Building Down Barriers

A Guide to Construction Best Practice

Clive Thomas Cain

• Publisher: Routledge
• Year: 2003
• ISBN:
  9781134439287
• Edition: 1
• Topic: Architecture
• Subtopic: Architecture Methods & Materials

With rapid changes in procurement processes and increasing pressure for improvement, cohesion and efficiency, practitioners need to be aware of industry-wide generally acknowledged best practice. The recent Latham and Egan reports in the UK have spurred further intitiatives from the demand side of the industry to speed the pace of reform. This text examines those new initiatives, clearly explaining and comparing them with each other and with similar initiatives from other countries such as the USA or Singapore, and painting a vivid picture of the future of the construction industry under the effects of such changes. Aimed at anyone involved in construction supply chain from supplier to end user.

1 Seventy years of customer demand for improvement

The first major report reviewing the performance of the UK construction industry was produced in 1929 and there have been around thirteen similar reports produced between 1929 and 1994. All were inspired by client concerns about the impact on their commercial performance of the inefficiency and waste in the construction industry, and all contained remarkably similar messages. These client concerns were very effectively summed up in a book entitled Reaching for the Skies written by an architect called Alfred Bossom in 1934. He went to America in the early part of the last century and became closely involved in the design and construction of skyscrapers. This taught him that construction could be treated as an engineering process in which everything is scheduled in advance and all work is carried out to an agreed timetable. The result of using these engineering techniques meant that buildings were able to be erected more quickly than they were in Great Britain, yet cost no more. They yielded larger profits for both the building owner and the contractor and enabled the operatives to be paid from three to five times the wages they received in Great Britain. On his return, Bossom saw the weaknesses in the performance of the British construction industry with unblinkered eyes and became an enthusiastic advocate for radical change.

In his book he stated:

All rents and costs of production throughout Great Britain are higher than they should be because houses and factories cost too much and take too long to build. For the same reason the building industry languishes, employment in it is needlessly precarious and some of our greatest national needs, like the clearing away of the slums and the reconditioning of our factories, are rendered almost prohibitive on the score of expense.

The process of construction, instead of being an orderly and consecutive advance down the line, is all too apt to become a scramble and a muddle.

Bad layouts add at least 15% to the production of the cotton industry. Of how many of our steel plants and woollen mills, and even our relatively up-to-date motor works might not the same be said? The battle of trade may easily be lost before it has fairly been opened – in the architect's designing room.

This description of a fragmented, inefficient and adversarial industry in 1934, which damaged the commercial effectiveness of its end user clients by being guilty of passing on unnecessarily high capital costs and poor functionality, seems little different from that described in the Latham Report, Constructing the Team, in 1994 or the Egan Report, Rethinking Construction, in 1998. In fact, the only thing different in the 1994 and 1998 reports is the realisation that the maintenance and running costs are also unnecessarily high.

The reason why the numerous reports between 1929 and 1994 failed to have any impact on the performance of the construction industry is because the industry continues to be blind to its failings. It was also unwilling to measure its performance, particularly the impact of fragmentation and adversarial attitudes on the effective utilisation of labour and materials and the lack of effective pre-planning of construction activities that had concerned Alfred Bossom in 1934. Because clients continued to reinforce fragmentation and adversarial attitudes by insisting on using a sequential procurement process, the situation was made worse. Subsequently, it became impossible to harness the skills and knowledge of the specialist suppliers into design development because they were not involved until after the construction contractor was appointed and the design was complete. Consequently, it was impossible for them to inject buildability and ‘right first time’ or greater standardisation of components into the developing design.

Fortunately, the Latham Report in 1994 proved a major catalyst in persuading clients to actively lead the reform movement, rather than standing to one side and expecting the industry to take the initiative. The reason for this radical change in client attitudes was that the Latham Report, for the first time, put a figure of 30 per cent on the cost of inefficiency and waste in the industry. Across the entire construction industry, this burden of unnecessary cost could amount to as much as £17 billion each year. Within the public sector annual expenditure of around £23 billion, it could amount to as much as £7 billion each year.

For individual repeat clients, the message about the high level of unnecessary cost was a powerful driver for them to take a much more active role in industry reform. The Latham Report led to the formation of influential client groups whose sole intent was to force the pace and direction of reform. The Construction Round Table had been formed in 1992 after the demise of NEDO (the National Economic Development Council), by a small group of major repeat clients such as BAA, McDonald's, Whitbread, Unilever and Transco. The Latham Report findings re-energised Construction Round Table members and encouraged them to take a more active and overt leadership role in the industry, which culminated in the publication of their Agenda for Change. The Construction Clients' Forum was formed in 1994 from a mixture of client umbrella bodies, such as the British Property Federation, and major repeat clients such as Defence Estates. The Government Construction Clients Panel was formed in 1997 to provide a single, collective voice for government procurement agencies and departments. In addition to these client groupings, pan-industry groups with dominant client leadership were also formed. The Reading Construction Forum was incorporated in 1995, and the Design Build Foundation incorporated in 1997.

In 1998, the Egan Report strongly reinforced the concerns of clients at the high level of inefficiency and waste and equally strongly reinforced the earlier message of the need for integration. The Egan Report differed from earlier reports by urging the importation of best practice in supply chain management from other sectors. The report stated:

We are proposing a radical change in the way we build. We wish to see, within five years, the construction industry deliver its products to its customers in the same way as the best customer-led manufacturing and service industries.

The work by the client bodies since 1994 on the nature of the cultural changes, coupled with a major review of construction procurement by the National Audit Office, led to the publication of three definitive and matching best practice standards. In October 2000, the Prime Minister, Tony Blair, launched Better Public Buildings, a best practice standard he had commissioned jointly from the Commission for Architecture in the Built Environment (CABE) and the Treasury. In September 2000, the Confederation of Construction Clients launched their Charter Handbook and, in January 2001, the National Audit Office published Modernising Construction. The latter provides a very detailed appraisal of the true effectiveness of the industry and the barriers that inhibit reform. It also sets out the fully integrated approach that is essential if radically better performance and value are to be achieved and proven by measurement.

All three best practice standards used the lessons learned on total supply chain integration by the Building Down Barriers project, that had been launched in 1997 by the Ministry of Defence to adapt best practice in supply chain management from the manufacturing sector. The objective had been to develop a comprehensive set of tools to integrate and manage the design and construction supply chain that had been tested, refined and proved on two identical test-bed pilot projects. This had been jointly funded by Defence Estates and the Department of the Environment, Transport and the Regions and had led to the production of the unique Building Down Barriers Handbook of Supply Chain Management. An overview of the full, and very comprehensive, handbook toolset is available in The Essentials, which was published by CIRIA in July 2000. The toolset offers a systematic and managed approach to the procurement and maintenance of constructed facilities, based on integrating all the activities of a pre-assembled supply chain under the control of a single point of responsibility. The overall goal is to harness the full potential of the supply chain to deliver optimal value to the client, in terms of the through life performance of the facility, whilst improving the profits earned by all involved.

As a consequence of their use of a common foundation, the three best practice standards are completely attuned in their approach to: integration, whole-life costs, and value for money. The key objectives of the approach are to deliver the following:

• The finished building will ensure maximum functionality.
• The end users will benefit from the lowest cost of ownership.
• Inefficiency and waste in the utilisation of labour and materials will be eliminated.
• The specialist suppliers will be involved in design from the outset to achieve integration and buildability.
• The design and construction of the building will be achieved through a single point of contact for the most effective coordination and clarity of responsibility.
• Current performance and improvement achievements are to be established by measurement.

2 The international demand for improvement

The demand from clients in the UK for radical improvements in the performance of the construction industry is not unique; it is a demand that is echoed by clients across most of the developed world. This is exemplified particularly well in two documents that have been published since the Latham Report in 1994. The first was the 1995 report by the Construction and Building Sub-committee of the Committee on Civilian Industrial Technology (CCIT) in the United States of America. The CCIT is part of the National Science and Technology Council (NSTC), which is a cabinet-level group charged with setting Federal technology policy. The second document was Construction 21, which was produced for the Singapore Ministry of Manpower in 1999.

The 1995 Construction and Building Sub-committee Report

The focus of the report was the effect the performance of the construction industry had on the performance of other sectors and on their ability to be competitive. It went on to demand that the research and development sector of the construction industry adopt two priority thrusts, namely the development of technologies and practices which would deliver better constructed facilities, and the development of technologies and practices which would improve the health and safety of the construction workforce. It set a requirement that the technologies and practices had to be developed for use by 2003 and would deliver specific improvements against the 1995 baseline performance. The improvements became the ‘National Construction Goals’ and were as follows:

• 50% reduction in delivery time
• 50% reduction in operation, maintenance and energy costs
• 30% increase in productivity and comfort (of the occupants)
• 50% fewer occupant related illnesses and injuries
• 50% less waste and pollution
• 50% more durability and flexibility • 50% reduction in construction work illnesses and injuries

The report pointed out that the construction sector constituted US$850 billion, which was about 13 per cent of GDP, and that the quality of constructed facilities was vital to the competitiveness of all US industry. It emphasised the need for a whole-life viewpoint of construction to give realistic attention to values and costs of constructed facilities. In support of this need, it cited the example of an office building, where the annual operating costs (including the salaries of the occupants) roughly equalled the initial construction cost. This meant that the primary value came from the productivity of the occupants, which depended on the capability of the building to meet user needs throughout its useful life.

The full text of the seven ‘National Construction Goals’ for better constructed facilities, and better health and safety of the workforce, is as follows:

• 50% reduction in delivery time. Reduction in the time from the decision to construct a new facility to its readiness for service is vital to industrial competitiveness and to project cost reduction. During the initial programming, design, procurement, construction and commissioning process, the need of the client for the facility is not being met; needs to evolve over time so a facility long in delivery may be uncompetitive when it is finished; and the investments in producing the facility cannot be recouped until the facility is operational. The need for reduction in time to project completion is often stronger in the case of renovations and repairs of existing facilities because of interruption of ongoing business. Owners, users, designers and constructors are among the groups calling for technologies and practices reducing delivery time.
• 50% reduction in operation, maintenance and energy costs. Operation and maintenance costs over the life of the facility usually exceed its first cost and may do so on an annualised cost basis. To the extent that prices for energy, water, sewerage, waste, communications, taxes, insurance, fire safety, plant services, etc., represent costs to society in terms of resource consumption, operation and maintenance costs also reflect the environmental qualities of the constructed facility. Therefore, reductions in operation and maintenance and energy costs benefit the general public as well as the owners and users of the facility.
• 30% increase in productivity and comfort. Industry and government studies have shown that the annual salary costs of the occupants of a commercial or institutional building are of the same order of magnitude as the capital cost of the building. Indeed, the purpose of the building is to shelter and support the activities of its occupants. Improvement of the productivity of the occupants (or for an industrial facility, improvement of the productivity of the process housed by the facility) is the most important performance characteristic for most constructed facilities.
• 50% fewer occupant related illness and injuries. Buildings are intended to shelter and support human activities, yet the environment and performance of buildings can contribute to illness and injuries for building users. Examples are avoidable injuries caused by fire or natural hazards, slips and falls, legionnaires' disease from airborne bacteria, often associated with workplace environment (sick building symptoms) and building damage or collapse from fire, earthquakes, or extreme winds. Sick building symptoms include irritation of eyes, nose and skin, headache and fatigue. If improvements in the quality of the indoor environment reduce days of productive work lost to sick days and impaired productivity, annual nationwide savings could reach billions of dollars. Criminal violence in buildings is a safety issue which can be addressed in part by building design. Reductions in illness and injuries will increase user's productivity as well as reducing costs of medical care and litigation.
• 50% less waste and pollution. Improvements of the performance of constructed facilities that shelter and support most human activities, provide major opportunities to reduce waste and pollution at every step of the delivery process, from raw material extraction to final demolition and recycling of the shelter and its contents. Examples are reduced energy use and greenhouse gas emissions and reduced water consumption and waste water production.
  Waste and pollution also can be reduced in the construction process: construction wastes are estimated at 20–30% of the volume of landfills.
• 50% more durability and flexibility. Durability denotes the capability of the constructed facility to continue (given appropriate maintenance) its initial performance over the intended service life, and flexibility denotes the capability to adapt the constructed facility to changes in use or users' needs. High durability and flexibility contribute strongly to the life cycle quality of constructed facilities since they usually endure for many decades.
• 50% reduction in construction work illnesses and injuries. A factor affecting international competitiveness is the cost of injuries and diseases among construction workers. Although the construction workforce represents about 6% of the Nation's workforce, it is estimated that the construction industry pays for about one-third of the Nation's workers' compensation. Workers' compensation insurance premiums range from 7% to 100% of payroll in the construction industry. Construction workers die as a result of work-related trauma at a rate that is 2.5 times the annual rate for workers in all other industry sectors (13.6 deaths per 100,000 construction workers, as compared to 5.5 deaths per 100,000 workers in all other industry sectors). Construction workers also experience a higher incidence of non-fatal injuries than workers in other industries.

It is interesting to note the similarity between the non-technical barriers listed in the report and those listed in the Latham and Egan Reports in the UK in 1994 and 1998. The barriers listed in the USA report were as follows:

• lack of leadership
• adversarial relationships
• parochialism
• fragmentation of the industry
• inadequate owner involvement
• increasing scarcity of skilled labour
• liability

The 1999 Construction 21 Report

As in the example of the USA report, the Construction 21 Report took a long, hard and unbiased look at the weaknesses in the performance of the construction industry in Singapore and examined their causes. It compared the situation in Singapore with that in Australia, Japan, Hong Kong, the UK and the USA, and it examined developments elsew...