CBA-Based Evaluation Method of the Impact of Defects in Residential Buildings: Assessing Risks towards Making Sustainable Decisions on Continuous Improvement Activities

Evaluating the impact of defects in buildings and ranking the most impactful ones enables construction companies to better choose which paths to take in light of continuous improvement activities to support more sustainable decisions regarding the design and operation of buildings. As a result, the risks of the different choices are more clearly identified while assessing all tangible and intangible aspects of residential building defects in a structured way. Although recent studies on managing construction defects in residential buildings have focused on monetary losses associated with maintenance activities based on the defect’s frequency and severity, these studies do not take into account the levels of customer satisfaction. To address this gap, this paper proposes a novel evaluation method of the impact of defects to support decision-making in managing defect occurrences in residential buildings. The goal is to rank the defects’ impact based on a combination of some critical aspects: frequency of occurrence, financial considerations on repairing such defects, the impact that these defects have on customer satisfaction, and the cost and complexity of preventing and minimizing these defect occurrences through continuous improvement activities. The method consists of a structured set of steps that use data from technical assistance departments and customer satisfaction surveys, where information about the users’ level of satisfaction and the occurrence of defects is available. In this paper, data obtained from a construction company were used to test and validate the proposed method. The method also examines the challenges and barriers associated with the technique and points out that difficulties in acquiring reliable data are a bottleneck for making conscious and sustainable decisions to address construciton defects. Moreover, the case study results highlight essential capabilities needed by companies to correctly assess the impact of defects, such as correctly logging data in a structured database and having skilled personnel to verify defects users might have complained about. The paper ends by proposing a set of guidelines to use the method and stressing that structured methods for decision-making are crucial to analyze construction defects in a structured way while also incorporating the user’s perspective. The proposed method is expected to improve sustainable managerial decisions where economic, environmental, social, and technical risks can be accounted for to enhance the quality of projects from the customer’s perspective. Such analysis can help optimize and prioritize the use of resources and minimize the economic impact of activities on the construction company.