How construction industry has developed
The development of construction industry over the years cannot be overemphasized. The industry’s transformation has been driven mainly by changes to the needs and wants of clients, technology and other global problems such as climate change. There are different ways in which the construction industry has changed including: digitalization of construction documents using blueprint apps for documents such as plans, records, permits, stakeholder communication, safety inspections, etc.; use of smart gadgets at different phases of the project; use of internet; use of computer aided design (CAD); adoption of construction management software; improved health & safety legislation and standards (Whirlwind, 2015); use of technological tools and processes such as drones, robots, building information modelling (BIM), lean construction, automated systems, etc.; and increased demand for complex projects. This development has also had an impact on professionalism in the industry. It has raised the level of qualifications and skills base for experts/employees in the industry (Leominster Construction, 2013). These experts are required to acquire and adopt skills that match the current demands. These skills and qualifications include use of modern technologies, understanding of current health and safety standards, coordination and collaboration techniques, project management approaches, and sustainability issues. Continuous professional development is also very essential for professionals in the industry to remain competent and relevant.
The client is responsible for selecting the qualified company and other independent experts for the execution of the project. Depending on the type of contract being used, the client can develop a selection criteria for the project team and construction company. All parties involved in the project must coordinate and collaborate throughout the project. They should building business and professional relationships for the current project and may also decide to form partnerships or joint ventures in future projects. Within a construction organization, professionals from different departments must also work as one team. The parties that do not have technical knowledge about the project should also be helped to understand it in the simplest terms possible. In the proposed industrial park project, all parties involved in the construction of the industrial buildings, factories and inter-connecting infrastructure should work as one team. This includes all members of the project and design teams, contractors, subcontractors, suppliers, independent experts and workers.
The different types of contractual work include:
Lump sum contract – this is also called fixed-price contract. In this contract, the total cost for all works related to the project is fixed. The contractor can get incentives in case of early completion or penalties for late completion.
Cost-plus contract – this is where the client pays the contractor the actual costs or expenses incurred in executing the project, plus profit and overhead. The cost plus contract can be cost-plus fixed percentage, cost-plus fixed fee or cost-plus fixed fee with guaranteed maximum price.
Unit price contract – this is where the project is divided into different items then unit prices of these items are used to calculate the contract price.
Incentive contract – this is where the contractor is paid depending on his performance in relation to the project targets of schedule, budget and quality.
Guaranteed maximum price contract – this is where the contractor is compensated depending on the actual cost incurred plus a fixed fee.
Materials and time contract – this is where the client pays for the materials and time that the contractor spends on the project (Brown, 2016). Here, the client bears more risks because he is responsible for cost overruns.
The best contract type for the proposed industrial park project is cost-plus contract. This contract type is suitable for projects with greater uncertainty or if there is a big cost fluctuation for materials, labour and equipment. Since the margin of the contractor is fixed, the client has a chance of saving money by adopting techniques that will ensure lower incurred costs than estimated costs. This type of contract also delivers high quality work (UpCounsel, (n.d.)).
The company structures in construction industry have also changed significantly over the years with all parties, including employees, now being given a chance to be part of decision making. Originally, company structures were purely vertical where decisions were made at the top and those at the bottom required to follow without questioning. These structures were very rigid with minimal information exchange. Today, company structures are more horizontal where decisions are made after consulting all members of the structure and considering their opinions. Companies are also giving room for external consultations to enhance their competitiveness. Another important elements of today’s company structures are specialists in various issues such as sustainability, innovation and technology. There is now more room for communication, consultation, collaboration, coordination and participation among members of the company structure (Lohrey, 2018). Examples of organizational structures used today are: functional structure, divisional structure, matrix structure and flatarchy structure (Karell, 2018). The best company structure for the proposed industrial park project is flatarchy. This structure removes barriers to communication and collaboration and at the same times removes unnecessary layers in an organization allowing members to share their knowledge and experience about the project (Alton, 2017). The proposed project requires coordination and collaboration and flatarchy structure allows parties to communicate freely, broaden their skills, develop their professionalism and consult effectively.
Over the years, construction companies have been changing their organizational structures from vertical hierarchies to horizontal hierarchies. This is so as to improve decision-making process by allowing coordination, communication, collaboration and consultation among all members of the company, from the top management to employees. The horizontal structures allow members to share their knowledge and experience, work with transparency, build trust among themselves and feel to be part of the company. Most companies’ ethos have also changed significantly and now includes values such as quality, environmental awareness, sustainability, customer satisfaction and experience, social responsibility, professionalism, safety culture, reputation and teamwork. The development in organizational structures of construction companies and business ethos will play a key role in successful delivery of the proposed industrial park project. These developments will facilitate consultation, coordination and communication among all stakeholders involved in the project thus improving decision-making. It will also enable stakeholders to share their knowledge and experience, and work as one team towards a common goal. It will also help in ensuring that the project delivered has positive economic, social and environmental impacts throughout its lifecycle.
There are different types of construction companies depending on the job is performed by the company such as land acquisition, design, execution, financial planning, operation, maintenance and paper work (Mishra, 2017). The main types of construction companies are:
Small renovation contractors – these are companies that work on projects that do not require large construction organization or estimating and the ones that require small capital. They usually do small office, commercial or home renovation works.
General contractors – these are experienced companies that take on large projects such as new buildings or renovation works. The companies usually subcontract a large percentage of the work.
Owner-builder – these are companies that construct buildings for their own ownership for the purposes of selling or renting upon completion.
Real-estate developers – these are companies that construct buildings either for personal ownership or for selling them before or after they have been completed.
Professional construction manager/company – these are companies that oversee execution of construction projects on behalf of their clients. The company is responsible for subcontracting the works packages and overseeing the entire project.
Program manager – these are companies that perform the same services as the general contractor and professional construction manager and goes beyond to include program management. After completing the project, the program manager usually continues to manage the operations of the project.
Package builders – these are companies that usually take on design and construct building projects. They can also subcontract the design package to independent engineers or architects.
Sponsor-builder – these are companies that signs contracts with governments to implement subsidized projects.
The most appropriate type of company for the proposed project in the scenario is professional construction manager/company. This is because the professional construction manager/company has the capacity (resources, expertise and experience) to implement such complex projects that comprise of different packages (industrial buildings, factories and interconnecting infrastructure). This is a relatively complex project and therefore the client (private developer) needs a professional company that will execute the project on his behalf.
Relationship between companies working on a construction project
This being a commercial & industrial project, the main type of relationship that is likely to exist between companies working on the project is business relationship. The companies working together (including contractors, subcontractors and suppliers) will network with each other and maintain positive relationships throughout the project (Tan, et al., 2017). They will be working together for mentoring, social support, role model and service of others (Steinlage, (n.d.)). The project is likely to take long and therefore these companies should develop a friendly and healthy project culture, communicate and collaborate with each other freely, build trust amongst themselves and work towards a common goal – delivering the project successfully (Nikinosheri & Staxang, 2016).
There are several links that connect construction companies. Some of these include: investment links, partnerships, public links, customer links, employee links, customer links and customer experience (Spacey, 2018). The construction project in this scenario entails a variety of works packages that require specialized contractors, subcontractors, suppliers and operatives. The companies involved in construction projects must work collaboratively to achieve common goals. They have to share their knowledge and experience in relation to construction materials and methods, industry regulations, innovative technologies, management techniques, etc. Most importantly is that they have to work so as to make profits and protect the reputation of their professionalism.
The main factors that differentiate between construction company contracts and tenders are as follows:
Documents – a tender consists of documents with details of the project works and execution conditions that need to be filled with bidding construction companies. The tender documents do not bind the construction company to perform the work. A contract consists of tender documents that have already been filled by the selected construction company. The contract document binds the construction company to perform the work.
Purpose – the purpose of tender is to invite interested construction companies to bid for the project while the purpose of contract is to sign an agreement with the qualified or selected company to implement the project.
Timing – tenders are documents issued to construction companies to bid for the project (before the start of bidding process) while contracts are documents signed after the bidding process has been completed.
Parties involved – tenders are usually offered to many contractors who are willing to bid for the project while contracts are only signed between the client and the contractor who has been selected to execute the project.
Most of the modern construction processes and sequences are technologically driven. Some of these processes include the following:
Precast flat panel systems – this is the process where floor and wall units of a building are manufactured offsite in different factories
3D volumetric construction (modular construction) – this is the process where 3D modules are manufactured offsite with complete finishes and services then transported to the site where they are assembled one by one (NHBC Foundation, 2016).
Flat slab construction – this is the process of constructing flat slabs using panelized formwork systems with no interference of horizontal services installation.
Precast concrete foundation – this is the process of constructing individual components of the foundation separately offsite and transporting them to the site for assembling (The Concrete Centre, (n.d.)).
Twin wall technology – this is the process of erecting two thin wall slabs and fling the space between them with concrete to make a complete wall.
Insulating concrete formwork – this is the process where a wall is built using twin walled panels (formwork) made from blocks or polystyrene panels. The formwork panels are then filled with ready-mixed concrete to make walls.
Hybrid construction – this is the process that combined at least two of the aforementioned construction processes.
These processes and sequences respond to sustainability needs of the industrial park project by minimizing the amount of resources needed and wastage throughout the project’s lifecycle. The processes also respond to sustainability needs by reducing the cost of construction, reducing construction time, increasing quality of work, reducing labour needs, minimizing carbon footprint and increasing productivity (Kempton & Syms, 2009).
Project planning basically involves listing activities of the project, developing schedules for these activities and determining/allocating resources for these activities. The following are some of the contract planning techniques for micro and macro projects:
Bar charts – this is the simplest project planning technique. It basically entails plotting different project activities or work packages against resources needed (such as time, costs, operatives, etc.)
Critical path method – this is the process of linking all activities of the project depending on how their execution depends on each other. The technique mainly entails determining the start and finish dates of each activity.
Line of balance – this technique involves scheduling repetitive activities where resources required for each activity are located to avoid delay of subsequent activities (Rodriguez, 2018).
Precedence diagram – this technique is mainly used for macro projects. In this technique, a schedule of the project is developed showing project activities, early/late start date, early/late finish date, duration and relationship between activities (Usmani, 2012). It also shows what-if, most likely, best-case and worst-case scenarios.
The overall project planning techniques include: defining the project scope, developing the work breakdown structure (WBS), estimating work for each package and identifying resources needed, identify project deliverables’ major risks and developing the project schedule using above-mentioned tools (Billows, 2017).
Building Information Modeling (BIM) impacts on the following aspects of the proposed project’s construction and operations: it enhances coordination and collaboration of construction companies, it optimizes, it speeds up construction process, it optimizes the schedule and cost of the project during construction, improves safety during construction process (Suemann, 2009), it helps in risk detection and mitigation by the construction companies, it minimizes disputes and conflicts among construction and operation companies, it enables easy maintenance by the operations companies, it improves construction and operation flexibility, it helps in minimizing carbon emissions by construction and operation companies, it helps in lowering maintenance costs by the operations companies, it facilitates faster project delivery by the construction companies, and it improves quality during construction and operation processes (Goubau, 2016).
How construction has developed
Construction has developed greatly over the years mainly because of technology. Most construction processes today are completed using advanced technological tools. Innovation has made it possible to develop efficient designs of different structures, analyze them, create prototypes/models, improve the models, visualize the whole project, customize the project, select the most efficient materials and complete the project using efficient construction methods. Innovation has also changed the tendering process by significantly reducing paperwork. Major tendering processes are done digitally enabling companies to participate irrespective of their geographical locations. Most importantly is that innovation has significantly revolutionized the operation and management of projects once they are complete. Most of the modern buildings have automated systems that control different elements such as lighting, electrical appliances, air conditioning, water consumption, etc. All the innovation aspects of these projects have been enabled by BIM. The most fundamental function of BIM is to enhance information sharing, collaboration and coordination of all stakeholders involved in the project throughout its lifecycle.
The developments in the construction industry, including BIM, modern construction methods, innovation, etc., will benefit th proposed industrial park project by: lowering costs, improving coordination and collaboration of companies and stakeholders involved, reducing carbon footprint, improving quality of work, facilitating faster completion, improving safety of the project, reducing error and variations, lowering project risks, improving productivity, improving design and visualization of the project, increasing financial control, easing maintenance, facilitate and support decision-making, and increase revenues collected from the project (Mesaros & Mandicak, 2017).
How health & safety has become an integral part of the construction process
Construction sites are prone to a broad range of health & safety risks. The risks have numerous economic and social impacts (Fatih & Celebi, 2015). This has made health & safety become an integral part of the construction process in efforts by stakeholders to reduce the number of injuries and deaths in the construction industry (Bianca, 2017). This has been achieved mainly by taking into account health & safety factor during planning and design stages of a construction project. Construction companies are required to ensure that all health & safety aspects have been considered before starting any construction work. This including developing and adopting a health & safety plan that outlines strategies put in place to improve safety of construction workers such as wearing appropriate personal protective equipment, training employees, employing qualified and certified personnel, strict supervision, clear communication procedures, etc. This issue has become very important such that the government has formulated health & safety policies and regulations that must be adhered to by construction companies, failure to which attracts heavy penalties.
The UK government has developed adequate legislation to improve safety of workers on construction sites. The legislation outlines the responsibilities of each stakeholder involved in construction projects (including the client, principal contractor, principle designer, designers, contractors and workers) and the consequences in case these stakeholders fail to adhere to the regulations. Some of the legislation entail formulation of construction health & safety regulations such as Construction (Design and Management) Regulations 2015 (CDM 2015), Manual Handling Operations Regulations, Work at Height Regulations, Personal Protective Equipment at Work Regulations, Health and Safety at Work Act, Workplace (Health Safety and Welfare) Regulations, Gas Safety Regulations, Lifting Operations and Lifting Equipment Regulations, etc. The agency responsible for these regulations is the Health and Safety Executive (HSE) (Health and Safety Executive, (n.d.)).
Coordination and collaboration plays a very key role in ensuring safe working practices mainly because it helps in ensuring that all stakeholders are fully informed about the common health & safety goals and strategies on how to achieve them (including training), enables faster reporting and response to safety incidents, enables sharing of knowledge and experiences on how to enhance safety on site (Sparer, et al., 2016), enables the whole team to solve safety issues together, enables the stakeholders to identify, analyze, prevent, eliminate or manage safety risks as one team, and makes the entire team responsible for safety on site.
How construction industry has benefited
Changes in health & safety legislation have had significant positive impacts in the construction industry. The main benefit is the reduction in number of accidents, injuries and deaths in the industry. Other benefits of these changes include: increased awareness of construction safety risks, increased productivity, reduced project delays, faster project completion, reduced overall project costs, reduced disputes between stakeholders on who should be responsible for non-compliance of safety regulations, and increased work quality.
Health & safety legislation has made stakeholders in the construction industry to be more responsible in ensuring that construction activities are undertaken in safer environments. The legislation defines the characteristics of safe working environment and practices, the roles and responsibilities of each stakeholder and penalties for non-compliance. In general, the legislation has enhanced development of a health & safety culture in the construction industry. This has prompted stakeholders to take into account the health & safety aspect when planning and designing the project. The main advantages of this legislation is that it minimizes health & safety hazards and risks and their associated costs, facilitates faster project delivery, eliminates or prevents unnecessary costs and enables successful project delivery. Nevertheless, the legislation also has some weaknesses including: successful implementation requires subject experts that may increase the project cost, implementation follow is quite challenging due to limited number of public officers, resistance from construction stakeholders due to high requirements and penalties, and it is applicable across the board irrespective of the type, complexity, size or uniqueness of the project.
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