Transforming Construction?
1 Introduction
The diagram below is a sort of map of our approach to the problem of transforming construction;
it contains all of the key elements of the subsequent discussion.
Thus, the two graphs shown at top left are the starting point:
unpredictability and unprofitability. The three project phases: design,
procurement and construction are split out separately. Within each phase, the
sequences of yellow boxes summarise the current mode of operation of the
industry, with its main consequences. The blue box sequences show how a Building
Information Modelling (BIM) approach might work and the consequences this might
have in each phase. The blue text box at bottom left summarises our argument
about the similarities between the effects EPOS had in retail and how BIM might
evolve in a similar way in construction.
A downloadable version of this image is available at
C3IndustryAnalysis.
Still a big diagram, A3 unfortunately.
Introduction
Most people who do business, either in, or with the modern
construction industry become aware pretty quickly that all is not
well with the industry. Attempts to understand and to solve the
problems of the industry have been many and regular over the past
sixty years or so.
Murray and Langford provides a
useful summary of the most important of these exercises. It's an
important document, and it makes pretty depressing reading. In
summary:
- The reports all identify the dislocation between design and
construction as a key problem; they urge closer integration
within design teams and between designers and constructors.
- They identify short-termist thinking as a strategic industry
problem, and urge major clients, government and parastatals in
particular, to provide long term continuity of work to the industry.
- They identify uncoordinated, incomplete, design information as a
common cause of poor construction performance. The tendency of
clients to want to rush to site is noted.
- They identify lack of management skills as a further cause of
poor performance on site.
- They propose innovative modes of project organisation and novel
forms of contract as a way to overcome these problems.
Perhaps the most depressing thing to note is the extent to which
the reports repeat each other, over and over again, throughout the
period, both in their analysis of the industry's problems and in
their recommendations for improvement. But nothing really changes.
In fact, it's impossible to imagine how something like an
industry, any industry - an entire sector of the economy - might go
about solving these sorts of problems. An industry is not a self
aware entity, capable of autonomous action. An industry is simply
the sum of the individual people who work in it. It is only they, as
individuals, who are capable of change; so it is they, as
individuals, who must be induced to innovate.
This is the challenge. It's easy enough to exhort, bully, even
persuade a few senior executives in the major firms to behave more
collaboratively with their clients, their consultants, trade
contractors, and even with each other. But to drive such a change of
approach down through the ranks, to the muck and bullets level is
impossible, as the history of the past sixty years demonstrates.
Instead, ways must be found of motivating fundamental change in
the way in which the project level, operations people in
construction go about their business. If sustainable improvement is
to come about, it must make things obviously better for people at
this level.
Start by asking "Where does it hurt?" The two really defining
characteristics of the modern construction industry are the
following:
- Construction is one of the least profitable major sectors
of the modern economy.
- The industry seems to be pathologically incapable of completing
projects predictably - on time and on budget.
These two features of the industry - unprofitability and
unpredictability - really do hurt people in a personal way. Knowing
that the margin between profitability and loss is almost zero, means
that every project team member is constantly aware of the extent to
which his company depends on him for its survival. And being
continuously aware of the likelihood of over-running budgets and
schedules is a hugely stressful state of mind. The combination of
the two means that people are forced to behave defensively above all
else. It leads directly to the confrontational, litigious attitudes
apparently endemic in the industry, and it poisons the industry's
relations with the outside world. This is pretty personal for most
construction people.
So anything that might reasonably be expected to ease this
condition is likely to be adopted positively. It is almost certain
that Building Information Modelling - to be discussed in more
detail later - is such a development.
The central issues in this analysis - profitability and
predictability - are linked in fairly obvious ways, at one level; if
a project runs late, that is, behaves unpredictably, preliminaries
rise and eat into the anticipated margin. This is the obvious
connection. However, the two are also linked by the fact that they
are both caused in large part by the same underlying phenomenon -
the industry's inability to manage project information effectively.
Construction is an exceptionally information intensive industry.
The CICC project in 1996 showed
that upwards of 500 individual documents, or documents about
documents, are generated for every million pounds worth of project
value. And a typical £50M project may involve upwards of fifty
separate organisations; statutory bodies, consultants, contractors
and so on.
The large numbers of people, the huge numbers of documents and
the speed of circulation, all add up to an environment of
exceptional information intensity. The crucial point is that very
little of the information currently generated in construction is
methodically structured, or systematic in any useful manner.
Typical construction documents: drawings, instructions,
schedules, programmes, bills, certificates, reports and so on, in
fact comprise more or less shapeless masses of ambiguous, subjective
information, largely lacking in systematic content. To interpret and
use this material accurately and consistently requires the
application of very high levels of human judgement and intuition;
skills that are both fantastically rare and also largely
un-teachable.
The challenge for construction is to find ways of reducing its
dependence on unstructured information and individual judgement, and
instead, of increasing the use of structured data and objective,
fact-based decision making in the operation and management of its
activities. Most other areas of the economy have moved on from
dependence on personal intuition and subjective judgement.
Manufacturing industry has almost entirely eliminated the use of
human skills in its production processes and human judgement has
been more or less eliminated from front line and middle management
data collection, analysis and decision making processes.
Construction must follow.
Arguably the most notable example of the displacement of
judgement by data has been in the transformation of the retail
sector following the deployment of Electronic Point of Sale (EPOS)
systems, starting about thirty years ago.
EPOS is a retail data management tool. An EPOS system is
essentially a data model of the store in which it is being operated.
The system captures enormous numbers of tiny pieces of very
precisely specified data about the state of the operation of any
given store, as purchased items of stock flow through its checkouts.
The system aggregates and organises this data and provides a variety
of analysis and management tools, which can be used by store
managers, buyers and others to manage the business of the company.
Modern EPOS systems give retailers almost complete control over
both their own operations and those of their entire supply chains.
In place of subjective judgement, EPOS has provided far more
reliable, data based, technical methods of status assessment and
stock control - the essential requirement for efficient,
large scale retail operations.
Until now, there have been no effective mechanisms for recording
facts of this sort in construction - the data generated
at the point of production on projects effectively just evaporates.
And there have been no organising frameworks or computer systems
available for managing and using this sort of data, even if it could
be captured. However, that situation is changing rapidly. Systems,
based on a technology called Building Information Modelling (BIM)
are becoming available, which will enable the essential production
data generated on projects to be captured and managed, just as
retail data is managed today in EPOS systems. The introduction of
these systems will almost certainly transform construction, as EPOS
did the retail sector.
This paper expands on this analysis. To begin with, the nature
and extent of the two strategic industry problems -
predictability and profitability - are outlined. The
paper then moves on to discuss the 'judgement versus data' problem,
as it affects things in the three project phases: Design,
Procurement and Construction. The analogy between construction and
the retail industry's experience is considered in more detail in the
final section. The general argument is mapped out in the diagram
below.
To repeat, the central thrust of our overall argument is that
both of the fundamental problems of construction - lack
of project predictability and low industry profitability -
result directly from the industry's excessive dependence on
unstructured information and the degree of human judgement that this
necessitates. The only way to make projects predictable and firms
profitable is by substituting computable data for unstructured
information. Building Information Modelling (BIM) and related tools
and techniques will enable this to happen and will transform
construction, in much the same way that EPOS has transformed the
retail sector over the past thirty years.
1. M. Murray, & D.
Langford Construction Reports, 1944-98,(Oxford:
Blackwell Science Ltd., 2003).
2. EU, ACTS; CICC: Collaborative Integrated
Communications
for Construction, Report on Project 017, 1995-97,
(Brussels, European Union, 1998)