effectiveness of modern methods of construction as a project risk management strategy

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CHAPTER ONE: INTRODUCTION

1.1 INTRODUCTION

This dissertation work is a research evaluating the effectiveness of Modern

Methods of Construction as a Project Risk Management strategy. In this chapter

I will very briefly define project risk as it pertains to the construction industry.

Afterwards I will present the problems of the construction industry. Then I will

clearly state the aims and objectives of this research dissertation, in the process

pointing out the significance of the research. Finally I will concisely introduce the

case study.

1.2 PROJECT RISK

According to the Project Management Body of Knowledge (PMBOK) Guide

(2000 edition), Risk is defined as an uncertain event/condition that, if it occurs,

has a positive or negative effect on at least one of the projects objectives.

Risk is the innate uncertainty present in a construction project (Chapman and

Ward 2005) and this is irrespective of the projects size (Santoso 2003). Risk is

a fundamental decision factor (Qui 2009), an abstract concept (Swift and

Callahan 2009), difficult to quantify (Haimes 2009), tricky to characterize and

impossible to measure (Raftery 1994).

The Institute of Risk Management defines risk as a combination of the

probability of an event and its consequences (ISO-IEC Guide 2002), and it also

notes that it could also mean the likelihood of deviation from planned outcomes

and/or events. Risk indicates uncertainty and/or ambiguity of outcome (Hopkins

2010). It is measured in terms of consequence and likelihood (ACTIA 2004).

Risk can be introduced in a construction project by any one of the following;

uniqueness, complexity, change, assumptions, constraints, dependencies and

people (Dinsmore & Cabanis-Brewin 2010).

1.3 PROBLEMS IN THE CONSTRUCTION INDUSTRY

The construction industry is a high risk industry (Sears et al 2008) with

complexity (Teo et al 2005); in a one-off environment (Zou 2007), it is plagued

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at the moment with lots of problems, some due to its nature and others due to

its manner of practice.

1.3.1 Problems due Its Nature:

Using the Normal Accident Theory developed by Perrow (1984), due to the high

risk and complexity, there tend to be high occurrences of accidents, cost

overrun, time delays and failure in the industry and even Dinsmore & Cabanis-

Brewin (2010) has noted that the complexity itself is a risk. Dubois and Gadd

(2002) discovered that the behaviour of the entire construction industry seems

to be a response to this innate complexity.

Due to the fact that construction projects are usually one-off events there tendto be less room for learning, one of the principles of PRINCE2 (TM) is learning

from experience (OGC 2009). Sears et al (2008) believes that experience is at a

premium in the industry.

Strategic alliances are needed for innovation and creativity in the construction

industry (Andersen et al 2004), Womack and Jones (2003) believes in

integrated working groups in order to achieve quality but the adversarial nature

of the construction industry (Adamson and Pollington 2006) makes this difficult

to achieve.

Saad et al (2002) believes that as a result of this adversarial nature the

construction industry lacks a systematic and strategic approach to change.

Hk (2006) proposed that in order to achieve quality in the construction

industry one needs to take into account the construction culture i.e. the

technical and social context of the industry.

Numerous studies e.g. Mohamed and Srinavin (2002), European Agency for

Safety and Health at Work 2004 report, Jergeas 2009 and many others have

talked about the need to improve working conditions on-site to improve

productivity; the very nature of the traditional construction methods does not

allow this (Latham 1994,Egan 1998).

Mincks and Johnston (2004) observed that site access and all that is involved

with such access e.g. dust and noise generated, is a risk factor especially in

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urban construction sites, the current nature of the construction industry really

has no solution for that problem. With increasing environmental awareness and

action (Moavenzadeh 1994) this problem keeps increasing and mounting

pressure in the industry.

1.3.2 Problems due to Its Manner of Practice

Weather is a serious risk factor in the construction industry as it reduces

construction times (Maas & Eekelen 2004) causing delays which has cost

implications and reduces the quality of construction material (Illston 2011).

The construction industry and its supply chain is too fragmented (Pan et al

2004) and this perpetuates division (Burwood and Jess 2005) leading to a lackof research into best practices and methods perpetuating a dearth of innovative

techniques.

On the construction site there seems to be a lack of accountability regarding

safety of personnel with the main contractor thinking/believing that the sub-

contractor is responsible for his staffs safety (Wilson and Koren 2006) and this

constitute a risk factor (Teo et al 2005).

The Office of National Statistics report notes an acute shortage of skilled

workers in the construction industry (Ruiz 2004) and this is confirmed by many

practitioners in the industry. The sub-contracting nature of the industry

exacerbates the problem as training is usually not provided to sub-contractors.

This lack of skilled personnel also rears its head in the projects quality issue

(Burwood and Jess 2005) as without skilled personnel you cannot produce

quality products. Singh (2001) discovered that this quality issue is particularly

observed in the roofing aspect of the construction industry.

Jaillon et al (2009) elucidated that the skills and competence of onsite workers

strongly determines the quality of the output of traditional construction method,

so to be able to deliver quality products there has to be a paradigm shift (Chen

et al 2010).

Holt (2001) discovered that proper communication between construction staffand senior management leads to improved safety standards but the industrys

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nature of multi-layers of contractors (Langford and Retik 1996) makes this

almost impossible to achieve.

1.4 AIMS OF RESEARCH

The aim of this dissertation is to evaluate the effectiveness of Modern Methods

of Construction as a project risk management strategy. Also to see how Modern

Methods of Construction compares with traditional methods of construction in

terms of cost, time, quality, safety and sustainability issues in a project.

1.5 RESEARCH OBJECTIVES

This dissertation stems from the pressing need in the construction industry to

improve performance and deliver successful projects in terms of cost, time,

quality, safety and environmental sustainability. This research builds from other

studies and research in the industry. This research hopes to achieve its set

aims by exploring the following research questions:

How effective is the use of Modern Methods of Construction in mitigating

various risks and/or issues in a mega construction project?

What impact on a mega construction projects objectives do Modern

Methods of Construction have?

Are Modern Methods of Construction necessary or should traditional

methods be executed properly?

By answering these questions I hope to clarify and present the benefits and/or

non benefits of Modern Methods of Construction.

1.6 SIGNIFICANCE/ JUSTIFICATION OF RESEARCH

Despite the production of numerous research and guides into the project

management processes of mega projects (Potts 2007), Yang et al (2011) still

believes that not enough research have been undertaken and research still lags

behind the pace of development. Winch (1998) and Barrett and Sexton (2008)

are also of the view that not enough research has been done into innovative

practices and products in the industry.

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Hobday (2000) believes that the one-off nature of construction project provide

little opportunity for learning and improving but Davies and Brady (2000) argues

that exploitative learning from other external projects can improve performance.

Vicarious learning i.e. from other peoples experience is a valid form of

knowledge (Kirkpatrick and Kirkpatrick 2006).

This dissertation research will look at Modern Methods of Construction, its use

and its effectiveness as a Project Risk Management Strategy. This I feel is

important as the government is actively encouraging its use and the Sir Egan

report 1998 (a landmark report) promotes its implementation.

A case study approach was taken because there was the need to conduct a

holistic, in-depth research (Feagin 1991). Case studies tend to provide a multi-

perspective analysis (Tellis 1997).

The case study chosen was the Heathrow Terminal 5 construction project which

was completed on time and on budget (Bourne 2009), an unusual feat in the UK

construction Industry.

Heathrow Terminal 5 is Europes largest construction project with unparalleled

complexity (Brady et al. 2006) and was made a test-bed for new managerial

ideas (Gil and Tether 2011).

1.7 CASE STUDY: HISTORY AND BACKGROUND.

London Heathrow Airport, according to statistics from the UK Civil Aviation

Authority and the Airports Council International, is the busiest airport in Europe.

It is operated by BAA the worlds largest operator of airports (Brady et al 2006).

In 1989 BAA began planning the Terminal 5 construction project to expand the

airport so as to be able to handle 35 million visitors every year (Gil and Tether

2010).

On the 20th of November 2001 the Secretary of State for Transport approved

the construction of Heathrow Terminal 5 after the longest public inquiry in UK

planning history, a total of 3 years and 10 months, cost 80 million (Brooker

2004).

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Heathrow Terminal 5 construction project was also one of the largest

archaeological projects ever taken in the UK (Rowley 2006).

The Heathrow Terminal 5 project comprises of (Pryke 2009)

A new Terminal with a control tower

A satellite building

Nine (9) new tunnels

Two (2) river diversion

A spur road connecting the M25

It involved multi-disciplinary engineering works consisting of mechanical, civil,

technology, communication and electrical systems (Potts 2007). It consists of a

total of 16 major projects, 140 sub-projects with 1500 work packages on a 260-

hectare site (Pryke 2009).

With a poor reputation for time delays and poor cost performance in the

construction industry (Baloi and Price 2003), BAA knew they had to come up

with a new and innovative way of delivering this project, as it is a regulated

utility with listings on the stock exchange subject to price capping. Hence any

unfavourable outcome would destroy its reputation and affect its share price

(Wolmar 2006). Besides using the forecast that if it does business as usual the

project could be as much as 24 months late with 6 fatalities and would exceed

budget by a billion pounds (NAO 2005), with stock exchange valuation of just

less than five billion at that time, (Gil and Tether 2010) this was more than they

could afford

1.8 STRUCTURE OF DISSERTATION

This dissertation research is made up of five chapters:

Chapter One: (Introduction). Here Project Risk is briefly defined, and then the

problems in the construction industry are stated. The aims and objectives of the

dissertation are revealed and the significance of the research highlighted.

Finally the case study is introduced.

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Chapter Two: (Literature Review). Here other academic work done will be

reviewed. The literature reviewed will be relevant to the concept of Project Risk

Management strategy, its relevance to the construction industry and to the case

study in particular. Also reviewed will be literatures on Modern Methods of

Construction, its definitions and benefits to the construction industry.

Chapter Three: (Research Methodology). Here the various research

methodology will be analyzed and the appropriate one chozen that will assist in

answering the research questions.

Chapter Four: (Data Analysis). Here the data analysis is done, examples in the

case study are pointed out and the relevant literatures in support of the analysis

are presented.

Chapter Five: (Recommendations and Conclusion). Here a summary of the

dissertation research is done, findings from the data analysis are presented and

recommendations are made.

1.9 CHAPTER SUMMARY

In this chapter I have briefly introduced the concept of project risk as it affects

the construction industry before I went on to talk about the problems of the

industry and how the problems evolved from 1) its nature and peculiarity and 2)

from its mode of operations. Also I stated the aims of the research i.e. what it

hopes to achieve and how it intends to achieve it, which is its objectives and I

also talked about the research questions. The reason the research is taking

place i.e. its relevance was also discussed then finally I briefly introduced the

case study, its history and the scope of work to be done.

I will now proceed to give a review of relevant literatures in the next chapter.

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CHAPTER TWO: LITERATURE REVIEW

2.1 INTRODUCTION

In this chapter I will conduct a literature review. In other words I will review other

academic work done on the concept of Project Risk Management strategy, what

it entails and its relevance to the construction industry and to the construction of

Heathrow Terminal 5 in particular.

Gil & Tether (2011) observed that studies of Project Risk Management have

hardly been done in relation with new innovative product development. Goodier

and Gibbs (2007) believes that for Modern Methods of Construction to develop

there need to be transparent information as stakeholders need all availablefacts before making strategic decisions. Hence I will review past literatures on

Modern Methods of Construction, its definition or definitions, its benefit and

purpose and/or relevance to the construction industry and to the construction of

Heathrow Terminal 5 in detail. Finally in order to satisfactorily answer the

research questions I will observe their interconnectivity as they affect the

construction industry.

2.2 PROJECT RISK MANAGEMENT

The construction industry is one of the most dynamic, risky and challenging

businesses (Mills 2001). Potts (2007) observed that mega construction projects

have great challenging risks which command immense management skills.

There are pressures from the government (e.g. Egan Report 1998, Latham

Report 1994), clients and even from stakeholders within the construction

industry itself to improve performance just as the manufacturing sector did

(Goodier and Gibbs 2007).

Risk is inherent in the execution of construction projects (Baldry 1998), and

Maziol (2009) observed that project performance and project risk are effectively

linked, so failure to carry out one (project risk) would lead to failure in the other.

Project Risk Management is the method of managing construction risk (Smith et

al 2006), of minimizing the impact of risk on a construction project (Shelly et al

2009). Project Risk Management is regarded as a management tool that aims

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at identifying sources of risk and uncertainty, determining their impact, and

developing appropriate management responses (Uher 2003). It is not about the

elimination of risk or removal of ALL risk but its efficient management (Mills

2001).

Zou et al (2006) observes that Effective Project Risk Management is central to

knowing the different kinds of risk being faced and successfully managing those

risks at different times during the project life cycle. Lack of Effective Project Risk

Management is the major factor responsible for project failure (Whittaker 1999).

Ward (1999) is of the strong view that due to limitation of resources and time in

a construction project, Project Risk Management efforts need to be effective.

Effective Project Risk Management is an integral element of the decision-

making procedure in the construction industry (Mills 2001). It is a methodical

decision-making tool (Uher and Toakley 1999). It is cognitive in nature (Baloi

and Price 2003) and helps in the formation of specialist decision making

(Hopkins 2011). Effective Project Risk Management is all about the right

decisions to maximise available opportunities and to manage existing threats

(Hillson and Murray-Webster 2006), accomplishing desired output in the

process (ACTIA 2004).

One of the processes proposed by Brim et al. (1962) cited by Pearson and

Hauschildt (1992) under Decision Theory was obtaining necessary

information, Effective Project Risk Management helps provide the necessary

information.

Effective Project Risk Managements major objective is to reduce uncertainty

and by doing so improve decision-making (Baloi and Price 2003). In certain

situations it provides an unambiguous path to making relevant decisions

(Hopkins 2011). Effective Project Risk Managements purpose is to generate a

comprehensive and extensive list of risks rather than a few limited set of key

risks (Ward 1999). It is essential for project success (Hillson and Murray-

Webster 2006). Effective Project Risk Management boosts confidence despite

the presence of uncertainty (Bing 1999). Effective Project Risk Management is

about capturing good luck so that it can be repeated and noting bad luck sothat it can be avoided (Chapman and Ward 2004).

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Project Risk Management is one of the designated eight areas of the Project

Management Body of Knowledge (PMBOK) which clearly demonstrates the

importance it is given by the biggest professional body committed to the study

and application of Project Management, the Project Management Institute.

BAA defines Project Risk Management as the identification, evaluation and

continuous management of the threats to the achievement of BAA's purpose,

vision, objective and strategy (BAA n.d Risk management policy [Online]

Available from http://www.baa.com/ [Accessed 30th June 2011]).

Effective Project Risk Management consists of the following four sequential

steps and one parallel step (OGC 2009)

Identify (context and risks)

Assess (i.e. Estimate and Evaluate)

Plan

Implement

Communicate

Crown Copyright 2009. reproduced under Licence from OGC

Figure 2: Project Risk Management Procedure

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Project Risk Managements best practice (which has to be holistic) demands

that dysfunctional organisational culture (e.g. blame culture) should be

eliminated in a construction project (Chapman and Ward 2004). Effective

Project Risk Management strategy is crucial to best practice as promoted by

Project Management Institutions (PMI 2004). Hillson and Murray-Webster

(2006) believe for there to be Effective Project Risk Management strategy, there

have to be the right risk attitude. Effective Project Risk Management offers

potential opportunities which may have a positive effect on the project core

objectives (Mills 2001), it is crucial to project success (Baloi and Price 2003)

and one of the major success drivers in business (Althonayan et al 2011).

2.3 TYPES OF RISK

Previous research has found out that due to its unique nature, peculiarities,

one-off nature, long periods, engineering-intensive and financial intensity the

construction industry has more risk than most other industries (Flanagan and

Norman 1993; Akintoye and MacLeod 1997; Smith 2003). Earlier researches on

Project Risk Management have only focused on risk as it affect individual

project objectives e.g. time (Shen 1997), cost (Chen et al 2000), safety (Tam et

al 2004) e.t.c.

While there are numerous risks that can affect construction project, this

dissertation research only focuses on Heathrow Terminal 5 construction project

and looks at the risk that affects the typical project objectives which according to

Zou et al (2007) are Cost, Time, Quality, Safety and Environmental

Sustainability.

RISK SOURCESCost Overrun Inaccurate Cost Estimation

Inflation (material and labour)Supply Chain FailureInterest Rate/Currency Fluctuation

Time Delay Poor Planning/Planning MethodsPoor Weather ForecastInappropriate Scheduling of ProjectLate Design ChangeProblems with Labour Efficiency

Quality Improper DesignsShortage of Design StaffsPoor Workmanship

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Faulty Construction ProcessSub-standard Materials

Safety Lack of TrainingPoor Safety AwarenessWorkspace Limitation

Wet and/or Slippery SurfacesReckless Operations

Environmental Sustainability Noise PollutionDust EmissionConstruction/Demolition WasteLiquid/Water WasteHarmful Gases

Table 2.0 Types of Risk

Clearly effective project risk management techniques were needed to be

deployed in order to cope with the complexity of a project that had 16 major

projects, 140 sub-projects and 1500 work packages on a 260 hectare site with

a cost of 4.3 billion and with as many as 60,000 people involved over its

lifetime (Potts 2007).

This project was a great example of a mega project as defined by Flyvbjerg et

al (2003).

Effective project risk management strategy is needed to have a successful

project (Zou et al 2007) and this is crucial in mega construction projects like the

Heathrow Terminal 5 project which had enormous organizational and

technological complexities (Brady et al 2006). The use of effective project risk

management at the conceptual stage (feasibility phase) has been found to be

very low in a study conducted by Uher and Toakley (1999) and this is

particularly worrisome as project risk management is most effective when

introduced at the early stages (Smith 2003; Ward and Chapman 1995; Baloi

and Price 2003).

Mills (2001) believes that decisions (including Project Risk Management

decisions) made at the beginning of a construction project have a significant

impact on the projects entire cost and duration and this view is supported by

Uher and Toakley (1999). The initiation stage is the most crucial stage in

relation to risk as it is the period in which there are a lot of uncertainties (Uherand Toakley 1999).It is imperative to identify possible risk as soon as possible

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in the conceptual phase of a construction project (Santoso 2003). Haslam et al

(2005) talked about a term in the construction industry called designing for

safety in which they spoke about the influence of the design team on the

construction process and the attendant risk involved in that process.

High markups or ten percent increase was used as a Project Risk

Management strategy but this has now been shown to be very ineffective (Baloi

and Price 2003).

2.4 RISK CATEGORIZATION

Bing et al (2005) categorises risk into different levels and believe that such

categorization and/or groupings allows for the projects strategic riskmanagement;

Macro Level(Exogenous i.e. externalto the project)

Political and governmentpolicy

Poor public decision-making process

Macroeconomic Poor financial marketInflation rate volatilityInterest rate volatilityInfluential economicevents (e.g. credit

crunch)Legal Legislation change

Change in tax regulationIndustrial regulatorychange

Social Level of public oppositionto project

Natural Force majeureGeotechnical conditionsWeatherEnvironment

Site availability due toarchaeological findings

Meso Level(endogenous i.e. withinthe project)

Project finance Availability of financeFinancial attraction ofproject to investorsHigh finance costs

Residual risk Residual risks

Design Delay in projectapprovals and permitsDesign deficiency

Unproven engineeringtechniques

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Construction Construction cost overrunConstruction time delayMaterial/labouravailability Late designchanges Poor quality

workmanship Excessivecontract variationInsolvency/default of sub-contractors or suppliers

Micro Level(also endogenous)

Relationship Organisation and co-ordination riskInadequate distribution ofresponsibilities and risksInadequate distribution ofauthority in partnershipDifferences in workingmethod and know-howbetween partnersLack of commitment fromeither partner

Third party Third Party Tort LiabilityStaff crisis

TABLE 2.1: Categories of Risk as they impact on Heathrow Terminal 5

2.5 MODERN METHODS OF CONSTRUCTION

I will first give a historical background on the use of Modern Methods of

Construction (MMC) before giving the various definitions.

2.5.1 Early Use of MMC.

The most famous and probably the earliest building constructed using a modern

method of construction in the UK is the Crystal Palace in Sydenham (Hobhouse

2004). The choice of materials used in its construction was driven with

sustainability in mind (Hobhouse 2002).

It was assembled to house the Great Exhibitions in Hyde Park in 1851

(Hobhouse 2004). Constructed totally off-site using prefabricated materials

suitable for recycling and transported to Hyde Park where it was assembled and

used. After the Great Exhibition it was then transported to an entirely different

location which clearly fulfils the definition of Modern Methods of Construction

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according to the National Audit Office (NAO 2005) and the Housing Corporation

(HC 2003).

After the Second World War and the slum clearance of the 1960s a lot of

houses were built using Modern Methods of Construction in order to cope with

the existing high demands (POST 2003). Due to the quality of materials used

and poor skills of the workers then these houses were found to be of poor

standards and design problems led to stigma attached to those types of houses

(POST 2003).

Modern Methods of Construction were also used to build houses for the Homes

fit for Heroes campaign in 1919 (Russell 1981) and with the government of the

day not keeping its original promise of the number of houses to be built just

added to the negative public attitude toward MMC (Merrett 1979).

A version of Modern Methods of Construction i.e. Off-Site Manufacturing

developed in the US after taking a cue from the Henry Ford standard production

line for car manufacturing, that idea spread into the construction industry

(Azman et al 2010). In Japan after the President of Toyota spent three months

in a factory in the US, the idea took off massively (Womack 1990; Gana 1996).Now UK and even US researchers are learning from the Japanese (Taylor et al

2003).

2.5.2 Definitions

Definition of Modern Methods of Construction varies greatly and there is even

confusion amongst practitioners in the construction industry of what constitutes

Modern Method of Construction (Windle 2004), leading to a sense of frustration

amongst suppliers (Goodier and Gibbs 2007). Wong et al (2003) is of the view

that the precise definition of MMC is dependent on the users experience and

understanding, in other words it is personal.

Modern Method of Construction consists of the following but not limited to

these:

Off-Site Manufacturing/Off-Site Construction

Off-Site Fabrication (Prefabricated)

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Volumetric Construction (Modules or Modular Construction)

Panellised Construction

Hybrid (Mixture of both Volumetric and Panellised)

Sub- Assemblies (Pre-Cast Concrete Foundation)

Site-Based Method of Construction (SBMC) e.g. TunnelForm, Gluelam

e.t.c.

Factory Built/Assembled

Off-Site Assembly

System Building

Modern Methods of Construction (MMC) is a term coined by the Office of the

Deputy Prime Minister (ODPM) (Goodier and Gibbs 2007) and adopted by other

governmental bodies is used to denote Non traditional designs (Kempton

2010).

Modern Methods of Construction (MMC) are described as those methods of

construction which provide an effective product management procedure in

providing more products of superior quality in shorter timeframes (Home

Builders Federation).

MMC comprises several methods of construction both off-site and on-site and

even innovative traditional construction (Goodier and Gibbs 2007). Kempton

and Syms (2009) simply say it is a generic term for a variety of construction

methods that are not the usual traditional methods.

Burwood and Jess (2005) just believes that it is an evolution in techniques,

used in the construction industry, that has taken place, as has occurred in other

industries though at a much slower pace, and feel the need not to place much

emphasis on it but that it should be renamed as Best Practice Method of

Construction to reflect this evolutionary process.

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Modern Methods of Construction is a radical change in thinking or paradigm

shift from the old/tradition methods of construction and this is what Sir Egan

proposed in his report: Rethinking Construction in 1998.

2.5.3 Benefits of MMC

MMC offers a subsequent boost in predictability of the construction process

(Sparksman et all 1999; Gibbs 1999) a key benefit for BAA as research has

shown earnings disappointment adversely affects stock price (Liu and Peng

2006). MMC has been identified as one of the keys to improving the

construction industrys performance by both the Australian construction industry

(Hampson and Brandon 2004) and by various UK government reports e.g. the

Egan Report Rethinking Construction (1998). Raysford (2000) believes it is

one of the key ingredients to changing construction culture and achieving

improvement in performance.

Numerous interviews involving construction industry practitioners and

questionnaire surveys with stakeholders have proven and documented the

increasing and copious benefits of MMC (Taylor et al 2009). Examples of those

studies are Johnsson and Sardn 2008; Blismas et al 2006; Gibb and Isack2003; Finnmore 1989; Herbert 1978).

A major characteristic of a project is its uniqueness; hence the benefit that could

be derived from its use of MMC is dependent on the specific conditions on that

construction project (Blimass et al 2006). They also believe that the decision-

making process on the use of MMC in a construction project is complex due to

interdependencies.

There are sectors where standardisation is particularly suited e.g. schools,

hospitals, hotels and University Halls of Residence and MMC is most

appropriate for delivering such harmonised performance products (Burwood

and Jess 2005). Wong et al (2003) is of the view that it is best for projects with a

high degree of repetitiveness.

Policies, especially those of the government, help in promoting certain

techniques (Burwood and Jess 2005) and this has been with the case of MMCwhere the ODPM used several initiatives and grant schemes to establish the

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development of MMC (Goodier and Gibbs 2007). The application of MMC has

the potential of becoming self-propagating over time hereby achieving economic

of scales to the benefit of all stakeholders (Burwood and Jess 2005).

Burwood and Jess (2005) believe that increasing pressures and new

legislations on environmental sustainability will enhance the viability of MMC.

The view of Maas & Eekelen (2004) is that the use of a new system is dictated

by the environment.

Uniform quality standards are easily achievable in a factory environment and

this provides an even greater impetus for the use of MMC (Burwood and Jess

2005). Wong et al (2003) reflects that MMC offers flexibility in architectural

finishes when compared to traditional construction methods.

Lack of stability in the construction industry is a major issue (Nolan 1996) MMC

will help promote the attractiveness of the industry with the provision of more

stable jobs hence enhancing the prospect of a career in the construction

industry (Burwood and Jess 2005).

MMC has in the past been linked to poor quality buildings and social

segregation (Goodier and Gibbs 2005b; Pan et al 2006), Goodier and Gibbs

(2007) believes that if this association persists then it will face acceptance

issues from stakeholders leading to an inevitable failure. There have been

numerous studies and surveys looking at the potentials of MMC with a view to

improving its performance and that of the entire construction industry (Goodier

and Gibbs 2007).

Goodier and Gibbs (2007) are of the view that improved education, better

communication and shared experience are necessary to bring all stakeholders

together and help the promotion and growth of MMC. Contrary to expectation

the proponents for the use of MMC in a construction project seem to be all

stakeholders in that project according to a survey carried by Goodier and Gibbs

(2007) as shown in Figure 2. This illustrates an increasing awareness of the

benefits of MMC.

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Goodier and Gibbs 2007

Figure 2: Proponents of use of MMC.

Goodier and Gibbs (2007) survey indicates that there is a strong view amongst

current stakeholders in the construction industry that there is a growing need for

MMC though due to negative perception they are not taking advantage of it at

the moment. And this is confirmed by other surveys done by Venables et al

(2004), and RGU (2002). Various tools and strategies e.g. marketing, case

studies and live examples are been used to promote the use of MMC by

suppliers (Goodier and Gibbs 2007).

With close to 80% of the workforce involved in the construction industry lacking

formal qualification (Dainty et al 2004), MMC offers a golden opportunity to

engage and educate thousands of people who will be working in factories and

on-site with great social benefits and this has already begun as shown in the

survey done by Venables et al (2004) . Shortage of skilled labour has been

identified as an issue in the construction industry in the UK (Dainty et al 2005)

and this encourages the use of MMC as shown in the survey done by Goodier

and Gibbs (2007) but Clarke (2002) found out that a skilled workforce is needed

in the first place for innovations such as MMC to occur. This presents a sort of

catch 22 situation for the construction industry.

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Wong et al (2003) believe that traditional methods of construction have reached

the end of its tether with little room for improvement due to its profound reliance

on various trades integrating effectively in a sequence.

Though MMC is widely used in new builds, there seem to be a great potential in

the refurbishment and repair market (Goodier and Gibbs 2007). Kempton and

Syms (2009) notes that the use of MMC helps increase the thermal

performance of a building saving running cost in the process and definitely

reducing bills.

For the benefits of MMC to be fully realised there need to be a systematic and

strategic integration of its techniques especially at the design phrase (Pan et al

2004).

2.6 CHAPTER SUMMARY

In this chapter I have reviewed several academic literatures on the concept of

Project Risk Management; I have described various types of risk and shown the

different categories of risk. I have also introduced Modern Methods of

Construction, talked about its history briefly and attempted to define it. I

reviewed several academic literatures on Modern Methods of Construction and

presented the various benefits. I will now describe the methodology used in

carrying out this dissertation research.

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CHAPTER THREE: RESEARCH METHODOLOGY

3.1 RESEARCH METHODOLOGY

This chapter examines the various research methodologies and selects the

appropriate one in answering the research questions with a view in achieving

the aims and objectives of this research as outlined in chapter 1. It would also

look at what influenced the choice of method used.

Jankowick (2000) defines research method as the way in which data is

collected and analysed and useful information drawn, in other words the

technique employed.

Here we would also scrutinize the way information and data was gathered, and

the data analysis used.

Research Methodology is the body of knowledge used in elucidating and

analysing research methods in regards to the research (Miller 1983). Webster

(2000) refers to it as rules for rules.

Research methodology is the standard approach and/or procedure used in

conducting a research (Angel 2009; Amaratunga et al 2002), the importance

cannot be overemphasized as it facilitates the achievement of consistency and

a greater degree of success (Angel 2009).

It is a well known fact that the research methodology used in a research has

massive impact on the quality of its findings so it is important to adopt the right

methodology.

3.2 RESEARCH

Research can be said to be the structured acquisition of specialised knowledge

(Shuttleworth 2008) in a focused and systematic way.

Blankenship (2010) defines research as the objective and focused process of

gathering data for analysis, to reach a conclusion. In other words it has an

aim/goal and it is for a reason, to achieve something.

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Research is known to enhance knowledge (Amaratunga et al., 2002) but it

needs to be done in a proper way to gain acceptance and to be of value to end

users. It is used to test and/or construct theories (Bryman 2004).

The intention of research is to postulate new theories and/or extend present

ones (Stem et al 1998). In management it is used to gain information to make

an informed managerial decision (Cooper et al 2006).

Amaratunga et al (2002) believes that the investigative process should be

logical, valid, efficient and methodological, and Blankenship (2010) believes it

should be done in a particular process and documented so that anyone else

can carry out such research.

Gliner and Morgan (2000) believes that research is for increasing knowledge

within the discipline and that is done via three directions:

Theory Development: where academic theories are postulated, built

and/or tested.

Practical Application: where the effectiveness and/or usefulness of a

technique, method and/or process is verified.

Developing Research Tools: here research is used to generate methods

to assess behaviours.

3.3 RESEARCH PROCESS

This refers to the steps taken as you undertaken your research. As noted from

the definitions of research, it is structured, systematic and can be replicated.

Research is generally presented as a multi-stage process that must be

performed to complete the dissertation (Saunders et al 2007).

Grossnickle and Raskin (2001) define it as the structured approached that

helps ensure all efforts result in useful actionable information. Saunders et al

(2007) observes that it is not linear but iterative and states that it must be done

with rigour.

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The number of stages varies but they tend to consist of the following

Problem Definition

Topic Formulation

Literature Review

Research Design

Data Collection

Data Analysis

Write-up

Stacks and Salwen (2008) believes that the research process is integrated and

that without theory a good research cannot be conducted and good theory

development requires good verification, and that the whole research process

starts with a research question.

Saunders et al (2009) describes the research process as an onion (illustrated

below) where the outer layers are developed till the core is reached which

consist of data collection and analysis, this pattern is also recommended by

Remenyi et al. (2000).

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Figure 3.0: The Research onion (Saunders et al 2003).

Layer Approaches

Research philosophy Positivism, Interpretivism, Realism

Research approaches Deductive, Inductive

Research strategies Experiment, Survey, Case study,Grounded theory, Ethnography, Actionresearch

Time horizons Cross Sectional, Longitudinal

Data collection methods Sampling, Secondary data,Observation, Interviews,Questionnaires

Table 3.0 Research Process Onion.

The research onion consists of the philosophy, approach, strategies time

horizons and the research methods. We would now look at each individually.

3.4 RESEARCH PHILOSOPHY

Research Philosophy refers to the way knowledge advances in an area and the

character of that knowledge as it relates to the research project (Saunder et al

2007). The principle behind the way research data should be collected and

analysed (Levin 1988).

Eaterby-Smith et al. (2003) believes that it is unadvisable to carry out a

research without an understanding of the philosophy behind it. The research

philosophy generally influences the research process (Saunders et al 2003).

There are three main research philosophies

Positivism

Interpretivism

Realism

3.4.1 Positivism

Positivism originates from the natural science and is the belief that knowledge is

obtained via observation and testing and no other means.

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Positivism believes strictly on scientific reasoning like in the natural science and

in law and law-like generalisation as in the physical sciences (Remenyi et al

2000).

This process is detached i.e. without emotions (Saunders et al. 2003), highly

structured in such a way that it is easy to replicate (Gill and Johnson 1997). And

that is a key feature of research.

3.4.2. Interpretivism

Interpretivism is how people comprehend societal actions (Schwandt 2000), it is

of the belief that it is inappropriate to use scientific methods to study humans

and society because people think, react and in most cases behave in eachindividual and unique way.

Crotty (1998) noticed that Interpretivism looks at the culturally derived

interpretation of the social life world. Interpretivism doesnt seek to verify or

contradict any hypothesis (Oates 2006) rather to categorize, investigate and

elucidate social events.

3.4.3 Realism

Realism is sometimes referred to as pragmatism or as the practical way of

evaluating situation/things. Often it is considered as a marriage and/or mixture

of both Interpretivism and positivism.

Saunders et al. (2003) defines realism as the belief that a reality exists that is

independent of human thoughts or beliefs, meaning humans might sometimes

not be aware of societal influences on their behaviour. It is possible for reality to

exist in several levels (Chia 2000) hence Realism requires that research should

take place from different angles and at several points and that it would add to

understanding (Flowers 2009).

3.5 RESEARCH APPROACH

Research approach refers to the way and/or means of conducting the research,

the avenue. It is not to be confused with the research methodology which

usually refers to the method and pattern of carrying out the research.

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Research Approach is the manner in which the research question is answered

(Blaikie 2009).

There are two typical research approaches

Deductive

Inductive

3.5.1 Deductive Approach

In this approach a hypothesis is rigorously tested in order to develop it into a

theory (Hussey and Hussey 1997). It is also used where a theory is available

but needs examining to prove it (Remenyi et al 2000).

3.5.2. Inductive Approach

Here data is first collected then analysed before developing a theory (Saunders

et al 2007). It offers more flexibility to the research process allowing the findings

to dictate the emphasis of the research (Easterby-Smith et al 2002) i.e. the

accumulated findings determines/induces the theory.

Deduction Induction

Collection of quantitative dataUses scientific doctrineProgress from theory to dataEmploys various controls to guaranteevalidity of dataUses concepts to clarify definitionResearcher detached from researchUse of large amount of samples todraw conclusions

Collection of qualitative dataAttachment to research frameworkFlexibility in structure allowingresearch emphasis to change at anytime/point in the research.Researcher is attached to theresearch.Seeks to understand the meaningpeople attach to events

No compelling need to generalize.

Table 2.1 Difference between Inductive and Deductive Research (Saunders et

al 2003).

3.6 RESEARCH STRATEGY

The procedure and plan adopted in resolving research question defines its

strategy (Saunders et al 2003). As with all plans it helps to stay focused on the

research, saving time and enhancing the quality of the dissertation.

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Research Strategy also refers to the procedure used to protect the reliability of

the data and improve its comparability (Frenkel et al. 1999). Blaikie (2009) says

it provides the logic for answering the what and why questions of a research.

Badke (2004) believes it is a very useful and helpful tool; it sets boundaries for

the research and helps provide a better understanding of the research process.

Saunders et al. (2003) list six research strategies

Experiment

Survey

Case Study

Grounded Theory

Ethnography

Action Research

3.7 TIME HORIZON

Time horizon refers to a time in the future in which an event should/ought to

have occurred but it usually refers to the period of time over which an event

occurs and is evaluated for performance.

Timberlake et al. (1987) simply refers to it as the time period over which

behaviour occurs; it is dependent on the research question (Walter and

Zehetmayr 2006), on the objectives of the research (Bergh and Ketchen 2009)

but independent of research strategy or methods (Saunders et al 2009).

There are two types of Time Horizon

Longitudinal

Cross-sectional

3.7.1 Longitudinal

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Sometimes called Diachronic research (Ruspini 2002), this refers to research

carried over a long period of time or at multiple sets of time, usually

observational. van der Kamp and Bijleveld (1998) cited by Ruspini (2002) noted

that one of its major characteristics is repeat measurement.

Bouma and Atkinson (1995) notes that the major question in longitudinal studies

is "Has there been any change over a period of time?"

3.7.2. Cross-sectional

Chernick (2011) refers to this as research done at a specific point in time with

strict relevance to the particular question. Saunders et al. (2009) calls it a

snapshot research because it provides only a one-time view (Yarbro 2010).

Cross-sectional or synchronic research tends to use the survey strategy

(Easerby-Smith et al 2008) though case studies use interviews carried out over

a short period of time. It is mostly used for research with time constraints e.g.

academic course work (Saunders et al 2009).

3.8 DATA COLLECTION METHODS

"High-quality data collection is fundamental to the advancement of knowledge in

the social sciences" (Axinn and Pearce 2006).

Data collection methods simply refer to the way data is collected and organized.

It refers to the totality of the entire data collection process i.e. pre collection,

collection and findings presentation, its reliability and validity.

The purpose of data collection is to obtain information e.g. for project

performance monitoring, action planning e.t.c. (Phillips and Stawarski 2008), the

method used should be precise to ensure relevancy to the research

question/problem (Connaway and Powell 2010).

Appropriate Data Collection Method is important as bias tends to creep in

during the data collection stage (Connaway and Powell 2010), and each

method of data collection has its own particular strength and weakness

(Swanson 2007).

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All methods of data collection requires rigorous and methodical design and

execution that includes, meticulous planning, painstaking development,

effective piloting and suitable management and investigation (O'Leary 2005).

Data collection could be done via any of the following methods; mail

questionnaires (email or post) and/or personal interviews (face to face or

telephone). Questionnaires are usually the most common method of data

collection (Alreck and Settle 1995),

3.9 MIXED METHODS

Mixed methods of data collection make it possible to gain new insights into the

causes and consequences of beliefs and activities (Axinn and Pearce 2006).The fondness for one method of data collection over another could lead to the

use of an inappropriate method (Swanson 2007).

As bias is an issue in data collection, the use of mixed methods of data

collection reduces though doesnt eliminate the risk hence increasing validity

and reliability (Connaway and Powell 2010).

Mixed methods are when one element of a data collection method is mixed

and/or used with another method of data collection (Axinn and Pearce 2006),

sometimes referred to as integrated methodology (Greene 2007).

3.10 CHOICE OF METHODOLOGY AND METHODS

Using the research process onion model (Saunders et al 2003) I will now detail

the choices made in this dissertation.

The philosophy espoused was a mixture of Positivism and Interpretivism as

business management research tends to favour this mixture (Saunders et al

2003).

The research strategy adopted was that of case study as MMC is a relatively

new area of research in which the use of case studies is preferred (Eisenhardt

1989). Yin (1981) likens the case study approach to that of an experiment

and/or simulation and notes it uses a mixed method of data collection. Its major

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strengths are in its flexibility and ability to take in large amount of information at

the same time (Masser and Williams (1986).

Since the research looked at the whole construction project of Heathrow

Terminal 5 it can be said to have a longitudinal Time Horizon. Yin (1989)

suggest that in answering research question of the how and why nature you

use a method that looks over a long period in a case study.

The Data Collection Method used was secondary data that was peer reviewed

i.e. from academic journals. Blimass et al (2006) advocates the use of

secondary data in construction management research though they accept that it

could be fraught with methodological dangers. As there is great difference in

the use of MMC nationally, the use of secondary data is recommended by

Saunders et al. (2009). Also as the researcher has love for the environment,

there is risk of bias hence the use of peer reviewed journals.

Tuckett (2003) notes that the use of secondary data has produced some

impressive practical work in sociology while Kenly (1998) believes that the

construction industry does not make sufficient use of existing data.

3.11 LIMITATION OF RESEARCH

1) Connaway and Powell (2010) has discovered bias as one of the major

limitation in a research work. Conscious of this fact, the researcher has been on

the lookout for bias in the dissertation in the hope of reducing it. As the old

saying goes to be forewarned is to be forearmed.

2) In the area of data collection the researcher tried to use a mixed method i.e.

primary and secondary data but this was not possible due to time factor and

also due to the fact that a new construction project has started on the Heathrow

Terminal 2 and most of the participants of the Terminal 5 project are involved in

it.

3) The dissertation only looked at Heathrow Terminal 5 i.e. had only one case

study. Saunders et al (2009) and others advocated the use of multiple case

studies.

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4) As the dissertation is an academic research it had limitations in particular

about the resources that can be used. Academic work definitely can NOT use

newspaper and/or news magazines to gather information.

3.12 CHAPTER SUMMARY

In this chapter I presented various research methods and using the research

process onion developed by Saunders et al (2003) and shown in Figure 3.0, I

took a step by step decision making process until I arrived at the most

appropriate choice given the limitation and constraints of this dissertation.

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CHAPTER FOUR: DATA ANALYSIS

4.1 INTRODUCTION

Dodd (2010) said that the one of the aims of a dissertation research is to

contribute to the body of knowledge. To be able to do that credibly; one must

have the right information. Davenport and Prusak (2000) described information

as data that makes a difference and believes that processing data credibly

gives reliable information which influences behaviour.

In this chapter I will first briefly discuss the type of data used before presenting

the results of the data, I will then analyze the data, illustrate the analysis with an

example from the case study (Heathrow Terminal 5) before finally presenting

relevant literatures that are in support of the analysis.

4.2 TYPE OF DATA USED

In this dissertation, the research data used was secondary data. This is as a

result of three main factors:

1. The extraordinary and enormous success of the Heathrow Terminal 5

construction project made it a subject of numerous researches creating a

fatigue amongst participants.

2. Mitra & Lankford (1999) argues that research is all about finding out new

things but you can/should use existing information provided you draw

your own conclusion, while Tuckett (2003) observed that secondary data

has produced some great research work.

3. The researcher has a strong love for the environment hence there is a

high risk of bias. So in order to reduce that risk, this dissertation research

draws data from previous studies and interviews conducted by previousresearchers who have been peer reviewed avoiding bias and proving

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accuracy which has been shown to be some of the disadvantages of

secondary data (Zikmund and Babin 2006).

Isaac Newton once said If I have seen farther than others it is because I have

stood on the shoulders of giants.

Now I will use the secondary data in answering the research questions and

showing the relevance to the construction of Heathrow Terminal 5.

4.3 PROJECT RISK FACTOR FACED BY HEATHROW TERMINAL 5

4.3.1 Cost Overrun

Executing a construction project within budget is one of the objectives of projectmanagement (Chen and Partington 2004). Iguma (2010) lists cost as one of the

task factors in a project. Cost effectiveness is a major requirement in project risk

management strategy (Ward 1999). Lack and/or poor cost management is one

of the prioritised management factors that contribute to project failure (Terry

2010).

BAA knew from researching other projects that there was a high risk of cost

overrun (Gil and Tether 2010) and they had to come up with innovative

solutions to minimize and/or reduce the risk. Nobody wants nasty surprises,

most especially BAA who as a publicly-quoted company had their reputation to

protect, since it was linked at that time to their share price.

SURVEY

In a survey conducted by Pan et al (2005) shown below, MMC was shown to

offer cost certainty. The survey involved UKs top 100 house-builders.

The methodology used was a mixture of face to face interviews and postal

questionnaires surveys in which it achieved a 36% response rate.

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Figure 4.0a Advantages of MMC courtesy of Pan et al (2005)

Figure 4.0b Advantages of MMC courtesy of Pan et al (2005)

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EXAMPLE IN CASE STUDY

An example of the cost certainty is discussed in the Civil Engineer's Handbook

of Professional Practice 2011 in which the use of MMC in the construction of the

external stairs meant that the construction time was reduced by five weeks and

a savings of about 250,000 made (Hansen and Zenobia 2011).

SUPPORTING LITERATURE

Though there is a perception that MMC is more expensive (Goodier and Gibbs

2007), this survey has shown that it provides cost certainty. I believe that this

was the major reason BAA decided to use MMC for close to 70% of its

mechanical and electrical engineering components (Brady and Davies 2010)because the mantra for everyone involved in T5 was on time, on budget

quality, safety with cares to the environment (Doherty 2008).

There is a growing need for increasing efficiency and reducing cost in the

construction industry (Hk 2006), which when compared with the

manufacturing industry, efforts to increase efficiency and reduce cost have been

less successful and definitely much slower (Winch 1998) hence the increasing

shift to MMC.

4.3.2 Time Delays

Traditionally time is seen as one of the indicators of project success (Shenhar et

al 2002), while they are of the view that it shouldnt be a case of one size fit all,

Shenhar and Dvir (2007) emphasised that in a time critical project failure to

meet time goals means project failure. Heathrow Terminal 5 had to be ready on

time or else BAA would have suffered serious reputational damage.

Executing a mega construction project, with its attendant complexity,

uncertainty and dynamism in its environment, within a specified time frame is

very difficult (Kartam 1999), but through the use of MMC BAA was able to

overcome that.

SURVEY

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From a survey done by Goodier and Gibbs (2007) in Construction Management

and Economics journal. It was a questionnaire survey of 75 UK construction

organizations.

Table 4.0: Advantages of MMC courtesy of Goodier and Gibbs (2007)

As can be seen from the survey (Table 4.0) shown above, decreased

construction time was one of the advantages gained from the use of MMC. The

survey shown higher above (Figure 4.0) by Pan et al (2005) also shows that

MMC provides time certainty.


An example in the case of Heathrow Terminal 5 construction of decreased

construction time is discussed in the book Heathrow Terminal 5: History in the

Making by Sharon Doherty. The roof that was built using MMC in Yorkshire was

tested prior to installation in Heathrow. Here the construction staff not only

learnt the sequencing and tolerance required but they also identified 125 errors

which were rectified before leaving Yorkshire (Doherty 2008). This error

identification not only led to faster installation times but also allowed the entire

construction project to make up for time lost due to the bad weather of 2001/02

(Potts 2008).

The speed in construction time was illustrated in several stories of pilots being

disorientated have left one day and returning the next to find a 40m high

building in place (Doherty 2008).

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By the time the roof was erected on site the 5500 electrical and mechanical

components were ready to be installed straight away having being prefabricated

off-site (a MMC) leading to massive time savings (Doherty 2008).


In a survey conducted by Goodier and Gibbs (2007), Time was one of the

factors used by the majority of the suppliers in selling the idea of buildings built

using MMC, hence demonstrating the importance of time on a construction

project and the effectiveness of MMC as a project risk management strategy.

This advantage of MMC in reduction of construction times is mainly due to the

absence of weather unpredictability amongst other things (Maas and Eekelen2004; Goodier and Gibbs 2007). Gibbs (1999) argues that reduction in

construction time would lead to savings in overall cost.

4.3.3 Quality

BAA set an ambitious target to build a world class facility (Doherty 2008) and

that in itself immediately demands high quality management to meet up with

such expectation.

SURVEY

In a survey conducted in a peer reviewed journal by Pan et al (2008) shown

below

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Figure 4.1 Drivers for using MMC

As can be seen from this survey quality is the top reason people choose MMC

and this view is supported by the other surveys shown in Figure 4.0 and Table

4.0.


As shown in the previous example BAA was able to test the roof for errors and

defects before installation, this was possible due to the fact that it was

constructed using MMC. All 5500 mechanical and electrical components were

tested and checked for errors and defects prior to installation hence ensuring

quality products were delivered.


There have already been concerns whether traditional methods of construction

can meet quality standards (Baker 2003; ODPM 2003); skilled labour is a major

issue in the industry (Goodier and Gibbs 2007) hence quality of output is also a

major risk as without good workmanship you cant have quality products.

Smith et al (2006) discovered that quality issues tend to surface more frequently

during the construction phase of the project. Also weather has been found tonegatively affect the quality of materials used in the construction process (Maas

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and Eekelen 2004). Hence by adopting MMC as the construction technique,

BAA effectively managed the quality risk factor in the construction of Heathrow

Terminal 5 project.

4.3.4 Safety

Construction projects in Europe and in the world in general have been found to

have high workplace accidents rates. For example in Europe, construction

accounts for just 10% of working population yet claims 15% of workplace

accident (Loosemore et al 2006) and here in the UK it accounts for a third of all

workplace death (HSC 2003).

SURVEY

Using the three peer reviewed surveys above it can be seen that from Figure

4.0 that safety issue was 6th on the list of advantages of using MMC. In Table

4.0 it is seen as 12th on the list but in Figure 4.1 it is joint 4th on the list. It is a

well known fact that safety isnt top priority on a construction site (Rooney et al

2008) but for it to do so well in the survey demonstrate the impact MMC has on

safety.


The safety record of the Heathrow Terminal 5 construction project is

remarkable, it had a total of two fatalities rather than the predicted six (Riley

2005) but the most striking is the accident rate which was four times better that

the industry record (Doherty 2008).

Tony Douglas (Managing Director of the T5 project) stated that if Heathrow

Terminal 5 had been built using the traditional method of construction it would

have needed 7000 more workers on site (Hansen and Zenobia 2008) and using

the Normal Accident Theory described below it would have resulted in more

accidents and possibly more fatalities.


The construction site is an environment with a lot of complexities (Teo et al

2005; Wild 2002), and though Dubois & Gadde 2001 argues it is a loosely

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coupled system, Hallgren and Wilson (2008) believes that its characteristics,

induced by planning, is similar to that of a tightly coupled system. Hence using

the Normal Accident Theory it is expected that accidents and loss of lives are

likely to occur. As a matter of fact BAA had estimated that at the end of the

construction of Heathrow Terminal 5 there would be 6 fatalities (Brady & Davies

2010). While such disasters and fatalities might seem inevitable, the High

Reliability Theory posits that such could be reduced hence making saving in

cost resulting from delays, loss of productivity, compensation claims etc.

The European directive 92/57/EEC demands that safety concerns must be

addressed during the design phase of a construction project and in all

management processes (HSC 2001), BAA did this via the early adoption ofMMC.

Fatalities tend to traumatize employees especially those directly involved

(Hopkins 2011). It also leads to bad publicity which amongst other things has

profit-threatening penalties (Gidfalvi 2001) especially for BAA who had to

watch their share price.

Teo et al (2005) believes that with large numbers of people working on site therisk of accidents occurring increases, removing some activities, through for

example Off-Site construction (a form of MMC), would reduce the chances of

accidents occurring.

4.3.5 Environmental Sustainability

Due to environmental concerns, political pressures and the activities of

environment activists, who are technically stakeholders in any mega

construction project, environmental issues and sustainability in the construction

industry is now a major issue worldwide (Jaillon et al 2009) and as a major

consumer of energy and natural resources (Burwood and Jess2005) it is

imperative that the construction industry is involved in achieving sustainable

development (UNEP 2003).

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Impact on the environment was the major reason for objection to the

construction of Heathrow Terminal 5 by local residents and by environmentalists

(Riley 2006), hence BAA again had to come up with a solution that would

impact minimally on the environment.

SURVEY

In the surveys above, sustainability didnt score much, recording a no show in

Figure 4.0, 6th in Table 4.0 and joint 7th in Figure 4.1. The researcher couldnt

find any reason for this and does not believe he is allowed to speculate in an

academic work. This result clearly demonstrates the benefit of using peer-

reviewed secondary data because if the researcher had gathered his own

(primary) data sustainability would have most probably featured highly due to

the risk of bias.

EXAMPLE IN THE CASE STUDY

In the construction of Heathrow Terminal 5 environmental concern was an issue

due to the objections as discussed above and also due to the fact that there

were vehicular restrictions placed on the project and the site had only one

viable entrance (Hansen and Zenobia 2008). If traditional methods of

construction were used it would have meant a 40ft vehicle using that entrance

every 40seconds or there about, a statement made by Tony Douglas the

Managing Director of the T5 project.

THE use of MMC in the construction of the aircraft stands and pavement areas

in Heathrow Terminal 5 project lead to a 25% reduction in bulk material required

(Potts 2008) which lead to a decrease in vehicular traffic bringing in the

materials.


Construction waste management and the attendant environmental impact is

now a project risk (Bing et al 2005). Due to their immense nature mega projects

have lots of environmental concerns (Potts 2007). Prefabrication (a form of

MMC) is now seen as a solution in waste reduction both during the design and

construction stages (Poon & Jaillon 2002, and Hk 2006).

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By adopting sustainability a construction project stands to benefit from savings

made from the reduced cost of transporting the waste to either a recycling

facility or to a landfill for eventual disposal of waste (Tam and Tam 2008).

The low skill level of the construction personnel has been identified as one of

reasons for the large amount of waste generated by the construction industry

(Chen et al 2002). Wang et al (2004) found out that if the skill level of operative

is improved it will lead to less waste being generated but the UK construction

industry is well known for its low level of training (Goodier and Gibbs 2007) so

hopes of training a huge workforce to acquire high skill level within a short

period to meet increasing legislative demands will be misplaced.

Yuan et al (2011) believes that traditional construction methods and culture is

the reason for the poor performance of the construction industry in

environmental sustainability. MMC reduces some of those peculiarities that

exist in the traditional methods of construction which in turn results in waste

reduction (Hook 2006).

4.4 CHAPTER SUMMARY

In this chapter I have given further explanation on the data choice, I then went

on to provide the various surveys done. I analyzed that data in the process

illustrating the analysis with relevant examples that occurred in the case study.

Afterwards I presented pertinent literature in support of the analysis.

I will now go on and conclude this dissertation research and make appropriate

recommendations.

CHAPTER FIVE: CONCLUSION AND RECOMMENDATION

5.1 INTRODUCTION

In this chapter I will give a brief synopsis of the dissertation research, what it

was all about and what it achieved, I will also state the findings of the research

and make appropriate recommendations before suggesting further areas of

research.

5.2 FINDINGS

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Innovation Diffusion Theory purports that the level of adoption of an innovation

and/or technique is determined by the clarity of its benefits (Rogers 2003) and

this view is supported by Crowley (1998) who notes that participants in the

construction industry will only adopt new technologies and/or innovations if

these are seen to be beneficial. The construction industry has a poor reputation

for performance delivery (Goodier and Gibbs 2007) and for it to remain

competitive it most embrace new technologies and be willing to innovate.

Though Andersen et al (2004) noted there are difficulties in introducing new

technology to the construction industry, Doherty (2008) makes mention of the

fact that the market is a powerful agent of change so really the industry has

little or no choice but to innovate since the market is demanding better quality

and performance.

This dissertation research was undertaken to highlight the immense benefit of

Modern Methods of Construction mainly from a project risk management

perceptive.

After reviewing relevant documents and analysing pertinent data from peer

reviewed journals the following findings were made

1. Modern Methods of Construction offers budget certainty i.e. it reduces

the risk of cost overruns in construction projects. Though it has been

found to be more expensive (Goodier and Gibbs 2007) that most likely

would change when it achieves economies of scale. For any organization

that needs to protect its reputation, executing a project within budget is

central to that aim.

2. Modern Methods of Construction also offers time certainty but it also

offers more e.g. reduction of on-site construction time, reduces overall

construction time with the attendant benefit of reduced cost and early

revenue generation.

3. Modern Methods of Construction offers massive improvement in quality

over traditional methods. First the ability to test products and correct

errors before installation as seen in the case study makes it a number

one choice. Secondly it gives better whole life performance. Finally it has

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been observed that structures built using MMC records less post-

occupation problems and defects. In all the surveys used, quality came

up top and the beauty of it all is that there is still scope for further

improvement in quality unlike the traditional methods.

4. Projects executed using Modern Methods of Construction have recorded

less accidents and fatalities as seen in the case study. This is mainly due

to less time spent on site and using the Normal Accident Theory that

means fewer hazards. Also most work is done in the factory which

means fewer accidents as the factory environment is better in accident

prevention, and it protects workers from rain and other elements.

5. While environmental sustainability didnt score much in the surveys used,

the use of Modern Methods of Construction can be seen to be effective

in the case study where it helped in reducing vehicular movement to the

site. From literature reviews and research MMC can be seen to be

effective in tackling the issue of waste which has cost benefits since

waste disposal has cost implications. Also research has shown that

buildings built using MMC perform better in terms of energy efficiency

which has cost benefits for the end users of infrastructure as it means

reduced bills and running cost.

While this dissertation research was undertaken to look at how effective Modern

Methods of Construction was a Project Risk Management Strategy in terms of

Cost Overrun, Time Delay, Quality, Safety and Environmental Sustainability it

found out that MMC offers other benefits for example:

Job Security: MMC offers Job security which leads to better loyalty with it

attendant productivity benefit.

Training: the use of MMC makes it possible to retain and train staffs, with

80% of construction workers lacking formal qualification (Dainty et al

2004), this has immense social benefits.

Skills Shortages: as skills shortage is a major issue in the construction

industry the use of MMC offers great advantages in this situation as the

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building is built where the skills are located and transported to site as

seen in the case study.

5.3 RESEARCH QUESTIONS

We would now re-examine the research question to see if the dissertation

research answers them

How effective is the use of Modern Methods of Construction in mitigating

various risks and/or issues in a mega construction project?

ANSWER

As can be seen both from the case study and the literature reviews, the use ofModern Methods of Construction have been found to be effective as a Project

Risk Management Strategy in terms of Cost Overruns, Time Delay, Quality,

Safety and Environmental Sustainability.

What impact on a mega construction projects objectives do Modern

Methods of Construction have?

ANSWER

From the extensive research undertaken Modern Methods of Construction has

been shown to have a positive impact on a mega construction projects

objectives.

Are Modern Methods of Construction necessary or should traditional

methods be executed properly?

ANSWER

With increasing demand for performance in terms of cost, time, quality, safety

and environmental sustainability the use of Modern Methods of Construction is

absolutely necessary. Traditional methods have been seen to be at the ends of

its tethers (Wong et al 2003) hence cannot deliver these requirements anymore.

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Organizations suffer serious reputational damages if they fail to deliver

successful projects on time and on budget as seen with the Wembley National

Stadium (though not discussed in this dissertation) where the executive

chairman John Roberts had to resign due to poor performance in that project

(Cashman 2006) and the UK arm had to be sold.

Chen et al (2010) suggests that for the construction industry to be able to

deliver quality buildings it has to embrace Modern Methods of Construction.

5.4 CONCLUSION AND RECOMMENDATION

Blimass et al (2006) argues for a multi-dimensional value based comparative

exercise, and believes that without such the opportunity for benchmarking andperformance measurement is lost. While Chen et al (2010) also believes that

holistic criteria should be used in selecting the right construction method rather

than just the cost-based assessment. In this dissertation research I have shown

the effectiveness of Modern Methods of Construction as a Project Risk

Management Strategy in terms of cost, time, quality, safety and environmental

sustainability.

I would recommend that organizations speed up their uptake of Modern

Methods of Construction to remain competitive in a global and fast changing

world.

I would also recommend that the UK government increases their promotion of

Modern Methods of Construction because of the immense societal benefits it

provides.

5.5 SUGGESTED AREAS OF RESEARCH

Secondary data was used in this dissertation research (reasons given above), a

research incorporating primary data is therefore suggested.

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A research comparing two similar projects in size and complexity but using the

two different methods of construction is suggested though none was found at

the scale of Heathrow Terminal 5 at the time of this dissertation research.

effectiveness of modern methods of construction as a project risk management strategy

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