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2.1 Literature Review
2.1.1 Definition of IBS in Malaysia
Industrialised Building System is a technology of construction which there are manufactured in controlled environment, either at off site or site. And then only transported, positioned and assembled into the construction works (CIDB, 2012). IBS also defined as a new construction method that can increase the quality and productivity of work through the use of better equipment, materials, plant and machinery and extensive project planning (Haron et.al, 2005). There are five main IBS groups identified in Malaysia, there are precast concrete framing, panel and box system, steel framing system, formwork system, block work system and prefabricated timber framing system.
2.1.2 Industrialized Building Systems in Malaysia
The Malaysian economy expanded at a faster pace than forecasted, growing between 4.5% and 5.5% in 2013 as compared with the growth of 4.5% to 5% in 2012 and 5.1% in 2011 (Department of Statistics Malaysia, 2012). The fundamental growth of the Malaysian economy was supported by an increase of domestic demand. The positive growth was driven by the growth of the Services, Manufacturing and Construction sectors. The growth of the construction industry recorded an increase of 5.2% in 2010 with an expected growth of 11.2% in 2013.
According to CIDB (2010), the use of IBS and innovation in the construction process also stimulated the growth of construction output and is seen as one of the most important sectors that contribute to the Gross Domestic Product (GDP) of a country. The construction supply chain links within the industry stimulates domestic demand and creates a significant effect on the Malaysian economy. According to Gibb (1999), the adoption of industrialisation and prefabrication in the construction process has always existed and looked upon as an ideal solution in innovation and enhancing construction environment.
Malaysia construction industry is now being developed from conventional construction methods towards more effective construction method. Through the Ninth Malaysia’s Plan, the Malaysia’s government is encouraging the usage of Industrialized Building System (IBS) as an alternative to the conventional construction method.
IBS is a construction method consisting of assembling separate structural components on the site. In IBS, the suitable size of IBS components such as beams and columns are very critical. Besides that, the type of connection between the structural element play the key role to make sure the building is functional, economic and safe. The structural member and connection used should be able to transfer any load applied without having severe damage.
The Malaysia’s government through the Construction Industry Development Board (CIDB) has a strategic plan to improve the effectiveness and productivity of the construction in Malaysia. It can be achieve by introducing the IBS into the Construction Industry.
During the early use of IBS in Malaysia, there is several problem occur. The IBS usage in the building construction is much lower than the infrastructure. The system is more expensive. Besides, leaking is a major problem and it has less aesthetic appearance. In 1960s, there is no comprehensive plan that can be used as guidance to the construction industry. So, the industry is depending to the existing conventional technology that needs high quantity of labour.
The importance of IBS was highlighted under Strategic Thrust 5 of CIMP and the IBS Roadmap 2003–2010 (1st phase) and 2011–2015 that were developed to assist Malaysia in capitalizing on new technologies and IBS-related issues. A series of support mechanisms and government initiatives has been designed to educate the construction supply chains in order to improve IBS implementation and performance. However, the conventional construction process causes some challenges to IBS adoption (Blismas & Wakefield, 2008).
The adoption of IBS has also made the conventional working practices and relationship amongst the players experience fundamental changes due to industrialised construction (Hsieh, 1997). IBS is a manufacturing process that needs earlier and consistent planning process amongst the players involved (Gibb, 2001). Thus, keeping in mind the importance of improving the integration of the supply chain in IBS implementation, its challenges should be analysed and established in order to persuade the construction industry to engage in a more systematic and strategic approach in IBS construction, especially in cases of fragmented supply chains.
In order to make Malaysia as a develop industry country in the year 2020, Roadmap IBS is conducted by CIDB with collaboration of the Public Work Department of Malaysia. The roadmap has been released in 29 October 2003. The Roadmap IBS is made as guidance and reference to all activities that help the industrialization of the Malaysia’s construction sector.
2.1.2.1 Types of Industrialized Building System in Malaysia
Prefabricated building components are widespread in the country. From the structural classification, the following five main IBS groups are identified which are used popularly in Malaysia (CIDB, 2003a; IBS DIGEST, 2007):
i. Pre-cast Concrete Framing, Panel and Box Systems-pre-cast columns, beams, slabs, 3-D components (balconies, staircases, toilets, lift chambers) and permanent concrete formwork
ii. Steel Formwork Systems-tunnel forms, Expanded Polystyrene (EPS) forms, beams and columns molding forms and permanent steel formworks (metal decks)
iii. Steel Framing Systems-steel beams and columns, portal frames and roof trusses
iv. Prefabricated Timber Framing Systems-timber frames and roof trusses
v. Block Work Systems-interlocking Concrete Masonry Units (CMU) and light weight concrete blocks
2.1.2.2 Advantages and Disadvantages of Industrialized Building System
Numerous benefits of adopting IBS had been reported by academicians around the world and becoming the driving forces to the construction industry players in deciding whether to use IBS or not (Pan et al., 2007a). Firstly, IBS offers cost saving through earlier completion time (Kamar et al.,2010; Idrus et al., 2008; Pan et al., 2007; Alinaitwe et al., 2011) and reducing site infrastructure and overhead (Kamar et al,. 2010). Besides, IBS construction process is governed by the speed of production and controlled environment of manufacturing facilities (Aburas, 2011), thus the need on fast delivery can easily be met by increasing the production capacity (C. Haas et al., 2000; Nawi et al., 2007).
IBS also have its disadvantages. Poor management of IBS projects often led to many difficulties, which end up to project delays, unacceptable qualities and higher cost (Haas et al., 2000; Kamar et al., 2009; Poon et al., 2001; Rahman & Omar, 2006). The success of IBS implementation in the Malaysian construction industry is solely depending on the contractors who manage the processes involved in the IBS life cycle (Kamar, 2011). Apart of that, the commitment of contractor in managing the project is crucial to achieve maximum safety of that project (Ismail et al., 2012). The contractor should be competent and experienced in managing the construction activities (Lou & Kamar, 2012; Chan et al.,2004; Wong et al.,2003). Similarly, the contractor should take into consideration all the issues in their management practice in order to achieve success in the implementation of IBS projects.
2.1.3 Cost issues
2.1.3.1 Incentives for Industrialized Building System (IBS) are not sufficient
Giving out incentive is one of the ways to attract more IBS user. The government through CIDB has introduced exemption of the construction levy (levy – 0.125 % of total cost of the project according to Article 520) as an incentive on contractors that used IBS at least 50% IBS components in construction of new residential project since 1st January 2007 (CIDB, 2010).
Even though, there is only a slight increase in the number of IBS user. This can say that the incentives for IBS are not sufficient. IBS adoption requires more pull and push factors from the government. Changing from conventional method to IBS was not possible due to the small profit margin unless more attractive incentive systems and benefits which can attract the conventional user to IBS (Kamar et al, 2010).
2.1.3.2 The availability of cheap foreign labour
The availability of cheap foreign labour which offset the cost benefit of using IBS is a main cause of the slow adoption. As long as the industry can easily to obtain foreign workers, the labour rates will remain low and contractor will find it is unattractive to change from conventional method to IBS (Kamar et al, 2010).
With high demand for construction activities in previous years, the industry has attracted a huge number of foreign workers into this country to take up employment on site as unskilled labour doing manual jobs. According to Construction Industry Development Board (CIDB) Malaysia, at June 2007, 69% (552,000) out of total 800,000 of registered workers is foreign workers. It is a huge number which distress the stability and growth of domestic economy and created social problems. The locals are reluctant to join the industry due to the low salary scheme being offered to foreign workers and wrong image projected by the industry. Therefore, government put in place measures to encourage industries to move-up the value chain and, where possible, to automate and mechanise their operations and in areas where automation and mechanisation was not possible, efforts were being made to replace foreign workers with skilled workforce (Kamar, 2010).
2.1.3.3 Enormous capital cost
The most significant challenge to the adoption of IBS is higher capital cost (CIDB, 2010; Pan et al.,2004; Pan et al., 2007; Blismas & Wakefield, 2009). Jaillon and Poon (2008) compared prefabrication and conventional construction methods in an economic context and found that the IBS system is constrained by the high initial cost of prefabricated components, whereas traditional construction does not have such a high initial cost. At the beginning, there is a requirement on large investment for setting up the plant, supplying machinery and mould, engineering consideration in dealing with the complexity of interfaces and expenditures of the transportation process (Qays et al. 2010; Haas & Fagerlund, 2002). The adopters also require a large volume of work to break even on the investment which means IBS needs a large scale of production in order to achieve economic viability (Pan et al., 2007; Hamid et al., 2008; Alinaitwe et al., 2011). Apart from that, a budget should be allocated for maintenance of machineries. Facing the inconsistency of volume demand resulted in lack of business continuity thus making the investment unsustainable and limiting interest on IBS.
2.1.4 Low Standardisation of components
One of the success factors in IBS usage is the standardization of components. To date the low components standardization prevents the same components to be used for other projects (Hashim & Kamar, 2011). Onyeizu et al., (2011) opined that architects, engineers and contractors regard standardization of building components as the key factor affecting IBS and design innovation. The effect of low standardisation will increase the initial cost due to the design cost and moulding which cannot be used for another project (Hamid et al., 2008).
2.1.5 Insufficient knowledge
According to Rahman & Omar (2006), lack of knowledge and exposure to IBS technology is one of the factors that contribute to poor structural analysis and design of prefabricated components, thus its led to improper assembly due to difficulties during installation. Lack of knowledge of IBS in the industry is one of the reasons on delay of IBS take-up (Blismas & Wakefield, 2009) .
2.1.6 The challenges of supply chain integration
In today’s global businesses, with regard to the development of technology and characterised by its great degree of repetitiveness and mass production, off-site manufacturing or IBS has been widely adopted across the globe. Therefore, the understanding and interpretation of IBS is very important prior to its implementation. However, even with the introduction and establishment of IBS in the Malaysian construction industry, it appears that the implementation of IBS is still low compared to other developed countries. Even with much support, encouragement and guidance in Malaysia, the usage of IBS is currently much lower than what it could have been. These problems demonstrate that although the introduction of IBS has promised to solve and improve the current construction process, these practices have been facing a difficult task to establish integration and cooperation between parties involved (CIDB, 2007). Abd Shukor et. al. (2009) conducted a research to identify the key problems in the construction industry in general and IBS in particular. They classified the possible problems into 16 significant themes and revealed that both the industry and the IBS players had not been very successful in their attempts to find the right solutions to the challenges encountered whilst indicating that the supply chain and procurement to be the root of most problems.
Among the challenges encountered were communication in terms of flow of information, conventional mindsets, problems in terms of coordination between various works and funding factors which includes problems in the process of payments. Abd Shukor et al. (2009) also revealed that there is a range of procurement stages that presents prominent problems which make it difficult to integrate people. Dainty, Briscoe, & Milllett (2001) claimed that the challenges that obstruct the integration of the supply chain between the main contractor and SME are namely attitude related issues, financial/cost related issues, programming/time-related issues and quality of information issues. Moreover, CIDB (2007) highlighted poor knowledge and unfamiliarity with IBS concepts and its benefits as one of the factors hindering integration among IBS players. Therefore, the establishment of the IBS provision in the integration of the construction supply chains must take place. The challenges of integration between the Client and the main contractor in IBS project procurement delivery need to be assessed in relation to the working practices in the current project procurement delivery arrangements approach to ensure cooperative working relationships that will lead to supply chain excellence.