With an estimated $246 billion worth of construction work to be done in Australia over the next five years, the prize is considerable for all players. Yet achieving this goal effectively requires considerable productivity improvements. The question as to why the construction industry has a relatively negligible increase in productivity in the past 20 years, whilst productivity in the manufacturing industry has almost tripled, is being asked with increasing frequency.
To answer this, players in the construction value chain could do well to look at what makes manufacturing so efficient and productive. It is expected that future construction projects could be delivered 40 per cent faster by 2030 and that integrated and intensive use of offsite solutions has the potential to drive cost savings exceeding 15 per cent. Understanding the inherent efficiencies of optimal approaches to manufacturing is key.
Offsite construction solutions, understood here as meaning the collective of manufactured, prefabricated and modular construction products, share many attributes with successful manufacturers:
- Safety, quality and sustainability are at the centre of the process. Once a product leaves the factory, it is able to be validated and certified in this regard.
- Supply chain relationships ‘end to end’ are strategic and integrated. Technical communication is enabled at a detailed level with specifications and product requirements coordinated.
- Technology is fundamental to production, productivity and verifiable product outcomes. Optimisation through technology and process allows people to focus on innovation and customer service.
- People input can be minimised through process and automation limiting labour input to cost.
- Sustainability benefits can be enabled through product inputs, management of supply chain and minimisation of waste.
- It’s all about time! Productivity is a key performance measure which drives cost.
In understanding where the productivity gains might lie for the construction value chain, it is worth considering the roles fulfilled by proponents and their impact on project governance, controls and outcomes.
Owners, clients and principals are all ‘initiators’, whether government or non-government, who are pivotal to project success. If initiators are to share in the benefits and increases in productivity that offsite construction can provide, they will need to become more sophisticated and educated to understand the products, processes and drivers and increase transparency and trust within their supply chain. This seems obvious, however it’s an approach that needs to be deployed at the outset of any project, as generally this is where you have the opportunity to get it brilliantly right or horribly wrong.
The traditional models of design and construct and risk-shedding will need to change to be more collaborative, with design accountability shared and coordinated from inception. Participants in the value chain – contractor, sub-contractor, supplier/ manufacturer – need to be involved and most importantly involved early.
Communication is key. Initiators need to establish communication platforms that form the ‘common language’ and that work for all participants. Embracing concepts and technology such as digital twins and Building Information Modelling (BIM) will be fundamental to a language of sharing and common data environments. Benefits will come from sharing knowledge and data, however we seldom share enough.
“Communication is key. Initiators need to establish communication platforms that form the ‘common language’ and that work for all participants. Embracing concepts and technology such as digital twins and Building Information Modelling (BIM) will be fundamental to a language of sharing and common data environments. Benefits will come from sharing knowledge and data, however we seldom share enough.” Dale Clark, Managing Director, Clark of Works.
Initiators including the government have a significant role to play in leading change, being the principal generators of capital project programs. There are many excellent examples where the government and industry have come together to lead thought. The Victorian Digital Asset Strategy (VDAS) comes to mind, however unfortunately in Australia we don’t always seem to share and harmonise initiatives across departments, or states. Again, sharing best practice, knowledge and data will be beneficial to all.
Initiators need to support the establishment of a legal/contractual environment that supports the nuances of the offsite industry. Traditional contracts will need to change to more appropriately consider design ownership, certification, conducive payment, security and insurance for offsite elements. Continued development of codes and standards will also be necessary.
Lastly, initiators will need to adjust their ‘balance scorecards/ assessments’. Cost is obviously important, however until we focus more on productivity, time and quality, cost will continue to be an outcome or ‘lag indicator’, and as in many prominent examples of project failure, cost overruns become a burden to many. In a world where our community and investors are focussed on sustainability, initiators need to value this aspect of their assessments more highly.
Contractors, builders, sub-contractors…. It’s a challenging time for constructors right now. They, like most industry participants, are motivated to run growing and profitable businesses in an environment that is moving faster than ever.
Technology investment in the construction industry has increased dramatically and the industry is forming a vortex of new’ considerations for Industry 4.0. Those constructors that do embrace the benefits of technology will be in the vanguard of securing productivity wins.
The offsite industry in Australia is already strong in collaborating and marketing its product and outcomes. In support of initiators and constructors, the offsite industry should continue to broaden its influence. Closer relationships with the value chain and advocacy through groups like Australian Industry Group (AI Group), the institutes for architecture and engineering and the Property Council of Australia (PCA) should all be on the list. I also challenge the PrefabAus Board to continue to grow its role in advocating for the industry. Evidence-based information sharing, documenting benefits, metrics and successes, will be fundamental.
This is a complex and challenging equation. A constant is the opportunity the construction industry has to do things better, collaborate and to access the benefits of more productive construction. It is a ‘no-brainer’ that offsite construction solutions will continue to play a vital and growing role in this equation, however, they will only accelerate with the enablement and collaboration of all of the roles in the construction value chain.
Dale Clark GAICD is a champion of industry advocacy and capacity building and has held numerous key industry roles: a Director of PrefabAus, and an advisory Board member of the Australian Steel Research Hub and the NSW Divisional Council of Property Council of Australia. He led Project Management and Procurement for Stockland for nine years, and the development pipeline for Macquarie University prior to that. He also spent 15 years as a contractor with leading organisations Lendlease, Baulderstone and Cockram. He and his teams have won numerous awards for process and procurement transformation, sustainability and diversity outcomes. He is currently leading strategic program initiatives for a number of developers and constructors as a consultant.■