SCRIResearch Report 4 Innovation
SCRIResearch Report 4 Innovation
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Innovation in Construction
A Project Life Cycle Approach
Beliz Ozorhon,
Carl Abbott,
Ghassan Aouad,
James Powell
May 2010
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SCRI Research Report
Innovation in construction
A Project Life Cycle Approach
Contacting SCRI
If you would like to find out more of this project please contact any of the following team members:
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University of Salford, 4th Floor, Maxwell Building, Salford M5 4WT, United Kingdom
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ii
Acknowledgements
Our research partner Centre for Construction Innovation (CCI) Northwest deserves special thanks.
They provided the contacts for our survey and case studies.
We thank all organisations and interviewees that contributed to our below case studies:
We also thank the Engineering and Physical Sciences Research Council (EPSRC) for the financial support
that they provided for this project.
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SCRI Research Report
Innovation in construction
A Project Life Cycle Approach
Executive summary
The construction industry has long been criticised for its conservatism and lack of innovation. But is this characterisa-
tion fair? Much of the innovation in the sector occurs at the project level and tends to be process and organization based.
According to official statistics construction companies invest comparatively little in formal R&D, but rather adopt new
technology and develop new ideas to improve their operations. Such innovations are difficult to capture with standard
indicators which tend to be more suitable for technology intensive sectors. Consequently, more research is required to develop
appropriate metrics for the different types of innovative activities that are carried out throughout the lifecycle of construction projects.
This report investigates the ways that construction innovation occurs and tries to address the difficulties in measuring this. Firstly, it
introduces the basic concepts related to innovation and emphasizes the importance of systemic innovation metrics that reflect the
breadth of the sector. It provides a list of indicators currently used to measure construction innovation based on a literature review
and discusses the adequacy of these metrics. Then, it proposes a framework that analyses the innovation value chain (IVC) through
the investigation of components of the innovation process including the drivers, inputs, enablers, barriers, tools, and outcomes.
The IVC view considers three stages of innovation: idea generation, conversion, and diffusion. A questionnaire was designed based
on this framework and a survey was administered to investigate the innovative activities of construction companies. The findings
of the survey suggest that the contractors largely innovate to improve their processes and services; their innovations are mainly
organization-based and incremental and driven by their clients. Although they are successful at generating ideas, they struggle to
diffuse these ideas and convert them into products and services at the same level.
The project level has been largely ignored in analysis so far; however it is the key to improving innovation performance. The
report extends the IVC analysis at the project level, by adopting a multi-stakeholder approach, through the production of four case
studies. These case studies have been selected among award winning projects at the North West Regional Construction Awards
2009. Interviews have been conducted with the key actors to track the collaborative ways in which the successful innovations have
been generated and to investigate the consequent benefits of innovation at the project and company level. The reported cases are
all examples of collaborative partnership among project teams and demonstrate a number of technical and organisational innova-
tions and good practices. These are grouped under four categories namely, strategic partnership, Modern Methods of Construction,
lean construction, and community engagement. The innovative practices not only led to a number of project level benefits such
as reduction in duration and cost, improved quality and environmental performance but also wider benefits such as enhanced
corporate image, knowledge transfer to inform future decisions, client and end-user satisfaction, and improved quality of life.
The findings of this survey are expected to illuminate further studies that will investigate the dynamics between project and firm level
innovation that will help understand the role of different actors in facilitating innovation throughout the lifecycle of a construction
project. The key lessons from this report are as follows:
n To present a fuller picture of construction innovation, a wider built environment perspective should be adopted.
n Much R&D activity is taking place that is not registered officially. More should be done to raise awareness of the R&D Tax Credit
scheme to construction companies.
n A representative range of measures for construction innovation needs to be created. In this regard, the Innovation Value Chain
approach to the measurement of innovation provides a flexible and simple system that can usefully be adopted alongside
measures that consider the economic, social and environmental impacts of innovation.
n More research is required to better understand the complex relationship between regulation, innovation and business need to
inform future policies.
n The benefits of innovation can only be realised by fully understanding the components of the whole innovation process that is
based on knowledge acquisition, transformation, and diffusion. Our understanding of innovation and how it occurs in the sector
can be enriched further by detailed work that brings together different theoretical perspectives on innovation that will enable the
development of context sensitive ways of recognising and measuring innovation.
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Table of Contents
ACKNOWLEDGMENTS...............................................................................................................................................................iii
EXECUTIVE SUMMARY...............................................................................................................................................................iv
TABLE OF CONTENTS...................................................................................................................................................................v
LIST OF TABLES...........................................................................................................................................................................vi
LIST OF FIGURES.........................................................................................................................................................................vi
1. INTRODUCTION...................................................................................................................................................1
2. WHAT IS INNOVATION?.......................................................................................................................................2
3. MEASURING CONSTRUCTION INNOVATION........................................................................................................3
3.1 Measuring Innovation as a System............................................................................................................4
3.2 Indicators for Measuring Construction Innovation..................................................................................4
7. REFERENCES.......................................................................................................................................................44
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Innovation in construction
A Project Life Cycle Approach
List of tables
Table 1: Measures of innovation at firm level.................................................................................................................5
Table 2: The innovation value chain at firm-level...........................................................................................................7
Table 3: Drivers of innovation..........................................................................................................................................9
Table 4a: Internal inputs of innovation............................................................................................................................10
Table 4b: External knowledge sources of innovation.....................................................................................................10
Table 5: Enablers of innovation......................................................................................................................................11
Table 6: Barriers to innovation.......................................................................................................................................11
Table 7: Innovative practices..........................................................................................................................................12
Table 8: Innovators within construction sector.............................................................................................................12
Table 9: Innovation benefits/impacts.............................................................................................................................13
Table 10: The innovation register for Case Study 1........................................................................................................22
Table 11: The innovation register for Case Study 2........................................................................................................27
Table 12: The innovation register for Case Study 3........................................................................................................32
Table 13: The innovation register for Case Study 4........................................................................................................37
Table 14: The combined innovation register...................................................................................................................39
List of figures
Figure 1: Framework for analysing innovation in construction.......................................................................................8
Figure 2: Innovation value chain in a construction project............................................................................................16
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1 Introduction
Innovation is a complex and multidimensional 3) T he findings of this survey were used to guide
process that has received the attention of the next stage of the research that involved a
researchers in all fields due to its contribution to deeper analysis of innovation and its associated
economic growth, competitiveness and quality of life. processes through the production of case studies and
Innovation in general terms is the creation and adoption interviews with key parties in selected projects. Fou
of new knowledge to improve the value of products, r detailed case studies taken from winning projects
processes, and services. Innovation in construction form the Northwest Construction Awards are present-
services has been recognized as a source of competitive ed. The case studies extend the Innovation Value Chain
advantage by the policy makers as well as industry approach to a multi-stakeholder project level. Through
practitioners. the case studies a comparison of standard measures
and perceptions against the reality of innovation as it
The construction industry has always been among occurs at the project level can be made.
the driving forces of the economy, however it has
also long been criticised for its lack of efficiency in
comparison to other industries and its unwillingness
to innovate. The performance of the UK construction
industry was analysed in the “Rethinking Construction”
report (Egan, 1998). In addition to creating a ‘Movement for
Innovation’ the report described how the UK
construction industry, at its best, displayed
excellence and delivered the most difficult and
innovative projects. It is now over 10 years since
the Egan report and the image of the industry as
lacking innovation still persists, but is this image fair?
This report aims to shed light on this basic question.
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SCRI Research Report
Innovation in construction
A Project Life Cycle Approach
2 What is Innovation?
This section of the report provides a brief overview The White Paper explicitly recognies
of inn ovation, its importance to companies and the the importance of forms of innovation
economy in general, and the various types and beyond the invention of new (technological)
classifications of innovation. Innovation is regarded as one products and points out the “changing face of innovation”
of the key factors contributing to national economic growth, that includes services, business processes and models,
competitiveness, and higher living standards and is at marketing and enabling technologies (DIUS,
the heart of the knowledge-based economy (OECD 2008). Research and development is not a good
and Eurostat, 2005). However, there is not a single and indicator of innovation or knowledge generation in many
complete definition of innovation. The UK’s Department services sectors; high levels of innovation activity are
of Trade and Industry (DTI) states that innovation is “the often not based on R&D expenditures (NESTA, 2008)
successful exploitation of new ideas” and that “it is unlike the case in manufacturing. Construction is partly
the key business process to compete effectively in the manufacturing and partly services, so construction
increasingly competitive global environment” (DTI, 2007). innovation needs to be investigated taking into account
its unique nature.
There are many attempts to classify different types
of innovation. For example, Henderson and Clark Construction is a very diverse sector and there is not
(1900) classify innovation as incremental, modular, one single way in which innovation occurs. It will
architectural and radical depending on the degree of vary throughout the supply chain and project stages,
product/architectural knowledge required to implement. and just as innovation will mean different things to
In the UK the DTI (2007) state that innovation can take different economies, so it is equally important to realise
several forms including product innovation (changes in the that the challenge and meaning of innovation for a small
products/services) which an organisation offers; process specialist sub-contractor will almost certainly be very
innovation (changes in the ways in which they are different from that of a multinational construction
created and delivered); position innovation contractor (Abbott et al., 2008). As Blayse and
(changes in the context in which the products/services are Manley (2004) stated, building and construction is partly
introduced); paradigm innovation (changes in the manufacturing (materials, components, equipment)
underlying mental models which frame what the and partly services (engineering, design, surveying,
organisation does). Phillips (1997) distinguishes consulting, and management) industry. Therefore, the
between technological innovation and non-technolog- organisational context of construction innovations
ical (including organizational and marketing) innova- differs significantly from a great portion of
tion. Technological innovations comprise implemented manufacturing innovations (Slaughter, 1998).
technologically new products and processes and
significant technological improvements in products and
processes. Organisational innovation in the firm includes
significant changes in organisational structures; the
implementation of advanced management techniques;
and the implementation of new or substantially changed
corporate strategic orientations. Marketing innovation,
on the other hand, is the implementation of a new
marketing method involving significant changes in
product, price, and promotion strategy (OECD and
Eurostat, 2005).
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3 Measuring Construction Innovation
The construction industry consistently scores poorly conceptual model for the analysis of innovation in
against standard measures of innovation. (NESTA, 2006). construction to describe the linkages between the
This is one of the reasons for the negative perception business environment, business strategy, innovative
of innovation in construction. But do these measures practices and business outcomes. Dikmen et al. (2005)
reflect the real situation? This section of the report developed a conceptual framework to investigate value
examines the need to take a systemic view of innovations within construction companies in the Turk-
innovation for measurement purposes and shows that if ish construction industry, where the elements of the
we are to be able to better understand innovation in con- model are objectives, strategies, environmental barri-
struction, appropriate measures that reflect the reality of ers/drivers, and organizational factors. Yitmen’s (2007)
innovation in construction are necessary. study focused on the investigation of the challenge of
change for innovation in the North Cyprus construction
As a significant economic variable, the measurement industry. These studies typically focus on how innovation is
of innovation has attracted a lot of attention. However, managed within one firm and there is a lack of focus
due to the complexities inherent in the whole process, on the specific project stages of innovation as well
measuring innovation is not an easy task. An as a lack of specific focus on different construction
economy’s rate of innovation depends on a range of sectors. Only a small minority of the research articles
activities and the links between them. Companies may take have considered innovation at a specific stage of the
the lead, but do not innovate in isolation. Most innovations project lifecycle or from the point of view of the project
involve a multitude of organizations. This is especially lifecycle in general (Dickinson et al., 2005). Moreover,
the case for the most knowledge-intensive, complex none of these studies discussed the accurate measure-
technologies (Milbergs and Vonortas, 2004). ment and proper indicators for construction innovation.
Innovative activities and effects of innovation The problem of developing appropriate measures for
depend extensively on the why innovation takes place construction innovation is compounded by the fact
(drivers) and who innovates (actors) as well as the external that construction is a very diverse sector and there is
environment the innovation takes place. Proper not one single way in which innovation occurs. The
indicators are necessary to link the outputs of organizational context of construction innovations
innovation at firm level to the impacts at national level. differs significantly from much of traditional
Innovation measurement tended to focus on products manufacturing innovations (Slaughter, 1998).
and related production systems that is based on measur- Building and construction is increasingly conceived
ing inputs to innovation (R&D expenditures, education as partly manufacturing (materials, components,
expenditures, capital investment) and intermediate outputs equipment) and partly as a services industry (engineer-
(publications, patents, workforce size and experience, ing, design, surveying, consulting, and management –
innovative products) (Milbergs and Vonortas, 2004). see Blayse and Manley, 2004). In general terms, how-
Although extensively used, these indicators are not ever, innovation can be observed at three different levels:
sufficient to measure the innovation process as a whole namely the ‘sector-level’, ‘business-level’ and ‘project
and especially that in construction. As NESTA (2006) level’.
stated, traditional indicators of innovation performance
are heavily biased toward investments in scientific and As a project-based and fragmented industry, much of
technological invention and so do not capture the innovation in construction is co-developed at the
innovation in non-research intensive industries and project level and therefore remains hidden (NESTA, 2006;
there is a gap between actual innovative activity and the Barrett et al., 2007).This means the construction
conventional measures that are intended to represent it. industry is a sector within which traditional measures do not
reflect the true extent of the innovative activity that is
Much literature has focussed on how innovation taking place (NESTA, 2006; Barrett et al., 2007). As much
could be implemented in construction projects (Tatum, of this innovation is process and organization-based
1987; Slaughter, 1998, 2000; Winch, 2003) and how and therefore hidden at the project level, construction
construction companies manage the innovation companies tend to invest less in R&D and rarely create
process based on some conceptual models (Seaden and new patents (NESTA, 2007; BERR, 2008). Sound policy
Manseau, 2001; Dikmen et al., 2005), and some case analysis and business level decision-making requires
studies (Slaughter, 1993; 1998; Veshosky, 1998; Koskela relevant indicators in order to remove this gap and
and Vrijhoef, 2001; Sexton and Barrett, 2003; Cleas- capture the hidden innovation in construction (Barrett
by, 2004). Seaden and Manseau (2001) developed a et al., 2007).
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SCRI Research Report
Innovation in construction
A Project Life Cycle Approach
3.1 M
easuring innovation as a Milbergs (2004) proposed a framework to analyse
system innovation at the national level, where the major
components of innovation are defined as the inputs,
Systemic innovation metrics are necessary to capture implementation (processes/activities), outputs,
the context in which organizations form and match and impact. According to Milbergs (2004), four
expectations and capabilities to innovate. Besides contextual domains are distinguished that influence
measuring the inputs and outputs of innovation, the the rate and direction of innovative activity. These in-
process and contextual variables should be investigat- clude the macro-economic conditions such as fiscal/
ed as well as the impacts in order to fully realize the monetary environment, interest rates, global economic
benefits of innovation. Besides measuring the inputs and growth rates, demographics; public policy conditions
outputs of innovation, the process and contextual such as R&D funding policy, taxes, intellectual property,
variables should be investigated as well as the impacts regulations, standards and market access policies;
in order to fully capture the extent of innovation activity. innovation infrastructure conditions such as university
research infrastructure, federal labs, capital markets,
The systems of innovation approach (Edquist, 1997, power and transportation systems, regional clusters;
2001, 2005) argues that innovation should be seen and national mindset such as public attitudes to science,
as an evolutionary, non-linear and interactive process, cultural factors, and political issues related innovation.
requiring intensive communication and collaboration
between different actors. Howells (1999) identifies at
least four overlaid innovation system – sub-regional, 3.2 Indicators for measuring
regional, national and international level. The links construction innovation
between sub-regional, regional, national and
international systems of innovations imply that analyses The preceding sections have identified the need for
should include actors and institutions at all four levels. innovation metrics to take account of the varied ways
in which innovation can happen in less technologi-
Initially, the concept of innovation system has been cally focussed sectors and the level of analysis. This is
applied to the national level (Lundvall, 1992; Nelson, particularly true for construction as modern construc-
1993; Niosi et al., 1993; OECD, 1999). The national tion companies largely function and innovate by the
systems of innovation (NSI) studies innovating firms in quality of their processes, the people operating them
the context of the external institutions, government and the way in which they change and adapt to suit
policies, competitors, suppliers, customers, value the changing business environment. Much construc-
systems, and social and cultural practices that tion innovation is project-based and unrelated to formal
affect their operation (OECD and Eurostat, 2005). NSI R&D expenditure and many innovations, particularly
provides a framework in which the whole innovation organizational or process innovations are neither
process can be analyzed in detail that has become an patented nor trademarked (Slaughter, 1993). There-
appealing framework for policy makers. The concept fore, traditional indicators poorly reflect the true level of
of a NSI comprises the variables related to innovation innovative activity in construction. This gulf between
processes within and among firms, and to the practice and measurement is the real innovation gap
innovation infrastructure surrounding and enabling (NESTA, 2006).
innovations by firms that represent the structural
dimensions of the NIS concept (Faber and Based on the analysis of construction innovation
Hesen, 2004). The literature on NSI emphasizes the literature by Dickinson et al. (2005), studies on
importance of strong linkages among these various insti- construction innovation so far lack specific focus on
tutions in improving national innovative and competitive level of analysis, stage of lifecycle, and sector. The levels
performance, and this emphasis applies in of analysis they suggested involved the product, proj-
particular to universities within national innovation systems ect, firm, industry and national levels. The construction
(Nelson, 1993). The exchange of knowledge, cross-sectoral firm level has received most attention in the analysed
collaborations and interdisciplinary research have been literature; this might be because the principal drivers for
shown to be essential to the innovation process in all the innovation are often created at the firm level (Seaden
case studies. Networks require links not only between and Manseau, 2001). Innovation could be investigated
sectors, departments and institutions but also within in different stages of the lifecycle including the design,
them (NESTA, 2009). preparation, construction, and maintenance. As Winch
(2003) argues, most product innovation in construction
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is excluded from the analyses in industry-based surveys. Adopting a built environment view helps analyse the major
Architectural and engineering consulting firms that carry economic activities of manufacturing, production, asset
out most of the design work in construction, typically management, project management, distribution, and
the most innovation in construction, are also excluded services. A similar approach was adopted in one of the
from the standard construction industry innovation studies (Reichstein et al., 2005) that included all firms
classifications. This point is developed further by in traditional construction as well as the firms involved
Barrett et al. (2007) who point out that the standard in architectural activities, urban planning and landscape
definition of construction does not include much of the design, quantity surveying and engineering consultancy
innovation rich and value-adding construction and design activities in the variable broad construction
activity such as manufacturing, architectural and sector.
technical consultancy, business services, and real
estate activities. The built environment cluster analysis It is possible to apply the basis of Milbergs’s (2004)
provides a wider approach to analyse the operations and framework and investigate the innovation process in
functions of the construction sector within the overall construction at the business level. Based on an extensive
economy of a country (Carassus et al., 2006). literature review, Table 1 presents a list of metrics for
inputs, contextual variables, implementation, outputs,
and impacts of innovation at the construction firm level.
Contextual (institutional) Organizational factors (company structure, culture, organizational learning, resources)
variables Country related factors (political, economic, regulations, public policies, socio-cultural conditions)
Industry-related factors (fragmentation, competitiveness, technological advancement,
project-based, lack of an agenda, no of parties, legal issues )
Implementation Tools, techniques, strategies (knowledge management, human resources, IT and R&D, design,
(processes/activities) marketing, distribution, business process reengineering)
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Innovation in construction
A Project Life Cycle Approach
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4. A Survey of Construction Innovation at the Firm-Level
In order to develop measures for innovation that are Tangkar and Arditi (2000) proposed a
appropriate to particular sectors it is necessary to six-phase labyrinth of innovation, where the flow of
understand the sectors own view of the significance successful innovation comprises need, creation,
of innovation and how and why it does (or does not) invention, innovation, diffusion, and adoption.
occur. To this end, this section of the report presents Hansen and Birkinshaw (2007) on the other hand presents
an analysis of innovation at the firm level that is the innovation as a sequential, three-phase process that
result of a survey of entrants for the 2009 Northwest involves idea generation, idea development, and the
Regional Construction Awards. The entrants for the diffusion of developed concepts that includes six
awards provide and interesting sample for analysis as, critical tasks namely, internal sourcing, cross-unit sourcing,
by definition, they believe themselves to be at the fore- external sourcing, selection, development, and
front of current practice. The survey itself used an Inno- companywide spread of the idea. In their classification,
vation Value Chain (Hansen and Birkinshaw, 2007) ap- the whole process is referred as the IVC. The first phase
proach so that although the survey considers innovation is to generate ideas that can happen inside a unit, across
from a firm-level it considers all stages in the process of units in a company, or outside the firm; the second phase
developing new ideas, putting these ideas into practice is to convert or select ideas for funding and developing
and diffusing successful practice to the wider organisation. them into products or practices; and the third is to dif-
fuse those products and practices. Similarly, Roper et al.
(2008) model IVC as a recursive process that has three
4.1 T
he innovation value chain main links such as ‘knowledge sourcing’ to assemble
knowledge necessary for innovation, ‘knowledge trans-
The stages of innovation have been classified in formation’ to translate knowledge into physical innova-
various ways by different authors. Rogers (2003) tion, and finally ‘knowledge exploitation’ to improve the
offers five stages namely, knowledge, persuasion, enterprise performance. The IVC offers a tailored and
decision, implementation and confirmation. Wolfe (1994) systematic approach to assessing firm-level innovation
suggests ten stages including idea conception, performance (Hansen and Birkinshaw, 2007). It is pos-
awareness, matching, appraisal, persuasion, adoption sible to apply the basis of the IVC framework and inves-
decision, implementation, confirmation, routinization, tigate the innovation process at the project level as well
and infusion. as the firm level. Table 1 shows the links of value chain
and key questions to measure each link.
Table 2: The innovation value chain at firm-level (Hansen and Birkinshaw, 2007)
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Innovation in construction
A Project Life Cycle Approach
4.2 Innovation framework for An innovation event, in the form of a new product or
construction process, represents the end of a series of knowledge
sourcing and translation activities and also the begin-
Figure 1 shows the proposed innovation framework, this ning of a process of value creation which may result in
paper has adopted, where the stages of innovation are an improvement in the performance of the innovating
determined as ideas, conversion, and diffusion based on business (Roper et al., 2008). The organisations employ
the IVC by Hansen and Birkinshaw (2007). In this model, a number of tools, techniques and strategies through-
based on the level of innovation capacity, ideas are gen- out the whole process and external factors such as driv-
erated through the acquisition of necessary knowledge ers, barriers and enablers determine the effectiveness of
and investment; these ideas are converted into product/ creation and diffusion of innovation. In this respect, it
process/service innovations within the company; finally can be stated that Milbergs’s (2004) framework at the
these innovations are exploited to achieve performance national level is adapted for the construction industry
benefits and impacts. to analyse firm level innovation process. The overall in-
novation performance is determined by the success of
the IVC together with the benefits and impacts achieved
through the innovations.
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4.3 The research methodology 4.4 Findings of the survey
One of the major objectives of this report is to The major aim of this survey was to provide insights on
provide insights as to how innovation is transformed current innovation practices and performance of the
from knowledge production, transferred into the industry that would inform the case studies that
construction industry and is diffused and embedded into were produced in the next stage of the research. The
the normal processes of construction companies. To this questions focussed each construction firm on the
end, a framework for analysis has been developed based drivers; internal inputs and external knowledge sources;
on the innovation value chain (IVC) approach where enablers; barriers; innovative practices; benefits/outputs;
components of the innovation process are defined actors; and innovation performance.
which clearly focus on the internal and external determi-
nants and outcomes of construction innovation. In this Drivers of innovation: In order to understand what
context, in collaboration with the Centre for Con- drives an organisation to innovate the question was
struction Innovation (CCI) Northwest, a survey was asked: To what extent do the following factors create
administered to the applicants of the 2009 North West the need for your organisation to innovate? (1-5)
Regional Construction Awards that constituted a sample
size of 47. The awards entrants were chosen as they all Table 3: Drivers of innovation
believe that they are at the leading edge of construc-
tion in the region and were willing to share their innova-
Drivers Mean
tions, and so the sample should provide an insight into
perceived best practice. A total of 30 completed Performance (cost reduction,
questionnaires were returned resulting in a 64%
response rate. The following questions aimed to productivity, effectiveness) 4.8
measure the different components of innovation at the Environment/sustainability 4.7
firm level using a Likert Scale (1-5) for each question:
End-user requirements 4.6
n To what extent do the following factors create the Technological developments 4.3
need for your organisation to innovate?
n To what extent do the following factors facilitate Competition 4.1
innovation within your organisation? Regulation and legislation 4.0
n To what extent does your organisation utilize the
following external sources of innovation? Aesthetics/design trends 4.0
n To what extent do the following factors help promote
innovation within your organisation?
n To what extent do the following factors impede the
The results are intended to shed light on the main
uptake of innovation within your organisation?
drivers for innovation at the firm level. Unsurprisingly
n To what extent does your organisation excel at the
the results show that the main driver is performance
following innovative practices?
improvement. Nevertheless, it is interesting to note that the
n To what extent do you think the following actors drive
environment/sustainability, and meeting end-user
innovation within the construction sector?
requirements are close behind. This indicates that
n To what extent does your organisation derive the
although there is a recognition that successful
following outcomes of innovation?
innovation ought to bring improvement in its own right
n To what extent is your organisation good at the three
but even so it is often something that has to be done
different stages of the IVC?
to meet external factors such as environmental factors
n Does your organisation have an innovation policy/
or client/user requirements. These findings are similar
strategy?
to those found in other studies (e.g., Slaughter, 1993;
n Does your organisation have a procedure to monitor
1998; Gann, 2000; BERR, 2008).
the success of innovation?
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Innovation in construction
A Project Life Cycle Approach
Internal inputs and external knowledge sources of Table 4b: External knowledge sources of innovation
innovation: To what extent does your organisation utilize the following
The IVC begins with the generation of new ideas. The external sources of innovation (1-5)?
following two questions were designed to better under-
stand the actions/processes that organisations take to
Sources Mean
generate new ideas and the sources of the new ideas
themselves. Clients 4.3
Partners 4.2
10
Enablers of innovation: Barriers to innovation:
This question was intended to help understand the This question was intended to elicit from the
factors that are seen as significant in enabling innovation respondents the main barriers to innovation for their
within an organisation. firms.
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Innovation in construction
A Project Life Cycle Approach
Adoption of advanced practices: Based on the responses (Table 6), it is observed that
Having asked questions relating to the general contractors believe that they are good at organisation-
conditions for and against innovation this question al innovations such as collaborative practices, contract
was intended to provide evidence as to which practices management/client relations. In terms of technological
contractors believe they excel, as an understanding of innovations they practices mirror the second most sig-
this will help inform the types of innovation that they nificant driver for innovation (environment/sustainability)
might be expected to introduce. with contractors now believing that they excel at waste
management and energy efficiency/carbon reduction.
12
The findings reveal that the major innovators are modular, architectural, system and radical, which can
viewed as the suppliers, followed by the designers, provide a basis upon which companies can select and
clients (Table 7). Being in the fifth place, contractors implement the innovations. Incremental innovation is a
would appear to believe, that in comparative terms, small change, based upon current knowledge and expe-
they do not perform well. The results support the idea rience, whereas a radical innovation is a breakthrough in
that suppliers act as key driver of technical innovation science or technology that often changes the character
in the construction industry, since they invest far more and nature of an industry.
in R&D than contractors or consultants and therefore
more likely to develop product innovations (Gann,
Table 9: Innovation benefits/impacts
1997). The result is perhaps also interesting in terms
To what extent does your organisation derive the following
of what it reveals about the mindsets of the contrac-
outcomes of innovation (1-5)?
tors surveyed. The previous question revealed that
contractors believe that they are good at organisational
Outcomes of innovation Mean
innovation and waste and energy reduction, yet despite
this they do not feel that they contribute to innovation Better company image 4.7
as much as suppliers, designers, clients and consultants.
The question remains is this because these four types Improvement of services 4.4
of organisations are outperforming them in terms of Improvement of client satisfaction 4.4
innovation or is it because the types of innovation
(product/material) from suppliers and designers are Improvement of product quality 4.4
viewed as more significant than the more process Improvement of processes 4.3
oriented innovation typical of a contractor. In the same
vein, it is also interesting also to note that end users Increase in technical capability 4.3
and facility managers are not viewed as significant Increase in organizational effectiveness 4.2
actors in the innovation process despite the fact that
client satisfaction and improvement of services are cited New services 4.1
in the subsequent question as two of the major benefits
New products 4.1
of innovation. This would seem to indicate a mindset
within the industry that still views innovation from a New processes 4.1
technology push rather than a user pull
Market penetration and growth 4.0
perspective despite the growing recognition in the
literature of the importance of service driven innova- Revenue growth due to new products
tion (Barrett, 2007) and the evidence from elsewhere in
this survey that client/end user pull is a more significant or services 3.8
driver of innovation. Short and long-term profitability 3.8
The role of different participants in stimulating and Improvement of organizational structure 3.6
achieving innovation will be revisited in the following Improvement of human resources 3.6
case study section.
Intellectual property (patents,
Benefits/impacts of innovation: trademarks, designs) 3.5
By obtaining a better idea of the expected benefits
of innovation, we can improve our understanding of
why a company would choose to innovate and how it
might measure its success. Outputs of innovation are
traditionally measured by patent or trademark
applications. However, modern construction companies
largely function and innovate by the quality of their
processes, the people operating them and the way
in which they change and adapt to suit the changing
business environment. Developing on Henderson and
Clark (1990), Slaughter (1998) presented five models
of construction innovation categorised as incremental,
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A Project Life Cycle Approach
The most significant benefit of innovation is seen to Bringing the Survey Findings Together
be better company image. As Tatum (1987) suggested The findings based on the 30 responses indicate that
reputation is the most valuable asset for a construction the contractors largely innovate to improve their
firm and is effective in sustaining long term competitive processes and services. In particular their innovation is
advantage. This is followed by improvement in driven by their clients and partners from whom they learn
services, client satisfaction and product quality which the most from. The main focus of their innovations is
are grouped together. This is a significant finding which organization-based and incremental rather than radical
reinforces that although innovation may be important or product based innovations. Slightly more than a half
for contractors per se it is external factors such as of the respondents have an innovation strategy and their
image, services and satisfaction that are seen to provide innovativeness is determined largely by the effectiveness
the most significant benefit to an organisation. The low of leadership, work environment, and collaborations
significance of intellectual property reinforces the point with partners. They specialize in introducing new ways
made by NESTA (2007) and BERR (2008), who of doing business more often than adopting advanced
suggested that construction companies tend to invest technologies. Whilst they can be regarded as success-
less in R&D and rarely create new patents. Hence, ful at generating ideas; they believe that they are less
such measurements that relate to outcomes based on successful at diffusing these ideas and converting
traditional science based indicators of innovation do not them into products and services at the same level.
reflect the focus of activity of contractors and conse
quently will give a poor indication of actual innovative Significant issues worthy of further investigation include
activity. the seeming mismatch between conventional indicators
of innovative activity such as R&D spend and patents and
Innovation performance: the locus and nature of innovation within the various
Finally another key integrational point related to measur- stakeholders within construction projects. Both of these
ing the innovative performance of companies was to as- issues will be investigated in more detail in the following
sess their strategies and processes. The respondents were section.
asked specifically to state how good they believed that
they were in terms of their IVC activities. Based on the
findings, it would appear that they believe that they are
slightly better at generating ideas through collaboration
within and outside their organization (idea generation –
4.2) compared to spreading developed ideas (diffusion –
3.9) and developing ideas into viable products, services,
or businesses (conversion – 3.8). The reasons behind the
slightly lower performance levels at the conversion and
diffusion of ideas compared to the generation of ideas
are explored in more detail in the next section.
The respondents were also asked to state whether their
organisation has an innovation policy/strategy and a
procedure to monitor the success of innovation or
not, since these two play a significant role in the
performance of innovative activities (DTI, 2007). 55% of the
companies indicated that they have an innovation
strategy, and 62% of them stated that they monitor/mea-
sure their innovation processes. The case studies in the
following section investigate futher how these strategies
and procedures are employed in the organisations. More
detail on how these activities actually occur and the way
that strategies are implemented will be explored in the
following sections.
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5. Case Studies Illustrating a Project Life Cycle to
Construction Innovation
Gann (2001) suggests that project-based construction innovations occur throughout the lifecycle of a
firms often struggle to learn between projects, where construction project, it is necessary to
Powell (1997) has shown that this is often the best understand the role of each project stakeholder both
time to develop lasting real changes after reflection on individually and collectively. It is increasingly accepted that
existing practices. Unfortunately, such firms often construction innovation encompasses a wide range of
have weak internal business processes and rarely en- participants within what in manufacturing would be called a
gage in activities such as post occupancy evaluation so “product system” (e.g. Marceau et al., 1999); the
they do not know how to continuously improve their difference in construction that operatives move through
processes. Measurement of the dimensions and elements of a changing context, as the building rises from the
construction innovation at the project level should be ground, whereas in manufacturing the product moves
key to improving the innovation performance of such by the operative.
companies. However, analysis of innovation at the
project level shows it is typically ignored by them. To carry out the wider study of innovation we envisage, a
Indeed the literature shows this is mostly due to the comprehensive approach of the construction industry is
difficulties in monitoring different activities carried out therefore necessary. One that recognises its uniqueness,
by different parties in each stage of the project (Dulaimi but also understands construction as a manufacturing
et al., 2002, Blayse and Manley, 2004). process and a service industry. This means specifying
the different kinds of firms involved in the construction
There are several reasons for this. Management of and the built environment processes and how they go
construction innovation is complicated by the about their business. This broad view must incorporate
discontinuous nature of project-based production in all participants involved in the construction process,
which, often, there are broken learning and feedback including governments, building materials suppliers,
loops. Project-based firms need to manage technologi- designers, general contractors, specialist contractors,
cal innovation and uncertainty across organisational the labour workforce, owners, professional associations,
boundaries, within networks of interdependent private capital providers, end users of public infra-
suppliers, customers and regulatory bodies (Gann and structure, vendors and distributors, testing services
Salter, 2000), but in tight time-spans and with little companies, educational institutions, certification bodies,
feedback on what works well. On the other hand, and others (Blayse and Manley, 2004).
project-based firms are always innovating at the
local level; this is because they have to as their work is From thisperspective, clients can, and do, act as a
always unique, always delivered to bespoke designs, catalyst to foster innovation by exerting key pressure
always achieving something new (Keegan and Turner, on the supply chain partners to improve their overall
2002). Studies by Gann and Salter (2000) point out the performance and by helping them to devise strategies to
need for a better conceptual understanding and new cope with unforeseen changes (Gann and Salter, 2000);
management practices to link project and business they can also demand high standards of work (Barlow,
processes. Although some strategies are proposed 2000), and by identifying specific novel requirements
in their studies, they do not address how to track for their project (Seaden and Manseau, 2001) absorb
innovative activities during the lifecycle of a construction some part of the accompanying risk. Knowledge and
project and how to integrate the new into traditional financial provision, effective leadership, and
ways of working. dissemination of innovations are also among the key
roles which clients could play (Egbu, 2008).
Relationships and knowledge-flows are important for
innovation at all levels of economic activity, including
internationally, nationally, inter-sectorally, sectorally,
inter-firm, intra-firm, inter-project and intra-proj-
ect (Manley, 2008). In a complex systems industry
such as construction, firms have to rely on the
capabilities of other firms, and often sub-contractors
with less understanding of new ways of working, to
produce innovations where this can only be achieved
by the cooperation between those concerned with the
development of products, processes and designs (Blayse
and Manley, 2004). In order to understand how
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A Project Life Cycle Approach
Contractors on the other hand play a mediator role in Figure 2 shows clearly the innovation value chain
the interface between the institutions that develop presented for a construction project. Here, the
many of the new products and processes (materials and construction sector is viewed as a complete system,
components suppliers, specialist consultants and trade which involves clients, contractors, sub-contractors
contractors), and those which adopt such innovations suppliers, consultants, and designers working together
(clients, regulators and professional institutions – see in harmony. The link between firm level processes and
Winch, 1998). Contractors introduce different types innovation at the project level should be explored in this
of innovations depending on their specialty areas. It context, to observe and then understand how differ-
is therefore suggested that companies operating in ent firms contribute to innovation process by develop-
building, infrastructure, housing, industrial ing and implementing strategies, assigning resources to
construction should be investigated to understand their create ideas and diffuse them.
innovation potential, as well as the subsectors of
construction, including architecture, urban
planning, surveying, consultancy, asset/facilities
management, and project maage-
ment. Such a more detailed
analysis would reveal better ways of understanding and
measuring innovation in different phases including the
production, construction, and marketing.
16
5.1 The research methodology 5.2 Case study 1: Cleveley’s
Coastal Defence and
Following on from the questionnaire survey, this
section further explores the need to link between firm level
Promenade Enhancement
processes through the analysis of 4 case studies. These Scheme
case studies have been produced on award winning
projects at the North West Regional Construction Awards THE CONCEPT
2009. Interviews have been conducted with the key A partnership between Wyre Borough Council, Birse
actors to track the collaborative ways in which the Coastal and other strategic partners was formed in
successful innovations have been generated and to March 2004 following an extensive, quality-based
investigate the consequent benefits of innovation at the tender process compliant with European procurement.
project and company level. The following issues were The project was designed to improve flood protec-
addressed during the interviews: tion to 8700 properties in the Cleveleys area and to
upgrade Cleveleys’ promenade. The Project is Wyre
n Project information (type and size of the Borough Council’s largest ever civil engineering project
project, parties involved) and the first partnering contract it has let. The scheme
n Main reasons/drivers to innovate (end user, with a contract value of £21m was funded by Wyre
competition, performance requirements, technology, Borough Council, DEFRA, Environment Agency, European
etc.) Regional Development Fund and delivered in 30 months.
n Major innovation introduced within the project (type The Cleveley’s scheme has been delivered in accordance
of innovation and stage within the project lifecycle), with the principles of Constructing Excellence, engaged
outputs of innovation (in terms of new or improved multiple stakeholders making a real difference to the
product/process/service) local environment and the quality of life. Demonstrating
n Inputs of innovation (human, financial, technical, numerous examples of innovation and best practice, it
and non-technical resources and internal/external is considered for the ‘Project of the Year’ award by CCI
knowledge sources) North West.
n Enablers of innovation (at each level)
n Barriers to innovate (at each level) INNOVATION JOURNEY/STORY
n Major tool/strategy employed to realize innovation Innovation on the Procurement
(innovation policy, measurement system, strategies at The innovative procurement and delivery of this project
firm and project level, solution of problems) was based on the key tenets of the Latham and Egan
n Roles of each stakeholder in (stimulating/ implement- Reports. In particular much emphasis was placed on
ing) the innovation (relations, communication, and the adoption of the partnering approach to achieve
cooperation among project participants) better working relationships and deliver more efficient
n Major benefits/impacts of this innovation construction in terms of quality, customer satisfaction,
(productivity, profitability, image, new markets, etc.) timeliness in delivery and value for money has been
n Lessons learned from the innovation process well documented since publication of these reports.
(capturing/transferring project knowledge) Partnering provides the conditions that can enable real
cost savings, eliminate waste, encourage innovation
The cases highlight the breadth and depth of the and promote learning from experience. To capitalise
companies’ activities to bring innovation into projects. on these benefits, and deliver best value, the Council
The active measures to drive value from collaborative replaced its old price-based competitive tendering with a
partnerships and community/end user engagement quality-driven process using the New Engineering
feature as significant enablers of innovation. The Contract (NEC). Under this system, 26 contractors
indings of these case studies are also published as were assessed through a 3-stage selection process that
individual reports and can be found at evaluated experience, financial stability, commitment
www.innovationcasestudies. to health & safety, employee skills, and references from
clients, subcontractors and suppliers.
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At the start of design, a partnering charter was produced The level of public interest and involvement in
that committed all partners to deliver a quality scheme the scheme led to it being formally branded
for the public; achieve an exemplary safety record; as ‘the people’s promenade’. The team used a
ensure the achievement of best value for the budget at variety of communication methods to keep an open
all times; communicate effectively with all those and informative dialogue with the public including:
involved or affected by the scheme; be considerate to
the community and to the environment; and deliver to n An accessible exhibition centre featuring displays of
the Council and public without defects. the history of the promenade, the design of the new
scheme, proposed works, weekly progress reports,
The client recognised that Early Contractor a feedback book and an overview of the following
Involvement (ECI) and integrated working were essential in months activities.
delivering a successful scheme. The construction team n Activities and competitions were provided for children.
involved were brought together as much as a year n Reporting progress through video, photographs and
prior to work beginning on site and the contractors were artists impressions on a dedicated project web site and
given the opportunity to input into the design stage of through presentations made throughout work period.
the project. Support was received from the funders at n A visitor’s opinion book was made available for visitors
each stage of the project. to record their comments. Thousands of comments
both positive and negative were assessed and a data
Innovation in the Community engagement from the feedback book was tabled and executed by
Visitor experience in the promenade was prime the project board on a monthly basis.
consideration in the design concept, which incorporates n Regular meetings of the community and construction
features to entice the visitor along the length of the team to resolve issues and take forward good ideas.
redeveloped promenade, providing focal points of n Community engagements events at construction
interest, information, outlook and experience of the milestones, for example ground breaking and
highest quality. Extensive public consultation was held sectional completions.
from the very outset of this scheme when the local n The local press and radio were also engaged to update
community were asked what they wanted from a the public on the progress and aims of the scheme.
seaside frontage. A design competition was undertaken
for the selection of the architect/designer to prepare a Innovation in the Construction process
master plan. Four designs were subject to consultation Because of the difficult working environment, any
and a joint decision was made to choose the final design coastal protection scheme carries inherent risks during
after they were reviewed by the contractor Birse Coastal construction. The construction team’s solution to the
for budget compliance and ‘buildability’. potential risks of the project was the innovative use of
precast concrete units as a safe, cost effective, higher
To ensure that the community involvement quality and more sustainable alternative to traditional
continued through the life of the project, an interest group solutions such as rock armour or in-situ concrete. It
‘Cleveley’s Seafront Partnership’ was established. This should be noted that the R&D team has worked on
was comprised of local residents, community groups design issues particularly with the precast concrete units.
and representatives from retailers, leisure facilitators,
hotels, restaurants, the police and commercial Precast units were manufactured using a high strength
bodies. Their brief was to work with Wyre BC and Birse concrete (Tarmac ‘Toproc C75’) in a purpose-built
Coastal, identify any potential problems early-on for facility, just 5 miles away from site. This allowed the
resolution and continue input throughout construction. team to take advantage of traditional manufacturing
The Seafront Partnership worked alongside the construc- techniques such as just-in-time delivery and lean
tion team to secure additional funding/grants for public construction, which resulted in less waste and higher
artwork and amenity enhancement features to efficiency. It also allowed the team to maximise health,
compliment the scheme and add to the visitor’s safety, quality and environmental benefits associated
experience. with off-site construction, whilst the close location of
the facility significantly reduced haulage costs of the
completed units to site. An additional benefit of
this solution was that no pollution occurred in the
sensitive coastal environment.
18
As concrete is precast off-site, there Effective knowledge sharing and then its management
was no risk of washout from unset are essential, not only in bringing the right ideas into a
concrete and a greatly reduced number of vehicles project, but also to ensure that these ideas are known
required on-site. by the entire project team and are diffused to following
projects. This project included a range of hard and soft
Peat onsite caused unstable ground conditions which mechanisms to promote and enable effective knowledge
had not been identified by the original site survey, management [ Give examples for clarity]. One central
however, Birse were able to identify an innovative, cost developmenty in this respect was the web site ‘cleveleys-
effective and sustainable solution to stabilize the ground seawall.co.uk’, which was kept updated with all project
that saved the project up to £1m; this was absorbed into information, pictures, progress reports.
the main programme so did not cause a time delay.
The diffusion of the ideas and best practice
Various low energy and renewable technologies were throughout the project was taken beyond the organisations
used on site including wind turbines were installed to directly involved. The project was a registered Constructing
provide power back the national grid, solar panels were Excellence demonstration project (project number 2800).
installed to provide power for heating and lighting in the As such, the project team actively participated in the
shelter areas, and LED luminaires were used to provide collection and dissemination of key performance
energy efficient lighting. indicator (KPI) results, which are used to inform the
industry. The team also contributed to the Constructing
Strict zero tolerance targets were set to provide safe Excellence case study document, providing an insight
working conditions. Weekly safety meetings meant that into the innovative techniques and best practice adopted
any potential health and safety issues could be identified on site.
and thus prevented at an early stage and responsibility
for project monitoring and continuing safety of workers
and public was given to every member of the team. This
resulted in there being no reportable incidents onsite.
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n Programmed to meet the defined council Another key theme in modern innovation is that of
objectives 72 weeks ahead of target. This time saving was ‘service driven innovation’. Again the public consultation
calculated from the target completion in the should be seen in this light. In construction it is possible
original scoping study based on experience from to deliver a project efficiently, e.g. to cost and time, but
previous schemes. for the solution delivered to not meet the needs of the
n Excellent public communication routes and user. A user or service driven perspective was used here
consultation developed to bring the ideas into the project from the public and so
n Understanding and meeting the expectations of our ensure that the sea defence wall meets their aspirations
customers and needs.
Contribution to quality of life: There are also many instances where a more
The Cleveleys Seafront Scheme transformed a dated and traditional ‘scientific’ approach is used to generate ideas.
dilapidated 1920’s seafront into a vibrant, modern 21st Considerable time and effort was committed to
century seaside frontage, comprising coastal protection ensure that the design was buildable and that modern
and a new promenade accented by seating, shelters, construction techniques could be used.
feature lighting, new café and extensive landscaping. Similarly where technical information and solutions were
needed the team worked with a university to obtain the
The new promenade has been developed for full technical information needed to better understand coastal
accessibility, providing a high quality, safe environment processes.
for the user. The scheme exploits the assets of the
natural coastal heritage, uses them to create and retain
jobs through the development of a sustainable tourism
destination. The scheme has also helped to provide a
20
Conversion of Ideas: Performance measurement should also be seen as one
A combination of open and scientific approaches was key enabler for the diffusion of project innovations.
used to bring ideas into the project. Idea generation is The monitoring regime provides the evidence of the
only useful if the ideas are then put into practice. The success (or failure) of the various innovations, which in turn
key decision in this regard was to use a procurement supplies the supporting information needed to justify
approach that enabled early contractor involve- ongoing use.
ment. This ensures that ideas can be tested for their
buildability and building methods can be developed that are The registration of the project as a Constructing
appropriate to the design. Excellence Demonstration Project is also notable as
a means of diffusion of innovations on an industry
It is also important to note that many technical wide basis. This not only provides a formal mechanism
solutions could only be delivered through the organisational for capturing lessons from within the project but also
innovation enabled by the procurement route. The use provides an industry wide dissemination route.
of Modern Methods of Construction (MMC) is often Constructing Excellence brings the IVC full circle.
seen as a technical or product innovation. However, the Not only is it a diffusion route, it also provides an
successful use of MMC on this project relied on process industry wide model for open innovation. Viewed in this
innovation that was enabled by the collaboration of the regard the diffusion of the ideas from this project is
project team. This in turn enabled solutions such as the repaid in kind by the generation of ideas from other
joint precast facility and logistics based around efficient Constructing Excellence projects that can be used and
delivery that were essential elements in the successful applied on subsequent projects.
use of MMC.
The drivers, inputs, processes, enablers, barriers,
The use of knowledge management approaches outcomes, and lessons learnt are examined for
can also be seen as an enabler for the effective different innovative activities throughout the project in the
conversion of ideas into practice. In this regard, knowledge below table. This summarises key elements of the projects
management is essential for ensuring that the full project innovations in a readily absorbable way making it open
team are aware of and understand the latest techniques for use by contractors and other partners involved in
that are to be used on the project. Effective knowledge construction.
management is also essential to the effective diffusion
of solutions throughout the project and in subsequent
projects which is the third element of the innovation
supply chain.
Diffusion of Solutions:
Many of the ideas that are applied successfully within
this project are brought in from their use in previous
projects. This successful diffusion of new innovations is
the third element of the IVC.
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22
5.3 C ase study 2: The Castlefields One of the most important ingredients of any
successful regeneration partneship is the involvement of the l
Estate Regeneration Project ocal community. Residents of the Castlefields estate
have been heavily involved in the regeneration process
THE CONCEPT
as well as in the development of each individual scheme.
The Castlefields Estate Regeneration Project in
Project team members have had the opportunity to
Runcorn, Cheshire is a unique 10 year partnering
establish positive working relationships with the local
regeneration scheme that has delivered an award
community, and better understand the needs and wants
winning range of over 500 units of new housing, as part
of the residents affected by the redevelopment.
of the vision for a sustainable future for Castlefields. This
project is a successful example of collaborative partnership
Innovative Modern methods of construction
between Plus Dane Group and Cruden Construction
Timber is renewable, sustainable, recyclable, non-toxic,
that embraced ‘Rethinking Construction’ principles
waste-efficient and bio-degradable and as such there
and achieved continuous improvement through the
is no other building material that matches its positive
application of lean construction. The Castlefields
environmental impact. Timber frame is a structural
Regeneration Partnership is using more than £44m of
system that has been tried and tested
funding to completely revitalise this estate. The master
throughout the world for centuries. It is the most
plan proposed a comprehensive programme of over 50
environmentally friendly form of construction available that
individual projects from the redesign of infrastructure
conforms to Modern Methods of Construction (MMC) and
and transport to community facilities and modern mixed
Off-Site Manufacturing (OSM) principles. A study carried
tenure housing. The next phase of regeneration includes
out by the Building Research Establishment (BRE) shows
the redevelopment of the existing local centre, into a
that modern timber frame construction produces near
new community hub.
zero carbon emissions. Timber frame is renowned for its
excellence in energy efficiency terms. Timber frame
INNOVATION JOURNEY/STORY
is engineered to the highest level of accuracy and
Innovative Procurement
quality; promotes greater efficiency and supply chain
The basis for all successful business processes employed
integration; brings predictability and greater control to
throughout the Castlefields regeneration started from
the construction process; improves construction health
the close relationship and integration of the project
and safety; and has fewer defects and high customer
team. It was essential that all members of the team,
satisfaction.
including key supply chain partners, were included in
planning and programming as early as possible. This
There are many forms of timber frame
partnering approach enabled design to be rationalised
construction to choose from, including advanced and closed
and input from Cruden Construction and the timber
panel, volumetric and hybrid systems. ‘Space 4’ closed
frame supplier taken into account in the early stages of
timber frames were used as the structural elements of the
the design process.
superstructure in Castlefields. By using MMC methods,
the closed timber framed panelled units went from
Cruden and Plus Dane achieved to adopt innovative
ground floor slab to panels in place in just twelve weeks
techniques through applying lean principles and they
- half the time of a similar traditional build. Packaged
formed a partnership with Space 4 as the timber frame
as house types, the panels were zipped together on
supplier and maintained this partnership for years. Plus
site and finished in facing brickwork, with render and
Dane Group employed RWD as consultants to aid in the
cedar boarding alongside aspects of double height
development of methods and procedures to improve site
glazing. The benefits of MMC were evidenced in many
processes. Plus Dane determined to work with Cruden
ways; not only was the site accident free, it was dryer and
to eliminate the initial cost barriers of modern methods
cleaner for the labour force to work on. There were also
of construction (MMC) in order to reap long term sav-
benefits for local residents too, with reduced levels of
ings and benefits. The funding of RWD by Plus Dane
vehicle movements and noise.
Group and the agreement to further invest jointly with
Cruden Construction demonstrates both partners’ desire
and willingness to engage other specialists who could
help to drive out waste through the adoption of lean.
These benefits have been brought through from phase
to phase, demonstrating continuous improvement.
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Innovative Lean construction Cruden is very keen to share its knowledge and
MMC required tighter, more reliable processes leading experience through the supply chain. They try to foster
to the adoption of lean principles. Lean construction is innovation based on their business and innovation plan.
the continuous process of eliminating waste, meeting or Their ultimate objective is to be able to meet client needs
exceeding all customer requirements, focusing on the better and be able to adapt to a changing world. The
entire value stream and the pursuit of perfection in key actions that will help them innovate both individually
the execution of a constructed project. Lean construc- and collectively focus on the staff, clients, suppliers, and
tion may require more time in the design and planning lean construction. These are listed as set as a series of
phases, but this attention eliminates or minimizes conversations in their business plan:
conflicts that can dramatically change budgets and
schedules. Supply chain management is an important n ‘Innovator of the Month’ to reward the individuals
support function for facilitating lean construction. In having exceptional contributions
addition, organisations are required to change their n Chairman’s lunches every two months to give direct
business processes to deliver the expected benefits access to the top
of lean construction. Standardisation of the finishing n Sustainability Group to research innovation within the
processes brought benefit to the supply chain, industry
reducing wastage of materials on site as well as wasted n Marketing Meeting Group to collate up to date
operations. feedback from direct contact by Senior Managers
n Feedback from the Customer Care Team and annual
MMC and lean construction involve totally different KPI Radar Charts
operations that were threatening for the whole indus- n Salford University’s SCRI Team to conduct a detailed
try in the beginning. Not only did the contractor have survey of the RSL Client’s by interview
to experience challenges to shift to new processes but n Work at Salford University in the ‘Think Lab’ with
also the subcontractors had to follow at the same pace ‘Innovation Circles’ that bring together suppliers and
and they had to adjust the operations based on the site subcontractors
conditions, which were not always favourable. n Assessment by the suppliers next year to help them
Construction in this way was far ahead of normal become a learning organisation
schedules due to the unexpectedly quick insallations n A series of small projects with a live construction arena
of the timber frames and the construction team had to challenge their norms about how they perform
difficulties in allocating sufficient number of staff to n Sharing the ‘Lean’ learning amongst all their
continue with the finishings. The major barrier and construction teams and exploring new ways of
frustration for the contractor in this phase was the poor thinking and working using the Castlefields pilots as
services; service disconnections and relocations caused a case study.
major delays in the project. Despite struggling in the
construction phase, supply chain partners are expecting Contribution to quality of life:
long term benefits from MMC and lean construction. The main attention is drawn to economical, social
and environmental issues in respect to the needs of
Innovative methods and tools future generations in the Sustainable Communities Plan
Plus Dane Group devote resources from across the Group introduced by the UK government. Castlefields has
to ensure they understand and are able to effectively been undergoing significant transformation, including
deploy new technologies and techniques as they substantial public and private sector investment. A
emerge, ranging from renewable energy sources through Liveability Study undertaken by Liverpool Housing Trust
sustainable housing solutions to MMC to create high as part of the overarching regeneration partnership
value low cost solutions for the clients. They are keen established that 78% of residents feel that the
to create a true learning culture with Cruden and regeneration, through demolition and new build has led
mechanisms to enable more sharing knowledge and to an improvement of the estate. 50% of residents now
best practice. say the regeneration of the area has influenced their
decision to stay on Castlefields. Castlefields regeneration
programme seems to have pleased the residents so far.
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INNOVATION VALUE CHAIN
Idea Generation: There are also many instances where a more
The project was very notable for its use of a ‘client- traditional ‘scientific’ approach is used to generate ideas.
driven innovation’ approach to idea generation. Considerable time and effort was committed to
Building regulation on social housing had a great ensure that the design was buildable and that modern
impact on the processes and performance of this construction techniques could be used. The
regeneration project. The UK Goernment’s initiative to scientific approach extends to the use of performance
create sustainable homes is released in the CfSH. This code monitoring throughout the project. Performance
requires the contractors to use innovative products in their monitoring provides the information needed to remove
construction processes and deliver the specified sustain- inefficiencies and drive improvement. This is true not
ability performance levels. The client was experienced in only for this project but for the ongoing applications
terms of MMC and introduced the idea of using closed of solutions developed on this project into following
timber frames to achieve sustainability. The next stage projects.
was to search for the right product and assess its ‘build-
ability’ with the contractor. Conversion of Ideas:
A combination of open and scientific approaches was
A further example of the work done to gain a full under- used to bring ideas into the project. Idea generation is
standing of the client is provided by the work commis- only useful if the ideas are then put into practice. The
sioned by Cruden with the University of Salford to survey key decision in this regard was to use a procurement
RSL clients. This service driven approach to innovation is approach that enabled early contractor
mirrored by the feedback collected from the customer involvement. This ensures that ideas can be tested for their
care team, Marketing Meeting Group and performance ‘buildability’ and building methods can be developed
KPIs. that are appropriate to the design. The Innovation
Circles created by Cruden provide one method whereby
Product innovation is only one component of the IVC in the supply chain members are formally brought together
the construction supply chain, the responsibility of which to help put solutions into practice.
lies with the suppliers. However, the implementation
requires joint effort by the client, designer, contractor, It is also important to note that many technical
suppliers, and subcontractors. The project team ensured solutions could only be delivered through the organisational
the successful implementation of product innovation innovation enabled by the procurement route. The
through a series of organisational innovations. use of MMC is often seen as a technical or product
innovation. However, the successful use of MMC
A principal idea that was brought into the project was on this project relied on process innovation. The
the use of partnering and associated process improve- project team identified that potential benefits of MMC
ment as called for in Egan report. Although these are well could only be achieved through the application of lean
established ideas, they are not always applied success- principles that involves supply chain integration and process
fully. The project team ensured that, with the partnering reengineering.
approach in place through the procurement route, steps
were taken to establish trust and drive efficiency starting Contractor’s devotion to learn about lean principles was
from the design process till the execution of MMC. appreciated by the client and they shared the cost for
lean consultancy to deliver higher performance.
Taken together, the project team have used a wide
variety of measures to facilitate and support the
generation of new ideas. A scheme such as ‘Innovator
of the Month’ ensures that all staff are aware of the
importance of innovation and have the opportunity to
contribute, this is supported by the idea of Chairman’s
lunches to firmly establish the fact that there is no
hierarchy or monopoly on the generation of ideas. This
concept is extended beyond the organisation through
‘Innovation Circles’ that bring together the supply chain
in an open approach to sharing ideas and tackling
problems.
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Diffusion of Solutions:
The successful diffusion of new innovations is the third
element of the IVC that is achieved through the client’s
drive to become a ‘learning and sharing’ organisation.
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Table 11: The innovation register for Case Study 2
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5.4 C
ase Study 3: Lancaster The key success has been to achieve a highly
sustainable development at an affordable
University Eco-Residences cost. Affordability has been achieved by looking at the
Project construction process and how the detail design may
incorporate features which facilitate construction.
THE CONCEPT Much of what has been incorporated is based on North
The eco-friendly accommodation at Lancaster American best practice and the work of Professor
University is the first replicable scalable model of its Avi Friedman who is head of the Affordable Homes
kind and has been designed as an environment that will Programme at McGill University, Montreal.
encourage ‘good habits’ in terms of sustainable living. Professor Friedman’s work has been funded by central
It is hoped that the accommodation will help to attract government for over 20 years and he is recognised
increasing numbers of students from across the UK and as a world authority on the subject of affordable
internationally. University Partnerships Programme (UPP) housing. The key features of this ‘sustainable by design’
established a partnership with Lancaster University in concept focused on a simple design delivering high energy
2003 to develop 950 rooms. The eco-friendly model efficiency and heat recovery. The units were built
was based on the research of Dr Avi Friedman. This using sustainable and renewable materials. Each unit was
research has been transformed into bespoke fitted with a Building Management System (BMS) that
accommodation by The constantly monitors and communicates utility use.
Goddard Wybor Practice. The country’s first
eco-residence was constructed using timber Innovative Procurement
frames based on good, simple planning. Off-site Lancaster University has selected UPP as partner for Phase
manufacturing (OSM) of the timber frames contributed to 4 of its Residences Programme, which delivered nearly
reducing the amount of construction materials required 1000 rooms. The deal has included a re-financing of the
and waste generated during the build. It was significantly previous three phases of the Residences Programme, on
quicker than traditional concrete builds and reduces the which UPP also partnered with Lancaster University, and
carbon-footprint of the build considerably. a 10-year extension of the leases, allowing the University
to release a significant amount of capital, to be reinvest-
INNOVATION JOURNEY/STORY ed back into the institution. The agreement transferred
Innovative Planning construction, operational, asset and demand risk from
Lancaster University’s ‘County’ and ‘Grizedale’ the university. UPP will provide facilities management
Eco-residences were developed to address issues and services to Lancaster University for the duration of the
problems identified from three previous phases of 48 year contract.
new-build residences at the university. The
university also sought to develop future university estates Another partnership, GreenLancaster, was established
on the basis of sustainable principles. HEFCE guidance on between Lancaster University Student’s Union (LUSU),
universities’ environmental performance provides an the University’s Estate Management department, and
important benchmark. HEFCE has confirmed that from the UPP, the aim of which was to help departments
2011, all HEFCE capital funding will be subject to across campus promote and deliver environmental initia-
Institutional Carbon Management Plans and further, tives. They have helped increase recycling rates, reduce
that pursuant to the Climate Change Act, the Higher toxic waste, reduce energy consumption and green the
Education Sector is likely to be set a target of reducing University’s supply chain. In addition they have gener-
carbon emissions by 80% by 2050. ated jobs for students, as well as raising the profile of
environmental issues amongst staff and students.
A working group (GreenLancaster) developed four key
objectives as the design criteria for the university’s Phase Engagement with student residents at an early stage in
4 residences: the design process and the inclusion of students and
other stakeholders’ requirements was key to producing
n Environmental sustainability an acceptable and high quality student residence. Fol-
n Reduced construction and rental costs lowing completion, further engagement on obtaining
n Enhanced social space and addressing initial feedback from new residents was
n Improved design quality and specification also critical. This stakeholder participation model will be
used in future student residence developments.
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Innovative Modern Methods of Construction System (BMS) which constantly communicates utility use
Although the systems or products used in the scheme to enable the students to monitor their carbon footprint
have been used before, the main innovation in this proj- for their townhouse which is calculated from its water,
ect is that all the various design and construction ap- gas and electricity usage.
proaches are brought together in a coherent, holistic
housing concept that was both sustainable and afford- A competition was launched in January 2009 to
able. Prefabrication is a major factor in keeping costs and promote this function with the residents and motivate them
waste to a minimum. Both the structural timber frames to be more environmentally conscious. This was set-up in
and bathroom pods are built off-site and delivered ready conjunction with GreenLancaster to promote and
for quick installation and connection. incentivise reduced energy and utilities use, and
reward the townhouses with the lowest resultant carbon
By using timber sourced from sustainable, managed footprint. Each townhouse has the opportunity to win
forests for the building’s superstructure, the carbon £600 per term which is the average cost of their utility
footprint of the build is reduced by 30%. Minimisa- bill. Students can log onto the Green Lancaster website
tion of construction impacts have been achieved by the http://www.greenlancaster.org.uk/carbon-competition/
construction contractor through a variety of mea- and view the carbon footprint and utility use for their
sures including site utility monitoring, with targets for house in real-time, as well as check on who is winning.
electricity and water, a construction site waste
management plan, use of reusable hoardings and Carbon emissions were reduced by 11.3% (or 16 tonnes
‘eco-cabins’ for onsite accommodation. CO2) for January-April 2009 compared with the same
period last year, when there was no carbon contest.
Construction was far ahead of schedule due to the Carbon emissions per person per day also dropped from
unexpectedly quick insallations of the timber frames. 3.54kg in 2008 to 3.14kg in 2009. Students achieved
Just in time (JIT) deliveries were fundamental to these results by taking some simple actions such as
maintaining the construction programme. MMC switching off the TV at the mains, not leave anything
required tighter, more reliable processes leading to on standby, half-filling the kettle, cooking together, and
the adoption of lean principles. Standardisation of the filling up the washing up bowl instead of running the
finishing processes brought benefit to the supply chain, tap.
reducing wastage of materials on site as well as wasted
operations. INNOVATIVE ACHIEVEMENTS
Significant financial and environmental benefits have
Panelised timber frame construction was new to some been achieved for both the University and student
members of the construction team, and seminars/ residents in the County and Grizedale developments.
project meetings were held at an early stage with the
n The cost was decreased from £32,000 to £29,830 per
contractor/supply chain partners with regard to the
student room in comparison to previous phase.
process approach and construction technology in-
n The rent charged to students had a 15% reduction
volved, both to give confidence and exchange knowl-
against the rental charges in previous phase.
edge. ‘Toolbox talks’ were initiated with the workforce
n The residences are anticipated to better CO2
of the various supply chain partners to ensure require-
emission targets from the Building Regulations, with
ments were properly implemented on site. Many detail
annual emissions of 963kg CO2/annum/student
design or construction issues incorporated in the scheme
against design criteria which predicted emissions of
have been adopted by supply chain members as general
1,147kg CO2/annum/student.
practice moving forward.
n Gas consumption is anticipated to reduce by 5-10%
per student room compared to the previous phase of
Innovative Methods and Tools
residences.
Lancaster University recognises the significant
n U values of 0.26 W/m2 (walls), 0.135 W/m2 (Roof/
environmental impacts associated with its operations
Floor) and 1.1 W/m2 (windows/doors) have been
and also its responsibility to address these impacts in
achieved.
all areas of its activities through its Environmental Policy
n The construction contractors are registered with the
and Environmental Management System (EMS). The
‘Considerate Contractors’ scheme, and achieved
environmental impact of new or refurbished buildings
an audit score of 32 out of 40 in a Considerate
is very carefully evaluated from conception, through
Contractors external audit.
design and construction to operation. The County and
Grizedale Eco-residences have a Building Management
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A Project Life Cycle Approach
30
After finalising the design, the project team looked However, the domain is not limited to university
for a cost effective solution that could deliver the accommodation; the same principles can now be
sustainability and quality requirements. Based on applied to deliver successful housing and commercial
the previous work by the architect, they decided to building projects.
apply MMC and the closed panel timber frame was the
innovative solution to speed up the process and The university acknowledged the significance of
achieve sustainability. Product innovation is only one sustainability and wanted to diffuse this among the
component of the IVC in the construction supply chain the students. The necessary infrastructure was put in place
responsibility of which lies with the suppliers. However, by the architect and the whole process was achieved
the implementation requires joint effort by the client, through successful partnering. Delivering a cost effective
designer, contractor, suppliers, and subcontractors. The sustainable project, all partners try to push the industry
project team ensured the successful implementation of to adopt same principles.
MMC through a series of process innovations including
JIT delivery and lean construction. Performance measurement should also be seen as an
enabler for the diffusion of project innovations. The
Conversion of Ideas: monitoring regime provides the evidence of the
Idea generation is only useful if the ideas are then success (or failure) of the various innovations, which
put into practice. In this respect, all project members in turn supplies the supporting information needed to
shared the same values and had strong commitment to justify ongoing use. It is notable that the BMS has raised
innovation and high quality. Extensive work the awareness of students in terms of sustainability
was previously undertaken to examine construction and has become an integral component of their daily
processes and incorporate elements within the lives. Cost savings are reflected into the rents that was
esign that facilitate construction. To help ensure these an additional benefit for the students. Students now
principles are put into practice the project team share their experiences with their friends and families to
identified that the maximum benefits of MMC would spread the idea of eco-friendly environments.
only be achieved through the application of lean
principles and spent considerable effort to apply those The drivers, inputs, processes, enablers, barriers,
principles. JIT delivery was another solution to catch up outcomes, and lessons learnt are examined for different
with the quick construction as a result of MMC. ‘Tool- innovative activities throughout the project in the table
box talks’ were initiated with the workforce of the on the following page.
various supply chain partners to ensure requirements were
properly implemented on site.
Diffusion of Solutions:
The successful diffusion of new innovations is the
third element of the IVC that is achieved through the
client’s drive to become a leader in eco-friendly university
accommodation. Much of the concept itself has been
based on work previously developed by the project
partners in the area of social housing. The
project is recognised as a best practice in its field; some
universities are planning to adopt similar schemes.
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5.5 C
ase Study 4: Cheetham Hill veloping new solutions for Tesco but the continuous
(repeatable) nature of the projects encourages them to
Tesco Environmental Format innovate and they benefit from the buying power of Tesco
Store at the same time and learn from them on monitoring their
operations and managing the supply chain. Tesco also
THE CONCEPT has its own technology centre and a small non-trade
This scheme is the first repeatable format to be built concept store that is open to its partners to test their
for Tesco, with the aim that this will become the ideas in.
standard design format for future stores. The innova-
tions that were achieved through the scheme have been Innovative Design and Construction Process
selected through design workshops and testing dur- Construction of the Eco-Store in Cheetham Hill was
ing the procurement stages of the project. The success based on the principles of using wood instead of
behind the project lies in the collaborative working relation- metal; introducing more natural daylight into the store
ship among the project participants and commitment to to use less electricity; achieving a more energy-efficient
innovation and meeting project goals. The heating and air-conditioning system; using less energy
contractor’s (Taylor Woodrow) role in this project was and water; generating our own energy; rethinking
critical in ensuring that the design team all worked refrigeration, fixtures and signage; and
together to deliver the clients aims. A mixture of new minimising waste; all of which contribute
construction techniques were sought to deliver an significantly in cutting the store’s carbon footprint.
environmentally friendly, energy efficient, sustain-
able, innovative, integrated, and value added project, The construction processes was similar to a standard
whilst maintaining customer and client satisfaction. The Tesco format store but the innovations below were
scheme is the first supermarket to run on vegetable introduced in terms of products and processes:
oil via a CHP unit that provides the energy and heat
requirements of the store. Examples of environmentally n Hybrid timber frame: One of the most important
friendly innovations include a certified hybrid timber elements of the environmentally friendly design
frame, sustainable cladding system, X-Lite roof lights, features is the innovative hybrid timber-steel struc-
wind catchers and clerestory glazing. ture. Through careful design detailing and value
engineering, B & K Timber Structures incorporate
INNOVATION JOURNEY/STORY their expertise in steelwork fabrication to offer hybrid
Innovative Planning structures. They combine the aesthetic and
Taylor Woodrow has been partners with Tesco environmental benefits of timber with the economic
since 1985 when Tesco decided to form strategic benefits of steel that reduce carbon footprint without
alliances with its contractors. The key reason for strategic compromising quality.
partnering for them was to continue to innovate their n Sustainable cladding system: The system was
supermarket buildings, so that they would be built faster sourced from Lithuania and required a lot of detail-
for less money and deliver high performance. Working ing and planning to execute a very smooth installation
together as a part of the team was the major enabler without any problems. It was manufactured off site
of innovation in this project. The team worked with B and offers an embedded/carbon energy saving of 8%
& K Timber Structures to supply timber frames. As one and the cladding is 100% recyclable.
of the only firms in the UK able to offer a complete n TriArch walling solution: This system is a
package of expertise in both steel and timber design, prefabricated walling system, which is made from
engineering, manufacture and installation, they were recycled gypsum and timber boarding. This
able to undertake the project at Cheetham Hill with product is 100% recyclable, there is no requirement for
efficiency, ensuring Tesco was in a position to commence plastering as the system is pre-finished and ready for
trading on schedule. either wall paper or paint finish that ultimately results
in no wastage.
Tesco is very successful at managing the innovation
process through collaboration with their strategic
partners. Tesco has nine contractors working with
them, all of which carry out R&D on their behalf. This
decentralised research approach brings mutual ben-
efits; people having specific expertise invest in de-
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n Roof lights: The pre-manufactured roof light n Help customers to understand their own carbon
system comprises of polycarbonate which contains a footprint and what they can do to reduce it.
nanogel core preventing solar heat gain within the
sales area of the store, but allowing the transfer of Tesco supported its targets with a £100 million
daylight. This helps reduce lighting levels in the store Sustainable Technology Fund starting in 2007 to support
by the introduction of natural daylight without the large-scale carbon reduction technologies in their stores,
danger of solar heat gain. distribution centres and supply chains worldwide. In
n Combined heat and power (CHP) unit: The team 2008, they invested around £60 million in energy-saving
worked on alternative energy sources on site such and low-carbon technologies, and over £26 million in
as wind, solar, bio-gas, CHP and combined cooling, 47 CHP and CCHP plants for local generation, as well
heat and power (CCHP). This unit runs on CHP that as 27 wind turbines and one store installation for solar
provides heat and electricity to the store with the use generation. These technologies are expected to reduce
of vegetable oil as an environmentally friendly the their carbon emissions by about 6,000 tonnes of CO2
primary fuel source. per annum.
n CO2 refrigeration: Natural refrigerants improve
energy efficiency in comparison to conventional Taylor Woodrow’s Technology Centre combines a
systems and have a greater advantage during the unique blend of experience and skills across a range of
majority of the year when ambient temperatures are disciplines and offers solutions at every stage of the
below peak summer values. CO2 is a highly efficient construction cycle aiming to increase the value of
refrigerant that improves the performance of heat customers through the provision of technical
exchangers and hence the temperatures of foodstuffs. expertise. The Centre comprises a team of engineers,
n Wind catchers: These have been provided to provide consultants and scientists dedicated to providing innovative
a vent for warm air build up with the store. Fresh air is solutions for the construction industry. This centre acts
then sucked from the outside to provide a continuous as an internal centre of excellence and was involved
circulation of fresh and cool air. throughout the construction process of Cheetham
n Mechanical systems: CO2 sensors have been Hill. For example, Taylor Woodrow set up an internal
installed which are linked back to the Building consultancy with them to develop a method of
Management System will allow the mechanical working out the consistency of grout mixes involved in the
systems to ramp up or down dependent upon the installation of the floor tiles and review information for
occupancy levels within the store. This helps to reduce the nanogel filled roof lights.
energy usage.
Taylor Woodrow developed a design manual and
Innovative Methods and Tools website to share with other Tesco contractors to
Tesco wants to play a leadership role in tackling climate knowledge share experiences and learn from delivery
change. Their aim is to mobilise collective action among of the project. They also contributed by working along-
customers, suppliers and employees, to help protect the side Tesco in collating information concerning material
environment and generate a mass movement in green usage and specifications, together with identifying how to
consumption. reduce wastage through using certain types of
products. They delivered a presentation to the other Tesco
Tesco has built a series of environmental stores in every preferred contractors on site as a work session over a
country they operate since 2006, where they test new period of three weeks. This involved a debate about
technologies and designs to save energy and reduce our materials and environmental initiatives integration. This
carbon footprint. Their major objectives set in the cli- demonstrated their commitment to sharing knowledge.
mate change programme regarding their buildings are
to:
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INNOVATION ACHIEVEMENTS INNOVATION VALUE CHAIN
Tesco’s climate commitments through the combination Idea Generation:
of new technology and good business lead to dramatic The project was very notable for its use of a ‘client-
reductions in their carbon footprint. The Cheetham Hill driven innovation’ approach to idea generation. Tesco
store’s carbon footprint is 70% less than an equivalent recognised the importance of delivering high
Tesco store built in 2006. This has been achieved in the environmental performance and set its agenda to re-
following ways: duce its carbon emission throughout its operations. They
developed a climate change programme and started
n 31% through energy efficiency measures, such as roof building environmental format stores that would help
lights allowing more natural daylight into the store, them design a repeatable store concept and increase
saving on electricity the likelihood of winning planning permission from
n 20% by using natural refrigerant, using CO2 instead environment conscious Local Authorities to build new
of HFCs sustainable stores in the future. Being committed
n 19% by using a combined heat and power plant strongly to carbon reduction, Tesco works on
running on “recycled vegetable oil”, according to developing and implementing green tech-
Symonds, enabling the store to generate its own nologies with their partners and supply chains.
electricity and make use of the waste heat.
Tesco themselves can be seen to operate an open
Other achievements by Taylor Woodrow related to this innovation policy. The ideas are brought into the project
project include: from all of their supply chain partners in a coordinated
fashion. As such, one of the main enablers of success-
n Zero tolerance on site for health and safety issues
ful delivery of this project was the innovative use of
n 89% Customer Feedback score on lessons learnt and
partnering approach. Tesco established strategic
future goals
partnerships with its contractors dating back to 1999.
n In the top 10 of the company house keeping league
The repeatability of the projects offered by Tesco was
throughout the last 4 months of the contract
another advantage for the team members. They c
n BREEAM “Very Good” rating
ollectively worked to search for suitable products,
n Over 500 visitors from client to other contractors who
invested in developing tailored products and tested them
visited the to learn about the technology they were
in their internal technology centres and on-site.
installing on the site
Once the design for an environmental format store
Contribution to Quality of Life:
was achieved, the project team looked for a cost
Cheetham Hill was an area of high unemployment and
effective solution that could deliver the sustainability and
social deprivation. This scheme targeted to employ
quality requirements. Product innovation is only one
40% of its staff who were currently unemployed local
component of the IVC in the construction supply chain, the r
people. The scheme will have a significant impact upon the
esponsibility of which lies with the suppliers to a large
regeneration of this town and reenergize the
extent. In this project, contractor also invested in R&D
community. The store is also Tesco’s latest regeneration
and was involved in product innovations through
partnership, with around half of the 260 employees
cooperating with its internal technology centre.
having previously been unemployed or on benefits for
six months or longer.
Conversion of Ideas:
A combination of open and scientific approaches was
The project was also notable in terms of community
used to bring ideas into the project. Idea generation
engagement. Taylor Woodrow contacted the local
is only useful if the ideas are then put into practice. In
primary school and worked with them at disruptive
this regard, the strategic partnership between the client
times to ensure that noise was kept to a minimum and
and the contractor created a conducive environment to
awareness was raised at all times within the programme.
test the innovative products for their buildability. The
Over 150 letters were also hand delivered to ensure local
contractor invested in R&D to satisfy the objectives set
residents were made aware of vibration and road works
by the client, they committed considerable time and
that were being carried out.
effort to achieve a cost-effective design solution. The
Technology Centre worked as a consultant for the
contractor and played a major role in innovating using
internal resources that saved time and money.
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Taylor Woodrow’s main role in the innovation process Knowledge management practices are also an
was to help ‘productionise’ the ideas that were sources effective enabler for the diffusion of innovations within
by all members of the team. They sought to find the and outside the organisations. Knowledge sharing is
best way to develop tailored products that would fit not only essential for ensuring that the full project team
into the design. One of the key decisions in this project are aware of and understand the latest techniques that
was to work with a supplier that is experienced in steel are to be used on the project but its is critical to diffuse
structures to develop the timber frame solution. This the innovative solutions within the market. Delivering
resulted in an innovative hybrid timber-steel structure a cost effective sustainable project, all partners try to
achieved through detailed design and value engineering. push the industry to adopt same principles. Longer term
This was environmentally friendly product that proved to benefits will accrue if the supply chain remains together
be cost-effective as well. and works on follow on projects.
The key point of this project was that the store is planned
to be a ‘blueprint’ for all future stores. Therefore,
knowledge and experience gained throughout the
project starting from the design to construction and
operation was critical. The repeatability of the project
was an important element that ensured the diffusion of
innovations introduced in this project.
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Table 13: The innovation register for Case Study 4
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Table 14: The combined innovation register
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There are many lessons that can be learnt from these n Sustainable construction can also be affordable by
case studies as summarised below: adopting the lean principles and transferring the
project knowledge and key lessons to future projects.
n There is no substitute for good planning; innovation n Idea generation is easier compared to converting
benefits can only be achieved through planned effort those ideas into practice since this requires advanced
to invest in new ideas and convert them into practice skills, commitment and large investment.
in a systematic way.
n Early contractor involvement and integrated working
are essential for a successful outcome by minimising
the discontinuities within the value chain.
n Contractor’s sole effort to innovate does not
guarantee success, support from like-minded people
is crucial.
n Innovation in construction can only be achieved
through understanding client requirements and
collaboration throughout the whole project lifecycle.
n Repeatability of projects and strategic partnership
between the client and the contractor help the teams
achieve its targets starting from the design phase
throughout its operation.
n New methods are jeopardizing for construction
industry since changing traditional way of work-
ing is not an easy task. Devotion to innovate is the
key to break the industry’s resistance to change.
Commitment from all parties along the supply chain is
one of the major enablers to innovate.
n Building regulations can drive both technological
(product and process) and organisational innovations
within the construction supply chain. Client’s devotion
to meet those regulations and effective team work
will ensure buildable solutions are developed.
n Qualified labour resource, capable of requisite
innovation, is scarce within the construction
industry. Sharing knowledge and best practice along
the supply chain can improve the culture and skills of the
workforce and it is therefore crucial for project
success.
n Exploiting potential efficiency benefits requires
organisational innovations such as supply chain
management and business process reengineering.
n Creative and open approaches to community
consultation can improve the relationship with the
local community and bring ideas into the projects.
n Benefits of MMC are not short-term, strong
commitment from all project participants is essential
to ensure long-term benefits.
n Achievements and the experience gained can
easily be transferred to other similar projects and newly
developed products can be offerred to the market.
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6. DISCUSSION AND CONCLUSIONS
This report has investigated construction 6.2 How Innovative is
innovation through a literature review of its measurement, a
survey of innovation at the firm level and case studies of
Construction?
innovation in a project setting. This section of the report
The case studies illustrate the range and breadth of
brings the findings together in order to highlight the
innovative activity in construction. To a degree, the
key lessons of the research and to suggest areas where
characterisation that the industry follows rather
further research is needed. The key lessons from this
than leads seems to hold true. The survey shows that
report are as follows:
contractors in particular list client and end user
satisfaction coupled with environmental/sustainability
6.1 M
easurement of issues as key drivers for innovation. The reverse view could
Construction Innovation also be taken. The case studies illustrate many examples of
contractors and wider project teams going to great
Conventional measures of construction innovation lengths to understand the end user and to provide
under represent the amount of innovation that takes innovative solutions in response. This user driven
place within the construction sector. This is for two approach is often cited as a characteristic of innovative
main reasons. Firstly, standard surveys of innovation industries.
only take a narrow view of the sector (SIC Code). To
resent a fuller picture of construction innovation the The range of activities that project teams use to bring
situation should be analysed from a wider built environment ideas into projects is also notable. The fact that much
perspective that includes material suppliers, design of this is done within project supply chains may mean
and use of facilities. Secondly, even within this wider that the activity escapes conventional measurement
perspective, conventional measures do not well but could also be seen to be indicative of an open
represent the innovation which is taking place. The innovation approach among the supply chain. The most
survey indicated and the case studies confirmed that formal example of this is provided by the fourth case
even where activities such as R&D take place this is study whereby Tesco marshalled the expertise of its
often within a project context and would not be includ- supply chain partners to develop their eco-friendly
ed in official statistics. Consequently, although the case superstore, but similar arrangements exist in all of
studies illustrate a wide range of activities to promote the case studies. Although the fragmented nature of
innovation and a wide range of outcomes from these construction is often cited as a barrier to innovation
innovations, only a small proportion of these would one of the key strengths of the industry is its ability to
be picked up by conventional statistics. The creation employ organisational innovations to reconfigure supply
of a representative range of measures for construction chains in order to deliver solutions to client needs. The
innovation is being taken forward by NESTA. Although perception from the survey is that innovation is led by
this report is not detailed enough to make such concrete the suppliers and the designers yet the case studies
proposals two recommendations can be made. present a more complex picture. Whilst it is true that
the case studies illustrate innovative design solutions
1) Much R&D activity is taking place that is not employing advanced off site solutions, the case
registered officially. More should be done to raise studies also illustrate that these innovations are only made
awareness of the R&D Tax Credit scheme to construction possible through process innovation from the contractor
companies. This would directly benefit the companies in order to meet specific needs driven by the client.
and improve the statistics.
In summary, the case studies illustrate a wide range
2) The Innovation Value Chain approach to the of innovation from all members of the supply chain in
measurement of construction provides a flexible order to meet the requirements of clients and end users.
and simple system that can usefully be adopted at a Although the case studies are taken from projects that
company and project level to produce meaningful data have been recognised for their innovation, the types of
and information ob the effectiveness of innovation innovation that they illustrate are widespread in present
policies and practice. day construction projects. The true test of whether or
not an industry is innovative should not be measured by
activity or types of innovation; rather it should be mea-
sured by the outcomes or results of innovation. This is
explored further below.
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Innovation in construction
A Project Life Cycle Approach
42
6.5 Summary
The report has illustrated some of the wide range of
innovation that occurs in construction projects and
has confirmed that much of this is hidden from
conventional metrics. Much of
the innovation that does occur
happens at the project level and has results that im-
pact upon the three pillars of economic, environmental
and social sustainability. Each of the project stakehold-
ers plays their part in successful innovation which rein-
forces the view that analysis of construction innovation
should take a wide view that encompasses a project
perspective. A view that fragments the industry will
under represent the innovation that occurs, in part, by
not reflecting the types of innovation produced by the
different industry stakeholders.
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Innovation in construction
A Project Life Cycle Approach
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8. Notes
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Innovation in construction
A Project Life Cycle Approach
Notes
48
Notes
49
Professor Mike Kagioglou
SCRI Director
www.scri.salford.ac.uk
£12.00
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