CIB TG57 - Industrialisation inConstruction

CIB Publication 354

Proceedings

TG57 - Special Track 18th CIB World Building Congress

May 2010 Salford, United Kingdom

CIBTASKGROUPTG57‐INDUSTRIALISATIONINCONSTRUCTION

PAPERSANDPOSTGRADUATEPAPERSFROMTHESPECIALTRACK

HELDATTHECIBWORLDBUILDINGCONGRESS2010,10‐13MAY2010

THELOWRY,SALFORDQUAYS,UNITEDKINGDOM

SelectedpapersfromtheProceedingsofthe18thCIBWorldBuildingCongress.Proceedingseditedby:ProfessorPeterBarrett,ProfessorDilanthiAmaratunga,Dr.Richard

Haigh,Dr.KaushalKeraminiyageandDr.ChamindaPathirage

TG57SpecialTrackPapers(excludingPostgraduatePapers)reviewedby:Prof.FritsScheublinandProf.Dr.‐Ing.GerhardGirmscheid

CIBPublication354

TG57‐INDUSTRIALISATIONINCONSTRUCTION

PAPERSANDPOSTGRADUATEPAPERSFROMTHESPECIALTRACKThe existing strategies for industrialisation in construction can be divided into On‐siteindustrialisationandOff‐site industrialisation.Anothersplit in industrialisationstrategies isbetweenproductindustrialisationthatfocusesonthetechnologicalaspectsofbuildingandprocess industrialisationandProcess industrialisation that is concernedabouthowpartiesare cooperating, contractually and informally. It deals with Design and Build contracts orwithmore advanced strategies like PFI, DBFMO, etc.Within above defined scope specialattentionwillbepaidtodriversforindustrialisationsuchas:improvedquality,addedvaluefor clients, cost reduction and lack of skilled labour, barriers to industrialisation:conservatism, cultural issues and the position of architects and strategies forindustrialisation: process innovation versus product innovation, off‐site production versuson‐siteproductionandtheimplementationofexistinginnovativesystems.

CONTENTSPapersIndustrialisationinConstruction:MultipleActors,MultipleCollaborativeStrategies 1Bougrain,B.Forman,M.HaugbHowEnvironmentsShapeInnovation:TheCaseofPrecastConcreteCrosswallforMulti‐ 14StoreyResidentialBuildingConstructionPan,W.Soetanto,R.Sidwell,R.DigitalFabricationandMassCustomizationforConstructingArchitecture:Suggestions 26fromSomeRecentCaseStudiesPaoletti,I.SustainabilityandProcessBenefitsofModularConstruction 38Lawson,R.M.Ogden,R.G.IndustrializationforSustainableConstruction? 52vanEgmond‐deWildedeLigny,E.L.C.PostgraduatePapersTheCriticalSuccessFactors(CSFs)totheImplementationofIndustrialisedBuilding 64System(IBS)inMalaysiaKamar,K.A.M.Hamid,Z.A.Alshawi,M.TheIBSBarriersintheMalaysianConstructionIndustry:AStudyinConstructionSupply 77ChainPerspectiveNawi,M.N.M.Lee,A.Arif,M.ConstructionIndustrializationandUseofPrefabricatedElementsAppliedinHospital 93BuildingsProduction:CaseStudyintheTechnologyCenteroftheSarahNetworkofRehabilitationHospitals(Crts),BrazilLukiantchuki,M.A.Caixeta,M.C.B.F.Fabricio,M.M.FormworkSpecific,ProcessOrientatedOperational‐Hours‐Consumption‐Model(OHC‐ 105Model)Kersting,M.Girmscheid,G.OptimizationoftheLifecycle‐CostsofStreetMaintenancewithinaGivenMaintenance‐ 117StrategyFastrich,A.Girmscheid,G.BusinessModel:TheCooperativeProductionNetworkthatEnablesMass‐Customized 130ProductionMethodsintheSwissPrecastConcreteIndustryRinas,T.Girmscheid,G.

Life‐CycleServiceProvision‐ConstructionKitforEnergeticallyOptimizedBuilding 144Lunze,D.Girmscheid,G.RiskCoverageCapacity‐TheNeglectedParameterwhenAllocatingRiskinSuccessful 157andSustainablePPP‐ProjectsPohle,T.Girmscheid,G.TheRoleofKnowledgeManagementinImprovingtheAdoptionandImplementation 169PracticesofIndustrialisedBuildingSystem(IBS)inMalaysiaAbdullah,M.R.Egbu,C.CIBBrochure 181Disclaimer 183

Industrialisation in Construction: Multiple Actors, Multiple Collaborative Strategies

Bougrain, F. CSTB, University Paris Est

(email: frederic.bougrain@cstb.fr) Forman, M.

SBi, Aalborg University (email: maf@sbi.dk)

Haugbølle, K. SBi, Aalborg University

(email: khh@sbi.dk)

Abstract

This paper examines industrialisation strategies followed by different actors of the construction industry: a client, a small builder of individual houses and a large contractor associated with a company developing and selling home furnishing. In the paper cooperation is considered as a form of process industrialisation. The economic literature usually distinguishes between two types of collaborative agreements: contractual and relational. Contractual elements provide guarantees. Relational factors bring trust and tend to favour learning among actors. The three case studies focus on collaborations during the course of these projects. They reveal that collaboration is never purely formal or relational. There is always a mix of contractual and relational governance mechanisms. Collaboration becomes more contractual once the concepts come closer to the market stage. At the R&D phase, cooperation tends to be more relational to promote trust and learning among partners.

Keywords: industrialisation, collaboration, innovation, contracts, relations

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1. Introduction

The building and construction industry is often perceived as a laggard for innovation compared with other industries. The fragmentation of the industry, the procurement process mainly based on tendered price and the conservatism of employees of the building site are often put forward to explain this situation. But the construction industry is also looking for new methods, approaches and tools that will improve its performance (Brousseau and Rallet, 1995). Industrialisation, prefabrication, concurrent engineering, supply chain management, clients’ participation have been considered as ways for the industry to improve its practices.

During the period following World War 2 several initiatives were launched to promote industrialisation in construction. In France these attempts resulted from the demand of the State that guaranteed the construction of thousands of social housings. But industrialisation has not been as successful and widespread as in other industries. In most Western countries the uptake of industrialisation and off-site manufacture is limited. The needs for diversity, the heterogeneity of the demand, the change of the demand during the course of a project, the resistance of the workforce on the building site, are barriers to the development of these approaches.

According to Davies and al. (2009), construction projects are ranging from unique megaproject to standardised one. The aim of this article is to focus on one side of the spectrum (the standardised projects) and to examine the process that allows industrialisation and to present which collaborative strategies were developed by the actors involved in those projects.

The second and third sections define industrialisation and explain how relational and contractual governance mechanisms are influencing collaboration. The following section draws upon three case studies: A French builder, a client working worldwide in the hospitality industry and a joint-venture made up an international contractor and a company developing and selling home furnishing worldwide. Results are discussed in a concluding section.

2. Industrialisation in the construction industry

The range of stakeholders working in the construction industry is broad. Construction cannot be limited to the definition given by the International Standard Industrial Classification (ISIC). It comprises not only the creation, renovation, repair or extension of buildings and engineering constructions but also upstream (manufacturing), parallel (architectural activities and technical consultancy) and downstream activities (facility management). All these actors are concerned by industrialisation but at different levels (Sexton and al., 2007).

The concept of industrialisation mainly concerns the suppliers of the construction industry who provide standardised and industrialised products. The model of product and process innovation developed by Utterback and Abernathy (1975) indicate that once a dominant design is established then the efforts in the industry focus on rationalisation and on process innovation to reduce cost and

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improve productivity. Industrialising the process is a way to rationalise it and to reduce production costs.

At a first glance the activity developed by architects and technical consultant is not industrialised. But even their activity can be standardised. As mentioned by Drejer (2004, pp557), the fact that “every service delivery is unique” is misleading and does not mean that every service is new. Services are mode of elements that remain unchanged and elements subject to developments.

Similarly construction project can be more or less standardised according to product and process standardisation. “Product standardisation depends on the extent to which a client specifies a one-off outcome. Process standardisation depends on the extent to which tasks and components can be simplified and repeated” (Davies and al., 2009, pp105). At one extreme routine projects are based on repetitive tasks and provide standardised outcome. At the opposite a unique project can require non-routine processes. Most projects lie within this range and “involve a combination of standardised and customised elements” (idem, 105). This also means that a unique project can be achieved by using standardised processes.

According to Alinaitwe et al. (2006), there are several ways to consider industrialisation in construction.

The first is to distinguish between on-site and off-site industrialisation:

• Off-site industrialisation refers to pre-fabrication of building elements that will be assembled on site. It can offer numerous benefits such as a decrease of trades and interfaces to manage and coordinate on site, better working conditions, better control and more consistency, a fall of waste on and off site (Blismas, 2007).

• “On-site industrialisation refers to the application of advanced tools and technologies on building sites” (idem, 2006, pp222). Just in time deliveries or identification of elements with bar codes are examples of on-site industrialisation.

The second option is to separate product industrialisation from process industrialisation. “On-site and off-site are both examples of product industrialisation. On the other hand, process industrialisation is concerned with how parties are cooperating, contractually and informally.” (idem, pp222).

3. Cooperation and construction

As it was aforementioned, cooperation is a form of process industrialisation. It is a way to have access to closely complementary and dissimilar activities (Richardson, 1972). It is sought when ex-ante co-ordination between different phases of production is necessary. These collaborative relationships can take a hierarchical form. According to the transaction cost economics, parties tend to apply legal contracts in order to safeguard against the hazard of opportunism. Hybrid forms such as cooperative

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agreements are suited when asset specificity is intermediary, transaction neither recurrent nor occasional (Williamson, 1991). However contract can never stipulate every potential contingency. This is particularly the case with complex project. Complex performance contracts are usually incomplete and excessively detailed. Thus they may be difficult to enforce (Lewis and Roehrich, 2009).

Conversely the relational perspective focuses on the role of trust. When trust replaces uncertainty and opportunism, informal obligations may constitute a more stable framework for interaction and learning (Lundvall, 1988). It promotes solidarity and information exchange. Informally it facilitates the enforcement of obligations. Dealing with interorganisational learning capacities, Lundvall (1993) introduces the concepts of technical, communicative and social learning and technical learning:

1. Technical learning exists when interaction between users and producers induces an understanding of reciprocal needs.

2. Communicative learning involves the establishment of technical codes, tacit and specific to the partners.

3. Social learning limits opportunism by creating similar behavioural codes.

Relational and contractual governance mechanisms are also considered as complementary. Developing complex contracts require the development of social relations (Poppo and Zenger, 2002). Contractual safeguards work as a guarantee and provide incentives to the other party. It stimulates cooperation by proposing processes for adapting to change.

The construction industry is often criticised for its inability to cooperate and to learn from one project to the other. Winch (1998, p.271) mentioned for the UK “the exploration trap where technologies are continually re-invented in a circular rather than progressive manner (…)”. Gann and Salter (2000) considered that construction firms tend to re-invent the wheel and to favour novelty rather than standardisation. Slaughter (1993) also indicated the problem linked to the duplication of effort that occurs among builders who use stressed-skin panel.

The fragmentation of the industry brings flexibility but it does not favour cooperative agreements. As indicated in the Egan (1998) report “the extensive use of subcontracting has brought contractual relations to the fore and prevented the continuity of teams that is essential to efficient working.” It also means that firms do not have any incentives to invest time in order to cooperate because of this discontinuity of teams.

4. The case studies

The results presented below are based on the work undertaken in the international collaborative project 'TRANSUSERS – transforming the construction sector through user-driven innovation'.

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TRANSUSERS was carried out between 2007 and 2009. Two research centres from Denmark and France were involved in this project.

4.1 Selection and origin of the cases

Cases were selected in two countries: France and Sweden. Winch (2000) has stressed the importance of national construction business systems. Construction is an industry with centuries of tradition but it usually takes place in a national context. Design, site works, maintenance and operating always need to be accomplished but the relationships between the actors accomplishing these tasks will vary from country to country. Each country has its own business system. Winch distinguishes between three types of business systems:

• The Anglo-Saxon system is characterised by “a greater reliance upon liberal market values, relatively low levels of state regulations….” (idem, 90);

• The corporatist system depends more on « negotiated coordination between the ‘social partners’, greater willingness to intervene in the market to protect social values… » ;

• The « étatique » system has more extensive coordination of the economy by the state relatively high level of worker protection … and a desire to promote national champions in various industrial sectors ».

France and Sweden represent two different systems. The organisation of each system has a very strong influence on the diffusion of innovation. For example Boxenbaum and Daudigeos (2007) showed that the difference in the level of diffusion of prefabricated elements in concrete in France and Denmark resulted from the interaction of several factors: labour supply, path-dependency (experience in the use of concrete within enterprises), national Danish legislation promoting prefabricated elements (no similar preference in France) and the agency of professionals.

The cases will focus on different actors of the construction industry:

• A French builder specialised in low energy houses which develops new methods for manufacturing prefabricated elements;

• A client working worldwide developing a new approach to renovate its hotels;

• An international contractor and a company developing and selling home furnishing in the world who developed a new house concept.

Information was gathered through publications when available and mainly face to face interviews with the stakeholders of the projects.

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4.2 Industrialisation in the hotel industry: the case of « hotelF1 »

With 3,871 hotels and 461,698 rooms, the group ACCOR covers every segment of the world hospitality market (90 countries), from budget to upscale. HotelF1 is the leader on the low-cost hotel segment. The 371 hotels are mainly located in France (282 hotels and 20,924 rooms). To be economically viable the low budget hotel chain was constructed according to an industrialised process. But this was possible because collaboration was established between the client and one contractor at the design stage. The joint use of contractual and relational mechanisms generated efficient results.

At the design stage a project team was constituted outside the traditional boundaries of the group ACCOR. This decision aimed at circumventing potential resistances which could have appeared within the group. This team collaborated with a contractor who had developed several concepts of prefabrication. The original proposal written by DUMEZ exceeded 50% the costs of objectives laid down by the project team (Ben Mahmoud Jouini and Midler, 1996). Consequently, a phase of co-operation began for the design of a prototype between this company and the project team in order to develop solutions which lower the initial costs of construction. A contract was signed between the two actors for fourteen months. But most of the time the client and the contractor went beyond their contractual agreement. The two partners rapidly trusted on another and worked with an open book approach. This information disclosure preserves the stability of the agreement and favours innovations1 . Indeed the financial impacts of any new proposal were rapidly computed. The stake of the collaboration consisted in optimizing the design of the hotel in order to industrialise the construction process and to limit the future exploitation costs. Despite the six months spent at the design stage, the first prototype required 5000 working hours to be built. The goal of the client was laid down at 2500 hours. The optimisation which followed, contributed to lower the execution time to 3500 hours for the second prototype. For eight months a value analysis was developed within the project team and showed the economic viability of the project. The prefabrication of the sanitary block contributed to reduce the construction costs. The project team was also able to reach the construction cost which was initially targeted because all the people involved in the construction of the three first hotels were the same. This entails learning among partners. To avoid relying on a single contractor at the construction stage, group ACCOR worked with two other companies. But the initial contractor got 50% of the market (fig.1).

The first hotel was built in 1986. This industrialised approach which was defended by the project managers since the first stages of the project, contribute quickly to the development of the chain. It also prevented the reactions of possible competitor projects.

In 2003, the managers of the low-cost chain thought that it was necessary to adapt the brand to changes in the marketplace. This resulted from the fall of the occupancy rate. Consequently a

1 "Because of the limited role of the price mechanism and of the uncertainties surrounding the appropriation of rent, information disclosure will be essential to the existence and stability of hybrid forms" (Menard, p.159, 1996).

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refurbishment of the hotel portfolio was launched in order to create a more contemporary room while still offering customers the lowest price in the market. The project aimed at redesigning rooms, the cafeteria and common areas, and reworking the brand’s logo, signage (“Formule 1” is replaced by “hotelF1”) and other aspects of its visual identity. Concurrent engineering was one of the key word of the renovation project. The length between the decision to renovate the hotels and the effective renovation of the first hotels helps the technical direction to improve its design, to ameliorate the supply-chain management and to optimise the process. For the renovations of the hotels long-term contracts (2007 – 2010) were signed between the technical direction of “hotelF1” and 10 selected contractors. It provides partners with opportunities to learn from one another. It also contributes to the establishment of common codes of information between partners. By providing the actors involved in the renovation project with an identical set of references, it favours communication, develops the stability needed for exchange and enhances the efficiency of coordination.

Figure 1: Nature of collaborative relationships between hotelF1 and its partners

Long-term planning (until 2010) results from the decision of the technical direction to adopt an industrialised approach. Construction is often characterised by the lack of continuity of teams that is essential to efficient working. This kind of framework agreements aims at tackling this problem and at improving efficiency and quality. In this case the standardization of the hotels of the F1 chain and the fact that most hotels were built at the same period, opened the opportunity for an industrialised renovation.

4.3 The prefabrication of individual houses

“Maisons MACCHI” is a family owned company, created in 1946 and employing 22 people. Specialized in the construction of houses, the company is characterized by its innovative approach

Design stage Construction stage Renovation

hotelF1

Contractor

hotelF1 hotelF1

Contractor A Contractor B

Contractor C Contractors

Relational cooperation based on trust

Contractual relationship (long term and recurrent contract)

50%

25%

25%

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concerning a method for manufacturing prefabricated elements. It is certified ISO 9001: 2000 and can be considered as one of the leading company on the French market for low energy houses.

The prefabricated process “MACC3” which was patented by the entrepreneur gives the company a competitive advantage on the market of low energy houses. This process rests on a prefabricated insulation system. The expanded layer of polystyrene (from 30 to 50 centimetres of thickness) is provided by a leading manufacturer. It is pressed in freshly-mixed concrete. The prefabricated wall is also very innovative because it integrates heating tablecloths and plumbing networks.

The development of the innovation results from the know-how accumulated by the contractor during his career and from partnerships established with several actors of the construction industry. These collaborations are both based on formal and informal agreements.

A polystyrene supplier, leader in his field, is frequently solicited by the contractor to deliver new products which are integrated into the construction process. For example, in the first times of collaboration, polystyrene was delivered in modules of 1 m by 1.20 m. The contractor then asked his supplier to cut out polystyrene on his manufacturing unit in order to deliver a product that fits the features of the construction process.

After a failure with a local manufacturer who intended to imitate the constructive process a collaborative agreement was signed with a German manufacturer who is in charge of prefabricating the walls. This company does not fully master the realisation of the prefabricated walls. Consequently it still benefits from the technical assistance of one engineer and two employees of “Maisons MACCHI”. The aim of their actions is to check that the electric boxes are stuck to the good place and the insulation layer in polystyrene is well positioned.

A partnership is also engaged with a financial institution which grants loans with reduced interest rates (3.5% up to 50000 Euros to every household who buys a low energy house).

Besides this partnership strategy “Maisons MACCHI” has decided at the end of 2008 to create an affiliate called “MACC3” in charge of the marketing and distribution of the prefabricated elements. The creation of “MACC3” intends to improve the commercial visibility of the product and to separate two activities (the construction of individual houses and the manufacturing and distribution of the prefabricated concrete elements) which do not require the same competences and are not directed toward the same customers.

4.4 BoKlok

BoKlok is a concept developed by IKEA and Skanska in 1996 focusing on low and middle income households. Both companies identified a market for new and affordable housing in Sweden. Based on user involvement and analysis of users, houses for prefabrication was designed and produced. The first apartment buildings were built in Sweden in 1997. Since then the concept has been exported to the other Nordic countries (in 2002 – 2003) and the United Kingdom (2006/2007). Skanska as a

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contractor and IKEA as a company developing and selling home furnishing had complementary and dissimilar activities but were pursuing similar objectives. They were competing on different markets. It facilitated the cooperation. IKEA, had long been looking for a partner in the building industry to help build new homes for low and middle income households. Skanska wanted to become the first construction company in Sweden to create a broad product on the basis of an entirely new approach. Both companies covered competences on knowledge about designing and furnishing, and of fabrication and producing and handling construction.

Figure 2: Nature of collaborative relationships between BoKlok and its partners

A marketing analysis indicated that the users wanted low price, did not want to live in high-rise blocks, but with access to neighbours and to green areas, a safe environment, light and airy, and use of natural materials. Also access to schools and public transportation was rated high. But the localisation did not need to be close to urban centres. Based on this information the IKEA team designed a compact living home for 1 to 3 people on 50 to 75 m2. After evaluating the project both company created a joint-venture in 2001. BoKlok is owned jointly by Skanska and IKEA (fig. 2)2. BoKlok AB is a concept company with its head office in Malmö, Sweden. It owns the brand and develops the successful business concepts. The company also awards licences, i.e. the right to build and sell BoKlok on a specific market.The licensee is granted the right to run the business under the BoKlok brand, and is given access to the licensor’s know-how and administrative and commercial assistance. This means that collaboration between the license and the licensor is purely contractual while the collaboration between IKEA and Skanska is a mix of contractual and relational mechanisms.

The production of houses is done off-site. A factory is located in Sweden. Collaboration with Moelven, the leader of the Scandinavian market in wood-based building products, was established and a part of the deliverances of buildings still comes from this company.

2 At Skanska it is a separate business unit (Residential Development Nordic) owned by Skanska that took over most of the activities.

BoKlok

Manufacturer of

wood-based

building products

Licensees (Denmark,

Finland, Norway,

Sweden, UK) Contractual relationship

JV – 50% IKEA – 50% Skanka (at the construction stage).

At the design stage the collaboration was more relational.

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Each license can develop its own strategy. For example in the UK, the companies that bought the right to build and sell BoKlok proposed a ”Try Before You Buy” scheme. It gives people the opportunity to rent a two-bedroom BoKlok apartment for a six-month period before buying the property outright. If they opt to buy their home their rental payments will be refunded, less a small administration fee.

The homes have been designed around factory processes that enable them to be far more efficiently constructed in quality-controlled conditions, than would be possible through traditional site based construction. They are constructed from timber frames and come with a host of standard features, including extra high ceilings and large windows for a light and airy feeling, laminated wood flooring, IKEA kitchens and huge balconies to upper floor flats. The buildings are transported in 3D to the site, where assembling and finishing takes place. At the end of 2009 about 4 000 apartments at over 100 locations in five different countries have been built.

5. Discussion and conclusion

The discussion examines the ways in which firms successfully collaborated with one another.

The aim of off-site industrialisation is to benefit from the efficiency associated to manufacturing (high volumes and reduction of production costs). In construction like in any other industry, the success of industrialisation requires more pre-planning on a project. Indeed any industrialised process does not accept changes as these changes are expensive once the manufacturing process has been launched. To limit the risks linked to changes collaboration between the stakeholders of a project is necessary at the design stage.

The three projects indicate that collaboration between various stakeholders was at the origin of the success of the three innovative projects. No single actor would have been able to achieve one of the three projects by relying on its own resources and competencies.

The group ACCOR collaborated at the design stage with a contractor. Because the uncertainty surrounding the project was very high, firms preferred to base their relationships on trust. Collaborative R&D requires trust to be efficient. Formal contractual relationships would have been inflexible to manage. Each actor brought its core competences: hotel trade for the client and construction for the contractor. Concurrent engineering was also developed. The contractor assigned a team of three employees at the design stage to coordinate the relationships with the finishing companies and the client. The stake of the collaboration consisted in optimizing the design of the hotel in order to industrialise the construction process and to limit the future exploitation costs.

The success of the renovation stage also resulted from the time spent at the design stage. Long term contracts were signed with contractors to favour communication and learning, develop the stability needed for exchange and enhance the efficiency of coordination. But learning effects were also optimised because the client drove the process. It coordinated the renovation sites and elaborated tools that favour learning.

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Similarly the collaboration and technical assistance provided by the builder of individual houses (“Maisons MACCHI”) to its manufacturer is a way to be sure that no bad surprise will be discovered on the building site. In the case of BoKlok lots of resources were also spent by IKEA and Skanska on design and on market studies to be sure that the concept that was developed would be profitable.

In the three cases the actors spent time and money at the design stage. This time was considered as an investment and not as a cost. In every case cooperation among actors took different forms. It was never purely formal or relational. There was always a mix of contractual and relational governance mechanisms. Collaboration became more formal once the projects became more stabilised. In the case of “HotelF1”, arm’s-length transactions were used instead of market transactions at the R&D stage. It promoted trust and learning among partners. Once industrialisation and construction were launched, contractual mechanisms became prevalent. Similarly IKEA and Skanska based their collaboration on trust at the R&D stage. Once the design phase was achieved and the project became closer to the market, a joint-venture was created.

To be successful the collaboration has to involve actors with complementary competences but also actors who follow different objectives:

• In the case of “HotelF1”, the client wanted to create a new market and to fast become the leader of this market. The contractor who already had built several individual housings by using prefabricated panels, wanted to benefit from its competitive advantage and to diversify its market.

• In the case of BoKlok, IKEA is primarily interested in supplying low-budget solutions for housing. This is leverage for selling more furniture whereas SKANSKA is interested in a new and industrialised housing concept to lower construction cost in order to win market shares in the housing area.

• In the case of Maisons MACCHI, despite the small number of commands, the manufacturer expected to benefit in the long run from the development of a growing market. The house builder wanted to increase its share on the low energy houses market, to reduce the painfulness of the building site, to improve the productivity and to limit building misconception.

Industrialisation involves the rationalisation of the whole building process and no single actor can handle the whole process. Collaboration appears to be one of the key elements of industrialisation strategies because all the stakeholders involved during the course of a project need to share the same view over the project. Successful industrialisation requires integrating all the stakeholders of the building process at the beginning of the project. But to improve the efficiency and the quality of the construction process, cooperation needs a leading actor who drives and coordinates the process and coordinates the network of partners. The driving actor can be represented by two stakeholders who established a strategic and formal partnership (such as IKEA and Skanska in the BoKlok case).

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Acknowledgement

The researchers wish to thank the funding agencies that sponsored the research: the Danish Enterprise and Construction Authority (Erhvervs- og Byggestyrelsen) in Denmark and PUCA (Plan, Urbanisme, Construction et Architecture) in France.

References

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How Environments Shape Innovation: The Case of Precast Concrete Crosswall for Multi-Storey Residential

Building Construction

Pan, W. School of Architecture, Design and Environment, University of Plymouth

(email:wei.pan@plymouth.ac.uk ) Soetanto, R.

Department of Built Environment, Coventry University (email:aa4129@coventry.ac.uk )

Sidwell, R. Countryside Properties

(email :Robert.Sidwell@cpplc.com )

Abstract

Precast concrete crosswall is an innovative offsite production technology, and has played a significant, although debatable, role in the attempts to industrialise construction. Despite well-rehearsed benefits from using crosswall, its uptake in UK multi-storey residential building is currently experiencing a significant slowdown. This calls for research to understand the trajectory of such technology. This paper aims to reveal the influence of external environments surrounding housebuilding organisations on the utilisation of crosswall for multi-storey developments. The research was carried out through a longitudinal case study of using crosswall for constructing 20 multi-storey buildings by a leading UK housebuilder in recent six years. The driving forces and inhibiting factors of external environments in relation to the Political, Economic, Socio-cultural, Technological, Environmental and Legislative (PESTEL) aspects for taking up crosswall during this period were identified. The results suggest that, although it seemed that the housebuilder drove the process of adopting and utilising the innovation, a combination of external forces shaped the development and diffusion of the technology in the company. This complex construct of influences imposed significant impacts on the decision-making process in the company of developing, utilising, reviewing, improving and/or abandoning innovation. Although the company had achieved a technically viable solution with due commercial and efficiency considerations through the six-year learning curve, the use of crosswall was recently suspended, which was primarily attributed to the changes of external environments and consequently in their supply chains. The findings complement the techno-economic and socio-technical theories of innovation, but also expand the spectrum of external environments which shape innovation at organisational level. The paper urges housebuilding organisations to address the dynamics of environments for innovation, but, more importantly, calls for more effective innovation-friendly environments for future residential building.

Keywords: innovation, multi-storey building, offsite production, PESTEL, precast concrete crosswall

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1. Introduction

The past one hundred years saw dramatic changes in the use of offsite production methods in UK residential building. Despite the previous research attempts to review the historical account of offsite technologies (e.g. Glass, 2000; Marshall et al., 1998; Ross, 2002; Housing Forum, 2002), few explored the process in which those technologies were developed, adopted, diffused, reviewed, and dropped or re-developed at organisational level. Although some research provided strategies for managing offsite (e.g. Pan et al., 2008), there is little information on the interrelationship between organisational strategies for utilising offsite and challenges arising from changes to macro environments of innovation. Similar to the ‘back and forth’ in the history in relation to the take-up of offsite, such technology is again facing challenges from the current housing market downturn resulted from the global economic recession (Building, 2008). Precast concrete crosswall is an innovative offsite production technology, which employs factory precast, precision engineered, concrete components, each of which is custom designed and manufactured offsite to suit the specific project (The Concrete Centre, 2007). Crosswall systems incorporate internal walls normally suitable for direct decoration and external walls as either perimeter wall infill or integrating cladding to satisfy functional and aesthetic requirements (Glass, 2000). Crosswall technology has played a significant, although debatable, role in the attempts to industrialise construction. Despite well-rehearsed benefits from using crosswall, its uptake in multi-storey residential building construction in the UK is currently experiencing another significant slowdown. This calls for research to understand the trajectory of such technology and review its uptake in residential building in turbulent environments surrounding housebuilding organisations.

This paper aims to reveal the influence of external environments on the utilisation of crosswall for multi-storey developments at organisational level. This research follows on a previous study which revealed an insight into the utilisation of crosswall for multi-storey residential buildings in the organisational context (Pan et al., 2009). The paper investigates the factors which inhibited and enabled the adoption and development of crosswall technology in a series of multi-storey crosswall projects. It identifies the roles played by project stakeholders in the process, and then examines the organisational strategies for managing crosswall technology in response to changes to external environments. The study was focused on multi-storey residential buildings rather than low-rise housing. For multi-storey residential buildings this paper adopts the definition of multi-family buildings with more than four storeys (Guertler and Smith, 2006). The focus on multi-storey buildings appears under-researched but important as that some 36million European households are in high-rise residences, equivalent to one in six of all households in Europe (ibid.). Also, high-rise development had attracted a strong attention in the UK in the past decade (Knight Frank, 2009).

2. A brief historical review of UK crosswall construction

The end of the First World War saw an urgent huge need for housing in the UK. With the then government’s encouragement, large numbers of different construction systems were approved (Marshall et al., 1998; Ross, 2002). However, precast concrete housing construction did not gain its

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popularity until the mid 20th century. Precast concrete and other forms of industrialised construction were used to address the problems of the loss of some 200,000 houses due to bombing and damage to about 25% of the entire building stock during the Second World War, shortages of building materials and labour, and an increasing population at the time (Marshall et al., 1998). As a result, more than 250 precast concrete ‘systems’ have been acknowledged, but less than 100 were deemed to be sufficiently robust or durable to warrant further commercial development (Glass, 2000).

In the early 1960’s, another further, sudden increase in demand meant that precast concrete systems were used yet again as a replacement for other unfeasibly labour-intensive conventional construction methods. By 1960, over 165,000 precast concrete dwellings had been built, ranging from small single storey bungalows to large high-rise blocks (Glass, 2000). Also, other concrete systems were ‘imported’ to the UK mainly for the construction of high-rise buildings, of which the large panel system suffered a major setback in the Ronan Point collapse in 1968 caused by a gas explosion in a block of flats in East London. Ronan Point’s construction was a result of over-speedy execution of the precise concrete panel system where a lack of structural continuity at the joints of precast components, leading to progressive collapse, was to blame. A housing industry in desperate need of dwellings could be vulnerable to such shortcuts. In the public’s perception, precast concrete in housing has become unfortunately associated with 1960’s ‘social engineering’, resulting in ill-matched housing types and social groupings, and ‘social malaise’ of high-rise dwellings, although it had been proven that actual structural failures were due principally to poor understanding of materials technology, poor workmanship and a lack of quality control on site (Glass, 2000). The 1970’s saw a reaction against system building in general. This was basically as a result of the problems of maintenance and repair caused by poor design, inadequately controlled prefabrication processes, and/or poor construction due to the use of unskilled labour and/or poor site management (Marshall et al., 1998). In the early 1980’s, the then Conservative government had introduced ‘Right to Buy’ legislation which led to the purchase of a great number of system-built local authority houses. Those houses constructed with pre-cast components were often affected by carbonation or chloride attack, many of which were refused by building societies for mortgage or re-mortgage (Ross, 2002). After mid 1980’s, significant developments took place in component-based systems, but there was very little in the way of complete housing systems development (Housing Forum, 2002).

In 1998, the publication of the Egan Report called for radical improvement in quality and efficiency of housing construction. This desire, coupled with the pressure from increasing housing demand, formed the backdrop for the growing interest in offsite. In a similar manner to previous historical efforts, the housebuilding industry has again come under pressure to adopt offsite and modern methods of construction (MMC) (ODPM, 2003). The invention of the term MMC intended to reflect technical improvements in prefabrication. However, a recent survey identifies that the extent of crosswall application in the UK domestic sector was low (Pan et al., 2008). With effects on the housebuilding industry from the recent economy recession, there had been criticisms on the over-provision of small flats in high-rise residential developments (Knight Frank, 2009). Associated with the significant slowdown of high-rise developments was the dramatic reduction of the use of crosswall for residential building. Most housebuilding organisations were forced to review their use of construction methods and examine their technology strategies in order to survive the economic recession.

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3. Methodology

The research was carried out through a longitudinal case study of the use of crosswall technology in the context of eight projects of a leading UK housebuilding organisation. These projects, labelled A to H (Table 1), altogether, included 20 multi-storey buildings, providing 1930 units of apartments. The superstructure of all the buildings was designed in crosswall methods. These buildings ranged from the first crosswall multi-storey constructed by the housebuilder in 2004 to the current high-rise up to 20 storeys utilising crosswall sandwich panels, which represents the six-year innovation journey of the company of exploring the use of crosswall technology. The longitudinal research design was grounded on theories regarding innovation as a complex and challenging multi-factor process (Jones and Saad, 2003), for which the period of six years and the cross-project nature of the investigation enabled a valid and reliable in-depth case study of the innovative technology.

Approaches to studying technology innovation abound in the literature, and they originated from the simple linear ‘market-pull’ and ‘technology-push’ (Schumpeter, 1934) theories and evolved to more complex, integrated innovation models like ‘socio-technical’ (Trist, 1981) and ‘techno-economic’ (Freeman and Perez, 1988) approaches, and ‘systems integration and networking’ model (Rothwell, 1992). However, the linear theories ignore the complex interrelations between the different aspects of the system in which innovation is developed and diffused. The more complex, integrated models, by focusing on some of the aspects of the systems of innovation, overlook the other important ones. In this study, the strategic management tool of PESTEL framework (see Johnson and Scholes, 2002) was used for the analysis of the environmental context including political, economic, socio-cultural, technological, environmental and legislative aspects. The external inhibiting and enabling factors to utilising crosswall technology were examined.

This organisational case study involved document analysis and personal interviews and workshops with the personnel of the housebuilder from both senior management and project operational levels which covered the roles including design, technical, construction, estimating, buying, innovation and sustainability. Representatives of the supply chains of the housebuilder were also interviewed to validate data on the utilisation of crosswall methods. Case study data consisted of interview notes, observations, documentary data, impressions and statements of participants, and contextual information. Given the diverse sources of information and the nature of accumulating data through the projects and buildings, the process of constructing case study data suggested by Patton (2002) was used for analysis, which included assembling the raw case data, constructing a case record and writing a final case study narrative presented chronologically and thematically. Three concurrent flows of activity: data reduction, data display and conclusion drawing and verification by follow-up discussions with key participants were used for making sense of the data. These analytic procedures and strategies enabled the meaningful presentation of the results of the study and the development of relevant arguments.

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Table 1: Details of the projects studied

Project Year of construction

Number of storeys

Number of buildings

Number of dwellings

Building detail Procurement Construction method

A 2004 9/7 2 (a/b) 47/55 Full external scaffold, no basement

Contractor 1; newly formed project team

Precast concrete crosswall system: crosswall panels and precast concrete floor planks topped with 75mm screeding

B 2005 5 1 80 Full external scaffold, no basement

Contractor 1 Same precast concrete crosswall system as in Project A

C 2006 13/8/5 3(a/b/c) 72/57/42 Mast climbers (no external scaffold), on and off-grid undercroft car park

Contractor 2; extended supply chains; developed effective project team

Similar precast concrete crosswall system to in Project A, and insitu concrete for off-grid undercroft car park

D 2007 10/9 2(a/b) 68/47 No basement, curved façade

Contractor 3; built supply chain database; R&D benchmarking

Similar precast concrete crosswall system to in Project A, and offsite produced curved façade

E 2007 7/5/4 3(a/b/c) 119/77/64 On and off-grid undercroft

Contractor 2; Similar precast concrete crosswall system, but 125mm wall system developed from usual 150mm; tailored undercroft design to avoid insitu concrete work

F 2008 9 1 152 3 storey podium Contractor 2; kind of partnering agreement

Similar precast concrete crosswall system for upper floors; insitu concrete work for podium

G 2009 (suspended)

16 5 630 Crosswall with sandwich panels, with podium

Contractor 2; multinational supply chains

Similar precast concrete crosswall system, but with sandwich external wall panels, eliminating on-site cladding & external scaffold

H 2009 (suspended)

20 3 420 Crosswall with sandwich panels, with podium

Contractor 2; multinational supply chains

Similar precast concrete crosswall system, but with sandwich external wall panels, eliminating on-site cladding & external scaffold; additional engineering work to ensure structural stability

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4. Results and analysis

4.1 Factors enabling & inhibiting crosswall take-up

The six-year period studied saw dramatic changes to the macro environments surrounding the housebuilder. These changes were interwoven and complex, but could be structured, for clarity, in the categories of political, economic, socio-cultural, technological, environmental and legislative aspects. The enabling forces were considered to include: government housing and planning policies in delivering sustainable communities and urban regeneration; government promotion of offsite and MMC; economic development leading to a stronger purchase market; rise of ‘buy-to-let’ market; preference of urban lifestyle of special social groups like younger generation and ‘key workers’; precast concrete technology development from their historical versions; a good number of suppliers and specialist contractors available in the market; increasing public concerns on environmental issues; and increasingly stringent building regulations and voluntary higher environmental standards. These changes, together, shaped the adoption and utilisation of crosswall technology in the company. The interviewees claimed that the primary driver for the housebuilder to utilise crosswall was its simplicity which enabled the company to construct buildings up to 20 storeys using ‘in-house build’ management, i.e. without the need to engage a specialist main contractor. This was seen as a major gain from both procurement and contractual aspects. The major inhibiting factor was considered to be the lack of housing sales as a result of the market downturn and a rapidly decreased preference of purchasers for flats in multi-storey buildings.

4.2 Roles of project stakeholders in the 6-year innovation process

A range of project stakeholders were identified in the six-year process of taking up crosswall technology, which included the housebuilder, the specialist concrete contractor and their supply chain, Health & Safety Executive (HSE), building controls, planning authorities, institutions, customers and the public. The housebuilder aspired to explore a technological solution to constructing multi-storey buildings without engaging a specialist main contractor. The housebuilder drove and led the process of adopting and developing crosswall technology in the innovation journey. They took the roles of the main contractor and project management, which covered the responsibilities of outline designs, detailed design coordination, procurement and construction. The specialist concrete contractor undertook detailed designs, supplied the crosswall system and provided installation services. The specialist concrete contractor and their suppliers were proactively involved in the whole process, and they were keen to expand their crosswall market share in the UK domestic sector. Other project stakeholders, e.g. HSE, building controls and planning authorities, were not involved in the decisions of adopting and developing the crosswall technology. However, their positive feedback on reduced health & safety risk and improved build quality by utilising crosswall systems encouraged the diffusion and further development of the technology across the company. The institutions, e.g. The

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Concrete Centre, British Precast Concrete Federation, Structural Precast Association, were involved in early consultations of utilising crosswall. The useful information on this type of construction provided by the institutions contributed to knowledge accumulation in the company. The institutions also helped diffuse learning from the projects by publishing industry case studies. The customers, i.e. the investors, individual dwelling purchasers, and the public, were not involved in the decisions of utilising crosswall. However, the general promising UK housing market during the period from the late 1990’s to 2007/2008 encouraged the urban development of multi-storey buildings (Knight Frank, 2009). This provided a good opportunity, at the time, for the market expansion of crosswall technology which is associated with fast construction (The Concrete Centre, 2007).

4.3 The housebuilder’s responses to environment changes

Against the changes to the macro environments, the housebuilder responded in the aspects of technological development, procurement management, design and cost re-engineering, and organisational learning. These responses had evolved over the time and the projects.

The responses in the aspects of technological development, procurement management, design and cost re-engineering were concurrent and reflected in the whole process of innovation. Within the context of the then promising housing market and positive policies favouring urban regeneration and high-rise developments marked by the publication of the government’s Sustainable Communities Plan (ODPM, 2003), the housebuilder adopted the initial crosswall method for Project A & B, and adapted it to the business context and project specifics. The approach was then modified for Project C through F. The modifications to the initial method included: a) replacing full external scaffold by mast climbers, b) developing 125mm crosswall panels from usual 150mm, c) re-engineering design to enable on- or off-grid crosswall undercroft/podium structures to avoid insitu concrete work, and d) modifying design, engineering and contractual solutions to suit partnering arrangements. These modifications sustained the use of crosswall in the subsequent projects by not only improving the technical and management performance but also providing the ‘cost engineering’ means. Through Project A to F, the housebuilder had developed and proved a technically feasible and cost-effective solution to constructing multi-storey residential buildings using ‘in-house’ management. The innovation journey demonstrated an effective learning process of the housebuilding organisation in terms of managing and implementing crosswall technology. A learning culture was evident in the organisation and reflected in their routine management processes and procedures. Following the process, a ‘novel’, more appropriate system, crosswall sandwich panels, was re-invented for Project G & H in order to secure better value by integrating cladding into external wall panels in factory and therefore eliminating the use of external scaffold on site. However, these two projects were recently suspended due to the negative economic climate and a consequent significant drop of housing unit sales of the company. The discussion with senior managers of the housebuilder suggests that the company was seeking alternative development solutions for these two projects. The company expressed no aspiration to build any further multi-storey schemes until market conditions improve.

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5. Discussion

5.1 The market and innovative construction technology take-up

The process of innovation, although apparently led and driven by the housebuilder, was predominantly enabled by the promising housing market from 2003 to 2007/08 but inhibited by the market downturn from 2007/08 to 2009. The suspension of Project G & H was based on considerations for the market rather than the use of any specific construction method. These results do not support the simple linear ‘market-pull’ or ‘technology-push’ innovation theories (Schumpeter, 1934). They also question the more complex, integrated innovation theories, although they show the involvement of a range of project stakeholders in the process of innovation and a complex construct of influences from these parties. The results indicate that the market conditions played the most significant role for enabling as well as inhibiting innovation. When the ‘market-pull’ emerged, it was the housebuilder who drove and led the innovation process. However, it was also the market, when the pull function disappeared, that ‘killed’ the innovation, no matter how successful it was. Clearly, this finding is not in agreement with that of many other innovation studies in context other than UK housebuilding, which are more associated with claims for technology-driven innovation. The attributes of UK housebuilding suggest that the industry is commercial driven, with a strong focus on land acquisition. Also, despite significant promotion of offsite and MMC (Egan, 1998; ODPM, 2003), UK residential building is still dominated by conventional methods. Few housebuilding organisations appear to position technological innovation as their corporate strategy. In the current housing market conditions, there are increasing criticisms on the over-provision of small flats in urban high-rise developments. Without supportive government policy, the future of high-rise residential developments is questionable, so is that of their associated technologies, e.g. crosswall. A far more conservative approach to development, concentrating on family homes in suburban and fringe-rural settings, is likely to emerge from the current crisis, and most companies will avoid high-density apartment schemes in more urban locations (Knight Frank, 2009). As suggested by Gann et al. (1998), a characteristic of the UK new-home market is that purchasers and users who, as a whole, are a fragmented and passive group with a strong preference for a traditionally-looking house. If the future of UK new-build homes mainly lies in traditionally-looking family homes, the future of industrialisation of UK housebuilding will then probably face significant market and socio-cultural resistance.

5.2 Champion and leadership to sustain innovation

The housebuilder took the leadership in the process of adopting and utilising crosswall. Such leadership was claimed by Jones and Saad (2003) to be required to bring about substantial internal and external structural and attitudinal changes needed. However, such leadership was effective only when the ‘market-pull’ existed. When the ‘market-pull’ vanished, the housebuilder’s leadership became ‘rootless’ and eventually disappeared. The housing products and their associated building technology went back to more conventional options. This result

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suggests that the leading or championing force needs to be stimulated and nurtured in order to sustain innovation. The study of the process taken by the housebuilder for adopting, developing and subsequently suspending the use of crosswall provides empirical evidence which supports the suggestion of Tushman and Moore (1988) that innovation should be linked to an organisation’s strategy and driven by an assessment of external opportunities and threats. Managing innovation involves mediation between external forces for change and internal forces for stability. This also echoes the suggestion by Gann et al. (1998) that construction firms must function effectively in their role as intermediaries if technologies originating upstream in the supply chain are to be integrated and used successfully within buildings. Therefore, this paper questions the conventional criticisms of housebuilders for their reluctance and inability to innovate (see e.g. Ball, 1999). Instead, the results suggest that the macro environments, part of the systems of innovation, shaped the up-take of crosswall of the housebuilder.

5.3 Regulations and technology innovation

Regulations are part of the institutional setting, within which technological innovation flourishes, vanishes, or remains inert. However, the results of this study suggest that regulations, although important to the company’s technology use, did not directly affect the innovation journey of utilising crosswall. Regulations normally do not specify construction methods to use but provide performance standards to achieve. Therefore, in the housebuilding sector, this performance-based regulatory framework leaves freedom to developers and housebuilders and their professional advisers to decide the use of construction methods. This freedom typically leads to a commercially dominant technology decision-making of individual organisations at corporate or project level. As a result, an industry-wide take-up of any specific innovative construction technology is difficult to take place. Gann et al. (1998) argued that detailed sector-specific knowledge is required to develop an appropriate regulatory framework for buildings, particularly if accommodation and stimulation of technological innovation is one of the desired outcomes. The sector-specific knowledge covers types of market, technologies, firm-level competencies, structure of industry and competition, and technical infrastructure. Such knowledge is naturally perceived to be obtained by the regulatory bodies, i.e. the government and its agencies, which is important if technological innovation in high-rise building is to be stimulated. However, whether or not high-rise residential buildings should be supported is another issue.

5.4 Innovation systems and technology take-up

The use of crosswall systems can result in a fast, simple construction process on site followed quickly by finishing trades, which should contribute to industrialisation of UK housebuilding. This advantage has been of great interest to hoteliers, student accommodation developers and other similar clients with high demands on time and quality, whilst it was much less appealing to housing which was generally less repetitive (Glass, 2000). However, opportunities arose for precast concrete construction from the start of the 21st century marked by a revival of high-rise

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developments in the UK. Nelson and Nelson (2002) believed that further development of the innovation systems idea would be significantly facilitated if more formal economic evolutionary theory were able to take abroad institutional analysis. This belief is supported in this study in which the trajectory of innovative crosswall technology reflected the prominence of reviewing and responding to changes to macro environments for housebuilding organisations. The innovation journey of the housebuilder of utilising crosswall provides evidence to elucidate the two-way interaction between the evolutionary and institutional economic theories, with physical and social technologies respectively (see Nelson and Nelson, 2002). Furthermore, the six-year journey of adopting, adapting, modifying and re-inventing crosswall technology suggests different roles and effects of evolutionary and institutional economic theories in technological innovation. Within the encouraging institutional context, the primary driving force to innovate was the company who led the process of implementing crosswall methods. The continuous engagement with the technology provided the company with a possibility to build up to 20 storeys without engaging a specialist main contractor. This technology breakthrough led to the management breakthrough and consequently significant cost savings and efficiency improvement. At the end of the six-year journey, despite a technologically viable solution for high-rise developments and matured project management expertise, the utilisation of crosswall was suspended. Therefore, albeit an overall consistence with the innovation systems idea, the results of this study suggest that institutional structures have a determinant effect on technological innovation, rather than that technologies shape institutional structures, in the current UK housing sector. However, when an encouraging institutional context existed, the driving force of technological development by the housebuilder was a must for furthering innovation. Nelson and Nelson (2002) posited that physical and social technologies co-evolve and that this co-evolutionary process drives economic growth. The findings of this study, however, suggest an unbalanced interdependence between these two schools of theories reflected in the current UK housebuilding practice.

It would not be surprising to see that many housebuilders will set back to the use of more conventional construction methods. It appears that this cultural setback, coupled with the significant skills loss in UK housebuilding (Knight Frank, 2009), will lead to a longer time and a more difficult process for the industry to take up innovation when the ‘market-pull’ revives in the future. This potential risk is significant given the under-supply of housing marked by the government’s pledge to deliver three million new homes by 2020 (Stewart, 2007).

6. Conclusions

This paper has revealed the influence of external environments on the utilisation of crosswall for multi-storey residential developments in the UK. A combination of political, economic, socio-cultural, technological, environmental and legislative forces shaped the adoption and diffusion of crosswall technology in UK housebuilding. This complex construct of influences imposed significant impacts on the decision-making process in the housebuilder of developing, adopting, adapting, modifying and/or abandoning crosswall technology. Although the company had achieved a technically viable solution with due commercial and efficiency considerations

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through the six-year learning curve, the use of crosswall was recently suspended. The housebuilder proactively drove the process of innovation. However, it was believed to be the significant slowdown of high-rise developments that ‘killed’ the innovation. This phenomenon was primarily attributed to the changes to external environments and consequently in their supply chains. Despite generally-recognised theories of innovation regarding it as systems, the results from this study suggest a dominant influence of macro environments on technology innovation. The intention of the housebuilder to, or not to, implement innovation was fairly dependent on changes to macro environments. The findings complement the techno-economic and socio-technical theories of innovation development, but also expand the spectrum of external environments which shape innovation at organisational level. Housebuilding organisations are urged to address the dynamics of macro environments for innovation in order to mitigate external risks. Knowledge accumulated through innovation journey should be maintained to gain market competitiveness for any revival of crosswall in the future. More importantly, more effective innovation-friendly environments are required. The housing and planning policy environments should enable ‘market-pull’ for innovation and embrace the leading and championing force in order to sustain innovation in future residential building.

References

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Digital Fabrication and Mass Customization for Constructing Architecture: Suggestions from Some

Recent Case Studies

Paoletti, I. Dept, BEST, Politecnico di Milano (email: Ingrid.paoletti@polimi.it)

Abstract

The scenario of construction industry is nowadays pushed to evolve due to different factors: first of all the enhanced capabilities of parametric design which enables designers to anticipate technological constraints, secondly the evolution of cnc machines and production devices which allows new degrees of freedom in some types of component production. Those factors influences the construction industry giving new tools to better respond to architecture contemporary request of flexibility, unusual shapes, high performances, personalization of materials and technologies. Digital fabrication – aiming at fastening and improve information transfer from design to construction - and mass customization - a type of production flexible to customer needs at a cost nearly equal to standard products - can offer to the designer new instrument to control architecture construction and introduce innovative procedures or technologies. This paper, after analysing some recent case studies, most of them focused on innovative building envelope components which seem to better take into account these new challenges, gives some suggestions for taking advantage of the benefits of digital fabrication and mass customization for constructing architecture.

Keywords: construction industry, digital fabrication, mass customization, parametric design, innovative technologies

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1. Digital fabrication and mass customization in construction industry

In the recent past, placed at the end of the operative chain, strangled by contracts with general contractor and impeached by a traditional company culture, construction industry seemed to have few possibilities for development. Today, the construction process becomes more and more global with a high international competition and the industrial production is necessarily obliged to reply to the requirements of architects in terms of flexibility and innovation.

On the one hand in fact, there is an exponential diffusion of industrialized components, due to opening markets competitivity, the improvement of performances and quality control, but also due to their capability of suiting technological complexity and construction flexibility of many architectural projects. A tendency near to the “technological push”, i.e. to the pressing of new products and systems towards design, pushed by an industry which searches for new markets investing in technology. On the other hand, the exchange between these technological potentialities expressed by the industry and the capacity by many representatives of the contemporary architecture to interpret it in an innovative way is increasing. This tendency can be seen as a “need pull”, a research of satisfaction which can generate profitable interferences with the technological push. In reality, in fact, it is difficult to find models exclusively referred to one or the other, but more often a wide range of hybrid solutions: the genesis of a technology can be found in an intermediate position between the necessity to satisfy a need and the availability of solutions for this need (Verganti, Calderini, 2005). The reasons that have caused the present industrialization state in the construction process, have not only been technical. The technological progress has to be included in the wider context of the structural transformation suffered by the construction sector since the beginning of the 1900 until now. In fact, the push to the industrialization has involved, in addition to the merely technological and industrial aspects, also those social-economical, scientific, cultural and ideological (Banham, 1957; Nardi, 1990)

One of the most important passage of contemporary architectural evolution in terms of representation, freedom of design and evolution, has been the development of the digital platforms, which permit the passage from an arbitrary representation of complex forms to an almost objective one. These computer systems support the increase of technical and computable performances by series of functions linked to the planning and the modelling of the architectural project, which have repercussions on the technical possibilities, accelerating the phase of feasibility. "In a certain manner, nowadays, there is a change from the mental imagine of the project to its instrumental imagine and it is completely different, i.e. the creation is modified by the instrument, by the software, independently of the quality and the performances of the instrument." (Virilio in Burkhardt, 2005, p.8). Livio Sacchi (2005) asserts "(...) numerous software are now available aiming at the management of the modelling of the architectural space, in an evident creative meaning, and there are more and more architects who declare expressively that their projects or buildings would not have been possible to imagine or to realize without the assistance of these computer programs. Thanks to the digital systems, the interaction is still stronger between the preliminary phases of the project process, the following executive operations and at last the construction and the management." (p. 29). Placing side by side digital tridimensional instruments, such as the parametrical software, to the usual bidimensional

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techniques, not only increases the possibility of representation of the project, but adds useful information for the realization of the project, introducing often innovative processes

This is connected to parametric softwares that unable a more direct production from design drawings, and production modalities, nowadays realized by flexible CNC machines.

Parametric softwares unable to add strategic informations to drawings for multipurpose aims: resolve complex geometries, add data, increase performances and reduce time in production design. Some of them actually used by designers are Digital Project, Generative Componentes,Grasshopper and Revit. They have different possibilities but most of them can be linked to fabrication thanks to specific scripts (fig. 1).

Figure 1: Construction photo and digital model of SOM, project for Kuwait City. The 3d lamella model was instrumental in the design documentation process

On the other side construction industry is proceeding towards a production made of custom products but on a large scale, with simplified processings and systems of light pre-fabrication, introducing mass-customization production systems. This term indicates a personalization of products which, recognizing the importance of the requirements for each single project, does not renounce to the conception of efficient technologies at a contained costs. Thus, products are realized to measure for each project and not as standard production for market forecasts. In construction industry this means merging a custom but craft-hand approach to architecture, that has always been the most suitable but the most expensive and time consuming, to a rigid industrialized approach, fast, light but sometime unsuitable for particular architectural solutions. Those new paradigms completely change the perspective of professional practice, integrating in the design phase skills to meet client and architects needs, thanks to a very competent know-how and to lean production technologies.

These innovations are more and more placed upstream the used technology, it is the result of synergies supported by digital technologies, which depart from the division between product and process towards a transversal research, in which both slopes are linked in a delicate balance between the possibilities offered by industry and research and the potential applications. Many systems of the building are concerned by digital fabrication and mass customization process, from structure to roof, but some of them seem to catalyze the major attention: architectural envelope. Those components seem to absorb and enhance availabability of informations that parametric design allow thanks to softwares, and will be analysed in the following case studies.

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2. Case studies

Traditional forms of buildings is radically changing in the last decades. This is due to a renovated cultural context, new technological boundaries, innovative digital tools and industrial building components. Those factors give a new freedom to designer, who is spured to experiment more complex shapes, using materials and construction systems according to completely unusual methods. Therefore contemporary architectural envolopes appear more complex not only in their morphology but also in their constructive configurations, raising new technological requirements. In order to meet those requirements construction industry is very soon involved in the design process, in order to dialogue with complex configuration and discretization of shapes geometry, increasing mathematical definition of surfaces, at a very early stage.

Four examples will be analyzed with different technologies. The first one is Post Tower by Murphy and Jahn, with an extruded façade structure, the second one is Zaha Hadid Innsbruck station with double curved glass and steel envelope, the third is Gehry New York office building, with a cold curved unit system façade, and the last one is Atelier Jean Nouvel New Genoa Fair building with a special metal cladding.

2.1 Post tower by Murphy and Jahn, extruded façade structure

Post Tower by Murphy and Jahn, a 160 meter high building that stands at the edge of the city adjacent to the Rhein River. park. The split, shifted oval tower is oriented to the Rhine and the city, facilitating views from the city and minimizing negative wind effects through its aerodynamic shape. In plan the split oval wedges are separated by a 7.40 m wide space. The connecting glass floors at 9-story intervals form skygardens, which serve as communication floors and elevator crossovers. (Figg. 2-3). The tower has a twin-shell facade, enabling natural ventilation, especially in the spring and fall. The glass outer shell protects from rain, wind and noise and allows for placement of the sunshades. Glass from floor to ceiling optimizes daylight. The peculiarity of this project from industrialization in construction perspective is the steel structure of the façade that has been designed and engineered in order to face high speed wind pressure but a the meantime to have a light section of brackets. It has been studied by Thyssen Krupp and Hoesch Bausysteme, two big steel companies in Germany, a special geometry that could allow the external fixing of the glass façade, the possibility to open it for ventilation and a reduced section of steel brackets. This has been achieved by extruding steel bars in two pieces, one with a T shape and the other one with a parenthesis shapes and fixing them together in a unique profile for glass positioning.Extrusion of steel has not been so easy at it needs stronger machines, higher forces, and matrix gets used very fast due to hot temperatures. However this technique applied to steel really allowed a 60 mm section profile for a floor high of 160 metres with strong structural performances. (Fig. 4-5).

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Figure 2-3: Murphy and Jahn, Post Tower Bonn, 2002. View of the cladding process and of the extruded steel brackets.

Figure 4-5: Murphy and Jahn, Post Tower Bonn, 2002. View of the steed extruded profile that has allowed a very thin section whilst garantueeing high structural performances.

2.2 Zaha Hadid Innsbruck station with double curved glass and steel envelope

Zaha Hadid Innsbruck stations is the last project presented in this paper and probably the most complex, from different points of view. Those stations have been completely designed by the architect in Rhino and then produced thank to a file to factory production systems.

The envelopes is a double curved surface, with glass panes, joined to the structure thank to a simple steel and epdm joints.

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The moulded, double-curved shapes may suggest that they are made of fibreglass, but the material used for these canopies is far more brittle and unforgiving: it is pure glass. This gives the canopies a polished, lustrous finish, just like ice. Toughened glass also has the practical benefit of being durable and resistant to knocks from falling rocks or trees.

Not surprisingly, the design pushed advanced glass technology to its limits. In construction method, the canopies really do resemble aircraft wings, as the skin has been wrapped all around parallel steel ribs spaced at 1.25m intervals. The big difference is that glass could not simply be riveted to the steel ribs to assume its double-curved shape.

Instead, it had to be made up of a series of rigid panels, all fabricated to the same 1.25m dimensions as the spacing of the ribs. Far more tricky than that, each glass panel had to be moulded precisely to its final double-curved shape, while softened by heat at the glassworks. A total of 850 glass panels were used to cover all four stations, and each panel was unique in its sculptural form. Some of the panels even come with a continuous recess or trough, with a radius as tight as 60mm, to serve as a rainwater gutter sunk into the canopy’s top surface and leading to a conventional downpipe concealed inside.

The glass technology was developed by structural engineer Bollinger & Grohmann, of Frankfurt and Vienna, and manufacturer Pagitz Metalltechnik, of Klagenfurt, although the panels were actually made in China using computer-numerical-controlled (CNC) machines linked directly to the design team’s CAD system in Europe (figg. 6-7).

The basic material of the manufacturing process was a series of flat panes of 12mm thick glass. Moulds were made out of steel rods contoured to the precise double-curved shape of each panel. Then an 8mm thick glass pane was made pliable with heat and laid over the countoured bed as an underlayer to mooth out bumps and imperfections.

After that the final pane was laid over the underlayer. Next, a 1.5mm thick layer of white polyurethane resin was laminated to the underside of the panel to hold the glass together in case it shattered and give it a strong white appearance. All the panels were prefabricated to a tolerance of ±3mm and after manufacture, their precise shape and dimensions were checked by a 3D digital scanner

The assembly method on site was at least as ingenious and even more complicated. Hadid wanted the curved outer surface of the canopies to be streamlined across all the panels, uninterrupted by gaps, steps or bolt-heads. A secret fixing system was devised in which stainless-steel cleats were bonded with adhesive to each panel so that they that would project slightly from the edges. (Figg. 8-9)

At the same time, a 93mm-thick strip of polyethylene that had been pre-formed by CNC to the precise curvature of each panel, was bolted around the outer edge of each steel rib. When each panel was offered up to its final position on-site, its projecting steel cleats were screwed into polymer buffer. Finally, the 25mm gaps between the panels were filled with black silicone that neatly concealed the cleats and screwheads.

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A final consideration has be made on the final results that somewhere shows the criticism of experimental technologies. In this case the thin joins sometime become wide silicon joints not always as previewed in the design phase. (Fig. 10)

Figure. 6-7: Zaha Hadid Innsbruck stations. View of one of the station on site and of the modelling of the complex envelope.

Figure. 8-9-10 :Zaha Hadid Innsbruck stations. View of one of the station on site and of the modelling of the complex envelope. (right) Experimental technologies still shows some criticism on site: in this case some joints became very large to close with silicone due to increasing tolerances.

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2.3 IAC building of Gehry associates

The IAC building of Gehry Associates is a glass office located on two side streets in New York City, giving the building’s main facade a smooth, uniform appearance. Horizontal, fritted white bands line the windows, a decorative element meant to control the flow of light inside.

The interest of this project consist on the unitized systems façade studied in order to maintain always a flat geometry, while at the same time having the possibility to ‘twist’ in a position that allows reaching a curved shape of the hole building. Based on a parametric unit principle all the unit are similar but different in order to utilise cell geometry database and similar system design to configure the building shape. (figg. 11-12). Directly exctracted from a file design in a parametric software called Catia, quite complex but very complete, curtain wall cells have their own dimension and an exact location in the building envelope structure. In order to build this envelope with a ‘curved’ surface while keeping flat unit system façade, each cell has the possibility to ‘twist’ inside a certain range in order to keep into the correct position. This operation has been first modelled in softwares and then tested on site in order to verify the tolerances and the materials flexibility. On site a manual pressure has been put on the transom in order to fit in its final position and glass at the end of the site operations has the possibility to be shaped for more than two centimeters. (figg. 13-164.This is undoubebly a strong evolution in building envelopes technology, because this technology starts from a unitized technology and tries to push the boundary of materials limits.

Figure. 11-12: IAC building in New York by Gehry Associates, 2007. View of the parametric cell design and the mock up test.

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Figure 13-14: IAC building in New York by Gehry Associates, 2007. Structure installation and envelope installation.

2.4 AJN, new Genoa fair, 2009

The new pavilion of Genoa fair is a simple building made of two exhibition levels overlooking the sea covered by a large roof projecting 12 m beyond the quay limit. The lower level is an extension of the existing quay, at +1.00 metre a.s.l., while the upper one is at a height of +14.125 a.s.l. The restaurants and the multi-purpose halls located at an intermediate level also overlook the sea.

The building has been conceived to ensure maximum usage flexibility. Indeed, the two levels can be managed both together and separately, to host two or several exhibitions at the same time. It is completely free of any pillars and therefore guarantees the utmost flexibility when setting up shows and exhibitions. The building develops mainly lengthwise and takes advantage of the unique site features, establishing a constant ‘dialogue' with the sea and the marina, to which all three levels are inextricably connected: the upper ones by means o f outdoor terraces, sheltered by the roof and with a view on the marina, while the lower level, outside the building, turns into a large square along the sea. The relationship with the sea is both direct and indirect. Indeed, the roof is internally lined with a reflecting false ceiling which reflects the image of the sea and the marina on the roof’s slanted surface, taking the dialogue with the sea further, deep into the building.

The entire upper floor is covered by a mirror-finish stainless steel sheet false ceiling. The reflecting surface of the false ceiling is like an artificial sky whereby space is no longer perceived as an indoor area. However, the false ceiling’s main function is to reflect light, resulting in indirect ambient light at all times. Besides letting in light, the false ceiling also reflects the images o f the sea and the boats below the building.The false ceiling in reflecting (mirror-finish), pressed-folded different shapes and surfaces have been obtained and combined at dif ferent orientations to create a relief-pattern reminding of sea choppiness. This product has bee realized using technology coming from automotive, and in particular from Piaggio technology for Vespa motos.

The difficult passage has been to keep down costs while expressing the project idea, therefore 4 moulds has been done that however can be combined in many different ways, creating an effect of casualty that is in reality is quite regular.

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Figure: AJN, new Genoa fair . View of the mirror-finish stainless steel with special moulds taken from automotive sector

Figure: AJN, new Genoa fair . View of the mirror-finish stainless steel with special moulds taken from automotive sector.

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3. Conclusions: some suggestions for future developments of digital fabrication and mass customization in architecture

The different forms of digital fabrication and customization of production analysed in the case studies allow some consideration around the concept of innovation in architectural design as a place of 'collection' of information.

The theme of the collection, accuracy and availability of information is therefore crucial in this context. Cynthia Ottchen speaks of the need to find a way to inform the project using 'soft data', ie a package of information that is not excessive for the proposed architecture (thinking at BIM systems) or insufficient to meet the needs of a contemporary project (thinking of the legislative consolidation of traditional materials).

The idea of a strict but not oppressive information in relation to different phases of the project allows to maintain the uniqueness of the architectural project while preventing the excess information in order to create approval and trivialization of constructive solutions, and then architecture. (Ottchen, 2009)

It 'clear that advanced methods of production are not intended to replace entirely the traditional ones, which for some materials and machining conditions are necessary for proper feasibility work. However, it is likely to expect that site will become an increasingly less approximate location of the project construction, especially where constructive methods of assembly techniques will refer to dry and industrial products.

In this context of transformation, construction industry must rethink the roles of different actors. The figures related to traditional contractual roles are changing towards less characterized roles with different specialist skills at different levels of the construction process.

The recent issue of Architectural Design (AD, March / April 2009) dedicated the monograph to the topic of the relationship between the various actors, in this changed scenario of techniques and tools for the project, with an emblatic title 'Closing the Gap'.

Distance between the design developed by advanced studies at the forefront and now increasingly widespread and construction process related to logic and basic contract is still very stiff. This last point, contractual responsibilities, is certainly at the same time the strong and weak point of the whole process of 'information' of the process.

Indeed, if somehow the mutual contamination of project information with other persons is an enrichment of the project and a guarantee of quality, on the other hand the difficulties of regulating this type of relationship, especially in a context like the Italian one, very stiff in terms of procurement, public and not, makes it difficult to test effects of a product customizion and digital fabrication.

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Not only technology but also the estimated calculation of an innovative solution are therefore a bottleneck in those situations where, for example, there is a mix of technologies (and products) or it is not possible to identify the dominant technology or viceversa every manufacturer has its specific know-how difficult to compare.

A solution could be for each part to pay a portion of the liability trial, the designer for the definition of the solution in relation to benefits and costs with the buyer, the producer by testing and prototyping with the designer and client the final company with contracts developed ad hoc as well as ad hoc developed technology solutions.

Actually the aim is to find those formulas that will avoid intermediate gray areas contractually harnessing the potential of industrial production in relation to new tools for advanced modeling, in order to diffuse innovative technologies in architecture and to bridges the gap between designing and producing that opened up when designers began to make drawings. (Palermo, 2009).

References

AA.VV., (2009), Architectural Design, Closing the Gap, mar-apr. John Wiley & Sons, London.

Martin Betchold, Daniel Shodek, (et alii), (2005), Digital design and manufacturing, John Wiley & Sono, New jersey.

Roberto Bianchi, Sensibili mutazioni costruttive, (2009), Laruffa Editore, Reggio Calabria,.

Patrick Beaucè, Bernard Cache, (2007), Objectile: Fast-Wood: A Brouillon Project, Springer, Wien NewYork,.

Jonathan Cagan, Craig M. Vogel, (2002), Creating breakthrough products, Prentice Hall, New York.

Stephen Fox, (2009), Factory 2.0, in Innovative Design and Construction Technologies, Maggioli, Rimini,.

Lavodou Armelle, (2005), “Architectes, entreprises e industriel: une complicitè a rèinventer”, in d’A, n. 151, dic, pp. 23-29.

Cynthia Ottchen, (2009), The Future of Information Modelling and the End of Theory, Architectural Design, Closing the Gap, mar.-apr., John Wiley & Sons, London, pp. 22-27.

Ingrid Paoletti, (2006), Building complex shapes, Clup, Milano.

Pier Carlo Palermo, (2009), I limiti del possibile, Donzelli Editore, Roma.

Verganti Roberto, Calderini Mario, Garrone Paola, Palmieri Stefania, (2005), L’impresa dell’innovazione, Il sole24ore, Milano.

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Sustainability and Process Benefits of Modular Construction

Lawson, R.M. The University of Surrey, UK,

(email: m.lawson@surrey.ac.uk) Ogden, R.G.

Oxford Brookes University, UK, (email: rgogden@brookes.ac.uk)

Abstract

Modular or volumetric construction has established a strong market in residential buildings and also in health and educational buildings, where the benefits of speed of construction are achieved. As Regulations for sustainability of buildings are introduced in many countries, the continued expansion of this highly industrialised form of construction depends on the quantification of its sustainability and construction process benefits. This paper addresses the constructional and sustainability benefits of modular construction, based on case studies of recent residential projects, including a 25 storey student residence. The factors investigated include; speed of installation, reduced disruption during construction, higher productivity, fewer transport movements, less waste and more recycling of materials, and more reliable thermal performance in comparison to more traditional construction. Data is presented to support these arguments based on the case studies. The different forms of modular construction are also be presented, which illustrate how the manufacturing process can be adapted to suit the particular building form. Guidance on high-rise applications of modular construction is presented.

Keywords: sustainability, construction, modular, industrialised, high-rise

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1. Introduction

Modular construction comprises pre-fabricated room-sized volumetric units that are normally fully fitted out in manufacture and are installed on site as load-bearing ‘building blocks’. Its primary economic advantages are: Economy of scale in manufacturing, speed of installation on site and improved quality and accuracy in manufacture.

Potentially, modular buildings can also be dismantled and re-used, thereby effectively maintaining their asset value. The range of applications of modular construction is in cellular-type buildings such as hotels, student residences, military accommodation, and social housing, where the module size is compatible with manufacturing and transportation requirements. The current application of modular construction is reviewed in a recent SCI publication (Lawson). A paper in The Structural Engineer (Lawson, Ogden et al), describes the mixed use of modules, panels and steel frames to create more adaptable building forms.

1.1 Generic forms of modular construction

There are two generic forms of modular construction, which affects directly their range of application:

• Load-bearing modules in which loads are transferred through the side walls of the modules – see Figure 1

• Corner supported modules in which loads are transferred via edge beams to corner posts – see Figure 2

Figure 1: Partially open sided module with load-bearing walls (courtesy PCKO Architects)

In the first case, the compression resistance of the walls (comprising light steel C sections at 300 to 600 mm spacing) is crucial. Current heights of modular buildings for this type of construction are typically limited to 4 to 8 storeys, depending on particular systems and the size and spacing of the

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C sections used. In the second case, the compression resistance of the corner posts is the controlling factor and for this reason, Square Hollow Sections (SHS) are often used due to their high buckling resistance. Building heights are limited only by the size of the SHS that may be used for a given module size (150 × 150 × 12.5 SHS is the maximum size of these posts).

Modules are tied at their corners so that structurally they act together to transfer wind loads and to provide for alternative load paths in the event of one module being severely damaged. This is the scenario method presented in Approved Document A (Building Regulations, England and Wales), which leads to minimum tying force requirements.

Figure 2: Open sided module with corner and intermediate posts supported by a structural frame (courtesy Yorkon and Joule Engineers)

1.2 High-rise building forms using modular construction

Modular construction is conventionally used for cellular buildings up to 8 storeys high where the walls are load-bearing and resist shear forces due to wind. However, there is pressure to extend this technology up to 15 storeys or more by using additional concrete cores or structural frames to provide stability and robustness. High-rise modular buildings of 10 to 25 storeys have been completed in the last 3 years.

One technique is to cluster modules around a core to create high-rise buildings without a separate structure in which the modules are designed to resist compression and the core provides overall stability. This concept has been used on one major project called Paragon in west London, shown in Figure 3, in which the modules were constructed with load-bearing corner posts (Cartz). The building form may be elongated laterally provided that wind loads can be transferred to the core. This can be achieved by using in-plane trusses placed within the corridors, or by structural interaction between the modules and their attachment to the core.

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Figure 3: Modular building stabilised by a concrete core (courtesyCaledonian Building Systems)

Bond Street, Bristol is a 12 storey student residence and commercial building in which 8 to 10 storeys of modules sit on a 2 storey steel framed podium (see Figure 4). The 400 bedroom modules are 2.7 m external width, but approximately 100 modules are combined in pairs to form ‘premium’ studios consisting of 2 rooms. The kitchen modules are 3.6 m external width. Stability is provided by four braced steel cores, as illustrated in the plan form of Figure 5. The ‘podium’ structure on which the modules are placed provides open space for retail or commercial use or below ground car parking. Support beams align with the walls of the modules and columns are typically arranged on a 6 to 8 m grid (7.2 m is optimum for car parking below)

Figure 4: 12 storey modular student residence at Bond Street, Bristol (courtesy Unite Modular Solutions)

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Core2

Core4

Core3

Core1

Corridor

CorridorCorridor

Separating wall

Premier roommodules

Separating wall

Standardmodules

Figure 5: Plan of modular building at Bond Street, Bristol showing the core positions

2. Study of high-rise building using modular construction

2.1 Project description

The modular construction project in Wolverhampton has 3 blocks of 8 to 25 storeys and in total consists of 824 modules. The tallest building is Block A, which is shown in Figure 6. The contractor was Fleming Developments for client Victoria Hall Ltd and the architect was O’Connell East Architects. The modular manufacturer was Vision, part of the Fleming Group. The project started on site in July 2008 and was handed over to the client in August 2009 (a total of 59 weeks). The project is located next to the main railway line north of the centre of Wolverhampton. Importantly, the use of off-site technologies meant that the site activities and storage of materials are much less than in traditional construction, which was crucial to the planning of this project.

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Figure 6: 25 storey student residence in Wolverhampton during construction (courtesy Vision Modular Systems)

The total floor area in these three buildings is 20,730 m2 including a podium level. The total floor area of the modules is 16,340 m2, which represents 79% of the total floor area. The average module size was 21 m2, but the maximum size was as large as 37 m2. The Vision modular system uses Square Hollow Section (SHS) corner posts and a concrete floor with perimeter Parallel Flange Channel (PFC) steel sections.

All three blocks are constructed either on a concrete ground slab or first floor podium. The tallest building, Block A, has various set back levels using cantilevered modules. Lightweight cladding was used on all buildings and comprises a mixture of insulated render and composite panels, which are attached directly to the external face of the modules.

2.2 Manufacturing and transport effort

It was estimated that the manufacture and in–house management effort was equivalent to a productivity of 7.5 man -hours per m2 module floor area (for a 21 m2 module floor size). This does not take into account the design input of the architect and external consultants, which would probably add about 20% to this total effort.

Allowing for 2 modules in most deliveries, the average travel distance was 300 km (205 miles) on each leg of the journey. The estimated travel time was 20 man-hours per module, which is equivalent to 13% of the manufacturing effort. This reflects the travel distance and a more realistic figure might be 6 to 8% of the manufacturing effort for a modular project in the UK.

The module weights varied from 10 to 25 Tonnes depending on their size. The modules in the first Block C were installed by mobile cane, whereas the modules in Blocks A and C were installed by the

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tower crane that was supported by the concrete core. The module self weight is approximately 5.7 kN/m2 floor area. For modules at this higher level, approximately 14% of the module weight is in the steel components and 56% in the concrete floor slab. At the lower levels of the high-rise block, the steel weight increased to 19% of the module weight. The steel usage varied from 67 to 116 kg/m2 floor area.

The total area of cladding was 10,440 m2 for the 3 blocks, which included composite panels, metallic cladding and insulated render. The thermal properties of the cladding (U-values) ranged from 0.18 to 0.27 W/m2 and 1.9 W/m2 for the glazing, giving an average of 0.45 W/m2 over the whole façade.

2.3 Construction Data

The installation period for the 824 modules was 32 weeks and the installation team was a total of 8 plus 2 site managers. The average installation rate was 7 modules per day although the maximum achieved was as high as 15 per day. This corresponds to 14.5 man-hours per module (9.5% of the manufacturing effort), or 0.7 man-hours per m2 of module.

The overall construction team varied from a further 40 to 110 personnel with 3 to 4 site managers for the non-modular components, and the number of personnel increased at the finishing stage of the 59 week project. The total man-hours on site work was estimated as 170,000 (or approximately 8.2 man-hours per m2 of the completed floor area). It was estimated that the reduction in construction period relative to site-intensive concrete construction was over 50 weeks (or a saving of 45% in construction period).

The estimated breakdown of man effort with respect to the completed building was; 36% in manufacture, 9% in transport and installation, and 55% in construction of the rest of the building. The total effort in manufacturing and constructing the building was approximately 16 man–hours per m2 completed floor area, which represents an estimated productivity increase of about 80% relative to site-intensive construction.

2.4 Deliveries and waste

Site deliveries were monitored over the construction period. During installation of the modules, approximately 6 major deliveries per day were made, plus the 6 to 12 modules. During concreting of the cores, approximately 6 × 8 m3 concrete wagons were scheduled to be pumped to create the core at a rate of one storey every 3 days. Waste was removed from site at a rate of only 2 skips of 6m3 volume per week during the module installation period and 6 skips per week in the later stages of construction, equivalent to approximately, 3 Tonnes of general waste, including off-cuts and packaging. This is equivalent to about 9 kg of waste per unit floor area.

The manufacturing waste is equivalent to 25 kg/m2 of the module area of which 43% of this waste was recycled. Allowing for the proportion of module floor area to total area of 79%, this is equivalent to about 5% of the weight of the overall construction. This may be compared to an industry average

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of 10 to 13% wastage of materials, with little being recycled. It follows that modular construction reduces landfill by at least 70%

2.5 Economic benefits of modular construction

Modular and off-site construction technologies take most of the production away from the construction site, and essentially the slow unproductive site activities are replaced by more efficient faster factory processes. However, the infrastructure for factory production requires greater investment in fixed manufacturing facilities, and repeatability of output to achieve economy of scale in production.

2.6 Economic model

An economic model for modular construction must take into account the following factors:

• Investment costs in the production facility.

• Efficiency gains in manufacture (economy of scale) and in materials use.

• Proportion of on-site construction (in relation to the total build cost).

• Transport and installation costs.

• Benefits in speed of installation

• Savings in site infrastructure and management (preliminaries).

A comparison of the breakdown in the costs of a building constructed using site –intensive processes and fully modular construction is shown in Figure 7. In modular construction, materials use and wastage are reduced and productivity is increased, but conversely, the fixed costs of the manufacturing facility can be as high a proportion as 20% of the total build cost.

Background data may be taken from a recent report ‘Using Modern Methods of Construction to Build Homes More Quickly and Efficiently’ (National Audit Office). In this report, the typical as-built cost of a fully modular residential building is stated as £1000/m2 in relation to a cost-median of £800 to £850/m2 for traditional housing. However, savings of 7-8% when using modular construction are readily identified in the NAO Report, which offset this cost premium. The economic arguments are presented below.

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Materials and Waste 30%

Site personnelcosts 40%

Site overheads15%

Site-intensive construction Modular construction

Transport and equipment

15%

Materials and Waste 20%

Factorypersonnelcosts 15%

Non modularcomponents

20%

Transport and craneage 5%

Site overheads8%

Site personnelcosts 20% Factory

overheads 20%

Figure 7: Comparison of breakdown of costs of site-intensive and modular construction)

2.7 Investment costs in manufacturing

The investment in factory production of modules takes into account the following fixed costs:

• Manufacturing machinery and factory infrastructure.

• Storage, materials handling and distribution facilities.

• Heating, lighting and running costs of the factory.

• Skilled personnel involved in manufacture.

• Management and administration overheads

• Design personnel and CAD/CAM facilities.

• Testing and system approvals

A typical advanced modular production facility would require an investment of £8 to 10 million (£9 to £11 million Euros) and running costs could be as high as £4 to 5 million (4 to 5 million Euros) per

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year including the costs of 80 to 100 personnel. Such a capital investment would be amortized over 5 to 7 years and would require a minimum output of 1500 modules per annum to achieve its ‘pay back’. It follows that the manufacturing cost per typical modular unit is approximately £5,000 excluding materials (or £200/m2 (220 Euros/ m2) for a 25m2 modular unit). This investment must be balanced against other tangible savings, as identified below.

2.8 Efficiency Gains in Manufacture and On-Site

The efficiency gains may be summarised as:

• More efficient materials use and ordering of materials.

• Less wastage and more recycling of materials.

• Higher productivity in factory production

• Less work on site in difficult conditions.

• More reliable performance of the completed building

It may be estimated that off-site production leads to at least 15% saving in materials and wastage. Given that materials cost is about 30% of the total building cost, this is equivalent to about 4% overall saving in build cost.

Productivity benefits are significant, and it may be estimated from the above case study that the labour costs in production are reduced by at least 30% relative to on-site work, and the number of site personnel is reduced by over 70%. This means that overall productivity is increased by at least 50% relative to site-intensive building.

2.9 Design costs

An annual production of 1,500 units may be broken down into 10 to 20 individual projects, with some opportunity for repeatability of components. Design and production costs will decrease with the number in any production run. A nominal 10% increase on production costs for design and management costs may be assumed for a typical modular project. Background testing can lead to efficiency gains by optimising performance and removing waste.

The cost of external consultants is also reduced from typically 6 – 8% in traditional design and tender projects to 3 – 5% in modular projects, as more design work is carried out in-house by the modular supplier. Furthermore, these costs will reduce for repeated projects.

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2.10 Proportion of work on-site

Even in a highly modular project, a significant proportion of additional work is carried out on-site. The National Audit Office report estimates that this proportion of on –site cost is approximately 30% of the total for a fully modular building, and may be broken down approximately into Foundations (4%), Services (7%), Cladding (13%) and Finishing etc (6%). However, in many modular projects, the proportion of on-site work can be as high as 55% -see case study. Modular construction also saves on commissioning and ‘snagging’ costs that can be as high as 3% in traditional construction. Efficiency gains may be achieved by pre-attaching cladding to the modules. Lifts and stairs and service units may also be produced as modules.

2.11 Transport and installation costs

Transport costs are relatively independent of module size and may be taken as £600 (720 Euros) per module for a 200 mile (320km) travel distance (each way to the site). A large mobile crane would normally be required at a cost of up to £2,000 (2200 Euros) per day, and an average installation rate of 6 to 8 modules per day can be achieved. The combined transport and installation cost is therefore approximately £900 per module, which for a 25m2 module is £36/m2 (40 Euros m2 ) or approximately 4% of the overall construction cost.

2.12 Benefits in Speed of installation

Overall construction periods are reduced by 30 to 50% relative to site intensive building techniques. The financial benefits of speed of installation may be considered to be:

• Reduced interest charges by the client.

• Early ‘start-up’ of business or rental income.

• Reduced disruption to the locality or existing business.

These business-related benefits are clearly affected by the size and type of the business. The tangible benefits due to reduced interest charges can be 2 to 3% over the shorter building cycle. The NAO report estimates that the total financial savings are as high as 6%.

In traditional construction, site preliminaries may represent 12-15% of the total cost and take into account: Management costs, site facilities, storage and accommodation and equipment. Savings can be achieved due to the reduced number of site personnel (and hence costs) over the reduced construction programme. Site preliminary costs may be taken as 5% for fully modular buildings, leading to a saving of 7 to 10% in comparison to traditional building.

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2.13 Overall cost balance

The cost-value balance may be summarised by considering the following savings relative to traditional construction, assuming the same construction cost:

Estimated Saving (% of construction cost)

• Client financial savings 3 – 6%

• Design fees reduction 2 – 3%

• ‘Snagging’ reduction 1 – 2%

Site preliminaries 5 – 7%

Total 11 to 20 %

It follows that the cost premium for modular construction could be up to 10% higher than site intensive construction and still be economic in overall terms.

3. UK code for sustainable homes

Sustainability in the context of construction is presented in terms of various ‘criteria’ of environmental, social and economic performance. In the UK, BREEAM is widely used for offices, and the UK Government’s Code for Sustainable Homes (CfSH) has become the environmental standard for use in the residential sector.

The CfSH assessment procedure is based on a number of accepted environmental criteria, which are weighted separately and earn a percentage of available credits. The available credits and weightings for each category of the assessment are presented in Table 1 The point scores are aggregated but certain minimum scores must be satisfied in areas such as energy/CO2, water saving and material resources, in order to achieve an overall rating.

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Table 1 Available credits to the UK Code for Sustainable Homes

Category Credits % of Total

1.Energy and CO2 29 36.4%

2.Water 6 9%

3.Materials 24 7.2%

4.Surface water run-off 4 2.2%

5.Waste 7 6.4%

6.Pollution 4 2.8%

7.Health and well-being 12 14%

8.Management 9 10%

9.Ecology 6 12%

Code Level 3 is the desired standard for most social housing projects. Code Level 6 is ‘zero carbon’, which is technically very demanding and outside current practice for the vast majority of buildings. A total of 57 points is required to achieve Code level 3 and 90 points for Code level 6.

4. Conclusions on sustainability

The primary use of energy over the building’s life is its operational energy due to heating (and in some cases cooling). Modular buildings can be designed to be highly insulating and very air-tight, with a leakage rate of less than 2m3/m2/hr.. Modular construction is lightweight, and the modular structure of a residential building weighs less than 30% of that of a concrete frame. Savings in foundation sizes can be significant on ‘brown-field’ sites and poor ground.

According to the Building Research Establishment, the UK construction industry average for material wastage on site is 13%. In comparison, site waste in modular construction is greatly reduced and all off-cuts are fully recycled in the factory. Nationally, 98% of all steel is recycled after use and 50% of current steel manufacture in Europe comes from recycled steel (scrap).

Site management is much improved by ‘just in time’ delivery of the modules and minimal storage of materials is required on site. Noise and other sources of disturbance are also minimised. Site deliveries and site traffic due to construction activities are also reduced by up to 70% relative to more traditional ways of building.

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References

Lawson R.M. Building Design using Modules , The Steel Construction Institute P367, 2007

Lawson R.M., Ogden R.G., Pedreschi R, Popo-Ola S and Grubb J Developments in Pre- fabricated Systems in Light Steel and Modular Construction The Structural Engineer. Vol 83 No 6, 15 March 2005 p 28-35

Building Regulations, England and Wales Approved Document A, 2006

Cartz J.P. and Crosby M Building High-rise Modular Homes The Structural Engineer Vol 85 no l 9 January 2007

National Audit Office, UK Using Modern Methods of Construction to Build Homes More Quickly, 2004

Department for Committees and Local Government (UK) Code for Sustainable Homes – Technical Guide, May 2009

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Industrialization for sustainable construction?

Van Egmond ‐ de Wilde de Ligny, E.L.C., Department of Architecture Building & Planning, Eindhoven University of Technology

(email: e.v.egmond@bwk.tue.nl)

Abstract

Sustainable construction (SuCo), which genesis dates in the early 1990’s, advocates the creation and operation of a quality and healthy built environment based on resource efficiency, life cycle economics and ecological principles. (Kibert, 2003). Currently the Construction Industry does not meet all these principles. This implies the need for change, thus innovation for SuCo. The purpose of our study is to explore the opportunities and constraints of a paradigm innovation such as towards industrialised construction to achieve SuCo. The particular issue that is dealt is whether the stakeholders in the CI are indeed willing and ready for a paradigm shift, i.e. a change in the underlying metal models. Have of will they put it into practice by developing and applying industrialised standardized construction technologies. Are there in one way or the other incentives – such as government policies and regulations- that further stimulate such SuCo practices? After all industrialised production in manufacturing sectors has proven to contribute to enhanced efficiency and effectiveness of the processes, thereby minimizing the use of labour and material resources and waste. Thus in the same line of thinking a paradigm shift towards innovative industrialised construction is assumed to contribute to achieve the SuCo objectives. To find answers to the questions the sustainability practices in the construction industry in the Netherlands and Chile were investigated. Methodologically the research drew on a merge of concepts of the Production Management and Innovation Theories. The findings have underpinned that -although the major driving factor for the stakeholders to change the construction processes was cost reduction- the measures to minimize losses in primary materials and material use by industrialised construction which takes into account the environmental aspects contributes to the achievement of the SuCo objectives. The conclusion is that SuCo in the CI requires the implementation of innovative solutions and project execution that goes beyond the traditional and generally accepted way of building. This calls for a paradigm shift amongst construction stakeholders which cannot be accomplished without a stimulating, supporting and regulating framework.

Keywords: industrialization, innovation, sustainable construction, stakeholders, technological regime

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1. Introduction

Traditional construction processes are blamed to be un-sustainable in terms of resource depletion and waste generation due to the application of un-sustainable products and construction processes. Sustainable construction (SuCo) is a performance concept which genesis dates in the early 1990’s. SuCo advocates the creation and operation of a healthy built environment based on resource efficiency, life cycle economics and ecological principles. (Kibert, 2003). There is an increased societal pressure on construction firms to meet the demand for sustainable and cleaner production as well as to offer higher quality of output against lower cost and a higher value added to the market to struggle out of the grasp of intensified competition. The construction industry (CI) faces the need for innovative ways of bringing about the built environment: a paradigm innovation such as a change towards SuCo by means of industrialised construction.

Industrialised construction – i.e. off-site standardized manufacturing of building parts and even of whole buildings- has shown to improve construction performance. The residential building industry in North American and European countries for example has applied industrialised processes which resulted in on-site construction with 16% lower labour and materials cost; 26% less material utilization and 37% less building time (Schuler 2002). These industrialization practices in majority involved the substitution of traditional building materials into factory built components such as roof and floor trusses, wall panels, cladding, prefab structural timber and steel structures and concrete wall systems, although there is already a trend of offering customer oriented complete manufactured houses focused at profitability and satisfying customer demands for affordability, comfort and flexibility. The issue that is dealt with in this paper is whether all stakeholders in the construction industry are indeed willing and ready for a paradigm shift, i.e. a change in the underlying metal models towards SuCo. Have of will they put SuCo into practice by developing and applying industrialised standardized construction technologies, which have shown to be beneficial? Are there in one way or the other incentives – such as government policies and regulations- that further stimulate such SuCo practices?

In the following first the methodological approach applied in this research will be explained. Then the findings will be presented of an explorative study on environmental practices of the CI in the Netherlands as well as those of the stake holders of the CI in Chile. Finally lessons learnt regarding SuCo will be discussed.

2. Methodological approach

In the above is indicated that SuCo requires investment in innovation, i.e. changes by new knowledge creation for sustainable products and building processes, their diffusion, adoption and implementation in projects. These are all long-term, high risk ventures, which are not always successful. (Manseau & Seadan, 2001). By integrating the views of Packendorff (1995) based on the Production Management Theories with other (e.g. Koskela and Howell, 2002) one can see a framework with three mutually related factors which determine construction performance: (1) Expectation/ motivation/ incentives of

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the individual stakeholders (2) Actions and practices as central element in the construction process and (3) Learning/ knowledge to select and apply certain building products and processes. In the same line of thinking the Innovation Theories -supported by empirical evidence- learns that the major factors which determine construction performance are to be found in the Innovation System of an Industry: the Stakeholders Network and the prevailing Technological Regime (TR). The TR includes the stakeholders‘(1) practices and actions, (2) knowledge and experience and (3) expectations, motivations and incentives. (Egmond 2005). The stakeholders’ network includes the project executing stakeholders as well as the governmental agencies and the knowledge institutions. The following theoretical framework was derived from the above described theories.

Figure 1: Theoretical framework

As shown in figure 1, the regulatory and support framework has an impact on project performance which on its turn depends on the stakeholders’ (1) actions and practices; (2) knowledge and awareness with regard to the valuation of environmental aspects; their financial capacity vs. the costs of the sustainable solutions; (3) motives, willingness and commitment to sustainability.

3. Sustainable construction and industrialization in the Netherlands

3.1 Stakeholder sustainability practice in the Netherlands

The research on SuCo and industrialised construction in the Netherlands was based on extensive reviews of existing literature and expert opinions. The awareness amongst construction stakeholders regarding the importance of achieving a more sustainable built environment has been given a new boost during the last years in the Netherlands. Increasing construction resource costs and a growing lack of on-site skilled labour -enhanced by a greying society, stimulated innovation in construction towards industrialization and improved sustainability. The focus is mainly on the reduction of energy, materials and waste in construction and the built environment. Developments in SuCo have taken place, mainly by application of eco-technologies in traditional building practices.

Innovative energy technologies are centred at (1) prevention of unnecessary use of energy; (2) the use of renewables (e.g. solar boilers); (3) the deliberate use of clean and high performance non-renewables (e.g. high performance boilers for central heating). However, so far many of these

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investments are not yet completely cost-effective and thus are not really commercially appealing. The sustainable use of building materials is mainly achieved through substitution of the traditionally used building materials. Innovative products and eco-materials like FSC timber, water based acrylic binders, recycled PVC rainwater pipes, water saving toilets, water saving showers are for example used in more than 50% of the newly built houses. Less often applied in building construction are innovations like paints with limited solvents, concrete aggregates to substitute gravel, high performance glazing, and separate water tubes for hot water. This also counts for second hand building materials. (Klunder 2002) Nevertheless there is a relatively high percentage of recycling and reuse of construction & demolition (C&D) waste in the Netherlands. In fact, this is only the reuse of rubble concrete granules, replacing sand and gravel in infrastructural works. Today, 95% of total C&D stony material waste is reused in this manner.

Various innovative industrially produced standardized building systems – e.g. Industrial, Flexible and Demountable systems (IFD) - were developed based on the awareness of the important role which industrialised building can play in driving up quality, value and increasing the lifespan of the building and building parts while cutting resource utilization and construction costs. IFD building can be seen as a three-pronged strategy to innovate the building process to achieve: (1) a maximum flexibility for the client e.g. by innovations for vertical and horizontal piping, providing various possible locations for toilets, kitchens and bathrooms. (2) industrial production to cut materials, costs and time and increase quality, e.g. by perfect modular dimensioning and a great deal of attention to the engineering details, prototype testing, and clear assembly instructions (3) demountability of components which enables a separate replacement of components with various life spans, thereby extending the life of the building as a whole to decrease waste, e.g. by a completely dry building method (no concrete pouring, mortar joints, screeds, stuccowork, sealant or PUR spray) as well as by the adjustability/ adaptability of all parts in differing degrees: bearing structure (limited),installation (practically unlimited), outer shell (limited and modular),interior finishing (practically unlimited and modular). (Van den Brand et all, 1999)

IFD however also requires process innovation: early co-operation between the stakeholders and a multidisciplinary approach during design and production, with changes in the traditional roles of the stakeholders. Specific skills are required for the organization and facilitation of and participation in the design, production and construction process. Large investments in innovation have taken place to meet the goals for IFD by collaborations between the so-called knowledge institutions, industry and housing corporations. Much research was particularly focused at developing innovative load-bearing structures, building envelopes and interior building components. An example is a load bearing structure that is composed of a steel support construction of hot-rolled standard profiles with concrete panel floors usually made of hollow elements. Piping can be integrated in the supports and the floor panels and partitions can be placed anywhere, which provides various layout possibilities. (Hendriks 1999) Another development is the substitution of on-site solid masonry by the industrially produced hollow ceramic tile cladding system for external façades, which have a “ceramic architectural look“, reduce mass and increase flexibility and dismantling/re-use. The major innovation and industrialisation efforts for SuCo have taken place in residential construction. In office building construction only marginal improvements have been established, and this mainly took place thanks to the client’s ambitions to expose a green image. Yet a pilot study in the EU in 2006 showed that the

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Netherlands, Belgium and the Scandinavian countries perform rather well regarding SuCo. The common factors that made this possible included: Substantial off-site profit; Highly mechanized site distribution; Just-in-time delivery of material and components; Low load of material waste; Well-paid onsite workforce; Skilled and well-trained workforce; High level of R&D; Flexible relationship between design/architecture and contractors; Early influence of contractors in the design process; Use of liability insurance. (Hamelin 2007) Swedish construction industry uses prefabrication (so-called catalogue housing units) to cut costs for residential construction. Belgium has several factories producing pre-fabricated units with a well trained workforce, limited subcontracting and lean management. The pre-fabricated units lead to at least 30% savings in steel and concrete. (Goodall 2007)

3.2 Dutch Supporting and Regulating Framework

In 1990, SuCo became a policy issue in the Netherlands via the National Environmental Policy Plan Plus of the Ministry of Housing, Spatial Planning and the Environment (www.vrom.nl). The national and municipal government authorities in majority stimulated the developments of eco-innovations by means of a reasonable coherent mix of policy instruments. Only after 1995 a first breakthrough for SuCo took place, when direct regulations such as the Energy Performance Norm (EPN) came into force being part of the Building Code. Building permits are only issued when building specifications meet the energy performance requirements expressed in the energy performance coefficient. How this energy efficiency target is achieved is left over to the actors in the CI, which makes this policy instrument highly appreciated by the CI. (www.epn.novem.nl). Indirect policy instruments -largely used in the Dutch SuCo policies- encompass both negative (based on the polluter pays principle) and positive instruments, such as subsidies and tax relief. For (1) consumers there are energy subsidy schemes and for (2) eco-innovators and project developers there are Innovation Subsidies managed by different Ministries. Self-regulation instruments to stimulate SuCo are the Energy Performance Advise (EPA) to stimulate energy saving in existing buildings; DuBo packages(DuBo = Dutch for SuCo); the establishment of a DuBo information centre; the development of sustainability assessment methods and demonstration projects,(e.g. in which designers were pointed at the opportunities of SuCo practices such as Industrial, Flexible, and Demountable (IFD) building methods). DuBo packages were developed to provide information and support to increase awareness and knowledge about SuCo in the form of almost hundred guidelines for SuCo Terms of Reference, Design, Construction, and Use and several prescriptions related to waste & material management. The packages had no legal enforcement power and were mainly applied in combination with DuBo-contracts. These were agreements between municipalities and private companies to adhere to the DuBo guidelines. The packages were rather practical, but too detailed in prescribing how to implement SuCo. Freedom in design and construction was gone, provoking resistance among the building industry. The DuBo- information centre for SuCo, was created in collaboration with market parties and research institutes. Several regional SuCo consultants support the DuBo-centre. In the course of time several sustainability assessment methods were developed, such as Greencalc, a software programme to assess environmental costs throughout the building life cycle. Other tools such GPR are rating tools comparable to the US Leed and UK Breeam sustainability rating tools that support communication and decision making in design for SuCo, without prescribing them.

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Broad support for the Dutch SuCo policy could have been achieved by its development in close collaboration with the target group. (Bueren & Priemus, 2002). Improvements in SuCo practices thanks to the coherence of the Dutch DuBo policy mix. However the actual results in terms of reduction of environmental pressure by the CI were less significant. Sustainability measures are usually considered in the early phases of new construction projects whilst sustainable maintenance and demolition is often still neglected. (Sunikka and Boon 2002) The learning effects of demonstration projects appeared too small, since often these projects are not evaluated and if so, then the results are not widely communicated. Klunder (2002) mentions that the decrease of environmental pressure by measures regarding sustainable material utilization is rather limited: 0% by dematerialization and 5% by reusing and recycling of building parts and materials. However 13% decrease of environmental pressure is established by selection of particular materials and industrialized construction and 20% by an increase of the quality and lifespan of the building and building parts. (Klunder 2002) This underpins the valuable contribution which industrialized construction can have to improve sustainability in the construction industry. The real threat to sustainable building, however, is the lack of market demand. SuCo measures are not adopted and implemented on a large scale and only a small part of the market uses SuCo as a mean to distinguish itself. (Bueren 2001) A market research in 2001 concluded that there was still not much interest in sustainable building in the Netherlands. (Sunikka and Boon 2002) Costs, capacity and knowledge amongst construction clients (e.g. housing associations) and acceptance by building users and tenants, are important barriers to sustainable construction. For example only 44% of the interviewed housing corporations mentioned to be interested in having a green image, whereas 41 % said they rarely profile themselves as being sustainable. They indicated that only 33% of their tenants have interest in sustainable building, 49% tenants are only interested to a certain extent and 9% are not interested at all. Moreover the willingness to invest in SuCo is rather limited: only 16% of the tenants are willing to pay extra for environmental measures. It has changed in the meantime, although the actual implementation of SuCo practices in the Netherlands still have not very much taken off. Government support was an absolute condition to create loyalty to SuCo in the Netherlands. Subsidies are considered as an important stimulation measure. CI stakeholders do not want to pay for environmental building practices but consider SuCo a collective responsibility of the government. Besides after years of promotion and stimulation of environmental building practices, the Dutch government has decided to chance its policy line into a more commercial approach. From 2004, the market was expected to pick up SuCo.

4. Sustainable Construction in Chile

4.1 Stakeholders Sustainable Construction Practice in Chile

For the study in Chile, questionnaires were distributed to collect the data amongst designers and contractors in the Santiago Metropolitan Region (75% of all construction takes place in this region). The regulatory and supporting framework was investigated by using publications and interviews with experts. (Kuysters, Egmond, Brand, Serpell 2004)

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About 50% of the designers did not commit themselves completely to SuCo voluntarily during the years (2000-2004). This means that only 23% have incorporated environmental issues in the mission statement of their firm, none of them have a specific employee for SuCo, 9% of the design firms have environmental policy document; only 27% of the designers request a waste treatment plan from the contractor. Sustainability in design is taken into consideration by less than half of the firms. Energy saving measures were applied by designers by application of thermal insulation to (parts of) the building envelope in 50% or more of their projects. In 90% of the projects roof insulation is applied; wall insulation in 65%, insulated glass in 40% and floor insulation in 30% of the projects. Energy considerations were taken into account in the design by means of looking at (a) the orientation and natural ventilation of the building by 75 % of the respondents; (b) solar protection by 65% of the respondents; (c) passive solar design by about 50% of the respondents. Orientation of the building and use of natural ventilation are probably most easy to achieve energy savings at low cost. Increased competition in the CI at the end of the 1990s, due to a drop in building production (the Asian crisis), has resulted in cost reduction measures including the minimization of losses in primary materials and material use. This is mainly accomplished by designing in standardized materials and the use of exact sizes of prefab panels. Designers applied (a) standardized building materials in 85% of the projects; (b) prefab elements in about 30% of the projects; (c) recycled materials in 10% and renewable materials in 5% of the projects; (d) design for flexibility and dismantling in about 20% of the projects. The resulting waste generation is between 0.12 m3/m2 for ‘simple/ standard buildings’ and 0.185m3/m2 for more complex buildings with better finishing. The decrease in building production has resulted in an absolute decrease in waste production and the decrease in waste generation factor has resulted in a larger decrease in waste generation. The majority of measures that were taken by the contractors are to reduce material waste in 75% and dust in 70% of the contractors. Next follow the reduction of noise (55% ); use of water (45%); chemicals (35% of the contractors). The reduction of energy took place by 45% of the firms. The contractors indicated to have implemented innovative clean technologies during the years 2000-2004: 11% of the contractors for energy saving; 78% of them to reduce dust and 64% a technology to reduce noise. Innovative energy efficient technologies are least often implemented. The waste and material reductions during the years 2000-2004 took place predominantly to prevent over-ordering. In 87% of the firms, no more materials than needed are purchased. Almost certainly over-ordering has not taken place for economic reasons. Besides they applied prefab elements in about 30% of the projects. Re-use of building materials has taken place in 40% of the projects and in only 30% of the projects the contractors sorted the waste they produced. 22% of the contractors did not commit themselves to any form of SuCo; 31% of them have an employee for SuCo; 25% of the contractors have an environmental policy document. Eight percent have signed the Clean Production Agreement (APL) and have implemented more and more often measures and technologies on the building site to control or reduce waste, dust, and noise than non-APL-ers. Of those who did not sign the APL, 67% indicated to have the intention to sign it in near future. Relatively many middle-sized companies have signed the APL.

The study revealed a strong positive relationship between the degree of awareness and importance dedicated to the environment by the firms and the environmental sustainability of their building practices. Environmental aspects have less priority than costs (45%), ethics (21%), functionality (15%) of the building and environmental impact during the use of the building (9%). Being innovative has no priority or at most limited.

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4.2 Chilean Supporting and Regulatory framework

In 1990, the National Commission of the Environment (CONAMA) was created in Chile with the purpose to institutionalise environmental issues in the country. Four years later (1994), the Chilean Environmental Act was approved, which includes the following three major policy instruments(Camus & Hajek, 1998): (1) Direct regulations which encompass the following obligations for building construction (a) to carry out Action, Prevention, and Decontamination plans, especially focussed at waste management. Four dump spots especially for construction & demolition (C&D) waste are allocated to support these plans; (b) to stick to norms and regulations, e.g. for energy saving in buildings and reduction of emissions. There are no specific norms for C&D waste. (2) Indirect regulations include charges for waste dumping and subsidies and technical assistance for the improvement of the environmental practices. There are no government interventions or tax policies on energy. (3) Self-regulation policy instruments include the facilitation of dialogue between the public and private sector to voluntarily change the behaviour in the CI towards SuCo (e.g. through the creation of the national council of clean production (CPL) in December 2000. CPL promotes and supports by means of its Clean Production Agreement (APL; www.produccionlimpia.cl) the realization of initiatives for clean(er) production (i.e. reduction of emissions (solid, liquid and air), solid waste and noise). Solid construction and demolition (C&D) waste is one of the focal points in the APL for the CI. This has resulted in the establishment of a waste recycling firm, which collects and disposes waste and separates waste (57% earth) on their dumpsite and recovers materials for reuse conform current regulations. 0.4% metals, 0.6% paper & carton, and 0.03% plastics is reused. Besides government authorities provide information for example by means of demonstration projects. This is also supported by private organisations such as the Chilean Chamber of the Construction Industry (CCC) which provides information for example by means of manuals for construction companies on how to minimise the negative effects (dust, noise, and solid waste) of construction.

Most important barriers for SuCo mentioned by the regulating and supporting organizations are the level of knowledge and lack of awareness and attitude in the CI; financial and market constraints; a lack of attention to SuCo in the educational system of Chile. A main aspect is the short-term thinking of the CI versus the long-term stretch of sustainability. There is a relatively low use of financial support by designers and contractors for SuCo investments. This can partly be explained by the unfamiliarity with it, or the conditions to be selected for support are possibly not favour able for the construction firms. Moreover SuCo has no priority in national policies. According to the interviewed Chilean experts, solutions for improved SuCo need to be sought in increased prefabrication and industrialisation, demonstration projects and monitoring data on environmental impacts and better education. Universities should play an important role in this by offering sustainability education.

5. Overall conclusions and discussion

Whilst the efficiency and efficacy of the CI has improved in the course of time through industrialisation, i.e. rationalization, systematization and mechanization of the construction processes by means of the development and application of innovations focused at profit-maximization, cost minimization and output maximization, the impact on the natural environment of this manufacturing

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model was not taken into account. The CI is challenged to change their practices in order to achieve SuCo targets. Although the driving factor was cost reduction, measures including the minimization of losses in primary materials and material use have underpinned that industrialised construction, which takes into account the environmental aspects contributes to the achievement of this SuCo. By focussing in design and project execution at standardized materials, recycled and renewable materials, flexibility and dismantling of these and the use of exact sizes of prefab panels, the waste generation factor decreased significantly. Meanwhile SuCo is understood to be more than only insulation and waste reduction in traditional building construction, although policies in many countries have focussed on those aspects. There still are barriers to overcome for true SuCo in the CI. Moreover SuCo should imply -following the new concept that has taken nature as model- that buildings are designed from the outset so that even after their functional lives, they will provide nourishment for something new. (McDonough and Braungart 2002) Hence SuCo requires innovative solutions in the CI and project execution that go beyond the traditional and generally accepted way of building. Designers, building material producers and contractors thus need to bring about design concepts, building elements and components as well as adaptations in the building processes by integrating the ecological aspects in order to achieve the optimum application of the sustainability principles during all stages of the life cycle of buildings. Innovative sustainable solutions for design, building materials en processes require investment in time and research costs, whilst such efforts are risky and their results cannot always be predicted to turn out positively. Besides life cycle thinking implies additional costs that occur on top of the initial investments. Although there is apparently no dispute in the Chilean CI about their responsibility to meet the SuCo targets, there is reluctance amongst the various stakeholders to be individually responsible in risky endeavours. This calls for building teams in which the construction project parties collaboratively share the risks. Also the Dutch experience learns that government support is necessary to stimulate SuCo and that for the adoption of SuCo measures on a large scale, it is essential to accompany environmental gains with gains in building-economics terms and in health improvements. Hence policy should incorporate incentives for the industry to partly carry the risks. This is in line with Cleff & Rennings (2000) who put forward that the role of supporting and regulating public and private organisations in funding and encouraging particularly sustainable innovations is considered critical; since factors of technology push and market pull alone do not seem to be strong enough, eco-innovations need specific regulatory support. Also Educational and R&D institutes are supposed to support in knowledge for innovative eco-solutions, whilst banking organisations may offer financial support. Yet the National Government is hold responsible for the development of clear sustainability policies and legal, fiscal or financial measures resulting in actions that change the behaviour in the market either in a voluntary or in a compulsory way in order to minimise the negative impacts on the environment. (Bourdeau, 1999).

A rather successful example of collaborative undertakings to bring about innovative solutions for SuCo is the program called Building America (BA). It is a public/private partnership that conducts research to find energy-efficient solutions for new and existing housing on an industrialised production basis. (www.eere.energy.gov/buildings) The long-term goal of the BA program is to develop cost-effective systems for zero energy homes. BA unites segments of the CI in teams, (architects, engineers, builders, equipment manufacturers, material suppliers, community planners, mortgage lenders, contractor trades), that traditionally work independently of one another in consortia by using a systems engineering approach. The BA team members agree to: Provide all materials and

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labour for research projects; Evaluate their design, business, and construction practices; Identify cost savings; Re-invest cost savings in improved energy performance and product quality; Join their efforts to develop solutions; Use a design-test-redesign-retest process to resolve technical problems. This enables the teams to incorporate SuCo strategies throughout an integral process of design and construction from the very start of the building process. Initial cost-effective strategies are analyzed and selected during the pre-design phase, after that they evaluate their design, business, and construction practices to identify cost savings. Cost tradeoffs often allow the teams to incorporate these strategies at no extra cost. Examples of SuCo innovations include new techniques to tighten the building envelope which enable builders to install smaller, less expensive heating and cooling systems. Cost savings can be reinvested in for example high-performance windows that even further reduce energy use and costs, whilst improving the sustainability and product quality. Other are an innovative SuCo home solution that treats the modular construction process as a system and composed of factory-made modules stacked one on top of the other, which reduces construction time and costs. By supporting industry-driven systems engineering research the program provides the feedback required to develop critical "next generation" building systems. Publication of the BA research information on the web site boosts the diffusion of the innovative solutions and increases the awareness about the need for SuCo in the CI market, which is important given the finding in this study that environmental awareness has a positive relation with SuCo practices. Rethinking and discussing the BA strategies is considered worthwhile to achieve SuCo targets.

References

Bourdeau, L (ed) 1999, Agenda 21 for Sustainable Construction, CIB report, Publ. no 237, CIB, Rotterdam

Brand, G. Van den, Rutten, P., Dekker, K. (1999), IFD Bouwen, Principes en Uitwerkingen.TNO (Netherlands Organization for Applied Scientific Research) report1999-BKR-R021, TNO Bouw Delft.

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The Critical Success Factors (CSFs) to the Implementation of Industrialised Building System (IBS) in

Malaysia

Kamar, K.A.M. Construction Research Institute of Malaysia, Construction Industry Development Board (CIDB)

(email:kamarul2411@gmail.com) Hamid, Z.A.

Construction Research Institute of Malaysia, Construction Industry Development Board (CIDB) (email:zuhairi@cidb.gov.my)

Alshawi, M. The University of Salford

(email: m.a.alshawi@salford.ac.uk)

Abstract

The Malaysian construction industry plays an important role in generating wealth to the country and development of social and economic infrastructures and buildings. To cope with an influx of foreign labour work in construction sector and to improve overall performance of the industry, the Malaysian construction industry has been urged to use Industrialised Building System (IBS) in building works. IBS is a construction process either by mechanising work on site or transferring the work as much as possible to the factory. This paper identifies the Critical Success Factors (CSFs) to the implementation of IBS in Malaysia. The potential CSFs to IBS are first identified through a literature search. A case study survey has being used to check the potential CSFs in real construction setting in Malaysia. The paper highlights the importance of pre-planning, coordination, effective communication, involvement in design, experienced staff, decision making, improve in procurement and contract, supply chain management, partnering, business strategy and Information and Communication Technology (ICT) to IBS in Malaysia. It is hoping that the CSFs will help the practitioners in implementing IBS by identifying the factors which is critical to the success in their venture in IBS.

Keywords: Industrialised Building System (IBS), Critical Success Factors (CSFs), Malaysia

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1. Brief highlights of Malaysian construction industry

The Malaysian construction industry plays an important role in generating wealth to the country and development of social and economic infrastructures and buildings. The industry provides job opportunities for 800,000 people which represented 8% of total workforce (CIMP, 2006). The construction industry is one of the productive sectors that constantly contribute to the economy. Its growth rates fluctuates between extremities that varies from as high as 21.1 percent in 1995 to as low as -24 percent in 1998. Since the 1990’s, the contribution of the construction sector to the GDP also fluctuated albeit at a more stable rate varying from a high of 4.8 percent in 1997 to an estimated low of 2.7 percent in 2005 (CIDB, 2008). This shows that the demand for construction is highly sensitive to the developments in other sectors of the economy. Recent data showed that the construction sector growth at 5.3% in 2007 and contributed 2.1% total Gross Domestic Product (GDP) of Malaysia (CIDB, 2008). The contribution to GDP would be much higher if one considers input from the whole supply chain activities of construction from design to maintenance. The total number of contractor registered with the Construction Industry Development Board (CIDB) as in June 2008 is 63,610 (CIDB, 2008). That is a phenomenal number if one compares that to the population. Nonetheless, the industry is under a constant pressure to improve its performance. As in the conventional construction which is a common practice in Malaysia, reinforced concrete frame and brick, beam, column, wall and roof are cast in situ using timber framework while steel reinforcement is fabricated offsite. This method is labour intensive involving formwork fabrication, steel bending and concreting. It requires many wet trades on site such as skill carpenters, plasterers and brick workers. The process can hamper by quality issue, unfavorable site condition, skilled labour shortage and bad weather conditions. One such option is to move towards industrialisation and that is by implementing the Industrialised Building System (IBS) in building construction. With industrialisation, most of the components of a building will be made off-site and manufactured in a factory and brought into site to be assembled. The move to industrialisation is also in line with effort to achieve national housing target of 709,400 units for the period of 2005-2010. Nonetheless, the main reason for Malaysia to move into industrialised construction is due to the influx of foreign labour doing manual jobs in construction. The number of foreign workers in Malaysia has increased from an estimated 0.5 million in 1984 to 0.63 million in 1997, 2.4 million in 1998, 1.9 million in 2006, and an estimated 2.2 million in 2007-2008. In construction sector, Construction Industry Development Board (CIDB) Malaysia reported that 69% (552,000) out of total 800,000 of registered workers as at June 2007 is foreign workers (CIDB, 2007). It is a huge number which distress the stability and growth of domestic economy and created social problems. It is hoping the industrialisation of the industry through mechanisation, pre-fabrication and automation will reduce the number of foreign labour and it eventually will be replaced by high skilled local workforce.

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2. Industrialised Building System (IBS) in Malaysia

Industrialised Building System (IBS) is defined as a construction technique in which components are manufactured in a controlled environment (on or off site), transported, positioned and assembled into a structure with minimal additional site work (CIDB, 2003). In other countries, IBS is known as off-site construction, offsite manufacturing and pre-fabrication. The used components are pre-fabricated. Those parts of building that are repetitive but difficult, time consuming, labour intense to cost at site are design and detailed as standardised components at factory. IBS also involve onsite casting using innovative and clean mould technologies (steel, aluminum and plastic). IBS offers benefits in term of cost and time certainty, attaining better construction quality and productivity, reducing risks related to occupational safety and health, alleviating issue on skilled workers and dependency on manual foreign labour and achieving ultimate goal of reducing overall cost of construction. In Malaysia, Construction Industry Development Board (CIDB) has classified the IBS system into 5 categories as follows (IBS Roadmap, 2003):

• Precast concrete framed buildings

• Precast concrete wall buildings

• Reinforced concrete buildings with precast concrete slab

• Steel formwork system

• Steel framed buildings and roof trusses

IBS has been introduced in Malaysia since early 1960s by the use of pre-cast concrete beam-column element and panelised system (Thanoon, 2003). The projects in Jalan Pekeliling, Kuala Lumpur and Rifle Range, Penang used Danish System and French Estoit System respectively. However, due to the leaking issue and high cost in producing panel components the technologies did not take off as planned. However, in 1990s, the employment of foreign labour originally considered as a stop gap measure has become a national security issue. Recent influx of foreign labour has reignited the interest on IBS. IBS Roadmap 2003-2010 was developed and published to steer the direction of IBS implementation and promotion activities and guide the practitioners and policy makers on IBS related issues (IBS Roadmap, 2003). The importance of IBS was highlighted under the Strategic Thrust 5 of the Construction Industry Master Plan 2006-2015 (CIMP 2006-2015) which has been published as means to chart the future direction of the Malaysian construction industry in 2006 (CIMP, 2006). The government through CIDB has introduced exemption of the construction levy (CIDB levy - 0.125 % of total cost of the project according to Article 520) as an incentive on contractors that used IBS at least 50% IBS components in construction of new residential project since 1st January 2007. To create a spill-out effect from public sector projects to private sector project, government had enforced the use of 70% IBS component in all government’s new

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building construction since 2008. From 2006 to 2010, in approximate of 320 government’s projects worth RM 9.43 billion had been identified to be carried out using the IBS. It is a huge market sector for IBS in Malaysia.

3. Problem statement

The initial take up for IBS nonetheless was not as high as first anticipated at this stage particularly from private sector. IBS Survey 2003 stated only 15 % of construction projects used IBS in Malaysia (IBS Survey, 2003). IBS Mid Term Review in 2007 indicated that approximately only 10% of the complete projects used IBS in the year 2006 as compared to forecasting IBS usage of 50 % in 2006 and 70% in year 2008 as projected in the roadmap (Hamid et al 2008). The availability of cheap foreign labour which offset the cost benefit of using IBS is a root cause of the slow adoption. It also relates to sheer cost of investment and the inadequacy of market size. Small contractors are already familiar with the conventional system and for them the technology suit well with small scale projects and therefore not willing to switch to mechanised based system. Furthermore, small contractors lack financial backup and are not able to set up their own manufacturing plants as it involves very intensive capital investment (Rahman & Omar, 2006). It was highlighted by many that the idealism, processes and management and skill sets behind IBS is differs from the traditional method. Lack of knowledge in IBS construction technology is equally important. There are cases, where building projects are awarded and constructed using IBS system but were contribute to the project delays and bad qualities, let alone a hike in construction cost. This has leaves the industry with a noticeable difficulties when using IBS. As a result, the industry is reluctant to embrace in IBS unless it is required by the clients. A wider understanding on the characteristics and what is involved in IBS is needed. Rethinking the old processes is now critical if the industry is to move forward. The industry requires change management and business re-engineering to encourage new mindset. What is needed is guidance on best practices and success factors which can be orchestrated the effort to adopt new construction mechanism. There are consensuses of opinions that IBS best handled as a holistic process rather than just a collection of technological solutions. The approach requires total synchronisation on construction, manufacturing and design processes. It needs emphasis on rationalisation, standardisation, repetition, collaboration, supply chain partnering and more effective planning and project management. The paper provides basis on the factors that are critical to IBS in Malaysia which result to the success or failure on IBS implementation.

4. Research objective

The objective of the research is to identify the Critical Success Factors (CSFs) to IBS construction in Malaysia through a series of case study survey. The identification of CSFs will established a range of limited area of focus which adopters can put their valuable resources on those things which really make difference between success and failure in IBS.

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5. Research methodology

The literature search is focused in identifying the potential Critical Success Factors (CSFs) to Industrialised Building System (IBS). A literature review seeks to describe, summarise, evaluate, clarify or integrate the content of information. Completing a literature review is usually a significant intellectual achievement in its own right, requiring the analysis and synthesis of previous work in such a manner that new understandings of that work are uncovered, and the way is opened for new research. Most of the reading materials are published journal, articles, text book and other relevant reading material. The case study is chosen as a research strategy as it permits an informal setting of data collection that reflects the reality of what is happening in the real settings. This approach also allows the researcher to probe each argument in details and obtain rich and more complex data in term of tacit knowledge, perception and human experience which may not be measured using a quantitative approach (Yin, 2003). Case study allows multiple source of evidence including interview, document check and observation. The analysis will be carried out to compare and check the potential CSFs identified in literature search with evidences captured in real construction setting. Future validation work will involves the formulation of questionnaire and follows by quantitative analysis.

6. Literature reviews

The Critical Success Factors (CSFs) to the implementation of Industrialised Building System (IBS) are highlighted as follows:

6.1 Good working collaboration will solve the problem related to complex interfacing between systems and ensure efficient process sequence in manufacturing plant and at site (Pan et al 2007, Na and Liska, 2008; Haas and Fangerlund, 2002).

6.2 Effective communication channel across the supply chain need to be established in order to coordinate the process and deal with critical scheduling from the beginning until the project completion (Pan et al, 2008; Blissmas, 2007; BSRIA, 1998)

6.3 Successful implementation depends on organisation ability to expedite learning curve from one project to another (Neala et al 2003). Therefore, continues improvement and learning can develop company understanding on the processes and the principal behind it as the knowledge will multiply as experience mount up (Treadway, 2006).

6.4 Coordination of design, manufacture, transportation, and installation process is vital to the success of IBS (Haas and Fangerlund, 2002; Li, 2006; Vrijhoef et al, 2002 and Lessing, 2006).

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6.5 Key decisions on strategy, application, design, logistic and detail unit should be made as early as possible between all parties involved (Gibb, 1999 & Neale et al, 1993). It should not be used as an afterthought, or as a late solution to shorten construction time, but rather as an integral part of the design from the earliest possible stage of the project (Gibb, 1999 and Blissmas et al 2006).

6.6 The team members should be involved during the design stages, working with the designers, to ensure that the design is not taken to a stage where it restricts the benefits that can be brought through the use of this method (Pan et al 2008; Blismas, 2007; Sanderson, 2003 and Gibb, 2001).

6.7 Successful implementation requires an experience workforce and technical capable in design, planning, organizing and controlling function with respect to production, coordination and distribution of components (Warszawski, 1999).

6.8 Information and Communication Technology (ICT) is vital and reliable support tool to improve tendering, planning, monitoring, distribution, logistic and cost comparison process by establishing integration, accurate data and effective dealing with project documents (Eichert and Kazi, 2007 and Hervas and Ruiz, 2007)

6.9 It requires partnership and close relationship with suppliers and sub-contractors from the early stage of project sequences (Kamar et al 2009; National Audit Office Report (2005); Pan et al 2008 & Pan et al 2007).

6.10 Extensive planning and scheduling of activities in advance is critical in which lead to better project performance, coordination, better scope control and ensure smooth project sequence (Haas and Fangerlund, 2002).

6.11 Improvement in procurement strategy and contracting is important in order to achieve long term success (Pan et al 2007 and Pan et al 2008). The negotiations, procurement and contract should allow the contractors and manufactures to contribute their knowledge, experience of design, construction and planning of the building.

6.12 Risk Management strategy is important when to offsite to deal with late design changes, late payment and contract problem (Housing Forum, 2002 and Hassim et al 2008). By assessing the potential cause of delays and disruption at all stage of the supply chain, contingency measure can be planned to minimised effect of such effort.

6.13 It requires emphasis on design and process standardisation and more effective use on the concept of repetition. Products are documented in systematic ways to ensure that

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everything is repeated in the same manner for installation (Mole, 2001 and National Audit Office Report, 2005).

6.14 High demands will be raised on the management of supply chain and logistic activities (Lessing et al 2005). It needs to be coordinated in a manner that allows the constructors gain the full control of the process with the intention to improve efficiencies and competitiveness (Malik, 2006).

6.15 It also depends on ‘top-down’ commitment and corporate motivation. This in return will ensure the right motivation and commitment from the whole team (BSRIA, 1998).

6.16 Skilled labour which is supported by quality training at all level is essential to success of offsite as it is in more traditional form of construction. It requires tremendous education and training effort of trades especially people involved in those handling, positioning and erecting the finished product (BSRIA, 1998 and Thanoon, 2003).

6.17 Any ventures need to strategies and business approaches and position in the new playing field (Malik, 2006). The management needs to establish clear business need in offsite and build strategic plan around it including effective combination of cost and production knowledge (National Audit Office Report, 2005).

7. Case study analysis

Four case studies have been conducted in Malaysia from August to December 2009. Data collection methods include semi-structured interviews, observations and reference to physical documents. The summary of the case studies depicted in the following Table 1:

Table 1: Analysis of IBS Case Studies in Malaysia

Potential CSFs

Company A Company B Company C Company D

Good Working Collaboration Yes Yes Yes Yes

Effective Communication Channel

Yes Yes Yes Yes

Continues Improvement and Learning

Not in any formal form

Not in any formal form

Not in any formal form

Not in any formal form

Coordination of Design, Manufacture and Construction

Yes Yes Yes Yes

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Key Decisions on Strategy, Application, Design, Logistic, and Detail Unit Should be Made as Early as Possible Between All Parties Involved

Not implemented but agreed to be important to IBS

Not implemented but agreed to be important to IBS

Not implemented but agreed to be important to IBS

Yes

Team members Involved During the Design Stage

Partly involved Yes Partly involved Yes

Experienced Workforce and Technical Capable

Yes Yes Yes Yes

Information and Communication Technology (ICT)

Not widely implemented but agreed to be important to IBS

Not widely implemented but agreed to be important to IBS

Not widely implemented but agreed to be important to IBS

Not widely implemented but agreed to be important to IBS

Close Relationship with Suppliers

Yes Yes Yes Yes

Extensive Planning and Scheduling

Yes Yes Yes Yes

Improvement in Procurement Strategy and Contracting

Similar to conventional

Similar to conventional

Similar to conventional

Similar to conventional

Risk Management Not in any formal form

Not in any formal form

Not in any formal form

Not in any formal form

Design Standardisation and Repetition

Yes Yes Yes Yes

Management of Supply Chain and Logistics

Yes Yes Yes Yes

Top-down Commitment Yes Yes Yes Yes

Skilled Labour for Site Installation

Yes Yes Yes Yes

Strategy and Business Approach

No Not widely implemented but agreed to be important to IBS

Not widely implemented but agreed to be important to IBS

Not widely implemented but agreed to be important to IBS

Results: All cases showed some similarity on the need of good working collaboration, effective communication channel, coordination of design, manufacturing and construction, the need experienced workforce and technical capable, close relationship with suppliers, extensive planning and scheduling,

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standardisation, supply chain, top down commitment on IBS and the need for skilled labour for installation. Risk Management and continues improvement ethos is applied in many situation but not initiated as a formal strategies for IBS. Information and Communication Technology (ICT) is agreed by respondents as critical to IBS but yet to be fully utilised in design, planning and quality monitoring. Business strategy including the need to identify IBS niche market is important but not widely implemented by adopters. IBS can be only benefit if decision to use it can be decided as early as possible not as afterthought during the project is agreed by respondents but the majority of projects in Malaysia design as conventional at the first place and need to be redesign again to suit IBS components. This gave some degree of difficulties to adopters. Although the Bill of Quantity (BQ) is different from conventional, there is no effort to change procurement and contract for IBS. Two companies are involved in design and have an in-house manufacturing capability and the remaining cases are project management contractors. The ability to own in-house design and manufacturing capacity will help the adopters to control supply chain and involve in the whole IBS value chain, however, this need high set-up and running cost and would risk and jeopardised the capability of contractor to implement projects as mention in the remaining case studies, so the adopters are undecided on this issues. The result was not concluded at this moment and will be compared with a survey among IBS practitioners in Malaysia in near future.

8. Initial thought so far

The following are author’s initial thought based on data from literature research and case studies:

• IBS can be only benefit if decision to use it can be decided as early as possible not as afterthought during the project.

• There is a consensus of opinion that the crucial factors in successful off-site projects lie in good site management, planning and control of overall process in project life cycle. This in turn, leads to recommendation that experience and well-trained workers are the critical for IBS contractors. Project Manager must be able to work with multi trade involved in IBS. Engineers with good technical knowledge in analysis, design, manufacturing and construction have the ability to produce systematic IBS systems. If the components are skillfully designed, erection can be carried out efficiently. Furthermore, complying with good practices in design and construction leads to high quality precast concrete structures.

• The integration of IBS components or modules into the building requires the various parties and supply chain to cooperate closely. This requires very careful definitions and management of interfaces between contractors and suppliers and a good communication channel. It has been suggested that by implementing integrated approach in design and construction, fragmentation gap could minimised.

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• Partnering with suppliers and sub-contractors from the earliest project stages is vital to ensure efficient and timely delivery of components and services.

• Components production must also include a commitment to IBS design. Initiating good working collaboration between design team, manufacturer and project coordinator can identify and deal with problem early and push forward improvement in productivity and quality

• There is no reason why construction approach to components production should be radically different from what is used by today’s leading manufacturers of consumer product. It should include management and sustained improvement of the production process to eliminate waste and ensure the right components are produced and delivered at a right time, in the right order and without defect. In this respect Malaysian construction industry has a great deal to learn about effective logistics management.

9. Closing remarks

Industrialising construction by way of manufacture of building components and delivery on site exactly when needed is considered an effective way to achieve productivity gains and to make the industry more attractive for new entrance. To move towards industrialisation, Malaysia government has encouraged the use of Industrialised Building System (IBS) construction. IBS is a potential method to improve overall construction performance in term of quality, cost effectiveness, occupational safety & health, waste reduction, image and productivity. With over forty years of laissez faire implementation in Malaysia, IBS has not become widely accepted or used. To expedite the adoption of IBS, factors which are important to IBS need to be identified. The paper investigates the Critical Success Factors (CSFs) of IBS in Malaysia which are limited numbers of areas that ensure successful IBS adoption. The CSFs which has been identified in this paper will assist in our understanding on IBS and improve overall readiness.

Acknowledgement

The authors would like to thank Construction Industry Development Board (CIDB) for providing grant on the study of IBS in Malaysia and case study participants which their contributions are extremely important to this research.

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The IBS Barriers in the Malaysian Construction Industry: A Study in Construction Supply Chain

Perspective

Nawi, M.N.M. School of the Built Environment, University of Salford

(email: m.n.mohdnawi@pgr.salford.ac.uk) Lee, A.

School of the Built Environment, University of Salford (email: A.Lee@salford.ac.uk)

Arif, M. School of the Built Environment, University of Salford

(email: M.Arif@salford.ac.uk)

Abstract

Supply chain management is a management of network relationships of organisations in pursuance of business process and performance improvement, while Industrialised Building System (IBS) is an alternative construction method towards sustainable and improvement of construction performance and image. Both concepts are related with movement of innovation to enhance the project delivery and performance in terms of cost reduction, quality, work environment, relationships, and productivity. Many efforts have been done in order to implement IBS in the Malaysian construction industry; unfortunately the process of implementation had faced a lot of hindrances. These hindrances arising from the supply chain include miscommunication, lack of coordination, lack of integration, lack of trust and negative attitudes. This paper through literature review aims to highlight all of these barriers and examines how far it affects the process of IBS implementation. Suggestions on how supply chain management practice could be implemented more effectively to pursue IBS implementation will be concluded.

Keywords: supply chain management system, Industrialised Building System (IBS), Malaysian construction industry, project performance

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1 Introduction

As a developing country, Malaysia is rapidly developing in every domain including construction. Public and private sectors have initiated the need for large and complex construction projects. Malaysia’s housing policy is geared towards meeting the objective of ensuring access to adequate and decent shelter to all citizens, particularly low-income groups.

It is predicted that between years 1995 to 2020, Malaysia will need a total of 8,850,554 houses, including 4,964,560 units of new housing, to cater for the increase in population during this period (Yoke et al., 2003). The statistics data will be more crucial by the increasing of immigration and natural disasters which create more demand for the housing. Unfortunately, only 1,382,917 units were constructed under the Sixth and Seventh Malaysia Plans. This means that another 3,581,643 units need to be built within the next twenty years to meet targets, and not 600,000 - 800,000 units as planned under the 8th Malaysia Plan. However, the increase of population as a by-product of modernisation has brought housing issues into new perspectives in Malaysia.

While the problem of housing grows more acute, Malaysia is struggling to meet its own housing needs, and is trying to do so through adopting new technology. The conventional construction method, which is commonly being practiced, is high cost and unable to respond to this huge demand in a short time with standard quality (Agus, 1997 and Senturer, 2001). Waleed et al., (1997) stated that to achieve the Malaysian Plan target using current conventional building systems, it will require an excessive workforce, since on average, only one house is completed per year per worker (one house/year/worker). The rising cost of labour is an important factor in increasing the total cost of the house. As stated by Friedman and Cammalleri (1993), the labour cost has increased to 30% of the construction cost as compared with 10% a few years ago.

2 IBS as an alternative solution

In an attempt to address these issues, the government, through its Construction Development Board (CIDB) Malaysia, actively promotes the adoption of a new or modern construction method system, entitled Industrialised Building System (IBS). Some researchers classify IBS as a process of total integration of subsystems, components and elements into one overall system which utilizes industrialized production, transportation, assembly and erection on site (Diaz, 1971; Junid, 1986 and Warszawski, 1999). Lessing (2005) specified IBS as a process of integrated manufacturing and construction under well-planned organization to improve quality through construction standardization and reduction of labour intensity. IBS also was identified as an industrialized production technique (Parid, 1997) and construction method (Badir & Razali, 1998) which components are manufactured under control environment either at site or factory, transported, positioned and assembled into a structure with minimum additional site works (Trikha, 1999). In this paper, IBS definition could be summarised as an innovative process of building construction using concept of mass-production of industrialised systems, produced at the factory or onsite within controlled environments, that includes the logistic and assembly aspect under a proper planning and coordination design process toward enhancing the end users desired values. According to IEM (2001), IBS has immense inherent

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advantages in term of productivity, indoor quality, durability and cost. Buildings constructed by this method also have a short construction time and standard quality (Senturer, 2001).

2.1 History and development of IBS in Malaysia

The IBS agenda in Malaysia begun in the early 1960’s when the Ministry of Housing and Local Government of Malaysia visited a number of European countries and evaluated their housing development programmes (Thanoon et al., 2003). Following the successful visit, the government initiated an IBS pilot project in 1964 which aimed to speed up the delivery time, and to build affordable and quality houses.

Despite the introduction of IBS in Malaysia was over 40 years ago, the pace of implementation is still slow. The Malaysian government are concerned that uptake of IBS is low despite the plausible potential (Hamid et al., 2008). A survey conducted by the CIDB of Malaysia in 2003 revealed the adoption level of IBS stands at only 15% (CIDB, 2003b). However, in the last couple of years, the momentum has steadily increased and has gradually become part of the industry. Many private companies in Malaysia have teamed up with foreign experts from Australia, Netherlands, United States and Japan to offer pre-cast solutions (CIDB, 2003b). There are now a number of key IBS projects such as:

• 17 storeys flats along Jalan Pekeliling, Kuala Lumpur. Gammon/ Larsen Nielsen used a Danish system of large pre-fabricated panels (CIDB, 2003b).

• Housing project comprising 6 blocks of 17 storeys flats, and 3 blocks of 18 storeys flats was constructed at Jalan Rifle Range, Penang. Hochtief/ Chee Seng adopted the French Estoit System (Din, 1984).

• Taman Tun Sardon Housing project in Penang. An IBS pre-cast component and system was used in the project and was designed by the British Research Establishment (BRE) in 1978 for low cost housing in tropical countries.

• Perbadanan Kemajuan Negeri Selangor (PKNS): low cost houses and high cost bungalows project in Selangor (CIDB, 2003b). This project is under a state government development agency which acquired pre-cast concrete technology from Praton Haus International, Germany.

• The 36-storeys Dayabumi complex which was the first project to use steel structure (part of IBS) as a method of construction completed in 1984 by Takenaka Corporation, Japan (CIDB, 2003b).

• Further, full and hybrid IBS construction successful landmark projects can be found throughout Malaysia, such as, Bukit Jalil Sport Complex; Lightweight Railway Train (LRT); Petronas Twin Tower; and Stormwater Management and Road Tunnel (SMART Tunnel).

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2.2 Adoption barriers of IBS in Malaysia

Early efforts by the government to promote usage of Industrialised Building Systems (IBS) as an alternative to the conventional and labour intensive construction method however has not made a headway. In an attempt to understand the poor diffusion of IBS, some researchers have investigated the barriers to effective IBS implementation in construction. Reconciling the relevant literature, these IBS barriers can be categorised into five main themes: cost and financial (Kamar et al., 2009; CREAM, 2007; Nawi et al., 2007a; IBS Steering Committee, 2006; Haron et al., 2005; and Thanoon et al., 2003), skills and knowledge (Kamar et al., 2009; CREAM, 2007; CIMP, 2007; Nawi et al., 2007a; IBS Steering Committee, 2006; IBS Survey, 2003; Nawi, et al., 2005; and Thanoon et al., 2003), procurement and supply chain (Kamar et al., 2009; Hussein, 2007; IBS Steering Committee, 2006; Chung, 2006; Faizul, 2006; Nawi, et al., 2005), perception from customers and professionals (Kamar et al., 2009; CREAM, 2007; IBS Review, 2007, Nawi et al., 2007a; and Nawi et al., 2007b) and lack of government incentives and promotion (CREAM, 2007; Nawi et al., 2007b; IBS Steering Committee, 2006; and IBS Survey, 2003). These issues specifically can affect the various stakeholders in the IBS value chain: either, manufactures designers, local authorities, contractors, suppliers or clients. As highlighted by CIDB (2009), improving procurement system and supply chain is the key to achieve IBS success in the Malaysian construction industry. Therefore, this paper will expose this problem specially on IBS supply chain design process in order to minimize that barrier appropriately.

2.3 IBS supply chain barrier

Studies by Potts (1995) identified that a shortage or late supply of information, equipment, and materials on site are among the factors that contribute to the problem of delay in construction industry. This problem is worsened by the situation where the construction site locating too far from manufacturers or suppliers area. According to the IBS Manufacturers Directory by the CIDB (2008), majority of IBS manufacturers are located in industrial areas (such as Klang Valley, Seremban and Butterworth). This situation indirectly will increase the logistics and transportations cost for the construction project especially in the rural areas such as Northern Region and East Coast of Malaysia (Chung, 2006 and Nawi et al., 2005). Consequently, the contractor will have to bear extra expenses for transportation cost in delivering the product.

Problem related to manufacturer’s requirement is identified as one of the hurdles of IBS adoption in the Malaysian construction industry (Fikri, 2005). In current practice, before a project is started, the awarded contractor will be paid around 25% of total amount of project as an initial payment by the client. In IBS projects, however, the problems that exist are normally associated with financial standing that is faced especially by local contractors. They do not have sufficient fund as well as inconsistent in pumping money or capital to the projects. As highlighted by Fikri (2005) and Nawi et al., (2005) IBS manufacturers are usually required to pay about 75% advance payment before able to proceed for a delivery to the construction site. In this case, normally the contractor will apply for a bond from financial agency (such as bank) as a guarantee source of finance for the company. Unfortunately some contractors, especially who are new in the field, failed to acquire a bond thus

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affect the project development process. This factor is being identified as one of the greatest hindrance of IBS adoption in Malaysian construction industry.

Practically, most of the IBS project deliveries still apply the traditional approach. It begins with an architect who gets the information from the client, produce an architectural design, to be given to the structural engineers. Upon completing the structural design, the engineer then passes the detail specification to the quantity surveyor for costing purposes and bill of quantities before passing it to main contractor who then take action for further discussion with manufacturer especially in term of building components production and the assemble process. This practice allows the manufacturers and contractors to be involved only after design stage. This supply chain process creates problems such as delay, increase in lead time, and late supply of material (Jha and Iyer, 2006; Baiden et al, 2006; Smith et al., 2004; Vrijhoef and Koskela, 1999; Evbuomwan and Anumba, 1998; and Gunasekaran and Love, 1998). Furthermore, IBS method has been heavily criticised in as it hinders effective communication, lacks of understanding among participants, team building and the design and construction team (Kamar et al., 2009; Hamid et al., 2008; CIMP, 2007; Nawi et al., 2007b; and Che Mat, 2006). This traditional approach known as ‘over the wall’ syndrome is shown in Figure 1. This wall affects each discipline’s ability to effectively communicate thus cause a problem to the process of communication especially among multi disciplines in organisation (Evbuomwan and Anumba, 1998).

Figure 1: Over the Wall Syndrome (Evbuomwan and Anumba, 1998)

As mentioned by Mendelsohn (1997), the reality of construction is that probably 75 percent of the problems encountered in the field are generated in the design phase. Studies in the manufacturing industry also have shown that approximately 70% of costs associated with a project are committed during the design phase (Prasad, 1996). These problems are related to the constructability concept in term of sharing information or knowledge process among project supply chain stakeholders. As defined by Construction Industry Institute, CII (1986), constructability is an optimum use of construction knowledge and experience in the conceptual planning, detail engineering, procurement, and field operations phases to achieve the overall project objectives.

In addition, the barrier to IBS is also allied to constructability issue in terms of technical part during the design-manufacture-construction stage. It is because; most of the IBS design process deals with

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offsite production through the concept of design for pre-assembly and pre-fabrication process. Some of the IBS previous studies identified that, the weakness of existing IBS construction method is still in its cumbersome connections and jointing methods which is very sensitive to errors and sloppy work (Thanoon et al., 2003 and Nawi et al., 2007b). For an example, poor jointing of prefabricated walls with other prefabricated or in-situ elements may cause water seepage problems, especially for high-rise buildings during the rainy seasons in Malaysia (Fikri, 2005 and Nawi et al., 2007b). This problem is further enhanced by the implication for the choice of finishes besides the use of low quality and unsuitable product as well. As a result, high moisture movement, incompatible with the other materials with which they were in contact, has led to tiles coming off the walls. All of these issues are underpinned by poor communication and integration among relevant players such as designer, contractor and manufacturer in the design stage (CIDB, 2009) thus resulted the need for plan redesign and incur additional costs if IBS is to be adopted (Kamar et al., 2009; Hamid et al., 2008; CIMP; 2007 and IBS Review, 2007).

Towards this process to run smoothly and successfully, the authority should consider the requirement of early integration and collaboration of specialist and knowledge holders such as contractors, manufacturers and suppliers to deliberate the design process at an earlier stage (Gil et al., 2001; Dowlatshahi, 1999; and Dowlatshahi, 1998). It is because the Malaysian current practice is still based on the traditional approach in the project delivery process. Some independent studies (e.g., Ireland 1985; ASCE 1991; Russell et al., 1993) also confirmed that integrating construction knowledge into design processes greatly improves the chances of achieving a better quality project, able to complete in a safe manner, within schedule, and for the least cost. Based on the literature review, the main approaches to improve project performance through early involvement of contractor and manufacture can be categorised into several major themes such as using an alternative procurement approach; using a partnering approach; and applying new management philosophy originating from other industries like Supply Chain Management (SCM), Value Management, Lean Construction and Concurrent Engineering. In this paper, the study however was limited on SCM as a collaboration tool to pursue IBS implementation in Malaysian construction industry.

3 Supply chain management

3.1 Definition and Concept of SCM

The term of supply chain is defined as “the integration of key business processes from end user through original suppliers that provides products, services and information that add value for customers and other stakeholders” (Soroor and Tarokh, 2006a). Further definition of supply chain has been defined as “the network of organisations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer” (Christopher, 1992), or simply as a system through which organisations deliver their products and services to their customers (Poirier and Reiter, 1996). Nelson (2003) defined supply chain as a “complex network or system of interconnected and interdependent individuals, groups, companies, organisations and relationships whose goal is to satisfy and add value to their particular customer.”

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The term Supply Chain Management (SCM) was developed in the 1980s, to express the need to integrate key business processes, from end-user through the original suppliers. Generally, the SCM term reflects the process of planning, implementing, and controlling the operations of the supply chain to be as efficiently as possible. SCM spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption (Udin et al., 2006). The other definitions of SCM are given in Table 1 below.

Table 1; Definitions of SCM

Sources Definitions

Gattorna and Walters (1996)

“A loop that starts and ends with the customer, where through the loop flow all materials and finished goods, all information and all transactions”

Bechtel and Jayaram (1997) “SCM is related to the flow of materials and information, from initial sources to the transformation process before delivery to the end-users.”

Lambert et al,. (1998) “SCM is the integration of key business processes from end user through original suppliers that provides products, services, and information that add value for customers and other stakeholders”

Mentzer et al,. (2001)

“SCM is defined as the systematic, strategic coordination of the traditional business functions and tactics across these business functions within a particular company and across businesses within the supply chain, for the purpose of improving the long-term performance of the individual companies and the supply chain as a whole”

CLM (2004) SCM encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. It also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers and customers. In essence, SCM integrates supply and demand management within and across companies.

3.2 SCM benefits

Nowadays, the construction is moving to the appointment of integrated supply chains to improve collaboration, integration, communication and coordination between stakeholders in the construction supply chain. All stakeholders or parties have a long term objective to work together to deliver added value to the client. The long term relationships enable the power of supply chain management to be fully realised and thus, the integration of supply chain management is recognised as one of the process improvement areas which is vital in the development of construction projects.

Person (1999) noted that by implementing SCM as an integrative part in business strategy, the client and contractor could get some benefits such as being able to reduce their supplier base; establish and nurture relationships with suppliers; organise training programmes to encourage a cooperative approach to problem solving; as well as develop system for rating suppliers performance on quality, speed and prices. Further conducted study in Hong Kong construction industry indicated that the concept of supply-chain in construction makes subcontractors and suppliers more responsive to the

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needs of the company (main contractor) and complies with the requirements of the projects (Wong and Fung, 1999). According to them, the development of strong relationships with main contractor will secure the supply of the services or material and control the quality and cost from subcontractors/suppliers.

Adoption of SCM in construction project, such traditional procurement related issues like miscommunication and lack of integration among design and construction teams could be reduced significantly (Love et al., 2004). For example, the involvement of suppliers (as expertise about design and procurement issues) at an early stage in the construction project will improve project performance through a reduction of wastage in schedule, cost and adversarial relationship issue (Person, 1999). Furthermore, this concept has a potential to minimize the barriers of information flow within the traditional separated of design and production process which has been criticised since 50 years ago (Simon Report, 1944; Banwell, 1964; Latham, 1994; and Egan, 1998). Love et al., (2004) indicate that there have been endless calls to “bridge this gap” by creating a seamless supply chain whereby the interface between various phases of project’s life cycle are integrated with one another. The example of a seamless supply chain model that offer a collaborative working arrangement in a concurrent approach is illustrated in the Figure 2 below. This model encourages disciplines with desperate goals to work collectively and result in a better understanding of one another goals; ultimately the team becomes customer focused (Karma et al., 2000). According to Love et al., (2004), this model also attempts to eliminate individual’s role ambiguity through the use of multi-disciplinary ‘entity’ team relationship. Another greater number of this model is to enhance a degree of interaction between team members and thus contribute to an effective communication process in the project. While, in the beginning of project, a facilitator will be assigned in order to ensure all the processes will run smoothly as planned. Therefore, a high degree of production lead time, wastage, redesign and a de-motivated workforce will be avoided efficiently.

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Figure 2: A Seamless project supply chain management model (Love et al., 2004)

4 Conclusion This paper has briefly reviewed the IBS (or offsite) principles and practices in Malaysian construction industry. Although, the introduction of IBS construction is considered a good potential solution to improve quality through construction standardization and reduction of labour intensity, it still faces

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some barriers in its process of implementation. Problem with project supply chain process (e.g. lack of integration in design, construction and production process) was identified as part of the IBS adoption barrier in the Malaysian construction industry. The key of IBS success could be achieved by improving procurement system and integration supply chain in the Malaysian construction industry (CIDB, 2009). In this paper, SCM as an emerging concept in the construction industry has been proposed as a new approach towards assimilating a symbiotic project team entity. One of the examples of SCM collaborative teamwork models in the construction industry is called a seamless project supply chain management model (Love et al., 2004). This horizontal structure organisation model has been designed with aim to stimulate collective learning and teamwork through the implementation of Total Quality Management (TQM) philosophy. This approach implies that individuals and groups work together concurrently rather than sequentially to design and develop both product and process and to ‘jointly’ identify material and equipment required for production (Love et al., 2004). This proposed SCM model for integrating design and production processes in construction however, requires further development and improvement in several areas before it can be applied in the IBS industry include;

• To identify the criteria or issue relating to the selection of project team member (stakeholders) process in offsite (IBS) project

• To identify stakeholder’s role and responsibility in offsite project particularly into the issue of design integration process

• To explore how architects and engineers can utilise Quality Function Deployment (QFD) in integrated and systematic way as noted by Love and Sohal (2002). This technique, however was not currently being used by practitioners to assist them during the design process even several previous researchers demonstrated that QFD is effective in construction (Karma 1999; Abdul–Rahman et al., 1999; Evbuomwan and Anumba, 1998; and Mohamed, 1995)

• To develop a format for client project briefing at the beginning of offsite project to include the issue of lack of integration during design, construction and manufacturing stages

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Wong, A. and Fung, P. (1999). Total quality management in the construction industry in Hong Kong: a supply chain management perspective, Total Quality Management1, 0 (2), pp. 199-208

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Yoke, L.L., Hassim S., and Kadir, M.R.A. (2003), ‘Computer-Based Cost Control Model For Industrialised Building System Construction’, International Conference of Industrialised Building Systems, Kuala Lumpur, Malaysia.

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Construction Industrialization and Use of Prefabricated Elements Applied in Hospital Buildings Production: Case Study in The Technology Center of The Sarah

Network of Rehabilitation Hospitals (Ctrs), Brazil

Lukiantchuki, M.A. Postgraduate Researcher at São Carlos School of Engineering, University of São Paulo, Brazil

(email:marieli@sc.usp.br) Caixeta, M.C.B.F.

Postgraduate Researcher at São Carlos School of Engineering, University of São Paulo, Brazil (eamil:michele@sc.usp.br)

Fabricio, M.M. São Carlos School of Engineering, University of São Paulo, Brazil

(email: marcio@sc.usp.br)

Abstract

The construction industrialization based on the use of prefabricated elements has been widely applied in civil construction, seen as a great improvement in the progress of construction. This system rationalizes the material use and optimizes “human labor”, nevertheless it demands a great technical knowledge and improvement and brings the need for control and guarantee of construction quality. Moreover, the use of industrial constructive systems is more rational and economical, reducing losses, raising productivity and providing less environmental impact. The Technology Center of The Sarah Network of Rehabilitation Hospitals (CTRS) - stands out as a Brazilian reference case of design and production of industrial hospital buildings. From the manufacturing facility in Salvador, state of Bahia, managed by the architect João Filgueiras Lima (Lelé), the CTRS developed and built hospitals in eight Brazilian capitals and other cities, from industrial parts and components fabricated in its factory. This production is remarkable for its architectural quality, for the use of “closed industrial construction system” and for innovative design solutions, focusing on hot climate buildings’ thermal comfort, with extensive use of natural ventilation. This work aims to study the production in CTRS, as a Brazilian reference on closed industrialization of hospital buildings. The analysis will be performed by a descriptive case study of product development process of design and production, focusing on the construction system developed. The results are the contextualization of the CTRS production, highlighting the importance of the design and the use of prefabricated elements for the quality of constructive, spatial and thermal comfort solutions and for the building flexibility to the fast advances, new technologies and new medical procedures, thus facilitating the maintenance and expansion stages. This work shows that production of the ferrocement elements in the factory mentioned provides less waste, greater technological control, greater efficiency and rationalization of working sites, together with formal innovations and high architectural quality. Moreover, the construction systems used by the architect allow the hospital structure to be more flexible in both

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aspects: the maintenance and future extensions, resulting in better functioning and suitability for new technologies.

Keywords: construction industrialization, prefabrication, healthcare architecture, lelé

1. Introduction

This article aims to analyze production process at the Technology Center of The Sarah Network of Rehabilitation Hospitals (CTRS), because this has a full course of civil construction, since at CTRS, the teams design the building, produce the prefabricated elements, perform the building assembly and carry out the maintenance of hospitals. Because of this, this work will analyze both production at CTRS and the performance of these systems in these hospitals, through collected data in specialized texts, site visits and interviews with professionals related with this issue.

The CTRS is located in Salvador, state of Bahia in Brazil, and is responsible for the industrialized construction of The Sarah Kubitschek Network of Rehabilitation Hospitals, that constitutes a non-governmental organization dedicated to health promotion, working in the rehabilitation of locomotor system diseases. The Sarah Network is constituted by ten hospitals, the first being in 1980, in Brasília, and later others were built in the cities of São Luís, Salvador, Belo Horizonte, Fortaleza, Rio de Janeiro (Children’s Center), Brasília (North Lake), Macapá, Belém, and again in Rio de Janeiro (hospital) opened in the year 2009, as shown in Figure 1.

Designed by the architect João Filgueiras Lima (Lelé), these hospitals, with ferrocement and steel industrialized construction systems, are the major contemporary Brazilian example in this area.

The architect João Filgueiras Lima, known as Lelé in the Brazilian architectural community, graduated in 1956 and since the beginning of his professional career was in contact with streamlined methods of construction, highlighting its work in construction of the new capital of Brazil, Brasilia, and also the period when he was in Eastern Europe, studying prefabricated building systems.

Together with doctor Aloysio Campos da Paz and with the economist and engineer Eduardo Kertész, Lelé created the Sarah Network from a document prepared in 1976 under the name of the Health Subsystem in Locomotor System Area. Lelé and Aloysio discussed the possibility of the hospital to have a different perspective, and from this they have matured the proposal over at least 13 years (Menezes, 2004).

Lelé’s architecture is characterized, therefore, by the quest for rationalization and industrialization of architecture. The use of prefabricated ferrocement technology gave the best technical conditions for shipping and parts have great resistance with a few centimetres in thickness, making them more lightweight and flexible.

Lelé suits the Sarah Network designs to technological and environmental needs of the hospital program, establishing principles that guide all buildings of the network, such as building elements

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standardization, green spaces, natural lighting and ventilation, among other aspects that help in the patients healing process. In Brazil, as a tropical country, and by the fact that most of these network hospitals is located in hot and humid weather regions, the use of natural ventilation as a strategy for achieving thermal comfort is essential. Not only it provides more pleasant and wholesome environments, but also avoids the air conditioning and therefore the excessive energy consumption.

Figure 1: Hospitals of Sarah Network. Source: (CTRS Collection, 2008).

The CTRS production is based on prefabrication of structure, walls, facilities, among other things. It can be characterized as a closed loop industrialized building system, in which a single company or organization is responsible for the production of constructive subsystems and determines the compatibility rules between components and, therefore, dominates the product technology and development process (Camargo, 1975 and Serrano, 1980).

The prefabrication systems are applied to all stages of the building, from the superstructure to hospital objects, such as bed-stretcher. Later, these same prefabrication systems of components, natural lighting and ventilation are applied in other projects of the architect, as the administrative centers in different Brazilian cities.

Prefabrication has been widely applied in large buildings. Despite of a little higher cost compared to traditional construction methods, its use is justified by the reduction of work stages, allowing the faster completion and better organization of the work. This streamlining enables the construction by optimizing the work on site, due to part of the production process being moved from site to factories. It is also important to consider its use since the design conception so that a satisfactory outcome can be achieved (Oliveira et al, 2002).

Lelé was usually engaged with construction techniques and pre-fabrication enabled the creation of elements with his own shapes, and in hospital architecture he improved the industrialization of these elements, creating more functional and lightweight compositions.

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2. Research method

This work was based on a case study in the CTRS and uses multiple evidence sources: field research through interviews with professionals related to the theme and site visits. The work began with an extensive literature review - that is not fully presented here – in order to get theoretical tools necessary to understand the features involved in Lelé’s production. After that, we visited the CTRS in Salvador to collect data and to know how Lelé’s entire staff works and the production process at the CTRS. During this visit, it was possible to see the collection of projects developed by the architect, which is composed of explanatory documents, designs, images and models.

Later, there was made an interview with the architect Lelé, in order to understand the design conception process and the CTRS operation. Next, the structural engineer Roberto Vitorino, who is responsible for the structural design of the Sarah Network Hospitals and who plays an important role in the industrialization process was interviewed.

Some hospitals of the Sarah Network were also visited. There were two trips to Rio de Janeiro, one during the construction and another when the building was almost complete. In these trips, it was possible to speak with the architect Adriana Filgueiras Lima, which is responsible for coordinating the hospital construction in Rio de Janeiro. Later, the hospital in Salvador was visited, when the architect Neuton Bacelar was interviewed. He attended the hospital construction in Salvador and is currently a member of Lelé’s staff, responsible for the maintenance of this hospital. And finally, the hospital in Brasilia was visited, where it was possible to analyze the building process of the network first hospital. The data collected on site in the hospitals were carried through photographs, design analysis and building systems.

3. The construction of the sarah network hospitals: a differentiated technology by the CTRS

When the management contract was created, at the beginning of Sarah Hospital Network, one of the goals was to extend the network throughout the country. Thus, it was decided to create the Technology Center in Salvador with the main purposes: to design and implement the network buildings based on industrialization, looking for economies and speed in construction, to design and implement hospital facilities if they offer advantages over market and perform buildings and equipment maintenance of all network units (Latorraca, 1999).

3.1 Design conception process

The conception of the Sarah Network hospitals is multidisciplinary. It involves professionals from different areas, such as architects, civil engineers, mechanical engineers, among others. The person responsible for architectural design and technical coordination is the architect Lelé, who manages the

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whole designing process and supervises every detail thoroughly. This greatly facilitates the subsequent stages: assembly and maintenance.

Table 1: Coordinators responsible for the design sectors in the CTRS

Design Sector Number of coordinators Designers on team

Architectural design and technical coordination

01 - João Filgueiras Lima --

Design teams 02 09

Consulting in Thermal Comfort 01 09

Landscape Architecture 02 02 Source: CTRS Collection

Related to hospital equipment, there is a selected engineer responsible for solving the hospitals automation, such as movable frames, training swimming pools, among other things. Furthermore, there is a landscaping architect responsible for the landscaping of the hospitals. Lelé also had the collaboration of the artist Athos Bulcão, who died in 2008. He was responsible for the integration of artworks.

The architectural design conception takes place simultaneously with other projects. First, the architect makes a sketch of the building and meets the structural engineer Roberto Vitorino, so that the architecture and structure design can be developed together. At this stage, they also talk to the mechanical engineer George Raulino, who is responsible for the calculations of the heat load and the air conditioning ducts so that the whole architectural design is scaled according to these requirements. It optimizes time and also provides a full integration among architectural design, structural design, electrical, hydraulic, and others, seeking a better functioning building in practice.

As the offices of Lelé and the majority of his team is in the CTRS, the design process is facilitated because at the same time a prefabricated piece is designed in the offices, it is performed in a workshop beside the offices, analyzed and coordinated by the architect. The excessive caution with the architectural design conception, with the production of prefabricated parts and the assembly of the buildings happens because all steps are performed by Lelé’s team, including the maintenance.

The architectural design developed reaches a high level of detail. In order to assist in the manufacture of parts and later in their assembly in the construction site, the details are made in a 1:1 scale, even the screw fittings. In one hospital design, the details reach 10,000 drawings (verbal information)1. Moreover, we draw a diagram to show how to assemble on site, to make process easier and faster. This procedure is important because the CTRS is located in the city of Salvador, and most of the hospital network is located in other cities, like Rio de Janeiro, Fortaleza, Brasília, among others.

1 Interview realized with the architect João Filgueiras Lima, in November 18th, 2008.

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Another important aspect is the modulation. In complex buildings standardization it is important, such as hospitals, which requires a fast and streamlined constructive method, not only to increase productivity but also to the design compatibility. Thus, in Sarah hospitals, it has established a modulation which enables greater precision in measures, improving the relationship among the various designers. This modulation is used in architectural, structural, electrical and hydraulic designs, and also in the manufacture of prefabricated parts.

Sarah Network Hospitals are a successful example of modulated systems use. Lelé says he has already used modules as 1.10 m and 1.20 m (Carvalho and Tavares, 2002), however, he believes that adopting a measure for module is also a matter of common sense, because it is difficult to define which the best module is. Currently he uses the module of 1.25 m and its multiples, because it is working better and has a lot of advantages, which will be shown forward.

First, the modules adopted previously had problems with flooring materials – pressed melamine and porcelain, basically. In Sarah Hospital Network, they use pressed melamine in pre-cut pieces of 0.625 m, thus following the basic modulation of 1.25 m. The ceramic pieces that they use have 50cm, which is not compatible with the module of 1.20 m. The module of 0.625 m makes the placement of floors easier, rationalizes the use of materials and reduces waste (Carvalho and Tavares, 2002).

The Sarah wards are large halls that allow the patient mobility. However, it is possible to isolate each bed when privacy is necessary. Each bed boxes has a measure of 2.50 m, which is also facilitated by the module of 1.25 m (Carvalho and Tavares, 2002).

The electrical installations are inserted into rails that run horizontally by steel beams or in vertical ducts. These rails and ducts are also useful for fire and hydraulic plumbing and air conditioning facilities. Thus, the solutions are standardized and it decreases the variety of materials (Carvalho and Tavares, 2002). The ferrocement walls follow the modulation, which has a width of 0.625 m. The structural design also follows this modulation, which can be seen in the roof trusses and frames. Unlike the horizontal dimensions, there is no modulation in the vertical direction, which is determined according to the need of the project.

3.2 Production: technology center of sarah network of rehabilitation hospitals - CTRS

In 1992, the CTRS began operating in temporary premises, and the permanent premises appeared only in 1993. The Center was established at the same site of Sarah Kubitschek Hospital, in Salvador, with about 20.000m2 of built area (Latorraca, 1999). The Center is configured by connected one-floor buildings, with 6 meters high, where the workshops – shown in the table 2 – function.

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Table 2: Workshops and Sectors of Technology Center of Sarah Network of Rehabilitation Hospitals - CTRS

Workshops / Sectors Managers Workers on team Functions

Administrative Superintendence

01 14

Facilities 03 Data not available

Structures 03 Data not available

Light Metallurgy 01 28 To execute small structures, such as furniture and hospital equipment

Heavy Metallurgy 01 31 To execute steel components , such as frames.

Ferrocement 01 16 To make wall pannels, retaining wall, among others.

Joinery 01 25 To make wood components, such as doors and furniture..

Plastic 01 12 To make components with injected plastic and fiberglass to construction and equipments.

Painting Data not available 08 To paint metal,wood and plastic pieces with

electrostatic-based epoxy and polyurethane

Maintenance/cleaning/

security Data not available 37

Automation 03 13

Visual Communication 01 04

Assembly on site 01 ~ 03

(depending on hospital size)

Data not available

Source: CTRS Collection

It is important to remember that within each sector described above, there are many other professionals, such as workshops workers of the CTRS.

The building system of Sarah Network Hospitals is composed by prefabricated components produced in the CTRS in Salvador. The system is basically constituted by a metallic structure and ferrocement wall panels. This allows great flexibility and makes the stages of construction assembly and especially the maintenance and future expansions of the building easier. In Health Care buildings it is very important because the flexibility allows adaptation to the new techniques of care, treatment and new equipments. According to Pressler (2006), although that requires a higher initial investment, the flexibility can result in increased operational efficiency and staffs, as well as potential economics in

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futures projects. In the case of Sarah Network Hospitals, as the production is industrialized, this initial cost is reduced, allowing flexible enterprises.

Upstairs in the workshops, there are mezzanines from where it is possible to overlook the workshops where they develop the technical, management sectors and cloakroom. In this same place Lelé’s office is located, who supervises the whole production. The interconnection of workshops happens through corridors superposed on two levels. The upstairs corridor serves the offices and cloakroom and the downstairs corridor serves supply and intercommunication of the production sectors (Latorraca, 1999). This integration between building and production is fundamental, according to the architect.

Figures 2 and 3: Heavy and light metallurgy workshops (Lukiantchuki, 2008)

Figures 4 and 5: Ferrocement and Painting workshops (Lukiantchuki, 2008)

The heavy metallurgy workshop produces heavier elements and structures, using the technology of steel beams which guarantees a specific design of the pieces (verbal information)2.

In the ferrocement workshop are produced all of the divisions of the hospitals. The reinforcements are made in industrialized steel tissue and special steel to counteract mechanical and specifics efforts. The ferrocement is mixed in cement machines and distributed mechanically to the posts of melt, which is injected by gravity in metallic molds using a funnel. This process is aided by vibrators attached to the

2 Visit in the CTRS, on November 19, 2008, guided by architect André Borém

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molds which guarantee a homogeneous distribution of the material, avoiding possible bubbles. After the molds filled, they are lifted by cranes and immersed in the tanks with water at 60°C – that accelerates the cure process with protection against contraction – which takes about 4 hours. After curing, these molds are transferred in a translation mechanic system where they go through unmolding. Subsequent to defacing, the pieces are transferred to the quality control (verbal information)3.

After unmolding, it’s necessary to finish the parts to remove burrs, sanding, and others aspects that require refinement. After this process, the walls are ready and they are put in storage, and later on taken to the building sites. The CTRS has a production capacity equivalent to 3 or 4 cycles per day.

After the components are ready, they are taken to the painting workshop, where the pieces receive the final touches, and when the paint is dry, the pieces are packed. The materials are stored in marked and specified boxes to facilitate the work on site.

The making of the covers is a rigorous process, because Lelé’s architecture is marked by curved roofs through the use of sheds. The radius of sheds established in the Project is designed on the ground as basis for the workers. The tiles go through a calender several times until they reach the desired radius.

Figure 6: Roof with curved sheds (Lukiantchuki, 2008)

In the light metallurgist workshop, based on the use of steel, elements that require a more rigorous finishing are produced, such as frames, furniture and hospital equipments.

In the first Sarah Network Hospitals, all frames were opened manually and now they are motorized. These mechanical and automation parts have a high technical rigor and all of theses parts are manufactured in the CTRS, at the mechatronics and electronics sector, in the Light Metallurgy.

As examples, there are the frames of the hospital in Rio de Janeiro, which are all motorized: the pool developed by the architect for the patients’ training, the bed-stretcher, which has movable height, is designed to facilitate the transfer of patients from stretcher to chair, and Sarah hospital trolley in

3 Ibidem

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Salvador, which transports patients from the lowest to the highest point of land. In addition, the cars that transport the patients are also developed in the CTRS.

The joinery is a smaller workshop and is responsible for manufacturing finishing elements - doors, partitions, among others – and furniture, such as cabinets and shelves. In the plastic workshop they make plastic chairs for the reception, fans, among others. Furthermore, the CTRS produces all visual communication elements to the hospital, such as warning and alert signs.

The average potential of production in the CTRS is one equipped hospital with 200 beds, worth 35 million dollars per year. But its potential may reach double: 70 million dollars per year, with no loss of quality or increase of production costs. The minimum production to keep it economically viable can not be less than 11 million per year (Antunes, 2008, p.63)

3.3 Transport

The easiness of transport of the pieces is very important for the Sarah Network Hospitals because all the components are produced at CTRS in Salvador and later taken to the hospital building site throughout the country. Thus it was necessary to consider the transport in the production process. Although the factory is located near a maritime port, the means of transportation chosen was trucks because of just one load-unload at the factory-site, and because there are Sarah Network Hospitals in several Brazilian states and many hospitals are distant from coastlines – two loading-unloading process would be necessary, thus putting pieces at risk of damage. Plus, it makes it simpler and more affordable (verbal information)4. The pieces were designed keeping the size of the trucks in mind to make the loading and the transportation of the components as regular and as fast as possible. According to structural engineer, must be avoid the use of larger trucks, especially those that exceed the length established by law and require auxiliary traffic vehicle.

3.4 Assembly

In the case of industrialized construction, the architecture and structure of the hospitals are designed considering the stages of assembly. This includes in the detailed projects, how the pieces will be mounted, what type of crane will be used, among other factors.

All the assembly of the parts produced at the factory is done at the construction site through joints and welds. The data colleted in the case study shows concern with the easiness of assembly through meticulous instructions in order to avoid mistakes. Besides, there is great attention paid to the structuring of these “plug-ins” to guarantee the efficiency and quality of work.

4 Interview with structural engineer Roberto Vitorino, November 19, 2008

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During the production, purposeful slacks are left. The parts are made with smaller sizes than the module. These slacks are proportional to the size of the pieces. Thus, problems during the construction are avoided and that diminishes the waste of parts. According to interviews, these errors are due to cut or fold of the sheets for example, but don’t admit mistakes because of inattention. If there are errors that compromise the construction quality, the pieces will be returned to the factory to be repaired or replaced.

In some specific cases of more complex structures, such as the auditorium’s roof of Rio de Janeiro hospital, the pieces are pre-assembled at the factory, pre-welded at the corners to make sure they fit together. After making sure that the pieces are not defective and the mounting is correct, the structure is dismounted and then transported to the construction site. According to the interviews, this is justifiable because possible mistakes are easier to be found in the factory. That happens due to the complexity of the structures – and it is easier and faster than having to return the pieces to the factory all the way from the construction sites kilometers away.

The case study shows the preoccupation of the coordinator team in accomplishing the more complex activities in the factory, because the labor is more qualified and the work environment better. That takes place because of the comfort, the resources and the proximity between production, workers and technical team of architects and engineer.

4. Final considerations

We can say that the Technology Center of The Sarah Network of Rehabilitation Hospitals (CRTS) isn’t only a factory, but a Research Center too - for improvement and quality of its products and production. The work of the architect at the CTRS does not agree with the view that prefabricated parts provide monotony and cramp the creative process.

Besides, prefabricated construction makes the maintenance of the buildings simpler and faster when parts need to be repaired or replaced. This guarantees building quality throughout its life cycle.

Thus, the closed systems have benefits and a big advantage in large scale production using the mass industrial method over regular construction. This allows costs reduction by production unit, and the expansions of technological quality and constructive system content, guarantying the integration between constructive components. The logic of mass industry also allows a great project investment and detainment of constructive system, because the investments will be diluted in the production series.

The difficulty of their systems is the necessity of higher constructive components production relatively standardized, implying some kind of homogenization of the aesthetic language of buildings from the same construction systems. However, the production of Sarah Network Hospitals shows that this doesn’t mean unimaginative or low quality construction, even though it is standard architecture.

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Nowadays, although the Center can produce in large scale, it has a low production because it is only allowed by the government to produce exclusively to the Sarah Network Hospitals and there is no prevision of new units to be built at the moment. Thus, the CTRS is working basically to guarantee the maintenance of existing units, thus being rather idle. According to the architect,

The Tribunal de Contas says that we are creating competition against the private construction company, so the government has prohibited us to produce anything to other companies other than the government’s – which means we have to work exclusively to Sarah Network. We predicted an expansion of this factory, but had no choice but to stop our projects because the current Sarah Network Hospitals don’t need any expansions, although many other hospitals desperately do. (Lima (Antunes, 2008)). 2004 apud Antunes, 2008, p. 58-59).

Bibliography

Guimarães, A G (2003) João Filgueiras Lima: O ultimo dos modernistas. Dissertação (Mestrado) – Escola de Engenharia de São Carlos, Universidade de São Paulo, São Carlos.

Latorraca, G (1999) João Filgueiras Lima, Lelé. São Paulo, Instituto Lina Bo e P. M. Bardi.

Menezes, C (2004) O que é ser arquiteto: memórias profissionais de Lelé (João Filgueiras Lima), Rio de Janeiro, Record.

Oliveira, L A, Souza, U E L and Sabbatini, F H (2002) “Produtividade da mão-de-obra na execução de fachadas com painéis pré-fabricados arquitetônicos de concreto”, Encontro Nacional de tecnologia do Ambiente Construído, Foz do Iguaçu.

Pressler, G R (2006) “Born to flex: Flexible design as a function of cost and time”, Health Facilities Management, Volume 19, Issue 6, Pages 53-54, 56, 58, June 2006, Chicago.

Carvalho, A P A, Tavares, I (2002) “Modulação no Projeto Arquitetônico de Estabelecimentos Assistenciais de Saúde: o caso dos Hospitais Sarah”, III Fórum de Tecnologia Aplicada à Saúde, Faculdade de Arquitetura da Universidade Federal da Bahia, Salvador.

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Formwork Specific, Process Orientated Operational-Hours-Consumption-Model (OHC-model)

Kersting, M. Institute for Construction Engineering and Management, ETH Zurich, Switzerland

(email: kersting@ibb.baug.ethz.ch)

Girmscheid, G. Institute for Construction Engineering and Management, ETH Zurich, Switzerland

(email: girmscheid@ibb.baug.ethz.ch)

Abstract

In the preconstruction planning process of each new building construction the question emerges which formwork system to choose. In most cases personal preferences influence the decision making process as only rough cost and time estimation methods are available so far for the identification of the optimal formwork system. These cost and time estimation methods are usually based upon performance factors gained from controlling results of previous projects and do not reflect any geometric properties of the respective project. To resolve these problems ETH Zurich has developed a new formwork-selection-process-model (FSP-model) in cooperation with the scaffolding/formwork manufacturer DOKA. In this paper the partial model of the FSP-model for the calculation of the operational hours consumption will be presented. The process orientated operational-hours-consumption-model (OHC-model) incorporates the resource availability as well as the work efficiency of different team combinations in order to determine the total sum of the activity durations. Through the use of the FSP-model construction companies can now select the optimal formwork system for the specific project and optimize their manpower resources and minimize their operation costs.

Keywords: Formwork, selection, process-orientated, operational-hours-consumption

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1. Introduction

In general buildings show a unique character in terms of structure, design, geometrical properties et cetera. This uniqueness makes the site preparation planning process difficult as no suitable templates exist because of the variable constraints. One of the difficult planning process elements concerns the selection of an optimal project orientated formwork system.

The decision making process for the selection of the optimal formwork system is in many cases based on personal experiences of previous projects. To date, only rough cost and time estimation methods have been available to identify the optimal formwork system. Therefore personal preferences influence the decision making process instead of analytical work simulations. This leads in most cases to suboptimal solutions for the specific construction project.

The newly developed formwork-selection-model (Kersting et al. 2009) considers the geometrical and structural properties of the building as input data. As the first partial model the process orientated geometrical-path-velocity-time model (GPVT-model) has been presented in Kersting et al. (2009). The output out of this model will now be transferred to the next partial model, to the operational-hours-consumption-model (OHC-model).

2. Research Methodology

The scientific framework of the presented work is embedded in the hermeneutic science program (HSP) to understand, interpret and construct new socio-technical realities. Within the HSP, Glasersfeld (1998) developed the constructivist research paradigm. Glasersfeld stipulates that constructivist models must be viable and have to fulfil the intended target-means relation.

The structure of this OHC-model is actional, generically-deductive as a target-means relationship using the constructivist research paradigm (Girmscheid 2007; Glasersfeld 1998; Piaget 1973). The scientific quality is achieved by triangulation (Yin 1994) due to:

• Viability of the generic-deductive model

• Validation through a theoretical framework

• Reliabilitation through testing the intended impact (target-means relation)

The presented OHC-Model is viably constructed as an actional, generic-deductively structured model according to the target-means-relations.

For the validation purpose the OHC-Model is theoretically-deductively structured using the principles of system theory (Bertalanffy 1969; Boulding 1956).

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Reliabilitation will be achieved using realization tests to check if alternative target relations exist under equal means. According to Yin (1994) the above sketch triangulation concept fulfils the scientific quality requirements.

3. Presentation of the main model, the formwork-selection-process-model (FSP-model)

The OHC-model is one part of the formwork-selection-process-model (FSP-model). In order to allocate the OHC-model in the FSP-model, the FSP-model will now be presented. The FSP-model consists of four parts (see

Figure 1):

• Part I: The geometrical-path-velocity-time-model (GPVT-model)

• Part II: The operational-hours-consumption-model (OHC-model)

• Part III: The logistics-interaction-model (LogIn-model)

• Part IV: Calculation of the formwork-specific costs

In a preparation step the FSP-model tests the applicability of the formwork systems in question in regard to the technical and construction process boundary conditions using specific knock-out criteria.

All the formwork systems which passed this preparation step will then be analyzed in part I with the geometrical-path-velocity-time-model (Kersting et al. 2009) thus resulting in the basic-elementary-process (BEP) durations of the different sequences of works without considering the team size and the parallel performance of the works by several teams.

All elementary processes which are interacting will be examined in a modified Cyclone-analysis (Halpin et al. 1979) in part II under consideration of the resource availability and the work efficiency. After taking the lead and the lag times of the different processes into account it is possible to first determine the possible team sizes and secondly allocate the manpower. This allows to calculate the activity duration per level i. The result will then be tested for the suitability of the cycle duration. All activity durations for every level will be added up together with the time necessary for the preparation and the post processing. This sum will then be compared with the maximum project duration given in the project boundary conditions.

In part III the influences of the logistic interactions will be investigated. The output of this step is the crane workload.

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In part IV it is necessary for the determination of the formwork-specific costs to calculate both the consumption of wage hours as well as consumption of construction equipment. Under consideration of the economic minimization principle the costs will be calculated for every possible formwork system in order to identify the optimum formwork system.

Operational-hours-consumption-model (OHC-Modell)Part II

OUTPUT: Basic-elementary-process durations

;k k kx yT a PU

v∆ + ∆⎧ ⎫= ⋅⎨ ⎬

⎩ ⎭

Formwork-selection-process-model (FSP-model)

Geometrical-path-velocitiy-time-analysis

Geometrical-path-velocity-time-model (GPVT-model)

INPUT: Geometrical and structural properties

Part I

Cyclone-analysis for interacting processes

Formwork systems

System A System B System n System ...

Test: Applicability

System not possible

yes

no

INPUT: Work efficiency1 1

WO k kWO WO

AT Tn

ωω

⇒ = ⋅ ⋅

INPUT: Resource availability( )( ) ( )sel

TSRA TC

TN

⎡ ⎤= ⇒⎢ ⎥⎢ ⎥⎣ ⎦

Team size determination

OUTPUT: Activity durations per level i

Calculation(economic minimization

principle)

Identification of the optimum formwork system

, ,, , , ,

1 1i k m k m

k m k m WO k m WO k m

AT AT Tn ω

⎛ ⎞= = ⋅ ⋅⎜ ⎟⎜ ⎟

⎝ ⎠∑∑ ∑∑

Test: Suitable cycle duration

Test: Maximum project duration

INPUT:Post processing

INPUT:Preparation

OUTPUT: Activity durations for all levels

1

n

all ii

AT AT=

= ∑

, , ,hours k m WO k mi k m

W AT n= ⋅∑∑∑

Variation of the team size

Variation of the team size

, ,Equ all Equ ki k

C C=∑∑

yesno

yesno

INPUT: Lead and lag timeand,S Process A Process Bt −

Manpower allocation

Logistics-interaction-analysis

Logistics-interaction-model (LogIn-model)Part III

OUTPUT: Crane workloadselTCCW

Calculation of the formwork-specific costsPart IV

Abbreviations

kT = Basic-elementary-process duration of process kPerformance factor of process kka =

Performance unit related to process kkPU =

Shifting in x-directionx∆ =

Shifting in y-directiony∆ =

Shifting velocityv =

Resource availabilityRA =

Minimal, optimal and maximal team sizeTS =

Minimal, optimal and maximal number of teamsTN =

Selected team combinationselTC =

Work efficiencyWOω =

Activity durationAT =

Number of workersWOn =

,E Process A Process Bt −

Consumption of wage hours

Consumption of construction equipment

Lead timeSt =

Lag timeEt =

Crane workloadCW =

Wage hourshoursW =

Consumption of construction equipmentEquC =

108

Figure 1: Formwork-selection-process-model

4. Development of the operational-hours-consumption-model (OHC-model)

The output of part I (Kersting et al. 2009) are the BEP-durations which will be now transferred to part II in order to get connected to the input of part II, the resource availability and the work efficiency.

4.1 Resource availability

Every elementary process shows a specific characteristic in terms of the assignable manpower. It is therefore essential to specify the boundary values for the possible team size as well as for the maximum number of teams per elementary process. For the stipulated purpose the following terminology has been developed:

/ ,Slab Wall SystemElementary processRA = Resource availability for a specific elementary process

TS = Minimal, optimal and maximal team size

TN = Minimal, optimal and maximal number of teams

selTC = Selected team combination

4.2 Work efficiency

In order to understand the next work step it is essential to show the difference between basic-elementary-process (BEP) durations and activity durations. BEP-durations describe the theoretical length of a process when it would be performed by one worker. Activity durations describe the real length of a process, when this is performed in reality by one or more teams with a discrete team size.

The alteration of the team combination results in an alteration of the work efficiency of a respective team. In many cases there exists a proportional correlation between the activity duration and the reciprocal value of the team size. This means, a duplication of the manpower results in half of the activity duration. In Figure 2 the grey bars show this correlation. One worker would finish the job after 200 minutes, two workers in half of the time, in 100 minutes. Three workers finally would finish in one third of the 200 minutes. Especially in earthworks this correlation is widely valid.

( )( )

( )( ) ( )/ , , ,

, ,Slab Wall SystemElementary process sel

TS min opt maxRA TC

TN min opt max

⎡ ⎤ ⎡ ⎤= = ⇒⎢ ⎥ ⎢ ⎥⎢ ⎥ ⎢ ⎥⎣ ⎦ ⎣ ⎦

109

Because of

• the geometric conditions

• the interactions between the teams and

• the characteristics of the elementary processes

this correlation has to be further investigated in building construction. This leads to non-proportional correlations. With the introduction of the work efficiency WOω in dependency on the number of workers it is possible to convert the basic-elementary-process (BEP) durations into activity (AT) durations for both cases, the proportional and the non-proportional correlations:

/ ,Slab Wall SystemElementary processAT = Activity duration for a specific elementary process

/ ,Slab Wall SystemElementary processT = Basic-elementary-process (BEP) duration for a specific elementary process

WOω = Work efficiency in dependency on the number of workers

WOn = Number of workers

Figure 2: Examples for the correlation between work efficiency and activity duration

/ , / ,1 1Slab Wall System Slab Wall SystemElementary process Elementary process

WO WO

AT Tnω

= ⋅ ⋅

200

100

67

250

100

74

0

50

100

150

200

250

1 2 3

Activity duration AT

100%

100%

100%

80%

100%

90%

0%

20%

40%

60%

80%

100%

1 2 3

Work efficiency‐‐‐‐

proportional correlation non‐proportional correlation

WOω

WOn WOn

[ ]% [ ]min

110

The black bars in Figure 2 show a non-proportional correlation of an elementary process which has its optimal work efficiency, when two workers will be allocated to this process. In case the team size will be increased to three workers the efficiency will decrease to 90%. The work efficiency is smaller, as the third worker cannot work all the time in this example. The activity duration for three workers is therefore longer (seven minutes more) in comparison to the activity duration for three workers with a proportional correlation (grey bars). In case only one worker is allocated to this process the activity duration increases compared to the proportional example as the work efficiency in the non-proportional example is only 80% for one worker.

4.3 Cyclone analysis

BEP durations will be combined with resource availability and work efficiency for every elementary process. Some of these elementary processes are strongly interacting. This means that teams allocated to different elementary processes have to cooperate. A good example for this is the shifting and lifting of formwork tables: Team A is responsible for the stripping and the subsequent shifting to the level edge (Shifting and Lifting 1 = SL1). At the level edge team B (the crane) takes over the formwork table and lifts the table to its target position on the next level (Shifting an Lifting 2 = SL2). At this position the table will be transferred to team C, which is responsible for the positioning and securing the formwork table. It is easy to understand that if there is only one worker in team A and six workers in team C this would result in a high waiting time for team C.

In order to examine which team combinations will work together in an efficient way it is essential to perform a modified Cyclone analysis (Halpin et al. 1979). The modification regards the discrete assignment of activity durations to individual runtime points. In Figure 3 the circles (Q Nodes) represent the entities which can fall into an idle state in this Cyclone network, whereas the boxes represent the necessary activities, which will be assigned discrete activity durations per every formwork table. Each formwork table gets a discrete number, represented with the index j. All sequences of work-durations in Figure 3 which show a j in the index will have a discrete assigned time value correlated to the equivalent formwork table.

The output of the Cyclone analysis is the total activity duration as a sum of all interacting processes as well as the waiting time per every team. In the waiting time coefficient analysis the waiting time of every team and the total waiting time will be tested whether these are within the defined limits.

111

Figure 3: Cyclone network for formwork tables

4.4 Lead and lag time

After the analysis of the interacting elementary processes the residual elementary processes will be examined. These processes have in most cases a set of different dependencies to their preceding and succeeding processes. As an example the reinforcement works for slabs can be used. These works have a dependency to the preceding process formwork erecting which means, the reinforcement works can only start when a certain portion of the formwork erecting has been finished. This dependency

1, ,SL j et

Prept

1, ,SL j lt

/P Rt

,Trans A jt

2, ,SL j lt

,Erec jt

2, ,SL j et

,Trans B jt

1, ,SL j et

Prept1, ,SL j lt/P Rt

2, ,SL j lt

2, ,SL j et

,Trans A jt

,Trans B jt

,Erec jt

112

related to the start of a process results in a lead time. For the cases when the dependency concerns the end of a process a lag time has to be considered.

4.5 Team size determination and the manpower allocation

At this point of the analysis all relevant input data are prepared for the team size determination and the manpower allocation. The team size determination and the manpower allocation is an iterative work step with the target to minimize the variations in the manpower demand.

Figure 4: Team size determination, manpower allocation and manpower demand

In the left part of Figure 4 the first step of the team size determination and the manpower allocation has been displayed. It is obvious that the manpower demand shows significant variations. The constraints from the lead and lag times have been displayed as well, so these cannot be disregarded during the iteration process. One possible result out of the iteration is shown in the right part of Figure 4. In this analysis it is not possible to find one optimal solution. A set of good solutions fulfils the boundary conditions in various levels. In the solution on the right a satisfying cycle duration (five days) has been achieved and the manpower demand shows almost no variation thus resulting in a higher amount of changes in the team size. Reducing the number of changes in team size will therefore lead to more variations in the manpower demand.

During the manpower allocation the effects of the work efficiency have to be considered. The team size variations for elementary processes with interaction require another Cyclone analysis in order to check the effects on the waiting time.

( )3,3

( )1,1

( )6

,1 2

120%St

T−∆ =

= ⋅

,4 5 4100%St T−∆ = ⋅

,2 3

310%Et

T−∆ =

= ⋅

,2 3

220%St

T−∆ =

= ⋅,3 4

410%Et

T−∆ =

= ⋅

,3 4

330%St

T−∆ =

= ⋅,4 5

5100%Et

T−∆ =

= ⋅

,1 2

2Et

h−∆ =

=

WOn

( )4,4( )4

( )4( )3,3( )3

( )3,3, 2 ( )3

( )2,2

( )2,2

( )1

( )4

,1 2

120%St

T−∆ =

= ⋅

,4 5 4100%St T−∆ = ⋅

,2 3

310%Et

T−∆ =

= ⋅

,2 3

220%St

T−∆ =

= ⋅,3 4

410%Et

T−∆ =

= ⋅

,3 4

330%St

T−∆ =

= ⋅,4 5

5100%Et

T−∆ =

= ⋅

,1 2

2Et

h−∆ =

=

WOn

( )6

Rei

nfor

cem

ent

Con

cret

ing

Erec

ting

Shi

fting

/Lift

ing

Stri

ppin

g

Rei

nfor

cem

ent

Con

cret

ing

Erec

ting

Shi

fting

/Lift

ing

Stri

ppin

g

113

4.6 Activity duration per level i

After selection of one satisfying manpower allocation solution it is possible to determine the activity duration per level i:

AT = Activity duration

T = Basic-elementary-process (BEP) duration for a specific elementary process

WOω = Work efficiency in dependency on the number of workers

WOn = Number of workers

i = Index for the level

k = Index for the elementary process

m = Index for the different section of one elementary process

The different sections of one elementary process are added up. Sections arise, when the team size of an elementary process change. In Figure 4 sections can be seen in the solution on the right side for the elementary processes stripping (three sections), erecting (three sections) and reinforcement (two sections).

Cycle duration:

With the result from the above calculation it is possible to test, whether the activity duration per level i fits into a suitable cycle duration. Preferable cycle durations depend on the usual number of days worked per week. Half weeks, one week or two weeks as cycle durations are regarded as suitable. In case the cycle duration does not fulfil the requirements another iteration step is necessary. In this iteration step the team size determination and the manpower allocation have to be changed.

, ,, , , ,

1 1i k m k m

k m k m WO k m WO k m

AT AT Tn ω

⎛ ⎞= = ⋅ ⋅⎜ ⎟⎜ ⎟

⎝ ⎠∑∑ ∑∑

114

5. Activity duration for all levels

As soon as the cycle duration requirements are fulfilled, the analysis can proceed to the next element. The time demand (as an activity duration value) for the preparation of the formwork system starting at the delivery to the site up to the first use will be identified. This activity duration value will be added on the activity duration of the first floor ATi=1. Also the time demand (again as an activity duration value) for the post processing will be determined. The post processing includes the formwork related works starting after the last concreting up to the final removal of the formwork from the construction site. The post processing activity duration will be added to the last floor ATi=n. The consideration of the preparation and the post processing activity duration allows the determination of the activity duration for all levels:

AT = Activity duration

i = Index for the level with i = {1...n}

Maximum project duration:

The total sum of all activity durations has to be lower than the maximum project duration. For the case that this requirement cannot be fulfilled another iteration step has to be executed. If all team size combinations do not pass this test, that particular formwork system will be excluded from the analysis. All the other formwork systems which passed the test will be transferred to the next model, to the logistics-interaction-model.

6. Conclusion

The developed process orientated operational-hours-consumption-model considers the resource availability and the work efficiency of different team combinations. In particular the consideration of the work efficiency for team combination variations with non-proportional correlation will now allow more accurate calculation values. This will improve to overall-accurateness of the FSP-model.

Together with the improvements due to the consideration of the geometrical and structural elements in the geometrical-path-velocity-time-model (part I) the FSP-model enables a much more reliable formwork selection process.

1

n

alli

AT AT=

= ∑

115

References

Bertalanffy, L. v. (1969). General system theory; foundations, development, applications. New York: G. Braziller.

Boulding, K. E. (1956). General Systems Theory-The Skeleton of Science. Management Science 2(3): 197-208.

Girmscheid, G. (2007). Forschungsmethodik in den Baubetriebswissenschaften. Zürich: Eigenverlag des IBB an der ETH Zürich

Glasersfeld, E. v. (1998). Radikaler Konstruktivismus Ideen, Ergebnisse, Probleme. Frankfurt a.M.: Suhrkamp.

Halpin, D. W., Woodhead, R. W., and Gareis, R. (1979). Planung und Kontrolle von Bauproduktionsprozessen. Berlin u.a.: Springer.

Kersting, M., and Girmscheid, G. (2009). Formwork specific, process orientated geometrical-path-velocity-time-model (GPVT-model). CRC Press.

Piaget, J. (1973). Erkenntnistheorie der Wissenschaften vom Menschen die Wissenschaften vom Menschen und ihre Stellung im Wissenschaftssystem. Frankfurt/M: Ullstein.

Yin, R. K. (1994). Case study research : design and methods. Thousand Oaks: Sage Publications.

116

Optimization of the Lifecycle-Costs of Street Maintenance within a Given Maintenance-Strategy

Fastrich, A. Institute for Construction Engineering and Management, ETH Zurich, Switzerland

(email:fastrich@ibb.baug.ethz.ch) Girmscheid, G.

Institute for Construction Engineering and Management, ETH Zurich, Switzerland (email:girmscheid@ibb.baug.ethz.ch)

Abstract

Public authorities as well as private operators of street networks nowadays try to optimize the maintenance of their facilities. Within a research project launched by the Swiss Federal Roads Authority, the Institute of Construction Engineering and Management at ETH Zurich developed a holistic model for the development and optimization of maintenance strategies and specific maintenance alternatives for highway networks. The holistic model consists of three sub-models for the definition of maintenance strategies and the development of maintenance alternatives within a strategy (LC Maintenance Strategy Development Model), the evaluation of maintenance alternatives based on a Net Present Value approach (LC Strategy Decision-Making Model) and the optimization of the measure selection to define an optimal maintenance alternative (LC Maintenance Management Optimization Model). While the first two models have already been presented in previous publications, this paper focuses on the third sub-model and the optimization of maintenance management within a given maintenance strategy. The model definition is based on a holistic and theory-based system definition to ensure a correct and reliable comparison of the different maintenance alternatives. The LC Maintenance Management Optimization Model uses dynamic programming to optimize maintenance alternatives.

Keywords: street maintenance, lifecycle-costs, optimization, maintenance strategy

117

1. Introduction

The maintenance management of infrastructures can be divided in three parts: The development of maintenance strategies and maintenance alternatives within a strategy, the economic evaluation of maintenance alternatives and the optimization of the maintenance management.

In earlier studies at ETH Zurich, two models for the definition and financial evaluation of maintenance strategies have already been developed. The presented optimization model considering the lifecycle-costs of all stakeholders is based on these models.

Optimization of maintenance management can be structured in a functional and a strategic part:

• Functional: Optimization of the maintenance alternatives within a given maintenance strategy

• Strategic: Optimization of the maintenance strategy

This paper focuses on the functional part. For the optimization process the applicability of several optimization techniques like linear programming and dynamic optimization were analyzed. The development of an optimal sequence of maintenance measures results from a sequence of action decisions. A decision must be made in each case as to whether action is required and, if so, which action. This produces a decision tree structure which can be used to develop various possible maintenance alternatives. The objective of the optimization is to select a path through the decision tree (a sequence of maintenance measures), that leads to a minimum of life-cycle costs for all affected stakeholders according to the economic minimum principle.

2. State of research

The fundamental approaches to maintenance management are transferable among the various types of infrastructure and are generally based on methods that are already being applied in other areas, e.g., maintenance of production facilities (Gertsbakh, 1977, Narayan, 2004). The respective specific requirements placed on the maintenance management differ, however, in individual cases. The risk of shutdowns and/or system safety play a crucial role, for example, in the case of bridges (Liu and Frangopol, 2005) or production facilities (Narayan, 2004). The development of LC street maintenance strategies is generally dependent on strategy definition at corporate management level. In this field, fundamental concepts for strategic corporate management have been developed by Grant (Grant, 2005), Mintzberg (Mintzberg, 2003) and Johnson and Scholes (Johnson and Scholes, 2002). Within a given maintenance strategy street operators on the operative level have to find an optimal alternative which defines the specific maintenance measures. In this context several approaches are possible either based on deterministic or genetic algorithms. Guillaumont et Al. (Guillaumont et al., 2003) developed a linear optimization model based on markov chains. Chan et Al. (Chan et al., 1994) as well as Ferreira et Al. (Ferreira et al., 2002) formulated a genetic optimization model. These models focus strictly on the optimization part and are not embedded in an overall holistic system. In previous

118

research projects the authors adapted general strategy development models to the specific requirements for developing and implementing strategies in street maintenance (Girmscheid, 2007). In the next step, based a holistic theory-based system definition a life-cycle cost decision-making model was developed (Fastrich and Girmscheid, 2007, Fastrich and Girmscheid, 2009). The last part of the holistic maintenance management approach is the optimization of the maintenance alternatives in order to minimize all stakeholder-costs.

3. Research methodology

The scientific framework of the presented work is embedded in the hermeneutic science program (HSP) to understand, interpret and construct socio-technical realities. Within the HSP Glasersfeld (Glasersfeld 1998) developed the constructivist research paradigm. Glasersfeld stipulates that constructivist models must be viable and have to fulfill the intended target means relation. The constructivist research paradigm is being used to demonstrate the validity and viability of the optimization model (Girmscheid 2007c; Glasersfeld 1998). The model was structured logically-deductively (viability). Triangulation (Yin 1994) is used to validate the scientific quality. To this end, the logical-deductive model is embedded in a theoretical reference framework (validity) and the intended input-output relationship verified using realizability tests (reliability) (Girmscheid 2007c). System theory (Bertalanffy 1969; Boulding 1956) is used as the theoretical reference framework for the maintenance management model. The analyzed system is broken down into its content, spatial and temporal structures. Using system theory the maintenance management model together with its sub-models – LC Maintenance Strategy Development Model, LC Strategy Decision-Making Model and LC Maintenance Management Optimization Model – is embedded into the system architecture "Road Network".

4. System definition

In order to insure an objective and reliable comparison of the different maintenance alternatives, a consistent system definition and system delimitation has to be defined for all alternatives. The system is defined and its boundaries determined using Boulding and Bertalanffy's fundamental principles of general system theory, which have been adapted to suit the specific requirements of construction management science. The system is being analyzed in the dimensions content, space and time (Fastrich&Girmscheid 2007b).

A self-contained road network is defined as the overall system. This overall system can be sub-divided into various hierarchically structured sub-systems (Fig. 1). The "Road Network" system is an open, dynamic system, i.e., the system interacts with its surroundings and is therefore subject to constant change. Figure 1 shows the input and output components of the system.

119

Figure 1: Road network system – Input into, and output from the system

Condition indices relating to the individual parameters of the road condition are derived from on-site measurement and analysis data to enable an objective and mathematical assessment of the condition of the roads. Figure 2 shows the conditions indices as defined in Swiss standard SN 640925 (SN 640925b 2003), which was used as a basis for this work.

Figure 2: Condition indices providing a mathematical description of the road condition

The natural time boundaries of the Road Network system are determined by the erection of the traffic systems and their reversion. Maintenance management is economically evaluated on the basis of a defined and self-contained interval (30-60 years) from the entire life cycle of the road. In light of the restriction to such an interval from the entire life cycle of a road, the comparability of the various alternatives must be assured both at the beginning and at the end of the analyzed period in the definition of the model boundaries. Since street conditions demonstrative different levels of progression in the various maintenance alternatives over the analyzed period, the differences must be balanced out in monetary terms at the end of the period of analysis. To this end, the substance value derived from the combination of the various condition indices is measured in monetary terms and the end value compared with the value as new. This produces the following boundary costs:

( )100%,e e

WHLim Mon Indext tC SW SW Cχ = ∆ = ∆ ⋅

These boundary costs are incorporated into each alternative as an additional proportionate cost at the end of the analyzed period.

120

5. Model classification within the system

Within the previously defined system, the activities and decisions of maintenance management are mapped in three interacting models (Fig. 3). System definition provides the framework and foundation for the model definition. The holistic maintenance management model derives in three sub systems as follows:

• Internal view: The activities within the system (strategy development and planning and execution of maintenance measures) are covered in the LC Maintenance Strategy Development Model

• External view: The financial evaluation of possible maintenance alternatives is covered by the LC Strategy Decision-Making Model. Therefore the input and output of the system are evaluated in terms of costs and consolidated to the overall Net Presen Value of each alternative.

• Integrative view: The LC Maintenance Management Optimization Model brings together the results of the other two models and leads to an overall optimization of maintenance management. The optimization algorithm reverts to the definition of maintenance alternatives based on the LC Maintenance Strategy Development Model and the cost evaluation based on the LC Strategy Decision-Making Model.

This paper focuses on the LC Maintenance Management Optimization Model. The LC Maintenance Strategy Development Model as well as the LC Strategy Decision-Making Model was already presented in earlier publications (Girmscheid, 2007, Fastrich and Girmscheid, 2007, Fastrich and Girmscheid, 2009). Regarding these models we only give a short overview as far as necessary for understanding of the presented model.

Figure 3: Classification of the three interacting sub-models within the system definition

121

6. Optimization model

Based on a systematic definition of maintenance alternatives within a maintenance strategy, given by the LC Maintenance Strategy Development Model and a holistic evaluation of all stakeholder-costs, given by the LC Strategy Decision-Making Model, an optimization model for street maintenance alternatives was developed. The optimization problem can be divided in two parts:

• Functional: Optimization of the maintenance alternatives within a given maintenance strategy, i.e. optimization of the sequence of measures over the regarded timeframe. The optimization process is implemented on the functional level of maintenance management. The object is to find an economically optimal sequence of maintenance measures, this applies to both the selection of the optimal measures as well as the optimal timing of those measures. Such optimization problems can be solved by several mathematical algorithms.

• Strategic: Optimization of the maintenance strategy. The object in this case is to define strategic guidelines that enable the decision makers to define an optimal maintenance alternative. The optimization process is implemented on the strategic level of maintenance management. Given that not all strategic requirements are mathematic terms, mathematical optimization of maintenance strategies is not always possible. In general, optimal strategic requirements have to be deduced from optimized maintenance alternatives on the functional level.

This paper focuses on the mathematical optimization of maintenance alternatives, i.e. optimization of the functional maintenance management within a given strategy.

6.1 Decision model

All optimization algorithms have to be based on a decision model, describing the regarded optimization task. It defines:

• Parameters and elements of the optimization

• A model for the evaluation of the alternatives

• Constraints of the optimization

A decision model is described by one or more objective functions ( )z x with the parameters ( ) 1 2, ,...,n nx x x x= =x . The parameters { }X∈x describe the alternatives with { }X describing the set

of possible alternatives. The setun { }X is defined by the constraints { }jR . Besides the parameters x which depend on decisions made by the street operator, there are usually also external influences r on the system (e.g. traffic or environmental influences). The LC Maintenance Management Optimization Model images maintenance management monocriterial, in regard to the overall stakeholder costs of each alternative. The overall costs are calculated in a Net Present Value approach

122

based on cost estimations for each cost element. A detailed description of the cost calculation was given in Fastrich and Girmscheid, 2009 (Fastrich and Girmscheid, 2009).

The target of the optimization is to find the optimal maintenance alternative, which means the optimal sequence of maintenance measures over the regarded timeframe. The development of specific alternatives is defined on the basis of a sequence of action decisions. A decision must be made in each case as to whether action is required and, if so, which action. This produces a decision tree structure which can be used to develop various possible maintenance alternatives χ (Fig. 4). For the mathematic optimization it is reasonable to define uniform time-steps for the action decisions. Therefore each row in the decision tree has the same number of decision steps. At each action decision i different maintenance measures ( ){ }i i iX Ix∈x are possible depending on the actual road condition iIx . A measure can be selected if its technical applicability, defined by the interval

( ) ( )min max;i iIx x Ix x⎡ ⎤⎣ ⎦ , covers the actual road condition. As long as the road condition has not reached the intervention level, there is always also the possibility to not select any measure at all ( 0ix = ).

The maintenance alternatives can be represented in abbreviated form as a vector of the planned

measures: ( )1 2

1 2

; ;...;nx x x xm m m mi i i in

x x x xi i i it t t t

m m mχχ χ

⎧ ⎫⎧ ⎫ ⎪ ⎪Γ = =⎨ ⎬ ⎨ ⎬⎩ ⎭ ⎪ ⎪⎩ ⎭

U M

( )2Decx

xc tI m∆

1Dect 2

Dect 3Dect

( ) ( )[ ]min max;x xi iIx m Ix m

Figure 4: Decision tree structure for the development of maintenance alternatives

123

6.1.1 Objective function

The objective function for a monocriterial optimization model is given by (Dinkelbach, 1992):

( ) { }{ }/ max min z X∈ ∈x x

where: ( )z x = objective function, x = parameters ( ) 1 2, ,...,n nx x x x= =x of the objective function, { }X = set of alternatives

The target of the optimization is to minimize the overall costs of all stakeholders of street maintenance. Therefore the objective function is given by the sum of the discounted costs of the three stakeholder-groups, which are street operators, users and third parties:

( )( ) ( )( ) ( )( ) ( )( )

,, , ,

1 NPV

1 1 1 1

ee

B B B B e B

Delimt O U Thtt t t

t t t t t t t t tO U Th Ut

CC C Cminq q q q

χχ χ χχ

− − − −=

⎛ ⎞⎜ ⎟= + + +⎜ ⎟+ + + +⎝ ⎠

∑

where: Bt

NPV χ = Net Present Value of all stakeholder costs for alternative χ , / / ,O U ThtC χ = operator /

user / third party costs, ,e

DelimtC χ = delimitation costs to ensure comparability at the end of the regarded

timeframe, / /B N Dq = Discount rate for operator / user / third party costs

The objective value of the optimization is the Net Present Value of all stakeholder costs of a maintenance alternative, with the development of this alternative being the target of the optimization. The parameters of the optimization are the maintenance measures x

im and their point in time xim

t . These two parameters define a maintenance measure. The development of the road condition between two measures is given by the behavioral functions for the different condition indices, subject to the environmental and traffic related impacts on the system.

6.1.2 Boundary conditions of the optimization problem

The boundary conditions { }jR define the set of alternatives { }X containing the possible courses of action at each point in time. Boundary conditions in street maintenance are:

• Requirements defined in the maintenance strategy The maintenance strategy defines the recommended intervention level LimIx for each condition index as well preferable or excluded measures. This triggers the point in time where an action has to be taken and affects the selection of the particular measure.

• Minimum operation standard The minimum operation standard for each condition index defines the absolute minimum level of road condition which must not be exceeded in order to assure a minimum of safety and functionality. It is a normative requirement which is autonomous from the maintenance

124

strategy. Usually the recommended intervention level defined by the maintenance strategy is decisive prior to the minimum operation standard.

• Technical requirements The technical requirements for the definition of maintenance alternatives regard the applicability of the different measures in certain ranges of road condition respectively at certain failure modes. Subject to the combination of parameter-value of the different condition indices only certain measures are technically applicable.

• Budget constraints Budget constraints can comply to singular years or longer periods of the regarded timeframe. They define the maximum operator costs. Thus the selection of maintenance measures in each period is restricted.

In each step i of the definition of maintenance alternatives the boundary conditions define a new set of alternatives { }iX . The set of alternatives depends on the boundary conditions and the changes of road condition resulting from the previous decisions 1, 2,...i− .

6.2 Optimization methods

For the optimization of maintenance alternatives in street maintenance several optimization methods are available. Those optimization methods can be classified as follows:

• Methods based on the optimization of each step of the definition of maintenance alternatives. Therefore in one optimization cycle an optimum is directly reached (e.g Branch and Bound methods, dynamic programming)

• Methods based on the comparison of complete maintenance alternatives. Those methods reach an optimum through the comparison of a large number of alternatives (e.g. Monte Carlo Optimization, Genetic Algorithms, Simulated Annealing)

This paper focuses on the first group of optimization methods, in particular on the dynamic programming method. Generally those methods hold the risk of getting stuck at a local optimum and therefore missing the global optimum. In case of optimizing maintenance management it can be shown that through the decision tree approach this methods leads to the global optimum following Bellman's Principle of Optimality (Bellman, 1957).

6.2.1 Dynamic programming

Optimizing street maintenance results in a decision situation which concerns a process that develops over time. Decisions have to be made in stages and are related to each other. Earlier actions affect the state of the system and hence the constraints and preconditions of later actions. Therefore it is advisable to account for all future effects by treating the entire decisions jointly; this is the goal of

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dynamic programming. The optimization method is based on Bellman's Principle of Optimality (Bellman, 1957), which states that a global optimum solution of a problem consists of optimum solutions of its sub-problems.

In case of optimizing street maintenance those sub-problems equal the sequence of decision steps for each interval [ ]1;k kt t + . Each possible solution equals a sequence of road conditions ( )0,1,...,k k n=z which depend on the decisions ku taken at each step of the optimization as well as the external impacts kr (Fig. 5). According to the general definition of a dynamic optimization model (Schneeweiss, 1974) the optimization model for street maintenance management can be described as follows:

• State vector: ( ) 0,1,..., 1, 2,...,5k kIx k n x= = =z

with the set of possible states [ ]{ }0;5kZ Ix Ix= ∈ , k kZ∈z

The state vector describes the road condition by the condition indices Ix at each decision step k .

• Decision vector: ( ) 0,1,..., 1xk im k n= ∨ = −u 0

with the set of possible decisions ( ) ( ){ };x min x max xk i k k i iU m z Ix Ix m Ix m⎡ ⎤= = ∈⎣ ⎦

Subject to the state vector defining the road condition in each decision step k the optimal measure x

im is selected. Given a adequate road condition there is also the possibility to select no measure ( k =u 0 ).

• Disturbance vector: ( ) ( ) ( )1, 1= 0,1,..., 1Ix Ixk k k k kIx f t f t k n− −=∆ − = −r

The disturbance vector defines the environmental and traffic-related impacts on the system. The development of road condition is described by behavioral functions for the individual condition indices. The disturbance vector between two decision steps k complies with the road detoriation over the period 1k kt t −− .

• Transition function: ( ) ( )1 1,, , 0k xk k k k k i k kg Ix Ix m Ix+ −

⎡ ⎤= = − ∆ ∨ +∆⎣ ⎦z z u r

The road condition after each period is related to the previous road condition, the improvement of road condition through measures taken and the detoriation of road condition through environmental and traffic-related impacts.

• Objective function: 1

kt

k tt

min NPV NPV=

=∑

The objective function is used to evaluate the decisions taken at each decision step and also the complete maintenance alternative. The evaluation is based on the Net Present Value of all stakeholder costs.

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State vector . kz State vector . 1k+z

Decision-vector .ku

 

Disturbance vector .kr

t

Decision step k Decision step k+1

Road condition Ix

LimIxIntervention Limit

Figure 5: Sequence of decisions within the recursive optimization process

Bellman’s principle of optimality is used to construct an optimal policy recursive backward in time, which leads to the dynamic programming algorithm.

Initialization: Set ( )1 1 : 0T TJ Ix+ + =

Recursive step: For i T= to 1 set ( )( )

( ) ( )( )1: , ,t t t

t t t t t t t tx X IxJ Ix min NPV Ix x J f Ix x+∈

= +

The recursive step is repeated until the beginning of the regarded timeframe is reached. Each recursive step contains the decision whether to conduct a maintenance measure or not, and if so, which measure to select. The decision takes into account all following decisions and therefore all future effects of a decision. Thus a global optimum, which means an optimal sequence of maintenance measures over the regarded timeframe is defined.

Acknowledgement

The LC Maintenance Management Optimization Model describes an optimization model for the optimization of street maintenance management on the operative level. It is embedded in a holistic, theory-based system definition and delimitation, which ensures a correct and reliable comparison of the different maintenance alternatives. The model uses dynamic programming for a mathematical optimization which can easily be implemented in existing pavement management systems. Together with previous research work on the definition of maintenance strategies and the derivation of maintenance alternatives within a strategy it forms an overall approach to support road authorities to ensure optimal street maintenance in practice.

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References

BELLMAN, R. E. (1957) Dynamic programming, Princeton - N.J., Princeton University Press.

CHAN, W. T., FWA, T. F. & TAN, C. Y. (1994) Road-Maintenance Planning Using Genetic Algorithms. Journal of Transportation Engineering, 120, 693-709.

DINKELBACH, W. (1992) Operations Research ein Kurzlehr- und Uebungsbuch, Berlin etc., Springer-Verlag.

FASTRICH, A. & GIRMSCHEID, G. (2007) NPV – Decision making model for street maintenance and rehabilitation IN XIE, M. & PATNAIKUNI, I. (Eds.) ISEC 04. Melbourne, Australia, Taylor and Francis publishers.

FASTRICH, A. & GIRMSCHEID, G. (2009) LC maintenance strategy development and decision-making model for street maintenance. IN N., G. (Ed. ISEC 05. Las Vegas, USA, Taylor and Francis publishers.

FERREIRA, A., ANTUNES, A. & PICADO-SANTOS, L. (2002) Probabilistic Segment-linked Pavement Management Optimization Model. Journal of Transportation Engineering, 128, 568-577.

GERTSBAKH, I. B. (1977) Models of preventive maintenance, Amsterdam a.o., North-Holland.

GIRMSCHEID, G. (2007) Entscheidungsmodell - Lebenszyklusorientierte Strategiebildung und Unterhaltsvarianten für Strassennetze. Bauingenieur, 82, 346-355.

GRANT, R. M. (2005) Contemporary strategy analysis, Malden, Mass., Blackwell Publishing.

GUILLAUMONT, V. M., DURANGO-COHEN, P. L. & MADANAT, S. M. (2003) Adaptive Optimization of Infrastructure Maintenance an Inspection Decisions under Performance Model Uncertainty. Journal of Infrastructure Systems, 9, 133-139.

JOHNSON, G. & SCHOLES, K. (2002) Exploring corporate strategy text and cases, London, Prentice Hall.

LIU, M. & FRANGOPOL, D. M. (2005) Multiobjective Maintenance Planning Optimization for Detoriorating Bridges Considering Condition, Safety, and Life-Cycle Cost. Journal of Structural Engineering, 131, 833-842.

MINTZBERG, H. (2003) The strategy process concepts, contexts, cases, Harlow, Pearson Education.

NARAYAN, V. (2004) Effective maintenance management risk and reliability strategies for optimizing performance, New York, Industrial Press.

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SCHNEEWEISS, C. (1974) Dynamisches Programmieren, Würzburg Wien, Physica-Verlag.

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Business Model: The Cooperative Production Network That Enables Mass Customized Production Methods in

the Swiss Precast Concrete Industry

Rinas, T. Institute for Construction Engineering and Management, ETH Zurich, Switzerland

(email: rinas@ibb.baug.ethz.ch) Girmscheid, G.

Institute for Construction Engineering and Management, ETH Zurich, Switzerland (email: girmscheid@ibb.baug.ethz.ch)

Abstract

Nowadays building construction in Switzerland is characterized by manual production techniques in small scaled precast concrete companies. New strategies and concepts are necessary to empower the small scaled precast concrete companies as well as local construction companies, architects and engineers to benefit from industrialization concepts in the client´s value creating process. This paper focuses on the cooperative production network as one key element in a two-dimensional cooperative business model. The cooperative production network will enable Swiss precast concrete (SPC) companies to increase their automation level and implement mass-customization on a platform basis. This will ensure a flexible and economical provision of individual elements in order to improve the competiveness of the small scaled SPC companies in the European market environment.

Keywords: business model, cooperation, production network, mass customization, prefabrication

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1. Introduction

1.1 Initial situation

Industrialisation in building construction is one main goal of the research community in construction engineering and management (Girmscheid 2007a). The prefabrication of concrete elements in the controlled environment of the plant is closely connected to the industrialization approach. Prefabrication therefore is one driver for increasing efficiency, quality and safety in building construction, and creating competitive advantages in a price driven environment. Besides increasing efficiency by industrializing construction processes, the provision of individual client solutions becomes important. Nowadays, the available automation allows the cost-effective production of individual elements (zero series). But only little progress in practice has been made in Switzerland, where the construction industry - and especially the precast concrete industry - is characterized by small players and where construction processes are still dominated by a manual, labour-intensive construction production techniques on-site. Together with the Swiss precast concrete (SPC) industry, ETH Zurich is developing a two-dimensional cooperative business model to realize the potential offered by industrialization in construction and automated prefabrication processes. The production cooperation is one key element in this business model.

1.2 Problem definition

The paradigm shift in the construction industry is moving from the supply of just labour and working resources to a supply of life cycle oriented, individual customer solutions. This requires small local players to vertically expand their service provision, e.g., by cooperating with other players in the value creation chain. The demand for life cycle oriented, individual customer solutions in turn requires individual precast elements and systems in the construction process. The manual production techniques prevailing in the precast concrete industry in Switzerland hindered the economical provision of these individual elements and systems or client oriented solutions. These constraints resulted in competitive disadvantages for the SPC companies compared with European competitors and local on-site builders. In consequence, the level of concrete prefabrication in building construction in Switzerland is very low by European standards, and European competitors are constantly penetrating the Swiss construction market (Figure 1).

The SPC industry must provide innovative, individual and cost-effective elements and systems in order to compete for the future as Prahalad and Hamel (1996) used to say. The SPC industry therefore needs to increase the automation level of off-site production processes by adopting a platform-based mass customization approach.

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0%

5%

10%

15%

20%

25%

30%

Germany Switzerland

European average

0 

100 

200 

300 

400 

500 

600 

700 

800 

2003 2004 2005 2006 2007 2008

Sales [100

0 tons]

Swiss enterprises

Import

Swiss enterprises + Import

Figure 1: (left) Quota of concrete prefabrication in building construction (BetonPlaza 2006) (right) Total sales of prefabricated concrete elements in Switzerland (SwissBeton 2007)

2. State of the art

Automation in the European precast concrete industry started years ago. It is state of the art within the European construction industry to use platform-based or system-based mass customization. It is state of the art within the timber construction industry to have an almost complete digital chain using computer integrated manufacturing (CIM) from the very early planning stage through to manufacturing. Meanwhile, digital chain tools, such as the building information model (BIM), are developing further. BIM will change the traditional planning process significantly and perfectly matches the mass customization approach to manufacturing individual client solutions. The SPC industry is still only just starting to make use of the information and communication technologies (ICT) and automation possibilities that are available today.

3. State of research

Investigations into the potential offered by prefabrication have been ongoing for decades, e.g., by MORRIS (1978). Today prefabrication advantages such as

• time and cost savings,

• high quality and

• safety improvements

are widely accepted. The disadvantages are equally well known:

• less flexibility to respond to subsequent changes,

• necessity of increased planning depth,

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• sensitivity for tolerances and

• size and weight restrictions while transporting.

Due to the limited technology in the seventies, prefabrication was, of course, based on the mass production concept and the largest possible series of equal elements (Girmscheid 2007c). Nowadays mass production doesn’t meet with the requirements of customers in respect of individual solutions and individual buildings. At the end of the 20th century, new prefabrication concepts emerged, based on mass customized production methods from the stationary industry (Chin et al. 2006).

Both the international research community and the international construction industry invested enormous effort into all basic elements of industrialization in construction, such as off-site fabrication (Gibb 1999) and on-site fabrication (Bock et al. 2007), logistics issues (Boenert et al. 2003), partnering and cooperation concepts (Eccles 1981; Girmscheid 2005; Hofmann 1999), developing potentials for the construction industry (Girmscheid et al. 2007) as well as industry-led research projects (Kazi et al. 2007).

International research groups, e.g., CIB Task group TG 57 “Industrialisation in Construction”, focus on realizing the potential for prefabrication that is offered by mass customization. In light of the new technological preconditions, prefabrication potential has been discussed, e.g., by GIRMSCHEID (2007a; 2007c), BECHTHOLD (2009), RICHARD (2009) or EGMOND&KUIJSTERS (2009) BOCK (2001) or BUSWELL ET AL. (2007).

An empirical study of client needs in the construction process with regard to precast concrete elements (Rinas et al. 2009b) discovered a demand for additional services (e.g., process improvements, planning support, individual elements, integrated elements) by players in the planning process involving precast concrete elements. The SPC industry currently does not offer these services and is therefore not making the best use of the opportunities for stronger integration of precast concrete elements in the planning process.

4. Research methodology

This research work is embedded in the holistic SysBau® approach (SysCon – system provider approach) developed and introduced by the Chair for Construction Process and Enterprise Management at the Institute for Construction Engineering and Management at ETH Zurich. The SysCon approach covers the life cycle oriented research fields - integrated delivery and lean construction (Girmscheid 2001). The scientific framework of the hermeneutic science program (HSP) for the socio-technical environment consists of the interpretativist research paradigm (Weber et al. 2002) and the constructivist research paradigm (Girmscheid 2007b; Glasersfeld 1998; Piaget 1973).

The presented cooperative production network is embedded in a two-dimensional cooperative business model (Rinas et al. 2009a). This model is designed logical-deductively as a target-means relationship by following the constructivist research paradigm. It is structured by the Principal Agent

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Theory (Jensen et al. 1976) and the Theory of Structuration (Giddens 1985). System Theory (Bertalanffy 1984; Luhmann 2006) gives the formal scientific framework for the two-dimensional cooperative business model. Using the Cybernetic System Theory (Luhmann 1994; Wiener 1992) makes the complex realities of a socio-technical environment (like a business model) controllable. The internal design of interaction among the players in the model uses Principal Agent Theory and Theory of Structuration.

The Principal Agent Theory is the theoretical foundation for feasibly designing a contractual incentive mechanism to protect the system from opportunistic behaviour. Opportunistic behaviour might occur because the partners in the cooperation (agents) have superior information over the cooperation (principal).

The Theory of Structuration explains how social systems, such as long term strategic production cooperation, develop recursively, steer and find balance in a field of multi-dimensional interactions. On the one side, governance in a partnership is represented by the structure of the organization. On the other side, governance impacts on the organization and changes its structure. The Theory of Structuration designs this recursive interaction. The power of the partners (governance) is given and controlled by the legitimization which is stipulated in the basic treaty (norm) of the cooperation. The structural element of signification in the cybernetic system is explained, steered and controlled by the means of communication, e.g., by periodical meetings of the cooperation steering board. The legitimized governance balances the authority for decisions (power) between the cooperation partners and on the steering board. Sanctions (incentive system) are legitimized if one partner disregards the norm of the cooperation. The power of partners to take decisions is therefore, on the one hand, legitimized by the opportunity to sanction, but on the other hand explained by communication

The scientific excellence in the constructivist research paradigm is achieved by triangulation due to

• viability of the generic-deductive model,

• validity through a theoretical framework and

• confirmation of reliability through testing the intended impact by using the principle of alternative interpretation of the structures, processes and impacts. It is judged whether the expected targets are reached with the means (target-mean relationship).

This methodology results in a scientifically confirmed model which is mostly free of internal opportunistic behaviour.

5. Objectives of the cooperative production network

The cooperative production network for the SPC industry is a key element in the two-dimensional cooperative business model and pursues the following objectives.

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First: It will exploit the technological developments that constitute today’s state of the art (automation, digital chain and planning tools, such as the building information model) for the cooperating SPC companies. By doing this, individual precast elements can be produced very economically, with clients benefiting from maximum freedom for value design.

Second: It will overcome the present status of SPC companies being basically the last link of the supply chain as a supplier for construction companies. It will help to develop the required system solutions and integrate these solutions in the traditional construction process. Thus, new clients and markets will become accessible for the SPC companies. In doing so, the part of the construction process value creation chain that involves prefabricated concrete elements may increase significantly. Subsequently a competition layer between price and value can be established and a process of innovation is stimulated (Figure 2).

Figure 2: The competition layer between client value and price

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6. Approach

6.1 Strategic cooperative network approach

The cooperative network approach was chosen as the solution to the structural problem of the SPC industry because of the widespread atomization of players, the fragmented processes in the construction market and the request for client focussed solutions.

Atomization and fragmented processes hinder development and innovation in the construction industry significantly. Furthermore, the fragmented building processes are neither effective (effective = doing the right things) nor efficient (efficient = doing the things right) (Drucker 1974). The building processes are not effective because the performance of several players does not focus on the final product. The building processes are not efficient because the different players may behave opportunistically and not focus on a common process along the value creating chain. A lot of information is therefore lost in the intersection between two phases of the construction process (Figure 3). The resources needed to regenerate the lost information cost value. This problem also affects the intersection from planning to production planning in the SPC companies and elaborates the building process with prefabricated elements. As a result extensive resources are used to gather information (Figure 4).

cum

ulat

ive

know

ledg

e of

pla

yers

trans

fer t

o us

er

trans

fer t

o co

nstru

ctio

n co

mpa

ny

Figure 3: Brain drain during the construction production process

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0

10

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50

60

70

80

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100

actual target

Information search

Coordination

Planning

Documentation

Presentation

Figure 4: Time consumption in the planning process (Bruhnke 2003)

Networks are known as a flexible form of organization which helps to fulfil the complex performance requirements in a solution finding, client oriented process. The fragmented building processes will be quasi internalized, defragmented and adjusted along the value creation chain within the network. The master plan of the two-dimensional business models includes the cooperative production network shows Figure 5.

 

 

Figure 5: Concept of the two-dimensional cooperative business model for the SPC industry

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This paper examines how SPC companies in the cooperative production network may provide individual products and how they can extend their service provision from single simple products to system solutions.

One obvious meaning of a cooperative production network could be to cooperate on procurement. A cooperative procurement solution focuses on the common procurement of resources, generating cost savings on the procurement side by economies of scale. But this clearly does not solve the initial problems; the meaning of the production cooperation must encompass more than just procurement.

Another meaning could be to cooperate on resources. By cooperating on resources, the partners increase their internal flexibility with regard to the division of labour on basis of the resources available among the partners at the time of service performance. This degree of freedom gives the partners the opportunity to design production more efficiently. The resource cooperation is a horizontal form of cooperation on the same level of the value creation chain. But it doesn’t solve the initial problems either.

The only appropriate solution which ensures the intended objectives is to concentrate on the system provider approach. The system provider approach focuses on the provision of system solutions. This approach requires a vertical form of cooperation among several value creation steps. And therefore requires the inclusion of further competencies of leading authorities in the planning process, such as architects and engineers. The extension of competencies ensures that client needs are included in the further cooperative design of the product and performance portfolio.

The automation of the prefabrication plants must be introduced selectively on a platform basis to stay within the financial bearing capacity of the small SPC companies. But this creates an element of specialization, which can be compensated by a cooperative extension of the service provision spectrum. In this case, a cooperative solution provision will reduce the niche problem. The range of performances can be extended if several SPC companies pursue the objective of transferring their single complementary services into system services (1+1>2).

6.2 Client value from the production network

Clients obtain added value, on the one side, from the more cost efficient production processes and methods and, on the other side, from better products resp. solutions from one source. A possible disadvantage of market restrictions is obsolete because of the high number of local competitors. Additionally, the competitive field is extended vertically from horizontal price competition to layer-oriented price-value competition whereby the number of competitors increases again. More client value can be generated by extending the cooperative production network to a development and production cooperation (Figure 2).

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6.3 Producer value from the production network

SPC companies obtain value from the specialization on dedicated product platforms and complementary products in the cooperative production network. The production network can minimize the risk of specialization and may realize economies of scope. Automation will be more financially viable, and the sales of the single company may increase whereby learning curve effects and economies of scale can be realized and a return on investment will occur.

The cooperative production network offers new chances to arrange complementary products and to continuously develop single products into systems solutions, through innovation and research or just by implementing the numerous innovations from research in the business by sharing the resources required to do this. This approach will make SPC companies better able to compete in a European market environment.

6.4 Implementation and further development concept

The implementation and development concept of the production cooperation includes the following steps in the research process. Firstly, the production cooperation is expanded into a development and production cooperation by implementing planning (architectural, engineering) competencies. Secondly, the structural and functional bonding in the two-dimensional cooperative model with the second cooperative dimension assembly and sales is designed. This helps to increase the market range of the cooperation and the further development on the basis of locally absorbed client needs. This ensures sustainable competitiveness. A ‘hub’ firm resp. focal enterprise (Jarillo et al. 1987; Sydow 1992) leads the cooperation network and ensures a stronger commitment among the partners in the cooperation.

In practice, the implementation starts with a resource and procurement cooperation among two or three SPC companies, preferably with a complementary product range or complementary competencies. Secondly, the partners must embrace the thought of cooperation and the upcoming chances when extending the cooperation. This step is the initial and important process for building a long-term cooperation and partnership. The initiation gives a deeper meaning to the cooperation and the cooperative behaviour of the partners. The processes and structures are defined by the two-dimensional cooperative business model. Additional SPC companies may subsequently join the cooperation to increase local and regional competitiveness.

In the next step, the cooperative objective will expand from resource and procurement to focus on client value creating system solutions. Therefore the partners develop a common strategy to fulfil client requirements and increase their competiveness (process innovation –> cost leadership, product and solution innovation -> differentiation). This includes defining the common vision – mission – strategy target function, establishing the required processes and structures based on the two-dimensional cooperative business model and an adequate platform-based automation that is commensurate with the available resources.

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The last step in the implementation process of the cooperative business model is the extension to the assembly and sales cooperation and the selection of matching local partners as cooperation users (e.g., franchisees). They are given the opportunity to use the internal resources (knowledge, processes, and products) of the cooperation and generate added value for themselves and for their clients. The cooperation generates added value from linking into distinctly different local markets (as is the case with the construction markets in Switzerland).

7. Conclusions

The implementation of platform-based mass customization could increase the competitiveness of SPC companies in the European market environment. This approach will not ensure that SPC companies follow the paradigm shift in the construction industry toward solution provision instead of labour provision. Value competition is the key to overcoming purely price orientated competition and creating added value.

The cooperative production network within the local SPC industry is a promising approach for making mass customization accessible to the SPC industry, allowing them to benefit from the production advantages of stationary industries, such as economies of scale, economies of scope, learning curve effects and automation possibilities. The cooperative production network is therefore a milestone toward becoming a solution oriented service provider.

The extension of the cooperative production network into a development and production cooperation fosters the realization of system solutions, which make value-price competition achievable. This leads to necessary innovations. From a holistic perspective of client focus and competitive strength, this requires an extension of the first cooperative dimension (development and production) to the second cooperative dimension (assembly and sales), and the implementation of a focal enterprise as a system leader. The two-dimensional cooperative business model provides the structures and processes to implement and motivate local players in a cooperative service network. It defines rules and mechanisms for reducing opportunistic behaviour among the partners and establishes and coordinates an efficient value creating process.

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Life Cycle Service Provision – Construction Kit for Energetically Optimized Buildings

Lunze, D. Institute for Construction Engineering and Management, ETH Zurich, Switzerland

(email: lunze@ibb.baug.ethz.ch) Girmscheid, G.

Institute for Construction Engineering and Management, ETH Zurich, Switzerland (email: girmscheid@ibb.baug.ethz.ch)

Abstract

Both private and public clients are currently demanding a paradigm shift for their properties in Swit-zerland. They wish to abolish the purely investment cost perspective in favor of life cycle oriented, sustainable, energetically optimized buildings that generate the lowest possible life cycle costs. In response to this demand, the Swiss construction industry needs to develop life cycle service provi-sions that largely reflect the required life cycle orientation. Based on the requirements and needs for life cycle service provision that were identified in the course of workshops with partners from the construction industry, a construction kit for LC service provisions for energetically optimized build-ings was developed within the scope of a research project at the ETH Zurich. This paper presents this construction kit comprised of various possible energetic modules that planners and service providers can use to develop life cycle oriented and energetically optimized structural solutions that can be cus-tomized to the needs of prospective clients. The energetically sustainable, life cycle oriented solutions should reflect the principles of “green building” and be correspondingly certified to document their sustainability. Integrated and/or interlinked energetic modules and sub-systems are combined on the basis of potential synergy effects. The project specific, client oriented configuration and arrangement of the energetic modules and sub-systems in an integral sustainable structural overall system will be evaluated with regard to the benefit-cost-ratio by means of a life cycle costs analysis.

Keywords: life cycle orientation, life cycle service provision, green building, synergies, innovations

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1. Introduction/status quo

When it comes to optimizing global energy consumption, the focus of the general public centers on the mobility sector (e.g., fuel consumption by vehicles and the development of alternative mobility concepts). This concentration of the energy debate on the mobility sector does, however, neglect the importance of the construction sector, which accounts for a much higher share of total energy con-sumption (Kirchner et al., 2008). The existing real estate in Switzerland still draws 80% of its energy needs from fossil sources and, in doing so, accounts for nearly 50% of total fossil energy consump-tion. This consumption generates high CO2 emissions with the correspondingly negative impacts on the Earth's climate.

Given the limited supply, the growing global demand for sources of energy (fueled, for example, by the growing global population, increase in global production, raised standards of living and working, and increases in personal mobility) will continue to result in massive price increases on the energy and raw commodities markets in future.

Quite apart from the ecological aspects, the economical aspects, above all, are encouraging clients and users to adopt a new approach to dealing with fossil energy sources. An analysis of the life cycle costs of buildings identified the operating costs during the utilization phase and, in particular, the costs for energy sources as the main drivers of costs (Girmscheid and Lunze, 2008). Clients and users are there-fore demanding a paradigm shift with the aim of sustainably optimizing life cycle costs over the long term and providing a more reliable basis for calculation (e.g., (Girmscheid, 2006c) & (Schulte, 2003)). The aim of this paradigm shift (Girmscheid and Lunze, 2008) is to ensure that buildings are optimized with regard to the total life cycle costs rather than with regard of the initial investment cost (Girmscheid, 2006b).

In order to provide a pro-active solution, the Institute for Construction Enterprise and Management at ETH Zurich is working with well-known companies from the Swiss construction industry and within the framework of the system provider research approach (SysBau®) developed by (Girmscheid, 2000) on a state-subsidized research project to develop a business model for life cycle service provision for building constructions. As part of this research project, the construction kit for LC service provisions described in this paper was compiled as a potential concept for designing a range of energetically optimized life cycle services (LC services) for building constructions.

This paper presents this construction kit for LC service provisions which aims at demonstrating to planners and service providers the possibilities for developing innovative, project specific and ener-getically sustainable solutions for the clients of the construction industry.

2. System concept for energetically optimized buildings

The system concept behind system service oriented LC service provisions is to release potential syn-ergies that transverse all modules and sub-systems to achieve the sustainable, life cycle oriented, re-

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source and utilization related overall optimization of buildings. In doing so, the system concept builds on the Green Building principles propagated by international certification systems as the fundamental concepts behind sustainable buildings (e.g., BREEAM, passive house standard, Minergie®, LEED, DGNB, etc.).

The system concept produces life cycle oriented, project specific, optimized and customized solutions for the construction tasks facing each respective client.

2.1 Fundamental concepts of energetically optimized buildings

Green building is internationally synonymous with efforts to plan and build sustainable buildings. The definition of "green building" is to plan, build and utilize the resources needed by buildings (energy, water, materials, etc.) as efficiently as possible and, in addition, to reduce the overall impacts of the building on the health of its users and on the environment as a whole (Cassidy, 2003). Focus centers on systematically analyzing buildings as integrated systems over the complete life cycle (Gowri, 2004). Consequently, buildings erected in line with green building principles have less negative im-pact on their environment and comply with all three sustainability requirements (ecological, economi-cal, social). (Lockwood, 2006).

Around the globe, various certification systems have emerged to measure and therefore enable the comparability of the sustainability of buildings erected in line with green building principles. The foremost internationally acknowledged systems for certifying building sustainability are:

• BREEAM (GB)

• Passive house standard (DE)

• Minergie® (CH)

• LEED (US)

• DGNB (DE)

Property sustainability will become strategically more relevant than ever before in the real estate sec-tor in future (Muschiol and Friedemann, 2008). Major globally operating corporations have already defined sustainability strategies for their real estate portfolios; other companies will follow. Sustain-ability will therefore exert increasing influence on the value of real estate and the rate of return that can be generated by it. In order to demonstrate the sustainability grade to the market, construction sector clients will therefore increasingly demand the corresponding certification of their real estate in future.

Engineers and architects must be familiarized with the possible energy modules and sub-systems if these energy sustainability standards are to be met, while at the same time taking account of architec-

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tural quality, life cycle oriented flexibility of utilization and the anticipated period of utilization by the client.

2.2 Conceptual design of an LC service provision

The energetic modules and sub-systems are linked according to the inherent synergy potential as fol-lows (Fig. 1):

• Selection and development of the project specific modules

• Integration of various modules into a sub-system

• Integration and/or interlinking of the sub-systems to each other

Sub-system 1

Modul 1 Modul 2

Modul ... Modul n

Sub-system 2

Modul 1 Modul 2

Modul ... Modul n

Sub-system ...

Modul 1 Modul 2

Modul ... Modul n

Sub-system n

Modul 1 Modul 2

Modul ... Modul n

Sub-system1

Modul 1 Modul 2

Modul ... Modul n

Sub-system 2

Modul 1 Modul 2

Modul ... Modul n

Sub-system ...

Modul 1 Modul 2

Modul ... Modul n

Sub-system n

Modul 1 Modul 2

Modul ... Modul n

Project specific synergetic interlinking of modules and sub-systems in integral sub-

systems

Integration

Interlinking

Construction kit for energetic sub-systems and interlinking potential for overall systems

Interlinking of modules to project specific sub-systems and interling of the sub-systems to an

energetic overall system

Figure 1: Integration of the modules to form sub-systems and interlinking of the sub-systems in an LC service provision to form a project-specific, integrated and/or interlinked overall system across all sub-systems and trades

In the context described here, modules are largely standardized, project neutral components of a sub-system. Within the innovation process, the project neutral and/or intra-project development and opti-mization of the modules takes place at the level of the manufacturer and/or supplier of these energetic modules. Requirements demanded by users of the modules are incorporated generically, i.e., inde-pendent of any specific project and/or across all projects, into the manufacturer's and/or supplier's development and optimization process.

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Sub-systems are comprised of energetic modules and give the service provision a structure in terms of function within the LC service provision (Fig. 2). The modules are interlinked and/or integrated to form sub-systems for a specific project based on the life cycle oriented requirements of the clients and/or users.

The sub-systems are combined to form integrated and/or interlinked sub-systems for the relevant con-struction task based on the cost drivers identified for a specific project. This interlinking opens up inherent synergy potentials that are evaluated using a risk-based probabilistic LC-NPV model (Girm-scheid, 2006b) and produce a project specific minimum life cycle cost and, as such, perceivable added value for the client. In order to ensure adherence to this minimum life cycle cost, performance and/or cost guarantees that take account of the specific client requirements (defined benefit) should be of-fered for the thus integrated and/or interlinked sub-systems. The service providers for a specific pro-ject are responsible for the innovative development and optimization of the integrated and/or inter-linked sub-systems, e.g., through a system service oriented cooperation for LC service provisions.

Service provision

focus

Resource oriented building optimization

LC Service Provision

Energetic passive sub-

system

HVAC facilities for heating and

coolong

Electric energy

Water supply and disposal

Facade

Construction activation

Fossil energy

Thermal solar energy

Geothermal energy

Biomass

Cogeneration of heat and power

Photovoltaic solar energy

Lighting

Drinking water utilization

Rain/gray water utilization

Technical water saving measures

Flexible wall & flooring systems

Flexible building technology

Floor and interior wall coverings

Wand- & Bodenbeläge

Computer system

Telecom. system

Service provision

related sub-system

Service provision module

Building management

Utilization oriented building optimization

Finishing Utilization infrastructure

Building management

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Figure 2: Hierarchical structure of an LC service provision

The economic sustainability in the form of the minimum life cycle cost for a pre-defined benefit should be assured by integrating and/or interlinking the modules and sub-systems at the early stages of value creation during project development ((Girmscheid, 2007a) & (Girmscheid, 2007b)). This will result in the realization of a competition of ideas that will assure the further project requirements in terms of functionality, architectural quality, rate of return and value conservation.

Energetic sustainability in the context of the project specific requirements should be subject to com-petitive optimization in all phases of the life cycle. To this end, factors that are relevant for the life

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cycle, such as the intended period of utilization and the wear and tear of the systems and installations within the modules and sub-systems, must be taken into consideration. Moreover, innovations that might considerably reduce the life cycle costs need to be anticipated. Taking these factors into consid-eration results in a differentiated, life cycle oriented analysis of the durability of materials, structures and systems. Depending on the degree of importance of these factors, materials, structures and sys-tems that tend to have a shorter service life or those that tend to have a longer service life may be the more relevant alternative in terms of life cycle orientation.

The area of focus of LC service provision in terms of content (Fig. 2) is the energy related and/or resource related optimization of the building. The following strategic aspects of energy optimization are proposed in order to ensure a high degree of independence from non-regenerative energy sources (Fig. 3):

• Reduction in the energy consumption and CO2 emissions of the building as a whole

• Increase in the generation and utilization of regenerative energy sources

Figure 3: Strategic aspects for achieving as much independence as possible from non-regenerative sources of energy

3. Modules and sub-systems for life cycle oriented building optimization

The energetic sub-systems and their modules that interactively influence each other are described below. The modules can be compiled into various energetic sub-systems to meet specific customer requirements. The sub-systems can then be used to map the different variants for the overall, client specific system. In doing so, account must be taken of the fact that the sub-systems, e.g., building envelope and energy supply, influence each other. The optimal solution derived from the partial vari-ants that meets the client's specific requirements is then determined by applying the economic mini-mum principle to the overall LC costs ((Girmscheid, 2006b), (Girmscheid, 2007a) & (Girmscheid, 2007b)). The sub-systems and their modules are summarized below:

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• Energetically passive building sub-system

• HVAC for heating and cooling sub-system

• Electrical power sub-system

• Water supply and disposal sub-system

• Interior finish sub-system

3.1 Energetically passive sub-system

The energetically passive sub-system contains all of the modules of an LC service provision that as-sure the energy passivity of a building and thus sustainably lower its energy consumption. The me-chanisms of energetic passivity encompass the avoidance of energy losses, the incorporation of exter-nal (solar) and internal (human, electrical appliances, etc.) heat sources and the equalization of the discrepancy between heat energy generation and heat energy needs through the use of passive inter-mediate energy storage. The following modules belong to the energetically passive sub-system:

• Building envelope/facade module

• Construction activation module

3.2 HVAC for heating and cooling sub-system

The HVAC sub-system for heating and cooling a building as part of LC service provision comprises the elements for actively generating heat and/or cooling in a building. Regenerative and non-regenerative energy sources are converted into effective heat and/or cooling energy using the appro-priate technologies. The following modules belong to the HVAC heating and cooling sub-system:

• Fossil energy utilization module

• Thermal solar energy utilization module

• Geothermal module

• Biomass module

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3.3 Electrical power sub-system

The electrical power sub-system of an LC service provision contains the elements for generating and utilizing electrical energy in a building. Compared with heat energy, electrical power is a compara-tively sophisticated form of effective energy since it can be deployed universally, is easy to store and transport, and can, moreover, be transformed into other types of energy with a high level of effective-ness. The following modules belong to the electrical power sub-system:

• Cogeneration of heat and power - polygeneration module

• Photovoltaic solar energy utilization module

• Lighting module

• Building management and automation module

3.4 Water supply and disposal sub-system

The optimization measures of the water supply and disposal sub-system aim to ensure the sustainable management of drinking water, which is a valuable resource, by means of user independent water saving measures. In addition to the efficient supply of top grade drinking water, the ecologically and economically sustainable handling of wastewater also plays an important role. The following modules belong to the water supply and disposal sub-system:

• Drinking water utilization module

• Rain / gray water utilization module

• Technical water saving measures module

3.5 Finishing sub-system

The life cycle oriented flexibility of the interior finish can be optimized by the LC service provider by defining standards for the interior finish. One possible structure for defining interior finish standards, for example, is to differentiate between "basic interior finish", "standard interior finish" and "user specific interior finish".

Performance and/or cost guarantees by the providers could be used to hedge against the expenditure (e.g., cost and downtimes) incurred in connection with changes to the standard of interior finish dur-ing the life cycle. This would shift the flexibility of the interior design into the sphere of both the client's and the LC service provider's interest.

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In order to make the changes in utilization as efficient as possible and to provide a secure basis for calculation for the user, the interior finish standards must build on specific matrices and appropriate, flexible wall and flooring systems.

The following modules belong to the interior finish sub-system:

• Flexible wall and flooring systems module

• Flexible building technology module

• Floor and interior wall coverings module

4. LC service package - potential synergies to be gained from designing the integrated and/or interlinked sub-systems of LC

service provision for a specific project

As part of an LC service provision, project specific LC packages can be formed from the modules and sub-systems described above in the shape of integrated and/or interlinked sub-systems (Fig. 4). Gen-erating more sophisticated service innovations at project level enables the development of complex specific solutions to respond to the requirements and needs of potential LC service clients. The aim of the integration and interlinking is to release client specific and life cycle oriented synergies to opti-mize the life cycle costs of the building and, in doing so, to generate perceivable added value for the client.

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Building envelope / facade

HVAC

Transmission heat loss

Ventilation heat loss

Solar irradiation

Heating Cooling Ventilation

Regenerative energy

Construction activation

Cooling aggregates

Heat recovery

Night-time ventilation

Integrated facade

Geothermics

Thermal solar energy

Biomass

heat insulation

Architect. aesthetics

Daylight utilization

Photo-voltaic Anti-dazzle

Electric sub-system

Switchable glazing

Lighting

Cogeneration of heat &

power

Thermal heat pump

Building management

Water supply and disposal sub-systemDrinking

water

Rain /grey water

Techn. Water saving

measures Figure 4: Interlinking the sub-systems and modules to form integrated sub-systems of an LC service provision

Fig. 5 shows the inherent synergy potentials for various structural solutions derived from integrating and interlinking various modules and sub-systems from the perspective of the HVAC system. Opti-mization within an integrated and/or interlinked sub-system aims to secure ecological and economic sustainability and a large degree of independence from non-regenerative energy sources. Potential synergies can be derived from this specified aim using the modules and sub-systems which focus on the utilization of regenerative types of energy and the efficient deployment of the types of effective utilization energy obtained from them.

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Figure 5: Project specific synergy potential offered by the HVAC system comprising modules from other sub-systems within the total building system

Based on the system provider concept developed by (Girmscheid, 2000), (Girmscheid, 2006c) & (Girmscheid, 2007c), project specific LC service provision such as this, which aims to secure the sus-tainability of the real estate, can be implemented synergetically in the construction market, e.g., by means of cooperative approaches. System service oriented cooperations can be used (Lunze and Girmscheid, 2008) to bundle the competencies needed for the LC service provision in order to release the synergies inherent in the integrated and/or interlinked sub-systems.

5. LC service package - LC cost analysis as a decision-making tool

During the development phase of an investment project, cost-benefit management is a crucial measure for meeting the goals of the clients. An appropriate, project phase oriented management tool for as-sessing the various modules for the sub-systems and the various combinations of the sub-systems for the overall building system is provided in the shape of the "Holistic cybernetic cost management process model" developed by Girmscheid ((Girmscheid, 2007a) & (Girmscheid, 2007b)).

One of problems facing construction management is to forecast the life cycle and, in particular, the utilization costs of various building systems as realistically as possible. The LC-NPV model devel-oped by (Girmscheid, 2006b) is based on the economic minimum and/or maximum principle. In keep-ing with the dynamic investment paradigm, the net present value (NPV) or cost-cash value (C-CV) methods are used to discount the expenditure and income (NPV) respectively the costs and their cal-culatory depreciation (C-CV) to a standard point in time. In order to reflect the uncertainties of future

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cash flows, probabilistic bandwidths have been introduced in this LC-NPV model for appropriate scenario analyses. As such, the LC-NPV model improves the basis for making decisions based on life cycle costs for the investors and clients in investment projects. Please refer to the corresponding pub-lications (e.g., (Girmscheid, 2006b) & (Girmscheid, 2006a)) for more details on the derivation and application of the LC-NPV model.

6. Summary/outlook

System providers can interlink the energetic modules and sub-systems in the construction kit for LC service provisions to create customer oriented, project specific, integrated and/or interlinked sub-systems based on the requirements and needs of potential clients.

Potential LC service packages can be derived from the potential synergies offered by integrating and/or interlinking the modules and sub-systems.

A project and customer specific, sustainable and life cycle oriented, overall optimum can only be achieved through a development and/or planning processes that incorporates all of the sub-systems, which can only be realized through a complex, cooperative, interactive and integrated exchange proc-ess that, moreover, encompasses the construction and utilization phases of the LC service provision in the shape of performance and/or cost guarantees.

New approaches to collaboration, partnering and strategic cooperation need to be identified to enable such development, planning and construction processes that incorporate all of the sub-systems, and include life cycle oriented performance and cost guarantees.

(Lunze and Girmscheid, 2008) have identified approaches adopted by other industry sectors that could be implemented in the construction industry. These will be further developed in additional research projects at ETH Zurich aimed at securing the successful development of the construction industry in terms of customer benefits and long-term business success.

References

Cassidy, R. (2003) White paper on sustainability: A report on the green building movement. In: Reed Business Information (Ed.) Building Design & Construction. Clearwater.

Girmscheid, G. (2000) Wettbewerbsvorteile durch kundenorientierte Lösungen - Das Konzept des Systemanbieters Bau (SysBau). Bauingenieur, 75, 1-6.

Girmscheid, G. (2006a) NPV-Wirtschaftlichkeitsanalysemodell - Lebenszyklusbetrachtung von kommunalen Strassenunterhalts-PPPs. Bauingenieur, 81, 455-463.

Girmscheid, G. (2006b) Risikobasiertes probabilistisches LC-NPV-Modell - Bewertung alternativer baulicher Lösungen. Bauingenieur, 81, 394-405.

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Girmscheid, G. (2006c) Strategisches Bauunternehmensmanagement - Prozessorientiertes integriertes Management für Unternehmen in der Bauwirtschaft, Berlin, Springer.

Girmscheid, G. (2007a) Holistisch kybernetisches Kostensteuerungsprozessmodell – Projektentwicklungsphase. Bauingenieur, 82.

Girmscheid, G. (2007b) Holistisch kybernetisches Kostensteuerungsprozessmodell – Vorplanungs- bis Ausführungsphase. Bauingenieur, 82.

Girmscheid, G. (2007c) Projektabwicklung in der Bauwirtschaft - Wege zur Win-Win-Situation für Auftraggeber und Auftragnehmer, Berlin, Springer.

Girmscheid, G. & Lunze, D. (2008) Paradigmawechsel in der Bauwirtschaft - Lebenszyklusleistungen. Bauingenieur, 82, 87-97.

Gowri, K. (2004) Green building rating systems: An overview. ASHRAE Journal, 46, 56-59.

Kirchner, A., Hofer, P., Kemmler, A., Keller, M., Aebischer, B., Jakob, M., Catenazzi, G. & Baumgartner, W. (2008) Analyse des schweizerischen Energieverbrauchs 2000 - 2006 nach Verwendungszwecken, Bern, Bundesamt für Energie BFE.

Lockwood, C. (2006) Building the green way. Harvard Business Review, 84, 129-37.

Lunze, D. & Girmscheid, G. (2008) Erfolgsfaktoren strategischer systemgeschäftlicher Kooperationen - Zwischenbericht Phase A: Qualitativ empirische Untersuchung (Multi-Case-Studie) zur Evaluation von Entscheidungs- und Gestaltungselementen sowie Erfolgsfaktoren strategischer systemgeschäftlicher Kooperationen in baufremden Branchen, Zürich, Eigenverlag des IBB an der ETH Zürich.

Muschiol, R. & Friedemann, T. (2008) Green Building – Nachhaltigkeit und Bestandserhalt in der Immobilienwirtschaft. KSD-Fachtagung Immobilienmanagement - Immobilienverwaltung und Energieeffizienz- Strategische Maßnahmen zur Senkung von Energiekosten. Mainz.

Schulte, M. M. (2003) Ein Beitrag zum Business-to-Business-Marketing für life-cycle-orientierte SysBau-Leistungen im Schweizer Hochbau, Zürich, Vdf Hochschulverlag AG an der ETH.

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Risk Coverage Capacity – The Neglected Parameter When Allocating Risk in Successful and Sustainable

PPP Projects

Pohle, T. Institute for Construction Engineering and Management, ETH Zurich, Switzerland

(email: pohle@ibb.baug.ethz.ch) Girmscheid, G.

Institute for Construction Engineering and Management, ETH Zurich, Switzerland (email: girmscheid@ibb.baug.ethz.ch)

Abstract

Proper and optimal allocation of the risks associated with a PPP among the partners is not only crucial; it is also the main driver of efficiency. In practice, however, a standardized and systematic approach to risk distribution is not recognizable. There is a lack of clear decision-making criteria and methods for distributing the risks of a PPP at minimal cost, which would enable the public sector to optimally allocate the risks bearing in mind the risk-bearing ability of the private partner. The Institute for Construction Engineering and Management at ETH Zurich has conducted an empirical survey to identify and analyze the general criteria that apply across all PPP projects in terms of risk allocation between the private and public partner. This study provided the basis for developing a risk allocation process model. Building on these findings, ETH is designing a multi-dimensional risk identification and allocation (RIA) model in collaboration with Swiss municipalities for ensuring the optimal and sustainable distribution of risks among the partners in a PPP. The RIA model and the ensuing optimal risk allocation helps to ensure maximum exploitation of the possible synergies offered by a PPP and, in doing so, to secure the long-term partnership and economic efficiency of the PPP for both the public sector and the private partner.

Keywords: Public-Private Partnership (PPP), risk allocation, risk-bearing ability, explanatory model

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1. Introduction

Around the globe, public-private partnerships (PPPs) have emerged as a very widespread and successful alternative for performing public duties. A PPP aims to release synergies by incorporating the specific expertise and economic competence of the private partner in collaboration with the public partner when performing public duties. These synergies are released by ensuring the best possible allocation of risk that takes account of the performance capabilities of the partners.

According to (Jacob and Kochendörfer, 2002), "optimal risk allocation" is the critical success factor for the long-term economic efficiency of a PPP.

Figure 1: Efficiency pyramid – Efficiency-increasing factors in a PPP (Jacob and Kochendörfer, 2002)

In practice, however, a standardized and systematic approach to risk distribution is not recognizable. Intuitive, habitative and opportunistic aspects relating to the negotiating strength of the partners usually determine the distribution of the risks. There is a lack of clear decision-making criteria and methods for distributing the risks of a PPP at minimal cost, which would enable the public sector to optimally allocate the risks bearing in mind the risk-bearing ability of the private partner.

One specific problem of risk allocation is that it frequently does not take sufficient account of the risk bearing ability and financial capacity of the private partner. As such, the PPP is jeopardized by the possible insolvency of the operator at an early stage if, for example, too high a level of risk is transferred to the private partner. Consequently, the risk bearing ability – i.e., the financial capacity - of the private partner must be identified and taken into consideration, and incorporated as a parameter into the risk allocation process in order to sustainably secure the long-term perspective and economic efficiency of a PPP.

The Institute for Construction Engineering and Management at ETH is designing a multi-dimensional risk identification and allocation (RIA) model in collaboration with Swiss municipalities for ensuring

Optimizationof risk transfer

Output orientationCompetition

Life cycle approach/Sustainability

Partnership behaviorBundling, transparency

Interest conformity

Efficiency-increasing factors

1st Level

2nd Level

3 rd Level

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the optimal and sustainable distribution of risks among the partners in a PPP. The RIA model and the ensuing optimal risk allocation helps to ensure maximum exploitation of the possible synergies offered by a PPP and, in doing so, to secure the long-term partnership and economic efficiency of the PPP for both the public sector and the private partner.

Both the specific strategic and operational risks relating to street maintenance in municipalities and towns (as the sample area), and the specific PPP risks were identified using this empirical study, and the existing mechanisms for distributing risk and assessing risk-bearing ability determined, thus providing the existential fundamental prerequisites and system boundaries for modeling a risk allocation concept.

2. State of research

Although most publications stress the central importance of risk analysis and allocation as the basis for both the actual project and the commercial success of the same (Akintoye et al., 2003); (BMVBW, 2003); (European-Commission, 2002); (Grimsey and Lewis, 2002), they do not provide the tools for putting risk allocation into practice.

Practice and research generally accept that "optimal risk allocation" is only achieved when none of the partners is shouldering a risk that the other partner could bear more efficiently, for example, because it has better means of influencing that particular risk (PPP Task Force NRW, 2007). This adheres to the general principle of risk allocation, according to which the risk should be allocated to whoever is able to handle it more cost effectively (Akintoye et al., 2003); (Boussabaine, 2007); (European-Commission, 2002).

Apart from these general principles of distributing risks, literature does not offer any suggestions for achieving this optimal risk allocation. Neither does it provide decision-making aids for risk allocation nor specific criteria that could be applied to allocate the risks. The relevant competence of the respective partners is the only clue given for optimal risk allocation; according to practice and research (Akintoye et al., 2003); (Boussabaine, 2007); (European-Commission, 2002), (PPP Task Force NRW, 2007), risks should be distributed in line with these competences. Here, again, unambiguous criteria for clearly determining competence and thus using it as the criterion for allocating risk are missing.

In addition to the general principle of risk allocation, only (Boussabaine, 2007) mentions that, in practice, the risk taker does not always have sufficient financial capacity to actually bear the risks that have been allocated to it (Boussabaine, 2007).

(Girmscheid, 2006) and (Girmscheid and Busch, 2008a) postulate three dimensions of risk allocation:

• ability to influence,

• ability to minimize impact, and

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• risk-bearing capacity of the risk taker,

which act as the input and design parameters for a risk allocation model to ensure the optimal distribution of risks in a project.

Generally speaking, literature does not offer any unambiguous criteria which could be used as the basis for cost-minimized allocation of risks and, therefore, for a successful long-term partnership for both parties. Only the fundamental principles of a risk management process using the standard tools for identifying and evaluating PPP project risks are described, but no further detail is provided on the process of actual risk distribution and the financial implications of such an allocation.

3. Research methodology

3.1 Methodological frame

According to (Popper, 1990) and (Plessner, 1965), research findings form part of the socio-technical milieu or 3rd world of products of the human mind. (Dilthey, 1900) and (Heidegger, 1938) claim that philosophical hermeneutics form the scientific-philosophical platform for the target-means relationship in construction management (Girmscheid, 2007a). The research paradigms of interpretivism (Weber, 1980) and constructivism (Glasersfeld, 1998) are the underlying research methodologies used to obtain knowledge in the hermeneutic science program.

Construction management forms part of this socio-technical world designed by humans. As such, scientific challenges in this filed can be addressed using these research paradigms (Girmscheid, 2007a).

The generic-deductive and constructivist research paradigm (Girmscheid, 2007a), (Glasersfeld, 1998), (Piaget, 1973) is used to design the base variables as a target-means relationship when allocating risk. According to (Yin, 1994), triangulation is used to validate the scientific quality of the designed explanatory model as follows:

• Assuring the viability of the generic-deductive design elements of a risk allocation concept for practical application

• Assuring the validity of the design elements by integrating a theoretical reference framework into the phenomenological explanatory model

• Assuring the reliability by testing the intended target-means relationship (realizability test)

− Multiple case studies − Replication logic − Cross-case analyses − Validation case studies

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For purposes of validation, the theoretical-deductive structure of the basic risk allocation criteria is designed on the basis of the fundamental principles of risk-bearing capacity theory (Girmscheid, 2007b); (Girmscheid and Busch, 2008b), of contract theory based on the Principal-Agent theory (Ross, 1973); (Jensen and Meckling, 1976); (Harris and Raviv, 1978) and of the structuration theory developed by (Giddens, 1985) in terms of power and dominance.

The reliability of the design of the basic risk allocation criteria is assured by a realizability test to examine the possibility of alternative interpretations under the same conditions. The triangulation concept outlined above complies with scientific quality requirements, according to (Yin, 1994).

As the first step toward designing the base variables of the risk allocation model, the empirical study presented in this paper was conducted using qualitative social research methods (Mayring, 2002) as the first step toward solving the problem.

3.2 Elements of the study

The empirical studies encompassed the following areas of focus:

• Identification of the specific strategic and operational risks relating to street maintenance by municipalities and towns (as the sample area)

• Capturing the concepts of general intra-project and intra-company external evaluation of the risk-bearing ability of investment projects (PPP projects), and enterprises and project companies acting as investors and/or PPP partners

• Analyzing existing PPP-based allocation concepts in practice and, in particular, the criteria that generally apply to all PPP projects in respect of risk allocation between the private and public partners

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Figure 2: Areas of focus of the empirical study

This paper only addresses the empirical study in the context of study area III - Allocation of PPP risks in municipal street maintenance - in more detail.

3.3 Research design and research logic

Stakeholder group sampling

Study area: Allocation of PPP risks

In this study area, the empirical studies focused on identifying the PPP-specific risk allocation mechanisms that are used in practice, together with the criteria for allocating risk among the contract parties.

When planning PPPs, the public sector is usually supported by consultants who are responsible, in particular, for designing the risk allocation model. As such, consultants are aware of the specific mechanisms and criteria for allocating risks that support the interests of the public sector.

This is why the group surveyed on the client side (public sector) was comprised of PPP consultants who have assisted, managed and supported national and international public offices in initiating and

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executing the PPP process. This enabled the largest possible store of PPP knowledge in terms of the "state of practice" and, specifically, of knowledge relating to the practice of PPP risk allocation on the client side (public partner) to be tapped.

The group studied on the contractor side were construction companies whose strategic business focused on PPP (SGE-PPP) and who had years of extensive experience in the execution of PPP projects, especially infrastructure projects.

The following best practice criteria were used for sampling the construction companies and consultants:

• Market relevance in their home country (D)

• Global player (operating internationally)

• General experts in the field of PPP

• Experts in the fields of PPP road construction / traffic infrastructure (general)

Cross-case

The qualitative findings from the case studies (identified risk allocation categories) were compared with each other in cross cases, and replication logic used to derive the respective conditions (validity limits) for the occurrence of the individual evaluation aspects among the various stakeholder groups (construction company/consultant), as recommended by (Yin, 1994).

The cross-case analysis was performed in two stages:

• Internal cross-case analysis - within the consultancy / construction company to ensure completeness (literal replication)

• External cross-case analysis - performed across the stakeholders to obtain generally applicable evaluation criteria that were valid for all stakeholders (literal replication) and to identify specific distinctions among the stakeholders (theoretical replication).

In the case of the internal cross-case analysis within a stakeholder group, the findings were assumed to be similar, with any differences being only due to particular characteristics of the companies in certain valuation categories in line with the so-called literal replication coined by Yin. This was performed both for the various consultants (internal cross-case analysis - consultants) and separately for the various construction companies (internal cross-case analysis - construction companies).

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The external cross-case analysis compared the findings relating to the two stakeholder groups of construction companies and consultants (external cross-case analysis - stakeholder groups). The aim of this comparison was to identify whether any generally applicable allocation mechanisms and allocation variables are used by both stakeholder groups in practice, or whether these contradict each other in some cases to reflect the opposing interests of the two stakeholder groups that apply the allocation categories. When comparing the two stakeholder groups, the findings in respect of the identified allocation aspects were therefore assumed to differ and to contradict each other in some cases, in line with the so-called "theoretical replication" coined by (Yin, 1994).

In addition, the situative conditions were determined, based on "replication logic", under which the specific criteria or cross-section criteria occurred (validity conditions or condition variables) in the context in which they were observed (stakeholder group).

The data was collected using semi-structured problem-centered interviews (Mayring, 1999) and recorded and codified for the descriptive conceptualization to extract the phenomenological hypothesis by means of a cross-case.

The scientific quality of the qualitative empirical study was verified by means of both internal and external validation and realizability tests in compliance with the criteria defined by (Yin, 1994), (Mayring, 1999), (Girmscheid, 2007a):

• Process documentation

• Argumentative interpretation assurance

• Adherence to systematic analytical procedure

• Proximity to the research subject

• Communicative validation

• Triangulation

4. Empirical study – results

Phenomenological explanatory model

The findings from the validated interviews were structured and collated into a phenomenological descriptive and explanatory model.

A phenomenological explanatory model differs from a phenomenological descriptive model, which only serves to describe the facts and events observed, in that it also provides an explanation for these events.

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The phenomenological explanatory model was used to deduct the mechanisms and basic elements of risk allocation in practice that represent the condition variables for shaping and developing a risk allocation model.

Results

The interviews were evaluated on the basis of a structured and qualitative analysis of the content using the following theory-based, typologized and conceptualized main categories which, on the one hand, are based on the risk theory devised by (Girmscheid and Busch, 2008a) and, on the other hand, on the freedom of the partners to act, and can be explained using both the Principal-Agent theory developed by (Ross, 1973), (Jensen and Meckling, 1976) or the structuration theory devised by (Giddens, 1985):

• Immanent within the sphere of one of the partners and/or subject of the contract

• Cause minimization

• Impact minimization

• Competition criteria and negotiating strength

• Risk-bearing ability

The following associated risk allocation variables were identified in the individual assessments:

Immanent within the sphere of one of the partners and/or subject of the contract

• Jurisdiction and legislation

• Subject of the contract - construction risks

• Subject of the contract - operating risks

Cause minimization

• Ability to influence - performance capability/expertise

• Ability to influence - power of disposal / function

• Ability to influence - selected project structure

Impact minimization

• Ability to influence - performance capability/expertise

• Ability to influence - insurability of risks

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Competition criteria and negotiating strength

• General and project-specific specifications by the private partner / municipality (negotiating strength)

• General acceptance criteria for the bidders (competition criteria and negotiating strength)

• Project-specific specifications by the banks (negotiating strength)

Risk-bearing ability

• Ability to finance

• Subsidy programs for medium-sized enterprises

• Risk of insolvency of the PPP project company

The findings from the survey clearly showed, however, that there are no clear criteria in respect of cause minimization, impact minimization and specific analysis of the risk-bearing ability of the PPP company.

Risks are currently largely allocated habitatively and intuitively, based on general experience, e.g., specifically the allocation of construction risks in the case of TC (Total Contractor) projects. By contrast, the allocation of operational and maintenance risks is largely dictated by the negotiating strength of the contract partner. Considerable research still needs to be conducted in this field to ensure the reasonable and justified allocation of these risks.

5. Conclusions

A long-term partnership, such as a PPP, can only produce a win-win situation if the risks are optimally allocated to reflect the respective competencies and influencing capacities of the partners and, especially, to take account of their financial risk-bearing ability.

The findings from this empirical study can help municipalities to systematically identify, assess and evaluate the long-term risks. In addition, it explains the main allocation categories for a distribution of risk that is commonplace in practice (explanatory model) and provides the basic fundamental variables for modeling an allocation model.

The further development of this model based on the derived basic risk allocation criteria will establish the optimal risk allocation which will help to ensure maximum exploitation of the possible synergies offered by a PPP and, in doing so, to secure the long-term partnership and economic efficiency of the PPP for both the public sector and the private partner.

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The Role of Knowledge Management in Improving the Adoption and Implementation Practices of

Industrialised Building System (IBS) in Malaysia

Abdullah, M.R. University of Salford

(email: M.R.Abdullah@pgr.salford.ac.uk) Egbu, C.

University of Salford (email: C.O.Egbu@salford.ac.uk)

Abstract

In Malaysia, the strategic changes towards the promotion of the concept of Industrialized Building System (IBS) started in 1998. It is envisaged that the benefits expected from the adoption of IBS will have positive and dramatic impact on the culture of building practices. An important issue which is likely to influence the wider and successful implementation of IBS is the role that knowledge management plays in this regard. This relates to such issues as the knowledge ability and skills of the workforce, and the role that knowledge sharing plays in effective decision making processes to do with IBS implementation in its many and different disguises. Through a literature review, and from a knowledge management perspective, this paper highlights some of the main issues that may contribute to the implementation of IBS in Malaysia construction industry. This paper also reviews existing strategies associated with the adoption for IBS, especially as they relate to lack of knowledge and awareness among industry players and stakeholders. Some conclusions are offered relating to the level of knowledge needed to change the readiness and perception of key stakeholders toward successful and wide adoption of IBS. These include, inter alia, the need for improvement of existing university curricular related to design and construction process, continuous learning among professionals, training and knowledge sharing initiatives. This paper recommends that a robust and holistic approach to the adoption of IBS is needed and vital in order to tackle the many and related issues to do with both the adoption and implementation of IBS in Malaysia. This integrated approach should consider the knowledge awareness, strategic procurement, production process philosophies, contractual arrangement, strategic policy and decision making process to mention but a few.

Keywords: industrialized building system, knowledge management

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1. Introduction

It is very unlikely that Industrialised Building System (IBS) has commonly been agreed and accepted in it definition (Hamid, 2008). Despite been argued by many researchers on the common term, generally the IBS could be seemed according to their stand. Elliot (2003) suggests that IBS should be seen from the philosophy rather than product or system. However some of the evidence shows that IBS undoubtedly can be define from the perspectives of process, product, technology, method, techniques, system or philosophy. According to Warszawski (1999) IBS can be viewed as a set of interrelated elements that act together to enable the designated performance of the building. It is also been supported that IBS can be defined as an investment in equipment, facilities and technology with the purpose of increasing output, manual labour saving and quality improvement. Gibb (1999) claims IBS as a process. It was described as incorporating prefabrication and preassembly that involves design and manufacturer of units of modules, usually remote from the work site and their installation to form a permanent work at site.

In Malaysia, it has been recorded by some authors that IBS is the system or techniques. Parid (1997) defines IBS as a system which uses industrial production techniques either in production of components or assembly of the building or both. In addition to that, Trikha (1999) claims that material assembling was used as IBS fundamentals in definition. It clearly suggested that IBS as a system in which concrete components prefabricated at site or factory are assembled to form a structure with minimum on site construction. Rahman and Omar (2006) outline IBS as a construction system that is built using pre fabricated components. Construction Industry Development Board (CIDB) also established their own definition for IBS to be known as a construction techniques in which components are manufactured in a controlled environment (On or Off site), transported, positioned and assembled into a structure with a minimal additional site works ( CIDB,2003) IBS can be classified into four major sub structural system known as Conventional System, Cast insitu Formworks System, Prefab Panel System and Combination Composite System (Kadir et al 2006).

2. Literature review

2.1 Implementation of IBS project in Malaysia

It has been recorded that IBS has been used in Malaysia since 1964 when government took a role of introducing the IBS to pilot project in Kuala Lumpur when 3000 units of 7 blocks of 17 storey and 4 block of 4 storey flats and 40 units shop lots was constructed in 22.7 acres of Land at Jalan Pekeliling, Kuala Lumpur by Gammon/Larsen Nielson as contractor using Danish System of IBS (Thanoon et al 2003).

Since then, the implementation of IBS as a construction system in many projects has been generally developed. In 1980s when Malaysia economic stated the growth of construction industry at an average of 13%, Selangor State Development Corporation (PKNS) acquired precast concrete technology from Praton Haus International based on Germany to build low cost walk up flats and high cost bungalow in Selangor (CIDB,2003). In 1984, the usage of steel structure as once of IBS has gained attention to

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construct the 36 storey of Dayabumi office complex by Takenaka Corporation of Japan (CIDB, 2003). In 1990s, the development of information technology (IT) was utilised to incorporate IBS design, production and site management. Rahman and Omar (2006) have claimed that the Brickfield Secondary School 1 in Kuala Lumpur as reference of IBS project used the IT facilities. It is recorded that prefabrication concrete panel was utilised using IT in planning the congested and limited site constraints.

The late 90s and early 2000 the government used the precast concrete load bearing wall as IBS type of construction. It was implemented to complete a serial of staff quarters and government accommodation in Senawang, Kuala Kangsar, Putrajaya (Rahman and Omar, 2006). The other testimonial of successful IBS projects constructed are Petronas Twin Towers in 1993; Monorail; Light Rail Transit; Vista Komenwel for 98 KL Commonwealth Games; Aquatic Stadium in Bukit Jalil; National Stadium in Bukit Jalil KL Tower; Putrajaya Bridge; Mutiara Damansara Shopping Centre; KL Central Station; Kuala Lumpur International Airport (KLIA); Putrajaya Housing; Teachers Quarters to mention but a few.

2.2 Issues and challenges

It is generally been agreed that few factors and issues are associated with the implementation of IBS. It has been highlighted by Meiling & Johnson (2008), that Lessing et al (2005) have outlined the characteristics or factors of IBS been successful among others are planning and control during the process; technical system developments; offsite manufacturing; long term relationship; supply chain management; customer focus; usage of information technology (IT); and systematic performance measure. Rahman and Omar (2006) highlight that mass construction method, lack of involvement from small contractors and lack of knowledge and exposure to IBS technology. Hussien (2007) elicits from the IBS Steering Committee of CIDB Malaysia 2003-2005 which identified the challenge of implementation among others are development of standard plans and standard component; apprentice training; testing and evaluation programme; vendor development program; and readiness of designers and consultants. Kamar et al (2009) enumerate the barriers to implement the IBS in Malaysia are readiness, cost issues, awareness and knowledge, planning and implementation and negative perception.

However, Abdullah & Egbu (2009) claim that economy development, nature of industry, perception of current conventional construction industry, stakeholder’s readiness and research development are identified as an issues and challenges of adoption for IBS. The issues and challenges faced by the industry key players will reflect the level of IBS adoption in Malaysia. It has been revealed from the report by CIDB that the level of usage of IBS is only 15% in 2003 (CIDB, 2003). IBS Roadmap 2003-2010 outlines the structured and formal guideline for construction stakeholders to adopt total concept of IBS in Malaysia. Hence, that strategic planning is seems to achieved off targeted. Haron et al (2009) state that it generally has been accepted that the level usage and implementation of IBS in Malaysia is still very low.

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2.2.1 Knowledge awareness of key players

Rahman & Omar (2006) highlight that lack of knowledge in structural analysis and design of pre fabricated components among civil engineers and those related to construction discourage the further implementation of IBS. Hence, the implementation of IBS is hindered by a lack of scientific information (Razali et al, 2005). Chung & Kadir (2007) observe that most of local authorities in Malaysia are unlikely to change local building regulation to comply the IBS element due to knowledge capacity. It is quite certain that implementation of Modular Coordination (MC) concept trough the amendment of Uniform Building by Low (UBBL) is yet to be executed due to limited knowledge and awareness (Kamar et al, 2009).

2.2.2 Level of workforce skill

Labour usage represents one of the critical elements in Malaysian construction industry due to severe shortage of local workers (Kadir et al, 2006). It is very unlikely that IBS required a high number of labours in it production and erection (Marsono et al, 2006). Some of the evidence show that IBS has reduced the numbers of workers on site due to mechanisation, automation and robotics system whenever the machinery is employed to ease the work of the labours (Richard, 2005). The effectiveness of labour productivity in IBS has been revealed by studies carried out by Kadir et al (2006). The used of information technology (IT) in design, production and erection has significantly required the knowledge and skills. Designers and managers in IBS production factory and on site required the knowledge of IT to plan and execute used the tools offer by IT such as simulation for components production, CAD/CAM Software, Project planning software. Technology can be used to improve firms/ ability in terms of the effective use of information (Jaafar et al, 2007). Rahmat et al (2004) highlighted that most important skill and knowledge for managers are communication, leadership and building regulations knowledge which lead to take up the IBS complexity to be implemented. Haron et al (2009) highlight that lack of skilled and knowledgeable manpower in IBS seems to be the barriers and hindrances of IBS adoption.

2.2.3 Policy and decision making process

The adoption and implementation of IBS or Prefabrication and modular construction should enhance environmental awareness through education and training focused by the government (Tam et al 2007). The role of government in establishing the policy for strategic level of implementation is a significant impact on the IBS issues. The incentives and promotion offered by statutory authorities and government policies are desirable through planning approval process whereby more floor areas are allowed to be built (Chaing et al, 2006). The demand and impact for prefabrication or IBS post war is significant due to changes of institutional environment been promoted the prefabrication or IBS to be taken up especially as policy option (Oonagh,1987).

Goodier & Gibb (2007) suggest that negative connotations and perception of offsite and IBS need to be conquered for more information to decision makers to make a consideration of IBS and offsite implementation especially cost comparisons with the traditional method. Rashid (2009) suggests that collaborative approach between designer and manufacturer to make joint decision making in

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finalisation of IBS design is significant. The issues of decision making for best selection of IBS can be classified as the skill and competencies of project team. The appropriate type of IBS is depending on various perspectives.

3. Methodology

This research paper is based primarily on a literature review of IBS development and related issues in Malaysia. The main idea is to present the scenario of IBS implementation issues in term of the knowledge roles and contribution factors that affected the total adoption. This preliminary study is part of the conceptual framework of PhD research to further explore the most significance issues in IBS type of selection.

The study will be conducted through the qualitative method of research. The questionnaires will be designed to strengthen the proposed case studies from the IBS project stakeholders’ perspectives. An analysis will help to justify the aims and objectives expected. Verification will be carried out with experts in the area through semi structured interviews and focus group session. The long term aim of the PhD research is to improve decision making process in selection of the type of IBS for housing and office buildings in Malaysia.

4. Discussion

4.1 IBS and knowledge management

Knowledge is an awareness of what one knows through study, reasoning, experience or association or through various type of learning (McInerney, 2002). Devenport and Prusak (1999) define knowledge as a fluid mix of framed expertise, values, contextual information and expert insight that provides a framework for evaluating and incorporating new experiences and information. Knowledge Management (KM) is defined as any process or practice of creating, acquiring, capturing, sharing and using knowledge, wherever it resides, to enhance learning and performance in organisation (Scarborough et al, 1999). KM involves knowledge identification, creation, acquisition, transfer, sharing and exploitation. KM is vital for work efficiency in projects and for improving organisational competitiveness (Egbu, 2000&2001) and the need for KM in the construction industry is fuelled by the need for innovation, competency, improved business performance and client satisfaction.

Knowledge Sharing (KS) is one of the KM processes and also one of the main components in knowledge management system – KMS (Alavi, 2001; Earl, 2001). Ismail & Yusof (2008) describe that KS refers to any type of knowledge including explicit knowledge or information, ‘know how’ and ‘know who’ tacit knowledge in the forms of skill and competency.

4.2 KM roles in improving the implementation of IBS

It is generally agreed that KM plays a role as a process of knowledge and information sharing and transfer from individual to another or groups. Hence, the lack of knowledge from one party will not be

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ensuring the other parties successful adoption of the knowledge and information. Much of KM focuses on the role of information technology (IT) and information systems (IS) and the tools that aid knowledge transfer and storage (Egbu, 2000; 1999).

It is been suggested that IT in 1990s plays a significant role in IBS in Malaysia when it showed improvement in structural performance (Kadir et al, 2005). Sexton et al (2006) also postulated Rogers (1995) that the adoption and implementation of new method of construction system shall require the consideration from knowledgeable designers and adequately persuaded the merits of Modern Method of Construction (MMC) in their decision making process of selecting the type of framing system. The argument been highlighted by Sexton et al (2006) assert the KM process must be recognised by the designers and project stakeholders to realise the viability of structural or building systems alternative through the application of Information Technology (IT) design support tools.

Rashid (2009) claims that examination conducted between designers and manufacturers of IBS in studying the collaboration revealed the miss matched between designing and manufacturing of local IBS products. It is suggested that improvement needs to be done. Hence, knowledge sharing and transfer initiatives in KM seems to be significant in this context.

4.2.1 Education curriculum and syllabus

According to various authors, the role of education curriculum and syllabus in higher education centre and universities related to engineering and construction process programs need to be enhanced with the advance and update technology in construction industry especially IBS (Rahman & Omar, 2006; Warszawski, 1999; Haron et al, 2009; Thanoon et al, 2003) .

Rahman & Omar (2006) suggest that subjects related to design and construction of precast concrete and other related IBS products should be offered as elective for graduated studies. It is also recommended that university curriculum and syllabus of construction and engineering shall consider adopting new topics of IBS. The academic curriculum in universities seldom incorporates courses on technology, organisation, construction and the design of IBS (Warszawski, 1999). Haron et al (2009) claim that knowledge level of IBS courses in engineering course based in Malaysia universities are lacking in exposure. The initiatives have been done on 9th May 2006 when a forum of Implementation of Syllabus for IBS was held by CIDB (CIDB, 2006). That knowledge sharing initiative seems to be successfully implemented.

4.2.2 Research and development

It has been generally accepted by various authors that the degree of research and development (R&D) in IBS is lacked behind in term of the development of new materials for IBS components, local design and manufactured building system, scientific information, modern method approaches and innovation (Haron et al, 2009; Kamar et al, 2009; Hamid, 2008; Rahman & Omar, 2006; Thanoon et al, 2003; Razali et al, 2002; Badir et al, 2002;).

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There are few R&D of IBS activated in Malaysia universities such as IBS Centre of Construction Research Institute of Malaysia (CREAM) and CIDB in Kuala Lumpur; Housing Research Centre (HRC) of UPM Civil Engineering Faculty in Serdang, Selangor; Open Building Research and Consultancy Team of UTM Skudai in Johore. The potential of R&D in IBS has been vast discussed by several researchers in the area of materials and management. According to CREAM (2008), it is recorded that 32 R&D projects undertaken by CREAM and only 14 of these are IBS related.

4.2.3 Innovation

It is generally agreed that relationship between KM and innovation has been widely discussed by scholars and practitioners in literature (Tasmin & Woods, 2008). It is generally recognised that KM can promote innovation and business entrepreneurship; help in managing change, and for emancipating and empowering employees (Egbu, 2000). Egbu (2000) stated that construction has not been as innovative as other industries even historically been highly innovative. Egan Report (1996) has recommended that lesson learnt from manufacturing sector and innovative culture must be created. It is seemed to be a challenge of construction industry when innovation required powerful drivers and right people with right culture to take place (Egbu, 2000).

Innovation can be as new as improvement. In IBS, the new construction materials or new method of construction associated as innovation. Sumadi (2002) states that innovations in the areas of materials, Information Technology (IT) and robotics are improving building quality in terms of industrialisation process and construction method. It has been viewed that materials innovations can be classified into two general categories which are known as new and improved material such as high performance concrete and prefabricated composite elements.

4.2.4 Information technology

The innovation in IT has shown the significant effect on the development of construction industry. Gajamani & Varghese (2007) highlight that the used Radio Frequency Identification (RFID) in prefabricated building and IBS components would seems to improve the project scheduling and monitoring due to compatibility of working with the other software such as MS Project and AutoCAD. Rahman & Omar (2006) state that use of Information Technology (IT) in design and visualization software and facilities such as 3D, 4D, nD and Building Information Modeling (BIM) to improve the process of Feasibility Study, Cost Modeling, Site Layout, Project Planning & Control has shown a significant impact in IBS construction industry improvement especially the risk reduction exercises. The most lacked information such as new technology of IBS will gain higher risk. Hence, the application of IT in IBS would seem to be beneficial.

4.2.5 Knowledge base decision making and selection criteria

Uriel & Lozano (2004) has developed a knowledge base system (KBS) for house layout selection and it has been demonstrated that Computer Algebra System can be used to improve the design process. Hence, the roles of knowledge are significant to be take place in improvement process. The KBS was based on the criteria of local climate, building site and customization or end users needs. In this

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relation, Pan (2006) outlines the criteria for build system selection into eight domains known as value for decision. The cost, time, quality, health and safety, sustainability, process, procurement and regulatory & statutory acceptance are identified as the selection criteria. These identified criteria seem to be critical factors for best selection of IBS type of product.

4.2.6 Knowledge sharing initiatives

The knowledge sharing initiatives among the professionals and stakeholders should be promoted to improve industry, organisation and individuals. Thus initiatives such as conference, seminars, symposium and dialog either locally or globally may contribute to the knowledge flows for participants to make informed and knowledge base decision making.

The sharing of knowledge among the manufacturing sectors and construction players has benefited construction industry when the improvement significantly takes part. The used of Just in Time (JIT) concepts or philosophy in precast concrete components has been proved to make a significant result in Japan construction industry. The JIT philosophy commonly known as Toyota production System originated from manufacturing sectors (Pheng & Chuan, 2001). That JIT concept then has been translated into English as lean production system dealt with right materials supply in right time, time place and right amount at every step of process. Hook & Stehn (2008) affirm the idea of Koskela & Ballard (2006) that lean construction is a test of conventional paradigm of project based on economics theories and adopt the theories of project management in production. IBS as defined earlier related to Offsite Manufacturing seems to be closed integrated with this concept.

4.2.7 Training and continuous learning

Continuous Professional Development (CPD) is a life-long learning process that maintains, enhances or increases the knowledge and skills of professionals to ensure their knowledge and ability are relevant to the needs of society (Board of Architect Malaysia, 2004) . This approaches in various professional bodies such as Board of Engineer and Board of Architect is to ensure the level of knowledge acquired and current issues related has been address in professionals and designers practices. Hence this will help professional to face spectrum changes and take advantage of the opportunities that may arises and also to underpin the value of their professional qualification. Ariffin and Torance (2008) quoted that one of the interviewees has been agreed that CPD will updated and exposed to the latest construction technologies. It also quoted that the sharing of experiences by these self-employed consultants at CPD activities allowed the non-consultant registered professional or designers to maintained their ''true'' professional knowledge.

The initiatives of CPD held by various professionals’ board and bodies through serials of trainings, short courses and seminars will enhanced the professional designers and practices to share the knowledge. It has been agreed that an attendances in this continuous knowledge management and knowledge sharing activities is compulsory for renewal membership requirement. The series of seminar related to IBS held by universities, research centre and professional bodies with or collaboration of CIDB or others related partners has been actively recorded since 1998 until today. Hence the improvement of IBS total adoption is still been questioned.

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5. Conclusion and discussion

This paper recommends that holistic and integrated approaches to adopt the IBS in Malaysia are significant. The issues arises to challenge the implementation of strategy, policy, procedures, method of IBS is a process of maturity of knowledge evolution for construction industry players. This robust approach in particularly from the KM perspective is considered as development of human capital which is prerequisite for industrialization process. The technology and human issues will lead the industry to achieve sustainable development. The significant roles of knowledge in any discipline including construction which has been perceived as lack of knowledge and skill awareness can overcome the dilemma by strategic planning from government and actives roles by industry players. The full commitment from project stakeholders to innovate and justify the risk is speculated to be as critical factors. An appropriated decision making model to facilitate the related parties to analyse and evaluate the best option of IBS in selecting the technology in IBS types and classification. Hence the perception of IBS as prefabricated and offsite only shall be widening up to the philosophical level in knowledge management desired. The role of knowledge management in improving any kind of activities has significantly affected the process and final products and must be reviewed in a holistic manner.

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