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UNIVERSITY OF MANCHESTER INSTITUTE OF SCIENCE AND TECHNOLOGY
MANCHESTER CENTRE FOR CIVIL AND CONSTRUCTION ENGINEERING
INTEGRATING SPECIALIST CONTRACTORS
IN EARLY PROJECT DESIGN STAGE
A dissertation submitted to the University of Manchester
Institute of Science and Technology for the degree of MSc. Management of Projects
By
Amer Abu-Zeineh
Manchester, United Kingdom
September 2004
MSc Dissertation Declaration
A. Abu-Zeineh i
DECLARATION
I declare that no portion of the work referred to in the dissertation has been submitted in support of an application for another degree or qualification of this or any other university or other institution of learning.
MSc Dissertation Acknowledgments
A. Abu-Zeineh ii
ACKNOWLEDGMENTS
This research owes its existence to a number of people. First of all, I would like
to thank my supervisor Dr. Nuno Gil whose conscientious guidance throughout
this dissertation made it a success.
In addition, my appreciation and acknowledgements are expressed to Mr.
Eric Dean, the Managing Director of Modular, Mr. Terry Pye, Modular Design
Manager, Mr. Nick Gunn, the RBS Architect and Mr. Graeme Macmillan, the
RBS Project Manager, who spent their precious time with me sharing their
knowledge and providing me with valuable information for my research.
The best of my acknowledgments is given to my family and all those who
supported me in order to complete the present research.
MSc Dissertation Abstract
A. Abu-Zeineh iii
ABSTRACT
INTEGRATING SPECIALIST CONTRACTORS IN EARLY PROJECT DESIGN STAGE
BY
Amer Abu-Zeineh
Supervised By
Dr. Nuno Gil
Master of Science in Engineering Project Management
As the complexity of construction projects increases, the role of specialist contractors is evolving from one of builder to one of partner in creating the design solution. Their early involvement in the project design phase addresses designers’ needs to integrate more operational knowledge when they conceptualize their design solutions. Specialist contractors (SCs) may offer knowledge regarding their own products, work capabilities, and production constraints. They can also help to develop creative solutions. Nevertheless, problems and obstacles may hamper this early involvement process and negatively influence the outcome.
This research investigates how SCs can be effectively integrated in the
early project design stages in construction projects. The research is based on the assumption that SCs’ role is largely equivalent to that of suppliers in manufacturing. Therefore, early supplier involvement in new product development projects has been investigated to learn lessons how SCs early integration can be successfully accomplished. The main research objectives are threefold: identify the advantages and disadvantages of the early SCs integration in design; address the main impediments that hinder such integration; and identify types of knowledge that SCs can contribute to the early project design phase. This study is based on field research on a real world case study for the world headquarters construction project of the Royal Bank of Scotland in Edinburgh.
The findings of this research indicate that early SCs involvement in design
allows for reducing projects cost, time, and quality uncertainty. It can also help to provide better control over onsite management. SCs can help to investigate design alternatives to reduce the overall project cost and lead-time. However, designers expect SCs to act as consultants rather than mere constructors if they are to participate in the early project design stage. A cultural change is therefore needed within SCs’ firms. Additionally, although face-to-face interaction has been found the healthiest way to leverage SCs’ knowledge during design, Information and Communication Technologies (ICTs) such as project extranets can offer opportunities to support this effort. This work identifies some other key factors behind the success of the early integration process: client support, mutual trust between designers and SCs, and long term relationships.
MSc Dissertation Table of Contents
A. Abu-Zeineh iv
TABLE OF CONTENTS
DECLARATION ...................................................................................................... i ACKNOWLEDGMENTS ....................................................................................... ii ABSTRACT ........................................................................................................... iii TABLE OF CONTENTS ....................................................................................... iv LIST OF TABLES ................................................................................................. vi LIST OF FIGURES ............................................................................................... vii LIST OF ABBREVIATIONS ................................................................................ viii CHAPTER ONE INTRODUCTION ............................................................ 1
1.1 Background ............................................................................................... 1 1.2 Problem Statement ................................................................................... 2 1.3 Buyer-Supplier relationship in Manufacturing .......................................... 3 1.4 Research Assumption ............................................................................... 3 1.5 Contribution to knowledge ........................................................................ 4 1.6 Research Purpose and Objectives ........................................................... 4 1.7 Conceptual Context ................................................................................... 4 1.8 Research Questions .................................................................................. 5 1.9 Research Methodology ............................................................................. 5 1.10 Research Scope ........................................................................................ 6
CHAPTER TWO EARLY SUPLLIER INVOLVEMENT IN NEW PRODUCT DEVELOPMENT PROJECTS .................... 7
2.1 Introduction ................................................................................................ 7 2.2 New Product Development (NPD) ............................................................ 7
2.2.1 Product Development and Construction Projects ......................... 8 2.2.2 Effective Product Development ...................................................... 9
2.3 Why Suppliers are Critical in NPD Projects ........................................... 10 2.4 Change in Buyer-Supplier Relationship ................................................. 10 2.5 Early Suppliers Involvement (ESI) in NPD ............................................. 11
2.5.1 The Extent of ESI in NPD Design Stage ..................................... 12 2.5.2 Supplier Design Responsibility ..................................................... 13
2.6 Advantages and Disadvantages of ESI in NPD ..................................... 14 2.7 Knowledge Exchange ............................................................................. 16 2.8 Barriers to Effective ESI .......................................................................... 16
CHAPTER THREE SPECIALIST CNTRACTORS IN CONSTRUCTION PROJECTS ..................................... 18
3.1 Rethinking Construction .......................................................................... 18 3.2 Design-Construction Interface ................................................................ 19 3.3 Integrated Design Team ......................................................................... 19 3.4 Specialist Contractors (SCs) ................................................................... 20
3.4.1 The Role of SCs in Construction .................................................. 21
MSc Dissertation Table of Contents
A. Abu-Zeineh v
3.4.2 Coordinating SCs’ Knowledge ..................................................... 22 3.5 Contractual Agreements ......................................................................... 24 3.6 Communication Systems ........................................................................ 25 3.7 Incentives to Promote SCs Early Involvement ....................................... 26 3.8 Involving SCs at Early Design Stage: Benefits and Obstacles .............. 27
CHAPTER FOUR THE CASE STUDY ANALYSIS AND FINDINGS ........ 27 4.1 The Case Study ....................................................................................... 28
4.1.1 The RBS Project ........................................................................... 29 4.1.2 Companies’ Profiles of the Case Study ....................................... 30 4.1.3 Why Modular? ............................................................................... 33
4.2 Modular System ...................................................................................... 33 4.2.1 Modular Design Process .............................................................. 34 4.2.2 Modular Manufacture Process ..................................................... 35 4.2.3 Modular Assembly Process .......................................................... 37
4.3 Types of SCs in RBS .............................................................................. 38 4.4 The Mechanism of Involving Modular in RBS ........................................ 38
4.4.1 The Contractual Agreements ....................................................... 39 4.5 The Objectives of the Early SCs Involvement ........................................ 40 4.6 Knowledge Exchanged and Communication Systems .......................... 42
4.6.1 Communication Systems .............................................................. 42 4.6.2 Types of SCs’ Knowledge ............................................................ 44
4.7 Impediments to Effective Early SCs Involvement .................................. 46 4.7.1 Two-stage Contract Problems ...................................................... 46 4.7.2 Cultural Problems ......................................................................... 47 4.7.3 Communication Problems ............................................................ 49 4.7.4 Other Problems ............................................................................. 50
4.8 Pros and Cons of Early SCs Involvement in Design .............................. 51 4.8.1 The Advantages of Early SCs Involvement ................................. 51 4.8.2 The Disadvantages of Early SCs involvement ............................ 54
CHAPTER FIVE CONCLUSION ................................................................ 53
5.1 Conclusion ............................................................................................... 56 5.2 Implications for Further Research .......................................................... 59
REFERENCES .................................................................................................... 60 APPENDIX (A) .................................................................................................... 67 APPENDIX (B) .................................................................................................... 69
MSc Dissertation List of Tables
A. Abu-Zeineh vi
LIST OF TABLES
Table Page
4.1 - List of the Case Study Interviewees……………………………………... 28
MSc Dissertation List of Figures
A. Abu-Zeineh vii
LIST OF FIGURES
Figure Page
2.1 - New Product Development and Construction Projects……..…………. 9
3.1 - Alternative Contractual Agreements with SCs……..…………………... 24
4.1 - RBS Contractual Structure………………………………………..……… 30
4.2 - Stone Panels Bonded to VIROCs…………...…………………………… 35
MSc Dissertation List of Abbreviations
A. Abu-Zeineh viii
LIST OF ABBREVIATIONS
CM: Construction Management.
EDI: Electronic Data Interchange.
ESI: Early Supplier Involvement.
ICTs: Information and Communication Technologies.
MDT: Modular Design Team.
MEP: Mechanical, Electrical, Plumbing.
NPD: New Product Development.
OGC: Office of Government Commerce.
RBS: Royal Bank of Scotland.
SFC: Strategic Forum for Construction.
SCs: Specialist Contractors.
Chapter One Introduction
A. Abu-Zeineh 1
C h a p t e r 1
INTRODUCTION
“Designers must involve the contractors, specialist sub-contractors and key
manufacturers as soon as possible. In order to interpret and develop a
functional brief it is essential that designers (including specialist
subcontractors and key manufacturers) are able to get close to the clients.
Many contractors do not allow this to happen and this needs to change. Once
the project is designed the advantages that can be offered by these
specialists are missed.”
Institution of Civil Engineers, cited in Accelerating Change
1.1 Background
The involvement of specialists at early design stage of project delivery is
essential to develop effective products. This approach has been applied in new
product development projects in some manufacturing sectors. In contrast, the
early involvement of specialists in construction projects is still limited.
The construction industry currently faces tremendous challenges since the
projects’ complexities are increasing. Advances in science and engineering
have led to more complex design solutions. Further, a myriad of new
technologies and materials are currently available to the constructors. This
places more challenges on consultants as they have to cope with more
information in the early design stage. Therefore, current projects require the
involvement of larger numbers than ever before of design, fabrication,
construction, as well as operation and maintenance specialists during the
design stage.
Key suppliers in most of today’s construction projects are specialists. They
have special skills to design and build different project components. These
suppliers are called Specialist Contractors (SCs). Tommelein and Ballard
(1997) define SCs as those contractors who perform construction work that
Chapter One Introduction
A. Abu-Zeineh 2
requires skilled labor from one or at most a few specific trades (e.g., electrical,
plumbing, HVAC, and roofing contractors) and for which they have acquired
special-purpose tools and equipment as well as process know-how.
SCs are involved in diverse construction projects. As a result, they may
have more knowledge and experience than consultants regarding
manufacturing, construction and assembling processes as well as their
products constraints. Integrating SCs in project design phase in construction
projects can add value to the industry. The aim of such integration is to create
opportunities for face-to-face contact between SCs and designers. This can
leverage the production knowledge during the design phase. This knowledge
may not be evident to designers during the design phase and thus it may help
to enhance project planning; reduce cost and time uncertainty and improve the
project quality.
However, it is still often the case that SCs do not assist the early design
phase. For example, traditional procurement routes, such as Design-Bid-Build,
involve SCs at late stage in the project development and hinder their early
involvement. They usually get involved in design only after competitively
bidding, when they have to develop and submit detailed shop drawings to the
architect/engineering consultants (Gil et al 2001).
1.2 Problem Statement
In the construction industry, the methods of executing the different construction
activities are often isolated from each other and there is no feedback from one
group of project’s players to another. However, it is not the same case in
manufacturing when suppliers are often perceived as an integral part of the
development team in product development projects to the extent that
cooperative relationships with suppliers are fostered and widely developed.
The same approach could be adopted in construction by integrating SCs at
early design stage. Current practices in the construction industry indicate that
designers increasingly consult SCs in the early design phase to develop and
detail better design solutions. Designers can benefit from the SCs’ early
contribution as they can help them better understanding about the project cost,
Chapter One Introduction
A. Abu-Zeineh 3
time and quality and consequently develop more sensible designs. Such
integration may not however be easy to be accomplished. It carries advantages
and disadvantages, obstacles and problems, benefits and gains that have not
yet been researched. These issues will be the focus of the research.
1.3 Buyer-Supplier relationship in Manufacturing
Traditionally, the process of developing new product in the manufacturing
sector is seen as a sequence of stages during which a new product is
developed from a conceptual stage into a prototype ready for mass production.
During these stages, suppliers are regarded as partners in developing products
rather than mere component producers. All players play important role in each
stage as a part of this process (Wognum et al 2002).
The change in buyer-supplier relationship has taken place in the
automotive industry where assemblers are increasingly involving suppliers in
early stages of product development. Womack et al (1990) state that Toyota
personnel work closely with its suppliers in order to streamline the production
processes. Further, they observe that Toyota product development process
includes integrated activities that involve more than one discipline and
organization. All parties are mutually dependent with respect to knowledge,
continuity and care. Suppliers have been promoted to work together with
designers at early stage in a new product development to pursue better
designs.
1.4 Research Assumption
The relationship between the buyers and suppliers has been widely
investigated since Womack’s study. Here, I assume that the role of SCs in the
construction industry is to a large extent equivalent to that of suppliers in
manufacturing. Both are specialists in designing and building particular
components for the client to produce the final products.
Chapter One Introduction
A. Abu-Zeineh 4
1.5 Contribution to knowledge
Investigating the role of SCs in project development and the necessity to
integrate them in the early project design stage is not new. However, there are
important issues and questions yet to be investigated regarding the advantages
and disadvantages of the integration process, impediments to effective SCs
involvement and the types of knowledge exchanged and communication links
between SCs and designers. Investigating these issues is expected to add
substantial contribution to knowledge regarding the early SCs involvement in
the design phase.
1.6 Research Purpose and Objectives
The purpose of this research is to investigate how SCs can be effectively
integrated in the early project design stage in the construction industry.
Specifically, it will identify some of the pros and cons associated with such
integration.
The objectives of the research are threefold: first, identify and characterize
the knowledge that SCs can give to the consultants at early design stage.
Second, identify the obstacles and problems that hamper the early SCs’
involvement in construction. Finally, it investigates the pros and cons of
incorporating SCs early in the design stage. The research yields better
understanding on the relationship between the designers and SCs. It also
presents how the SCs’ early knowledge may enhance the effectiveness and
performance of the construction projects.
1.7 Conceptual Context
The literature review covers the theory from two main disciplines: mainstream
and construction management. The products development phase in the
manufacturing sectors have similarities with design development in construction
projects. This concept provides better insight for the relationship between
manufacturing and construction.
Chapter One Introduction
A. Abu-Zeineh 5
The literature review has been carried out in the following disciplines:
Mainstream management literature: Specifically, the literature reviews the
buyer-supplier relationship and the early supplier involvement (ESI) in
new product development (NPD) projects to draw some lessons that will
guide to better understanding about SCs involvement at early design
stage in construction.
Construction management literature: It reviews the role of SCs in the
project development and the advantages of incorporating them at early
design stage.
1.8 Research Questions
This work is based on the following research questions:
What kind of knowledge can SCs contribute to the early project design
stage?
What are the obstacles and problems hampering SCs early
involvement?
What are the advantages and disadvantages of integrating SCs in the
early project design stage?
1.9 Research Methodology
The research adopts the “case study” research method. It is developed by
conducting series of one-on-one interviews, based on open-ended questions
with practitioners working for different companies involved in the project
delivery of the world headquarter of Royal Bank of Scotland (RBS) in
Edinburgh. Specifically, I study the case of Modular’s early involvement in the
RBS design phase. Modular has collaborated with the RBS designers in the
early design stage.
Modular is a specialist contractor specialized in designing, manufacturing
and installing prefabricated interior building’s elements including toilet blocks,
internal partitions and related joinery and plumbing works.
Chapter One Introduction
A. Abu-Zeineh 6
1.10 Research Scope
Chapter one introduces the research. It articulates the problem, the research
purpose and objectives and the research method. The scope of the research is
also discussed.
Chapter two reviews literature on the relationships between buyers and
suppliers in new product development projects. Specifically, it investigates the
early collaboration between the suppliers and buyers and identifies the
obstacles and incentives associated with such collaboration.
Chapter three discusses the specialist contractors’ role in construction
projects delivery. It presents the definition of SCs and gives an overview about
their skills and knowledge. It also presents the procurement routes that fit the
SCs involvement in early design stage.
Chapter four presents the case study. It discusses the pros and cons of
integrating Modular in the design stage of the RBS project. It also investigates
the mechanism of how this integration was accomplished. Further, the
obstacles and problems that hampered the integration are addressed. Finally, it
describes types of knowledge that Modular has contributed to the early design
stage.
Chapter five presents the conclusion. It sets a number of recommendations
that are drawn from the findings and proposes further research and studies.
Chapter Two ESI in NPD Projects
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C h a p t e r 2
EARLY SUPPLIER INVOLVEMENT IN NEW
PRODUCT DEVELOPMENT PROJECTS
2.1 Introduction
In any sector, the relationship between buyers and suppliers is crucial. It
influences the competitive advantages of the organizations in the market. One
practice that has evoked much interest is the early involvement of specialist
suppliers in the new product development process. Early supplier involvement
(ESI) contributes to the performance of the product development process and
yields significant benefits on buyers’ organizations. It brings operational
knowledge into design development and supports designers at early stage
(Dowlatshahi 2000).
2.2 New Product Development (NPD)
New product development (NPD) projects develop new products in a company.
NPD is important to any organization for one simple reason: all products have a
limited life cycle. This means that in order to stay competitive in a market,
companies need to review and modernize their products according to the needs
of the market. This modernization can occur either as a result of technology
advancements, or changes in the marketplace.
Firms should reduce time and cost required to develop new products to be
in a competitive position (Hartley et al 1997). Close relationship between buyer
and suppliers can help to achieve such reduction. Early involvement of a
supplier in buyer’s product development project affects NPD cost, time and
quality performance (Clark 1989; Kamath and Liker 1994).
Chapter Two ESI in NPD Projects
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2.2.1 Product Development and Construction Projects
Traditionally, the process of developing new product in the manufacturing
sectors is seen as a sequence of stages during which a new product is brought
from a conceptual stage to the implementation stage. During the concept stage,
the design is refined and evaluated for technical and commercial feasibility. The
design then reaches to the implementation stage at which it is ready for
prototyping and testing (Pawar et al 2002). The next stage is the mass
production when a large-scale production begins (see Fig. 2.1a).
The product development process in construction is the process by which,
the inception, conception, development, realization, use, maintenance and
demolition/decommissioning of a facility can be described and managed
(Kagioglou 2003).
Pinto and Covin (1989) argue that the NPD and construction projects form
two distinct classes. In their view, there are some fundamental differences
between them, in that they offer varying prerequisites for scheduling, feedback,
top-management support, allocation of competence and personnel and risk-
management.
However, the author believes that although there are differences between
the two disciplines, similarities can be observed between NPD and construction
projects. Both encompass design and implementation phase (see Fig. 2.1).
During the design phase, the designers develop the product specification and
produce the final drawings that will be ready for implementation. Then the
implementers translate the design into a tangible product during the
implementation phase. The implementers may be the suppliers in NPD or
specialist contractors in construction. They manufacture and assemble final
products. The product may be a manufactured product or construction building
components, such as steel works and toilet blocks. This viewpoint can support
the research assumption that the role of suppliers in NPD is similar to the role
of SCs in construction projects.
Chapter Two ESI in NPD Projects
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(a) New Product Development Projects
(b) Construction Projects
Figure (2.1) - New Product Development and Construction Projects
2.2.2 Effective Product Development
When the market conditions are unpredictable and technology evolves rapidly,
the situation changes and project requirements change consequently (Iansiti
1995). Effective product developers in such environment have to embrace
change not to fight it. Companies should be flexible and responsive in turbulent
environments. Flexibility does not only include hiring creative individuals or
implementing an organic organizational structure but it also includes proactive
management by creating a development process that increases the speed by
which the organization can react to such changes.
New Product Development Projects Mass Production
Design
Implementation
Project start
End of the Project
End of the product Life
Cycle
Construction Projects
Manufacture
Project start
End of the project
Implementation
Design
Assembly
Chapter Two ESI in NPD Projects
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10
Overlapping between the design and implementation phases increases the
speed of product development and consequently enhances the ability to react
to market changes. Suppliers and those who are in charge of the design
collaborate together during the product development stage to develop a single
final design. This can enable two-directional knowledge transfer (Iansiti 1995).
2.3 Why Suppliers are Critical in NPD Projects
Harold et al (1992) state that suppliers are strategically critical for the following
reasons:
As the technological complexity increases, suppliers can offer
knowledge and ideas for product innovation beyond the capabilities of
any single company. Thus, working as partners in NPD can enhance the
competitiveness and profitability of both companies.
Establishing a good supplier relationship and involving them early in the
design stage may result in more reliable and smoother flow of both
materials and information between supplier’s and buyer’s companies.
Good relationship with suppliers can strength the buyer responsiveness
to the competitive market demands and challenges. Buyers who depend
on telephone-price-contract types of supplier relationship have less
ability to react positively to these demands.
Long-term relationship yields significant benefits on both suppliers’ and buyers’
companies. When buyers and suppliers engage in a long-term relationship that
lasts a long period, both can reap substantial benefits from knowledge of each
other products and processes (Helper 1990).
2.4 Change in Buyer-Supplier Relationship
Changes in the buyer-supplier relationship largely concern the automotive
industry where assemblers are increasingly involving their suppliers in early
stages of product development (see e.g., Womack et al 1990; Helper 1991).
Chapter Two ESI in NPD Projects
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11
Previous to that, suppliers were being evaluated and rewarded according to
specific evaluation criteria such as delivery schedules, price and quality
standards (Dowlatshahi 2000; Womack 1990). For example, auto-
manufacturers used to prepare in-house design and then give the drawings to
their suppliers and ask them to bid on a given number of parts of a given
quality, such as number of allowable defective parts per 1000, and a given
time. Then, the lowest price bidder gets the business (Womack 1990).
The new approach proposes that the buyer-supplier relationship must be
based on mutual collaboration and trust. Early collaboration with suppliers in
NPD has been regarded as one of the important factors that can help buyers to
acquire high quality parts with reasonable cost and time. Dowlatshahi (2000)
states that close relationship between buyers and suppliers may affect the cost
of the parts, ease of manufacturing processes, reduce suppliers’ lead time,
produce higher quality parts, reduce level of inventory required, enhance the
logistical support required for the product and facilitate the post-service support
required for the product.
2.5 Early Suppliers Involvement (ESI) in NPD
Hartley et al (1997) have investigated the buyer-supplier interface and found
that there are three main facets that must be managed: (a) the timing of
suppliers’ involvement, (b) the supplier’s design responsibility and (c)
communication between the buyer and the supplier. They found that these
issues can significantly affect the time needed to get the production in the
market.
Bozdogan et al (1998) state that suppliers’ participation in NPD process
has increasingly led to changes in the management of the buyer-supplier
relationship, with a tendency towards the partnership form. They view this
development as entrusting greater design responsibilities on suppliers.
On the other hand, the role of purchasing department is very important to
facilitate the early collaboration between suppliers and designers. It establishes
the ground rules, outline objectives and timetables, and involve suppliers early
Chapter Two ESI in NPD Projects
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12
on. Their responsibility is to conduct a preliminary contact with suppliers who
are eager to participate in the NPD design stage.
2.5.1 The Extent of ESI in NPD Design Stage
In many industries, 50% or more of direct product costs are attributed to
purchased materials which make it important to involve suppliers early in NPD
(Hartley 1997). Several researchers, particularly in the automotive industry,
have investigated the ESI in design process. ESI has been identified during
several phases of a product development (Clark and Fujimoto 1991; Twigg
1998):
At concept stage: suppliers of body components may provide
manufacturing advice to model stylists.
During detail engineering stage: suppliers have inputs to the design
process with regard to the specification of new materials and their
application in novel ways.
For the process engineering stage: manufacturing knowledge is
essential for buyers. Toolmakers, equipment manufacturers, raw
material suppliers, or process specialists all have important role to play
in the design.
Liker et al (1998) also conclude that ESI process can be conducted at three
levels: At the most basic level, suppliers representatives who understand the
manufacturing capabilities of their companies can look at their customer’s NPD
design at early stages when there are still many degrees of freedom, and make
suggestions on how the design can be altered to make it more manufacturable.
At the middle level, engineers from supplier’s and buyer’s firms can work
together and participate in the design of the product. At the highest level, the
customer can provide the supplier with broad performance specifications and
space constraints and grant him the autonomy to develop the product and
process. The latter level of supplier involvement is referred to as “black-box”
sourcing.
Chapter Two ESI in NPD Projects
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13
In addition, Bonaccorsi and Lipparini (1994) have investigated two
dimensions that indicate at which stage suppliers are involved in a project:
The timing of supplier involvement: refers to the stage at which the buyer
approach suppliers and make them aware about the project.
Degree of competition among suppliers: refers to the degree of
competition among suppliers at their time of involvement.
On the other hand, organizations are changing the structure of the supply chain
and the number of tiers in it (Wognum et al 2002; McIvor and Humphreys
2004). This occurs because most suppliers are currently producing assembled
systems or complete sub-assemblies rather than individual components.
Wognum et al (2002) state that such suppliers are often called system
suppliers. They get responsibility for the co-ordination of sub-assembly parts
during the design, production, and assembly phases. In this way, a so-called
tier structure is built. The system supplier becomes the first tier supplier, while
the part supplier becomes the second-tier supplier. For example, Toyota and
Nissan have organized their suppliers in two tiers, where the first tier suppliers
are responsible for just in time delivery of sub-assembly parts. Hence, suppliers
become more system rather than component suppliers and responsible for the
product development (McIvor and Humphreys 2004).
2.5.2 Supplier Design Responsibility
Due to the increase in project complexity, higher specialization, and new
technological capabilities, outside suppliers can perform many activities at
lower cost and with higher value added than a fully integrated company can
(Mikkola and Larsen 2003). Detailed design outsourcing is one of the important
issues that have been investigated in the literature of ESI. ESI places greater
responsibility on suppliers in developing detailed design for their customers
(Hartley et al 1997).
Hartley et al (1997) state that suppliers are usually specialists in their area
and have focused knowledge of the specific parts they produce. Therefore, they
Chapter Two ESI in NPD Projects
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14
are in a better position than buyers to design the component in a way that
reduces the number of tooling, equipment, or layout changes that are required
in the supplier’s manufacturing plant.
However, Wasti and Liker (1997) argue that detail design outsourcing
entails many risks because of the design’s intangible nature, difficulty of
appraisal and monitoring of supplier performance and level of uncertainty.
There is a high risk probability of critical information leakage to competitors
during the design stage. Likewise, when a supplier works for several
customers, there is a possibility that he uses the same design for different
customers and causes the first buyer to face steep loss in his competitive
power. Further, it is difficult to measure designer performance and gauge how
much time has been spent on design as these factors can consequently
influence suppliers’ price.
Despite the risks involved in design outsourcing, the literature about ESI
reports a high level of collaboration and sharing of design work especially in the
Japanese auto firms. Hartley et al (1997) state that shifting component design
responsibility to technically capable suppliers reduces cost when they have
lower wages and overheads.
2.6 Advantages and Disadvantages of ESI in NPD
Wognum et al (2002) state that collaboration between buyers and suppliers
confers many benefits during the NPD process. They describe these benefits
as follow:
Increased added value: Suppliers role has been shifted from merely
producing parts to also developing them and deliver complete sub-
system. This helps buyers to acquire more added value products.
Longer-Lasting collaborative relationships: relationships between
buyers and suppliers last longer. ESI contributes to build long-term
relationship between buyers and suppliers.
Larger mutual dependency: Since suppliers can offer greater added
value and long-term collaborative relationships, the client has
Chapter Two ESI in NPD Projects
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15
become more dependent on the knowledge, continuity, and care of
the selected suppliers. As such, buyers and suppliers become more
mutually dependent.
Researchers found that ESI has positive impacts on NPD in reducing project
development lead times (Clark 1989; Hartley et al 1997), improving perceived
product quality (McGinnis and Vallopra 1999), acquiring better
manufacturability and sharing knowledge, learning and technological risks.
Further, ESI in NPD has been regarded as one way to cope with the risks of
outsourcing (Wasti and Liker 1997).
Another advantage of ESI is that it facilitates early communication between
buyers and suppliers. Collaborative communications become essential in NPD
(Wognum et al 2002). ESI encourages personal visits between suppliers’ and
clients’ firms which are important to build trust and long term relationship.
Further, Buyers sometimes provide space and facilities for the so-called “guest
engineers” from suppliers’ firms to work closely together in the same physical
space (Wasti and Liker 1997). On the other hand, ESI facilitates the use of
ICTs as they can easily used to support the early collaborative practices
(Wognum et al 2002).
ESI also emphasized on building long-term relationship based on
qualitative rather than quantitative criteria. Most buyers no longer rely on quotes
and bids when they want to involve suppliers in the early design stage in NPD
(Dowlatshahi 2000). This can help buyers to leverage the development of joint
resources with their suppliers.
Nevertheless, there are some disadvantages of ESI in NPD including risks
of information leakage, loss of control or ownership, longer development lead
time and conflicts due to different aims and objectives (Wasti and Liker 1997).
Additionally, Mikkola and Larsen (2003) state that ESI entails risk of losing
propriety knowledge, hollowing out internal competencies, increased
dependence on strategic suppliers and increased standardization of
components through specified interfaces.
Chapter Two ESI in NPD Projects
A. Abu-Zeineh
16
When suppliers are involved early in the design phase, they may be
responsible for functional specification and detailed engineering activities. This
means that suppliers own a lot of competitive information which buyers may not
be aware about. Further, clients may lose their competitive knowledge for
outside suppliers who may become competitors (Wasti and Liker 1997).
2.7 Knowledge Exchange
One of the main drives behind involving suppliers early in NPD process is to
gain better leverage of suppliers’ technical capabilities and expertise to improve
product development efficiency and effectiveness (Wynstra et al 2001). Using
suppliers’ knowledge and expertise have positive impacts on the design and
the project as a whole.
ESI requires careful knowledge management to be effective. Purchasing-
design-suppliers team should provide an interdependent liaison for information
sharing with suppliers (Dowlatshahi 2000). Brown and Eisenhardt (1995) state
that successful product development teams include people who encourage
communication outside their groups. The reason is that increases the amount
and variety of information that enhances product development performance.
Dowlatshahi (1997) identified a range of early supplier knowledge
including: design and quality specifications; costing data; delivery time; material
requirements and specifications; tooling and production processes. Early
knowledge exchange helps buyers and suppliers to create a situation
conducive to minimize costs, reduce lead-time, and enhance the quality (McIvor
and Humphreys 2004).
2.8 Barriers to Effective ESI
The changes caused by ESI have significant implications on the organizational
culture in terms of the individual roles, responsibilities, reward systems,
reporting, and relationships. Wognum et al (2002) state that cultural differences
between buyers’ and suppliers’ organizations may hamper the ESI process.
ESI requires changes within the organizations to enhance the concept of the
Chapter Two ESI in NPD Projects
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early collaboration and encourage joint problem solving and decision making
across the intra-organizational boundaries (McIvor and Humphreys 2004).
In addition, the influence of senior management has major impact on the
success of ESI. McIvor and Humphreys (2004) in their research about ESI in
the electronics industry found that successful ESI depends upon a high level of
commitment and resources allocation from both customers’ and suppliers’
organizations. They stated that senior management support for ESI is critical for
the success of the process. Bidault et al (1998) agree that clear strategic
policies to involve supplier in NPD is crucial to achieve optimum benefits of ESI.
Moreover, Lack of ESI support and trust between the product development
team members cause conflicts. For example, problems may occur because of
the design personnel resistant to increase the level of involvement of suppliers
in the design process. Also, suppliers may be suspicious of the motives of the
designers when requesting competitive knowledge, such as cost information,
and thus hesitate to transfer their key knowledge (McIvor and Humphreys
2004).
Additionally, other barriers have been identified to affect the ESI
effectiveness including communication difficulties and contractual
arrangements. Utilizing ICTs and incompatibility of communication systems
between the buyers’ companies and their key suppliers’ may cause problems.
Further, the contractual arrangements may hamper ESI efficiency if they do not
provide incentives for suppliers to share their knowledge with buyers (Wognum
et al 2002)
Chapter Three Early Involvement of SCs in Construction Projects
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C h a p t e r 3
EARLY INVOLVEMENT OF SPECIALIST
CONTRACTORS IN CONSTRUCTION PROJECTS
3.1 Rethinking Construction
Based on learning lessons from manufacturing and looking for improvement in
the construction industry, the Strategic Forum for Construction (SFC) was held
in 2002 and the “Accelerating Change” report, which culminates the first year’s
work of the forum, was produced. The Accelerating Change has a vision for the
UK construction industry to realize the maximum value for clients, contractors,
suppliers, consultants, communities, and stakeholders and sets some strategic
targets that are met through changes in client leadership, integrated team
working group, and accelerating culture change (SFC 2002).
The report recommends clients to adopt the notion of integrated teams and
long term supply chains and to actively participate in the creation of such
teams. It states that clients have to start projects entirely differently if they
intend to unlock the potential of the supply side. This means product
manufacturers, suppliers, and specialists should be involved into integrated
teams with designers at early design stage to align with the report
recommendation and achieve good performance targets. Specialists integration
in design can help to develop solutions that have positive impacts on the
industry including: less site processing, increased standardization, pre-
assembly and prefabrication, which takes work off the site, reduces health and
safety risks, and improves quality and reliability (SFC 2002).
Chapter Three Early Involvement of SCs in Construction Projects
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3.2 Design-Construction Interface
Typically the work within the design stage is split into several pieces which are
delivered to different specialists for implementation (Alarcon and Mardones
1998; Gil et al 2001). The owner selects the architects who prepare the
architectural designs and specifications, and then the engineering designs are
developed. The construction stage comes later when a contractor is selected
by the client to execute the design.
The requirements of the client, the constructive aspects and the standards
of quality are all identified during the design stage through procedures,
drawings and technical specifications. However, the design is traditionally
carried out without interaction between the construction and the design teams.
Consequently, problems, such as incomplete design, change orders, rework,
and construction delay, emerge during the construction phase (Alarcon and
Mardones 1998).
In their survey about the design-construction interface, Alarcon and
Mardones (1998) identified some factors that cause problems during the
construction stage. They state that the lack of construction knowledge during
the design stage as well as the lack of coordination among specialists may
cause major problems during the construction stage. Their findings indicate that
a flow of information should exist between designers and implementers by
incorporating construction personnel in the design stage.
3.3 Integrated Design Team
Because the increasing complexity of construction projects and the separation
between design and construction, several construction companies have looked
for ways to solve the potential problems before the beginning of the
construction activities on the site. Melhado (1998) pointes that construction
companies are looking for improving the coordination between suppliers and
designers. He states that there is a need of a closer relationship and
overlapping between design and construction phases in the current approach of
project delivery.
Chapter Three Early Involvement of SCs in Construction Projects
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Koskela et al (2002) clarify that the collaboration between project
stakeholders at the very beginning of a project help to build effective integrated
design team. They believe that the design stage should incorporate
representatives from every stage in the life cycle of the facility, including
members of the production team that is to design and build it. Additionally, they
believe that overlapping between phases and having production personnel in
design allows designers not to freeze the design and narrow a set of
alternatives to a single selection very quickly. Further, Ballard et al (2002) state
that involving downstream players in upstream works and decisions can help to
develop production design rather than traditional design which suffers a lack of
operational solutions.
Production specialists who are commonly called specialist subcontractors
or specialist contractors are one of the key players in the integrated design
team. Their early contribution to the design may help designers to develop
effective solutions to meet clients’ requirements. Tommelein and Ballard (1997)
state that inefficiencies during construction result from lack of interaction
between contractors and designers.
3.4 Specialist Contractors (SCs)
In construction, the production team consists mainly of specialist subcontractors
who are responsible of designing, manufacturing, assembling and building
different parts in a project. In the project management literature, there are
different names for specialist subcontractors, such as production specialists,
trade contractors and specialist contractors (SCs).
Specialist contractors are supposedly the equivalent of specialized
suppliers in manufacturing. Tommelein and Ballard (1997) define SCs as those
contractors who perform construction work that requires skilled labor from one
or at most a few specific trades (e.g., electrical, plumbing, HVAC, and roofing
contractors) and for which they have acquired special-purpose tools and
equipment as well as process know-how.
Chapter Three Early Involvement of SCs in Construction Projects
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3.4.1 The Role of SCs in Construction
The role of SCs has evolved from the need of artisanship to complicated
assembly of components (Bennett and Ferry 1990). SCs’ role can be described
as the provision of a special product for inclusion in the building so that the
required performance is obtained. Their expertise is applied to designing,
adapting, developing, manufacturing and installing the special product in such a
way that it can be integrated into the process of designing and constructing the
whole building. The special product may vary from one piece of equipment to
an integrated complex of dynamic and static items, such as an HVAC system
(FREECPD 2004).
The work of SCs does not only include the on-site activities, but also it
includes off-site tasks. They conduct work on site as spelled out in the contract
documents and do so in a timely fashion as set in the overall project schedule.
Tommelein and Ballard (1997) state that they must complete a number of off-
site preparation tasks prior to mobilizing on site. The list below illustrates these
tasks:
Obtain design drawings and contract specifications describing their
scope of work.
Create shop drawings that include fabrication and installation details. At
this stage, SCs can reflect their methods design and process know-how
and add value to the process.
Perform materials take-off (MTO), send out requests for quotation
(RFQ), and select vendors.
Procure raw materials or order subassembled components.
Expedite delivery of materials.
Hire (if need be) and schedule labor.
Obtain equipment, tools, temporary structures, etc.
Then SCs’ tasks are shifted to mobilization and production on site, they include:
Execute construction work on-site and complete the work.
Chapter Three Early Involvement of SCs in Construction Projects
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Close out the project by extending warranties and requesting/receiving
final payment.
There are two types of suppliers in construction: commodity and specialist
suppliers. Commodity products firms supply materials and goods that many
others can do (e.g., reinforcement bar, cement, steel sections, aggregates, etc).
SCs and specialist suppliers, however, supply unique goods, sub-systems and
service exchange which require them to have specialized knowledge, skills and
tools (Wasti and Liker 1997).
3.4.2 Coordinating SCs’ Knowledge
Gil et al (2001b), in their research about SCs contribution to the design of
semiconductor facilities, classify SCs’ knowledge that they may contribute to
the early design stage in four categories. These are (1) ability to develop
creative solutions; (2) knowledge of space consideration; (3) knowledge of
fabrication and construction capabilities (4) and, knowledge of supplier lead-
time and reliability
SCs knowledge can help to develop creative design solutions that
designers may not otherwise be aware of. Their creativity derives by (cross-
fertilization) which results from working with different designers, clients, and in
different projects. Further, SCs know how much space needed to assemble
their products on-site. This information may be underestimated during the
design phase and hamper the construction to proceed efficiently. SCs’ inputs
about their fabrication and construction capabilities are also important and may
enable designers to align their early design decisions with SCs’ capabilities
without sacrificing the design creativity and quality. Additionally, SCs’
information about product lead time, delivering dates, service and maintenance
is valuable for designers and project managers to enhance the project
efficiency and help to investigate alternative equipments and system designs in
terms of performance reliability.
Chapter Three Early Involvement of SCs in Construction Projects
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Knowledge exchange process between SCs and designers must be firmly
managed and coordinated by the design team in order to achieve the optimum
effectiveness of specialist contractors in carrying out their on-site works.
Designers should coordinate the information flow by utilizing SCs’ design inputs
in facilitating others’ works. (FREECPD 2004) identifies four interdependent
aspects of co-ordination when dealing with SCs knowledge:
Technical compatibility: Specifications rarely provide details of the
interfaces or joints between work packages. Achieving effective joints
requires a process called interface control. This process defines
precisely the information needed by various parties, and tightly controls
and co-ordinates the flow of that information to get it to the right parties
at the right time.
Dimensional integration: Designers have to transfer the necessary
dimensional data to SCs. Each SC must be aware of others whose work
occupies the same space, thus all SCs’ works can fit the spaces
provided by the overall design and, in many cases, have to fit around
each other.
Process planning: The site works may become a series of small and
inefficient operations separated by idle time waiting for the next
operative to be available. Thus, clashes between SCs may emerge and
the project may be hit by delay. SCs’ knowledge can help to avoid such
problems by keeping the site handling, assembly and fixing processes
as simple as possible. SCs implementation approaches on-site can be
integrated in the design to sort out many problems early on.
Flow of information: Developing effective design requires flexibility and
an understanding of the contributions required from the people involved.
The design team should ensure that a comprehensive management
framework is established at the outset to facilitate the integration of
inputs from all the SCs.
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3.5 Contractual Agreements
“OGC recommends the adoption of forms of contract that encourage team
integration. These are PFI, Prime Contracting and Design and Build.…
Traditional non-integrated strategies will only be used where it can be clearly
shown that they offer the best value for money which means in practice they
will seldom be used.”
Office of Government Commerce, cited in Accelerating Change
Most commonly, specialist contractor involvement in a specific project is
established on a contractual basis. SCs get involved in projects only after they
win the bids. They participate in design when they have to develop and submit
detailed shop drawings to the architect/engineer (Tommelein and Ballard 1997;
Gil et al 2001a). As a result, SCs are excluded from all aspects of design and
obliged to build what has been documented in contracts. Thus, their knowledge
seldom gets leveraged in early design phase.
Gil et al (2001b) illustrate three alternative contractual arrangements
between client, general contractor, designers and SCs. These are (I) design-
bid-build, (II) design-build contract with general contractor (III) design-build with
SC. (see Figure 3.1). The latest type of contracts may help to early integrate
SCs in the design phase as it builds direct relation with the client from the
project inception. Nevertheless, Gil et al (2001b) state that clients still may able
to involve SCs when using other alternative contractual arrangement by asking
SCs for design assistance.
Chapter Three Early Involvement of SCs in Construction Projects
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Figure (3.1) – Alternative Contractual Agreements with SCs (Gil et al 2001b).
Additionally, the client may nominate a specific SC to help designers in
developing the design solution. Thus, the general contractor, during the
implementation phase, does not have the opportunity to select another SC for
that specific work (Gil et al 2001b). Tommelein and Ballard (1997) also state
that clients in large projects may require that a certain percentage of the work
be subcontracted out to SCs in order to give smaller companies an opportunity
to participate. Thus, clients structure contracts so as to promote SCs early
involvement in design.
3.6 Communication Systems
In order to gain knowledge sharing between designers and SCs, effective
communication that enables SCs to better understand designers’ intent is
paramount. Good communication may open the room between both parties to
discuss design alternatives and can help to make accurate estimation. Gil et al
(2001b) highlight the following communication mechanisms between SCs and
designers: (i) promote meetings between SCs and designers, (ii) co-locate SC’s
representative to work together with designers in the design office, and (iii)
promote meetings between SC and its suppliers. These meetings should be
coordinated to be open and effective. They encourage face-to-face
Chapter Three Early Involvement of SCs in Construction Projects
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26
communication which may include essential non-verbal cues that would
otherwise be absent by using other communication mediums. Short et al (1976)
conclude the following list of cues:
Mutual attention and responsiveness. For example, in order to provide
continuous evidence that the other is paying attention, he will respond by
nodding his head or by making gestures.
Channel control. For example, head nods and eye movements are used
in determining who shall speak and for how long.
Feedback. The speaker needs to know how others are reacting to what
has gone before. If the visual channel is locked out, the speaker must
wait for a verbal reply from the listeners before he receives any feedback
on his remarks.
Illustrations. Often, speech is accompanied by hand movements that are
used to illustrate an object or action, for emphasis, or to point to objects.
The clarity of the message will be improved by gesturing.
Interpersonal attitudes. Non-verbal cues can indicate sudden changes in
a relationship, for instance the change from a relaxed to a more formal
posture. Non-verbal cues also can express the speaker's affective
reactions or true emotions in what may be verbally a completely
emotion-free statement.
Emblems. This term refers to gestures being used instead of a word. For
instance, a head-shake instead of speaking out the word 'no'.
In addition, using existing and emerging ICTs (e.g., project extranet and e-mail)
in construction projects may ease communication between project participants
(Gil et al 2001b).
3.7 Incentives to Promote SCs Early Involvement
SCs should have incentives to share knowledge at early design stage. In
manufacturing, ESI emphasizes on building long-term relationship based on
qualitative rather than quantitative criteria.
Chapter Three Early Involvement of SCs in Construction Projects
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Similarly, practitioners in construction industry are exploring methods along
the lines of what was done in manufacturing to promote good relationships
among project participants. Partnering and long-term relationship have now
become widespread in use to build good relationship between project
participants (Tommelein and Ballard 1997). Building long-term relationship with
SCs should be fostered and designers should reduce their pool of SCs. By
doing so, SCs will be encouraged to share their knowledge at early design
stage as they know that their contribution will be rewarded with further work in
the future (Gil et al 2001b).
3.8 Involving SCs at Early Design Stage: Benefits and Obstacles
Practitioners have investigated the pros and cons of ESI in manufacturing
(Clark 1989; Hartley et al 1997; McGinnis and Vallopra 1999). They also
discussed the impediments that affect this process (Wognum et al 2002; McIvor
and Humphreys 2004). Involving SCs in early design stage is still in a state of
evolution and development and may not be easy to accomplish. It carries
advantages and disadvantages, obstacles and problems, benefits and gains
that have not yet been researched. Guided by the principles of ESI in
manufacturing, these issues will be the focus of next chapter.
Chapter Four The Case Study Analysis and Findings
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C h a p t e r 4
THE CASE STUDY ANALYSIS
AND FINDINGS
4.1 The Case Study
In order to gain better understanding about the phenomenon of early SCs
involvement in design phase, the research utilizes the exploratory case study
method. It aims at defining the research questions through empirical inquiry that
investigates this contemporary phenomenon within its real-life context. The
main source of data collection was mainly based on face-to-face interviews and
direct observation. Specifically, this study is based on open-ended types of
questions interviews. The interviews were conducted with the RBS project
manger, the RBS architect, Modular design manager, and Modular director.
Secondary data sources such as companies’ website, documentation, and past
researches were also used.
The research questions were divided into three main parts: (1) Identification
of the advantages and disadvantages of early Modular involvement during the
design phase; (2) identification of the impediments hinder this integration; and
(3) addressing the type of knowledge associated with the integration process.
The questions of the interviews were tailored around these main topics to gain
different perspectives from different project participants about the research
questions.
Prior to the interviews, Mr. Eric Dean, the Managing Director of Modular,
and Mr. Terry Pye, Modular Design Manager, have provided me with the RBS
contacts who played a significant role in the integration process. They put me in
contact with Mr. Graeme Macmillan, a Mace Package Manager, and with Mr.
Nick Gunn, the RBS Architect. Interviews guidelines were constructed and sent
Chapter Four The Case Study Analysis and Findings
A. Abu-Zeineh
29
to respondents in Modular and RBS project team prior to the interviews to make
them aware of the type of questions to be asked. Appendix (A) shows the
interview guidelines designed for Modular and RBS design team.
Four interviews were conducted and all were tape recorded. The following
table lists the project participants whom I interviewed and their responsibilities:
Name Role Company Responsibility
Eric Dean General
Manger
Modular Manages the design and the
production processes in Modular.
Terry Pye Design
Manger
Modular Manages the design process in
Modular and acts as a liaison
between Modular and RBS project
team.
Graeme
Macmillan
Package
Manager
Mace Ltd. Manages, procures, and delivers
specific construction elements in
the RBS project including the
toilets package.
Nick Gunn Architect (AJV) Michael
Laird Architects
and RHWL
Architects.
Develop the RBS scheme design.
He plays significant role in the
early collaboration process with
various project participants
including SCs.
Table (4.1) - List of the Case Study Interviewees
4.1.1 The RBS Project
The case study is based on an analysis of the world headquarter of Royal Bank
of Scotland (RBS) construction project in Edinburgh. Early SCs involvement
has been adopted during the RBS design phase. Practitioners working for
different companies involved in the RBS project delivery have been
interviewed. Specifically, the interviews were conducted with Modular, Mace
Ltd., and the joint venture architects Michael Laird Architects and RHWL
Architects.
Chapter Four The Case Study Analysis and Findings
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RBS is the new worldwide headquarter based in Edinburgh. It is considered
as one of the major construction projects in Scotland. The objective of the
project is to move all the small offices which are in the central of Edinburgh out
into a one site.
The project occupies a brown field site which was originally the Gogurburn
Mental Hospital. The project is strategically located in a highly landscaped
environment on the main road that links Edinburgh city with its main airport. It
consists of seven three-high-storey buildings based around the main road. The
project occupies about sixty acres of land and will cost around 360 million
pounds including the cost of the land. Around 3500 employees are currently
working in the project construction.
RBS has selected the construction management (CM) procurement route
to procure the buildings. Mace was appointed to lead the project design and on-
site construction. The project has been broken down into packages which were
awarded to the trade contractors and specialists by various procurement
routes. The project management was responsible for selecting the trade
contractors who are executing the site works. The architects and cost
consultants worked under a direct supervision of the project management to
develop the final project design and keep it aligned with the proposed budget.
Figure 4.1 depicts the RBS contractual structure. It illustrates that each party
has signed a direct contractual agreement with the client. The solid lines show
the contractual relationship while the dashed lines show the functional and
collaboration relationships.
4.1.2 Companies’ Profiles of the Case Study
Mace Ltd.
Mace is an independent management company works predominantly in the
property and construction sector. Its business is the management and delivery
of the design and construction processes from inception to post completion
aftercare. They operate internationally, throughout Europe and the Middle East
Chapter Four The Case Study Analysis and Findings
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31
and offer a broad range of services such as construction management, project
management and construction consultancy.
Figure (4.1) – RBS Contractual Structure
Mace is involved in RBS as a design, construction and project manager. The
project has been divided into specific construction elements and grouped in
packages. Each package consists of three to five elements depending on the
complexity of the job. For example, the package may comprise of the toilets
blocks, joinery and MEP (Mechanical, Electrical, Plumbing) trades. Generally,
CLIENT Royal Bank of Scotland RBS
Design Consultants
Architects JV - (Michael Laird
Architect / RHWL Architect)
Mechanical &
Electrical Design - (WSP Group)
Structural Design –
(Anthony Hunt Associates)
Cost Consultants Doig and Smith
Project Management / Construction Management
Mace Ltd.
Works Package
Contractors and SCs
Contractual Relationships Functional Relationships
Chapter Four The Case Study Analysis and Findings
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32
the package manager’s role includes procuring, managing and delivering
specific elements within his package. Mace is also responsible for the overall
coordination of the activities of the trade contractors but is not liable for any
failings on their part.
Michael Laird Architects and RHWL Architects (AJV)
Michael Laird Architects is one of Scotland’s leading architectural practices
based in Edinburgh. They entered into Joint Venture agreement with RHWL
Architects in London to carry out the RBS project design. They developed the
scheme design according to the client requirements and conducted a full scale
investigation about base manufacturers, suppliers that could carry out on-site
works. They worked under a direct management from Mace to fulfill their duties.
The architect actively collaborates with SCs who were involved during the
design stage as he believes that they have significant design inputs.
Modular Ltd.
Intelligent Modular Solutions Ltd. has recently been re-branded from Oakland to
Modular to reflect the continuing change in the core business of the company
from a fitting-out and specialist joinery contractor to a design-led high tech
manufacture-based organization. Modular is now specializing in computer
aided manufacturing and engineering bespoke interior design of prefabricated
products.
Because the construction industry is moving towards off-site and
prefabricated products, Modular has developed a new system for designing and
prefabricating toilets blocks. In addition Modular is currently developing a wall
system where large-scale walls up to 6m high can be produced. The system is
highly mechanized and has a lot of advantages over the traditional on-site
construction methods including: (1) Precise dimensions, the system takes out
human error elements of on-site construction, as it replaces the traditional
sequence fit out activities (e.g., building the wall, plumbing system, tile fixing),
with finished product; (2) Very high standard of quality control, Modular’s
Chapter Four The Case Study Analysis and Findings
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products is factory-based which makes it easier to get higher quality than site-
based construction elements; (3) Reduce lead times, it cuts down the time
needed to get the final product assembled on-site by approximately 40-50%
depending on the site condition and job complexity. However, the cost of the
product is 5-10% higher than the traditional approach.
Prefabrication is regarded as a solution to provide better controlled
environments over construction sites. Usage of Modular’s prefabrication
technology has resulted in substantial savings in both construction and
operating costs because of the system’s superior quality and efficiency.
4.1.3 Why Modular?
Effective collaboration exists between Modular and clients’ consultants in all
construction projects that Modular involved in. Their unique product places a
new dimension in their work strategy, as they are currently acting as a specialist
contractor. Designers have perceived the necessity to integrate Modular at
early design stage because it has the ability to develop creative solutions and
has better knowledge about their products and installation processes.
Moreover, Modular has experienced design manager and director who are
responsible for interacting with and influencing clients’ consultants as well as
facilitating the collaboration with them during the early design stage. They
attempt to seek a mutually consolidated design suitable for both Modular and
clients.
I personally involved in preparing a research about Modular processes. I
realized then that their current successful collaboration with the RBS design
team forms a fertile sphere to investigate the phenomenon of early
collaboration between SCs and designers during design.
4.2 Modular System
Modular has the following main processes: in-house design; manufacture and
assembly. The prerequisites of the processes are reliant on effective supply
chain management. Moreover, inventory management of raw materials and
Chapter Four The Case Study Analysis and Findings
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other auxiliary components is extremely important. Modular process maps are
shown in Appendix (B).
The major raw materials are prefabricated cement-particle boards, natural
and artificial stones for wall cladding and steel connector bars. Modular
apportions the provision of materials to multiple upstream suppliers to achieve
better prices and quality and maintain continuous flow in the supply chain.
4.2.1 Modular Design Process
The prime objectives of Modular are to assemble the toilets on the construction
sites with minimum additional reworks and timescale. Therefore, high accuracy
is crucial in design as well as in manufacturing. The design team is responsible
for designing the right elements of the toilets with accurate dimensions.
Incorrect designs can lead to erroneous production which may incur extra cost
of retrofitting the defected components. Also, the client’s consultants need to
provide precise design information and accurate fitting positions to Modular
design team (MDT) for better and comprehensive design development.
However in general practice, the clients are unable to provide accurate design
information in the conception stage of projects due to uncertainties associated
with the project specifications. Effective early collaboration between the clients’
designers and MDT at design stage of a project can reduce these uncertainties.
MDT develops design manual for every toilet. It consists of two main parts:
Part 1 consists of six pages report that is sent to the client’s consultants. This
report contains the toilet plans, elevations, and sections on a large drawing
scale. The second part consists of very detailed drawings for every panel. This
part is mainly utilized during manufacturing and assembly processes.
The followings are the main steps that are followed by MDT in toilets design:
On-site survey: Draftsmen carry out on-site survey to collect accurate
dimensions for the toilets elements as well as the fittings’ positions and
cuts. Precise drawings provided by clients’ architects can significantly
help in this stage.
Chapter Four The Case Study Analysis and Findings
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Agree the Final Design: After getting approval on the final design, MDT
produces their initial detailed drawings (Part 1). The drawings are
discussed with the client’s consultants and the final shapes, details and
specifications are approved. There is a flow of information between
Modular and the client’s architects to get their approval on part (1).
Detailed Drawings: Having obtained the approval for the design, MDT
starts working on Part 2 of the manual. During the design process, the
client may seek requests for information (RFI’s) which may result in
further discussions with the client side. The designs are subject to
changes due to uncertainties inherited in the construction and the client
needs. MDT uses AUTOCAD, INTELL (Smart) software in the design.
Design Amendment: As per new changes, MDT amends both parts of
the design manual and resends (Part 1) to the client to acquire the final
approval.
Joinery Drawings and Design Finalization: The designers provide a set
of detailed drawings of the joinery works for the toilets. The drawings
form a part of the design manual. The drawings are sent to the client
for approval. The stage of obtaining the final approval is called Status B
which implies that the client has approved the whole design. MDT
finalizes the design as per project plan.
Cutting List: MDT prepares a cutting list which includes the panels’
detailed dimensions to be used in the manufacturing phase. The
cutting list consists of detailed tables which contain the boards and
stones dimensions, shapes, cut sizes, grooves’ dimensions and other
information required by manufacturing.
4.2.2 Modular Manufacture Process
The manufacture system comprises of a series of processes which are
implemented to produce desired quality panels as per given design
specifications. This includes:
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Cutting of Cement Particle Board: The basic raw material required to
initiate the manufacturing is high quality 16 mm thick Cement Particle
Board known as VIROC. The cutting list (CAD information) is
transferred from MDT to manufacturers, where the respective cutting
information is written down on the respective boards. The Beam Saw
machine is used to cut the boards to the desired sizes.
Bonding & Sealing: Three cement particle boards of equal dimensions
are bonded together with glue and are passed through a Press to
ascertain firm sticking between the panels. After Bonding, the thickness
of the bonded panel would be 48mm for wall panels and 32mm for floor
panels of the bathrooms. The bonded boards are sealed together with
a sealant which establishes a balance in the boards and also
eliminates the environmental moisture out of the Board panels.
CNC operation—VIROC: The CNC operation at this stage drives the
entire manufacturing. Double bedded CNC is programmed to generate
holes, groves and cuts in the bonded boards for connecting systems of
the toilets such as pipe fittings, plumbing and joinery.
Stoning: At this station, cutting list of the stone is prepared according to
the precise dimensions of boards upon which the stone is to be
bonded. A 12 mm stone is cut on Beam Saw as per cutting list and is
sent for bonding onto the VIROC.
CNC final operation: After Bonding of stone onto the VIROCs, the
complete toilet panel is operated through a CNC, which precisely aligns
the edges of stones with the edges of VIROCs. (see Figure 4.2).
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Figure (4.2) - Stone Panels Bonded to VIROCs
4.2.3 Modular Assembly Process
Assembly is the final stage in Modular factory before dispatching the toilet kits
to construction sites. It comprises of:
Pre-assembly in Modular workshop: Pre-assembly in the factory is the
first step in the assembly system. The finished panels in manufacturing
floor will be directly sent to assembly shop for pre-assembly. Steel bars
are screwed up firmly on the vertical sides of each panel to connect
them together. The panels are erected and fixed together to build a
temporary toilet so as to test whether the total quality of assembled
toilet meets the requirements of the client.
Disassembly, packaging and dispatching: The temporary assembled
toilets are disassembled into panels for packaging. The panels then are
packaged and made ready for dispatching.
Assembly on construction sites: On arrival at construction sites, the
panels are unpacked in sequence according to their part numbers, and
then on-site assembling starts using a multipurpose vacuum machine.
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4.3 Types of SCs in RBS
Mace and the architect classify the RBS’s key specialist contractors, according
to their products nature and degree of competition, in two categories:
System suppliers - these are manufacturing system suppliers provide
assembled systems rather than individual construction components.
Their products are almost unique. Few competitors often exist to
compete against each other. For instance, Modular belongs to this type
of suppliers.
Part suppliers - these are typical specialist contractors who are
responsible for constructing and assembling specific parts and
components on-site, such as steel, HVAC, and roofing contractors.
Many part suppliers are often available to compete against each other.
The difference between system and part suppliers is that the latter produce a
composition of parts taken together on-site according to the design
specification while the former produce fully integrated prefabricated systems.
4.4 The Mechanism of Involving Modular in RBS
Mace has identified Modular as the most likely supplier for the toilet package in
RBS project since they provide high quality product with more cost and time
certainty. The client invited Modular to gain more information about its new
system and the accompanied advantages and disadvantages before taking the
decision to proceed in integrating Modular during the scheme development
phase. Modular was involved in RBS 18 months prior the start of the toilet fit-
out. They developed the design layout of the toilet blocks in conjunction with the
architect, the cost manger, and the project manager. There was a systematic
process of informing the designers and getting approval for every specific detail
in the toilets design.
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4.4.1 The Contractual Agreements
Mace has identified four different procurement routes in RBS: (1) single-stage
competitive tender; (2) two-stage competitive tender; (3) single-stage single
source tender; and (4) two-stage single source tender. Two-stage tenders are
the predominant route to involve specialist contractors during design. Mr. Nick
Gunn mentions some factors that influenced the procurement route selection
process. These are: type of contractors, contractors’ capabilities, reliability, and
job complexity. He believes that single source two-stage agreement is
appropriate when the job is unique and few specialist contractors can do the
same.
Mace has based their procurement routes selection process on the type of
specialist contractors as following:
System suppliers - Competitive tenders are rarely used to procure
systems since few competitors are available. Single source two-stage
tender was the predominant route to procure such kind of works.
Part suppliers - Competitive two-stage tenders are commonly used to
procure such parts as many contractors offer the same products.
During the first tender stage most design problems are sorted out and a final
design is developed. The architect employs various design inputs from the SCs,
the cost consultants, and the project managers to develop the base design. A
design agreement or consultancy agreement is signed for stage one. The
agreement covers SCs for any cost incurred during this stage. Further, it lays
responsibility on SCs to share their knowledge with the designers to develop
the final design.
Modular produced a mockup to get approval to proceed in their design after
the design agreement had been signed. At the end of phase one, the design,
cost, schedule and the implementation method were identified. The second
stage is the implementation phase where a traditional trade contract is signed
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for manufacturing and on-site assembling. Two-stage contracts enable the
clients’ consultants to integrate SCs’ design knowledge in their solutions.
4.5 The Objectives of the Early SCs Involvement
The objectives of early SCs involvement in RBS design phase vary between
project participants. Surprisingly, every party has its own objectives that are
different from others although some common objectives are observed. Mr.
Terry Pye considers that the early integration is imperative for Modular success
for the following reasons:
Eliminate competition – He believes that Modular early involvement
enables them to eliminate competitions because they designed their
product in a way that no other suppliers can compete against them.
Influence the design – Modular seeks to standardize its product as much
as possible to make it more economic. Their main objective is to develop
a robust design that can be used in more than one version of toilet
blocks and thus redesign is only needed for specific small parts.
Eliminate on-site construction problems – Because Modular’s product is
factory-based, all design problems, such as plumbing, electrical
equipments, and tiles fixing can be sorted out during design and prior to
manufacturing.
Avoid design rework - Modular is encouraged to share the early design
efforts to guarantee that the developed design is a final version and
reworks will not be encountered after manufacturing starts.
Early knowledge about the project – Being a part of the development
team from the design inception has helped modular to gain detailed
knowledge about RBS and the personnel involved. Mr. Terry believes
that more effective communication occurs when having early information
about the project and the people involved.
Building strategic relationship with the client and the design team – This
can be classified as a strategic objective. Mr. Terry Pye believes that
their early involvement opens the opportunity to work with the same
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design team members in future projects. In addition, he states that being
responsive during the early design process helps to develop strategic
relationships with clients, architects and project managers.
Moreover, providing the designers with valuable information during the design
phase may enhance the competitive positions of SCs and raise their level of
involvement at early design stage. This is further reinforced by a comment from
Mr. Eric Dean:
“Our involvement in the design phase becomes imperative. I expect the extent
of our involvement in the design process to increase because we possess
valuable information.”
Excerpt from Interview with Modular Design Manager
On the contrary, the project manager and the architect state that the main drive
behind involving SCs in the design phase is to acquire as much as possible of
cost, time and quality certainty. Mr. Graeme Macmillan believes that involving
production companies in the design phase helps to achieve 100% design
before switching to the implementation phase:
“…it is all about achieving cost, quality and program certainty as much as
possible. The objective is to have 100% design before the works start on-site. It
is not to achieve 75% design, which normally happens in construction projects,
and then start construction.”
Excerpt from Interview with the Project Manager
Moreover, the architect believes that having specialists’ knowledge in the
design eliminates a lot of design and construction risk before moving to the
implementation phase. He stated that architects are not specialists in toilets’
design and other specialized building parts. It is difficult for them to develop
design for such elements without having design inputs from SCs.
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4.6 Knowledge Exchanged and Communication Systems
Interviewees were questioned on the types of information exchanged in RBS
and types of communication links used.
4.6.1 Communication Systems
The first issue dealt with was the type of communication systems used between
RBS and Modular. The interviewees agreed that efficient collaborative design
requires more communication between team members. Mr. Nick Gunn believes
that communication is essential between the architects and the SCs during the
design phase. He stated that the process is about leveraging SCs knowledge
early on which needs channels to be swapped.
The project management was very keen to develop a high collaborative
design team whose members are tied together. The design team is based on-
site where a space was offered for every member. Modular design manager
has spent six months onsite working with the architect and Mace to develop the
final design. The project management offered Modular the whole facilities such
as private computer machine, access to project printers, and personal e-mail.
Admittedly, being collocated during the development stage facilitates face
to face contact which is the richest communication medium. Face to face
communication keeps communication cycles extremely short and provides
many cues and verbal modalities, such as facial expression, direction of gaze,
and body language or posture. Mace attributes the success of the integration
process to being on the same place and having direct interaction between the
design team members. Mr. Nick Gunn stated:
“…it is an advantage having everybody based in the same building on-site.
Being in the same place has helped us to know each other well, tackle design
problem in more efficient way and get instant feedback for any problem we
encountered.”
Excerpt from Interview with the Architect
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In addition, frequent visits between design team members are essential to
enhance the communication. For example, RBS design team visited modular to
approve the prototype which was developed at early design stage while
Modular manager and other personnel visited RBS project on weekly basis to
attend meetings.
Beside meetings and visits, current Information and Communication
Technologies (ICTs) offer more and more possibilities to support
communication. Interviews revealed that various communication systems have
been used in RBS such as Electronic Data Interchange (EDI) and Project
Extranet.
Extranet usage is the most prevalent tool used in communication between
RBS project participants. BIW project extranet system has been used by
Modular and the design team. It endows them the opportunity to share, modify,
store, organize, and create a range of documents including Request for
Information RFI, change request, maps, photos, scheduling, and drawings.
Modular’s engineers upload their drawings for the toilets blocks on the main
server which can be accessed by the design team members. Physical drawings
are rarely issued. Interviewees agreed that there are major advantages of using
project extranet in RBS. The following list summarizes these advantages:
Lower capital cost as access to the internet is all what is required.
Provides up-to-date information.
User-friendly interface.
Quick system.
Information security.
Easy to capture changes and know who is responsible for these
changes.
Post elimination and less papers.
Enhance the collaboration between project participants.
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The architect states that the key advantage of using extranet is that every party
can look at others’ works and adapt their work according to the new uploaded
information. Comments or new information can be placed on the main server
and then it can be easily integrated in the design. However, he stated that
although the usage of extranet was prevalent, there were always usage of other
systems such as faxes, e-mails, and telephones because they are easier, faster
and offer instant information and feedback.
4.6.2 Types of SCs’ Knowledge
Interviewees believe that the main drive behind SCs early involvement is to
leverage their knowledge at the early design stage. Generally, there are two
kinds of knowledge: tacit and explicit knowledge. Tacit knowledge is embedded
in individual experiences and involves intangible factors, such as personal
beliefs; it is hard to articulate with formal language and is commonly captured in
the term “know-how” (Nonaka 1991). In contrast, explicit knowledge can be
articulated into formal language, including grammatical statements,
mathematical expressions, specifications, and manuals; it can be processed by
a computer, transmitted electronically, or stored in databases.
Both SCs’ explicit and tacit knowledge are important during the design
phase. While explicit knowledge can be easily shared between people, tacit
knowledge is not easy to be transferred unless it is converted to explicit.
Information exchanges between Modular and the architect varies between
explicit and tacit. I asked the interviewees about the types of knowledge that
Modular contributes during the design phase. Interestingly, some types of
knowledge are observed to be important for one party but less important for
others. For example, getting the information regarding cost and time from the
SCs is high on the priority list of the project managers whereas types of
materials and technical knowledge were found more significant for the architect.
I spell out the types of knowledge that SCs can contribute to the early
design stage. I give examples about Modular for illustration.
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Materials specifications: It includes information about the
appropriateness of the materials and their capabilities and problems. For
example, Modular has not recommended marble-based tiles for toilets
floors as urine stains can easily change the color of some types of
marbles.
Methods statement: It is about informing the project manager and the
architect how the product will be put in. For example, Modular has given
information about their lifting methods and space needed for the product
and the machine used in assembling.
Cost and time: Modular provides the design team with the cost of their
product. They also inform designers about the product lead-time and
production cycle time.
Technical suggestions: Modular has provided designers with information
about space design required to allow construction to proceed efficiently.
They also provide them with their knowledge about plumbing, ventilation,
and electrics (e.g., types of urinals, washbasins, and lighting types).
Interviews revealed that the architect has little information about these
issues. For example, Modular asked the architect to move some walls
for a specified distance so they could use one large panel instead of two
panels. One panel makes it more economic for Modular to produce and
gives the wall more stability from an engineering point of view.
Process capabilities: Modular gave designers information about their
new system and its capabilities and adaptability to fit various interior
design purposes.
Product constraints: these include the constraints in manufacture,
assembling, getting raw materials from suppliers, transportation, and
labor availability.
Market information: This includes information about the latest
technologies in construction and new methods of implementations.
Maintenance & Serviceability: Information about how to maintain and
service the product is often given to the design team. For example,
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Modular informed the RBS designer how to service and maintain the
toilets including type of cleaning materials to be used, methods of
replacing specific plumbing and electrical defect parts.
Interviews revealed that the amount of information given by SCs to designers
varies in function of: (1) Level of competition: SCs are less willing to exchange
knowledge during the design phase when other potential contractors compete
against them during the implementation phase. (2) Job complexity:
prefabricated products require that detailed information to be shared with the
architects. (3) Commercial value: SCs are more willing to share their knowledge
during the design phase if the commercial value promises a relatively high
profit. (4) Relationship with designers: long-term relationship and trust
encourage SCs to offer more knowledge to the design. (5) Operation or
maintenance contract: The RBS project manager believes that SCs have more
enthusiasm to share knowledge with designers when they are promised to
maintain or operate the product during the operation and maintenance period.
4.7 Impediments to Effective Early SCs Involvement
The interviews revealed a number of barriers in involving SCs early on in
design.
4.7.1 Two-stage Contract Problems
Contractual arrangements influence the extent to which SCs participate in
design. The case study revealed the use of two-stage contracts to enable SCs’
early involvement. However, some risks and problems are hard to cover in such
type of contracts. The separation between design and implementation
agreements has caused many problems in RBS. These problems can be
illustrated as follows:
Extent and accuracy of SCs’ information. When SCs are involved in first
stage they have to share knowledge with designers. However, the
information they tell is less when the probability of winning the stage-two
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tender is low. One example given by the project manager is about the
cost accuracy. He stated that a SC involved early in RBS shared his
design cost with the design team. His cost was extremely competitive
and gave him the chance to win the implementation stage. Later, it was
discovered that the cost given during the design was unreasonable.
Risk of SCs failure. The SCs may perform effectively during the design
phase but fail to fulfill their on-site tasks during implementation due to
lack of experience, material, and budget. Bringing another new SC
would also be risky because he may fail to understand the design
developed by the former SC. Admittedly, depending on one contractor
for both stages exposes the project to same risk. The project manager
stated that looking for new SC and making him aware about the on-site
processes may take months, while the architect added that the design
may be reworked to fit the new SC’ capabilities.
Risk from client side: SCs who are selected during the design phase
may not have many incentives to share all their knowledge unless they
guarantee that they will be awarded the implementation stage. They are
afraid of losing their competitive knowledge for other SCs who work in
the same field if the client chose other SCs for implementation. The RBS
project manager stated that some SCs refused to provide the design
team with information about their onsite installation processes and raw
material sources. They claimed that these issues are private and do not
benefit the design development. They started, however, to give
designers this information when they guaranteed the second stage
tender.
4.7.2 Cultural Problems
Every company has its own culture that comprises a set of norms, values,
assumptions, tangible signs, members’ behavior, structures, processes, and
ways of doing works. Basically, organizational culture is the personality of the
organization (McKenna 2000). The early SCs involvement in the design phase
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places some challenges in the organizational culture. As people from different
companies and with different cultural attitudes have to work together, problems
on the individual and company levels may be encountered. On the individual
level, functional differences between collaborating employees may lead to
problems:
“I do not know much about Modular... they shared their knowledge and
suggested us to modify specific parts of our design. I was reluctant to change
anything in the design. They had their own opinion from a production point of
view and we had our own opinion from architectural point of view.”
Excerpt from Interview with the Architect
In addition, differences in technicality and construction processes may also
cause problems.
“There is a thinking difference. The design team and people on-site had little
knowledge about our system [Modular]. Designers saw new construction
process on-site; it is quit different from the traditional construction process.
Some problems have been encountered with the project manager and the
architect on methods of implementation and types of material used. They had
to adapt to our new system.”
Excerpt from Interview with Modular Design Manager
On the company level, cultural differences exist in the nature of companies’
work. The integration of contractors in the design phase requires them to
perform as design consultants as well. Otherwise, problems can arise.
“During the design phase, we expect SCs to act as consultants more than
contractors. Many of them still face tremendous problem to switch between the
two roles and find it difficult. Their main focus is how to make profits. This
happens because most of today’s SCs worked as pure contractors. They used
to receive the design and execute it on-site.”
Excerpt from Interview with the Architect
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All interviewees stressed that mutual trust in each other’s knowledge, skills, and
professionalism, as well as open communication, understanding the design and
implementation processes, and willingness to build long-term relationships can
help solving these cultural problems.
4.7.3 Communication Problems
Opportunities to support communication can be fostered through personal
visits, working in the same office, and using current ICTs. Interviewees
identified a number of communication problems that might hamper the early
collaboration process. Specifically, significant communication problems may
result from the use of ICTs. Although a project extranet has many advantages,
interviews revealed some problems in using it. For example, Mr. Terry Pye
stated that the huge number of project drawings places complexity in the
numbering and the uploading systems. If the system finds a problem, such as
numbering problems, it rejects the drawings and it is difficult then to understand
why they were rejected. Additionally, the extranet takes out human involvement
and face-to-face interaction.
RBS design team members believe that ICTs can not completely replace
face-to-face communication, but they extend the possibilities to exchange
information. They insist that face-to-face interactions and sitting around one
table to discuss the design issues is more efficient for knowledge exchange and
early collaboration.
Moreover, interviewees mentioned other communication problems. The first
problem mentioned is caused by inexperience of managers and engineers with
the possibilities of extranet. A second problem is that parties are reluctant to
exchange information on a subject that is still uncertain. A third problem is that
SCs may work for more than one client. Each may have a different
communication system. The SCs have to adapt to every client’s system which
make it often difficult for them.
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4.7.4 Other Problems
The lack of competition
This problem emerged in RBS when the project management relied on a single
source to procure specialized component. Sourcing products from a single
supplier is often used when there are no competitors able to provide the same
or better products. Monopoly and opportunism are the main problems that have
faced RBS when they depended on one SC during the design phase. This can
be illustrated by the following statements:
“…you need to have at least two SCs tendering for the same package.
Otherwise, a lot of obstacles will emerge in terms of achieving best value for
money. The main reasons behind the problems are monopoly and
opportunism… a single SC can apply changes without reasonable reason
because he knows that everybody relies on him and he is in a strong position”
Excerpt from Interview with the Architect
“Modular got the job without bidding since Modular was the only bidder for
phase two. This was because the design in phase one has been developed in a
way that took the whole competition out. Modular put itself in a situation that
they [RBS designer] cannot choose anybody else.”
Excerpt from Interview with Modular Design Manager
Lack of client support
Although the RBS project management was the initiator of the early SCs
involvement process, the client plays significant role in supporting and
approving the process. The lack of client support for the process may cause
problems. The Client must be informed regularly about the integration process
and the problems encountered. This can facilitate getting the client’s support
and resolve conflicts rapidly:
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“Bringing contactors early on during design to act as consultants is quite new.
Clients support for the process is crucial for its success. They have to
understand the integration process and its advantages. By doing so, it is easy
to convince the client to make changes if any problem emerges in the process
because he knows everything from the beginning.”
Excerpt from Interview with the Architect
Adversarial relationships
Having inconsistent team whose members have adversarial relationships may
hinder the integration and communication process. Design personnel may not
welcome the level of involvement of contractors in design because of the
perpetual contradicting relationships between designers and contractors.
Generally, the architect believes that the adversarial relationship may still exist
in construction projects; however, he added that the relationships with most
SCs do not fall under this type of relationship.
4.8 Pros and Cons of Early SCs Involvement in Design
Early SCs involvement in the design phase entails many advantages and
disadvantages. However, Interviewees believe that the integration process
encompasses more advantages.
4.8.1 The Advantages of Early SCs Involvement
Reduce cost, time and quality uncertainty
Reduce cost and time uncertainty is one of the main drives behind involving
SCs in the design phase. Traditionally, the design is developed by architects
and engineers without having reliable design inputs from contractors in terms of
cost and time needed for implementation. Thus, the cost escalates and a delay
hits the project when construction progresses. Winch (2002) defines uncertainty
as the lack of information required at a given time. It has two main sources:
complexity and predictability. Past experience is a reliable guide to reduce
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uncertainty. Cost and time uncertainty is very high during design. Thus,
leveraging SCs’ knowledge and past experience during the design may result in
reducing cost and time certainty:
“More schedule and cost certainty have been achieved as we worked hand in
hand together during design. We were 100% confident about our cost and
program before construction starts. Modular provided us with the precise cost
and time needed to get their product ready on-site.”
Excerpt from Interview with the Project Manager
In addition, involving production personnel in the design phase grants
opportunities to discuss the design comprehensively to reduce cost, time, and
increase quality. The architect stated that having SCs’ knowledge and
discerning their capabilities during the design phase helps designers to develop
better solutions. He gave an example that Modular has provided the designers
with high quality marble that fit the toilet usage better than that he proposed
initially.
Better control over on-site activities
SCs can provide clients and project managers with valuable information about
their potential on-site activities. For example, Modular provided Mace with
information about their field activities such as the number of on-site labor,
machines, stock area needed for their products, and time required for on-site
assembling. The project manager stated that such information from Modular
and other SCs has helped him to develop an early understanding about on-site
activities, develop smooth project program, maintain on-site workflow without
interruption, and achieve better site coordination.
Improve design efficiency and effectiveness
Interviewees stressed that the traditional approach of having only the designers
work on the entire physical layout without involving production people is simply
no longer viable. Designs are becoming complex and it is impossible for single
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designer to produce an optimum design unless having inputs from the SCs.
Design team which involves SCs is considered as a viable alternative. SCs’
design inputs provide engineers and designers with the efficiencies needed to
produce cutting-edge designs with less design reworks during the project life
cycle:
“Modular involvement in design resulted in a toilet design that can be easily
executed because it is developed by collaborative efforts… we had no design
reworks during construction.”
Excerpt from Interview with the Architect
Shift detailed designs to SCs
Adopting early SCs involvement may shift design tasks and responsibilities
from designers to SCs because the latter know more about their products. SCs
are able to produce better detailed drawings for their products especially those
who produce factory-based elements. During the design phase, designers can
transfer detailing of design to SCs who know better how to do it. This has a
major advantage as early detailed drawings can replace the detailed shop
drawings that contractors often produce during the implementation phase. For
example, the architect stated:
“The burden of preparing detailed drawings for the toilets has been shifted to
Modular. Their early prepared design manuals have saved the project time as
they replaced the shop drawings.”
Excerpt from Interview with the Architect
Getting better SCs’ prices and lead-time
SCs, during design, may have long time prior construction to investigate other
sources of raw materials, new suppliers, and methods of implementation.
Further, when a SC involved in more than one project, raw materials can be
ordered in bulk quantities and early during the projects design. For example,
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Modular had time to investigate other sources for the steel bars during their
involvement in the RBS design phase. They have got better prices from a new
supplier outside United Kingdom. Modular also benefits from their early
involvement in major construction projects in organizing their raw materials
orders. They attempted to prepare bulk orders to reduce the cost and the lead-
time of their products.
4.8.2 The Disadvantages of Early SCs involvement
Eased accessibility for competitors to copy or acquire key technologies
Many contractors may be involved during design, their knowledge and
experience is exposed to each other. This makes SCs less willing to share their
key knowledge with designers because the fear of losing their competitive
advantages for the competitors. Mr. Terry Pye mentioned that he is reluctant to
speak about Modular production processes when other contractors attend the
weekly meetings. He prefers private discussions with designers.
Clients pay a lot of money upfront
Clients often pay architects and engineers for developing design solutions.
However, they need also to pay the SCs when they are early involved. The
project manager stated that RBS paid a lot of money for Modular and other SCs
for their early involvement in design. He considered this as a disadvantage
because a large amount of money has been spent prior construction. He added
that clients often prefer to see their expenses result in physical buildings rather
than mere drawings.
Longer design lead-time
The time required by the designers to develop the entire design layout without
involving SCs is often short. The architect believes that the design lead-time is
longer when SCs are involved because designers have to deal with many
design inputs from various SCs:
Chapter Four The Case Study Analysis and Findings
A. Abu-Zeineh
55
“SCs coordination consumes time and efforts which are not otherwise spent if
we [designers] develop the design unilaterally.”
Excerpt from Interview with the Architect
Despite these disadvantages, early SCs involvement during design phase is
regarded as an added value tool. Interviews showed an enthusiasm to push
such integration forward in future projects.
Chapter Five Conclusion
A. Abu-Zeineh
56
C h a p t e r 5
CONCLUSION
5.1 Conclusion
The findings from the case study show that early SCs involvement in design
offers many advantages for clients, designers, and SCs. The research reveals
that leveraging SCs’ knowledge during design is the main drive behind adopting
the early integration process. SCs’ knowledge can help clients, designers, and
project managers to reap substantial benefits regarding projects’ cost,
schedule, and quality. It reduces the level of uncertainty associated with the
design. It also offers information that can help to improve site coordination and
reinforce the project management. Additionally, SCs may benefit from their
early involvement in investigating design alternatives, and in influencing the
design to meet the capabilities of their products. This can help them to eliminate
the competition and enhance their competitive positions.
Nevertheless, it has been observed that there are few disadvantages and
obstacles that may impede the integration process and influence its
effectiveness. The main problem addressed is the difference in objectives
between SCs and design team members. SCs still regard their early
involvement as a process to achieve private objectives rather than help to
deliver projects according to the common objectives. Aligning SCs’ objectives
according to the client desire is crucial to achieve the optimum benefit of the
integration process.
Additionally, the integration process places cultural challenges on both SCs
and designers. SCs need to collaborate early with designers to develop a single
design solution. This requires them to shift their role from one of contractor to
one of design consultant. SCs still face problems to adapt to work with the
designers. Changes in organizational culture should occur at the company and
Chapter Five Conclusion
A. Abu-Zeineh
57
the individual levels. Training, allocation of appropriate resources can help to
push the process to success.
Moreover the contractual arrangements have been found problematic.
Particularly, two-stage contracts still need improvements to solicit knowledge
exchange between designers and SCs. The separation between the design
and the implementation phase may hamper the integration process to meet its
optimal aims. SCs are less willing to share their competitive knowledge with
designers when they are not confident about getting the implementation stage
contract. Additionally, they still have the fear of losing their competitive
knowledge for competitors during design. This may influence the extent and the
accuracy of their information.
Further, it has been found that vigorous communication is crucial for the
integration success. The research reveals that face-to-face communication is
the richest medium to exchange knowledge early on. ICTs still may not offer the
same advantages that can be offered by direct interactions. Although their
utilization is cheaper, they do not offer instant feedback and group discussion
between the design team members. In addition, although the usage of project
extranet in communication is growing, it still may need improvements to provide
a more congenial environment like that offered by face-to face interaction to
support the early communication between SCs and designers.
This research has also explored types of knowledge that SCs contribute to
design. They include knowledge of materials specifications, methods of
implementation, cost and time, technical suggestions, process capabilities,
product constraints, market information and maintenance and serviceability
information. Designers must be aware about the opportunity that SCs’
knowledge offers to improve their design. Current practices in the construction
industry should benefit from SCs experience and skills to improve projects’
efficiency.
Moreover, the research illustrates that SCs are increasingly involved in
projects’ design phase. Specifically their level of involvement has been raised
because of the increasing of their products’ complexity. Like suppliers in
Chapter Five Conclusion
A. Abu-Zeineh
58
manufacturing, many SCs’ have become systems suppliers because of the
industry needs for finished products and prefabricated systems. However, the
challenge is to improve the early involvement process to enable SCs and
designers to collaborate effectively and align their incentives to meet the project
objectives. Top management support and building trust between project
participants may help to alleviate some problems and perhaps can induce SCs
to share more knowledge. Further, building long term relationship with clients,
designers and project managers may enhance the process efficiency and help
to overcome many obstacles and impediments.
Chapter Five Conclusion
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59
5.2 Implications for Further Research
Early SCs involvement in the design phase has not yet been widely
investigated. This study will hopefully add new ideas to the project
management body.
It is shown through out this study that the early SCs integration in design
has advantages and limitations. The process is still immature and does not
meet its optimum targets because of the lack of process understanding among
project participants and the limited incentives. Research into four main areas is
recommended:
Study the cultural differences between SCs and designers in order to
improve their relationships.
Aligning SCs’ desires with the overall project objectives.
Investigating the incentives needed to better leverage SCs’ knowledge
during design.
Improving the ICTs to provide more social atmosphere to facilitate the
early communication between SCs and designers.
MSc Dissertation References
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Case Study Interview Guidelines for Modular
1. Can you give me brief information about the RBS project?
2. Can you describe briefly your company’s role in the RBS Project and your role in Modular?
3. Who was responsible for integrating MODULAR in the RBS design phase? Who approached Modular from the client side?
4. Can you describe how the integration process has been accomplished? Can you describe the nature of the contractual arrangement between MODULAR and RBS?
5. Do you think that RBS-MODULAR contractual arrangement is appropriate? If no, please give reasons.
6. When did MODULAR sign the contract? (After/Before the integration)
7. Did Modular help the Design consultants before signing the contract?
8. If yes, what were the incentives for MODULAR to get involved before signing a contract? Are the unpaid efforts rewarded?
9. What are MODULAR’s objectives from getting involved at early design stage?
10. Can you clarify who are the personnel involved in the integration process from both RBS and MODULAR sides?
11. Can you describe how the communications between the designers and MODULAR happen? Are the ICTs used in the communication?
12. Do you think that MODULAR has provided the consultants with valuable information / knowledge in the design phase? If yes, please give examples.
13. Specifically, what was the MODULAR’s responsibility in the RBS design?
14. What are the advantages and disadvantages of integrating MODULAR in the RBS design phase? Please give examples.
15. Do you think that the early involvement has helped MODULAR to reduce its product lead-time?
16. Do you think that MODULAR influenced the design? If yes, please give examples.
17. What do you think about the effects of the integration on the RBS project’s schedule, cost and Quality?
18. Do you think the cultural, thinking and context differences between the designer firm and MODULAR have caused problems?
19. What do you think the impact of such integration on the future projects? Do you think that it will enhance the competitive position of MODULAR in the market and affect the relationship with the designers and client for future business?
20. What do you think about integrating Modular in the early design phase and what are your recommendations for future projects?
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Case Study Interviews Guidelines for RBS Design Team
1. Describe briefly your company’s role in the RBS Project and your role?
2. What was your role in integrating MODULAR in the RBS design phase?
3. When have you been involved in the integration process?
4. Can you tell me what was the client’s role in the integration process?
5. Can you describe how the integration process has been accomplished and managed?
6. Do you think that RBS-MODULAR contractual arrangement is appropriate? If no, please give reasons.
7. Do you think that other procurement routes can fit such integration?
8. Modular has helped the Design consultants before signing the contract (stage 1), were there any incentives offered for MODULAR to get involved before signing a contract?
9. What are the client objectives from involving Modular at early design stage?
10. Can you clarify who are the personnel involved in the integration process from the RBS project team?
11. Can you evaluate the communications efficiency between the RBS team and MODULAR? What is your opinion about the ICTs used in the communication? (Specifically, the usage of the extranet)
12. Do you think that MODULAR has provided the consultants with valuable information / knowledge in the design phase? If yes, please give examples.
13. Specifically, what was the MODULAR’s responsibility in the RBS design? How much authority has been given in the design?
14. Do you think that MODULAR influenced the design? If yes, please give me examples.
15. What are the advantages and disadvantages of integrating MODULAR in the RBS design phase? Please give examples.
16. Do you think that the early involvement has helped RBS to reduce the project schedule and provide more control environment?
17. What do you think about the effects of the integration on the RBS overall cost and Quality?
18. Do you think the cultural, thinking and context differences between the RBS team and MODULAR have caused problems? What other obstacles, if any, faced the integration process?
19. What do you think the impact of such integration on the future projects? Do you think that it will affect the relationship with the designers and client for future business?
20. According to your role in the RBS project, what do you think about integrating Specialists contractors in general at the early design phase? What are your recommendations for future collaboration?
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APPENDIX (B)
Modular Design, Manufacture and Assembly Process Maps
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Modular Design Process
Initial on-site survey
Prepare Design Manual – Part 1
Disapproval Discuss design &
Get Client’s Approval
Prepare Design Manual – Part 2
Approval
Check changes and drawings with client’s consultants
Amendment
Needed
Yes
No
Prepare Joinery Drawings
Issue the final Manual
Issue the Cutting list (C.L.)
Send copy of C.L. to the Manufacturing floor
Note: Survey visits are carried
out more than one time during the
process to make sure that any changes on-site are
integrated in the manual
drawings.
Place copy in the
archive
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Modular Manufacture Process
Cutting of VIROC
Bonding & Sealing (VIROC)
CNC Operation-VIROC
Panels without Stoning
CNC Cutting Operation Bonded Panels
VIROC Panels For stoning
Cutting of stones (Beam Saw)
Stone Panels Bonding with VIROC Panels
ASSEMBLY SHOP (Assembly of Panels)
Raw Material VIROC
Raw Material Stones
C.L. (From Design)
Note: Quality is embedded in all process activities.
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Finished panels from
manufacturing
Connector bars from suppliers
Installation of connector bars on the panels
Panels with
connector
Preassembly in Modular workshop
Disassembly
Packaging
Transport to construction site
Assembly on construction sites
Design Manual Replacement from
manufacturing
No
Defected panels
Defected panels
Note: the qualified finished panels are the products from manufacturing. QC represents Quality Control Process. Design Manual will verify the numbering of each panel in assembly.
QC
QC