UNIVERSITY OF MANCHESTER INSTITUTE OF SCIENCE AND...

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

To

My Beloved Parents

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

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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

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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


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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,


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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.


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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.


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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.


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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).


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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.


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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


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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).


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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


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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.


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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


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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


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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.


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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


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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).


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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.


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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.


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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.


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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.


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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.


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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


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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.


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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


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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.


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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


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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


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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


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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


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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.


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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.”


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.”


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.”



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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”


“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.”


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.”


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.”


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.”


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:


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“SCs coordination consumes time and efforts which are not otherwise spent if

we [designers] develop the design unilaterally.”


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

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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


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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


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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.


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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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60

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MSc Dissertation Appendix (A)

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APPENDIX (A)

Interviews Guidelines


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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?

MSc Dissertation Appendix (B)

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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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Modular Assembly Process


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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

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