Unit 3: Review of traditional construction models and a comparison of product
development processes with other industries (key-words: delivery, methods,
benefits, traditional construction process, lean thinking)
Aims: The general aim of this unit is to review traditional construction models and compare these models with other industry practice. Students will be encouraged to question current models and be innovative in developing lean solution to current problems
Procurement Process
The procurement process is defined as the process from the completion of design to the successful commissioning of the assembly of the building. Procurement is also represented by the contractual and financial arrangements although these are dependent on the parties involved.
Traditional Construction Procurement
The traditional form of procurement is where the designer does not have direct link with the specialist and all communication is via the main contractor who in many cases will not accept design liability. This results in a grey area of responsibility and liability as information is passed from one to the other. In general, the designer or the architect is the leader of the project and represents the client to implement the design process. The architect becomes more of a surrogate client and takes on the responsibility to make sure the project is delivered on time and on budget. The traditional method of procurement, the client appoints independent consultants, on a fee basis, who fully design the project and prepare tender documents upon which competitive bids, often on lump sum basis, are obtained from contractors. The successful tenderer enters into direct contract with the client and carries out the work under the supervision of the original design consultants. In the traditional procurement, the professionals are empowered to use best practice defined by their own professional bodies and education. The basic workforces in general play an inactive role towards the design and planning process. The basic workforces here work consistently if there are no interruptions in the production process. Such an environment generally encourages an adversarial attitude among the design teams. In terms of cost benefits, reduction of up to 30% can be achieved. While a reduction of 40% in delivery, time can be achieved but there is a little change in the quality of the product.
Innovative Construction Procurement
The innovative construction approach gives both experience and inexperience client hands-on involvement to determine the cost and quality of the intended design. The client would need a management with strong leadership and teamwork qualities in order to produce what is expected. Hence, the client, in terms of design and construction, has only one organisation to deal with. Such procurement was introduced to accommodate forever increasing diversity, complexity and standardisation of building techniques. There is also a growth in prominence of subcontractor and also the size of projects that demand for tighter time and cost targets thus requiring a more unified and purposeful management of the total process. Since the client acts as the surrogate designer, the client plays a major role in determining the viability of the design. The designer or architect would become the intermediary for the inception of the design and would assist the client to realize the completion of the project. In order to achieve this an interface or a medium have to be developed so that the client would be able to make precise decisions on a candidate solution from the available options generated by the interface. The client would also be involved directly in assessing the business related benefits of the choice of the method of constructions. In this procurement method, there is a direct involvement of the manufacturer in terms of design, costing and logistics. There is also a close relationship between the manufacturer and the main contractor in terms of delivery and site installation. This system of procurement is able to serve a greater number of clients in whom the clients will directly be in contact with competent and multi-discipline professionals in design, management and marketing. Each professionals has their own specialty and competent in respective fields of expertise. The management structure of this form of procurement is organised hierarchically according to the stages of product development. The basic workforce in this procurement process play a more pro-active role and continuously giving positive feedback in terms of the viability of the perceived design. Such a pro-active role amongst the basic workforce would also encourage speed of installation to meet a tight programme and minimise disruption. In the case of the Student Accommodation, Plymouth University, Plymouth, modular standardised units were installed in less than 10 days with minimal disruption and no additional scaffolding was required. Assessment of this process of procurement finds that savings in construction time with improved quality, leading to reduced site preliminaries and expensive callbacks. It is also found that this method of procurement reduces financial cost by earlier return of initial capital, with quicker and higher income from rental, less cost of temporary accommodation and increased asset value.
Fundamental Aspects of the Innovative Construction Procurement
The decision making process in the innovative construction procurement differs from the traditional in a way that key decisions need to be made early in the procurement process to avoid expensive alteration to the design. Decisions also need to be made on environmental implication and site related benefits in order to reduce its impact on neighbouring properties and site traffic. The effects of transportation logistics on cost and sizes and on the inter-relationships of modules also need to be taken into account in the decision making process. It is important to note that because this system of procurement rely heavily on the prefabrication process, therefore the initial space planning, subsequent detailed design, service integration and co-ordination are critical. The design needs to be completed prior to the commencement of manufacturing. The nature of this process of the innovative construction procurement is flexible according to the needs of the client. Some clients, for instance developers prefer the complete turnkey package which provides design, manufacture and erection services. However, in many cases the client will appoint an architect who is responsible with the overall design and co-ordination of all the specialist manufacturers. Alternatively, the architect may draft a performance specification for the works, which is usually done in consultation with one or more modular manufacturers. This is then used as a basis for tendering, either through a main contractor or directly to the modular specialists. It is important to remember that each module manufacturer undertakes the construction of its modules differently. The manufacturer will lend assistance and provide appropriate detailed drawings but will not be able to provide commercially sensitive product technical details. Therefore, it is essential that lead-in time be considered for prototyping, designing and manufacturing of bespoke modular units to coincide with other design process. If the configuration of design is reused from previous projects then designing and prototyping time will be greatly reduced. The lead-in time required from ordering to delivery of the modular units can be as short as 6 to 8 weeks if the modular units have been prototyped previously on similar projects and the production logistics are well established. As an example, a hotel project may require eight different modular units, internal, end bay, rooftop, and left- and right-handed units. However, the floor configuration is the same throughout the project. For building, which is considering employing the modular construction approach, extra time should be allocated for the manufacture of pre-production prototypes, which would identify potential design and manufacturing problems. It is suggested by The Steel Construction Institute, that a period of 4 to 6 weeks should allowed for the prototyping stage. Hence, there would be an adjustment to the lead-in time of delivery of 10 to 14 weeks. This lead may increase to 18 weeks especially when acquiring lifts and complex plant units. In order to reduce the lead-in time of delivery the main contractor has to create an effective partnership with the suppliers. Such a partnership has been proven successful on numerous projects for example in the case of Sainsbury, which acted as a client established a partnership with Construction Management Partners Schal to develop Sainsburys new Ecostore. Schal approached the development process by proposing several options to the client. Schal explored possibilities in developing new structural system, new floor system and new interior. Task forces were set up to tackle specific issues for example developing a new and economical floor system. Sainsburys partnership managed to produce a floor system, which reduced costs and programme. The floor system was tested and inspected in order to meet the demands of Sainsburys Ecostore. As a result, Sainsburys Ecostore looks aesthetically good and with construction time down to 16 weeks and cost savings equivalent to 32%. Looking at the long-term aspect of this approach, maintenance cost was reduced and the assurance of future work for all the project members.
Learning from Existing Delivery Methods.
Integrated Procurement Systems.
Integrated Procurement System is defined as an arrangement where one contracting organisation takes sole responsibility, normally on a lump sum fixed price basis, for the bespoke design and construction of a clients project. The fundamental characteristics of this system are the responsibility for the design and construction lies with one organisation, reimbursement is generally by means of a fixed-price lump sum and the project is designed and built specifically to meet the need of the client.
Advantages
The single point of contact between the client and the contractor that means the client has the advantage of dealing with one single organisation, which would be responsible for all aspects of the project. If the clients requirement were accurately specified certainty of final project cost could be achieved then the cost would be less when compared with other procurement. The use of integrated procurement systems enables design and construction to be overlapped and should result in improved communications being establish between contractor and client. These two characteristics enable shorter, overall project periods to be achieved and project management efficiency to be improved.
Disadvantages
The clients brief is often ambiguous and does not convey exactly what he is proposing to the contractor. Hence, difficulties may arise when evaluating tender submissions. The absence of a bill of quantity makes the valuation of variations extremely difficult and restricts the freedom of clients to make changes to the design of the project during the post contract period. The clients control over the aspect of design and aesthetics of the building is less when compared with other method of procurement.
Management-Orientated Procurement Systems
This system is defined as a process whereby an organisation, normally construction based, is appointed to the professional team during the initial stages of a project to provide construction management expertise under direction of the contract administrator (see fig. 1).
The main characteristics of this procurement are: The contractor is appointed on a professional basis as an equal member of the design team providing construction expertise. Reimbursement is based on a lump sum or percentage fee for management services plus the prime cost of construction. The actual cost is carried out by works or package contractors who are employed, co-coordinated and administered by the management contractor.
Advantages
The use of this system of procurement enables the commencement of the project to be accelerated, which in turn, should enable earlier completion to be achieved than when using conventional procurement systems. Early advice can be obtained from the contractor/manager on design, buildability, programming, materials availability and together with general construction expertise. This system has a high degree of flexibility to allow for delays, variations and rescheduling of work packages. Since the financial structure of this system is fragmented, the monetary failure of any works contractor will only have limited effect overall process. The application of individual work packages to carry out all construction work ensures that competition can be achieved on up to as much as 90% of the construction cost of the project and makes it possible to adjust the cost, or scope, of uncommitted work should the packages already awarded have exceeded their estimated cost.
Disadvantages
One of the fundamental aims of this procurement system is the elevation of the contractor to the status of a clients adviser/consultant with the result that the contractors contractual liabilities are limited, in the same way as other members of the professional team, to accepting responsibility of negligence in the performance of his management role. Although the contractor/manager is responsible for supervising construction and ensuring that work is built to the standards identified by the design team, the fact that his obligations are limited to his management capabilities means the client is liable for the cost of remedying any defects resulting from substandard performance of any works contractor who is unwilling, or unable, to rectify his own faults. The whole issue of maintaining quality control is problematic when using this procurement system. The client may need to appoint additional site supervision to avoid difficulties in determining the responsibility for defects and to ensure that the specified quality is achieved. The client does not have a firm price tender available before commencing work although both private and public accountability can be partially satisfied as the majority of the construction cost can be subject to competitive tender.
Client via Contract Design Consultants Quantity Surveyor Management Contractor Construction contractors Carrying out work packages
Contractual Contractors
Functional Relationship
Fig. 1 : Contractual and Functional Relationship of Management Contracting.
Summary
Synthesis
By looking at the fundamental aspect of the Innovative Construction Procurement and critically analysing existing procurement methods, it is possible to create a systematic framework for the Innovative Construction Method.
A summary of the fundamental aspects of the Innovative Construction Procurement: The commencement of the construction of the project needs to be accelerated in order to evoke speedy completion and ensure optimum capital gain. Early planning is needed from a management contractor or construction manager on design, buildability, programming, construction methods, procurement of plant and materials. The client wishes to have flexibility available to incorporate design amendments into the project during the construction period. The completion period of the project takes priority over the construction cost. The project would require sophisticated construction and management techniques in order to ensure success. The client wishes to be objectively involved in the overall management of the project. The client wishes to appoint a single organisation to be responsible for the design and management of the works and act as a consultant.
One is able to deduce from the summary that the innovative construction procurement has a similar management organisation as the management orientated procurement in which both require the contractor to act as the design and the construction consultant of the project. However, allowing the client to determine the success of the project. It is also important to stress that such procurement would need the liabilities of the project to be shared with the other participating members and not allowing the client to bear the burden of liabilities. Hence, in this point of view the innovative construction procurement differs from the management-orientated procurement.
This aspect of effective and pro-active partnership is also common in the aircraft and automobile industry in which the industry would create partnerships with sub-contractors to manufacture sub-components. The status of the sub- contractor is elevated to the same level as the main contractor and the client. Hence, the profits and the liabilities are shared between the members of the partnership.
Lean Thinking and Management in the Innovative Construction Procurement
In other industries, which employ a similar procurement to the Innovative Construction Procurement for example, the aircraft manufacturer Boeing Company has adopted, several key lean thinking principles to further enhance the communication between members of the design team.
Boeing Company has acknowledged the fact that one of the problems that a project is in trouble is when all parties are reluctant to make key decisions. This is partly due to a poor communication channels between relevant parties and an absence of required detailed construction documents and, poor flow of information. Boeing Company eliminated this problem by fully utilising the standard e-mail to make multi-billion decisions. Since Boeing Company had a clear and define aim to deliver its product on time and meeting the required quality standards, it was able to reduce untimely decisions. Members of the partnership were able to access and make necessary modification on the current database through the DCAC/MRM process.
Boeing Company also employed key lean principles in the manufacturing of the sub-components and the main component. Essentially, there are three components in Boeing Companys key lean principles takt time production, one piece flow and pull system. Takt time production describes the rate of assembly in a factory. Lean does not mean doing things faster; it means doing things at the right pace. To simply put it, the customers rate of demand establishes the pace of production. So, rather than simply maximising the rate of work, Lean sets the pace in the factory, ensuring that the customers needs are met on time.
One-piece flow system is the opposite of batch production. Instead of building many products and then holding them in queue for the next step in the process, products go through each step in the process one at a time, without interruption. Producing products one at a time continuously improves quality.
Pull Production is the opposite of push. It means products are made only when the customer has requested or pulled it, and not before. Doing so prevents building products that are not needed. After achieving a predictable pace of production, one piece flow, and reliable machinery, Boeing Company can operate in a pull production environment, allowing the company to provide products when customer need them.
Having such a principle, Boeing Company was able to eliminate complex solution, which was producing more waste and was harder to manage. Boeing Company was able to reduce overproduction and produce the exact amount the customer needs. Defects, excessive power utilisation and unproductive operations were also eliminated through this principle. Employing the Key Lean Principle has reduced lead in time, long setups and unplanned down time of machines, processes, or people. It also eliminated the movement of materials or information that does not add value to the product.
As a conclusion, such a principle, if applied to the construction industry, would bring benefits in terms of: Promoting modular construction, which offers considerable, benefits to the developer terms of speed of construction, the ability to pre-plan the construction phase of the work and reduced callbacks. Modular construction offer highly cost effective solution for medium rise buildings eliminating the need for a separate independent structural frame. Speedy completion leads to reduction in preliminaries, plant usage, site disruption and earlier rental or sales. Improvement in quality leads to an increase in rental or sales potential and client perception.
References
1. Bennett, J. & Jayes. S. (1998), The Seven Pillars of Partnering, Thomas Telford Publishing, London. 2. Boeing Co., Improving Our Production System, http://www.boeing.com/commercial/initiatives. 3. Gann, D. (1999), Flexibility and Chouse in Housing, The Policy Press, University of Bristol. 4. Neale, R., Price, A., Sher, W. (1993), Prefabrication Modules In Construction, Chartered Institute of Building. 5. Masterman, J.W.E. (1992), An Introduction to Building Procurement, E & FN Spon, London. 6. Rogan, Lawson, Bates-Brkljac (1999), Value and Benefits Assessment of Modular Construction, The Steel Construction Institute and The Oxford Brookes University.
ChatGPT Side Hustles 2024 - Unlock the Digital Goldmine and Get AI Working for You Fast with More Than 85 Side Hustle Ideas to Boost Passive Income, Create New Cash Flow, and Get Ahead of the Curve
Summary of The Subtle Art of Not Giving A F*ck: A Counterintuitive Approach to Living a Good Life by Mark Manson: Key Takeaways, Summary & Analysis Included