Role Of Clients In Driving Innovation Construction Essay

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Construction industry has been facing a number of challenges one of the most significant of which is the environmental sustainability. Building regulations and clients' requirements are the major drivers of innovative solutions in construction processes to reduce carbon footprint and deliver the required environmental performance levels. The major objective of this paper is to investigate the role of a private client in driving innovation to achieve environmental sustainability. In this respect, an award winning project in the UK is analyzed as a case study. The client introduced a climate change programme and established a strategic partnership to construct the first repeatable environmental store. The project team adopted many new construction methods to significantly reduce the energy use and thereby carbon footprint. The case study demonstrates how a private client can trigger and support innovation in construction by investing in R&D to generate new ideas, converting them into innovative solutions and diffusing them along the value chain.

Keywords: Construction projects, clients, innovation, case study.

INTRODUCTION

There have been a number of changes and challenges such as globalization of the business environment; demographic change; environmental sustainability and climate change; new materials and technologies; ICT; and governance and regulation that may have a significant impact on the construction industry [1]. Among these drivers, sustainability has become a major concern for the construction industry due to the fact that construction activities significantly impact on waste, energy use and greenhouse gas emissions. As a response to climate change and its effects on the environment and energy academics, practitioners and governmental bodies have been involved in many discussions and applications to create a low-carbon economy. There has been a growing emphasis on corporate sustainability, which is also reflected by pressure being exerted by clients, government and other stakeholders for the industry to be more accountable for its environmental impacts [2]. The United Kingdom is among the examples of government-led initiatives in terms of energy consumption regulations and policies. The UK government has been implementing strategies on environmental, economic and social sustainability [3] with the aim of increasing the profitability and competitiveness of the construction industry by issuing a number of regulations such as the Code for Sustainable Homes (CfSH) [4]. Efficient implementation of sustainable practices depends on the adoption of innovative methods, tools, and products. As Dewick and Miozzo [5] suggest that "there has never been a more important time to understand the innovation process of sustainable technologies and encourage the implementation of energy-efficient technologies".

In order to understand how innovative activities occur throughout a construction project, it is essential to understand the role of each project stakeholder both individually and collectively [6]. It is increasingly accepted that construction innovation encompasses a wide range of participants within what in manufacturing would be called a "product system" [7]. Each stakeholder within the construction value chain has a different responsibility and role in stimulating and achieving innovation. For example, clients can act as a catalyst to foster innovation by exerting pressure on the supply chain partners to improve overall performance and by helping them to devise strategies to cope with unforeseen changes [8], by demanding high standards of work [9], and by identifying specific novel requirements for a project [10]. Contractors, on the other hand, play a mediator role in the interface between the institutions that develop many of the new products and processes such as the materials and components suppliers, specialist consultants and trade contractors [11] and those which adopt such innovations such as the clients, regulators and professional institutions [12]. Manufacturing firms invest far more in R&D than contractors and are subsequently more likely to develop product and process innovations [13].

Considering the increasing need for sustainable built environments, building regulations and clients' requirements have been reported to be the major drivers of innovative solutions in construction sector [14]. The major objective of this paper is to discuss the innovation journey in a construction project and investigate the role of a private client in driving innovation to achieve sustainability, by building upon previous research by Ozorhon et al. [6]. In this respect, an award winning environmental format store project in the North West of the UK was selected as a case study. The case highlights the role of a private client in shaping innovative activities that were enabled through collaborative partnership along the supply chain. The paper summarizes the key actions taken by the client including the climate change programme and investment in R&D to guide the project team in designing and constructing an innovative store. .

ROLE OF CLIENTS IN CONSTRUCTION INNOVATION

Construction services deal with the society; therefore innovation is often more open and user-driven. Project teams aiming at engaging the end-users starting from the early phases of the project designed for the public use are more likely to achieve end-user satisfaction [15]. Earlier work in different countries on investigating the role of clients in construction innovation focused on the government (as a public client) and regulations in triggering or hindering innovation. For example in the UK, the Innovation Nation White Paper [16] identified the potential importance of regulation as a tool for promoting innovation. This paper presents the emerging findings from an extensive review of the evidence on regulation and innovation. It was stated that "regulation either directly or indirectly can affect the nature and direction of innovation as well as the ways in which businesses innovate; it can influence decisions on the inputs used (e.g. R&D investment, external knowledge), the nature of outputs (e.g. the characteristics of new differentiated products and services) and the direction of innovation (e.g. demand for particular technologies)" [16]. As a result of an Australian work, some initiatives were proposed for governments to improve innovation in the construction industry, such as implementing programs to assist skill development in industry associations; reviewing the R&D Tax Concession Schemes for small and medium-sized enterprises; stronger resourcing of education and training programs, improving the regulation of the construction industry to further encourage innovation [17].

Egbu [18] has identified seven key roles of clients in construction innovations, in which the clients (1) act as a source/provider of knowledge (including customer capital) for innovation; (2) act as a change agent; (3) provide effective leadership; (4) provide financial incentives; (5) introduce appropriate forms of procurement and contract conditions; (6) manage and share risks; and (8) disseminate innovations. Brandon [19] demonstrated the changing spectrum of how clients could potentially respond to innovation and their willingness or reluctance to drive the innovation process. Based on his definition, on one end of the spectrum there are some clients that would impede innovation due to their 'risk averse' approach to innovation and on the opposite end "there exist a group of clients for whom innovation is the key to their status and success and who genuinely adore the chance to be different to others particularly in the properties that they design" [19]. Manley [20] suggested that "the more demanding, technically competent and experienced the client, the more likely it is to stimulate innovation in projects, by demanding outcomes that exceed business-as-usual practice". In a recent study, Reichstein et al. [11] investigated the sources of product and process innovations in construction, the results of which demonstrate the importance of using customers as a source for information and knowledge for product innovation. They found that product innovators rely on their customers to help them innovate. In a previous research, a similar conclusion was drawn by Von Hippel [21] who worked on the role of users in the innovation process and indicated them as a source of ideas for product innovations. In a survey done in Australia, repeat public-sector clients were nominated by the respondents as 'encouragers' of innovation in the construction industry. The results pointed out the fact that "compared to other industry groups, such clients had the highest rate of investment in R&D; the highest rate of adoption of advanced practices and technologies; the best return on innovation; and played a key role in providing ideas for innovation" [20].

As Egbu [18] stated, although there have been a few studies that have attempted to consider some of the roles which clients can play in contributing to innovation [12, 22, 23, 24], there is still limited research to better explain the key roles that clients play, taking into account the nature and types of client, and the different types and nature of innovation. The literature has focused on the public sector clients; however the behavior and practices of private clients should also be investigated. In this respect, the objective of this paper is to identify the role of a private client in driving innovation in construction by examining an award winning project.

RESEARCH METHODOLOGY

Questionnaire surveys and case studies are two different means of measuring construction innovation. There have been relatively few large-scale surveys of innovation in construction and what role these processes of innovation have in reshaping practices (e.g. [11]). Case study methodology has been rarely adopted to investigate innovative activities in the construction sector (e.g. [25]). In this research, in-depth qualitative case study methodology has been adopted to gain full understanding of the project-based practices and corporate policies on achieving innovation in collaborative environments. Participation of relevant parties in the project-based interviews was critical in terms of obtaining the contradicting opinions and/or communalities based on each stakeholder's viewpoint. By this way, the interaction of the actors involved in the selected project is examined and discussed. Although the results cannot be generalized, through experiences explained in the case study and the mechanisms outlined, the findings are expected to raise awareness in terms of co-producing innovation for correspondent key parties and similar projects.

This paper builds upon the research done by Ozorhon et al. [6] in collaboration with the Centre for Construction Innovation Northwest in the UK, which involved a questionnaire survey that was administered to the applicants of the 2009 North West Regional Construction Awards and following case studies with the award winners. The awards entrants (for the survey) and winners (for case studies) were chosen as they all believe that they are at the leading edge of construction in the region and were willing to share their innovations, and so the sample should provide an insight into perceived best practice. Findings of the survey indicate the clients are among the key drivers of innovation in the construction industry [6]. Similar conclusions were drawn based on the case studies that involved the investigation of a coastal defence scheme, an estate regeneration project, an eco-residences project, and an eco-store project. The innovative use of partnering, community engagement, modern methods of construction, and lean production were analyzed in these case studies and clients were observed to have played an exemplary role in both creating the right project conditions in which innovation can flourish and in understanding and communicating end user needs to the wider project team [6]. In this paper, the innovation journey of one of the case studies (environmental format store project) is discussed that was notable with its client-driven approach to innovation. The innovation experience of the project team in this project is explored through 1.5-2 hour-interview with three participants including the client, the project manager, and business development director. The interview data and application forms for the Awards are used to generate the innovation stories for the case study.

The following issues were addressed during the interview by exploring the role of each stakeholder at each stage of the innovation process:

drivers to innovate (client, designer, regulation, etc.);

inputs of innovation (financial and human resources, knowledge sources, etc.);

major innovative activities (technical or non-technical);

enablers and strategies employed (partnering, community engagement, knowledge management, etc);

barriers to innovate (cost, awareness, project restrictions, etc.);

benefits/impacts of innovation (productivity, profitability, image, new markets, etc.); and

lessons learned from the innovation process.

Within the context of this paper, these issues will be covered under different headings that are organized based on the key actions and stages throughout the innovation process.

CLIENTS DRIVING INNOVATION: A CASE STUDY

The environmental format store scheme was part of a major regeneration within the Cheetham Hill area and was linked to a separate development of arcade shops to provide a new heart within the community. This scheme was special because it is the first repeatable format to be built for one of the major food retailers in the UK, with the aim that this will become the standard design format for future stores. The client has put corporate responsibility and the impact of their buildings and operations on the environment at the top of their agenda. Their stated aim is to reduce emissions from their buildings by at least 50% by 2020. This project will reduce operational energy by 70%, far in excess of the 50% target. A mixture of new construction techniques were sought to deliver an environmentally friendly, energy efficient, sustainable, innovative, integrated, and value added project, whilst maintaining customer and client satisfaction. The innovations that were achieved through the scheme have been selected through design workshops and testing during the procurement stages of the project. The success behind the project lies in the collaborative working relationship among the project participants and commitment to innovation and meeting project goals.

Client's commitment for carbon reduction:

The project is very notable for its use of a 'client-driven' approach to innovation and idea generation. The client recognised the importance of delivering high environmental performance and set its agenda to reduce its carbon emission throughout its operations. The aim set by the client for this project was to deliver, by working with a team of specialist consultants, an environmentally friendly format store that would meet the requirements of a BREEAM rating of 'very good'. They also wanted to set an example by reducing CO2 emissions in their own business throughout the world and share innovative information with other organizations, businesses and Government to help stimulate a low-carbon economy. They have built a series of environmental stores in every country they operate since 2006, where they test new technologies and designs to save energy and reduce their carbon footprint. For this 50,000 square foot supermarket they had an original target of a 50% reduction in its carbon footprint when compared against a traditional supermarket. This store is important to them because it will be their new "blueprint" for future stores, the new blueprint being designed to work across all formats.

The client wants to play a leadership role in tackling climate change. Their aim is to mobilize collective action among customers, suppliers and employees, to help protect the environment and generate a mass movement in green consumption. Their climate change programme has three main parts including leading by example (reducing their own direct carbon footprint); working with their supply chains and partners to reduce emissions more broadly; and leading a revolution in green consumption. In this respect they can easily be regarded as a 'leading-edge' client that has high levels of technical competence, with challenging needs and with extensive experience [26]. They have supported their targets with a £100 million Sustainable Technology Fund starting in 2007 to support large-scale carbon reduction technologies in their stores, distribution centers and supply chains worldwide. In 2008, they invested around £60 million in energy-saving and low-carbon technologies, and over £26 million in 47 CHP and CCHP plants for local generation, as well as 27 wind turbines and one store installation for solar generation. These technologies are expected to reduce their carbon emissions by about 6,000 tonnes of CO2 per annum.

Being strongly committed to carbon reduction, the client has been working on developing and implementing green technologies with their partners and supply chains. The contractor of this project has been partners with the client since 1985 when the client decided to form strategic alliances with its contractors. They have a total of nine contractors working with them, all of which carry out R&D on their behalf. This decentralised research approach brings mutual benefits; people having specific expertise invest in developing new solutions for them but the continuous (repeatable) nature of the projects encourages them to innovate and they benefit from the buying power of their partnering client at the same time and learn from them on monitoring their operations and managing the supply chain. The key reason for strategic partnering for them was to keep innovating their supermarket buildings, so that they would be built faster for less money and deliver high performance.

Design and planning:

The concept development for an environmental format store started in 2001 and involved collaborative work among all project team members including a representative from the client, engineer, architect, services consultant, and contractor. They recreated the team to achieve a repeatable store design that could be built anywhere in the country in a cost-effective manner. Early contractor involvement was one of the major features of the project; contractor started working with the client since the conceptual phase one year before the construction has started.

The major design objectives set for this project were to identify opportunities for delivering a sustainable design, not just in the short term but also medium and long term; provide an overall viable solution that offers benefit to the customer and to the community, financially and operationally; reduce the embodied carbon footprint of the structural frame and envelope to achieve carbon neutrality; provide mixed mode ventilation throughout the store maximizing natural ventilation where possible; maximize natural day light within the store via skylights and clerestory glazing; introduce a new lighting concept utilizing a fully dimmable integrated energy saving system; and supplement energy by low carbon technology.

In order to achieve these objectives, the whole team met regularly. The client was the leader of the project at each stage. The architect had a specific interest in the external appearance and aesthetics of the building; the cost consultant worked on ensuring a cost-effective solution; structural engineer and supplier worked together to develop a tailored timber frame; and the contractor, being a strategic partner with the client, was concerned to achieve customer satisfaction and worked on a buildable design through testing it in a suitable site and searching for energy efficient solutions through the effort of their in-house research team. During the product development stage, the team searched the market for available products and worked on converting these into a form ready for use in the new store. Although this led to an increase in the cost, it pushed other suppliers to work together to accommodate the changes. It was not very easy to convince all suppliers to change their processes; however helping the supplier to access a big market empowered them to allocate resources in order to tailor their products for future use.

R&D and technology management:

The client has its own technology centre and a small non-trade concept store that is open to its partners to test their ideas in. The contractor also invested in R&D in this project. Once the design for an environmental format store was achieved, the project team looked for a cost effective solution that could deliver the sustainability and quality requirements. The contractor's Technology Centre combines a unique blend of experience and skills across a range of disciplines and offers solutions at every stage of the construction cycle aiming to increase the value of customers through the provision of technical expertise. The Centre comprises a team of engineers, consultants and scientists dedicated to providing innovative solutions for the construction industry. They offer services including building pathology; building information modeling; risk management; compliance testing including cladding, air tightness, acoustic, structural; environment and sustainability consultancy; and sustainable energy management. This centre acts as an internal centre of excellence and was involved throughout the construction process of Cheetham Hill.

Innovative solutions:

The contractor's main role in the innovation process was to help 'productionize' the ideas that were sourced by all members of the team. They sought to find the best way to develop tailored products that would fit into the design. One of the key decisions in this project was to work with a supplier that is experienced in steel structures to develop the timber frame solution. This resulted in an innovative hybrid timber-steel structure achieved through detailed design and value engineering. This was environmentally friendly product that proved to be cost-effective as well.

Construction of the Eco-Store in Cheetham Hill was based on the principles of using wood instead of metal; introducing more natural daylight into the store to use less electricity; achieving a more energy-efficient heating and air-conditioning system; using less energy and water; generating their own energy; rethinking refrigeration, fixtures and signage; and minimising waste, all of which contribute significantly in cutting the store's carbon footprint. The construction processes was similar to a standard format store but in terms of products and processes, a number of innovations were introduced including the hybrid timber frame, sustainable cladding system, recycled and prefabricated walling system, pre-manufactured polycarbonate roof light system, combined heat and power unit, wind catchers, clerestory glazing, CO2 refrigeration and CO2 sensors that all help to reduce energy usage. The components of the innovation process are summarized in Table 1.

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As emphasized in the previous sections, the main driver of the project team to innovate was the client's requirement for a cost-effective, high quality, and repeatable eco-store and their desire to lead the market in green consumption based on the sustainability requirements outlined in the CfSH. The major inputs utilized were the client's climate change programme; joint R&D work; strategic planning efforts; and consultation. The use of hybrid timber frames; low energy and renewable technologies; and client's approach to partnering with multiple number of contractors were the main innovations introduced in the project. Integrated teams (long-term partnership, supply chain integration and competition among partners); understanding policy and customer requirements; conducive company culture and vision; repeatability of the project; and client's buying power in terms of supplying the materials in a cost-effective manner were observed to be the enablers of innovations. However, the project team has encountered some barriers, most important of which were the increased costs; reluctance of the suppliers; unavailability of products in the market; and conflicting interests between engineers, designer and contractor. Through the innovative activities the team achieved to reduce the project duration; improve quality, health and safety; minimize waste; and obtain a repeatable design.

Benefits of innovation:

The client's climate commitments through the combination of new technology and good business lead to dramatic reductions in their carbon footprint. The Cheetham Hill Eco-store's carbon footprint is 70% less than an equivalent store built in 2006. This has been achieved through the use of roof lights allowing more natural daylight into the store, saving on electricity (31%); CO2 refrigerant (20%); and a combined heat and power plant running on "recycled vegetable oil" (19%). The project has been awarded the BREEAM "Very Good" rating with the energy consumption levels achieved.

Cheetham Hill was an area of high unemployment and social deprivation. This scheme aimed to employ 40% of its staff who were currently unemployed local people. The scheme will have a significant impact upon the regeneration of this town and reenergize the community. The store is also the client's latest regeneration partnership, with around half of the 260 employees having previously been unemployed or on benefits for six months or longer.

Lessons learnt:

There are many lessons that can be learnt from this project as summarized below:

The client's devotion to reduce its carbon footprint was the major driver of innovation.

The way that the full team worked together to ensure buildable solutions are developed was notable.

Idea generation is easier compared to converting those ideas into practice since this requires advanced skills, commitment and large investment.

Repeatability and strategic partnership between the client and the contractor helped the scheme achieve its targets starting from the design phase throughout its operation.

Achievements in this project and the experience gained can easily be transferred to other similar projects and newly developed products can be offerred to the market.

CONCLUSIONS

Environmental sustainability and climate change are among the driving forces for the future actions in construction industry. Based on the inefficiencies of the construction process due to energy consumption and the significant impacts on the environment due to carbon emissions, governments and industry members have raised awareness to contribute to the low-carbon economy that is being targeted as a global attempt. Achieving sustainability through reduced energy use and greenhouse gas emissions requires innovative solutions to be applied in design, materials, construction, and operation of the buildings. The innovation process occurs in a project setting in construction where coordination across several organizations is essential to facilitate innovation. Previous research suggests that building regulations and clients are the major drivers of innovation regarding sustainable practices in construction. The literature has mainly focused on the governmental policies and public sector clients. In the context of this paper, the client-driven innovation practices were discussed within a case study where a private client initiated and led the whole process by the help of strategic partnership with its contractor. The client can be seen to operate an open innovation policy. The ideas are brought into the project from all of their supply chain partners in a coordinated fashion. As such, one of the main enablers of successful delivery of this project was the innovative use of the partnering approach.

The client acknowledged the significance of sustainability and wanted to diffuse this along all businesses and markets that they operate in. The successful implementation of new innovations in this project is achieved through the client's drive to revolutionise the industry in terms of green consumption. The client set ambitious targets for carbon reduction based on a climate change programme and started building environmental format stores that would help them design a repeatable store concept. So, 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. Repeatable nature of the project can also increase the likelihood of winning planning permission from environment conscious Local Authorities to build new sustainable stores in the future.

The client's commitment to reduce carbon emissions is the major driver behind the success of this project. The client established a strategic partnership that worked very well to convert ideas into practice. The strategic partnership between the client and the contractor created a conducive environment to test the innovative products for their buildability. Apart from their in-house activities, the client outsourced R&D to their strategic partners and invested largely in developing low-carbon solutions. The Technology Centre within the contractor's organization worked as a consultant for the contractor and played a major role in innovating using internal resources that saved time and money.

The team worked on a number of energy efficient and sustainable solutions, most of which were developed specifically for this project. The use of a hybrid timber-steel frame that is developed by the manufacturer having expertise in steel structures was a unique and innovative approach. The scheme is the first supermarket to run on vegetable oil via a CHP unit that provides the energy and heat requirements of the store. The scheme includes many environmentally friendly innovations such as a certified hybrid timber frame, sustainable cladding system, polycarbonate roof lights, and CO2 refrigerant.

In this project, the client has been very successful at managing the innovation process through collaboration with their strategic partners. Experience and knowledge gained in this project can easily be transferred to future projects to ensure cost effectiveness and ease. There are many lessons that can be learnt from this project. Firstly, client's commitment in reducing carbon emissions will lead the market and be an example of a private client driving innovation in construction. Another important point is that partnership and repeatability help the teams invest in new technologies and develop innovative solutions. Although the findings of this case study cannot be generalized, the role of a private client in driving construction innovation to achieve sustainability was emphasized in this research and thereby the key innovative practices were illustrated. The research can be enriched further by detailed work to recognize and examine the role of private clients in supporting or hindering innovation. The findings of this case study and analysis of additional cases are also expected to provide guidance to analyze client-driven innovations in other project-based industries.

ACKNOWLEDGEMENT

This paper is produced based on a part of a research completed in the Salford Centre for Research and Innovation at the University of Salford. The author would like to thank people who helped with this research as well as the case study participants.

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