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Construction Industry Research Achievements International Conference (CIRAIC 2007)

Keynote Address By Tan Sri Jamilus Hussein

Industrialised Building System: The Challenges and Way Forward Ladies and Gentlemen:

It is indeed an honour to be given this privilege of addressing this conference

congregating the best brains in the industry made up of experts, researchers and

intellectuals with one common interest: to contribute to the development of the

construction industry as encapsulated in the theme of the conference “Enhancing

the construction industry through R&D”. A cursory look at construction-related

research journals will indicate that there is no dearth of efforts to generate new

knowledge in this field. At ground zero, however, the majority of construction

activities in this country are still what it traditionally used to be, namely, workers,

using labour force, putting materials in moulds to create predetermined shapes. It

is this decoupling between knowledge and practice that is troublesome and must

be addressed if the benefits of research are to be transferred to the ground. One

possible reason for this malaise may be due to the absence of many intermediate

steps required to bring an idea to fruition and include processes such as

technology development, transfer and absorption; skills and manpower

development; commercialisation and production management, and, in some

cases, logistical requirements. It is indeed unfortunate if an excellent idea fail to

reach the ground for reasons other than its own value. As such, it is imperative

on the research fraternity to ensure that a research project is not only able to

create new knowledge but must also be aware of the requirements needed to

bring the idea to the market, something we can call “knowledgepreneureship” or

simply “k-preneurship”. For one, different countries have different breed of

business community. In the more developed countries such as the United States,

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the business community sees R&D as an opportunity to develop blue ocean

strategy. In Malaysia, the business community is rather sceptical about the value

of R&D and considers it to be the product coming out of ivory towers out of touch

with realities in the business world. As a result they continue to compete in the

red ocean using every means available to outdo each other. To breach this gap

the responsibility lies with the researchers as they are in the know.

Ladies and Gentlemen:

CIDB has conducted a technology foresight exercise in March, 2000 and

identified 17 research focus areas that will affect the scenario for the

development of the construction industry in Malaysia. They are the following:

1. Construction policies will be focussed on improving the productivity. This includes

focusing on cost-effective, fast and efficient processes.

2. Safe and secure ICT policy will be set up that will include setting up of our own

system, concentrating on real time data management and virtual reality.

3. Construction industry will maximise local input, e.g., local materials, machines,

equipment, and other local resources.

4. We will network with R&D centres world-wide so that we can develop our competitive

knowledge and update on new discoveries and inventions.

5. Development of indigenous technologies and resources, substitutes for materials,

machinery and equipment and in biotechnology will be enhanced.

6. More stringent standards will be imposed on built products especially those that

concerns human friendliness and comfort.

7. Only skilled manpower can work in the construction industry.

8. Repetitious and dangerous works will be done by automation and robotics

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9. Prefabrication and modularisation will be the accepted practice.

10. Urbanisation will be controlled leading to public transportation and vertical city.

11. Open systems will be the method of construction where customers will have more

decision making at the earliest possible stage. Throughout its life cycles the built

environment can be changed to suit human needs.

12. Energy efficiency will be one criterion for approval and tool for marketing – energy

technology, new resources of energy.

13. Every process in the construction industry will be green.

14. Industry will put more importance in the reusability and recyclability of materials,

biodegradability.

15. Artificial intelligence embedded in built products is a norm.

16. Advanced materials, composite, bio-composite

17. Expert systems.

The Construction Industry Master Plan (CIMP) 2006-2015 has taken cognisance

of all the recommendations as contained in the Technology Foresight study. The

importance of research is reflected in the fact that it is the defining tool to

generate innovativeness as stipulated in the CIMP’s fifth Strategic Thrust:

“Innovate through R&D and adopt new construction methods.”

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Ladies and Gentlemen:

My keynote address will focus on IBS as it is not only, I believe, one of the most

important agenda that can alter the landscape of the Malaysian construction

industry as identified above but, more importantly, it is a subject that is close to

my heart. I leave the other areas of research to my learned colleagues

presenting the other three keynote addresses to share their wisdom with us in

other sessions.

Ladies and Gentlemen:

I propose that we approach the subject of IBS by firstly examining the progress of

the IBS programme to date. We will then consider what steps are required to

keep the programme on its track. This will involve both researchable and non-

researchable areas. Finally we will dwell on the priority of research in IBS to

achieve the objectives of the IBS Roadmap.

Malaysia’s IBS programme is guided by the IBS Roadmap 2003 – 2010. It has

been four years since the launching of the Roadmap and we are about half-way

through in our mission to industrialise the construction industry. It is pertinent to

examine how far we have progressed and whether there is a need to review

some of the targets in the roadmap. More importantly, it is imperative that we get

feedback from the industry players on the IBS programme this far.

The Roadmap is a comprehensive document that divided the IBS programme

into the five main focus areas that reflect the inputs needed to drive the

programme, each beginning with the letter M. They are Manpower, Materials,

Management, Monetary, and Marketing. The inputs for the 5 M strategies

consider numerous key areas to encourage the adoption of new techniques and

technology which include human capital, material processes, incentives and

promotional methods. The inputs are then divided into its elements and activities.

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Each element to be implemented were then identified and included into the time

span of the Roadmap in order to achieve the mission within the stipulated time-

frame. Eight Ministries and eight Government Departments, Agencies or Unit are

involved in the implementing the Roadmap. The Roadmap was endorsed by the

Cabinet in 2003 and its progress is being monitored by a committee headed by

the Ministry of Works.

Based on the progress report of the IBS Roadmap as of December 2006, the

progress of majority of the activities identified in the Roadmap are encouraging

especially on policy and direction. Most policy issues have been resolved and

implemented, while all relevant documents required to support the programme

have been developed. In particular, activities under the charge of CIDB are all

meeting their datelines. Notwithstanding these achievements a number of

implementation snags were identified as being potential hurdles to the

implementation of the Road map. These included the following:

• Developing and sustaining market demand for IBS sufficient to generate

economies of scale for its industrialisation

• Development of standard plans and standard component drawings for

common use,

• Apprentice and on-the-job training in the area of IBS moulds and casts,

and assembly of components,

• Vendor development program, and

• Readiness of designers and consultant practices

Ladies and Gentlemen:

Based on CIDB’s record, to date, 27 contractors have applied for levy exemption

for incorporating more than 50% IBS score in their project. Considering that a

total of 2,650 residential projects were implemented during the same period, this

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indicate that only about 1 per cent opted for more than 50% IBS content in their

project! Of the 27 only a fraction will qualify for the waiver of levy as most do not

comply to the requirement of Modular Coordination as in MS1064. This shows

that although the processes of implementing the Roadmap proceeded according

to plan, more effort should be put in especially on the demand side.

Ladies and Gentlemen:

For all the success at implementing the planned activities in the Roadmap, the

acid test of the IBS programme can only be in terms of its adoption by the

industry. Given the figures, we need to ponder why the market is not responding

very enthusiastically to the programme. Let me offer a few possibilities. They are:

a) Changing mindset: Achieving acceptance by the construction

community.

This is by far the most difficult problem. Many in and out of the

construction industry still have the perception that IBS is rigid and not

flexible enough in both form and dimension to meet all the variable

demands of construction. This leads to the mistaken conclusion that

IBS can only produce monotonous design.

b) The cost of using IBS exceeds the conventional methods of

construction, especially given the ease of securing relatively cheap

immigrant labour,

c) The risk of trying an unfamiliar technology is too high compared to

current profit margin in construction,

d) IBS design concept is not being taken into consideration at the onset of

the project,

e) Designers will not design using components as they do not find the

components in the market, whilst producers will not produce

components as they do not see designs using components

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Ladies and Gentlemen:

These are fundamental issues that have to be addressed urgently to avoid all our

efforts going to waste. We must use the experience in other countries, judiciously

selected, to guide us in our mission. In most cases, off-site casting, precasting or

component construction have succeeded in certain type of projects such as

residential, commercial outlet like large mega store that caters for fast moving

products and collects large cash revenue daily. To such clients every day saved

means millions in revenue and any mode of construction that can save time at

reasonable investment cost is welcome.

The construction industry is a very competitive and risky industry. It is also an

established industry with many deep-seated and culturally-embedded practices.

To change these established practice is an onerous task indeed. In a highly

competitive industry such as construction where profit hovers around 5 – 10 %

and risks are extremely high, will a developer substitute proven methodology with

unfamiliar techniques such as IBS which can easily blow out the 5 – 10 % profit?

What then is the way forward and how do we get out of the vicious circle that is

currently plaguing the Government’s effort at industrialising construction?

In order to create a market that generates continuous demand on IBS, and to

avoid unprecedented losses to contractors, a strategy has to be formulated. This

strategy will be derived from a pilot study which will take into account the current

government’s policy on IBS, and will focus on the needs to achieve economies of

scale for IBS and seek ways to overcome the unaccommodating perception and

lukewarm response on IBS. The objective is to make IBS the preferred mode of

design and construction so that both designers and stakeholders instinctively

choose standardisation of components from the onset of any construction

project.

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This state of affair can be achieved if the following issues are resolved

accordingly:

1. Modifying mindset: It must be recognised that this problem stems not out

of technology but of people. The prerequisite of success for the Roadmap

depends to a large extent on the meetings of minds of all in the value

chain of IBS. It is the clients, architects, designers, engineers, quantity

surveyors, technicians, contractors, project managers, construction

managers, financiers, technicians, skill workers and the approving

authorities’ officers that must undergo a mental evolution.

Precast and component technology have existed for some time but have

not generated much interest as alternative construction method has be so

deeply entrenched that many are loathe to change it – the mentality of

“why fix it if it ain’t broken…”. This perception arises because the

conventional construction method creates problem to the nation but not to

the contractor. The cost advantage of employing cheap foreign labour, for

instance is a boon to contractors but a bane to the nation as it entails a

leakage in the economy in the form of expatriation of funds and brings with

it numerous social and health problems such as increase crime rate,

taxing the national health and education system and incurring high

policing cost.

2. Generating economies of scale: When comparing the cost of construction

between conventional methods and IBS it is most likely that the IBS under

consideration are proprietary products produced by a few established

companies. In other words it is a construction industry subject to an

oligopoly. If the domination by few companies can be transferred to many

small-and-medium enterprises (SME) as in the case of the production of

precast culvert, columns and drains, stumps and footings, the economies

of scale can be improved dramatically. The most often-quoted problem to

achieve this objective is the problem of standard joints. R&D can

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contribute to this issue by developing standard joints that can

accommodate the various standard components. I was informed that

research efforts are already underway to develop such a joint.

The corollary to economies of scale for IBS is of course the diseconomies

of scale for the conventional method. This can be achieved by restricting

the number of foreign workers employed in the construction industry or by

imposing a high levy for their employment, making the employment of

skilled construction workers mandatory, or by giving double tax exemption

to developers using IBS. All these are currently already in place but there

is a need for researchers here today to undertake an integrated study to

determine what is the appropriate quantum that will tilt the construction

industry in favour of IBS.

3. The way forward: To solve the numerous problems faced by IBS a number

of pilot projects using various forms of IBS must be developed. Although a

few pilot projects were implemented earlier they were done without the

advantage of the added knowledge as of today. Pilot projects are needed

to change the mindset of practitioners and stakeholders, and to convince

them what is preached is practicable. If the pilot project is carefully chosen

to include standard Government buildings such as schools and

residentials it may even be able to generate economies of scale to the

component producers. Researcher must also involve themselves in these

pilot projects so that appropriate prototypes of buildings using IBS that

fulfils the requirements of all parties can be developed.

Another important missing piece to the puzzle is the need for a champion

to drive the programme forward and to act as an agent of change in the

construction industry. CIDB, through the National IBS centre established

at Cheras, can serve this purpose. The centre can address the problems

raised above and review any changes needed to keep Roadmap on

course. The centre is particularly relevant in trying to breach the gap

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between the proprietary approach that is currently being practiced and the

industrialisation of the construction industry to garner the involvement of

more SME’s so that a more open system is evolved thus transforming the

oligopolistic domination of a few to a more laissez-faire industry that will

put pressure on price.

Ladies and Gentlemen:

That being the situation, how can R&D contribute to the development of IBS in

the construction industry? There is no question of the positive attributes of IBS

such as speedy construction, less labour, higher quality, less wastage and

uncluttered site that is a boon to safety and health. But to be effective, the

technology must, foremost, meet the commercial needs of the customer. This is

where R&D can play a role. Research must be undertaken to develop an IBS

system that answer the following questions:

a) How do we perfectly assemble a perfectly produced component using

yet to be trained installer?

b) What factors contribute to the professionals’ adversity to IBS? In

particular what is the state of readiness of all the professions involved

in the IBS value chain in particular the architects, the engineering

consultants, the quantity surveyors; and those involved in the supply

chain including issues such as skilled manpower, supplier and

assemblers, and in the linkage activities such as ICT and the

authorities?

c) What is the tolerance level of components that can be achieved if IBS

were to be produced at an industrial level compared to the tolerance

achieved by proprietary systems?

d) What are the drivers needed to change mindset among Construction

industry stakeholders?

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e) How do we make changes to accurately-dimensioned and perfectly-

assembled components due to site conditions or clients requirement?

f) What is the optimum component size, weight or capacity that will give

the best mix of component cost, transportation cost and assembly

cost?

g) To what extent do modular dimensions limit designers’ creativity?

h) One way to overcome site problem is to construct every complete

module in the factory leading to modular construction system. Is this

cost effective and what degree of tolerance is required for site

components?

i) What alternative material that is light but sufficiently strong and

resistant to fire that can be used as alternative material for IBS but is

sufficiently cheap compared to concrete, bricks and mortar?

j) What is the most appropriate safety net that can be instituted to

motivate our contractors to be more innovative?

k) From the economic standpoint, should we opt for open system only or

should we allow proprietary systems compete with open system?

l) Are there commercially feasible systems that are neither fully

component-based nor fully cast-in-situ?

m) How do we cater for the propensity of purchaser to renovate when IBS

is used to construct?

n) What are the factors that contractors consider in selecting a mode of

construction?

o) What is the impact of using IBS on the traditional subcontracting

system of project management?

p) What is the future impact of using IBS on the craft industry in

construction?

q) What type of construction technology is most suitable for what kind of

building?

r) How do we solve the issue of shortage of construction workers in

future?

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s) Errors tend to accumulate as more components are used. What

actions can be undertaken to mitigate this?

These are some researchable areas that can provide answers that will help in the

implementation of the IBS Roadmap. To prioritise the research areas urgency

must be given to research that can solve issues concerning costs, followed by

those that can provide flexibility, and followed by those that can provide a safety

net for the contractors.

Ladies and Gentlemen:

There is much that can be achieved through concerted research effort on R&D.

In order to generate continuous and industry-relevant research results a centre of

excellence for IBS Research & Development as well as skills and technology

development and commercialisation the National IBS Centre has been

established in Cheras. This Centre must also be equipped with an R&D and

testing capacity that is urgently needed by the programme. CREAM can be

assigned with the task of managing the IBS research and testing centre. Only

with such capacity will the National IBS Centre be complete to undertake its

responsibility of aligning the IBS programme with the needs of the industry

spanning the following full value-chain activities: Research and development;

technology development; technology transfer and commercialisation issues;

management, policy and marketing (including business fraternity readiness)

issues; and studying issues related to structure, norms, practices and culture. By

undertaking these activities the IBS centre will become an effective agent of

change for the construction industry. The excellence of the centre will be judged

by the degree of industrialization it is able to generate in the construction sector

in this country. After all, that was what we targeted for the nation three years ago.

It is time we fulfilled that planned.

Thank you.