Future challenges in construction By : Ir Hj Mohd
Description: Future challenges in construction By : Ir Hj Mohd Fazli bin Osman Content Introduction Challenges Malaysias Initiatives Introduction In the years ahead, the construction industry will have to overcome various challenges, be it direct or
Related Topics
Download Presentation
"Future challenges in construction By : Ir Hj Mohd" is the property of its rightful owner. Permission is granted to download and print the materials on this website for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Presentation Transcript
slide1. Future challenges in construction By : Ir Hj Mohd Fazli bin Osman<br>
slide2. Content Introduction
Challenges
Malaysia’s Initiatives<br>
slide3. Introduction In the years ahead, the construction industry will have to overcome various challenges, be it direct or indirect. Technocrats associated with the construction industry need to employ innovative technologies and skilled project handling strategies to overcome these challenges.
A glance around and the wonders of civil engineering glares at us; a house here and a flyover there; a highway here and a metro line there. The green splash of nature is slowly converting into a concrete boulevard, thanks to the construction industry.<br>
slide4. The influx of various new technologies and deployment of project management strategies has made it possible to undertake projects of mega scale. Investment in this sector has been found to contribute significantly to the GDP of the country.
Gross Domestic Product (GDP) is the best way to measure a country’s economy. It is one of the primary indicator use to gauge the health of the country’s economy<br>
slide6. However, in its path of advancement, the industry has to overcome a number of challenges, some new and some old. Many of these challenges are a direct result of construction operations, while others a result of indirect, peripheral activities.
A surprising number of challenges are not construction issues but must be addressed and managed to ensure project success. Some of the construction issues include workforce considerations, safety, time constraints, and the changing nature of the work.<br>
slide7. Non-construction challenges that are part of the business landscape include legal issues, government regulations, environmental concerns, and sociopolitical pressures.
Business that fail to take the challenges seriously, however will face uphill battle for viability.<br>
slide8. What are the challenges?<br>
slide9. 1. Project Performance The opportunities in construction are growing, but so is project complexity. With companies already operating under razor-thin profit margins, a single production surprise can wipe out profits for the whole company. Design complexity compounds this problem. As designs become larger and require greater efficiency, construction companies struggle to keep up.<br>
slide10. The lack of on-time and on-budget projects is telling. The 2015 KPMG Global Construction Survey found that more than half of all construction companies experienced one or more underperforming projects in the previous year.<br>
slide11. 2. Project Management Construction as such, is a complex array of interdependent activities that some would say is at best, an organized chaos. The very nature of construction introduces challenges typically not encountered in other industries. The work is often seasonal and involves functioning in remote sites with accessibility problems. There may be difficulty in applying automation and requires adoption of technical innovation and the costs can vary as per the conditions.<br>
slide12. The product can be of mindboggling size, cost, and complexity and also the work is not performed in controlled conditions, therefore highly impacted by weather and other environmental conditions.<br>
slide13. The management of construction projects requires knowledge of modern management as well as an understanding of the design and construction process. Construction projects have a specific set of objectives and constraints such as a required time frame for completion. The Great Pyramids, the Hanging Gardens of Babylon, and the ancient cathedrals of Europe did not rise up haphazardly. From start to finish, precise coordination was required to complete these massive projects that often stretched across decades and generations.<br>
slide14. Construction managers plan and coordinate such construction projects. She/he must understand and navigate the project through its realities and master the obstacle thereby gaining an edge over the market. A capable project manager must understand the business, legal and social aspects of construction and be determined to convert risks into opportunity. He must adapt to the changing business, social, legal and sustainable environment and lead the organisation through the challenges it faces.<br>
slide15. 3. Skilled Labor Shortages The construction industry is bracing for a dramatic reduction in workforce. The Associated General Contractors of America (AGC) found that 74% of the total respondents believe there is a crunch in skill trades, and 53 percent said they were unable to hire construction professionals such as supervisors, estimators, and engineers.
The U.S. construction market consisted of two generations: the traditionalists and baby boomers. Now, the workforce has split into four generations: traditionalists, baby boomers, Generation X, and millennials.<br>
slide16. This present labor diversification is a challenge because of stark differences in work ethic, attitude, outlook, and behavior between the generations. Traditionalists have nearly all left the workforce and baby boomer retirement is in full swing. By 2020, millennials are expected to represent half of the global workforce– many with little to no experience or interest in the construction industry
The combination of increasing project complexity and decreasing experience is a risk multiplier, increasing the risk of deliverable delays, quality construction problems, and employee safety concerns.<br>
slide17. 4. Sustainability The construction industry is the top global consumer of raw materials. The industry generates between 25 to 40 percent of the world’s carbon emissions. This volume of natural resource utilization is not sustainable and could compromise the environment for the sake of growth.
Achieving targets for global carbon dioxide emissions reduction will be a major challenge for the construction energy in rapidly developing countries. Smart planning and sustainable design could reduce energy consumption and pollution, but require a new approach to project management– an approach that the construction industry on a whole is not yet prepared to undertake.<br>
slide18. 5. Poor Productivity and Profitability Currently, the barriers to entry in construction are low, creating a saturated marketplace with heavy competition. This competition is shrinking profit margins and constraining essential reinvestment in new technology and better business practices. Stagnant construction labor productivity is compounding this problem.
This lack of productivity is reflected in the bottom line, where typical margins for construction companies range between 2 and 8 percent. Consequently, construction companies find themselves trapped between shrinking profit margins and stagnant productivity, unable to generate the profit necessary to invest in critical technology<br>
slide19. 6. Embracing Disruption and Readiness for the digital future. The construction industry is at an inflection point, analogous to the move from landline telephony to cellular technology. Digital technologies are disrupting the industry, providing new opportunities to address the challenges of poor profitability/productivity, project performance, skilled labor shortages, and sustainability concerns. Digitization of the construction industry is not a question of if or when—the changes are happening now.<br>
slide20. The industrialization of construction and the application of proven manufacturing technology and best practices will help companies drive reliable outcomes and improve margins. Digitization will increase productivity, eliminate waste, and mitigate the adverse impact of on-site surprises.
Digitization will change almost everything, including the competitors and the barriers to entry. The end result: a more productive and profitable industry that builds more sustainable assets. Construction companies must take steps now to join the digital future and stay ahead of the competition—or risk being left behind.<br>
slide21. 7. Compliance Government and lawmakers impose industry legislation for a reason, but it is sometimes difficult to see past the red tape. Industry legislation is a major driver for change in a number of different sectors. With safety engineering, H&S, employee rights and numerous other business management practices affected, construction companies can often find the red tape constrictive and counter-intuitive.
While some of these issues may not materialize for years to come, many others are more than likely to cause imminent concern construction firms.<br>
slide22. What about Malaysia? Malaysian construction industries are tackling the challenges through CIDB construction Industry Transformation Program (CITP) initiative.
CITP initiative have 4 strategic thrust as follows:
Quality, safety & professionalism
Environmental sustainability
Productivity
Internationalisation<br>
slide25. How JKR fits in?<br>
slide26. Let us look at past organization that is similar to JKR. Looking at the organization stand at any given moment which necessitate to anticipate effects that changing economic conditions, new rivals and market dynamics is a major threat to your ability to compete for business.<br>
slide27. Australia Public Works Department (PWD)
Formed :1st January 1901
Dissolved :31st December 1984
Superseding agency : Building management authority
Jurisdiction : Government of western Australia
Public Works Department (PWD) are the State Government Agency of Western Australia which was charged with providing and maintaining public infrastructure such as dams, center supply, school, hospital, harbor and other public building.
The department is no longer operational, having its responsibilities reassigned to other state government and corporate entities<br>
slide28. New Zealand Department of Public Works often referred to as Public Works Department
Formed 1876
Disestablished and privatized in 1988
When privatized the corporation have 2 main subsidiaries, work consultancy services and works civil construction. These were sold in 1996 and became OPUS international consultants and infrastructure respectively, and the corporation were disestablished.<br>
slide29. United Kingdom Formed 1943 during world war 2
1962 renamed as ministry of Public Buildings and Works
1972 most former works function were transferred to the largely autonomous property service agency (PSA).
Subsequent re-organisation of PSA into Property Holdings was followed by abolition in 1996 when individual Government departments took on responsibility for managing their own estate portfolios.<br>
slide30. Singapore Public Works Department of Singapore formed in 1946. Infrastructure and building development.
PWD Singapore was incorporated in 1999 under Temasek Holdings.
2002 renamed CPG corporation and 1 year later became part of the Downer EDI group.
2012 Downer EDI was transferred to China Architecture Design and Research Group (CAG)<br>
slide31. Malaysia PWD was born 1872
PWD Federation of Malaya was formed in 1948
Later as JKR Persekutuan Tanah Melayu and finally JKR Malaysia.<br>
slide32. Observation 1 From the above scenario, it can be observed that in meeting the challenges of the construction industries, these organization have adopted certain standard and reengineered themselves. These reengineering is done in the context of changing economic conditions and market dynamics in order to alleviate the competitive ability of the organization to compete for business.<br>
slide33. PWD Singapore is a glaring example. From a government organization, it become a corporate body under Temasek Holding and later CPG corporation. It is one of the leading development professional in Asia-Pacific region providing building and infrastructure development and management service which comprise master planning, urban design, green design, architectural, engineering design and consultancy, project management, construction management to facilities management services.<br>
slide34. Observation 2 Another thing to note is that, most of the PWD organization started with D.I.Y.
Later to meet the changing economics conditions and market dynamics, the modus operandi of this organization evolved. Thus introduction of the outsourcing concept.
Now we have suppliers , skill workmen, contractors, consultants etc i.e the ecosystem of the construction industry.
The PWD’s role has change to that of consultancy and project management. Some PWD’s organization went on further to become corporatize and privatized entity. Their business is still engineering business.<br>
slide35. Observation 3 JKR Malaysia is no exception. In meeting the changes of the construction industry. JKR Malaysia too has her share of the rollercoaster ride.
Massive road building plan to open up rural Malaya. “Self-contained work team formed” (NST, 19.6.1960)
PWD comes under review to speed up government projects. (The Strait Times, 25.12.1981)
Dasar Pengswastaan Negara, 1983. “Many ambitious and service professionals left JKR for the private sector”.
1994 paper on corporatization of JKR, was sent to cabinet. The proposal was rejected. The paper was prepared by JKR/Arthur Anderson.<br>
slide36. Corporatization of state water department 1990’s
The privatization of Institut Kerja Raya Malaysia (IKRAM) 1997.
During Tan Sri Zaini tenure as KPKR he introduced “ Self contained team for small projects to speed up projects delivery.
Privatization of federal road maintenance, 2001.
Formation of National Water Services Commission, 2007.<br>
slide37. Cont’d During Dato Sri Wahid tenure as KPKR. “Change or die”. Hence the introduction of matrix Organization, 2007.
Restructuring of JKR Malaysia Headquarters, 2014, with emphasis on the following:
Project Based to Asset based organization
Total asset management. Life cycle cost
Hybrid matrix – improving delivery.
Going forward as Government Technical Advisor.<br>
slide38. JKR stigma
The design does not complete on time
The tender does not execute as schedule
Lack of communication among stakeholder
Lack of coordination among stakeholder.
The project does not complete on time as schedule
The project need extension of time in order to be completed
The quality of construction and installation does not meet the good engineering practice and functional requirement.
Discrepancy and error in construction drawing Pre-Tender Post-Tender<br>
slide39. JKR strategies and initiatives to enhance effectiveness of project delivery.
Acquisition Categorization (ACAT)
Gateway
PM Competency Framework
PM Tools and Methodologies
Project Implementation Strategies<br>
slide40. Cont’d Building Information Modelling (BIM)
JKR Strategic Themes
Outstanding Project Delivery
Co-creative Customer Experience
Centre of Technical Excellence
Leading Sustainability
Innovative Organization.<br>
slide41. For us to ponder. What JKR can do other people also can do.
They can do better than JKR
What value added does JKR have in order for JKR to be The Choice Consultant.
What will JKR be beyond 2020???<br>
slide42. The organization will
not get better by chance,
it will get better by
CHANGE.
To improve is to
change.
To be perfect is to change often.<br>
slide43. Thank You<br>
slide2. Content Introduction
Challenges
Malaysia’s Initiatives<br>
slide3. Introduction In the years ahead, the construction industry will have to overcome various challenges, be it direct or indirect. Technocrats associated with the construction industry need to employ innovative technologies and skilled project handling strategies to overcome these challenges.
A glance around and the wonders of civil engineering glares at us; a house here and a flyover there; a highway here and a metro line there. The green splash of nature is slowly converting into a concrete boulevard, thanks to the construction industry.<br>
slide4. The influx of various new technologies and deployment of project management strategies has made it possible to undertake projects of mega scale. Investment in this sector has been found to contribute significantly to the GDP of the country.
Gross Domestic Product (GDP) is the best way to measure a country’s economy. It is one of the primary indicator use to gauge the health of the country’s economy<br>
slide6. However, in its path of advancement, the industry has to overcome a number of challenges, some new and some old. Many of these challenges are a direct result of construction operations, while others a result of indirect, peripheral activities.
A surprising number of challenges are not construction issues but must be addressed and managed to ensure project success. Some of the construction issues include workforce considerations, safety, time constraints, and the changing nature of the work.<br>
slide7. Non-construction challenges that are part of the business landscape include legal issues, government regulations, environmental concerns, and sociopolitical pressures.
Business that fail to take the challenges seriously, however will face uphill battle for viability.<br>
slide8. What are the challenges?<br>
slide9. 1. Project Performance The opportunities in construction are growing, but so is project complexity. With companies already operating under razor-thin profit margins, a single production surprise can wipe out profits for the whole company. Design complexity compounds this problem. As designs become larger and require greater efficiency, construction companies struggle to keep up.<br>
slide10. The lack of on-time and on-budget projects is telling. The 2015 KPMG Global Construction Survey found that more than half of all construction companies experienced one or more underperforming projects in the previous year.<br>
slide11. 2. Project Management Construction as such, is a complex array of interdependent activities that some would say is at best, an organized chaos. The very nature of construction introduces challenges typically not encountered in other industries. The work is often seasonal and involves functioning in remote sites with accessibility problems. There may be difficulty in applying automation and requires adoption of technical innovation and the costs can vary as per the conditions.<br>
slide12. The product can be of mindboggling size, cost, and complexity and also the work is not performed in controlled conditions, therefore highly impacted by weather and other environmental conditions.<br>
slide13. The management of construction projects requires knowledge of modern management as well as an understanding of the design and construction process. Construction projects have a specific set of objectives and constraints such as a required time frame for completion. The Great Pyramids, the Hanging Gardens of Babylon, and the ancient cathedrals of Europe did not rise up haphazardly. From start to finish, precise coordination was required to complete these massive projects that often stretched across decades and generations.<br>
slide14. Construction managers plan and coordinate such construction projects. She/he must understand and navigate the project through its realities and master the obstacle thereby gaining an edge over the market. A capable project manager must understand the business, legal and social aspects of construction and be determined to convert risks into opportunity. He must adapt to the changing business, social, legal and sustainable environment and lead the organisation through the challenges it faces.<br>
slide15. 3. Skilled Labor Shortages The construction industry is bracing for a dramatic reduction in workforce. The Associated General Contractors of America (AGC) found that 74% of the total respondents believe there is a crunch in skill trades, and 53 percent said they were unable to hire construction professionals such as supervisors, estimators, and engineers.
The U.S. construction market consisted of two generations: the traditionalists and baby boomers. Now, the workforce has split into four generations: traditionalists, baby boomers, Generation X, and millennials.<br>
slide16. This present labor diversification is a challenge because of stark differences in work ethic, attitude, outlook, and behavior between the generations. Traditionalists have nearly all left the workforce and baby boomer retirement is in full swing. By 2020, millennials are expected to represent half of the global workforce– many with little to no experience or interest in the construction industry
The combination of increasing project complexity and decreasing experience is a risk multiplier, increasing the risk of deliverable delays, quality construction problems, and employee safety concerns.<br>
slide17. 4. Sustainability The construction industry is the top global consumer of raw materials. The industry generates between 25 to 40 percent of the world’s carbon emissions. This volume of natural resource utilization is not sustainable and could compromise the environment for the sake of growth.
Achieving targets for global carbon dioxide emissions reduction will be a major challenge for the construction energy in rapidly developing countries. Smart planning and sustainable design could reduce energy consumption and pollution, but require a new approach to project management– an approach that the construction industry on a whole is not yet prepared to undertake.<br>
slide18. 5. Poor Productivity and Profitability Currently, the barriers to entry in construction are low, creating a saturated marketplace with heavy competition. This competition is shrinking profit margins and constraining essential reinvestment in new technology and better business practices. Stagnant construction labor productivity is compounding this problem.
This lack of productivity is reflected in the bottom line, where typical margins for construction companies range between 2 and 8 percent. Consequently, construction companies find themselves trapped between shrinking profit margins and stagnant productivity, unable to generate the profit necessary to invest in critical technology<br>
slide19. 6. Embracing Disruption and Readiness for the digital future. The construction industry is at an inflection point, analogous to the move from landline telephony to cellular technology. Digital technologies are disrupting the industry, providing new opportunities to address the challenges of poor profitability/productivity, project performance, skilled labor shortages, and sustainability concerns. Digitization of the construction industry is not a question of if or when—the changes are happening now.<br>
slide20. The industrialization of construction and the application of proven manufacturing technology and best practices will help companies drive reliable outcomes and improve margins. Digitization will increase productivity, eliminate waste, and mitigate the adverse impact of on-site surprises.
Digitization will change almost everything, including the competitors and the barriers to entry. The end result: a more productive and profitable industry that builds more sustainable assets. Construction companies must take steps now to join the digital future and stay ahead of the competition—or risk being left behind.<br>
slide21. 7. Compliance Government and lawmakers impose industry legislation for a reason, but it is sometimes difficult to see past the red tape. Industry legislation is a major driver for change in a number of different sectors. With safety engineering, H&S, employee rights and numerous other business management practices affected, construction companies can often find the red tape constrictive and counter-intuitive.
While some of these issues may not materialize for years to come, many others are more than likely to cause imminent concern construction firms.<br>
slide22. What about Malaysia? Malaysian construction industries are tackling the challenges through CIDB construction Industry Transformation Program (CITP) initiative.
CITP initiative have 4 strategic thrust as follows:
Quality, safety & professionalism
Environmental sustainability
Productivity
Internationalisation<br>
slide25. How JKR fits in?<br>
slide26. Let us look at past organization that is similar to JKR. Looking at the organization stand at any given moment which necessitate to anticipate effects that changing economic conditions, new rivals and market dynamics is a major threat to your ability to compete for business.<br>
slide27. Australia Public Works Department (PWD)
Formed :1st January 1901
Dissolved :31st December 1984
Superseding agency : Building management authority
Jurisdiction : Government of western Australia
Public Works Department (PWD) are the State Government Agency of Western Australia which was charged with providing and maintaining public infrastructure such as dams, center supply, school, hospital, harbor and other public building.
The department is no longer operational, having its responsibilities reassigned to other state government and corporate entities<br>
slide28. New Zealand Department of Public Works often referred to as Public Works Department
Formed 1876
Disestablished and privatized in 1988
When privatized the corporation have 2 main subsidiaries, work consultancy services and works civil construction. These were sold in 1996 and became OPUS international consultants and infrastructure respectively, and the corporation were disestablished.<br>
slide29. United Kingdom Formed 1943 during world war 2
1962 renamed as ministry of Public Buildings and Works
1972 most former works function were transferred to the largely autonomous property service agency (PSA).
Subsequent re-organisation of PSA into Property Holdings was followed by abolition in 1996 when individual Government departments took on responsibility for managing their own estate portfolios.<br>
slide30. Singapore Public Works Department of Singapore formed in 1946. Infrastructure and building development.
PWD Singapore was incorporated in 1999 under Temasek Holdings.
2002 renamed CPG corporation and 1 year later became part of the Downer EDI group.
2012 Downer EDI was transferred to China Architecture Design and Research Group (CAG)<br>
slide31. Malaysia PWD was born 1872
PWD Federation of Malaya was formed in 1948
Later as JKR Persekutuan Tanah Melayu and finally JKR Malaysia.<br>
slide32. Observation 1 From the above scenario, it can be observed that in meeting the challenges of the construction industries, these organization have adopted certain standard and reengineered themselves. These reengineering is done in the context of changing economic conditions and market dynamics in order to alleviate the competitive ability of the organization to compete for business.<br>
slide33. PWD Singapore is a glaring example. From a government organization, it become a corporate body under Temasek Holding and later CPG corporation. It is one of the leading development professional in Asia-Pacific region providing building and infrastructure development and management service which comprise master planning, urban design, green design, architectural, engineering design and consultancy, project management, construction management to facilities management services.<br>
slide34. Observation 2 Another thing to note is that, most of the PWD organization started with D.I.Y.
Later to meet the changing economics conditions and market dynamics, the modus operandi of this organization evolved. Thus introduction of the outsourcing concept.
Now we have suppliers , skill workmen, contractors, consultants etc i.e the ecosystem of the construction industry.
The PWD’s role has change to that of consultancy and project management. Some PWD’s organization went on further to become corporatize and privatized entity. Their business is still engineering business.<br>
slide35. Observation 3 JKR Malaysia is no exception. In meeting the changes of the construction industry. JKR Malaysia too has her share of the rollercoaster ride.
Massive road building plan to open up rural Malaya. “Self-contained work team formed” (NST, 19.6.1960)
PWD comes under review to speed up government projects. (The Strait Times, 25.12.1981)
Dasar Pengswastaan Negara, 1983. “Many ambitious and service professionals left JKR for the private sector”.
1994 paper on corporatization of JKR, was sent to cabinet. The proposal was rejected. The paper was prepared by JKR/Arthur Anderson.<br>
slide36. Corporatization of state water department 1990’s
The privatization of Institut Kerja Raya Malaysia (IKRAM) 1997.
During Tan Sri Zaini tenure as KPKR he introduced “ Self contained team for small projects to speed up projects delivery.
Privatization of federal road maintenance, 2001.
Formation of National Water Services Commission, 2007.<br>
slide37. Cont’d During Dato Sri Wahid tenure as KPKR. “Change or die”. Hence the introduction of matrix Organization, 2007.
Restructuring of JKR Malaysia Headquarters, 2014, with emphasis on the following:
Project Based to Asset based organization
Total asset management. Life cycle cost
Hybrid matrix – improving delivery.
Going forward as Government Technical Advisor.<br>
slide38. JKR stigma
The design does not complete on time
The tender does not execute as schedule
Lack of communication among stakeholder
Lack of coordination among stakeholder.
The project does not complete on time as schedule
The project need extension of time in order to be completed
The quality of construction and installation does not meet the good engineering practice and functional requirement.
Discrepancy and error in construction drawing Pre-Tender Post-Tender<br>
slide39. JKR strategies and initiatives to enhance effectiveness of project delivery.
Acquisition Categorization (ACAT)
Gateway
PM Competency Framework
PM Tools and Methodologies
Project Implementation Strategies<br>
slide40. Cont’d Building Information Modelling (BIM)
JKR Strategic Themes
Outstanding Project Delivery
Co-creative Customer Experience
Centre of Technical Excellence
Leading Sustainability
Innovative Organization.<br>
slide41. For us to ponder. What JKR can do other people also can do.
They can do better than JKR
What value added does JKR have in order for JKR to be The Choice Consultant.
What will JKR be beyond 2020???<br>
slide42. The organization will
not get better by chance,
it will get better by
CHANGE.
To improve is to
change.
To be perfect is to change often.<br>
slide43. Thank You<br>