When the Latham Report, ‘Constructing the Team’, was published in 1994, Michael Latham noted that ‘There is scope for improvements through greater standardization of components and design details and more off-site prefabrication’. 24 years later, the wait for those improvements may finally be coming to an end.
The unavoidable truth is that without innovation, we don’t have the resources to accomplish the huge amount of building that the UK needs. There’s £600 billion of government investment in the pipeline, yet our workforce is ageing and short of the skills needed in traditional construction processes. Some of the sobering statistics are well known. The residual value of a building is little more than half the cost of its construction. Around 30% of building materials and 40% of working hours are wasted. Yet profit margins are slim, and the unpredictability of the process poses risk for everyone from the customer onwards. The collapse of Carillion shows how real those risks are.
The solution is not squeezing the supply chain – that’s been tried and has not worked. Nor can there be compromise on the performance of the assets, networks and systems. Much-needed efficiencies can only be achieved through a fundamental shift in process, where construction becomes much more like manufacturing, and the use of raw materials is minimized, as is their processing and handling. The components of a construction asset can be delivered to the site at the right time, in the right sequence with the correct information. And once there, they can be assembled by fewer, more easily trained people.
This produces a new way of working (see Figure 2), where integrated solutions use standard components configured using standard processes to give bespoke assets. It contrasts with the traditional model (Figure 1). Here, there's fragmentation at every level, and clients become distanced from multiple suppliers or installers – the people who are actually delivering what they want.
The residual value of a building is little more than half the cost of its construction. Around 30% of building materials are wasted and 40% of working hours.