Analyzing of Japanese Construction Industry from the Viewpoint of

International Desk of Construction

Professor. Dr.-Eng. Shizhao DING

Research Institute of Project Administration and Management

Tongji University, Shanghai

Aug. 27 1999, Kochi

1. Introduction

2. The Change of International Construction Industry

3. Reviewing of Japanese Construction Industry System

4. Suggestions to Add Value to Japanese Construction Production Process

1. Introduction

1.1 Background of the Reviewing

1.2 General Impression to Japanese Construction Industry

1.1 Background of the Reviewing

• Project information of Japanese contractors in China

• As guest professor in Nagoya University from July 1998 to January 1999

• Investigation and interviews (government body and firms ) in Tokyo in January 1999

• As member of delegation of Chinese Ministry of Construction visited Japanese Ministry and contractors in June 1999

1.2 General Impression to Japanese Construction Industry

the role in the international market

Japanese manufacturingindustry

Japanese manufacturingindustry

Construction industry

Construction industry

big difference

TECHNOLOGYTECHNOLOGY

MANAGEMENTMANAGEMENT

Conservative in management field

Active in technical field

General Impression (2)

TECHNOLOGYTECHNOLOGY MANAGEMENTMANAGEMENT

exchange with another countries

in the field of construction management

TOOFEW

General Impression (3)

Prefer keeping traditional instrument and procedure

Do not pay enough attentionto international innovation

in construction industry

General Impression (4)

2. The Change of International Construction Industry

2.1 Globalization of Construction Industry.2.2 Tomorrow‘s Company in a World of Hyper

Competition 2.3 Private Finance Initiatives for Property and

Construction Investment around the World

2.4 The Forefront of Change - Client’s Change2.5 Innovation of Technology and Management 2.6 Managing in a Wired World2.7 The Management of Change in an Organization

and the Role of Technology2.8 The Value Adds Services - Management of

Process/Pre- Construction Services

What are the ‘ hot issues’ affecting construction around the globe ?

Taking the pulse of the global construction industry , will it survive in its present form?

ADDING VALUE TO DESIGN AND CONSTRUCTION

more change in 5 years than in previous 50 years

• Organizer : The Reading Construction Forum The University of Reading

• Oxford, Pembroke College

• 24-25 September,1997

• Participants : 30, come from UK, USA, China, Australia, South Africa, Sweden. 7 counties

2.1 Globalization of Construction Industry.

INTERNATIONAL CONSTRUCTION MARKET

INVESTMENT

REGULATIONS

DESIGN

CONSTRUCTION

MANAGEMNT CONSULTANT

SUPPLIER

2.2 Tomorrow‘s Company in a World of Hyper Competition

(1)What is happening in the world to property and construction?

(2)What are the drivers of change and how the leading companies embracing change in the market place?

(3)Where are the growing construction market in the world?

(4)Taking the pulse of the global construction industry , will it survive in its present form?

2.3 Private Finance Initiatives for Property and Construction Investment around the World

P F I

reduces public sector borrowing

promotes efficiency

reduces bureaucracy

PFI project : Infrastructure, hospital

2.4 The Forefront of Change- Client’s Change

Transparent production process

Providing end product, like manufacturing industry

New project delivery : CM, Partnering, Integrated Management

Good quality

Low cost

Short duration

Everybody wants the construction industry to change and client have been at the forefront of change

2.5 Innovation of Technology and Management

keep on leading edge

Train, retrain, train again

Continuous improvement programEurope IT-project control system

New product, new servicesTechnology development strategy

Turnkey, partnering, DDC(develop+design+construction) ...

Document Management System in construction company

2.6 Managing in a Wired World

• What are the new business opportunities being created by information technology and computers?

• The way in which information is managed in an organization is fast becoming new tools of competition

• What is the progress of the construction industry in the world? Is there hope for the digitally deprived and the digital homeless?

2.7 The Management of Change in an Organization and the Role of Technology

• What are the key drivers of change?

• How can the construction industry adapt to change?

• What is the strategy for managing change?

2.8 The Value Adds Services - Management of Process/Pre- Construction Services

• Providing service not only for management of construction process, but also for management of production process

• Providing service not only for management of implementation phase , but also for management of pre construction phase

3. Reviewing of Japanese Construction Industry System

3.1 The perspective and Principle of Reviewing

3.2 Reviewing of the Organization System of Japanese

Construction Industry

3.3 Reviewing of the Mechanism of Japanese

Construction Market

3.4.Reviewing of the Opportunity Placing on the Asia

Construction Market for Japanese Construction

Industry

3.1 The perspective and Principle of Reviewing (1)

Japanese Construction Industry

OrganizationSystem

LawSystem

Mechanism

Technology Management Economics

Design

Construction

Supply

INTERNATIONAL DESK OF CONSTRUCTION

The perspective and Principle of Reviewing (2)

System ofJapaneseConstructionIndustry

System ofJapaneseConstructionIndustry

?

Benefit to designer and contractor

Owner is satisfied

Benefit to development of national economy

Benefit continual development of

construction industry

3.2 Reviewing of the Organization System of Japanese Construction Industry (1)

Construction IndustryConstruction Industry

Government Bodies

Professionalinstitute

Researchinstitute

University

Designer

Managementconsultant Contractor

Supplier

Reviewing of the Organization System of Japanese Construction Industry (2)

UniversityUniversity

Few/no BS course forConstruction Management

Technique

Management

Pay attention for the lecture of Project

Management andConstruction Economics

Practical experiencefor project management

of academic staffs

Reviewing of the Organization System of Japanese Construction Industry (3)

Professional institute

Professional institute

The qualification of professional management of construction

is very important

In UK - CIOBIn USA - AICIn Australia - AIOBInternational association- IAPMC

In Japan

Reviewing of the Organization System of Japanese Construction Industry (4)

DesignerDesigner

Scope of work : providing managementservice in projectimplementation phase ?

Reviewing of the Organization System of Japanese Construction Industry (5)

ContractorContractor

Providing

Full service :Program ManagementD+D+B+FM

Management service ofprocess, not onlyof civil job

New contract forms :CMPartnering

3.3 Reviewing of the Mechanism of Japanese Construction Market (1)

Mechanism ofconstruction market

Mechanism ofconstruction market

Forms of tender Types of contract

Supplyof professional management

consultant

Reviewing of the Mechanism of Japanese Construction Market (2)

Forms of tender/bidForms of tender/bid

government project Open bid in western countries

not identicall

Limited competition

Reviewing of the Mechanism of Japanese Construction Market (3)

Types of contractTypes of contract

General contract

Familiar with

Lump Sum Unit Price

Turnkey - design and build Not base onfunctional description

In European Lump Sum Unit Price

In Germany: since 1971 functional description

CM in Japan is not identical with CM in USA

Familiar with the innovation of project delivery

Reviewing of the Mechanism of Japanese Construction Market (4)

Supplyof professional management

consultant

Supplyof professional management

consultant

Government bodies

Private sector

Oversee market

Low

3.4.Reviewing of the Opportunity Placing on the Asia Construction Market for Japanese Construction Industry (1)

Asia Construction MarketAsia Construction Market

Japanese Construction IndustryJapanese Construction Industry

Design(+ Civil Eng.)

Construction(+ Civil Eng.)

Management

Material

Personal cost (-)Finance (+)

Facility(+)

Reviewing of the Opportunity Placing on the Asia Construction Market for Japanese Construction Industry (2)

AdvantageFinance

Technology

Design and constructionfor large scare and complicatedproject

Construction Machine andtools

PFI Project

Reviewing of the Opportunity Placing on the Asia Construction Market for Japanese Construction Industry (3)

Management technique Comparison with Americanand European countries

Few chanceDesign and constructionof building

Personal cost Influence on the opportunity to get job of design, construction and managementconsultant

Problem/disadvantage

4. Suggestions to Add Value to Japanese Construction Production Process

4.1 Look at the Innovation’s Tendency of International Construction Production Process

4.2 Promote Integrated Construction Production

4.3 Promote of Integrated Management for Construction Production

4.4 Promote Management Consulting Service

4.1 Look at the Innovation’s Tendency of International Construction Production Process

INTERNATIONAL DESK OF CONSTRUCTION

Look at the Innovation’s Tendency of International Construction Production Process (2)

Virtual construction

Change of Scope of workof construction firms

Organization of information communication

Virtual organization

Look at the Innovation’s Tendency of International Construction Production Process (3)

Project Controlling

Program Management

Integrated Management

Look at the Innovation’s Tendency of International Construction Production Process (4)

P F I

Look at the Innovation’s Tendency of International Construction Production Process (5)

I T

I C

4.2 Promote Integrated Construction Production

DESIGN + BUILD

DEVELOPMENT MANAGEMENT + DESIGN + BUILD

DESIGN + BUILD + FACILITY MANAGEMENT

FINANCE + DEVELOPMENT + DESIGN + BUILD + FACILITY MANAGEMENT

DEVELOPMENT MANAGEMENT + DESIGN + BUILD + FM

D + B

DM

FM

F

DEVELOPMENT MANAGEMENT

+PROJECT MANAGEMENT

4.3 Promote of Integrated Management for Construction Production

+FACILITY MANAGEMENT

Lifecycle management

4.4 Promote Management Consulting Service

ManagementConsultingService

ManagementConsultingService

Investor

Developer

Designer

Contractor

Supplier

Adding Value to Design and construction