Identifying appropriate construction procurement strategies

The origins of the various procurement methods in construction are considered, followed by a discussion of the circumstances for which each procurement system is best suited. The likely future development sin management-based methods are discussed in the context of current research, showing that co-ordination of trade and specialist contractors , more flexible contracting, constructive conflict management and a potential polarization of views about project management in the industry are likely.

Financial protection in the UK building industry: bonds, retentions and guarantees

Financial Protection in the UK Building Industry provides comprehensive treatment of a complex aspect of construction management which is increasingly important in modern construction contracts. The term 'Financial Protection' refers to refers to the various mechanisms by which funds are made available to ensure the due performance of a partys contractual obligations. This book is based on material written for a research project funded by the Reading Construction Forum. Financial Protection in the UK Building Industry looks at the legal and economic background to the problem of providing financial protection to clients to guard against poor performance and or the insolvency of contractors, consultants and sub-contractors. The inclusion of practical guidance notes and summaries makes this a valuable guide for the construction professional as well as for the researcher. * provides in-depth analysis of financial protection measures * explores the ways in which financial protection can increase efficiency in the industry * financial protection in construction is beset with problems - this book points toward practical solutions

How could construction supply chain benefit from RFID/GPS integration: a knowledge management perspective

Construction materials and equipment are essential building blocks of every construction project and may account for 50-60 per cent of the total cost of construction. The rate of their utilization, on the other hand, is the element that most directly relates to a project progress. A growing concern in the industry that inadequate efficiency hinders its success could thus be accommodated by turning construction into a logistic process. Although mostly limited, recent attempts and studies show that Radio Frequency IDentification (RFID) applications have significant potentials in construction. However, the aim of this research is to show that the technology itself should not only be used for automation and tracking to overcome the supply chain complexity but also as a tool to generate, record and exchange process-related knowledge among the supply chain stakeholders. This would enable all involved parties to identify and understand consequences of any forthcoming difficulties and react accordingly before they cause major disruptions in the construction process. In order to achieve this aim the study focuses on a number of methods. First of all it develops a generic understanding of how RFID technology has been used in logistic processes in industrial supply chain management. Secondly, it investigates recent applications of RFID as an information and communication technology support facility in construction logistics for the management of construction supply chain. Based on these the study develops an improved concept of a construction logistics architecture that explicitly relies on integrating RFID with the Global Positioning System (GPS). The developed conceptual model architecture shows that categorisation provided through RFID and traceability as a result of RFID/GPS integration could be used as a tool to identify, record and share potential problems and thus vastly improve knowledge management processes within the entire supply chain. The findings thus clearly show a need for future research in this area.

The impact of multiskilling on UK construction manpower

The overall significance of the construction and building services sector internationally cannot be overemphasised. In the UK, the industry currently accounts for 10% gross domestic product (GDP) and employs 2 million people, which is more than 1 in 14 of the total workforce. However, regardless of its output (approximately £65 billion annually) there has been a steady decline in the number of trade entrants into the construction and building services sector. Consequently, the available ‘pool of labour’ is inadequately resourced; productivity is low; the existing labour force is overstressed; there is an increase in site deaths; and a long-term labour shortage is envisaged. Today, the evidence seems to suggest that multiskilling is a tentative redress for ameliorating the skills crisis in the construction and building sectors. A 43-year time-series of data on 23 manpower attributes was evaluated as part of this investigation. The developed linear regression models show that the concept of multiskilling obeys the ‘law of diminishing returns'. That is, a weak relation was found between construction output and a three or more combination of manpower attributes. An optimisation model is prescribed for traditional trades.

On the discourse of construction competitiveness

It is contended that competitiveness is better understood as a discourse rather than as a characteristic that is supposedly possessed. The discourse of competitiveness derives its legitimacy from the enterprise culture that came to dominance during the 1980s. Current popularized theories of competitiveness are constituent parts of this broader discourse, which has had significant material implications for the UK construction sector. The dominant discourse of competitiveness amongst contracting firms is shaped by the need to achieve structural flexibility to cope with fluctuations in demand. Fashionable espoused improvement recipes such as total quality management, business process re-engineering, and lean construction legitimize and reinforce the material manifestations of the enterprise culture. In consequence, the UK industry is characterized by a plethora of hollowed-out firms that have failed to invest in their human capital. While the adopted model may be rational for individual firms, the systemic effect across the sector as a whole equates to a form of anorexia. However, the discourse of competitiveness is by no means monolithic and continues to be contested locally. There have also been numerous counter-discourses that have been mobilized in response to the undesirable externalities of unbridled enterprise. Currently, important counter-discourses promote the ideas of sustainability and corporate social responsibility.

UK construction orders and output: A comparison of government and commercially available data 1995-2001

Because of the importance and potential usefulness of construction market statistics to firms and government, consistency between different sources of data is examined with a view to building a predictive model of construction output using construction data alone. However, a comparison of Department of Trade and Industry (DTI) and Office for National Statistics (ONS) series shows that the correlation coefcient (used as a measure of consistency) of the DTI output and DTI orders data and the correlation coefficient of the DTI output and ONS output data are low. It is not possible to derive a predictive model of DTI output based on DTI orders data alone. The question arises whether or not an alternative independent source of data may be used to predict DTI output data. Independent data produced by Emap Glenigan (EG), based on planning applications, potentially offers such a source of information. The EG data records the value of planning applications and their planned start and finish dates. However, as this data is ex ante and is not correlated with DTI output it is not possible to use this data to describe the volume of actual construction output. Nor is it possible to use the EG planning data to predict DTI construc-tion orders data. Further consideration of the issues raised reveal that it is not practically possible to develop a consistent predictive model of construction output using construction statistics gathered at different stages in the development process.

Understanding construction consortia: Theory, practice and opinions

Firms form consortia in order to win contracts. Once a project has been awarded to a consortium each member then concentrates on his or her own contract with the client. Therefore, consortia are marketing devices, which present the impression of teamworking, but the production process is just as fragmented as under conventional procurement methods. In this way, the consortium forms a barrier between the client and the actual construction production process. Firms form consortia, not as a simple development of normal ways of working, but because the circumstances for specific projects make it a necessary vehicle. These circumstances include projects that are too large or too complex to undertake alone or projects that require on-going services which cannot be provided by the individual firms inhouse. It is not a preferred way of working, because participants carry extra risk in the form of liability for the actions of their partners in the consortium. The behaviour of members of consortia is determined by their relative power, based on several factors, including financial commitment and ease of replacement. The level of supply chain visibility to the public sector client and to the industry is reduced by the existence of a consortium because the consortium forms an additional obstacle between the client and the firms undertaking the actual construction work. Supply chain visibility matters to the client who otherwise loses control over the process of construction or service provision, while remaining accountable for cost overruns. To overcome this separation there is a convincing argument in favour of adopting the approach put forward in the Project Partnering Contract 2000 (PPC2000) Agreement. Members of consortia do not necessarily go on to work in the same consortia again because members need to respond flexibly to opportunities as and when they arise. Decision-making processes within consortia tend to be on an ad hoc basis. Construction risk is taken by the contractor and the construction supply chain but the reputational risk is carried by all the firms associated with a consortium. There is a wide variation in the manner that consortia are formed, determined by the individual circumstances of each project; its requirements, size and complexity, and the attitude of individual project leaders. However, there are a number of close working relationships based on generic models of consortia-like arrangements for the purpose of building production, such as the Housing Corporation Guidance Notes and the PPC2000.

Informal communication networks and the diffusion of innovations in UK construction projects: A research design

The UK industry has been criticised for being slow to adopt construction process innovations. Research shows that the idiosyncrasies of participants, their roles in the system and the contextual differences between sections of the industry make this a highly complex problem. There is considerable evidence that informal social networks play a key role in diffusion of innovations. The aim is to identify informal communication networks of project participants and the role these play in the diffusion of construction innovations. The characteristics of this network will be analysed in order to understand how they can be used to accelerate innovation diffusion within and between projects. Social Network Analysis is used to determine informal communication routes. Control and experiment case study projects are used within two different organizations. This allows informal communication routes concerning innovations to be mapped, whilst testing if the informal routes can facilitate diffusion. Analysis will focus upon understanding the combination of informal strong and weak ties, and how these impede or facilitate the diffusion of the innovation. Initial work suggests the presence of an informal communication network. Actors within this informal network, and the organization's management are unaware of its' existence and their informal roles within it. Thus, the network remains an untapped medium regarding innovation diffusion. It is proposed that successful innovation diffusion is dependent upon understanding informal strong and weak ties, at project, organization and industry level.

Learning across business sectors: facets of innovation in aerospace and construction

Innovation is notoriously difficult to define and is invariably intertwined with issues of knowledge creation, continuous improvement and organisational change. An extensive literature classifies numerous types of innovation and militates against any simplistic attempt at definition. It is widely accepted that innovation is at least partly dependent upon the surrounding environment. Industry recipes and institutionally embedded practices shape the environment within which innovation occurs. Recent research directions have addressed the diffusion of innovation and its dependence upon social and institutional structures. In this respect, it is highly pertinent to compare the way that innovation is interpreted and enacted in different industrial sectors. The comparison between UK aerospace and construction is especially revealing because the two sectors are so different and therefore constitute radically different climates for innovation. Empirical research is reported based on semi-structured interviews with practitioners from both sectors. Interpretations of innovation are found to differ dramatically between aerospace and construction. Within the context of an ongoing struggle to define innovation, both industries are striving to become more innovative. The aerospace sector is found to emphasise technical innovation whereas the construction sector emphasises process innovation. An overriding cultural bias in Western economies towards technological innovation results in the common perception that aerospace is much more innovative than construction. The experienced realities of practitioners in the two sectors are much more complex.

The price of risk in construction projects: contingency approximation model (CAM)

Little attention has been focussed on a precise definition and evaluation mechanism for project management risk specifically related to contractors. When bidding, contractors traditionally price risks using unsystematic approaches. The high business failure rate our industry records may indicate that the current unsystematic mechanisms contractors use for building up contingencies may be inadequate. The reluctance of some contractors to include a price for risk in their tenders when bidding for work competitively may also not be a useful approach. Here, instead, we first define the meaning of contractor contingency, and then we develop a facile quantitative technique that contractors can use to estimate a price for project risk. This model will help contractors analyse their exposure to project risks; and help them express the risk in monetary terms for management action. When bidding for work, they can decide how to allocate contingencies strategically in a way that balances risk and reward.

Understanding UK construction professional services exports: definitions and characteristics

Services are very important to the UK balance of trade; a surplus has been recorded for trade in services every year since 1966. Construction professional services exports (CPS), which cover architecture, engineering and surveying (AES), have also increased, contributing over £3bn to the UK trade balance in 2007. The changing environment of construction professional services exports complicates the validity of the characteristics and definitions of services as described in the research literature and official export statistics. Through semi-structured interviews undertaken with large consulting engineers and a round-table discussion with industry and government representatives, the research found that the impact of globalisation and the changes in the construction business environment, such as increasing foreign ownership and changing forms of procurement, are not fully reflected in the official statistics. There have also been rapid changes in technology, procurement and methods of delivery which have impacted exporting AES firms and a more appropriate set of characteristics is needed to better reflect the project-specific and knowledge-intensive nature of AES firms.