IBS Roundtable Workshop Report, 2 Nov 2009, Kuala Lumpur

(Construction Research Institute of Malaysia (2010), IBS: The Critical Success Factors and Way Forward, Proceedings of 2nd CIDB/CREAM IBS Roundtable Workshop, Edited by Kamarul Anuar Mohamad Kamar, Mustafa Alshawi and Zuhari Abd. Hamid, CIDB Malaysia, 2nd November 2009, Kuala Lumpur)

Recommendations and the way forward derived from this workshop:

1. To benchmark IBS technologies, lesson learned and best practices from other countries – Construction industrialisation is a worldwide agenda. Our industry shall not work in isolation but to benchmark and learn from others. IBS is already successful adopted in Finland, Sweden, Japan, Germany and Singapore where offsite technologies had eventually modernised and improved the industry. This report recommended the industry players together with CIDB and IBS committees to find ways to capture and disseminate technologies, lesson learned, and best practices from successful countries and companies to expedite our learning curve on IBS and to guide the way forward. This can be done through international Benchmarking program and Technology Transfer initiative. Based on Manubuild’s program discussed in this workshop, knowledge and practices on the following areas can be captured; Virtual Reality (VR) simulator training program, IBS supply chain management, open system’s connections and joints, new innovation on materials and products, mobile factory concept and technologies, the business and financial model for IBS

2. To improve own capability and to focus on the Critical Success Factors (CSFs) – The following Critical Success Factors (CSFs) has been identified in the workshop as highly importance to IBS implementation:
i. Avoiding design change during construction and manufacturing
ii. Advanced planning and coordination
iii. Building up capacity in design, manufacturing and construction
iv. Supply chain management
v. Adoption of ICT tools in Project Management
vi. Partnering in project
vii. Obtaining IBS benefits through design
viii. Strong corporate vision and commitment
ix. Capturing specialist input in design (design integration)
x. Business strategy, appropriate use of technology and championing financial issue
xi. Implement good practices in Project Management
xii. Creating demand and volume in IBS (Sustainability in Business)
xiii. Good and effective communication
xiv. Implement standardisation and repetition
xv. Training, education, knowledge and competent workface

Industry recommendations highlighted in this workshop are as follows:
i. Increasing volume and demand by focusing on specific market sector
ii. Adopt partnering and business strategic alliances
iii. To be innovative and embrace in Research & Development (R&D) and ICT
iv. Increasing capacity in design, production and capability in Project Management
v. Tackling cost issue
vi. Focus on quality end product
vii. Focus on customers
viii. Emphasis on standardisation
ix. Training and awareness
x. Adopted financial strategy

The CSFs and recommendations highlighted are to be compiled and published for the industry reference. The CSFs are important as a guidance and reference for formulation of better policies and programs that will benefit IBS players in the future.

3. To solve issue on foreign labour – Availability of cheap foreign labours doing manual job (at approximate RM 30 – RM 40 per day) is a root cause hindering IBS to compete with conventional. In a nutshell, foreign labours usually unskilled and it is already affecting the quality and productivity of construction. Foreign labours were also contributed to the outflow of national currency and often associated with social illness. Therefore the workshop participants urged the government to find solution sooner rather than later to get rid at least half the number of foreign labours (particular in doing manual jobs) in Malaysia but to retain the skillful one. This is inline with the government aspiration to achieve higher income society as stipulated under the New Economic Model for Malaysia (MEB). The government are suggested to introduce minimum wage for construction workforce, reform Akademi Binaan Malaysia (ABM), attract graduates and school leavers to join the workforce, and to retrain and reskill our construction workforce under NOSS to work as IBS assembler or at IBS component factory.

4. To adopt partnering in IBS project – The report suggested partnering and strategic alliances as one of the key areas to be explored and implemented by IBS adopters.

i. Partnering will ease communication problem between parties. Partnering will help the stakeholders to fully understand other interest as well as their own during IBS implementation. Any dispute will be easier to be resolved in minimum time. It may close fragmented gaps between stakeholders
ii. Partnering supply chain will ensure better coordination and smooth flow of production and installation
iii. Partnering with more establish IBS adopters will improve one learning curve
iv. Partnering with more establish construction players will ensure capability to secure project
v. As PFI is a preferred mode construction in the future, partnering will enhance company profile and improve financial capability to implement project

However, culture and competitive environment in construction may hinder successful partnering and strategic alliance.

5. To create demand and volume from private sector project – Demand and volume is two essential components that make IBS viable. The contractors, manufacturers and designers perceived that, the level of adoption is depending on market forces and client willingness to use IBS. Clients are drivers to IBS in Malaysia. Although, IBS is make compulsory in public building projects, the industry believe that IBS should be private sector driven and the demand for IBS is on natural market forces in order to sustain. The industry did not want to see an artificial market was created due to public sector demand only. The New Economic Model for Malaysian (MEB) together with 10th and 11th Malaysian Plan will involve more private sector investment and financing as we will see more projects to tender in PFI (Private Finance Initiative) mode. The role of client is significant for creating demand for IBS. Many believe that stakeholders will automatically build up their capacity and be ready to implement IBS once the demand and volume is there. Therefore, the report suggested that the government to find ways in encouraging and facilitating private sector clients to use IBS. The private sector client should be exposed on the benefit and positive impact of IBS to their project (such is in quality and speed of construction) by continues awareness program and education. Incentive, tax exemption and recognition from the government should be extended to the clients (building owners) that choose IBS over the conventional method (similar to current GBI incentive). In addition, IBS should be incorporated or work in tandem of Malaysian Green Building Index (GBI) initiative as a solution to implement sustainable construction and reduce carbon footprint. It will attract clients to use IBS and obtain incentives offered under the GBI. Otherwise, as a last alternative, a careful study should be undertaken to regulate IBS in private sector as in public sector currently. Only by having sufficient market demand and volume, the cost of IBS will be reduced (by mass production of components) and sustainable market will be created.

6. To improve design knowledge and design integration – The industry is still lacking of knowledge in IBS design. Often, the design engineers are struggling to design building in IBS, and depending much on contractor or manufacturer to translate previously conventional design to IBS. It is a rare situation where designer advice clients to use IBS. However, many believe that, IBS can be only benefit if decision to use it can be decide as early as possible (as a tender drawing) not as afterthought during the project. Once clients decided to use IBS, it needs to be design and tender in IBS. Furthermore, IBS can be best implemented where aspects that can benefited the projects can be incorporated through design i.e. standardisation, pre-assembly, manufacturability and constructability. Therefore it was suggested better education and awareness should be implemented to designers to improve their capability to design IBS

7. Creating an IBS “economic cluster” to boost this industry by creating a partnership between government and private sector when and where it is needed. Economic cluster refers to all necessary components that are required to get IBS off the ground. This could include (not an exclusive list; Design and manufacturing as the core of the industry, SMEs to create the specialised supply chain to the core business, IBS Association to create “one voice” for the industry and hence better define and communicate their equipments, Finance – to partially finance SMEs to establish the supply chain, Special Housing finance – special “mortgage” facility to help people buy the produced units and thus creating the market IBS Regulatory Unit –to advise government and industry on new and adjusted regulations to jump start this industry. This approach will help to create a new environment within which IBS can flourish in a much shorter time and will also put Malaysian IBS on the map.

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