Our first guest post is an very interesting one, so without further ado I will let Dan introduce himself. Enjoy and please find time to comment!
Engine[er]
Guest post by Dan Engström. Adjunct Professor at Luleå
University of Technology (www.ltu.se) and industrial researcher at NCC Engineering (www.ncc.se).
Associate professor of architecture. Would have continued as a structural
designer, but too many colleagues with actual talent realized the merits of
indoor work without hard manual labour.
Change agents of the
World, unite! We need to restructure our industry.
Looking around in our
sector, it becomes clear to me that we are in trouble. We are not too far off
the situation that the struggling – dying – traditional audiovisual industry is
in. They are facing a paradigm shift in technology and client habits with
existing business models. They are marketing products (discs) when clients
increasingly are asking for services (streaming). The old business and
organizational models in our industry are also put under such strain that we
need to rethink the way we do business. I am not suggesting we throw everything
out as if our mature industry were a greenfield to build a brave new world on.
But I am arguing (as strenuously as I am able) that we need to develop and
implement a new logic to our work. Sooner rather than later, we need to fundamentally
change. Let’s call it our own version of Perestroika, the effort to restructuring
of the stagnating Soviet Union. One major difference though. We need to
succeed.
Let me motivate this
rather startling call-to-arms with a look at my own hunting grounds – the Swedish
housing industry. If the number of apartments built is the main
indicator of the success of national and local politics in my country, the cost
development of multi-storey housing has become the main indicator of the
success of our construction industry. And maybe you’re already seeing where
this is going.
Since the mid-80s, the number of apartments in one/two-family
dwellings and in multi-storey buildings respectively has developed surprisingly
similarly. This development seems to be changing. Now, roughly speaking, 7 out
of 10 newly started apartments are located in multi-storey housing. According to Statistics Sweden, during the
first nine months of 2011, construction of a total of 16,046
apartments were started in Sweden. This is down from the 18,570 apartments
during the same time in 2010.
When it comes to the key metric, the cost development,
how are we doing? It is not too far-fetched to use the Retailer Price Index
(RPI) as an indicator of the purchasing power of our clients. Let’s map that
against the Construction Price Index (CPI) of multi-storey housing over time.
Let’s start in 1968, i.e. the early days of the major housing projects. A graph
of these cost statistics is certainly not a pretty sight. Since the mid-90s,
production costs have sky-rocketed compared to the purchasing power of our
clients.
The striking graphical impact of the graph stands. We.
Are. Failing. That is why we need Construction Perestroika. Sweden too has had
our share of Latham Reports and Rethinking Construction reports. I now call for
action, of the implementing of the findings in real business. The one main
change that we need to make is simple to describe but very hard to pull off:
changing from project-based logic to product-based logic. In my book, that’s our
Perestroika in a nutshell. We need to stop giving clients wish-lists for every
project and start preparing clients offers where that is possible. Develop
systems-building. Learn from manufacturing, with concepts like Lean (focusing completely on client value),
Mass customization (combining volume
with client choice) and incremental
improvement (articulating our methods and processes and letting hands-on
workers decide how they should be improved). This involves keeping our
value-chain together, built on interactive business trust, and making
substantial investments in work between projects, which is something we
normally just do not do.
We’ve developed building products in the small scale (like
the sports hall we’ve developed at my company, see link below) but we have a
whole sector to change; from the brief and contracts of clients to the design,
production and supply-chain. It will be a very long haul to bring our existing structures
to bear on these new ideas and new business. Imagine for example that we reengineer
the revenue streams for professional services so that they reflect the value
created for the clients. Clients seriously do not care how many hours we put
in. Substituting metrics for real value for the time-sheet is logical, doable
and necessary. But it affects our business to the core. Are we up to it?
Arguably, the Perestroika of the Soviet Union brought out the hidden conflicts
between the republics and made the union impossible to hold together. Like the
audiovisual industry, clients will soon push on to Construction Perestroika – строительство перестройка for the flavour of it. When it
takes off it will soon separate the early adopters that
will survive and the hard-of-hearing ones that will not. If the old structures
cannot adapt to new client requirements (read: “we’ve had it”) then new players
will enter that can.
When The Revolution Comes, Everything Will Be
Beautiful.
Dan Engström
Links and references:
·
Links to Swedish Housing Statistics in English: http://www.ssd.scb.se/databaser/makro/MainTable.asp?yp=tansss&xu=C9233001&omradekod=BO&omradetext=Housing+and+construction%26%239001%3B=2&langdb=2
·
Trash the time-sheet: role models: http://www.verasage.com/ and motives:
http://iloapp.mickla.se/blog/change?Home&post=7
·
When The Revolution Comes, Everything Will Be
Beautiful: a powerful album by the United Sons of Toil from Madison, Wisconsin,
available for the price you are willing to pay at http://music.unitedsonsoftoil.com/.
![Starting up an Engine[er]](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_48ubt0myJl9Kc2av_Yix8HwEpZTit9DLMrmiRI2LjDYLbqNtxNz6VTsBNTgpDxOGErtF-SRLInkC-wRWFeM-LRL0N0VvpgtHxCBKGnpQ1CZBb5-wXP76Y-of8pZkYpAOR7iTm1OOE6c/s435/newblog.jpg)
Incentive payment schemes are typically not good systems. Pay people by the hour, they take longer to do the job. Pay by the widget they produce more widgets, but not necessarily able to sell the quantity produced, and typically of low quality. Payment and pricing schemes have to produce the right output.
ReplyDeleteAlso people don't want pictures of hospitals, and even less need for pages filled with silly numbers. They want a physical operating hospital, and they wanted it yesterday: when the need was apparent. So every minute spent on design and construction is 1 minute too long.
Also if supplying a product, then hospital ships, and floating residential apartments are possibly the best way to supply a world market: rather than buildings locked to the ground.
A car may flow from an assembly line every 2 minutes, but it takes 2 weeks to build a car from start to finish. Just-in-time based on concept that when go into a supermarket the need is instantly satisfied by what is available on the shelves. Production wise everything is pulled through the system to the empty shelf.
The building industry is too reactive. It starts the design too late, then construction eventually follows, thus 1 billion people in need of housing.
So there certainly is a need for a revolution to meet the needs far more rapidly. Community not interested in the business that would find designing a hospital interesting and challenging: they want the business that can supply the hospital now.
Also humans are born with legs, they are not plants: so mobility is important. So consider that ship building, and car industry may pose a future challenge to the building industry.