drivers and barriers of ibs roadmap in malaysia

Kamarul Anuar Mohamad Kamar, Zuhairi Abd. Hamid Maria Zura Mohd Zain, Ahmad Hazim Abd Rahim, Mohd. Khairolden Ghani, Mohamed Nor Azhari Azman, Taksiah A. Majid and Mohd Sanusi S. Ahamad (2012), Drivers and Barriers to Industrialised Building System (IBS) Roadmaps in Malaysia, Malaysian Construction Research Journal, ISSN 1985 -3807, Vol. 9 (1)

DRIVERS AND BARRIERS OF INDUSTRIALISED BUILDING SYSTEM (IBS) ROADMAPS IN MALAYSIA

Kamarul Anuar Mohamad Kamar1 Zuhairi Abd. Hamid1 Maria Zura Mohd Zain1 Ahmad Hazim Abd Rahim1 Mohd. Khairolden Ghani1 Mohamed NorAzhari Azman2, Taksiah A. Majid2, Mohd Sanusi S. Ahamad2

1Construction Research Institute of Malaysia (CREAM), Makmal Kerja Raya, Jalan Chan Sow Lin, 55200 Kuala Lumpur. 2School of Civil Engineering, Engineering Campus, Universiti Sains Malaysia, 14300 Nibong Tebal, Penang, Malaysia. Abstract – The IBS survey had become essential tool to ensure the achievement of IBS Roadmap (2003-2010) to meet the goal and the target. Part of the process review survey, it also record the Malaysia’s trend achievement in the usage of IBS in the building construction industry. The first IBS survey was published in 2003 and secondly in 2005 and followed by in 2008 and the last recently in 2010. The objective of quantitative survey is to identify the most popular and widely used IBS system by Malaysian G7 contractor and drivers and barriers to use IBS as perceived by them. G7 is CIDB contractor grade that can applied tender without limit. The survey shows that the acceptance, adoption and deployment of IBS in the Malaysian construction industry is still low and does not help to improve outstanding and persisting problems in productivity, dependency on foreign workers and high level of construction wastage. Keywords: Industrialised Building System (IBS), Malaysia, barriers, drivers, critical success factors INTRODUCTION

The earliest IBS survey in Malaysia was conducted in 2003 where to study the awareness and usage of IBS in construction from the point of view from contractor G5 to G7. While the second part IBS survey continued in 2005 is to survey architects’ opinion and acceptance on IBS. The third review IBS survey was conducted in 2008 is to measure the acceptance of construction industry (class G7 – G4 contractors) towards IBS system. The IBS survey 2010 was focused on the G7 role in IBS system as they have the high capital catered for the project and affordability to use the IBS technology. Presently the objective of IBS Roadmap (2003 - 2010) has almost met the target deadline. The Roadmap was design by the IBS Steering Committee to ensure that the formulated IBS is applied to the construction industry in Malaysia. It also discloses the actions taken by the CIDB in ensuring the implementation of IBS in the construction industry.

The initial take up for IBS nonetheless was not as high as first anticipated at this stage particularly from private sector. The adoption is somehow fail to get private sector buy-in. IBS Survey 2003 stated only 15 % of construction projects used IBS in Malaysia (IBS Survey, 2003). IBS Mid Term Review in 2007 indicated that approximately only 10% of the complete projects used IBS in the year 2006 as compared to forecasting IBS usage of 50 % in 2006 and 70% in year 2008 as projected in the roadmap (Hamid et al 2008). While the IBS survey 2008 that had carried out from June 2008 to December 2008. There measured four aspects including (a) the awareness on the IBS system IBS (b) the actual usage of IBS (c) the perception on the ease of IBS usage and (d) perception on the usefulness of IBS. The t-test of the average percentage difference shows that all the respondents consisting of class contractors (G7, G6, G5 and G4) have strong agreement on the IBS actual use (problems faced in using IBS), the awareness on IBS and the IBS actual use (promotion of IBS by the government through CIDB) with 0.63%, 3.98% and 4.06% respectively. But there are disagreement in perceived IBS usefulness, the perceived ease of IBS usage and the actual use of IBS (the benefits of using IBS in construction) vis-à-vis 12.74%, 10.06% and 6.54%. This shows that all the contractors are facing the common problems in using IBS. However, they are highly aware of the importance of IBS in the construction industry as well as the need to overcome the problems in using IBS. They appreciate the role of CIDB to promote IBS in the Malaysian construction industry. In contrast, there is doubt on IBS actual use in the context of benefit, perceived ease of IBS use and perceived IBS usefulness from the all the correspondents consisting of contractors, where the t-test on items shows that G7 have strong agreement on the usage of IBS with their acceptance of the IBS system as compared to other class of contractors (G6, G5, G4).

The availability of cheap foreign labour which offset the cost benefit of using IBS is a root cause of the slow adoption. It also relates to sheer cost of investment and the inadequacy of market size. Small contractors are already familiar with the conventional system and for them the technology suit well with small scale projects and therefore not willing to switch to mechanised based system. Furthermore, small contractors lack financial backup and are not able to set up their own manufacturing plants as it involves very intensive capital investment (Rahman and Omar, 2006). It was highlighted by many that the idealism, processes and management and skill sets behind IBS is differs from the traditional method. Lack of knowledge in IBS construction technology is equally important. There are cases, where building projects are awarded and constructed using IBS system but were contribute to the project delays and bad qualities. This has leaves the industry with a noticeable difficulties when using IBS. As a result, the industry is reluctant to embrace in IBS unless it is required by the clients. A wider understanding on the characteristics and what is involved

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in IBS is needed. There is a critical need to manage the design and manufacturing differently from the traditional way as IBS is different and needs a different mindset along with the right environment. Rethinking the old processes is now critical if the industry is to move forward. There are consensuses of opinions that IBS best handled as a holistic process rather than just a collection of technological solutions. The approach requires total synchronisation on construction, manufacturing and design processes. It needs emphasis on rationalisation, standardisation, repetition, collaboration, supply chain partnering and more effective planning and project management. The survey provides basis on understanding the preferable system, drivers, barriers and the factors that are critical to IBS in Malaysia as perceived by the contractor which result to the success or failure on IBS implementation.

The aim of this paper is to highlight part of the IBS survey report for 2010 under the 4th review of the IBS awareness in Malaysia. The respondents were also asked to identify critical success factors to IBS implementation based on their past experiences and their general perception. The critical success factors are imperative principle to be adopted by contractors in order to use IBS. The study will improve our understanding on the preferable system, drivers and barriers to the use of IBS among contactor as well as their success factors in using and maximising benefits and values offered by IBS. This report includes statistics of quantitative survey conducted on the G7 construction companies in Malaysia in determining the level of IBS usage and factors associate with it.

SURVEY OBJECTIVE, METHODOLOGY AND SAMPLING

Contractors are the stakeholders dealing with the project management and deal with issues relating to construction on day to day basis. They are responsible for the means and methods to be used in the execution of the construction of the project in accordance with the contract documents. They are also responsible for the supplying of material, labour, equipment, (engineering vehicles and tools) and services necessary for the construction of the project. In many cases, the main contractors will delegate portions of the contract work to the sub-contractors. The total number of IBS contractors in Malaysia registered with CIDB is 894, while 334 of them are G7 contractors which represent the largest type of contractors involved in IBS (CIDB, 2010). As contrary to popular believe that IBS is client driven, recent study revealed that the contractors in Malaysia also have much influence over the developer’s decision as to use IBS or not. As such, perspective of contractors on IBS needs to be scrutinised. It is important to note that an effort towards total industry adoption to IBS from conventional largely depends on the readiness and maturity of contractors to coordinate processes involved in the IBS life cycle. There were a number of cases where the use of IBS had not lead to a total satisfaction and could actually be less productive than conventional method. IBS has been associated in the past with low quality buildings, leakage, abandoned projects and other such drawbacks delivered by contractors.

The objective of this survey is to identify the most popular and widely used IBS system by Malaysian G7 contractors, and the drivers and barriers in the use of IBS as perceived by them. The respondents were also asked to identify critical success factors in IBS implementation based on their past experiences and their general perception. In this survey, 200 postal questionnaires were sent to the G7 contractors registered with the Construction Industry Development Board (CIDB) and listed in the Orange Book (Malaysian IBS Directory). The G7 contractors were selected as a survey sample due to its influence on the course of direction of the construction industry. They are the largest group of CIDB’s contractor classification registered as IBS contractors. The G7 contractors can also put up tender and implement large projects. The use of IBS by the G7 contractors will create a big demand and establish new supply chain. G7 contractors also have the capacity to put up capital investment needed to implement IBS. It employed huge number of workforce, sub-contractors and specialists in their projects. A change from conventional to IBS will influence others and make significant impact to the industry as a whole.

A total of 37 usable completed questionnaires were received and analysed, the number implies that around 18.5% of the total sample contracted has participated in this study. The low response had been expected for a mail based questionnaire. More than half of the respondents (53%) are Senior Management involved in IBS, which is good for an opinion survey analysis, as the respondents are more likely to portray the actual company direction. Project Manager and Project Engineer represented by 16% and 6 % respectively. This is also a good indication that the respondents are among the professionals and relevant to the survey, as shown in Figure 1. 64% of the respondents have more than 15 years of experience in construction and another 30% of respondents have at least 5 years of experience under their belt. This evidence is another good indicator that the respondents are highly qualified to answer the survey questions, as shown in Figure 2.

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Figure 1. Respondent Designation

Figure 2. Respondent’s Working Experience

SURVEY ANALYSIS AND DISCUSSION

The survey revealed that the most popular and widely used system by the contractor is a formwork system (31%). It is in the form of aluminium, metal and plastic formwork which are proved to be flexible and cost effective. The precast and steel frame system also gained substantial popularity at 26 % and 23 % respectively. Only 7% of the respondents had ever used timber frame systems which indicate lack of knowledge on the system. The Cronbach’s alpha obtained in this survey is 0.859 which is higher than 0.65. This proved that the questions are valid and the result is reliable.

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Figure 3 shows the most important drivers for contractors to use IBS were achieving high quality (13.5%), gaining

speed of construction (13%), minimising on site duration (10.4%), client’s demand (8.7%), and addressing skill shortage (7.4%). Factors such as energy saving (1.3%), building’s regulation (2.2%), and dealing with adverse weather condition (3%) appear to have been overlooked by the contractors.

Figure 3. Driver to IBS as perceived by Malaysian G7 contractor

While Figure 4 shows the most significant barriers restricting the use of IBS among contractors were considered to be higher construction cost (14.3%), high capital investment (11.5%), difficulties in achieving economies of scale (9.3%), inability to freeze design early and complex interfacing (7.7%), and lack of knowledge in IBS (7.7%). Other factors related to level of Information Technology (IT) (1.1%), building regulation (1.7%) and code and standard (1.7%) however, were not considered relevant by the contractors. The survey reveals that the main attribute to the lack of contractors embracing IBS are rarely purely technical in origin. They are more related to the organisational strategy and soft issues which underpin the capability of organisation to successfully implement IBS. This led to the identification that IBS is best handled as a holistic process and it requires a total synchronisation on construction, manufacturing and design processes.

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Figure 4. Barriers to IBS as perceived by Malaysian G7 contractor

In addition, the Table 1 show the respondents point of view regarding the importance of each potential success factors based on Likert Scale 1 to 5 (1 – Least important, 2 – Less Important, 3 – Important 4 – Very Important and 5 Most Important). Based on statistical analysis, the mean value for all factors are calculated more than 3.0 (> 3.0) which indicates that all of the factors listed are important to the implementation of IBS. Vision and commitment from the board management is the most important factor determined the success of IBS, followed by early decision to use IBS and early assemble of the project team. Effective communication, management of site, logistic and machineries and business and finance are also gained significant importance to the contractors. Factors like technology and capability, training and education and information technology are perceived as less important by the contractors. The highlighted in this survey will assist new contracting organisations to adopt IBS.

Table 1. The Critical Success Factors (CSFs) - Ranking

Descriptive Statistics N Mean Std. Deviation Top- Down Vision & Commitment 37 4.35 0.676 Early Decision to Use IBS 37 4.30 0.878 Early Assemble of Project Team 37 4.24 0.796 Effective Communication 37 4.19 0.569 Site , Logistic & Machineries 37 4.19 0.660 Business & Finance 37 4.19 0.877 Process Coordination 37 4.11 0.614 Competent Workforce 37 4.03 0.833 Planning & Scheduling 37 4.00 0.707 Design Process 37 3.95 0.524 Management of Supply Chain 37 3.86 0.751 Continues Improvement 37 3.78 0.672 Partnering and Alliance 37 3.78 0.750 Demand and Volume 37 3.76 0.723 Organisation Knowledge 37 3.76 0.683 Information Technology (IT) 37 3.70 0.618 Training and Education 37 3.68 0.669 Technology & Capability 37 3.62 0.924 Valid N (list wise) 37

The survey anal

• The use of tly due to its flexib be used in different of scale and co tional, it can thus be e use of the form trades at site. Malaysi tion of more innovati ems that can contribu e of timber stru through appropriate inc

• Accord efficiency from the use of factory made products, thus reducing the possibilities of poor workmanship and lack of quality control. The quality of the final IBS products are normally much superior to the conventional work as the former are produced under rigorously controlled condition. Complex shapes and finishes can be inspected and any sub-standard components are rejected before it gets erected into the structure. IBS also as observed, provide high quality surface finishes where joints section is the only part to be grouted, eliminating the requirement of plastering.

• One of the obvious drivers to use IBS is a reduction of construction building time. IBS project has proven to complete faster compared to conventional construction project due to the usage of standardised components and simplified construction process. It has also proven to build faster since on-site and manufacturing activities are usually undertaken in parallel. It cuts down the duration of work and simplifies the processes by reducing onsite activities and number of trades.

ysis and discussion are as follows: system formwork (metal, aluminium and plastic) gained its popularity recen

ility (can be used in many projects, recyclable at many phase of construction and can types of design structure). System formwork is not dependent on economy

mmercially viability. Since the method of construction is not too different from the conven easily used by the labour without additional training. However, one can argued that th

work system has a very limited impact on the reduction of foreign workers and not to replace wet an G7 contractors should have enough capability and capacity to invest into adop

ve systems. It was suggested that the government should focus on promoting IBS systte to the fulfilment of its main objective which is reducing foreign workers. The us

cture should be promoted and the pre-cast and steel manufactures should be facilitatedentives.

ing to Malaysian G7 contractors IBS offers improvement in quality, productivity and


• According to the Malaysian G7 contractors, IBS offers significant savings in labour and material cost, as the

number of labour force required in IBS is far lower than those required in traditional method. It is however, necessary to emphasise that the workers still need to be imparted training and skill appropriate to IBS. It is expected such trained skilled worker in IBS would be much more quality conscious then the unskilled labour doing manual jobs in conventional construction. IBS also alleviates the issue of skills shortages in the construction industry since all the construction elements are fabricated at factory. IBS eliminate extensive use of carpentry work, bricklaying, bar bending and manual job at site.

• IBS in some ways could be a cheaper method of construction compared to conventional method. The savings could come from lesser number of workers. IBS can also be cheaper if one consider the whole life costing of the building. There are direct cost saving in material, construction over-head, while indirect cost saving occur due to faster delivery of building. Further, construction of prefabricated elements in IBS results in considerable reduction in the use of scaffolding, and other temporary support as compared to onsite construction.

• On the other hand, the limited take up among Malaysian G7 contractors on IBS relates to the sheer cost of investment and the inadequacy of market size. Since the Asian financial crisis in 1997 and global recession in 2008, it becomes apparent that large investments in central production plants are uneconomical. Relatively, high transport and overhead cost virtually eliminates the potential gain achieved through industrialisation. With the current low demand and low standardisation of IBS components, undoubtedly the initial usage of IBS will increase the total material costs of the projects even though ultimately it lowers the total construction costs in the longer term. As profit is the main motivation for contractors, an increase in take up rates will only materialise when the overall prices of IBS components are reduced.

• It is also observed that the lack of investment on heavy equipments and mechanise construction system due to high capital investment could hamper a move towards IBS. Heavy capital cost involves in IBS will result in an insufficient capacity for contractors to secure projects. Contractors hence require some form of government intervention and assistance such as award and provision of large scale projects that would justify the capital investment required to adopt and deploy IBS. Some contractors seek large design and building contract from the government. Large design and building contracts will enable the successful development of unique technical capabilities and present innovation opportunities in IBS, which otherwise would be almost an economically inappropriate choice.

• Lack of experience, lack of technical knowledge and lack of skilled labour are barriers to successful IBS adoption. Poor human capital development on IBS will not only affect contractors but will affect the whole supply chain. Familiarity with IBS concept and its benefits is vital to its success because IBS requires different approach in construction.

• Some G7 contractors invest in their own system and owned their prefabrication yard. Nonetheless, there is general consensus among practitioners that IBS needs mass production to achieve economic viability but currently in Malaysia, there is no assurance of continuity of production thus limiting interest on IBS. It requires volume and economy scale of production to produce IBS components. But despite the mandatory adoption in the public sector, there is still lack of support and slow adoption from private sector clients thus creating unbalance and unsustainable demand. This is because there is a lack of assessment criteria set by the approving authorities, policies and incentives to urge the developers and private sector clients to use IBS.

RECOMMENDATIONS The recommendations towards the improvement of IBS adoption in Malaysia are:

• IBS should not be seen as a threat to traditional methods. The failure of IBS to penetrate market the market due to the misconception that it will eventually replace the traditional sector, while it actually should work closely in tandem in promoting best practices in construction. The sharing of best practices between the two approaches us essential for continues successful development of both construction method.

• A vendor development programme modeled along the lines of the development of the national car industry should be established to target delivery of building components for the construction to support G7 contractors in Malaysia. The vendor program is to be accredited by existing government agencies which can provide a vetting process not only to guarantee consistent quality but also the achievement of structural capacity, fire rating and other requirements. The selected vendor are to be provided training, seed capital, components design, and selected private sector consultant to start up production factories. The location of this vendor’s manufacturing plant has to be located in the areas with available labour. Based on educated assumption, the expected investment requirement of RM 1.25 million is considered within the reach of SMEs and small contractors displaced by the new technology. A system is to be developed such that

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building component accredited will be given green lane approval such that technical and non-technical legislation that hinders implementation of the new technology will be removed. The government can help by conducting market research to ascertain market opportunities to the vendors. The vendors also need inventory management consultancy and advice and development of better tools and infrastructures required for location of manufacturing plant.

• One of the steps that must be taken in coordinating IBS industry is to develop and enhance the method of identifying targeted market for IBS. As such, the CIDB should take the initiative to develop detailed market selection that will facilitate the identification of targeted market as well as provide assistance in addressing the needs and enquiry of prospective local construction companies who wish to venture to IBS. The selection matrix could be based on the followings:

i. Opportunities: availability of projects

ii. Chances of securing project iii. Business environment iv. Funding - whether the projects are government funded, multilateral agency funded or

privately funded v. Level of risk, raging from security risk to infrastructure risk

vi. Ease of entry and exit

• From a wider perspective, there is a good level of willingness among industry and government to take things forward. However, there is reluctance among companies to take risks, which is mainly related to the unstable market and hence a lack of investment. In this context, the contractors might need to consider creating an IBS “economic cluster” to boost the industry by creating a partnership between the government and private sector when and where it is needed. This approach will help to create a new environment within which IBS can flourish in a much shorter time and it will also put Malaysian IBS on the map. Economic clusters refer to all necessary components that are required to get IBS off the ground. This could include (and this is not an exhaustive list):

• IBS Association to create “one voice” for the industry and hence better define and communicate

their needs. This cluster could also undertake the role of lobby group for IBS. • Promote design and manufacturing as the core of the industry. • Develop SMEs to create the specialised supply chain to the core business. • Partially finance SMEs to establish the supply chain. Special Housing finance – a special

“mortgage” facility to help people buy the produced units, thus creating the market. • IBS Regulatory Unit – to advise government and industry on new and adjusted regulations to

jump start this industry. • Develop and promote Building Information Modeling (BIM). • Develop new materials and technologies for IBS. • Facilitate a joint venture with semi-government bodies or government-linked companies to

develop housing using IBS systems and joint ventures between local and international IBS contractors.

Although the recommendations may seem broad, a strategy can be formulated that could coordinate many of

these aspect at national level. The government organisation such as IBS Centre of Construction Industry Development Board (CIDB) could facilitate such a strategy to support the IBS Roadmap 2011-2015. CONCLUSION

The Malaysian government has encouraged the use of IBS to improve construction practices and modernise the industry. However, to change the conventional practice to IBS is an onerous task indeed. Despite many theoretical and practical advantages of IBS, the acceptance, adoption and deployment in the Malaysian construction industry is still low and does not help to improve outstanding and persistent problems such as low productivity, dependency on foreign workers and high level of construction wastage. Although, the industrialisation through utilisation of IBS is encouraged, one should not forget that the present limitations and weaknesses of the system will become the barriers for successful adoption. It is natural to perceive that IBS would provide the solution on cost, labour and time saving. However, construction process is a very complex process where it involves completion of buildings that combined different types of technology, materials and parties that will hamper the move to IBS. There are still limited numbers of contractors in Malaysia which are specialist in IBS that can undertake IBS jobs. The readiness, even for large G7 contractor to embark

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in IBS is still questionable. IBS contractors particularly G7 contractors should take a lead in IBS. They should deploy highly innovative IBS including the adoption of robotic, automation and mass-customisation. They should embark and invest in technology and develop human capital. In order to compete in global market construction companies in the future, there is a need to develop and enhance their practice by adopting effective processes in IBS and creating value-add in the complementary industries (e.g. building and construction materials, tooling, heavy equipment and machinery). Therefore, Malaysian G7 contractors might need to consider creating an IBS “economic cluster” to boost this industry by creating a partnership between government and private sector when and where it is needed. This approach will help to create a new environment within which IBS can flourish in a much shorter time and will also put Malaysian IBS on the world map.

ACKNOWLEDGMENT

The authors wish to thank the Universiti Sains Malaysia (USM), IBS Centre and Construction Research Institute of Malaysia (CREAM) for supporting the Industrialization Building System (IBS) research. REFERENCES Rahman, A.B.A. and Omar, W., (2006) Issues and challenges in the implementation of IBS in Malaysia, Proceeding of

the 6th Asia-Pacific Structural Engineering and Construction Conference (ASPEC 2006): Kuala Lumpur, Malaysia; 5-6 September 2006.

Hamid, Z.A., Kamar, K.A.M., Zain, M.Z.M., Ghani, M.K. and Rahim, A.H.A., (2008) Industrialized Building System (IBS) in Malaysia: the current state and R&D initiatives, Malaysian Construction Research Journal (MCRJ). Vol 2 No., 1-11.

CIDB, (2003) Industrialized Building System (IBS) Roadmap 2003-2010 Construction Industry Development Board (CIDB), Kuala Lumpur.

Orange Book, (2009), IBS Manufacturers/Distributors/ Suppliers and Onsite Manufacturers Directory, Volume 3,Construction Industry Development Board (CIDB).

IBS Info, (2010), Construction Industry Development Board (CIDB), Malaysia, issue 1.

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drivers and barriers of ibs roadmap in malaysia

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