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The construction industry needs to get past new toys and business as usual

Murray Grove by Waugh Thistleton architects is constructed using cross laminated timber. Photo by Ben Scicluna via Flickr
Murray Grove by Waugh Thistleton architects is constructed using cross laminated timber. Photo by Ben Scicluna via Flickr

There is a lot of grief in Australia’s construction industry this week following the demise of Strongbuild. It’s time for some frank realities to be outed from the shadows. 

The transformation of Australia’s construction industry into a viable alternative to the past must be about pre-competitive engagements across the key players. It is not about new toys to enshrine business as usual, it’s not about self-indulgent interests, it’s not entertainment and it’s not about the industry’s customers being modern construction’s guinea pigs.

And not everyone in construction today will be coming on the journey – I predict that fewer than 40 per cent of construction enterprises now will exist in their current form or at all, by 2030.

Firstly, I want to acknowledge the leadership and integrity of the Strongbuild team. They have been bold, innovative, generous and above all amongst the most ethical people in the industry today. I am sure there will be reports about commercial shortcomings and other contributing mishaps that may have contributed to their demise. But these will not prove to be the root cause in my view. There are much larger shadows that lurk behind the scenes.

A few years back, I met with the chief executive officer of Forest & Wood Products Australia (FWPA). We discussed how the modernisation of the local industry might be influenced and in particular how the future prospects of timber buildings may be enhanced. FWPA has a well-funded platform to advocate for the timber industry and they are influential. I put it to the CEO that for a modern construction industry to thrive in Australia there would need to be a layer of pre-competitive collaboration across key stakeholders like the concrete and steel sectors.

Forest products are measured alongside fish and other primary products

Readers will probably be unaware that forest products in Australia are not counted as part of the construction industry. The sector is measured alongside fish and other primary products. The degree of timber imports is less visible to most as a result.

Australia has a growing trade imbalance when it comes to the use of structural timbers ranging from the timber used in regular housing construction to that now promoted around mass timber products like glulam, laminated veneer lumber and cross laminated timber. The timber industry is well informed about the likely reduction of detached and attached housing (project homes) starts each year, as greenfield land expansion at the urban-edge of our cities is increasingly challenged by available suitable land, the cost of servicing new infrastructure and increasing dysconnectivity with jobs and social infrastructure.

The timber industry foresees an increasing focus on brownfield redevelopments and the rise of higher density housing.

Understanding the complexities of the timber industry supply chain is another long discussion. Safe to say that the recent drive by the sector to make its case in the multi-level construction space has become an imperative. FWPA has invested millions in this pursuit. Strongbuild alongside others has epitomised this push.

As part of this strategy, FWPA  (and advocates of steel and concrete products) have  shown no interest in understanding or investing in the pre-competitive attributes that will be necessary to help establish what is known as an off-site construction manufacture (OSCM) capability in Australia.

It advocates steadfastly to ensure there is no leakage of any investment that may benefit any other material use. This is despite the inextricable linkages between the success of one to another. Even the most welded on advocate for the use of timber concedes that every material has its place.

Unfortunately, in this tussle, some end up misplaced. Construction’s customers become the guinea-pigs as a result.

The Victorian government is leading a push to transfer the legacy of manufacturing from the auto industry into modular construction technology

In Victoria, there is a major push for the use of pre-fabricated modular buildings whose core materials involve light weight steel frames. The Victorian government has led this push to mobilise modular (volumetric) construction as a potential solution to making housing supply more affordable and to help transfer a sizeable legacy of manufacturing capability left by the demise of the local auto industry.

Millions have been thrown at attempting to fast track a modern manufacturing sector in modular residential and school buildings to emulate the production models of the larger northern hemisphere markets.

The reality is that these models are unlikely to transfer to Australia due to market dislocation, lack of scale and sector volatility. The Unitised Building system demonstrated this. There have been a few exemplar variations since, such as those used by Hickory in its integrated façade and structural system. There are very few with the ability to follow suit.

Attend any construction conference these days where advocates for prefab, timber, lightweight steel, BIM, automated production systems proclaim their game changing attributes – these are mostly vendor driven affairs or exercises directed to providing professional (CPD) development to enable the uptake of one piece or part of the modern construction jigsaw to leap over another. These events become more of a marketing endeavour than disruptive.

Better practices not just for timber

Some have commented that the promotion of timber construction over all else has become so pervasive that one imagines future conferences may involve robing to demonstrate one’s green credentials and immersion in a new timber driven religious experience.

Let’s be clear the industry should be heavily invested in smarter, less wasteful and lower carbon practices. But the best material or construction methodology for purpose must be weighed carefully for its potential resilience and whole of life performance, including recycling.

So, what is pre-competitive industry practice and why is it important?

Making today’s built world requires construction’s traditional eco-system and practices to be reimagined. The global construction industry is now about 20-years into what is described as the fourth industrial revolution. At best the industry is still struggling to play out the practices and culture that survived at the twilight of the last century. In a global, customer-facing, digital-enabled and social-media driven new world, industries that imagine survival with more of the same, only with new toys and business as usual are doomed.

The impact of truly smart buildings will mean this being embedded in the entire supply chain

Few have contemplated the impact that an emerging breed of smart buildings will have. When the Internet of Things (IoT) fully penetrates an industry such as construction, the game changes.

Smart will need to be embedded throughout the entire chain of making, installing and operating the built-world. Buildings that are not smart will have a lower value than those that are. Imagine the residue of a BIM designed and constructed buildings or infrastructure. How will inert designs, as-builts and compliance assurance certifications interact with live operational diagnostics and the interrelationships with their users occur?

The construction industry’s risk-averse practices of the last century are now being exposed. Big questions are being asked about how the “pieces and parts” of construction should be reliably authenticated and joined up to deliver assured systems that will start their life journey as smart. Construction’s risk-averse past stands in stark contrast with these trends.

The community’s rising distrust of construction governance and fitness for purpose is not resolved by contracts that seek to limit liability and embed past custom and practice.

There has been little if any evidence that, as a result of all of the available technologies to construction today, the industry’s performances are improving. Many claim they have a better offering than another, but there is no evidence to bear this out. The industry lacks pre-competitive reference points.

In a fourth industrial revolution those reference points are essential – they are the critical pieces to evidencing what is better and what fails this test. Examples can be found in the systematisation of the core elements that make up motor vehicles, computers, food, pharmaceuticals, aircraft and almost any other globally traded good of service, just not construction. The exclusionary thinking by the proponents of timber, steel and concrete still needing to work this out, remain lurking in the shadows.

The joining up construction movement has started

This week, nine universities came together at Western Sydney University to discuss what a modern construction industry will look like when it transforms. Not if, but when.

Thoughts turned to new enterprise typologies, the technologies that will drive new customer-facing assurance platforms, the new skills and jobs that will arise, what future-fit regulatory and governance models will be needed to displace out-moded jurisdictional practices which have been dumbed down to accommodate the lowest common hangers-on.

And most importantly, what will be the nature of a modern construction narrative that will be attractive to boys and girls in schools today. What sort of measurably smarter, safer, innovative workplace will they seek?

The shadow of the dead-hands of construction were the elephants in the room – industry bodies that perpetuate a federated industry culture that deploys risk adversity as a professional entitlement and a tool to ensure the status quo.

Professional bodies that have yet to imagine an industry offering that achieves single point accountability for customer satisfaction. Organisations who call out red-tape as a reason for resisting lifting their game as part of ensuring even the weakest link in the chain is not exposed.

They were all being privately called out, just as were the silos in universities between disciplines who fail to see the interdependencies of construction joining up with engineering, design, computing, law and business. There were also positive reports on where these barriers are breaking down.

My hope for the next Strongbuild or hopefully a regenerated original

There are two ends to meeting this aspiration.

Firstly. Customers have to get what making the build-world in the fourth industrial revolution holds out for them. If they want it – and they should, they cannot be passive observers.

There are a few examples of new customer activism appearing, but it’s early days. These customers will need to get a better grasp of a modern construction ecosystem that can deliver the aspiration of smarter, more sustainable and efficiently delivered buildings and infrastructure. They will need to reset the practices of their traditional emissaries.

Project managers, specifiers and surveyors will need to recalibrate their value propositions if they are to fit in. They will need to understand that those who invest in different and better, like Strongbuild, have created important proprietary capabilities. The will need to understand meaningful early engagement with clearly defined outcome metrics as the new rules of procurement. They will need to display a new class of good-faith and fair-dealing that embeds integrity as the quid-pro-quo of better, faster and cheaper. Cheaper is, in the end, the measurable reality. This is not at the expense of fair margins, it is entirely about taking on the price of unsustainable supply chain inefficiency and indulgence.

At the other end of this challenge are organizations like FWAP, the steel and concrete institutes and policy makers that simply frustrate the uptake of new innovation and competitive advantage. It seems an impossible hope that the timber industry might lobby the federal government to agree on a national forest strategy that had two prongs. One to lower the trade imbalance of Australia’s structural wood imports and the other to provide a carbon sink to mitigate the impact of the essential construction inputs of steel and concrete.

It is simply folly that sector advocates kid themselves that they act in the national interest when they perpetuate their past self-facing indulgences. They should be turning their minds to how the best roll-out of a more systematised construction eco-system might be joined up to lower waste, embrace the best applications to deliver a smarter, more assured, resilient built-world, supported by the best industry capabilities to ensure their common good.

It is only when these ends meet that businesses such as Strongbuild will be able to offer an attractive investment platform that powers realising the vision that leaders like this bring to the market. The last week has been a sad indictment on an industry needing urgent change.

David Chandler is the principal of CE Advisory, an Industry Engagement Lead for c4SMC at Western Sydney University and an Independent Construction Industry Practitioner and Commentator. W:westernsydney.edu.au/c4SMC


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Comments

2 Responses to “The construction industry needs to get past new toys and business as usual”

  • Margaret says:

    David makes good points. The perennial challenge is to move beyond the prevailing ‘developer’ mindset of “build it, spend more money marketing it,then sell out as fast as possible”. Owner occupiers such as some corporations, universities and government have tinkered with whole of life [WOL} approaches, including the PPP deliveries, but any “innovation” has always been focussed on the first capex, not the WOL cost. Moreover, for large parts of taxpayer funded property portfolios, there is no nexus between the initial capex and the maintenance funding, as they are in different buckets [and often delivered on a ‘maintenance by catastrophe = Just in time’ basis], thereby obviating any long term savings of the numerous intelligent initiatives on offer. Some re-investment in engineering knowledge within the public service to educate our technology-illiterate pollies and other decision-makers would no doubt assist!

  • Tim Renouf says:

    As a regular reader and commentator on building enery efficiency to some FIFTH ESTATE articles, seldom have I read writing so full of unrelenting conviction, and piercing accuracy. Well done David.

    Your views on building, regulations and the behaviour of industry are captivating to read. Students at Western Sydney University listening to your talks (if I assume correctly), would have to walk away energenized and full of hope.

    In my opinion, the Lighthouse shines to protect the Public Interest from hitting the rocks. All regulations ought be recalibrated so that the Light is correctly positioned, and maintains its repeated warning signal.

    David, you are one of those Lights.

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