Section 1 Unit 3

8/12/2019 Section 1 Unit 3

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Unit 3:Review of traditional construction models and a comparison of product

development processes with other industries (key-words: delivery, methods,

benefits, traditional construction process, lean thinking)

Aims:The general aim of this unit is to review traditional construction models and

compare these models with other industry practice. Students will be encouraged toquestion current models and be innovative in developing lean solution to current

problems

Procurement Process

The procurement process is defined as the process from the completion of

design to the successful commissioning of the assembly of the building. Procurement

is also represented by the contractual and financial arrangements although these are

dependent on the parties involved.

Traditional Construction Procurement

The traditional form of procurement is where the designer does not have direct

link with the specialist and all communication is via the main contractor who in

many cases will not accept design liability. This results in a grey area of

responsibility and liability as information is passed from one to the other. In

general, the designer or the architect is the leader of the project and represents the

client to implement the design process. The architect becomes more of a

surrogate client and takes on the responsibility to make sure the project is

delivered on time and on budget. The traditional method of procurement, the

client appoints independent consultants, on a fee basis, who fully design the

project and prepare tender documents upon which competitive bids, often on lump

sum basis, are obtained from contractors. The successful tenderer enters into

direct contract with the client and carries out the work under the supervision of the

original design consultants.

In the traditional procurement, the professionals are empowered to use best

practice defined by their own professional bodies and education. The basic

workforces in general play an inactive role towards the design and planning

process. The basic workforces here work consistently if there are no interruptions

in the production process. Such an environment generally encourages an

adversarial attitude among the design teams.

In terms of cost benefits, reduction of up to 30% can be achieved. While a

reduction of 40% in delivery, time can be achieved but there is a little change in

the quality of the product.

Innovative Construction Procurement

The innovative construction approach gives both experience and inexperience

client hands-on involvement to determine the cost and quality of the intended

design. The client would need a management with strong leadership and


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teamwork qualities in order to produce what is expected. Hence, the client, in

terms of design and construction, has only one organisation to deal with. Such

procurement was introduced to accommodate forever increasing diversity,

complexity and standardisation of building techniques. There is also a growth in

prominence of subcontractor and also the size of projects that demand for tighter

time and cost targets thus requiring a more unified and purposeful management ofthe total process.

Since the client acts as the surrogate designer, the client plays a major role in

determining the viability of the design. The designer or architect would become

the intermediary for the inception of the design and would assist the client to

realize the completion of the project. In order to achieve this an interface or a

medium have to be developed so that the client would be able to make precise

decisions on a candidate solution from the available options generated by the

interface. The client would also be involved directly in assessing the business

related benefits of the choice of the method of constructions.

In this procurement method, there is a direct involvement of the manufacturer interms of design, costing and logistics. There is also a close relationship between

the manufacturer and the main contractor in terms of delivery and site installation.

This system of procurement is able to serve a greater number of clients in whom

the clients will directly be in contact with competent and multi-discipline

professionals in design, management and marketing. Each professionals has their

own specialty and competent in respective fields of expertise. The management

structure of this form of procurement is organised hierarchically according to the

stages of product development.

The basic workforce in this procurement process play a more pro-active role and

continuously giving positive feedback in terms of the viability of the perceiveddesign. Such a pro-active role amongst the basic workforce would also encourage

speed of installation to meet a tight programme and minimise disruption. In the

case of the Student Accommodation, Plymouth University, Plymouth, modular

standardised units were installed in less than 10 days with minimal disruption and

no additional scaffolding was required.

Assessment of this process of procurement finds that savings in construction time

with improved quality, leading to reduced site preliminaries and expensive

callbacks. It is also found that this method of procurement reduces financial cost

by earlier return of initial capital, with quicker and higher income from rental, less

cost of temporary accommodation and increased asset value.

Fundamental Aspects of the Innovative Construction Procurement

The decision making process in the innovative construction procurement

differs from the traditional in a way that key decisions need to be made early in

the procurement process to avoid expensive alteration to the design. Decisions

also need to be made on environmental implication and site related benefits in

order to reduce its impact on neighbouring properties and site traffic. The effects

of transportation logistics on cost and sizes and on the inter-relationships ofmodules also need to be taken into account in the decision making process.


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It is important to note that because this system of procurement rely heavily on

the prefabrication process, therefore the initial space planning, subsequent detailed

design, service integration and co-ordination are critical. The design needs to be

completed prior to the commencement of manufacturing.

The nature of this process of the innovative construction procurement is

flexible according to the needs of the client. Some clients, for instance developers

prefer the complete turnkey package which provides design, manufacture and

erection services. However, in many cases the client will appoint an architect who

is responsible with the overall design and co-ordination of all the specialist

manufacturers. Alternatively, the architect may draft a performance specification

for the works, which is usually done in consultation with one or more modular

manufacturers. This is then used as a basis for tendering, either through a main

contractor or directly to the modular specialists.

It is important to remember that each module manufacturer undertakes the

construction of its modules differently. The manufacturer will lend assistance and

provide appropriate detailed drawings but will not be able to providecommercially sensitive product technical details. Therefore, it is essential that

lead-in time be considered for prototyping, designing and manufacturing of

bespoke modular units to coincide with other design process. If the configuration

of design is reused from previous projects then designing and prototyping time

will be greatly reduced.

The lead-in time required from ordering to delivery of the modular units can

be as short as 6 to 8 weeks if the modular units have been prototyped previously

on similar projects and the production logistics are well established. As an

example, a hotel project may require eight different modular units, internal, end

bay, rooftop, and left- and right-handed units. However, the floor configuration isthe same throughout the project.

For building, which is considering employing the modular construction

approach, extra time should be allocated for the manufacture of pre-production

prototypes, which would identify potential design and manufacturing problems. It

is suggested by The Steel Construction Institute, that a period of 4 to 6 weeks

should allowed for the prototyping stage. Hence, there would be an adjustment

to the lead-in time of delivery of 10 to 14 weeks. This lead may increase to 18

weeks especially when acquiring lifts and complex plant units. In order to reduce

the lead-in time of delivery the main contractor has to create an effective

partnership with the suppliers. Such a partnership has been proven successful on

numerous projects for example in the case of Sainsbury, which acted as a client

established a partnership with Construction Management Partners Schal to

develop Sainsburys new Ecostore. Schal approached the development process by

proposing several options to the client. Schal explored possibilities in developing

new structural system, new floor system and new interior. Task forces were set up

to tackle specific issues for example developing a new and economical floor

system. Sainsburys partnership managed to produce a floor system, which

reduced costs and programme. The floor system was tested and inspected in order

to meet the demands of Sainsburys Ecostore. As a result, Sainsburys Ecostore

looks aesthetically good and with construction time down to 16 weeks and cost

savings equivalent to 32%. Looking at the long-term aspect of this approach,


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maintenance cost was reduced and the assurance of future work for all the project

members.

Learning from Existing Delivery Methods.

Integrated Procurement Systems.

Integrated Procurement System is defined as an arrangement where one

contracting organisation takes sole responsibility, normally on a lump sum fixed

price basis, for the bespoke design and construction of a clients project. The

fundamental characteristics of this system are the responsibility for the design and

construction lies with one organisation, reimbursement is generally by means of a

fixed-price lump sum and the project is designed and built specifically to meet the

need of the client.

Advantages

The single point of contact between the client and the contractor that means

the client has the advantage of dealing with one single organisation, which

would be responsible for all aspects of the project.

If the clients requirement were accurately specified certainty of final project

cost could be achieved then the cost would be less when compared with other

procurement.

The use of integrated procurement systems enables design and construction to

be overlapped and should result in improved communications being establish

between contractor and client. These two characteristics enable shorter, overall

project periods to be achieved and project management efficiency to be

improved.

Disadvantages

The clients brief is often ambiguous and does not convey exactly what he is

proposing to the contractor. Hence, difficulties may arise when evaluating

tender submissions.

The absence of a bill of quantity makes the valuation of variations extremely

difficult and restricts the freedom of clients to make changes to the design of

the project during the post contract period.

The clients control over the aspect of design and aesthetics of the building is

less when compared with other method of procurement.

Management-Orientated Procurement Systems


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This system is defined as a process whereby an organisation, normally

construction based, is appointed to the professional team during the initial stages

of a project to provide construction management expertise under direction of the

contract administrator (see fig. 1).

The main characteristics of this procurement are:

The contractor is appointed on a professional basis as an equal member of the

design team providing construction expertise.

Reimbursement is based on a lump sum or percentage fee for management

services plus the prime cost of construction.

The actual cost is carried out by works or package contractors who are

employed, co-coordinated and administered by the management contractor.

Advantages

The use of this system of procurement enables the commencement of the

project to be accelerated, which in turn, should enable earlier completion to be

achieved than when using conventional procurement systems.

Early advice can be obtained from the contractor/manager on design,

buildability, programming, materials availability and together with general

construction expertise.

This system has a high degree of flexibility to allow for delays, variations and

rescheduling of work packages.

Since the financial structure of this system is fragmented, the monetary failure

of any works contractor will only have limited effect overall process.

The application of individual work packages to carry out all construction work

ensures that competition can be achieved on up to as much as 90% of the

construction cost of the project and makes it possible to adjust the cost, or

scope, of uncommitted work should the packages already awarded have

exceeded their estimated cost.

Disadvantages

One of the fundamental aims of this procurement system is the elevation of the

contractor to the status of a clients adviser/consultant with the result that the

contractors contractual liabilities are limited, in the same way as other

members of the professional team, to accepting responsibility of negligence in

the performance of his management role.

Although the contractor/manager is responsible for supervising constructionand ensuring that work is built to the standards identified by the design team,


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the fact that his obligations are limited to his management capabilities means

the client is liable for the cost of remedying any defects resulting from

substandard performance of any works contractor who is unwilling, or unable,

to rectify his own faults.

The whole issue of maintaining quality control is problematic when using this

procurement system. The client may need to appoint additional site

supervision to avoid difficulties in determining the responsibility for defects

and to ensure that the specified quality is achieved.

The client does not have a firm price tender available before commencing

work although both private and public accountability can be partially satisfied

as the majority of the construction cost can be subject to competitive tender.

Client via Contract

Design Consultants Quantity Surveyor

Management Contractor

Construction contractorsCarrying out work packages

Contractual Contractors

Functional Relationship

Fig. 1 : Contractual and Functional Relationship of Management

Contracting.


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Summary

Synthesis

By looking at the fundamental aspect of the Innovative Construction

Procurement and critically analysing existing procurement methods, it is possible

to create a systematic framework for the Innovative Construction Method.

A summary of the fundamental aspects of the Innovative Construction

Procurement:

The commencement of the construction of the project needs to be accelerated

in order to evoke speedy completion and ensure optimum capital gain.

Early planning is needed from a management contractor or construction

manager on design, buildability, programming, construction methods,

procurement of plant and materials.

The client wishes to have flexibility available to incorporate design

amendments into the project during the construction period.

The completion period of the project takes priority over the construction cost.

The project would require sophisticated construction and management

techniques in order to ensure success.

The client wishes to be objectively involved in the overall management of the

project.

The client wishes to appoint a single organisation to be responsible for the

design and management of the works and act as a consultant.

One is able to deduce from the summary that the innovative construction

procurement has a similar management organisation as the managementorientated procurement in which both require the contractor to act as the design

and the construction consultant of the project. However, allowing the client to

determine the success of the project. It is also important to stress that such

procurement would need the liabilities of the project to be shared with the other

participating members and not allowing the client to bear the burden of liabilities.

Hence, in this point of view the innovative construction procurement differs from

the management-orientated procurement.

This aspect of effective and pro-active partnership is also common in the

aircraft and automobile industry in which the industry would create partnershipswith sub-contractors to manufacture sub-components. The status of the sub-


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contractor is elevated to the same level as the main contractor and the client.

Hence, the profits and the liabilities are shared between the members of the

partnership.

Lean Thinking and Management in the Innovative ConstructionProcurement

In other industries, which employ a similar procurement to the Innovative

Construction Procurement for example, the aircraft manufacturer Boeing

Company has adopted, several key lean thinking principles to further enhance the

communication between members of the design team.

Boeing Company has acknowledged the fact that one of the problems that a

project is in trouble is when all parties are reluctant to make key decisions. This ispartly due to a poor communication channels between relevant parties and an

absence of required detailed construction documents and, poor flow of

information. Boeing Company eliminated this problem by fully utilising the

standard e-mail to make multi-billion decisions. Since Boeing Company had a

clear and define aim to deliver its product on time and meeting the required

quality standards, it was able to reduce untimely decisions. Members of the

partnership were able to access and make necessary modification on the current

database through the DCAC/MRM process.

Boeing Company also employed key lean principles in the manufacturing ofthe sub-components and the main component. Essentially, there are three

components in Boeing Companys key lean principles takt time production, one

piece flow and pull system.

Takt time productiondescribes the rate of assembly in a factory. Lean does

not mean doing things faster; it means doing things at the right pace. To simply

put it, the customers rate of demand establishes the pace of production. So, rather

than simply maximising the rate of work, Lean sets the pace in the factory,

ensuring that the customers needs are met on time.

One-piece flowsystem is the opposite of batch production. Instead of building

many products and then holding them in queue for the next step in the process,

products go through each step in the process one at a time, without interruption.

Producing products one at a time continuously improves quality.

Pull Production is the opposite of push. It means products are made only

when the customer has requested or pulled it, and not before. Doing so prevents

building products that are not needed. After achieving a predictable pace of

production, one piece flow, and reliable machinery, Boeing Company can operate

in a pull production environment, allowing the company to provide products whencustomer need them.


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Having such a principle, Boeing Company was able to eliminate complex

solution, which was producing more waste and was harder to manage. Boeing

Company was able to reduce overproduction and produce the exact amount the

customer needs. Defects, excessive power utilisation and unproductive operations

were also eliminated through this principle. Employing the Key Lean Principle

has reduced lead in time, long setups and unplanned down time of machines,

processes, or people. It also eliminated the movement of materials or information

that does not add value to the product.

As a conclusion, such a principle, if applied to the construction industry,

would bring benefits in terms of:

Promoting modular construction, which offers considerable, benefits to the

developer terms of speed of construction, the ability to pre-plan the

construction phase of the work and reduced callbacks. Modular constructionoffer highly cost effective solution for medium rise buildings eliminating the

need for a separate independent structural frame.

Speedy completion leads to reduction in preliminaries, plant usage, site

disruption and earlier rental or sales.

Improvement in quality leads to an increase in rental or sales potential and

client perception.

References

1. Bennett, J. & Jayes. S. (1998), The Seven Pillars of Partnering, Thomas

Telford Publishing, London.

2. Boeing Co., Improving Our Production System,

http://www.boeing.com/commercial/initiatives.

3. Gann, D. (1999), Flexibility and Chouse in Housing, The Policy Press,

University of Bristol.

4. Neale, R., Price, A., Sher, W. (1993),Prefabrication Modules In Construction,Chartered Institute of Building.

5. Masterman, J.W.E. (1992),An Introduction to Building Procurement, E & FN

Spon, London.

6. Rogan, Lawson, Bates-Brkljac (1999), Value and Benefits Assessment of

Modular Construction, The Steel Construction Institute and The Oxford

Brookes University.
http://www.boeing.com/commercial/initiativeshttp://www.boeing.com/commercial/initiatives

Documents

Section 1 Unit 3