Factors Influencing Contractor Performance in Indonesia: A Study of Non Value-Adding Activities

Non value-adding activities can be defined as activities that consume time, resources or space but do not add project value. This term is classified as waste in the language of Lean Production. Waste can significantly affect the business performance and productivity of contracting organisations. This paper aims to investigate the incidence of non value-adding activities within contracting organisations in Indonesia, focusing on non-residential building and infrastructure projects. Data was collected through questionnaires and personal interviews targeting 99 respondents from 46 different contracting organisations. Statistical analyses were performed to rank the importance of waste variables and waste causes variables for different categories of organisations. The findings from both literature and survey conducted suggest that repair on finishing works, delays to schedule and waiting for materials were identified as the key variables, whereas design changes, lack of labourers’ skill and slowness in making decisions were identified as the key waste causing variables of non value-adding activities. The paper recommends that to minimise the negative impact of non value-adding activities, contractors maintain detailed records of all events which occur on-site in relation to the incidence of waste.