13.7.10

Rethinking IBS: Part 1

1. The adoption agenda of IBS in Malaysia is quit straight forward. IBS is made mandatory in public sector buildings and it creates volume for manufacturers. This will eventually reduce overall construction cost through mass production of standard components. Eveybody will use IBS at the end. It is supply-demand logic. Common sense! But does it sustain and create a spill out effects to private sector projects as predicted? or it just artifical market is been created? No one could tell. But the volume in IBS should be celebrated in positive mood.

2. However, one could obseved charecteristics of IBS which include the elements of 'newness' and accumulation of knolwedge from various area has put IBS under innovative domain. Innovation in this sense is not only the invention as per say, but also the diffusion (acceptation and adoption). It need mindset change. It need to be treated as a long term gain rather that quick fix.

3. In innitiating industrialisation and innovation, volume alone is not enough. Never before in the history of industrialisation, the introduction of products/processses/systems through industrialisation depended on volume alone.

4. Volume must come together with value. It must be married with it. If industrialisations in other sector are not putting effort on value creating, we are now still driving a Ford T-model or watch Spain winning thier first World Cup in a black and white TV. Concentrating on volume alone without technology upgrading was never happen before.

5. Nonetheless, unlike manufacturing, automotive and telecomunication industry, which evolves and innovate every single seconds, as i'm writing this right now. We in the industry still use a mould systems and simple panel systems after 40 years of adoption for the sake of practicality and cost saving.

6. By applying this, IBS has create no or little value other than replacing wood mould with steel or substitute panals to brick and mortar. Onsite IBS mould systems or onsite panel casting pre-cast system has been 'over-rated' by us as if it is IBS at the most effective. Rarely we heard on innovative panel and roof systems (that cooling the house), modular bathroom and modular kitchen. Neither green components yet.

7. I am not too naïve to understand that the nature of construction is project by project basis. I also fully aware that IBS wealth (read as profit) is even not fairly distributed among stakeholders (manufacturer hold 70%) . We are talking about the industry suffered with thin profit margin which retarded innovation unlike the manufaturing. But, since the volume is there, someone should highlight the importance of value creating here, not only focus on volume.

8. The government should double incentives to value creating IBS companies and i think the government should give innovative grants and soft loans and they must belive that IBS is a long term. I suspect the main aim of IBS in Malaysia to get quick fix (reduce foriegn workers) is not sustaining IBS. Balance of quick fix and long term gain is the way forward.

9. Creating and encouraging IBS indsutry that are innovative should be a first priority. Volume is good, but concentrating on volume alone would never florished the industrialisation, as the history of industrialisation would tell. On the other hand, industry must take the lead on this. Use the volume to innovate. We want 'Praton Haus type of technology exploration' again but with greener and sustainable solution

10. The way forward for IBS would not on the cheapest, most flexible mould systems or standard panels for standard design. The way forward should be (green), pre-assembly, robotic, automation, reproduction and even mass-cutomisation which create most value. Only by then the industrialisation can evolves. Only by then IBS can sustain and this is of course in line with our high income economy agenda.

11. I hope that the new IBS Score (will be launched end of next month) will put emhasis on value creating IBS. I think simple precast system or cast in situ has been overly-rated by us in this scoring system. High marks should to IBS that create most value and IBS that encourage high income economy and high income society. Special creteria must be develop to give highest mark to the use of modular, preassembly, robotic and automation and green. On the other hand, low technologies IBS such as formwork systems shold be strongly discouraged by giving them zero mark or to be exluded under IBS catogorisation.

12. To create value, there is a good level of willingness among industry to take things forward. However, there is reluctance among companies to take risk which is mainly related to unstable market and hence lack of investment. There is a critical need to manage the design and manufacturing differently from the traditional way as IBS is different and needs a different mindset along with the right environment. To create most value to IBS, we might need to consider 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. The economic cluster are 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

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