experts who were interviewed
indicated having to frequently depend on precedent law cases in
order to resolve conflicts with owners, as regards the manner in
which Poom-Sam must be applied.
Therefore, this research recognized that before collecting the
productivity data, the WBS of Poom-Sam must be revised to
reflect the recent changes in work methods, equipments, and
technologies. Its ambiguous contents also need to be rearranged.
4. Data Collection and Analysis
4.1 Selected Work Items and Data Collection Methodology
Before selecting the work items for the study, a preliminary
study was conducted in order to rationalize the WBS items pre-
sented in Poom-Sam. Experts agreed that Electric arc welding
was the only item to be used among the Cutting and Welding
works in steel fabrication shops. Further, Lifting equipment and
Fire-resistant spraying for steel frames were to be revised by
reflecting recent equipment and construction methods. As a
result, eight items were finally selected for the study (Table 2).
Stud bolt installation, Rail installation for ceiling-mounted
cranes, and Lightweight steel frame installation were excluded
since they were either established recently or rarely used in
practice.
Data was collected for a period of two years − from January
2006 to December 2007. For construction sites, the construction
procedure was monitored, and schedule tables and daily work
reports were analyzed. The productivity data from production
report was statistically analyzed for the steel fabrication shops.
Table 2 shows the selected work items and 20 investigated sites.
4.2 Productivity Analysis
Table 3 shows the results of the statistical analysis conducted.

Table 2. Overview of Visited Sites and Selected Work Items

Works on survey (items in Poom-Sam)
No Site 72 74 75* 76
71* 73 77 78*
1 2 3 4* 1 2 3* 1* 2
1 S Plant ○ ○ ○
2 S Department Store ○ ○ ○ ○ ○
3 U Apartments & Store Complex Building ○ ○ ○ ○
4 J Dormitory ○ ○ ○ ○
5 H Office Building ○ ○ ○ ○ ○
6 T Public Corporation Branch Office Building ○ ○
7 C Museum ○ ○ ○ ○
8 H Animation Center ○ ○ ○
9 D Experimental Building ○ ○ ○ ○ ○ ○
10 H Plant ○ ○ ○
11 C Hospital ○ ○ ○
National Center of Korean Traditional Per-
12 ○ ○ ○
forming Art
13 Police Comprehensive Academy ○ ○ ○
14 IS Tower ○ ○ ○ ○
15 Y Library ○ ○
16 H Casting plant ○ ○ ○ ○ ○
17 Y Engineering ○ ○ ○ ○ ○
18 H Plant ○ ○ ○ ○ ○
19 Y Steel plant ○ ○ ○ ○ ○
20 H Steel plant ○ ○ ○ ○
Number of Sites 5 20 9 5 15 7 5 8
* excluded or simplified works

−4− KSCE Journal of Civil Engineering

 Productivity Analysis of Steel Works for Cost Estimation of Public Projects in Korea

Table 3. Summary of Data Analysis Results

Required Amount
Code Description Resource (unit) Ratio
Previous Revised
721 Steel frame fabrication in plant Total steel weight (under 60 ton) Steel workers (m·d/ton) 9.86 7.45 75.6%
Scaffolders (m·d/ton) 0.53 0.46
722-1 Steel frame erection on site Under 6 floors 87%
Steel workers (m·d/ton) 0.067 0.058
722-2 High tension bolt fastening Under 40 ea/ton Steel workers (m·d/ton) 0.84 0.78 86%
722-3 Welding on site Welding length (based on 6 mm thickness) Welder (m·d/m) 0.05 0.32 64%
722-4 Anchor bolt installation j22~j25 Steel workers (m·d/nr) 0.23 0.24 104%
Scaffolders (m·d/m2) 0.056 0.040
723 Deck plate installation 2
71%
Welder (m·d/m ) 0.04 0.02
Safety facility installation &
73 Scaffolders (m·d/m2) 0.020 0.017 85%
dismantling
Installation Scaffolders (m·d/nr) 42 27(+15)
Equipment installation and
741 Dismantling Scaffolders (m·d/nr) 42 26(+15) 98%
dismantling
Telescoping Scaffolders (m·d/nr) 6 7
742 Steel frame lifting and installation Tower crane Capacity (ton/day) 15 15 100%
762 Electric arc welding Welder(m·d/t) 1.73 1.52 88%
Painte r(m·d/100 m2) 0.076 0.056
Fire-resistant spraying for Using Vermiculite Material in Mechanics (m·d/100 m2) 0.061 0.025
77 76%
steel frame humid condition Special workers (m·d/100 m ) 2
0.039 0.051
Workers (m·d/100 m2) 0.084 0.048

Since the number of data points used for one productivity figure
from each site exceeded 10, the averaged productivity figure for
each work item was statistically significant even if the rate was
collected only from five sites. Quartiles of the sample were elim-
inated to prevent data distortion by outliers.
The productivity of the work item Steel frame fabrication in
plant is given by the number of laborers required for molding
(excluding welding), lining, and cutting and fabrication in order
to complete one ton of steel fabrication. Steel frame installation
on site includes erection, high tension bolt tightening, welding,
and anchor bolting. Column base mortar work was excluded
because Poom-Sam refers to general mortar, whereas the data
that was collected referred to non-contraction mortar.
The results indicate that on an average, the productivity ana-
lyzed in this study is approximately 85% of that presented in
Poom-Sam. Among the 11 items, Anchor bolt installation is the
only item whose productivity is higher than the Poom-Sam
standard. Surprisingly, the productivities of both the sub-items
related to Lifting Equipment, namely Equipment (Tower crane)
installation and dismantling and Steel frame lifting and installa-
tion, are unlikely to change over the decades. The current prod-
uctivity of Welding on site item was only 64% of the value
presented in Poom-Sam. For the Steel frame installation on site
item, the labor productivity averaged 85% of the value presented
in Poom-Sam. Moreover, the productivity of Electric arc welding
based on the converted welding length of 30 m/t was 88% and
that of Fire-resistant spraying for steel frame was 76%. On the
basis of the above results, it can be concluded that on average,
the productivity of steel works has significantly improved.
4.3 Cost Analysis
As discussed in the preceding portion of this paper, the
productivity analysis showed 15% productivity improvement on
average. However, this does not mean that the cost decreases by
approximately the same proportion, as the productivity improve-
ment influences part of the labor and equipment costs and not the
material cost. The effect of productivity improvement on the
total cost may vary with the quantity of material from one project
to another. Therefore, two projects were case-studied in order to
determine the effect of productivity improvement on construc-
tion cost. Table 4 outlines the following two projects that were
selected for the analysis: K police academy and S government
office building.
In construction cost analysis, although an identical standardiz-
ed system is a precondition, in reality, systems vary from one
project to another. Therefore, it is required to make several as-
sumptions in advance. In this study, the following work items
were excluded from the cost comparison:
• Work items for which the units were revised for productivity
measurement
Table 4. Two Projects Selected for Cost Analysis
K Police academy
S Government
office building
Public school building Public office building
Construction duration 2003-2008 2007-2009
Under 9 floors
Building size 12 floors
(25 buildings)
Total quantity of steel 2,076 ton 2,110 ton

Vol. 16, No. 1 / January 2012 −5−

 Seokheon Yun, Hunhee Cho, Yongho Tae, Bangryul Ahn, Sung-Hoon An, and Youngki Huh

Table 5. Result of Construction Cost Analysis (Unit: 1,000 won)

Project A Project B
Before (A) After (B) Ratio (B/A) Before (A) After (B) Ratio (B/A)
Revised works 1,271,548 1,007,110 79.2% 1,809,148 1,461,287 80.8%
Other works 1,962,073 1,962,073 100.0% 1,767,247 1,680,911 100.0%
Total 3,233,621 2,969,184 91.8% 3,576,395 3,142,199 87.9%

• Work items where cost was estimated by quotation
• Work items commonly used for other non-steel-related work
items such as tower crane installation and dismantling
• Work items that have an unreasonable standard estimating
system
The work items excluded from the two projects on the basis of
the abovementioned criteria accounted for 61% and 50% of the
total steel works cost, which means that the productivity of items
that accounted for 50% of the total cost was renewed. Table 5
shows that the estimated steel works costs were 91.8% and
87.9% of the costs estimated by Poom-Sam. Considering that the
productivity of half of the items was renewed and that the prod-
uctivity of each item was improved by 20%, the construction
costs are expected to reduce by 10%. In other words, the con-
struction costs for both the projects, which were estimated by
using SP presented in Poom-Sam, were 10% higher than the
industry norm. This resulted in increasing the bidding price by
approximately 10%, thereby wasting taxpayer’s money.
4.4 Discussion
The productivity analysis showed that on an average, as com-
pared with the current SP in Poom-Sam, which was established
at least two decades ago, the productivity has improved by 15%,
which may be equivalent to the reduction in the construction cost
estimation by approximately 10%. In other words, using the
existing SP would have led the government to overspend, which
has commonly been commented upon in ‘The Board of Audit
and Inspection Committee’ meetings.
Moreover, there is a policy issue regarding the manner in which
the benefit produced by improved productivity must be shared.
Construction companies continue to adopt new equipments and
technologies in order to improve productivity. If SP is renewed
each time that companies improve their productivities at their
own cost, to some extent, their efforts are wasted. Therefore, the
government and companies must fairly mediate the distribution
of the benefits arising from productivity improvement.
From a preliminary study, it was found that SP provides the
productivity of impractical construction methods and outdated
equipments. Further, the WBS of Poom-Sam was found to be
rather complex, which encumbers estimators’ understanding of
the system. This study suggested a practically simplified format
of SP that can be used for making the system more effective.
In this study, the productivity and cost of steel works was
found to be 85% and 91% of the current SP, respectively. The
productivity improvements are attributed to the technology
advances in equipment and construction methods over the last
two decades. However, as agreed upon by the professionals
involved in the study, the productivity improvement in the con-
struction industry appears to be lesser than that in other industries
because of hesitation in adopting new technological develop-
ments and deployments. Although a continuous technology de-
velopment is important for improving productivity, companies
would be discouraged if the entire reward was apportioned only
to contracting agencies and not companies. Therefore, the prod-
uctivity improvement should appropriately apply to Poom-Sam
through compromise between the government and companies.
In future studies, productivity of each steel work needs to be
analyzed with information that is more detailed. This will iden-
tify driving factors of productivity and will lead to better produc-
tivity management. Moreover, additional data for considering the
possible factors influencing productivity must also be collected.
Finally, follow-up-studies must be conducted for addressing the
manner in which Poom-Sam must be effectively updated, which
is important for maximizing the usage of the government budget.
Acknowledgements
This work was supported by the Korea Institute of Construc-
tion Technology (KICT) and the Ministry of Land, Transporta-
tion, Maritime Affairs (MLTM).
References

5. Conclusions
To analyze the productivity of steel works and influences of
productivity changes on construction cost, 15 construction sites
and 5 steel fabrication shops were visited over a period of two
years. The collected productivity figures were compared with the
SP values presented in Poom-Sam. Finally, a case study was
conducted on two projects to simulate the effect of productivity
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