Renovation projects exhibit complex characteristics due to the presence of constraints that lead to cost and schedule overruns. Numerous researchers have concluded that the performance of renovation projects is typically lower than that of new construction projects. This paper discusses the initial phases of a research conducted at Michigan State University, which focused on developing a framework for production management of renovation projects. The emphasis of this paper is on the findings from literature review and interviews, pertinent to performance measurement in renovation projects that led to the framework development. However, the framework development and the framework itself have not been discussed. This paper primarily addresses two questions: (1) what are the complexities of renovation projects that lead to underperformance in cost, time, and quality? and (2) what are the limitations of state-of-the-art construction performance measurement systems for managing production in renovation projects? Interviews of 10 construction companies were conducted to identify current practices of production management in renovation projects. This research observed a lack of a formal production management process in renovation projects, with a limited use of performance measurement systems. The research identified essential attributes for avoiding schedule and cost overruns on renovation projects. 1. Introduction Renovation projects represent about one-third of the total expenditure spent on construction projects [1, 2]. In the late 1990s, a study conducted in the United States concluded that renovation projects including remodeling, reutilization, and rehabilitation constituted up to 50% of the total construction budget expended [3]. In the commercial and institutional sectors, the annual expenditure on renovation projects has increased from close to $20 billion in 1992 to approximately $120 billion in 2007 [4–7]. This increasing investment in renovation projects has been attributed to the growing needs of public owners and governmental institutions, which represent a major clientele for renovation projects, in order to maintain and upgrade their infrastructure and built facilities [8]. Moreover, renovation projects mostly offer an economically viable alternative for public owners in comparison to new construction, as multiphase renovation projects tend to eliminate the need to close owner’s operations during construction [2, 3]. While renovation projects are a growing sector of the construction industry, its performance is typically lower than that of new
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