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ACCELERATING CONSTRUCTION INDUSTRY DEVELOPMENT

Presentation Outline:

Mohan Kumaraswamy
The University of Hong Kong International Talk at Yogyakarta Session 2

01 November 2008

Construction Industry Reform Initiatives Worldwide But still many shortfalls! SO we all still NEED: Top-Down and Bottom-up Industry Development Knowledge and Technology Exchange to develop Small & Medium Contractors and to Integrate above Developments How?
Examples from Physics to Chemistry; & Biology to Business

Overall Models, Policies, Strategies and for Industry Improvements


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Construction Industry Reforms/ Improvements?


Construction industries have undergone intensive Reviews in the past decade Also before: e.g. in UK from the 1940s, Sri Lanka 1980s High-powered Reports in UK, Australia, Singapore, Hong Kong, Netherlands: Egan, 1998; ISR, 1999, C21, 1999; CIRC, 2001; PSIB, 2004. Also, Construction Industry Development Boards - to coordinate industry improvements in South Africa and Malaysia. Others e.g. BCA, Spore; CIC, Hong Kong; ICTAD, Sri Lanka; . Indonesia

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BUT CONTINUING PROBLEMS in ALL our Construction Industries: Low on quality, safety & productivity; High on costs, delays and disputes Lack co-ordination, integration and teamworking. - hence, wastage and low value Cashflow difficulties and delayed payments down supply chains Uncertainties of work volume continuity on one hand, and industry capacities on other hand. SOME POSSIBLE CAUSES? fragmented industry, adversarial culture purely price-based selection of contractors & even consultants Domestic construction industry can not develop e.g. Local contractors do not get work because of inadequate experience. But can not develop experience, because they do not get work! - Chicken or Egg paradox!
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A TALE of THREE INITIATIVES and PLANS for TWO more R&D initiatives

MSS - for Top-Down Improvements


Objectives: To develop framework and sample modules - to help provide decision support on assembling far better project Procurement and Delivery systems. Sample modules: (a) incorporate relational contracting principles e.g. Joint Risk Management, for more sustainable co-operation/ partnering (b) PPP procurement (c) Contractor Selection (d) Extension of Time evaluations.
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Management Support System (MSS) for Large Clients (LCs) Technology & Knowledge Exchange Information and Knowledge Management System (IKMSs) for Small & Medium Contractors (SMCs) PROPOSAL for a Project-specific Project Information & Knowledge Management Platform (PIKMAP) PROPOSAL for a Technology & Knowledge Flows (TKF) Study Euro-Asian links established
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Delivery Sub-systems
CDM Claims & Disputes Management System CM Cost Management EM Environmental Management HRM Human Resources Management ICM Information & Communications Mgmt. PA Performance Appraisal QM Quality Management RM Risk Management TM Time Management VM Value Management
7 Mohan Kumaraswamy @ Yogyakarta Collaborative Delivery System Nov. 2008

Procurement Sub-systems
CC Contract Conditions FG Functional Groupings PM Payment Methods SM Selection Methods WP Work Packaging

Integrated Procurement System


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YM Safety Management
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EOTe - Extension Of Time evaluation; CS - Contractor Selection; PA - Performance Appraisal; dss - Decision Support System

Relational Contracting & Joint Risk Management Advisor Partnering Knowledge Base

Public Private Partnership Decision Support System

ICT-AI ENABLED COLLABORATIVE CONSTRUCTION PROJECT MANAGEMENT SUPPORT SYSTEM FRAMEWORK

I PR NT OC EG R SY UR AT ST EM ED EM EN T

WP PM

PPP dss

To later link to Technological System

E IV AT OR R Y AB V E M LL ELI TE C O D YS S

ICM QM TM

CM VM RM

INTEGRATED PROCUREMENT SYSTEM

COLLABORATIVE DELIVERY SYSTEM

INTERORGANIZATIONAL LEARNING SYSTEM

SYNERGISTIC TECHNOLOGICAL SYSTEM

FG

CC

CDM EM HRM

SM EOTe dss CS dss PA dss

PA YM
To later link to Technological System
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Mohan Kumaraswamy @ Yogyakarta Nov. 2008

INTEGRATED TEAMS, SYNERGIZED INPUTS, STREAMLINED LOGISTICS AND OPTIMIZED OUTPUTS


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Technology Transfers? Difficult even in JVs so Holistic 4D view of Technology Synergies between 2 JV partners by combining their Technology profiles - TECHNOLOGY EXCHANGE
Technoware

Humanware

1.0

extend to KNOWLEDGE EXCHANGE


Infoware
I
A

Y B X

Technoware
T KEY

H
Humanware

1.0

1.0

O
Orgaware Key
Orgaware
O

Technology Profile of Organisation A Technology Profile of Organisation B Combined Technology Profile of a non-effective JV of A and B Combined Technology Profile of a Synergistic JV of A and B

ORGANISATION A 1.0
Infoware

ORGANISATION B COMBINED PROFILE

Fig. 1. Two potential scenarios of Overall (combined) JV Capacities and Competencies


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H Relational Integration ICT-aided Collaborative System I Infoware Structural Integration Humanware

3rd Intitiative:

SMILE-SMC
- for Bottom-Up Improvements

Two-way Technoware Transfers T Technoware


KEY Technology Profile of Organisation A Technology Profile of Organisation B

Orgaware O

+ Organisational Learning + Knowledge Management


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Small & Medium Contractors (SMCs) constitute 98.6 % of registered Construction Organisations in Hong Kong ..and are estimated to carry out over 90% of actual work SMCs need help to improve their Information & Knowledge Management for improving both internal processes and interface management SMILE-SMC will help in such Capacity Building
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Figure 2. Facilitating Technology Exchange in JVs Nov. 2008

Mohan Kumaraswamy @ Yogyakarta

SMILE-SMC AIMs:

To empower continuous improvement of SMCs through


framework innovative tools for boosting productivity, quality and image strategic information management useful knowledge management e.g. to increase business opportunities, streamline workflows & save on wastage
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SMILE-SMC - Main Objectives


user-friendly

Identify information & knowledge gaps, co-ordination barriers, etc. Identify, consolidate and develop good practices, critical success factors, appropriate benchmarks etc. Develop a framework & innovative tools a SMC-friendly web-based strategic information & knowledge manager to improve performance & increase competitiveness
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DEVELOPMENT AND GROWTH


Suppliers

SMILE-SMC Users
Subcontractors Main Contractors Trade Contractors Others

Parent/JV/ subsidary company

mutual improvements

Other companies on same projects

Clients

LESS WORK OPPORTUNITIES

Internal improvements

GREATER PRICE COMPETITION


Computer

Web-Based Interface

mutual improvements Subcontractors Suppliers

Wanted zone Discussion Forum Performance improvement

Available zone Information Library

IMPROVED INFORMATION & KNOWLEDGE MANAGEMENT INTEGRATED DEVELOPMENT THROUGH SMILE-SMC


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SMILE-SMC Uses

Potential Users and Uses of SMILE-SMC System


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SMILE-SMC Performance Improvement Zone Overview of the SIKM solutions


1.

Web-based SIKM (e.g. Materials & Supplier Management application) Mobile SIKM Pocket PC applications (e.g. Site Diary)

2.

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Potential for an Integrated Project Management Platform


Sample screenshots from Mobile SIKM

Database XML Spreadsheet etc.

Many previous exercise on Integrated Project Management Systems But (a) most are not truly integrated and (b) many commercially available systems are glorified Document Management Systems So an over-arching PIKMAP is conceptualised to link and apply the MSS and SMILE-SMC systems on a specific project to cover critical parts of the entire Supply Chain/ Value Network
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MSS
Client As MSS CDS Interface for Project P Project Consultant(s) Project Suppliers
Collaborative Delivery System

CLIENT A
Client As IPS

PROJECT INFORMATION & KNOWLEDGE MANAGEMENT PLATFORM (PIKMAP)


Project Main Contractor(s)

Client As MSS CDS Interface for Project P Project Consultant(s) Project Suppliers

Other authorized bodies (e.g. relevant Govt. Depts.)

PROJECT INFORMATION & KNOWLEDGE MANAGEMENT PLATFORM (PIKMAP)


Project Main Contractor(s)

Other authorized bodies (e.g. relevant Govt. Depts.)

SMILE compatible interface for SMCs on Project P

SMILE compatible interface for SMCs on Project P

General Web-based Interface for SMILE-SMC users

General Web-based Interface for SMILE-SMC users Mohan Kumaraswamy @ Yogyakarta

Other SMILESMC users

SMILE-SMC Nov. 2008

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CONCLUDING OBSERVATIONS

from PHYSICS to CHEMISTRY


Physical Integration - Network Structures? - necessary, but not enough. D&B, DBO, PPP only Integrates Functions Structural Integration Still need RELATIONAL INTEGRATION Catalysed by a VALUE FOCUS To trigger better Chemistry - chemical mixing/ integration & chain reactions down supply chain Can help in Cultural Revolutions too!
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Frameworks for Collaborative IKMSs and DSSs were developed in two independent R&D projects for Large Clients and SMCs 2nd phase of SMILE-SMC is at SMILE-NET see http://www.smile-net.hk/ A new Project Platform can extend coverage to Project Supply Chain/ Value Network A Technology & Knowledge Exchange proposal is being pursued with an Euro-Asian group (last meeting at Surabaya, Jan. 2008) Ideal for better teamworking / RIVANS What else must we do to develop our Industry?
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from BIOLOGY .
from Synergy to Symbiosis
SYMBIOSIS: (a) living together (in more or less intimate association or close union) of two dissimilar organisms (b) close and often long-term interactions between different species 1 Parasitism: an organism of one species benefits from a prolonged, close association with another, the host, which is harmed 2 Commensalism: one organism benefits and the other is not significantly harmed or helped (e.g. bird in a tree) 3 Mutualism: biological interaction between individuals of two different species where both derive benefits
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.. to BUSINESS
CO-OPETITION i.e. Co-operation + Competition Co-operating to be more Competitive together - through integrated networks and common objectives? See - http://www.hku.hk/cicid/3_events/63/63_summary.pdf

Back to Business? Back to Basics .. GOOD RELATIONSHIPS, BETTER NETWORKS, BEST VALUE Mohan Kumaraswamy @ Yogyakarta
Nov. 2008

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Your Opinions please .? Critical Industry Issues & potential long and short-term Solutions and Strategies ?
Also see http://www.hku.hk/cicid/ (at The University of Hong Kong) email: cicid@hkucc.hku.hk