Ibs - People, Strategy & Process

INDUSTRIALISED BUILDING SYSTEM (IBS):
STRATEGY, PEOPLE AND PROCESS

Zuhairi Abd Hamid
Kamarul Anuar Mohamad Kamar
Mustafa Alshawi
Copyright
Published in 2011 by
Construction Research Institute of Malaysia (CREAM)
MAKMAL KERJA RAYA MALAYSIA
IBS Centre, 1st Floor Block E, Lot 8,
Jalan Chan Sow Lin
55200 Kuala Lumpur
MALAYSIA
ISBN 978-967-0242-05-7
Copyright © 2011 by Construction Research Institute of Malaysia (CREAM)
All rights received. No part of this publication may be reproduced, stored and transmitted in
any form, or by any means without prior written permission from the editors.
The views expressed in the papers are of the individual authors. The editors are not liable to
anyone for any loss or damage caused by any error or omission in the papers, whether such
error or omission is the result of negligence or any other cause. All and such liability is
disclaimed.
The reader should verify the applicability of the information to particular situations and
check the references prior to any reliance thereupon. Since the information contained in the
book is multidisciplinary, international and professional in nature, the reader is urged to
consult with an appropriate licensed professional prior to taking any action or making any
interpretation that is within the realm of a licensed professional practice.
TABLE OF CONTENTS
No. Item Page
1.0 Industrialised Building System (IBS) 1
2.0 Revisiting the Issue of Definition and Classification 9
2.1 IBS Definition and Classification 9
2.2 Definition Issues 10
2.3 Industrialised Building System (IBS): Existing Definition 12
2.4 Other Terms to Represent Indusrtrialisation of Construction 15
2.5 Classification and Categorisation Issues 16
2.6 IBS: A product, process or system? 21
2.7 IBS as Innovation in Construction 22
2.8 A Working Definition on IBS 23
2.9 Rethinking IBS Definition and Classification 24
3.0 The Drivers and the Barriers to IBS Adoption 26
3.1 Driving Forces to IBS Adoption 26
3.2 Barriers to IBS Adoption 30
4.0 The Adoption of IBS in the Construction Industry 33
4.1 Global Adoption of IBS 33
5.0 The Adoption of IBS in Malaysia 39
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5.1 The Malaysia Construction Industry 39
5.2 Challenges of the Malaysian Construction Industry 42
5.3 The Modernising Effort to Construction Industry 45
5.4 Encouragement Policies on IBS 52
5.4.1 Early Initiatives through R&D (1984-1999) 53
5.4.2 Establishment of Steering Committee and IBS Strategic Plan 1999 54
5.4.3 IBS Roadmap 2003-2010 55
5.4.4 Introduction of Modular Coordination (MS 1064) 56
5.4.5 Budget Announcement 2004-2006 56
5.4.6 Construction Industry Master Plan 2006-2015 (CIMP) 57
5.4.7 Levy Exemption as Incentives to IBS Adopters 58
5.4.8 IBS Roadmap Reviews 2008 59
5.4.9 Treasury Circular (SSP 7/2008) 59
5.4.10 IBS Roadmap 2011-2015 60
5.4.11 Orange Book and IBS Score 62
5.5 The Chronology of IBS Adoption 65
5.5.1 The Adoption of IBS in post-independent Malaysia 66
5.5.2 Development in 1964 to 1970s 66
5.5.3 Development in 1970s to early 1980s 67
5.5.4 Development in 1980s to 1990s 68
5.5.5 Development in 1990s to 1998s 69
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5.5.6 Development in 1998-2008 70
5.5.7 2008 to 2011 72
5.6 The Current Usage of IBS in Malaysia 73
5.6.1 IBS Survey 2003 73
5.6.2 IBS Survey 2005 (Architects and Designers) 74
5.6.3 IBS Roadmap Review Survey 2007 74
5.7 Registered IBS Contractors and Manufacturers in Malaysia 74
5.8 IBS Technologies in Malaysia 77
5.8.1 Pre-cast System 78
5.8.2 Formwork System 80
5.8.3 Steel Framing System 82
5.8.4 Prefabricated Timber Framing System 82
5.8.5 Block Work System 83
5.8.6 Innovative on-sieSysem 85
6.0 Critical Success Factors to IBS Adoption 86
6.1 Definition of Critical Success Factors 86
6.1.1 Critical Success Factors to IBS Adoption 87
6.1.2 Business Strategy 88
6.1.3 Procurement and Contract 89
6.1.4 Project Management 91
6.1.5 Design Management and Integration 94
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6.1.6 Management of Supply Chain 97
6.1.7 Information Technology (IT) 99
6.1.8 Continuous Improvement 101
6.1.9 Skills 102
6.1.10 Training and Education 102
7.0 Case Studies on Successful IBS Adoptions 105
7.1 Introduction 105
7.2 Case 1 110
7.3 Case 2 128
7.4 Case 3 146
7.5 Case 4 160
7.6 Case Study Analysis 173
7.7 Strategy 177
7.8 Process 181
7.9 People 186
8.0 The Transformation Framework 190
8.1 Framework to transform traditional contractor to IBS 190
9.0 Conclusion and Final Remarks 197
9.1 Conclusion and Final Remarks 197
9.2 IBS and the Issue of Sustainability 205
9.3 Open and Industrialised Building System 211
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9.4 Partnering in IBS 224
9.5 Mass-Customization and Automation: A Higher Level of IBS 227
9.6 IBS and The Issue of Foreign Workers 231
10.0 Recommendation 234
10.1 Policy and Institutional Strengthening 234
10.2 Implementation 238
10.3 People (Human Capital) 242
10.4 Process and Operation 244
10.5 Marketing and Branding 247
10.6 Future Research 250
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LIST OF FIGURE
No. Figure Page
2.1 Degree of industrialisation 18
2.2 Industrialisation value creation 20
3.1 Potential cost reduction of industrialised construction 26
6.1 Relationship between unit cost and unit repitition 96
8.1 Transformation Framework 192
LIST OF TABLE
No. Table Page
2.1 Levels of Industrialised production and definition 17

2.2 IBS Classification by Mazjub 20
2.3 IBS Classification 21
5.1 IBS contractor in Malaysia 75
5.2 IBS contractor in Malaysia 75
5.3 IBS manufacturer in Malaysia 76
5.4 IBS Accredited Installers 76
5.5 Registered IBS Consultant 76
7.1 Case Study Analysis 173
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Industrialised Building System (IBS) in Malaysia
CHAPTER 1: INTRODUCTION
Industrialised Building System (IBS) is the term coined by the industry and
government in Malaysia to represent the adoption of construction
industrialisation and the use of prefabrication of components in building
construction. IBS is defined as a construction technique in which
components are manufactured in a controlled environment (on or off site),
transported, positioned and assembled into a structure with minimal
additional site work (Hamid et al., 2008; CIDB, 2007; CIDB, 2005 and CIDB,
2003). It consists of precast component systems, fabricated steel structures,
innovative mould systems, modular block systems and prefabricated timber
structures as construction components (CIDB, 2003).
Parts of the building that are repetitive but difficult – and too time
consuming and labour intensive to be casted onsite – are designed and
detailed as standardised components at the factory and are then brought
to the site to be assembled (CIDB, 2003). The onsite casting activities in IBS
utilise innovative and clean mould technologies (CIDB, 2007; CIDB, 2005 and
CIDB, 2003).
The construction industry globally has started to embrace IBS as a method of

attaining better construction quality and productivity, reducing risks related
to occupational safety and health, alleviating issues for skilled workers and
dependency on manual foreign labour, and achieving the ultimate goal of
reducing the overall cost of construction. Apart from this, it offers minimal
wastage, fewer site materials, a cleaner and neater environment, controlled
quality, and lower total construction costs (Pan et al. 2008, Hamid et al. 2008
and Pan et al. 2007).
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Hampered by the labour and quality issue and generally low performance
of the industry, Malaysia construction fraternity is moving towards
construction industrialisation and that would involve adopting IBS by
encouraging the industry to radically transform its conventional practices
(CIMP, 2007; CIDB, 2005 and CIDB, 2003). To address the many issues facing
the transformation to IBS, in 2003, the Construction Industry Development
Board Malaysia (CIDB) redesigned its strategies and formulated the IBS
Roadmap 2003-2010. The focuses of the roadmap were on the development
of manpower, material, monetary, machinery and management. In 2008,
the use of IBS has been made mandatory in the construction of public
buildings (under Treasury Circular 7/2008). The decision to regulate the use of
the IBS method under Treasury Circular 7/2008 was to create sufficient
momentum for the demand for IBS components.
For the private sector, there is an exemption to the Malaysian construction

levy (CIDB levy - 0.125 % of the total cost of the project according to Article
520) on contractors that have used IBS in 50% of the building components in
residential buildings (Hamid et al. 2008). IBS Roadmap 2011-2015 has been
published in 2011 as the successor of IBS Roadmap 2003-2010. To remain
focused, the IBS Roadmap 2011-2015 has been narrowed down to four
policy objectives which are quality, efficiency, competency and
sustainability on IBS implementation (CIDB, 2010). Stipulated under this
roadmap, all private sector projects must be constructed with minimum
content of 50% IBS components by the year 2015. The implementation and
regulation of this policy will under the purview of CIDB based on amendment
of CIDB’s Act 520 in late 2011.
Despite acknowledging its benefits and aggressive policies in place, the

construction industry is still not rapidly embracing IBS from the year 2003 to
2010 based on annual surveys by the CIDB. While many members of the
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industry are open to the idea, a major portion of the industry stakeholders
are indifferent, perhaps due to resistance towards change, or insufficient
information regarding the feasibility of change to IBS. Challenges and
barriers to successful IBS adoption in Malaysia are:
• The industry is already familiar with the conventional system and, for
them, the technology suits them well and therefore they are not
willing to switch to a mechanised system and IBS (Kamar et al. 2009
and Hamid et al. 2008). The foreign workers are also still available in
abundance as a cheap solution to labour problem.
• It is admitted presently that switching to IBS would not guarantee

significant cost savings, especially with the small volume of buildings
constructed. Or else, the industry is still not convinced on the cost
benefits of IBS. The change to IBS also requires significant upfront cost
and the current market is being monopolised and dictated by
certain quarter of manufacturers which have been already acquired
technologies, prefabrication facilities and are supported by strong
financial muscle. Lack of level playing field is also discouraged any
new business entry.
• Lack of experience, lack of technical knowledge and lack of skilled

labour are very important barriers to successful IBS adoption. There
have been cases where buildings were awarded and constructed
using the IBS system but it contributed to project delays and bad
quality (CIDB, 2010; Kamar et al. 2009 and Rahman and Omar, 2006).
• Further, there is a lack of proper project management techniques,

specifically for IBS, and there is no specific cost control mechanism
adopted by contractors in IBS (Hussein, 2007). Therefore, the risk of
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trying an unfamiliar technology is too high compared to the current

profit margin in construction (Hussein, 2007).
• At present, common practice shows that manufacture of IBS

components is involved only after the tender stage of the value
chain. This lack of integration among relevant players in the design
stage has resulted in a need for redesign and additional costs to be
incurred if IBS is adopted (Hussein, 2007 and Hamid et al. 2008). There
is a desperate need of a new approach of procurement using
strategic partnering in the construction delivery system.
• Lack of support and understanding from construction professionals

due to a lack of professionals trained in the IBS. Some of the
professionals viewed IBS as a threat to survival and longevity of their
professional services to the industry. This in turn is perhaps due to
uncoordinated and incomprehensible training awareness and
syllabus (Thanoon et al. 2003 and Rahman and Omar, 2006).
Changes from conventional to IBS method will have an influence on the

design, manufacture and site work as a result of an increased use of
prefabricated structural elements and other innovative solutions. Therefore
changes in the overall process are required. There is a consensus of opinion
that IBS is best handled as a holistic process and requires a total
synchronisation of construction, manufacturing and design (Hamid et al.
2008). Factors such as project management, rationalisation, standardisation,
repetition, collaboration, Information Technology (IT), lean management,
integration, supply chain partnering, planning, skills and training would be
essential (Pan et al. 2008; Pan et al. 2006 and Goodier and Gibb, 2007).
4
The 12 key principals in implementing IBS are as follows:
1. Changing conventional design to IBS during after the tender has

been rewarded is a bad practice. IBS can be only benefit if decision
to use it can be decide as early as possible not as afterthought
during the project. The design must be firm before manufacture and
installation. The concept of design freeze should be implemented.
2. Planning is essential. IBS requires thorough arrangement of detail

design, work delivery schedule, most cost effective way for
installation and logistic is coordinated and benefit in term of shorter
construction period is materialised. Tighter and longer period of
planning are required to allow for design, logistic and installation
planning, procurement and approval procedures. Extensive planning
must be completed well in advance which lead to better project
performance, coordination, better scope control and ensure smooth
project sequence.
3. IBS can be best implemented if we have capability in design

management and design integration, where aspects that can
benefited the projects can be incorporated through design i.e.
standardisation, modular, pre-assembly, manufacturability and
constructability.
4. Obtaining manufacturing input at an early stage of the project is

essential to IBS design. It is vital for IBS adopters to involve the project
team in design stage as early as possible to ensure their input on the
issue of manufacturing, design harmonisation and constructability
are captured before the design is confirmed and transfer to the
manufacturing floor.
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5. The adopters must have a clear business strategy, clear capital

expenditure analysis, structured cost control instruments and initiate
the use of appropriate technology at time. Based on the
industrialisation principal, innovation adoption is an evolution which
depends on the maturity of organisation. There is no point on
implementing the latest construction technologies in IBS, without
considering one capability and readiness to embrace in it. In recent
times, more and more public projects were tendered in Private
Finance Initiative (PFI) mode. Thus, requires companies to have
strong finance capability and strategy. Partnering perhaps is the way
forward to build up capacity and capability to implement IBS.
Successful IBS implementation is also depends on the strong support,
commitment, awareness, vision, knowledge and leadership of
CEO/Senior Management. In most cases, IBS is a top-down
implementation. Obtaining this support could be the key to the
successful IBS project.
6. IBS requires good communication channel and information flows

between all level of decision making and all project phases. Effective
communication channel across the supply chain need to be
established in order to coordinate processes and deal with critical
scheduling in IBS from the beginning until the project completion.
Clarity and simplicity of communication channel is the rule. ICT could
be a reliable support tool.
7. The repetition process each time project was implemented allows

continues improvement and waste elimination in the technique and
processes to achieve better performance in IBS. IBS can only benefit
the adopters if the implementer can adopt improvement in each
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repetitive process and potentially to cut corners in term site

arrangement, logistic, process flows due to the nature of
repetitiveness. This is the essence of manufacturing which has been
adopted in construction through IBS.
8. The imperative factor in successful IBS implementations lies in good

site management, planning and control of overall process in project
life cycle. This in turn, leads to recommendation that experience and
well-trained workers are the critical for IBS. Project Managers must be
able to work with multi trade involved in IBS. Engineers with good
technical knowledge in analysis, design, manufacturing and
construction have the ability to manage systematic IBS systems.
Design knowledge is also critical. If the components are skillfully
designed, erection can be carried out efficiently. Furthermore,
complying with good practices in design and construction leads to
high quality IBS structures. A comprehensive training scheme will
support this.
9. IBS can only be implemented if we have demand and economy

viable. IBS adopters were suggested to be selective in choosing
projects that are economic viable and can benefit by the use of IBS.
Large and repetitive contract is preferred. It was observed that a
number of successful IBS adopters are indeed a sub-division of
developers which can ensure stability, continues resources and
continues business. Others initiate partnering and strategic alliance.
Only by having demand IBS can sustain.
10. ICT is the key enabler to IBS implementation and become a reliable
support tool. The application of ICT tools needs to be utilised in a
more widespread manner, in order for the IBS industry to improve
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efficiencies, planning, manage process and ensure reliability of

components deliveries.
11. The integration of IBS components or modules into the building

requires the various parties and supply chain to cooperate closely.
This requires very careful definitions and management of interfaces
between contractors and suppliers and a good communication
channel. It has been suggested that by implementing integrated
approach in design and construction, fragmentation gap could
minimised. Establishing partnering and strategic alliance in supply
chain is the way forward.
12. There is no reason why construction approach to components

production should be radically different from what is used by today’s
leading manufacturers of consumer product. It should include
management and sustained improvement of the production process
to eliminate waste and ensure the right components are produced
and delivered at a right time, in the right order and without defect. In
this respect Malaysian construction industry has a great deal to learn
about effective logistics management.
To expedite the adoption of IBS, factors which are important to IBS need to
be identified. There is a critical need to manage the design and
manufacturing differently from the traditional way as IBS is different and
needs a different mindset along with the right environment. Rethinking the
old processes is now critical if the industry is to move forward.
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CHAPTER 2: REVISITING THE ISSUE OF DEFINITION

AND CLASSIFICATION
2.1 IBS Definition and Classification
One major hurdle for research in the area of construction industrialisation

was to define the boundaries and establish clear definition. The terms used in
construction industrialisation are ill defined, often interchangeably with other
term and their precise definitions depend heavily on user’s experience and
understanding, which vary from countries to countries. The lack of uniform
definition and uncertainty in context and boundary contributed to the
prejudices and misunderstanding. Many industrialised construction
technologies coexist with onsite work in hybrid construction and so
demarcating what constitute industrialised construction practice is
problematic. As such, the workable definition needs to be developed for the
research fraternity and practitioners.
Through many of the prefabrication and industrialisation terminologies are

still in use, Industrialised Building System (IBS) is become a term to represent
those terminologies in Malaysian construction industry. The term IBS is widely
used by the government, practitioners and researchers in this country to
represent industrialisation in construction. The term is defined by Construction
Industry Development Board (CIDB) as construction technique in which
components are manufactured in a controlled environment (on or off site),
transported, positioned and assembled into a structure with minimal
additional site works (CIDB, 2003). The term is however, cover very wide
scope which include the application of onsite systems. While other terms
used to represent construction industrialisation are often relates to innovative
solution, current definition by CIDB includes low-tech solutions and other of
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practices which already become common and not substituting

conventional practices.
The terms and classifications provided by the CIDB were also misinterpreted
T
as a system for construction of buildings, while IBS can be interpreted as an

approach or process used in making construction less labour-oriented and
faster as well as fulfilling quality concern (Shaari and Ismail, 2003). The
broader view of IBS is about the changing of conventional mindset,
championing human capital development, developing better cooperation
and trust, promoting transparency and integrity (Shaari and Ismail, 2003).
There is a consensus however that the move towards industrialisation of
construction industry is a global phenomenon and not merely a local or
isolated initiative. The definition and classification need to be evolved and
incorporate with global views and understanding. It gives a different
perspective and enriches one understanding on IBS concept.
2.2 Definition issues
Industrialisation is not easy to define. It is necessary here to clarify exactly

what is meant by industrialisation. Literatures give a variety of descriptions
but little consensus is found. The International Council for Research and
Innovation in Building and Construction (CIB) linked industrialisation with the
use of mechanical power and tools, the use of a computerised steering
system and tools, production in a continuous process, continuous
improvement of efficiency, standardisation of products, prefabrication,
rationalisation, modularisation and mass production (CIB, 2010). The Oxford
Advanced Learner’s Dictionary (2010) defined industrialisation as the process
of industrialising or the fact of being industrialised, the convention of any
organisation into an industry and it develops extensively with industries.
Industrialisation in this research means the industrial method employed
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referring especially to prefabrication, mechanisation and standardisation.

From the perspective of construction, industrialisation is part of a wider
modernisation process through the development of modern methods of
production and technology systems, mainly factory production, where work
is centrally organised and production operations are mechanised and
focused on mass production (Lessing, 2006). Warszawski (1999) highlighted
the fact that an industrialisation process is an investment in equipment,
facilities and technology with the objective of maximising production output,
minimising labour resources, and improving quality. Industrialisation has
demonstrated a high capacity to reduce the costs, improve the quality and
make complex products available to the vast majority of people.
Industrialised construction is a generic process of standardisation and

rationalisation of the work processes in the industry to reach cost efficiency,
higher productivity and quality (CIB, 2010). A more elaborate definition for
industrialised construction is a change of thinking and practices to improve
the production of construction to produce a high-quality, custom-built
environment, through an integrated process, optimising standardisation,
organisation, cost, value, mechanisation and automation (CIB, 2010).
Another split in construction industrialisation strategies is between product
industrialisation that focuses on the technological aspects of building and
process industrialisation that is concerned about how parties are
cooperating, contractually and informally (CIB, 2010). The industrialised
system is defined as to build onsite with elements or components produced
in series in plants. The components are thing like floors, walls, columns,
beams, and roofs. They are then assembled and erected on the site and are
properly joined to form the final units (Badir et al. 2002).
One of the terms used in construction industrialisation is Industrialised Building

System (IBS). The term building system is defined by Warszawski (1999) as a
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set of interconnected elements that are joined together to enable the

designated performance of building. A building system is also characterised
as a set of interrelated elements that act together to enable designated
performance of building. It may include various procedures (technological
and managerial) for the production and assembling of these elements for
this purpose (Sarja, 1998).
2.3 Industrialised Building System (IBS): Existing Definitions
Though many of the prefabrication and industrialisation terminologies are still

in use, IBS has become a term used to represent those terminologies due to
the research context of the Malaysian construction industry. The term IBS is
widely used by the government, practitioners and researchers in this country
to represent industrialisation in construction. The term IBS is often
interchangeably with other terms like offsite and prefabrication, and their
precise definitions depend heavily on the user’s experience and
understanding. The lack of a uniform definition and the uncertainty in the
context and boundaries of IBS have contributed to the prejudices and
misunderstanding. Many industrialised construction technologies coexist with
onsite work in hybrid construction and so demarcating what constitutes IBS
practice is problematic. As such, a workable definition needs to be
developed.
To date, there are a few definitions by researchers who studied in this area
previously that can be found through literatures. The term IBS was defined by
Abdullah and Egbu (2009) as a method of construction developed due to
human investment in innovation and on rethinking the best ways of
construction work deliveries based on the level of industrialisation. The level
of industrialisation in IBS can be classified as pre-building system, modern
construction, advance automation and volumetric construction (Abdullah
12
and Egbu, 2009). In Hassim et al. (2009), IBS is defined as an organisational-

process continuity of production, implying a steady flow of demand,
standardisation, integration of the different stages of the whole production
process, a high degree of organisation of work, and mechanisation to
replace human labour wherever possible.
Zulkefle (2007) defined IBS as a set of interrelated elements that act together
to enable the designated performance of a building. In a wider sense, it
may also include various procedures (technological and managerial) for the
production and assembling of these elements for this purpose. Chung (2007)
defined IBS as a mass production of building components, either in factory
or at site, according to the specification with a standard shape and
dimensions and the transporting of them to the construction site to be re-
arranged to a certain standard to form a building. Rahman and Omar
(2006) defined IBS as a construction system that utilises pre-fabricated
components. The manufacturing of the components is systematically done
using machines, formworks and other forms of mechanical equipment. The
components are manufactured offsite and once completed will be
delivered to construction sites for assembly and erection.
Lessing et al. (2005) defined IBS as an integrated manufacturing and

construction process with well-planned organisation for efficient
management, preparation and control over resources used, activities and
results supported by the use of highly developed components. The term is
also defined as a new construction method that can increase the
productivity and quality of work through the use of better construction
machinery, equipment, materials, and extensive project planning (Haron et
al. 2005).
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The Construction Industry Development Board (CIDB) has defined IBS as a

construction technique in which components are manufactured in a
controlled environment (on or off site), transported, positioned and
assembled into a structure with minimal additional site works (CIDB, 2003). In
Badir et al. (2002), IBS is defined as a concept of mass production of quality
building by using new building systems and factory-produced building
components. Trikha (1999) defined IBS as a system in which concrete
components prefabricated at site or in factory are assembled to form a
structure with minimum in situ construction.
Earlier researchers like Parid (1997) defined IBS as a system which uses
industrialised production techniques either in the production of components
or assembly of the building or both. Esa and Nurudin (1998), in the first IBS
colloquium in Malaysia, defined IBS as a continuum beginning from utilising
craftsmen for every aspect of construction to a system that makes use of
manufacturing production in order to minimise resource wastage and
enhance value end users.
The earliest definition of IBS found in literature is a definition by Junid (1986)

back in 1986. Junid (1986) defined IBS as a process by which the
components of a building are conceived, planned and fabricated,
transported and erected at site. The system includes a balanced
combination between software and hardware components. The software
element includes the system design, which is a complex process of studying
the requirements of the end user, market analysis and the development of
standardised components (Junid, 1986).
All the above definitions emphasised prefabrication, off-site production, and

mass production of building components as the main characteristic of IBS.
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2.4 Other Terms to Represent Industrialisation of Construction
In the literature review, IBS is used interchangeably with other terms like
offsite construction, prefabrication, offsite manufacturing, Modern Method
of Construction (MMC) industrialised building and industrialised construction.
Each terminology provides a rich historical account of the development of
the concept. Nonetheless, regardless of the terms, the idea is the same,
which is to move some effort away from the construction site to a more
controlled environment of the manufacturing floor. Modern Method of
Construction (MMC) is a term adopted in the United Kingdom as a collective
description for both offsite-based construction technologies and innovative
onsite technologies. The former represents prefabrication and
manufacturing technology and the latter includes techniques such as thin-
joint block work and tunnel-form construction (Goodier and Gibb, 2006). In
definition, MMC includes both industrialised and non-industrialised
innovation. Non-industrialised innovation is the use of an innovation method
that has been seen in other industries including carpet reinforcement, metal
shutters, core jump systems, double jumping cores, edge protection systems
and service walls (BURA, 2005).
The other term used to describe industrialised construction is prefabrication.

Prefabrication is a manufacturing process that generally takes place at a
specialised facility, in which various materials are joined to form a
component part of the final installation (Tatum et al. 1986). Some
prefabrication can be done onsite (onsite fabrication). CIB (2010) defined
prefabrication as building, at factory, sub-assemblies or full modules which
are quite similar to what is produced on a traditional construction site, often
using the same processes and the same materials.
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Offsite construction is a description of the spectrum, or part thereof, which is

manufactured or assembled remotely from the building site prior to
installation in their final position (Goodier and Gibb, 2006). In an offsite family,
Offsite Construction (OSC), Offsite Manufacturing (OSM) and Offsite
Production (OSP) are largely interchangeable terms which refer to that part
of the construction process which is carried out away from the building site,
such as in a factory or sometimes in specially created temporary production
facilities close to the construction site (or field factories) (Goodier and Gibb,
2006).
While the components are probably assembled onsite and offsite,

preassembly literally means to “assemble before” and covers the
manufacture and assembly (usually off-site) of buildings or parts of buildings
earlier than they would traditionally be constructed onsite (Gibb and Isack,
2003). Those terminologies reveal a wide range of contextual issues which
are associated with the definitions. Nonetheless, no previous research has
explored the relationship between these terminologies.
2.5 Classification and Categorisation Issues
Similar to the definitions, there exists in the literature a number of IBS

categorisations. The categorisation provided by Kelly (1951, as cited in Pan,
2006) shows a comparatively comprehensive account of fabrication in an
early context. It presents various degrees of prefabrication including pre-
cutting, fabrication of panels, construction of volume closing sections and
the manufacturing of a complete mobile dwelling unit. This concept is similar
to more recent work by CIRIA (2004), Gibb (1999) and Gibb and Isack (2003)
which shows the spectrum as depicted in Table 2.1.
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Table 2.1: Levels of industrialised production and definition (Gibb, 1999)

Level 0 Basic Materials With no pre-installation assembly
aspect
Level 1 Component sub-assembly Small sub-assemblies that are
habitually assembled prior to
installation
Level 2 Non-volumetric pre-assembly Planar, skeletal or complex units made
up from several individual components
- and that are sometimes still
assembled on-site in ‘traditional’
construction
Level 3 Volumetric pre-assembly Pre-assembled units that enclose
usable space – can be ‘walked into’ –
installed within or onto other structures
– usually fully finished internally
Level 4 Modular building Pre-manufactured buildings –
volumetric units that enclose usable
space but also form the structure of the
building itself – usually fully finished
To further improve on the study of classification according to the level

system, Gibb and Pendlebury (2005) suggested that it is helpful to delineate
the extent of offsite completion within each category in addition to the
basic structure of the unit itself, and they provided a star system for this
delineation: one star – no significant internal or external finishes applied in
the factory; two stars – either internal or external finishes applied in the
factory; and three stars – both internal and external finishes applied in the
factory.
One of the most important studies on industrialisation categorisation was the

work by Roger-Bruno Richard (2005). He is arguing in his research that even if
the large number of components is sub-assemblies, construction is still forever
site-intensive handicraft. As a result, the degree of industrialisation should be
an indicator to measure the level of industrialisation adoption in construction
(Richard, 2005). The categorisation also represents the maturity of
17
industrialisation adoption. Five degrees of industrialisation can be identified,

mainly by extrapolating from what is going on in other industries such as
manufacturing and automotive (CIB, 2010). The degree of industrialisation
discussed in Richard’s research is shown in Figure 2.1.
Figure 2.1: Degree of industrialisation (Richard, 2005)
There are five degrees of industrialisation which are: prefabrication,

mechanisation, automation, robotic and reproduction. These are described
as follows (Richard, 2005):
1. Prefabrication is a manufacturing process that generally takes place

at a specialised facility, in which various materials are joined to form
a component part of the final installation (Tatum et al. 1986).
2. Mechanisation comes in whenever machinery is employed to ease
the workload of the labourer.
3. Automation is a situation when the tooling (machine) completely
takes over the tasks performed by the labourer.
18
4. Robotics comprises the ability of the same tooling which has the
multi-axis flexibility to perform diversified tasks by itself. This allows the
mass-customisation concept.
5. Reproduction implies that the research and development of
innovative processes are truly capable of simplifying the production
process.
According to Richard, the first four degrees are still more under the influence
of the traditional methods of building. Prefabrication aims rather at the
location of the production where the next three degrees (mechanisation,
automation and robotics) aim at substituting labour with machineries
(Richard, 2005). Reproduction, on the other hand, is a concept borrowed
from the printing industry and it is an innovation capable of simplifying the
multiplier of complex goods and delivering affordable, quality building to
the vast majority of people (CIB, 2010).
More recently, with specific reference to Richard’s work, CIB classified

industrialised construction into contents and value creation based on the
level of complexity and industrialisation (CIB, 2010). Figure 2.2 shows the
value creation of industrialised construction versus the type of systems used,
as well as the level of standardisation. IBS can create the most value when
the product undergoes individuality, integration and less standardisation in
the form of modular construction and integrated elements. Increasing the
individuality, content and spatiality of modules results in a reduction of the
series sizes, while, on the other hand, increasing content and spatiality adds
more monetary value due to rationalisation effects in the factory. Therefore,
the value creation of industrialisation can only be established using robotised
and automated manufacturing process which is different from current
conventional practices (CIB, 2010).
19
Figure 2.2: Industrialisation value creation (CIB, 2010)
More classic IBS classification can be traced in the work of Majzub (1997). IBS
is classified based on systems and building materials. The classification is
described in Table 2.2 as follows.
Table 2.2: IBS classification by Majzub (Majzub, 1997)

General System Production Material
System
Frame Light Frame Wood, large light gage metals
Systems Medium Light Frame Metal, reinforced plastics,
Heavy Frame laminated wood
Heavy steel, concrete
Panel Light and Medium Weight Panel Wood frame, metal frame (light
Systems Heavy Panel (Factory gage) composite materials
Produced) Concrete
Heavy Panel (Tilt Up-Produced Concrete
On Site)
Box Systems Medium Weight Box (Mobile) Wood frame, light gage metal
(Modules) Medium Weight Box (Sectional) composite materials
Heavy Box (Factory Produced) Wood frame, light gage metal
Heavy Box (Tunnel Produced On composite materials
Site) Concrete
Concrete
20
In the Malaysian context, the classification by the CIDB is widely used and
well understood by scholars and practitioners. CIDB has classified the IBS
systems into five categories as depicted in Table 2.3 (CIDB, 2003).
Table 2.3: IBS classification (CIDB, 2003)

Classification Descriptions
Precast The most common group of IBS products is the precast concrete
concrete elements; precast concrete columns, beams, slabs, walls, “3-D”
framed components (e.g. balconies, staircases, toilets, lift chambers, refuse
buildings chambers), lightweight precast concrete, as well as permanent
concrete formworks
Formwork Considered as one of the “low-level” or the “least prefabricated” IBS,
System as the system generally involves site casting and is therefore subject
to structural quality control, the products offer high-quality finishes,
and fast construction with less site labour and material requirement.
Steel Framing Commonly used with precast concrete slabs, steel columns and
System beams, steel framing systems have always been the popular choice
and used extensively in the fast-track construction of skyscrapers.
Recent developments in this type of IBS include the increased usage
of light steel trusses consisting of cost-effective profiled cold-formed
channels and steel portal frame systems as alternatives to the heavier
traditional hot-rolled sections
Prefabricated The system consists of timber building frames and timber roof trusses.
Timber Framing While the latter are more popular, timber building frame systems also
System have their own niche market; offering interesting designs from simple
dwelling units to buildings requiring high aesthetical values such as
chalets for resorts.
Blockwork The construction method of using conventional bricks has been
System revolutionised by the development and usage of interlocking
concrete masonry units (CMU) and lightweight concrete blocks. The
tedious and time-consuming traditional brick-laying tasks are greatly
simplified by the usage of these effective alternative solutions.
2.6 IBS: A product, process or system?
It is worth noting that IBS could be either the product or process. The
definition captured and discussed in this paper revealed that IBS is not
necessarily restricting its scope to the final product which is a system but
21
mainly involves the processes which lead to the production of the system
and its construction application. Thus, the answer either IBS is a product,
process or system is heavily depends on its context and unit analysis of the
observer. In general, a review on IBS definitions classified IBS into two
categories; IBS as a method, approach and process and IBS as a product,
system and technology. Based on the literature search, the majority of
scholars defined IBS as a method, approach and process. However, there
are also authors who defined IBS as a product, system and technology
particularly from an earlier scholar in this field including the definitions
provided from notable researchers in Sarja (1998) and Warszawski (1999).
Thus, the important for both definitions are not discounted. Therefore, IBS can
be a product, process and system based on the research context and
observer’s perspective.
2.7 IBS as innovation in construction
The construction industry is commonly characterised as one of that is labour

intensive with low level of innovation. Innovation in this sense is not only the
invention as per say, but also the diffusion (acceptation and adoption) (CIB,
2010). One could argue that IBS and innovation are two similar concepts as
mentioned in Pan (2006). (In the case of Pan (2006) the term used to
describe industrialisation in construction is offsite). Pan argued that one can
adopt industrialised construction as similar as one should treat an innovation.
It is based on the understanding of the concept of innovation itself. It has
been widely accepted that 'newness' is one of the basic elements of
innovation (Cripps, 2002). Rogers (2003) defined innovation as an idea,
practice, or object that is perceived as new by an individual or other unit of
adoption. He later added that another element of innovation is successful
exploitation of new ideas. Egbu and Young (1998) defined innovation as the
successful introduction, application and exploitation, within a role, group or
22
organisation, of ideas. Pan (2006) argued in his thesis that IBS and innovation
is a two concept, both can be interpret as products and processes, new to
the unit of adoption and involve risks in its process of adoption. Similarly, both
have no absolute guarantee to be successful or desirable (Pan, 2006). He
argued later that not all IBS are innovative vice versa but both are in the
same context when “newness” set to be introduced. As such, the adoption
of IBS as mentioned in CIB (2010) should relate to the accumulation of
knowledge and technologies in construction process from various areas in
the course of time and can be related to the concept of innovation. To sum
up, the understanding on innovation characteristics is important in order to
introduce new technologies and processes of IBS.
2.8 A working definition on IBS
Drawing on the existing body of knowledge analysis on definitions from

previous scholars and consideration from above discussion, a working
definition for IBS has been developed. IBS is defined as, “An innovative
process of building construction using concept of mass-production of
industrialised systems, produced at the factory or onsite within controlled
environments, it includes the logistic and assembly aspect of it, done in
proper coordination with thorough planning and integration”. It literally
means that those parts of building that are repetitive but difficult, time
consuming, labour intense to cost at site are design and detailed as
standardised components at factory. The definition also emphasised on
coordination between design, manufacturing and construction. It is
important to note that in this research, IBS involves onsite casting using
innovative and clean mould technologies (steel, aluminium and plastic).
23
2.9 Rethinking IBS Definition and Classification
The term IBS is invented to move away from the typical paradigm of
prefabricated systems. This paper proposed the definition, discussed IBS
classification and its degree of industrialisation. The book made the following
recommendations:
• IBS should be seen as innovation in construction. The innovation

agenda has been promoted worldwide as in industrialised
construction. It is imperative that IBS is seen as an evolution of
construction using new and innovative techniques rather than a
revolution.
• The classification of IBS should be expanded to cater the scope of

volumetric (modular) and hybrid construction. IBS is not to be seen
as a threat to traditional methods. Both methods should be able
to work in tandem and improve their processes collectively. The
sharing of best practice between the two approaches is essential
for the continued successful development of both construction
sectors.
• IBS should move up the degree of industrialisation from

prefabrication to reproduction through innovation. The mass-
customisation concept which is vital to open building system
agenda can only be achieved through the adoption of
automation in the level of industrialisation
• The more advanced IBS is in the level of industrialisation, the more

roles IBS has to be involved in project life cycle. The reproduction
level of industrialisation will involve the whole project life cycle
24
from planning to maintenance. IBS can be seen as a solution to

the whole project life cycle if only, it can achieve reproduction
level of industrialisation
• The workable definition has been proposed in this book to

engage positive debate into it and to obtain constructive
reaction from practitioners and researchers. It is hoped that the
definition will enhance our understanding of IBS.
25
CHAPTER 3: THE DRIVERS AND BARRIERS TO IBS

ADOPTION
3.1 Driving Forces to IBS Adoption
IBS does have apparent advantages that drive the industry players to
consider and adopt them in their project. IBS offers numerous benefits to the
adopters which ultimately lead to a cost advantage. Figure 3.1, compiled
from CIB recent research (CIB, 2010), clearly reveals streamlining potential
for better work preparation, logistics optimisation and continuous
improvements which have a major impact on the cost structure of a project.
For example, the cost saving that could be achieved by optimising
construction logistics is more than 20% of the total labour costs. It also has
potential to optimise construction supervision by up to 19% by moving the
works away from the construction site to the manufacturing floor.
Figure 3.1: Potential cost reduction of industrialised construction (CIB, 2010)
26
Other advantages of adopting the IBS method are:
• Reduced build time - one of the obvious drivers to use IBS is a

reduction of construction build time. IBS projects have proven to be
quicker to complete compared to conventional construction projects
due to the usage of standardised components and a simplified
construction process (Pan et al. 2008; Blissmas, 2007; Pan et al. 2007
and Trikha and Ali, 2004). It has proven to be faster to build since on-
site and manufacturing activities are usually undertaken in parallel
(Trikha and Ali, 2004). It cuts down the duration of work and simplifies
the processes by reducing onsite activities and the number of trades
(Blismas and Wakefield, 2008; Blismas, 2007 and Mann, 2006).
• Labour reduction - IBS offers significant savings in labour and material

costs, as the number of labour forces required in IBS is far lower than
those required in traditional methods (Na and Liska, 2008; Marsono et
al. 2006 and Badir et al. 2002). In many cases, the usage of IBS has
proven that it will reduce substantially the amount of unskilled and
skilled labourers directly involved on site. This has been proven in Israel
where a study was carried out to compare IBS with conventional
construction methods in 1984. The results showed that the use of IBS
has brought savings in site labour up to 70% and savings in total
construction costs of 5-8% compared to conventional methods
(Warszawski, 1999). Similarly, in Singapore, the use of a fully
prefabricated system provides labour savings of up to 46.5% as
compared to the conventional method (Chung, 2006). The usage of
IBS will open up many opportunities to the younger generations who
seem reluctant to be involved in the construction industry. It is
necessary, however, to emphasise that there are relatively far fewer
27
workers that still need the training and skills appropriate to IBS (Trikha
and Ali, 2004). It is expected that such trained skilled workers in IBS
would be much more quality-conscious than the unskilled labourers
doing manual jobs in conventional construction (Trikha and Ali, 2004).
• Solving skills shortages - IBS alleviates the issue of skills shortages in

construction since all the construction elements are fabricated at
factory. IBS eliminates extensive use of carpentry work, bricklaying,
bar bending and manual jobs at site (Na and Liska, 2008; Hamid et al.
2007; Hashimi, 2006; BRE, 2002; Pan et al. 2005 and Haas and
Fangerlund, 2002).
• Fewer disturbances to the community - fewer tradesmen visiting

construction sites in IBS projects has reduced local disturbances
(Blissmas et al. 2007 and BRE, 2002). This benefit is critical for hospital,
school and hotel refurbishment projects, particularly in the city centre
area (Blissmas et al. 2007).
• Improvements in construction quality - IBS offer improvements in

quality, productivity and efficiency from the use of factory-made
products, thus reducing the possibilities of poor workmanship and lack
of quality control. The quality of the final IBS products is normally far
superior to conventional work as the former is produced under
rigorously controlled conditions (Gibb and Isack, 2003; BURA, 2005;
BRE, 2002; Trikha and Ali, 2004 and Haas and Fangerlund, 2002).
Complex shapes and finishes can be inspected and any substandard
component rejected before it gets erected into the structure. As
observed, IBS also provides high-quality surface finishes where the
joints section is the only part to be grouted, eliminating the
requirement for plastering (CIDB, 2010).
28
• Clean site conditions and reduced health and safety risk - IBS
construction sites have proven to look very tidy and organised
compared to the wet and dirty conventional method sites. Wastage
of temporary works such as timber formworks and props, which are
normal in conventional construction, is not there when one applies
IBS. Thus it reduces the risk related to health and safety by promoting
safer working conditions (Chung, 2006; BURA, 2005 and Pasquire and
Connolly, 2002).
• Increase construction build rate - in the house-building sector, IBS

improves the build rate of housing schemes dramatically by
increasing the number of houses completed over a period of time.
This will help developers to meet demands in housing and contribute
to the government’s aim to provide a sufficient supply of affordable
housing (Pan et al. 2006; BURA, 2005 and Badir et al. 2002).
• Waste reduction - IBS also proved that wastage can be reduced

greatly due to prefabrication of most of the building components. The
system offers the potential to minimise the environmental impact of
construction activities in many ways. Prefabrication in a factory
environment enables waste reduction through process orientation
which entails controlled production and standardised processes. IBS
also promotes economic and environment sustainability as
component moulds could be used repeatedly for different projects,
allowing economy of scale and reduction in cost (CIDB, 2010; Kamar
et al. 2009 and Thanoon, 2003).
• Potential cost financial advantage - IBS in some ways could be a

cheaper method of construction compared to conventional method.
29
The saving could come from a lower number of workers. IBS can also
be cheaper if one considers the whole life costing of the building
(Kamar et al. 2009). There are direct cost savings in materials and
construction overheads, while indirect cost saving occurs due to
faster delivery of building (Trikha and Ali, 2004). This particular
advantage is beneficial for the construction of small shops and
offices, as demonstrated in the construction of McDonald’s outlets in
the UK (Ogden, 2007). Furthermore, construction of prefabricated
elements in IBS results in a considerable reduction in the use of
scaffolding, shuttering and other temporary supports as compared to
onsite construction (Trikha and Ali, 2004).
3.2 Barriers to IBS Adoption
Despite acknowledging its benefits, the construction industry is still not rapidly
embracing IBS. The construction industry is an established industry with many
deep-seated and culturally-embedded practices, so the introduction of
anything perceived as new or different faces barriers. The barriers to
adopting the IBS method in construction are:
• IBS requires radical and substantial change from a traditional

building process towards a manufacturing process. It was
highlighted that the idealism, processes, management and skill
sets behind IBS method are different from those in the
conventional method (Hamid et al. 2008).
• In contrast to the traditional method, the design, manufacturer,

assembly and other related processes require a more coherent
structure of process planning and control in order to reduce
defects and errors (Gibb, 2001 and Warszawski, 1999).
30
• A strong constraint in the industry is a lack of adequate

knowledge of the IBS method. There is limited expertise in the
marketplace among designers and constructors regarding the IBS
method. Approaches to design are still largely based on
traditional methods that are unsuited to IBS (Blissmas, 2006).
• Although IBS is used to address the skill shortage in the

construction industry, some evidence suggests that a skilled
workforce in specific skill areas like integration, coordination and
assembly are becoming more important to IBS due to different
roles and project methods that are undertaken (Pan et al. 2008
and Pan et al. 2007).
• IBS adoption requires a new business approach, investment and

financial planning including an effective combination of cost
control and selection of projects that give enough volume to
justify the investment (Pan et al. 2008; Malik, 2006; Pasquire and
Connolly, 2002 and BSRIA, 1998).
• IBS adoption requires an improvement in conventional

procurement and management of the supply chain (Venables et
al. 2004). The IBS building procurement is slightly different from
conventional methods which include purchasing of materials in
advance before the actual site progresses (Whelan, 2008 and
BSRIA, 1998).
In this regard, the main barriers for the industry to embrace IBS are rarely
purely technical in origin. They are more related to the organisational soft
issues and strategy which underpin the capability of organisations to
31
successfully implement IBS method. The IBS adoption requires fundamental

structural change to the industry. IBS change the way people in the building
industry work, both in term of the process and product. The real advantages
of IBS can only be realised through a thorough understanding on the
principles underpinning manufacturing, whilst also appreciating constrains
and pitfalls that comes with a fragmented construction industry.
32
CHAPTER 4: THE ADOPTION OF IBS IN THE

CONSTRUCTION INDUSTRY
4.1 Global Adoption of IBS
The concept of prefabrication and industrialised construction is not new to

the construction industry. The building blocks from the great Egyptian
pyramids were prefabricated to the correct size at the quarry to reduce the
weight for transportation. Traditional farm houses in Europe since the Middle
Ages were partly prefabricated in a 3-feet module (Sumadi et al. 2001). The
historical data can be traced back to the 19th century, where there were still
some examples of industrialised buildings. In “The industrialised of buildings”
by Carlo Testa, the author mentioned that the Crystal Palace built in 1851
was the starting point for industrialised buildings (Sumadi et al. 2001).
Designed by James Paxton, the temporary exhibition hall was based on a
modular 24 feet grid system. The design of this building was based on
industrialised components such as glass windows, timber frames and steel
(Sumadi et al. 2001). The project was engineered by Sir William Cobbit, the
iron works construction was done by Fox Henderson and the glass structure
was imported from France by Change Brothers (Monk, 2005).
Meanwhile Charles E. Peterson in his book “Early American Prefabrication”

said that the first English brought to America the first panelised timber houses
in 1624 (Sumadi et al. 2001). However, the prefabrication and industrialised
housing concept received widespread attention in the state as evidenced
by the construction of a steel-structure house by General Homes in the 1920s
(Thanoon et al. 2003). In Europe, precast housing systems were used to
33
address the need of housing post world wars in the 1920s, 1945 and during
the population boom in the late 1950s to 1970s. In Australia, George Wimpy
Sons Ltd built houses using a tilt slab concept in the 1930s to overcome the
acute shortage of housing (Thanoon et al. 2003). Throughout history,
industrialisation has not only created new opportunities, it has also forced
the construction industry to adopt new practices. It enables the construction
industry to manage material and energy better.
In the UK, both Latham and Egan reports emphasised the advantages of
standardisation and preassembly and stressed the importance of modular
and industrialised systems to improve construction performance (Latham,
1994 and Egan, 1998). The UK construction industry has often been
described as fragmented, adversarial and inefficient requiring significant
improvement. In the impetus of the reports, the Modern Method of
Construction (MMC) and offsite construction were introduced to address the
under supply, skills shortage and poor build quality of housing (DCLG, 2007;
DCLG 2008 and NAO, 2005). Promotion of offsite construction has therefore
seen as a mechanism for overcoming some of these problems.
The Barker Review (2004) suggested that offsite technologies could both
improve the quality of construction and address skills constraints in the
industry. It has been widely documented that offsite technologies offer
potential for reductions in cost, time, defects, health and safety risks and
environmental impact and improve predictability, whole life performance
and profits. Currently, offsite and prefabricated construction is a preferred
mode of construction of hospitals, military accommodation, hostels and
prisons in the UK (Goodier and Gibb, 2007; Pan et al. 2008 and Pan et al.
2007).
34
The Swedish construction industry is regarded as the most industrialised and

developed in the world, with 90% of single-family houses constructed using
IBS (Peng et al. 2003 and Al-Aghbari, 2004). In the mid-1960s, the Swedish
government projected a national mission of producing 1 million new houses
within 10 years. The objective was achieved through the introduction of IBS
(Peng et al. 2003). There are about 55 manufacturers offering IBS in Sweden
and apart from the local market, Swedish manufacturers export houses to
many European countries. Their magnificent achievement in IBS is a result of
direct government proactive policies which include substantial grants for
research and development (Peng et al. 2003).
In Finland, housing made in a factory represents 70% of total building

construction. It offers effective and rapid site assembly and improves the
quality and productivity of construction (Sarja, 1998). The growth of
residential housing using IBS is 20% annually and the predominant form of IBS
is small and modular panelised systems (Peng et al. 2003).
In Japan, attempts to industrialise the construction industry began in the late

1950s, for the following reasons: shortage of carpenters, oil price hike, rapid
economic growth and urbanisation, depletion of timber, quality issues and
for better earthquake and fire protection (CIRIA, 1996). Most of the
prefabricated construction industry concentrated on three major urban
markets with consistent population clusters, namely, the Kanto region (Tokyo-
Yokohama), the Chubu region (Nagoya) and the Kinki region (Osaka and
Hyogo) (Peng et al. 2003). Since then, the Japanese housebuilding industry
has developed the most advanced manufacturing techniques in
construction. Automation and robotics were applied in both manufacturing
floor and onsite construction for better quality, minimum onsite duration and
better value for customers (Gibb, 2001).
35
Industrialised construction in the building industry in Germany has improved

in quality and provides better value with considerable variety and flexibility
in design. It also helps the developers to overcome strict standards of quality
control imposed by local authorities in their building industry (DTI, 2004).
In Denmark, about 80% of the detachable houses used IBS and most of it
was done via a panelised system (Peng et al. 2003 and Al-Aghbari, 2004).
The IBS in Denmark is aimed at the domestic market as well as the export
market. Their international contractors such as Jespersen & Son and Larsen &
Nielson have constructed large projects throughout the world using
prefabricated concrete systems (Peng et al. 2003).
The IBS industry in the Netherlands represents 10% of the total market, and
the conventional brick wall and masonry construction is still dominant in the
market. Nevertheless, IBS has steadily increased in market share. This is due to
substantiation by standardised components, a flexible manufacturing
process and improved industrialised building techniques (Peng et al. 2003).
The industrialised housing in the Netherlands is steadily increasing its market
share due to potential cost savings of up to 30%. This too is substantiated by
standardised components, a flexible manufacturing process and improved
industrialised building techniques (Thanoon et al. 2003).
Singapore, through the Housing Development Board (HDB), has produced

advanced prefabricated components and systems for quality housing since
the 1980s. It proved successful in terms of the quality and speed of
construction. They have started adopting a modulated grid layout concept
based on Modular Coordination (MC) as the basic building block for all
apartment designs since the early 1970s; its industry-wide pre-fabrication
36
programme started in the early 1980s through technology transfer initiatives

with Australian, Japanese and French partners (Peng et al. 2003 and Al-
Aghbari, 2004). As a result of continuous effort, the HDB has made a
remarkable achievement in the adoption of IBS for the construction of the
public housing program. These initiatives are the incorporation of modular
co-ordination of its public housing designs, design standardisation and
customisation, prefabrication, and the mechanization of site operations. The
setting up of HDB Prefabrication Technology Centre (PTC) in 1994 marks
another milestone achievement in the application of IBS in Singapore. PTC’s
main activities are to design, develop and produce prefabricated building
products; conduct research and development of advanced and innovative
construction materials and systems; manage and supply prefabricated
building products; conduct training and license its intellectual property
rights.
The application of IBS as an innovative construction method in Thailand is

gaining higher popularity as compared to the scenario of the construction
industry in Thailand way back in the 1970s. According to Buddhi (2004), in
2004, the government of Thailand has a plan to build about 600,000 units
within three years for the low to medium income level citizens. Most of these
family units are detached houses. Commissioned developers and designers
have proposed different housing systems. However, it is important to note
that in terms of material, production, construction, etc., the design must be
suitable for large scale construction within a limited time and cost. In July
2004, the National Housing Authority (NHA) of Thailand has approved the
usage of the “Precast Large Panel Construction”. This marks another
milestone for the construction industry in Thailand, where several thousand
PLP houses will be built within a period of several years. No beam and
columns are used except at few locations. In terms of the speed of
37
construction, the total time required is significantly less than the conventional
system. According to Buddhi (2004), for a typical 2-3 bedroom two storey
house, the time required for casting, lifting, erection and completion of
structural system is about 2-4 days once the system is setup. This shows how
fast a typical house built based on IBS concept can reach, as compared to
conventional construction method.
One of the most significant current developments in industrialised

construction is the development of the open building manufacturing
concept initiated by Manubuild. The Manubuild project is an industry-led
collaborative project, part funded by the European Commission.
Commencing in April 2005, it involves participation from the industry
stakeholders, research institution and universities (Manubuild, 2007). The
vision of Manubuild is open building manufacturing, a new paradigm for
building production and procurement by combining highly efficient
manufacturing techniques in factories and on construction sites, and an
open system for production of components offers diversity of supply and
building component configuration opportunities in the open market
(Manubuild, 2007). It aims at realising a step change on four different
aspects from technology push towards market pull, from mass production to
mass customisation, moving towards a combination of offsite production
and intelligence onsite production, and from project market towards
service-centric market (Manubuild, 2007).
38
CHAPTER 5: THE ADOPTION OF IBS IN MALAYSIA
5.1 The Malaysian Construction Industry
In Malaysia, under definition in the Act 520 (CIDB, 2003), the construction
industry is the industry that concerns construction works that include
construction, installation, repair, maintenance, renewal, removal,
renovation, alteration dismantling or demolition of:
a) any building, erection, edifice, structure, wall, fence or chimney,

whether constructed wholly or partly or below ground level
b) any road, harbour, railway, cable way, canal or aerodrome
c) any drainage, irrigation or river control work
d) any electrical, mechanical, water, gas, petrochemical or
telecommunication
e) any bridge, viaduct, dam, reservoir, earthwork, pipeline, sewer,
aqueduct, culvert, driveshaft, tunnel and reclamation work
Construction in Malaysia began in the early days, together with the

formation of various states in the country. It started in around the 5th century
with the development of Gangga Negara, an ancient kingdom in Kedah
(CIDB, 2007). Construction (yet to be considered as an industry) evolved
through the establishment of Malay architecture in 14th and 15th century.
Chinese and Indian settlements, on the other hand, introduced their

traditional elements in Malaysian construction and architecture in this
country, followed by colonial influence in the 16th (Portuguese), 17th (Dutch)
and 18th and 19th (British) centuries in the construction of buildings (CIDB,
39
2007). Construction in the post-independent Malaya (formerly known as

Malaysia) had geared up towards developing better infrastructures and
housing for the people (CIDB, 2007).
Today, the Malaysian construction industry plays an important role in

generating wealth to the country and development of social and economic
infrastructures and buildings. The industry provides job opportunities for
800,000 people which represent 8% of the total workforce (CIMP, 2007). The
construction industry is one of the productive sectors that constantly
contribute to the economy. Its growth rate fluctuates between extremities
that have varied from as high as 21.1 percent in 1995 to as low as -24
percent in 1998 (CIDB, 2008). Since the 1990s, the contribution of the
construction sector to the GDP has also fluctuated, albeit at a more stable
rate, varying from a high of 4.8 percent in 1997 to an estimated low of 2.7
percent in 2005 (CIDB, 2008). Recent data showed that the construction
sector grew at 5.3% in 2007 and contributed 2.1% total Gross Domestic
Product (GDP) of Malaysia (CIDB, 2008). The industry creates a multiplier
effect to other industries, including manufacturing sector, financial and
banking, agriculture, mining and professional services and has predicted by
many as the catalyst of economic recovery and as a driver for the
modernisation of Malaysia.
The Malaysian construction industry has largely been spurred by

Government spending to build the nation’s infrastructure. From 1981 to 2005,
total development expenditure incurred by the Federal Government was in
excess of RM 300 billion, mainly in the economic sector (CIMP, 2007).
The 10th Malaysian Plan was announced by the Honorable Prime Minister on
April 2010. About RM 230 billion has been allocated for the physical
development and infrastructure. In addition to the RM 230 billion allocated
40
for development that would either directly or indirectly benefit the

construction sector, the 10th Plan also include a host of initiatives and
incentives that are expected to generate more robust activities in the
construction sector. These include economic reforms in terms of private
sector led economy, innovation led growth, rationalisation of the
government's role in business by increasing privatisation and Public-Private
Partnership (PPP), and developing the Small Medium Enterprises (SMEs).
Launched on September 21, 2010, Economic Transformation Programme

(ETP) is a comprehensive action plan to propel Malaysia's economy into high
income economy. The program will lift Malaysia's Gross National Income
(GNI) to US$ 523 billion by 2020, and raise per capita income from US$ 6,700
to at least US$ 15,000, meeting the World Bank's threshold for high income
nation. It is projected that Malaysia will be able to achieve the targets set if
GNI grows by 6% per annum. The construction industry has been touted as to
play a significant role in supporting the National Key Economic Areas
(NKEAs) under the ETP. The construction industry is vital for creation of
infrastructures and buildings under the Entry Point Projects (EPPs) especially in
the development of Mass Rapid Transit (MRT), 1Malaysia Financial District,
Sungai Buloh and Sungai Besi mixed development projects. Some of the
more prominent infrastructural facilities earmarked for development under
the EPPs are:
• RM 2.7 billion for roads and rail networks leading to key ports and
airports.
• Completion of the double-track rail project between Johor Bharu
and Padang Besar (RM 16.5 billion).
• MRT to cover a 20 km radius from the Kuala Lumpur city centre that is
expected to carry 2 million passenger-trips per day when completed.
41
• RM 1 billion for capital dredging of port channels to cater for bigger

vessels for Westport Port Klang and PTP Johor, and RM 6 billion
upgrading works to these ports and Penang Port.
• Expansion of airport capacity at a cost of RM 3.3 billion (to cater for
62 million passengers in 2015: 47 million in 2008), a new low cost
carrier terminal at KLIA and upgrading of the Penang International
Airport
5.2 Challenges of the Malaysian Construction Industry
Despite its growth and healthy contribution to GDP, Malaysian construction

industry is under constant pressure to improve its performance. The
Malaysian construction industry has been characterised as adversial and
inefficient and in need of structural and cultural reform (CIMP, 2007). As in
conventional construction which is a common practice in Malaysia,
reinforced concrete frame and brick, beam, column, wall and roof are cast
in-situ using timber framework while steel reinforcement is fabricated offsite.
The current conventional practice in the industry can be divided into
structural system and non-structural infill materials. The structural system
includes reinforced concrete frame such as column-beam-slab frames and
are completed through 4 distinct operations. These 4 operations are listed as
below:
i. Erection of timber formwork and scaffolding

ii. Fabrication of steel reinforcement
iii. Pouring of concrete into formwork
iv. Removing of formwork and scaffolding
42
This method is labour-intensive involving formwork fabrication, steel bending

and concreting. It requires many wet trades on site such as skilled
carpenters, plasterers and brick workers. The process can be hampered by
quality issues, unfavorable site conditions, skilled labour shortage and bad
weather conditions (Hamid et al. 2008 and CIMP, 2007).
The use of conventional construction is not in line with the government’s

mission to achieve a national housing target of 4,964,560 units (houses) built
between the periods of 1995 to 2020, with 709,400 units to be constructed in
the period of 2005-2010 (Al-Aghbari, 2004). The total number of registered
contractors is 63,610 (CIDB, 2008). That is a phenomenal number if one
compares that to the population and this has created a fragmented
industry. In this regard, the fragmented construction industry retards the
development of industry-wide information and knowledge sharing (Trikha
and Ali, 2004). Most of the time, planners, architects and designers interact
only minimally among themselves and they as a rule are uncommunicative
with the builders and contractors so none benefit from the experience of
others (Trikha and Ali, 2004).
The construction industry has taken the cheaper path by utilising a cheap
supply of foreign labour made available through liberal foreign policies and
prolonging the use of labour-intensive construction techniques. For the local
construction industry, labour supply is cheaply sourced from neighbouring
countries. The Construction Industry Development Board (CIDB) reported
that 52% out of a total of 800,000 registered workers were foreign workers as
at September 2010 (CIDB, 2010). It is a huge number which distresses the
stability and growth of the domestic economy and creates social problems.
Although the construction industry is very competitive, practices in the

industry have resulted in relatively low productivity as compared with other
43
sectors, with the GDP per worker about half that of other industries. The
productivity of the construction industry has been stagnant since the 1980s.
The productivity level of the industry is worth RM 20,511, with an increase of
1.52% from the previous years. Nonetheless, this growth is relatively low
compared to other sectors in Malaysia (MPC, 2009). The ineffectiveness and
low productivity are caused by the failure of the industry to utilise the new as
well as other relevant labour-reducing technologies. At present, the
products of the construction industry are generally not of a high quality.
Factors that contribute to a lack of quality in construction are poor design
and buildability, ineffective supervision, lack of skilled manpower,
inadequate and inappropriate equipment, financial problems and lack of
information at point of use (CIDB, 2008; CIDB, 2009 and CIMP, 2007).
Records tend to show that the construction industry is among the leaders in
the frequency of injuries and fatalities. The fatality rate by occupational
accidents in construction is one of the highest in the country with 72
recorded cases in 2008 and 95 cases in 2007 (DOSH, 2008). These rates were
on a par with the number of cases in the manufacturing industry, although
the manufacturing sector produced a larger volume of works and a higher
number of occupational accidents. Though the number of incidents, injuries
and fatalities has declined significantly over the past decades, the current
number recoded is still high and unacceptable as compared to other
developed countries. This is due to the current practices of the construction
industry which often take place outdoors under conditions which are not
favourable to health and safety. The main cause of accidents in
construction is falling from elevation, like a fall from a roof, scaffolding
collapsing, and structures collapsing, followed by being struck, which
includes, being struck by falling objects, run over by heavy equipment, or
struck by a crane, boom or load (CIMP, 2007).
44
The industry also puts time and energy into security requirements outlined by
financial institutions (CIMP, 2007). Some banks have asked for construction
companies to deposit sinking funds equivalent to the amount of the loan
requested as a prerequisite for loan approval. The impracticality of this
requirement lies in the fact that access to such funds would negate the
need for a loan in the first place (CIMP, 2007).
The contractors may have also faced difficulties with loan repayments in the
initial years because they may have invested substantially in heavy
equipment and machinery at the beginning of the project. Such projects will
only start to generate returns upon operation of the project. Furthermore,
they have to secure more projects in that country in order to fully utilise the
capital expenditure invested (CIDB, 2008 and CIMP, 2007).
In the area of construction R&D, the industry perceived that most companies
do not conduct their own R&D but would rather purchase technology they
require. Most construction related R&D activities in the country are
performed in academic institutions, but the areas covered usually do not
meet the industry need (CIMP, 2007).
With its current levels of quality, productivity, safety and excessive reliance
on unskilled foreign workers, the state of the industry is not in line with the
future development of Malaysia.
5.3 The Modernising Effort to Construction Industry
In order to continue leveraging on domestic opportunities and competing in

the global marketplace, Malaysian construction industry players need to
address a number of key strategic and operational challenges. There is a
need to take a holistic approach in reviewing the factors impacting the
45
construction industry value chain. Improvements need to be implemented

by all parties along the entire construction industry value chain for lasting
transformation to occur. In the transformation process, it is important for the
industry players to be ready and to begin sourcing alternatives to the labour-
based construction method.
One such option to solve construction problems and to modernise the

industry is to move towards industrialisation and that is by adopting IBS in
construction (Hamid et al. 2008 and CIMP, 2007). The main aim of IBS
adoption in Malaysia is to gradually reduce the dependency on foreign
labour and to save the country’s loss in foreign exchange (Hamid et al. 2008
and Hussein, 2007). IBS also provides the opportunity for the players in the
construction industry to project a new image of the industry to be on a par
with other manufacturing-based industries (CIMP, 2007). The adoption of IBS
promises to elevate every level of the construction industry to a new height
and image of professionalism (CIMP, 2007). If IBS is adopted, efficient, clean,
safe and innovative will be the new attributes that will be associated with
the Malaysian construction industry (CIMP, 2007).
IBS construction will save valuable time and it helps to reduce the risk of
project delays and possible monetary losses (CIMP, 2007). The design and
production of elements can be started while the construction site is under
survey or earthwork. The production of the IBS elements are unaffected by
weather conditions due to the controlled environment of the casting area.
The usage of large structural panel speeds up the structural works and thus
other trades such as painting, electrical wiring and plumbing works can take
place sooner (Chung, 2006).
In November 2008, the Treasury Malaysia issued a Treasury Circular Letter,

referred to as SPP 7/2008, to all Malaysian government agencies directing
46
them to utilise IBS in their building development projects. Despite

acknowledging its benefits, the construction industry is still not rapidly
embracing IBS. While many members of the industry are open to the idea, a
major portion of the industry stakeholders are indifferent, perhaps due to
resistance towards change, or insufficient information regarding the
feasibility of change to IBS. The construction industry is an established
industry with many deep-seated and culturally-embedded practices, so the
introduction of anything perceived as new or different faces barriers. A
survey conducted by the Construction Industry Development Board (CIDB)
in Malaysia stated that in 2003 the level of usage of IBS in the local
construction industry stood at 15% (CIDB, 2003). Challenges and barriers to
successful IBS adoption with specific reference to Malaysian case are:
• Availability of cheap foreign labour - the availability of cheap foreign

labour which offsets the cost benefit of using IBS is a root cause of the
slow adoption. As long as it is easy for the industry to find foreign
workers, labour rates will remain low and builders will find it
unattractive to change into simplified solutions such as IBS. The cost
of using IBS exceeds the conventional methods of construction,
especially given the ease of securing relatively cheap foreign labour
(CIDB, 2010, Kamar et al. 2009, CIDB, 2008 and Hussein, 2007). In
some cases, irresponsible employers hire illegal foreign workers, and
in the process, have brought down the labour rates further. The
government has spent millions of Ringgit each year to train
construction workers but it is a waste if the graduates are not
interested in finding jobs in the construction industry due to the
extremely low wage structure. In the end, the industry will always
prefer the labour-intensive methods, at the expense of IBS (Kamar et
al. 2009 and Shaari, 2006).
47
• Sheer cost of investment to set up IBS - the limited take up also relates
to sheer cost of investment and the inadequacy of market size
(Kamar et al. 2009; CIDB, 2008; Hamid et al. 2008 and Hussein, 2007).
Since the Asian financial crisis in 1997 and global recession in 2008, it
becomes apparent that large investments in central production
plants are uneconomical. Relatively, high transport and overhead
costs virtually eliminates the potential gain achieved through
industrialisation (CIDB, 2010 and Kamar et al. 2009). With the current
low demand and low standardisation of IBS components,
undoubtedly the initial usage of IBS will increase the total material
costs of the projects even though ultimately it lowers the total
construction costs in the longer term (CIDB, 2010). It has also been
observed that the lack of investment in heavy equipment and a
mechanised construction system due to high capital investment
could hamper a move to IBS (Rahman and Omar, 2006). Heavy
capital costs involved in IBS result in an insufficient capacity for
contractors to secure projects (Hamid et al. 2008). Contractors
hence demand government intervention and assistance, such as
award and provision of large scale projects that would justify the
capital investment required to adopt and deploy IBS. Some
contractors seek large design and build contracts from the
government. Large design and build contracts enable successful
development of unique technical capabilities and present
innovation opportunities like IBS, which otherwise would almost be an
economically inappropriate choice (Abdul Aziz, 2007).
• Reluctance to change - in IBS, there is a critical need to manage the

design and manufacturing differently from the traditional method, as
IBS is different and needs a different mindset along with the right
48
environment. Most contractors are already familiar with the

conventional system and for them the technology suits their projects
well, therefore they are not willing to switch to a mechanised-based
system. Changing their method or trade will require more investment
to train the labourers or to buy the machinery (Chung, 2006). Industry
professionals are still confident about the conventional in-situ system,
which has been proven to be a relatively cheap, open, flexible and
reliable method of construction (Idrus et al. 2008). IBS has existed for
some time but has not generated much interest as alternative
construction methods have to be so deeply entrenched that many
are loathe to changing it – this is the mentality of “why fix it if it isn’t
broken?” (CIDB, 2010 and Hussein, 2007). This perception arises
because the conventional construction method creates problems for
the nation but not for the contractor. Furthermore, there is a lack of
proper project management techniques, specifically for IBS, and
there is no specific cost control mechanism adopted by contractors
in IBS (Hussein, 2007). So the risk of trying an unfamiliar technology is
too high compared to the current profit margin in construction
(Hussein, 2007). It is also unfortunate that the local construction
industry is reluctant to invest more in research which is often a long
drawn-out affair without a promise of immediate return (Trikha and
Ali, 2004). Furthermore, Hamid et al. (2008) argued that there is a
mismatch between the IBS target by the government and the
current industry’s readiness to adopt and change to IBS, therefore
the industry needs to be guided and helped to improve its readiness
regarding IBS. Finally, a large faction of the industry feels that the
present incentives given by the government to promote IBS are
inadequate to support feasibility of change to the IBS (Idrus et al.
2008).
49
• Low standardisation of components - low standardisation of

components also hinders successful use of IBS (Hamid et al. 2008). The
tailor-made components which do not fit into another project will
increase initial costs due to the cost of the mould and design. Lack of
standardisation was due to a lack of a certification and
accreditation scheme on IBS and the lukewarm response to Modular
Coordination (MC) promotion under MS 1064 (Hamid et al. 2008). As
such, it is also vital for the industry to develop a standard plan and a
standard component drawing for standard use particularly in public
sector buildings (Hussein, 2007).
• Poor human capital development on IBS - lack of experience, lack of

technical knowledge and lack of skilled labour are important barriers
to successful IBS adoption (Hamid et al. 2008; CIDB, 2008; Rahman
and Omar, 2006 and Thanoon et al. 2003). Poor human capital
development on IBS does not only affect contractors but indeed will
also affect the whole supply chain. Based on IBS Survey 2005, the
majority of designers agreed that they had insufficient knowledge in
IBS (CIDB, 2005). Furthermore, the client and approving authorities
cited that they had poor knowledge of IBS, resulting in delays in
building approval (CIMP, 2007). Familiarity with the IBS concept and
its benefits is vital to its success because IBS requires a different
approach in construction (Kamar et al. 2009).
• Lacks of integration in design stage - The characteristics of

construction project are fragmented, diverse and involve many
parties. IBS manufacturers and contractors are currently involved only
after the design stage. This lack of integration among relevant
players in the design stage has resulted in the need for a plan
redesign and additional costs to be incurred if IBS is adopted (CIDB,
50
2008 and CIDB, 2005). IBS benefits can be optimised if the concepts
of standardisation, constructability and manufacturability are
considered during the design stage. As in the current practice, all
these are not being taken into consideration at the onset of the
project (Hussein, 2007). Gibb (1999) underlined that IBS should not be
used as an afterthought as it will limit the benefit of adopting it.
• Public perception on IBS - Hamid et al. (2008) highlighted that poor

public perception could be another setback to IBS. As a result, IBS is
not popular among design architects due to the misconception that
IBS will eventually limit their creativity in building design (CIDB, 2005).
Many in and out of the construction industry still have the perception
that IBS is rigid and not flexible enough in both form and dimension to
meet all the variable demands of construction. This leads to the
mistaken conclusion that IBS can only produce monotonous design
(Hussein, 2007). The term IBS is also often misinterpreted with a
negative meaning linked with industrial buildings from the 1960s.
These buildings are normally associated with low quality and
unpleasant architectural appearance (Rahman and Omar, 2006).
• Lack of sustainable volume and demand - there is a general

consensus among practitioners that IBS needs mass production to
achieve economic viability, but currently, in Malaysia, there is no
assurance of continuity of production, thus limiting interest in IBS
(Chung, 2006). It requires volume and economy of production and
scale to produce IBS components, but despite mandatory adoption
in the public sector, there is still a lack of support and slow adoption
from the private sector clients, thus creating imbalance and
unsustainable demand (Hamid et al. 2008). The current state of the
prefabricated construction method is used in mega projects
51
implementing prefabricated methods of construction employing a

mass production approach in achieving economic viability. However,
the economic viability does not apply because there is no continuity
in its production of the components used after the completion of the
particular mega project. The system developed will be ended. Full
utilisation of the particular system can be done to make it more
economical and of value after the project has finished with
standardisation and proper coordination in its system and
dimensioning (Chung, 2006).
• Reliance on close system - from the fragmented prefabricated

construction approach and practices it can be seen that every
different manufacturer and applicator in the prefabricated
construction has its own designs and construction method. This results
in incompatibility of the components used among the manufacturers
in terms of dimensioning and installation at site. This results in making
the prefabricated industry uncompetitive due to the fact that once
a contractor applies a prefabricated manufacturer system, he will
probably be obliged to get the supply from the same manufacturer
throughout the construction (Chung, 2006). In this regard, the supplier
will control the price and the components will be expensive and not
commercially viable for small contractors (CIDB, 2010). There is ample
evidence that the failures of past construction systems are due to
blind acceptance of foreign products that were not open (flexible)
and were unsuitable to our climate and culture (Shaari and Ismail,
2003).
5.4 Encouragement Policies on IBS
52
Currently, there is no Act of Parliament or subsidiary legislation which

specifically regulates IBS whether in relation to its design and production or in
relation to its use and installation. Neither the Street, Drainage and Building
Act, 1974 (Act 133) nor Uniform Building By- Laws 1984 (UBBL), a subsidiaries
legislation made thereunder, nor the CIDB Act contains any provision to that
effect. The UBBL, which lays down a set of comprehensive mandatory
requirements relating to buildings to be constructed or set up in all the State
of Peninsular Malaysia, however does stipulate that were the By-Laws makes
any reference to the British Standard Specifications or the British Code of
practice and there exists a corresponding Malaysian Standard Specification
or Malaysian Code of Practice with respect to subject matter, the Malaysian
Standard Specification or the Malaysian Code of Practice shall be used and
applied. But at this moment, a Malaysian Standard Specification or
Malaysian Code of Practice with respect to IBS has yet to be established.
5.4.1 Early Initiatives through R&D (1984-1999)
A collective movement towards construction industrialisation was first

pioneered by researchers in the Housing Research Centre (HRC), Universiti
Putra Malaysia (Kamar et al. 2009). A rebranding of the prefabrication
concept through the usage of the term Industrialised Building System (IBS)
was introduced, differentiating it from the former in terms of better
productivity, quality and safety. The research centre had organised a series
of national and international colloquiums and seminars on IBS starting as
early as 1984 to 2003. The focus at the time was to identify local materials for
affordable housing schemes planned to be constructed using IBS (Kamar et
al. 2009). Their research on interlocking load bearing hollow block building
led by Professor Abang Abdullah Abang Ali had won the prestigious Geneva
Gold Medal 2001. The use of this block as part of IBS eliminates the use of
mortar layers and increases the speed of construction where the wall can
53
be assembled at a much faster speed compared to a mortar masonry

system. The HRC was also engaged with the National Affordable Housing
research programme with the Ministry of Housing and Local Government
(MHLG) and the Construction Industry Development Board (CIDB) to
develop an affordable housing design for government quarters and housing
projects between 2001 and 2003 (Kamar et al. 2009).
5.4.2 Establishment of Steering Committee and IBS Strategic Plan 1999
The establishment of the CIDB in 1996 (under Act 520) as a government

agency under the Ministry of Work aims to enhance the development of the
construction industry spearheading IBS adoption to new heights. In 1999,
based on the resolution made during the Colloquium of Industrialised
Construction System 1998, CIDB formed the IBS Steering Committee in an
effort to bring to the fore all the IBS-related issues in a framework to drive the
industry forward (CIDB, 2005). The IBS Strategic Plan 1999 was published as a
result of the establishment of this committee. The IBS Strategic Plan 1999
proved to be a good framework that set wheels in motion towards full
adoption of the IBS industry. The programme had laid out definite missions to
ensure a successful upgrading of the Malaysian construction industry and to
maintain a competitive edge in the global market with IBS (CIDB, 1999). In
the plan, the main thrusts put forward were to make construction
sustainable, to be able to penetrate the global market, to support and utilise
knowledge-driven technology, to raise the standard and quality of
construction, and to produce a human-friendly built environment (CIDB,
1999). While the efforts seem to be successful at some point, there is still a lot
of room for improvement. A greater coordination of the whole industry is
needed for greater success in the campaign.
54
5.4.3 IBS Roadmap 2003 -2010
Developed by the captains of the industry, IBS Roadmap 2003-2010 had

succeeded IBS Strategic Plan 1999 in 2003. The roadmap that aimed to
facilitate the transformation of the Malaysian construction sector was
endorsed by the government during its parliamentary sitting in October 2003.
The master plan is based on the 5-M Strategy (Manpower, Materials-
Components-Machines, Management-Processes-Methods, Monetary and
Marketing) with the target of having an industrialised construction industry as
well as achieving targets on developing an open building industry by the
year 2010 (CIDB, 2003). 109 milestones were set to be achieved by the year
2010. The lead secretariat for the development and monitoring of IBS
Roadmap consists of the CIDB, IBS Steering Committee and IBS Technical
Committee under the patronage of the Ministry of Works. The key elements
of the roadmap are as follows:
a) To have a labour policy that gradually reduces the percentage of

foreign workers from the current 75% to 55% in 2005, 25% in 2007 and
15% in 2009
b) To incorporate IBS and Modular Coordination (MC) in professional
courses for architects, engineers and others
c) To incorporate the syllabus on IBS and MC in architecture,
engineering and building courses in local universities
d) To enforce Modular Coordination (MC) by local authorities through
Uniform Building By-Laws (UBBL)
e) To develop a catalogue of building components and standard plans
for housing
f) To develop an IBS verification scheme for IBS products and
components
55
g) To enforce utilisation of IBS for 30% of the total government project

(building) in 2004 and gradually increasing this to 50% in 2006 and
70% in 2008
h) To introduce a buildability programme for all private building and
enforcement from 2008
i) To provide tax incentives for manufacturers of IBS components
j) To offer a green lane programme for users of standard plans
(designed using standard IBS Components and MC)
k) To start a vendor developing programme, training and financial aid
l) To abolish the levy for low, low-medium and medium cost houses;
and to set a 50% levy reduction
5.4.4 Introduction of Modular Coordination (MS 1064)
One of the important milestones in IBS Roadmap 2003-2010 was the

introduction of Modular Coordination (MC) (CIDB, 2003). MC is a concept of
coordination of dimensions and space where buildings and components are
dimensioned and positioned in a basic unit or module known as 1M which is
equivalent to 100 mm, as stipulated in MS 1064, and developed in 2000. The
concept allows standardisation in design and building components (CIDB,
2007). It encourages participation from manufactures and assemblers to
enter the market, thus reducing the price of IBS components. In essence, MC
will facilitate open industrialisation which is the prime target of the roadmap.
The proposed enforcement of using MC through Uniform Building By-Laws
(UBBL) would encourage open system in IBS.
5.4.5 Budget Announcement 2004 – 2006
The IBS agenda was further boosted with the 2004, 2005 and 2006 Malaysia
Budget announcements. In 2004, new government building projects had
56
been strongly encouraged to have at least 50% of IBS content in their

construction elements which had been calculated using IBS Score Manual
developed by CIDB. Furthermore, in 2005, the government had pledged to
construct 100,000 units of affordable houses using IBS (Hamid et al. 2008).
Finally, in 2006, a tax incentive was offered through Acceleration Capital
Allowance (ACA). IBS manufacturers would be given ACA for expenses
incurred in the purchase of steel moulds used for production of precast
concrete components to be claimed within three years (CIDB, 2005 and
Shaari, 2006).
5.4.6 Construction Industry Master Plan 2006 -2015 (CIMP)
The Construction Industry Master Plan 2006-2015 (CIMP 2006-2015) had been
published in December 2006 as a means to chart the future direction of the
Malaysian Construction Industry. The effort to promote IBS was highlighted
under Strategic Thrust 5: innovate through R&D to adopt a new construction
method (CIMP, 2006). A number of programmes have been undertaken
under the recommendation of CIMP including the establishment of the IBS
Centre located at Jalan Chan Sow Lin, Kuala Lumpur. The IBS Centre is a
one-stop centre for IBS programmes initiated by CIDB, providing training and
consultancy on IBS and showcasing IBS technologies through the
demonstration projects. The centre has 5 elementary tasks: industry planning,
promotion and marketing, verification and certification, training and
technology development.
Currently, the centre offers 7 professional training courses: Module IBS01:

Introduction to IBS and Modular Coordination; Module IBS02: IBS Score
Calculation and Submission; Module IBS03: Precast Concrete Planning and
Execution; Module IBS04: Analysis and Design of Precast Concrete Structure;
Module IBS05: Analysis and Design of Steel Frame Structures; Module IBS06:
57
Modular Coordination Design; and Module IBS07: Procurement and

Contract Administration.
The CIDB also offers courses for contractors to become IBS component
installers under the National Occupational Skill Standard for Construction
Industry (NOSS). The CIMP also supports the Research and Development
(R&D) activities on IBS conducted by the Construction Research Institute of
Malaysia (CREAM), a research arm of CIDB. The establishment of Makmal
Kerja Raya Malaysia (MKRM), a national laboratory for IBS testing and
research, has further enhanced R&D activities and become an important
element under the Verification, Validation, Certification and Testing (VVCT)
quality assurance programme. IBS manufacturers have to certify under the
VVCT in order to be included in the Orange Book (Directory for IBS
manufacturer). To date, there are about 12 IBS researches that have been
conducted, worth more than RM 6.0 million of capital investment.
5.4.7 Levy Exemption as Incentives to IBS Adopters
The government also realised that it is important for the private sector to
participate in ensuring the successful implementation of the programme by
creating sufficient demand for the players. Currently there is an exemption
to the Malaysian construction levy (CIDB levy - 0.125 % of the total cost of
the project according to Article 520) on contractors that have used IBS in
50% of the building components in residential buildings (Hamid et al. 2008).
Some may argue that the incentive in the form of an exemption of levy for
projects with a minimum IBS Score of 50% is too little to justify capital
investment on IBS (Shaari, 2006). The effectiveness of the offer is very unlikely
due to the fact that the current levy imposed on building projects is already
low. Initially the levy charged for construction projects was at 0.25%.
However, after the enforcement of the Economic Stimulus Package in 2003,
58
it was reduced to 0.125%, and as for low, low-medium and medium cost
housing projects, no levy is imposed. Based on the 0.125% rates, say for a RM
20 million project, the levy to be paid to the Government is only RM 250,000.
The offer will only be attractive if the increase in cost due to the usage of IBS
components is less than that value (Shaari, 2006).
5.4.8 IBS Roadmap Reviews 2008
In 2007, the CIDB performed a mid-term review of the implementation of IBS

Roadmap. The review was performed using available data supplemented
by the collection of industry perceptions through interviews with key industry
decision makers. The report was published under the title Implementing IBS
Roadmap 2003-2010 (CIDB, 2008). Several recommendations have been
brought up to remove and reduce barriers in the roadmap implementation
including developing and executing a holistic communication plan,
employing different approaches for different industry segments, changing
customer perceptions and creating demand as a leverage to IBS adoption
(CIDB, 2008).
5.4.9 Treasury Circular (SSP 7/2008)
One of the most important milestones of IBS policy is regulation on the use of
IBS in the construction of public buildings. In November 2008, the Treasury
Malaysia issued a Treasury Circular Letter, now referred to as SPP 7/2008, to
all Malaysian government agencies directing them to increase the IBS
contents of their building development projects to a level not less than 70
points of the IBS score and in that sense IBS must be incorporated as part of
the contract document for tender (Hamid et al. 2008).
59
It replaces the earlier instruction released on 6th July 2005 by Treasury for the
usage of 50% IBS content in all government projects. Released on 31st
October 2008, the Treasury Circular Letter was issued to all Secretary
Generals, Heads of Federal Department, State Secretaries, Heads of Federal
Statutory Bodies as well as to all local authorities. The essence of the
instruction is the usage of Open Building, MC design and 70% IBS Score for all
projects. Agencies are required to submit periodical reports of IBS project
implementation to ICU which acts as the central monitoring agency.
Exemptions are offered for certain classes of projects and the IBS Centre will
function as the main technical reference centre.
The circular letter took effect immediately and the Implementation and
Coordination Unit (ICU) of the Prime Minister’s Department has been given
the task of monitoring the level of compliance to this directive by the
respective agencies. The decision was to create sufficient momentum for
the demand for IBS components and to create a spill-out effect throughout
the nation. To monitor the implementation, the government established the
National IBS Secretariat. It involves coordination between inter-ministry levels
to make sure the policy is successfully implemented. During a period from
October 2008 and May 2010, about 331 projects under 17 ministries were
awarded and constructed using IBS (CIDB, 2010). The majority of the projects
were construction of public schools, hospitals, higher learning institutions and
government offices throughout Malaysia. The total cost of the projects was
about RM 9.6 billion (CIDB, 2010).
5.4.10 IBS Roadmap 2011-2015
The new IBS Roadmap 2011-2015 to replace the current roadmap will be
published in 2011. The policy’s objective is to impose high-level intended
60
outcomes of implementing IBS. To remain focused, it has been narrowed

down to four policy objectives which are quality, efficiency, competency
and sustainability (CIDB, 2010). A sustainable IBS industry will contribute to the
competitiveness of the construction industry. The pillars of the roadmap are
as follows (CIDB, 2010):
a) Good quality designs, components and buildings are the desired

outcome of IBS. Aesthetics should be promoted through innovation.
b) To ensure that by using IBS, the completion time of a building is
speedier, more predictable and well-managed.
c) To have a ready pool of competent IBS professionals and workers
throughout the entire project life-cycle: from design, manufacture,
and building to maintenance.
d) To create a financially sustainable IBS industry that balances user
affordability and manufacturer viability.
Four workstreams have been established as an action plan to achieve the

new roadmap pillars:
• Workstreams 1: Institutional Strengthening

• Workstreams 2: Focusing on User
• Workstreams 3: Product Focus
• Workstreams 4: Industry Focus
Based on this workstreams, 37 action steps have been recommended to be

accomplished by 2015. It is hoped that the roadmap will drive the way
forward for sustainable IBS adoptions; both in public and private sector. The
goals for the Roadmap are encapsulated below:
1. To sustain the existing momentum of 70% IBS content for public sector
building projects through to 2015
61
2. To increase the existing IBS content to 50% for private sector building
projects by 2015
5.411 Orange Book and IBS Score
The Construction Industry Development Board (CIDB) has introduced a

registration scheme for IBS. Only companies listed in the IBS Directory for
Manufacturers and Installers (Orange Book) will be considered to tender
government projects. Any products manufactured in Malaysia or imported
from other countries should go through a Verification, Validation, Testing and
Certification (VVCT) assurance programme in order to be listed under the
Orange Book. The IBS score, on the other hand, is made to measure the level
of adoption of IBS in particular buildings. The system becomes significant to
measure the level of adoption in public buildings where the use of IBS should
be more than 70% or the IBS score is 70 or over. It is also used to measure
residential buildings, where contractors who used more than 50% or have an
IBS Score of 50 or more will get an exemption of the construction levy for the
project. The scoring system is made accordingly to the following principles:
the usage of prefabricated and precast components, application of
standard components, application of modular coordination, and lowering
foreign labour dependency and repeatability. The assessment of the IBS
score is made based on three main components: 50% for the structural
system, 30% for the wall system and another 20% for other modular
applications. The IBS Scoring System emphasis on the following attributes:
1. The use of prefabricated and precast components

2. Off-site production of components
3. The use standardised components
4. Repeatability
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5. Design building component based on Malaysian Standard “Guide to

Modular Coordination in Building”, MS 1064
A higher IBS score is a reflection of higher reduction of onsite labour, lower

wastage, fewer site materials, a cleaner environment, better quality, safer
construction sites, faster project completion as well as lower total
construction cost.
5.3.12 Registered IBS System Provider
In order to optimise the benefit of IBS, a project wide strategy on the systems
and management involves in it have to agreed and applied at the early
stage of the project. Further, it was observed that the construction costs are
lower if the manufacturers are allowed to propose the design of the
components themselves that best suited to their manufacturing capabilities.
Therefore, the registration of manufacturers is necessary to reduce
evaluation work during the Tender Evaluation stage. The Public Work
Department (PWD) has launched “Registered IBS System Provider” scheme.
With this two-stage tendering, several manufactures would be asked to
submit initial tender at an early stage of the project, based on the outline
design produced by PWD’s project design team. Particular manufactures
would then be chosen at this stage and asked to develop their design and
approaches to achieve project deliverables. Effectively this second stage is
tendered out based on the first stage tender.
This scheme was established to create and capture value towards client’s
satisfaction. The implementation of IBS can be sustained by having the best
value in construction. The underlying principal of this scheme are:
• Leverage on manufacturing
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• Competitive designs
• Continuous design improvements
• Focus on quality
5.3.13 The implementation of open building system
The government of Malaysia has agreed to expand the method of

Industrialised Building System (IBS) in construction sector and endorsed the
content of IBS Roadmap 2003- 2010 to guide the mission. One of the main
objectives is to introduce Open Building System (OBS) concept by the year
2010. The introduction of OBS will not only reengineer our construction
process (supply-chain, trades, design, etc.) but will transform the way of
doing business in construction. OBS is the long term and systematic
approach toward a positive development of building industry. The adoption
of the open system approach will greatly benefit the building industry as it
increases the production capacity, lower manpower requirement, shorten
construction time, improve quality and in the long run bring down the overall
building cost. Despite all the attention, OBS concept is still an under-charted
territory in Malaysia.
For the start, it is important for the industry through CIDB and SIRIM to
develop Malaysian Standard Joint for IBS components. It is significant
because of two prefabricated parts only fit on the building site if their
dimensions and connections are well coordinated. Current developed joint
are used in closed system protected by patent. They are specifically design
to fit the pre-caster prefabricated component and it is not supporting holistic
concept of openness in OBS. At present, CIDB through their research arm,
Construction Research Institute of Malaysia (CREAM) has been collaborated
with PWD and expert from University of Nottingham are developing the
standard joint that look into the strength, stiffness, ductility and stability of the
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connection. CREAM together with University of Salford and Universiti

Teknologi MARA Malaysia is currently looking into a framework of technology
transfer to emulate the success of Manubuild Program in Europe.
In 2011, another research by CREAM and International Islamic University of

Malaysia (IIUM) will streamline accepted definition of open building system in
Malaysian perspective. Further, IBS Centre Malaysia in September 2011 will
publish a catalogue on standardise pre-cast component that will spur and
encourage the application of open system through standardisation.
The construction of life-size structures at the compound of IBS Centre, Kuala

Lumpur will be the first ever attempt at show-casing a diverse range of
products and techniques in the construction technology market. The full
scale structures will demonstrate attempts at using the OBS and combination
of multi- IBS products and components in building designed according to MS
1064, the MC design standard. The components involve in this OBS pilot
projects are from Pryda (Malaysia) Sdn. Bhd. (Roof trusses), BPB Malaysia
Gypsum Sdn Bhd. (Internal wall partitions), IJM Building Systems Sdn Bhd.
(Formwork systems), Corporate Builders Sdn Bhd (PC Walls), Baktian Sdn Bhd
(PC Walls), ACP Industries Bhd (Half Slabs), Setia Precast Sdn Bhd (PC Walls),
Eastern Pretech Sdn Bhd. (Hollow Core Slabs & Toilet Pod), PJD Concrete
Products Sdn Bhd (PC Walls), Zenbes Sdn Bhd (Blocks), CSR Building Materials
(M) Sdn Bhd (Light-weight Blocks), Lafarge Roofing Systems Sdn Bhd (Roof
Tiles), VS Interior Décor Sdn Bhd (Railings), Hoe Fock Wooden Works Sdn Bhd
(Wooden Windows & Door Frames), STO Sea Sdn Bhd (Painting), Johan
Ceramics Berhad (Tiles).
5.5 The Chronology of IBS Adoption
65
5.5.1 The adoption of IBS in post-independent Malaysia
IBS has been introduced in Malaysia since early 1960s when Public Work
Department (PWD) and Ministry of Housing and Local Government (MHLG)
of Malaysia visited several European countries and evaluate their housing
development program (Thanoon et al. 2003). In 1963, the government sent a
group of architect from PWD to learn industrialised building in some of
European countries. The following year, another group of architect from the
Federal Capital Commission was sent to France for about 6 month for
exposure in industrialised buildings (Sumadi et al. 2001). In the same year,
Ministry of Housing and Local Government (MHLG) was being set up by the
government to concentrate to development of housing. The ministry officers
and representatives visited West Germany, Denmark and France to gather
more information on industrialised building later that year (Sumadi et al.
2001).
5.5.2 Development in 1964 to 1970s
After their successful visit in 1964, the government had started its first IBS
project aims to speed up the delivery time and built affordable and quality
houses as stipulated under the 2nd Malayan Plan 1960-1965 and the 1st
Malaysian Plan 1966 – 1970. About 22.7 acres of land along Jalan Pekeliling,
Kuala Lumpur was dedicated to the project comprising 7 blocks of 17 stories
flat consists of 3000 units of low-cost flat and 40 shops lot. This project was
awarded to JV Gammon and Larsen and Nielsen using Danish System of
large panel pre-cast concrete wall and plank slabs. The project was
completed within 27 months from 1966 to 1968 including the time taken in
the construction of the RM 2.5 million casting yard at Jalan Damansara. In
1965, the second housing project initiated by the government comprising 6
blocks of 17 stories flats and 3 block of 18 stories flats at Jalan Rifle Range,
66
Penang. The project was awarded to Hochtief and Chee Seng using French
Estoit System (CIDB, 2006 and CIDB, 2003). Both projects utilised the large
panel system which required large concrete panel cast in the factory and
transported to site on trailers for assembly. The speed of construction is much
faster although the tendered price was slightly higher by 5% to 8% (Sarja,
1998). Another earliest IBS project was at Taman Tun Sardon in Penang
(consists of 1,000 units five-storey walk up flat). IBS pre-cast component and
system in the project was designed by British Research Establishment (BRE)
for low cost housing (BRECAST system). A similar system was constructed
almost at the same time at Edmonton, North London and about 20,000
BRECAST dwellings were constructed through out UK from 1964 to 1974
(CIDB, 2006). Nonetheless, the building design was very basic and not
considering the aspect of serviceability such as the local needs to have wet
toilet and bathroom (Rahman and Omar, 2006)
5.5.3 Development in 1970s to early 1980s
In 1978, the Penang State Government launched another 1200 units of

housing using prefabrication technology. Two years later, the Ministry of
Defense (MOD) adopted large prefabricated panel construction system to
build 2800 unit of living quarters at Lumut Naval Base. As one can observed,
IBS was engage at first place in the construction of low-cost high-rise
residential building to overcome the increasing demand for housing needs.
Many construction in at this time utilised precast wall panel system.
Nonetheless, the industrialisation of construction was never sustained in this
period. Failure of early closed fabricated systems had resultant the industry
to avoid of changing their construction method to IBS. Some of the foreign
systems that were introduced during the late 60s and 70s were also found
not to be suitable with Malaysia climate and social practices. Newer and
better technologies were constantly being introduced than in the market
67
since wet joint systems were identified to be more suitable to be used in our
tropical climate and it was also better to utilised the bathroom types which
were relatively wetter than those in the Europe (CIDB, 2005). At the same
time recent innovation the form of precast concrete sandwich wall panels
developed in Europe, has received wide acceptability in countries having
hot temperature climates due to better insulating properties resulting in a
cooler in door environment and has been send in several pilot projects in
Malaysia through 1970s to 1980s period (Trikha and Ali, 2004).
5.5.4 Development in 1980s to 1990s
During the period of early 80s up to 90s the use of structural steel
components took place particularly in high rise buildings in Kuala Lumpur.
The usage of steel structure gained much attention with the construction of
36-storey Dayabumi complex that was completed in 1984 by Takenaka
Corporation of Japan (CIDB, 2003 and CIDB, 2006). In the 90s, demand for
the new township has seen the increase in the use of precast concrete
system in residential buildings. Between 1981 and 1993, Perbadanan
Kemajuan Negeri Selangor (PKNS) a state government development
agency acquired pre-cast concrete technology from Praton Haus
International based on Germany to build low cost houses and high cost
bungalows for the new townships in Selangor (CIDB, 2003 and Hassim et al.
2009). It was recorded then, around 52,000 housing units was constructed
using Praton Haus system (Trikha and Ali, 2004) and the state of art pre-cast
factory was set up in Shah Alam (Sarja, 1998). Other than the use of Praton
House technology from Germany, PKNS was also embarked in other IBS
systems at the same period; Taisei Marubumi - large panel are cast in factory
using tilt-up system where one panel forms the base for next panel cast
(1,237 housing units and 11 shop lots at PJS), Hazama system (3,222 flat units
and 1,112 housing units at Bandar Baru Bangi), Ingeback system which is
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Swedish system using large panels in vertical battery mould and tilt-up table
mould (3,694 flat units) All the project were constructed by local contractor
with international technical support from established international firms in
joint venture partnership (Hashim et al. 2009 and Sarja, 1998).In that period
IBS used in Malaysia are large panel system (housing project in Shah Alam
and Taman Brown), metal form system in Wangsa Maju, Pandan Jaya and
Taman Maluri and modular systems which are heavily promoted by CIDB in
government project. Although the system originated overseas, local
contractors has made modification to suit local requirement. Instead of
steel, high quality film coated plywood shuttering is used in an innovative
mould system. The form can be easily dismantled and handled by small
crane and can be adjusted to suit architectural requirement (Sarja, 1998).
Other systems are framing system, modular system and partially pre-cast
system (the Cemlock Built System which is originate in Australia and used by
the National Housing Department in Pekan Selama housing project) (Sarja,
1998).
5.5.5 Development in 1990s to 1998s
In this booming period of Malaysian construction 1994 -1997, hybrid IBS

application used in many national iconic landmarks such as Kuala Lumpur
Convention Centre (steel beam and roof trusses and precast concrete slab:
Victor Buyck Steel Construction), Lightweight Railway Train (LRT), KL Sentral
Station (steel roof structure and precast hollow core: RSPA – Bovis), KL Tower
(steel beams and columns for tower head: Wayss and Freytag), Kuala
Lumpur International Airport (steel roof structure: KLIAB – Eversendai) and
Petronas Twin Towers (steel beams and steel decking for the floor system –
69
Mayjus JV and SKJ JV). The booming period of construction during that time
includes the development and construction of new administration capital of
Malaysia; Putrajaya and Cyberjaya. Both cities are the massive
development areas consist of new government buildings, business
boulevard and residential area, and most of them were built in IBS or a
hybrid IBS, combination between IBS and conventional construction.
Although incorporated in 1974 as a construction company, the SP Setia story
really began in 1996 when they refocused their core business to property
development. Setia Precast Sdn Bhd, a wholly owned subsidiary of SP Setia
Bhd has established a firm reputation as Malaysia’s leading IBS specialist in
precast technology for high-rise residential apartment. In the last decade,
they had successfully constructed more than 10,000 units of residential
apartments up to 18 storeys in Ampang, Puchong, Sungai Petani and
Putrajaya
5.5.6 Development in 1998 – 2008
At this state, the use of IBS as a method of construction in Malaysia is

evolving. Many private companies in Malaysia have teamed up with foreign
expert to offer solutions to their IBS projects (Eastern Pretech, BPB Malaysian
Gypsum, Lafarge and Duralite). Many had acquired enough knowledge
through technology transfer to build up own capacity in IBS technologies
(PKNS Engineering, Setia Precast and Global Globe). In fact, Malaysian was
also developed their own IBS technologies (Zenbes, CSR, IJM Formwork,
Pryda, Baktian and HC Precast). The local IBS manufacturers are
mushrooming, although the facilities yet to operate in full capacity. In 1999,
the Public Works Department (PWD) had designed the 5-storey block of
quarters for Judicial and Legal Training Institute at Bangi. The first storey was
built using cast in-situ concrete beams and columns with the upper 4 storeys
built with precast concrete wall system. The precast component was
70
supplied by Norwest Holding Sdn. Bhd. and Associated Structural Concrete

Sdn. Bhd. Between 1998 and 2002, Encorp Berhad and Leighton introduced
precast concrete walls and precast planks in the development of 10,000
units of teachers’ quarters on 107 sites throughout Malaysia. A total of 4,700
units of the teachers’ quarters were completed by Sunway Precast Industries
Sdn. Bhd. and the remaining units were completed by Leighton and Hume
Industries Sdn. Bhd. The project comprised low-rise (4 and 5-storey high)
apartment complexes were designed by NRY Architects Sdn. Bhd. Each
apartment unit has 3 bedrooms, 2 bathrooms, a living room, a dining room,
a balcony and a courtyard. The IBS system is largely used for private
residential projects in Shah Alam, Wangsa Maju and Pandan, Dua
Residency, Taman Mount Austin and Tongkang Pecah, Johor. Starting on
2006, O-Stable Panel Sdn. Bhd. has been widely used as IBS system in double
storey bungalow and terrace houses at Selangor and Putrajaya. The
prefabricated component was supplied for Putra Perdana Construction Sdn.
Bhd. for bungalow houses at Putrajaya, and PKNS and Baktian Sdn. Bhd. for
houses in Selangor. It used in public residential projects in Putrajaya Prescient
17 and Prescient 9, PPR Sungai Besi, Sungai Bedaun, and Telipok, Sabah. The
new generation of building that utilised IBS is better in term of quality, and
architectural appearance compared to the earlier generation. IBS is also
widely used to construct government’s schools and teachers housing
complexes (Kuala Kangsar, Yan and Sungai Petani), hospitals (Serdang
Hospital and UKM Hospital), collages and universities (Penang Matriculation
Collage, UiTM, Kuching and University PETRONAS and University of Malaysia
Sabah), custom and immigration complexes (Kelana Jaya and Johor Bahru),
private buildings (Weld Tower, Maju Perdana, Traders Hotel, City Square and
Olympia Tower, Jaya Jusco, IKEA) and police quarters (Senawang). The IBS
agenda was further boosted with the 2004, 2005 and 2006 Malaysia Budget
announcements. In the year 2000 and 2004, the Finish originated company
Eastern Pretech (M) Sdn. Bhd. had supplied prefabricated components such
71
as hollow core slabs, precast planks, precast balcony, precast beams,

precast columns, precast staircase elements, precast parapet walls and
load bearing walls for residential projects of townhouses and apartments at
Cyberjaya and Seremban. In 2004, new government building projects had
been strongly encouraged to have at least 50% of IBS content in their
construction elements which had been calculated using IBS Score Manual
developed by CIDB. Furthermore, in 2005, the government had pledged to
construct 100,000 units of affordable houses using IBS (Hamid et al. 2008).
Finally, in 2006, a tax incentive was offered through Acceleration Capital
Allowance (ACA). IBS manufacturers would be given ACA for expenses
incurred in the purchase of steel moulds used for production of precast
concrete components to be claimed within three years (CIDB, 2005 and
Shaari, 2006).
5.5.7 Development in 2008 to 2011
One of the most important milestones of IBS policy is regulation on the use of
IBS in the construction of public buildings. In November 2008, the Treasury
Malaysia issued a Treasury Circular Letter, now referred to as SPP 7/2008, to
all Malaysian government agencies directing them to increase the IBS
contents of their building development projects to a level not less than 70
points of the IBS score and in that sense IBS must be incorporated as part of
the contract document for tender (Hamid et al. 2008). The circular letter
took effect immediately and the Implementation and Coordination Unit
(ICU) of the Prime Minister’s Department has been given the task of
monitoring the level of compliance to this directive by the respective
agencies. The decision was to create sufficient momentum for the demand
for IBS components and to create a spill-out effect throughout the nation. To
monitor the implementation, the government established the National IBS
Secretariat. It involves coordination between inter-ministry levels to make
72
sure the policy is successfully implemented. During a period from October

2008 and May 2010, about 331 projects under 17 ministries were awarded
and constructed using IBS (CIDB, 2010). The majority of the projects were
construction of public schools, hospitals, higher learning institutions and
government offices throughout Malaysia. The total cost of the projects was
about RM 9.6 billion (CIDB, 2010).
5.6 The Current Usage of IBS in Malaysia
Three official surveys had been conducted by the Construction Industry

Development Board (CIDB) which were IBS Survey 2003, IBS Survey 2005
(architects’ and designers’ perspectives) and IBS Roadmap Mid Term
Review 2007 in order to measure the current state of IBS adoption in
Malaysia.
5.6.1 IBS Survey 2003
IBS Survey 2003 was conducted by CIDB in 2003 on 5,712 G7, G6, and G5 (B
and C categories). On average, as reported in this survey, IBS usage in
building construction was low (33.8% of total construction). The greatest
number of IBS manufacturers produced steel framing systems. This constitutes
40% of all IBS producers, followed by precast concrete producers (25%). 55%
of the local contractors used prefabricated roof trusses while 15% used a
type of IBS in frames, walls and slabs. The survey also highlighted that 61%
(the majority) would prefer IBS to be made compulsory but to set a certain
percentage of usage, and the majority (37%) of respondents requested
more IBS awareness and education programmes to be conducted. IBS
usage in certain areas is still low and the industry needs to be informed of the
benefits as well as the correct applications of the systems. Nevertheless, most
73
of the respondents were quite positive with the increased usage of IBS in the
Malaysian construction industry (CIDB, 2003).
5.6.2 IBS Survey 2005 (Architects and Designers)
IBS Survey 2005, which focused on architects’ and designers’ views on IBS,
reported that the majority (66%) of the architects and designers claimed to
have relatively poor knowledge of IBS, which resulted in a lower uptake of it.
Only 30% of designers had been involved in IBS projects previously, more
than 90% of respondents agreed that IBS promotes cleaner sites, reduces
labour and simplifies installation, and only 30% of respondents were satisfied
with current IBS products. In addition, 34% of respondents had requested
more awareness and education programmes on IBS (CIDB, 2005).
5.6.3 IBS Roadmap Review Survey 2007
IBS Roadmap Mid Term Review in 2007 (published under the title:
Implementing the IBS Roadmap) reported that only 10% completed projects
used IBS in the year 2006. Less than 35% of the total construction projects
used at least one IBS product in 2006 as compared to an early forecast of
completed IBS projects of 50% in 2006 and 70% in year 2008, as projected by
the IBS Roadmap (Hamid et al. 2008 and IBS Survey, 2005).
5.7 Registered IBS Contractors and Manufacturers in Malaysia
The total registered IBS contractors in Malaysia stood at 895 in the year 2007
with 334 class G7 contractors (Table 3.1 and 3.2) and registered IBS
manufacturers in Malaysia until 2010 are 118, producing approximately 347
IBS products available in the market, as shown in Table 3.3. The majority of
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the contractors are involved in building and industry steel structure work and
only 11 companies specialise in special formwork system.
Table 5.1: IBS contractor in Malaysia (Hamid et al. 2008)

Grade Specialties Total
Number
B01 Building and industrial pre-casting work 28
B02 Building and industrial steel structure work 516
B12 Aluminum, glass and steel work 232
B15 Roofing and steel cladding work 108
B19 Special formwork 11
Grand Total 895
There is also a good number of IBS precast concrete framing system, panel
and box system available in Malaysia and only 10 manufactures are
involved in producing block work system.
Table 5.2: IBS contractor in Malaysia (Hamid et al. 2008)
Grade Number
G7 334
G6 52
G5 83
G4 42
G3 237
G2 76
G1 71
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Total 895
Table 5.3: IBS manufacturer in Malaysia (CIDB, 2010)

IBS Type Total
manufacturers
Pre-cast concrete framing, panel and 104
box system
Steel formwork system 79
Steel framing system 32
Prefabricated timber framing system 25
Block work system 14
Others (on-site) 35
Innovative solution 16
Total l 305
Table 5.4: IBS Accredited Installers (CIDB, 2010)

IBS Type Nos.
Steel Roof Trusses 1474
Precast concrete frame / wall 24
Lightweight block 887
Timber Roof Trusses 46
Total 2431
Table 5.5: Registered IBS Consultant (CIDB, 2010)

IBS Type Nos.
Engineering 131
Architecture 48
Quantity Surveyor 38
Total 217
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Malaysian construction industry is very good in modifying and adopting IBS

technologies captured from oversea practices. Many private companies in
Malaysia in present day have teamed up with foreign expert to offer
solutions to their IBS projects. Many had acquired enough knowledge
through technology transfer to build up own capacity in IBS technologies.
Many world-class Malaysian developers have chosen IBS over the
conventional methods for important projects such as the Petronas Twin
Towers, Putrajaya, KL Sentral and KLIA. There is ample evidence that the
failures of past construction systems are due to blind acceptance of foreign
products that were not open (flexible) and were unsuitable to our climate
and culture.
IBS in Malaysia is seen as a threat to traditional methods but in reality many

IBS technologies like block works is exist together with conventional
practices. The failure of IBS to penetrate the market is due to a
misconception that it will eventually replace the traditional sector, while it
actually should work closely in tandem to promote best practice in
construction. The sharing of best practice between the two approaches is
essential for the continued successful development of both construction
sectors. IBS should be looked by the industry as easy, simple and cost
effective solutions to the players.
Each IBS system has its own advantages and limitations. The selection and
implementation of correct technology in IBS projects is perhaps the key to
IBS success. There is a need to realise that precast concrete IBS is not suitable
for every project. If more people were aware of its capabilities and available
technology, they could identify particular system that suited the project. The
advantages of IBS systems in Malaysia are as follows:
5.8 IBS Technologies in Malaysia
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5.8.1 Pre-cast System
• Precast a panel and building system provides easy

standardisation, speedier construction, cost-effectiveness,
high quality finish and enhanced facade design. Pre-cast
system is more economical for high-rise apartment projects.
IBS can be beneficial to that sort of building due to the
repetitive nature of the design. No actual parameter to
determine the exact period of investment recovery as this
much depends on number of projects and targeting period of
recovery. Some estimation goes that, to break even in setting
up a prefabrication factory, the company requires 2,000 units
of housing apartments to be built in a year. In many cases, the
capital investment could be recovered in construction period.
• Precast concrete construction which involves the use of

precast elements, has contributed significantly towards the
development of the nation; especially in infrastructure and
social development projects. The Pekeliling or Tuanku Abdul
Rahman Flats; constructed in 1960s and the Putra-Star LRT and
KL Monorail projects which began developments in 1990s are
some of the comparative venture period of Malaysia’s
construction industry. Precast components come in a variety
of shapes for different types of usage, both architectural and
structural. It includes the traditional precast beams, columns,
slabs, walls, staircases, parapets and drains; as well as other
relatively new precast components for toilets, pilecaps,
facades, lift shafts and refuse chambers. Also common are the
precast concrete permanent formworks that consist of precast
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panels that act as forms for in-situ concrete. It includes the

“half slabs” and the “sandwiched/double walls”. As the
production of lightweight concrete are getting cheaper, more
precast components are also produced in the form of
lightweight concrete panels and blocks that greatly ease
transportation and installation.
• The success story of PKNS Engineering and Construction

Berhad (PECB) in operating state of the art technology on IBS
shown that the construction industry in Malaysia is able to
adopt advanced, mechanised and automated IBS
technologies. From 1981 until 1991, PECB built and operated a
very modern prefabrication yard at Shah Alam using Praton
Haus’s belt conveyor and semi-automatic precast production.
The overall investment was worth in the region of RM 12.0
million which was considered a relatively huge upfront
investment at that time. The high investment in the technology
also requires high skills workforce with high productivity output.
• In pre-cast system, proper coordination in installation between

panels and services are important. To address this issue, the
adopters require systematic labeling and coding of
components. Systematic numbering and standardised
information is created to avoid double handling. Further, this
IBS system can be only benefit if decision to use it can be
decided as early as possible not as afterthought during the
project. This practice will allow manufactures, contractors and
Mechanical and Electrical (M&E) specialists to get involve and
share their knowledge early during design stage. The
collaborative design team can be established by improving
79
procurement and contract, establishing a clear statement of

needs from clients or integrating the team starting from
project briefing all by client’s initiative.
• The advantages of using the precast concrete framed system

are that the system engages a highly mechanised method of
construction allows fast track construction and requires less
manual work onsite. The system offers flexibility in terms of large
span and open spaces without disruption of internal walls. The
skeleton frame also gives more freedom for architects to
design façade claddings
• On the other hand, precast wall system offers open spaces

between load bearing walls without the need of the column.
With the use of light partition walls, the system can still offer
flexibility in the design of the interior layout. Another
advantage is that precast panels can be standardised and
produced in large quantities. Therefore, the precast wall
system offers the advantages of speed and reduction in
construction cost. This will result better cash flow for the owner.
The quality of internal and external finishes of the building can
be readily achieved with pre-fabricated walls.
5.8.2 Formwork System
• The steel formwork system is suitable for low-rise and high rise
construction. Currently, the system has rapidly gained
acceptance in many town and cities in Malaysia because it
can offer a faster speed of erection, comparatively lower cost
and simplicity equipments. The monolithic construction
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obtained from this system also allows for better integrity and
robustness of the building. The steel formwork system provides
good accuracy for the cast in situ components and a smooth
internal finish that eliminates the need for plastering. In
addition, the system provides further benefits such as sound
insulation and fire resistance. Due to many advantages, the
system becomes more popular with both big and small
contractors.
• Formwork system is cleaner, safer and requires less labour than

conventional methods, yet it is flexible enough to cater for
immediate changes of requirement and can be reused in
many projects. Some formwork system is economical and
efficient type of high-rise building construction. The initial
investment cost for formworks and moulds are much less than
a precast system, having taken into consideration aspects
required completing the shell structure of the buildings.
• The tunnel form system is a formwork system which builders

may use to cast walls and slabs in one operation efficiently.
Tunnel form system simplifies the whole construction process
by enabling a smooth and fast operation that can result in
cost effectiveness, productivity and high quality finished.
Tunnel form projects have proven that impressive results can
be achieved in terms of productivity, efficiency, economy and
quality. It can usually be reused for 500 to 1,000 times, and is
an effective way to construct buildings that have repetitive
elements or layouts. The system is now one of the most
preferred methods of cellular construction by the contractors
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in Malaysia whilst clients appreciate Tunnel form’s ability to

deliver projects to budget and on time.
5.8.3 Steel Framing System
• Previously, the application of steel framing system is only to

commercial and industrial building. The application for
housing is only limited to roof trusses. Just recently, the
application of steel roof trusses, showed their capability in
building industry whereby the cost become competitive as
compared to timber roof trusses.
• The advantages of using the steel frame system are

buildability and simplicity of construction as well as greater
construction speed. The speed and economy of construction
can be enhanced further by the large number of repeated
components in the structural system.
• Besides high-rise buildings, the usage of steel elements is also

popular with the construction of universities, colleges, schools,
hospitals and commercial complexes. Undoubtedly, structural
steel offers greater freedom and flexibility to the designers,
rapid construction for the contractors and faster returns on
investment (ROI) to the owners.
5.8.4 Prefabricated Timber Framing System
• Before the arrival of foreign and modern influence, the

indigenous Malay and Orang Asli tribes of peninsular Malaysia
and their related Bumiputeras tribes in Sabah and Sarawak
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had already developed their traditional dwelling using timber

structure.
• Timber structure system involved the design and construction

of buildings and structures using prefabricated wood and
wooden products especially in structural or load bearing
elements. There are two types of prefabrication of timber
which is ready-cut plus shop fabrication of joints (column and
beam) and structural panels where there are only walls and
floors without column and beam.
• Although cost and availability of timber product is often seen

as the barriers of the use of timber in construction. Timber
building frame systems have their own niche market, offering
interesting designs from simple dwelling units to buildings
requiring high aesthetical values such as chalets for resorts.
5.8.5 Block Work System
• IBS system in Malaysia does not limit to high advanced

technologies and mass-production concept. The block work
system is one of the simplest, flexible and most versatile
systems that can be used by many in the industry. The block
work is also some sort of low cost IBS with low capital
investment, where many contractors can be involved in it. IBS
block work is the easiest way of adopting IBS and blockwork
system can easily penetrating construction market. However,
there is a need for skilled designers to design blockwork than
can capitilise the benefit of IBS. The block work system
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depends on modular dimension at design stage, is also

comparable to LEGO system.
• Moreover, some engineered block work applies load bearing

wall by incorporating the columns and beams as integral part
of the wall for all types of houses (up to 5- storey in high). The
amount that can be saved on a wall can range from 10% to
30% as compared to conventional with additional less
foundation cost. To encourage overall involvement from many
in the industry, the IBS score for blockwork use in project should
be increased. The non-load bearing wall using blockwork
system is suitable for fencing and partition. Standard sizing,
therefore making construction site neat, organised and clean.
• The block system particularly engineered block is flexible and

can suit and complement other IBS technologies. The block
system is also easily be manufactured and easily be
assembled by the adopters. Nonetheless, the block systems
must be in some form of standardisation in term measurement
(modular) and also incorporate industrialisation and
automation in factory environment.
• In early 1970’s, single storey low cost terrace houses were

mostly built out of plain wooded frame and plank sitting on 3 ft
high plastered brickwork and taking the advantage of simple
raft foundation due to lightweight super structure. This type of
construction today has been classified as one of IBS system.
However, now, the application of this system seems unrealistic
due to cost issue, but as the technology advance and it is
easier to be implemented by the industry players, the system
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should be promoted as IBS solutions low cost project, where

the cost will be reduced when foundation cost is less
substantial.
5.8.6 Innovative On-site System
• Some companies also established a temporary production

plant onsite. The set-up of the temporary production plant was
highly successful, producing components to a very high
standard, at a rate exceeding demand, and to a lower cost
than anticipated. The case clearly demonstrated that IBS
options were not restricted to fixed, long-term facilities, but
rather were more about understanding the concepts of
production and manufacture.
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CHAPTER 6: THE CRITICAL SUCCESS FACTORS (CSFs) TO

IBS ADOPTION
6.1 Definition of Critical Success Factors
The term critical success factors first appeared in the literature when there
was interest in why some organisations seem to be more successful than
others, and research was carried out to investigate the success components
and also those things that must be done for successful implementation
(Auruskeviciene et al. 2006). Rockart (1979) defined critical success factors
as a limited number of areas in which results, if they are satisfactory, will
ensure successful competitive performance for an organisation. Hofer and
Shendel (1978) defined critical success factors as those variables which can
affect significantly the overall competitive position of various firms in an
industry.
There is a need to identify critical success factors in a particular industry for a

number of reasons. First, it leads to a better understanding of the
competitive environment, which in turn may assist in making decisions
related to new product development and marketing activities
(Auruskeviciene et al. 2006). Second, critical success factors establish a
range of limited areas of focus, and the companies can put their valuable
resources into those things which really make the difference between
success and failure (Bullen and Rockart, 1981). Third, the study on critical
success factors evaluates a change for business start ups, the planning of a
company’s process and an effective implementation plan (Dickson et al.
1984). Finally, the understanding and development of critical success factors
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enables a firm to make a successful entry into an industry, find a different

position among other firms and successfully combine the creation of the
perceived value and cost reduction (Ketelhohn, 1998).
6.1.1 Critical Success Factors to IBS Adoption
The adoption of IBS requires a migration from a traditional building process

towards a lean and effective manufacturing process. The huge change in
approach from traditional to IBS method requires massive support, clear
vision from the management, commitment, and motivation, which are
critical to convince the decision makers, customers, clients and one’s own
organisation structure to utilise the IBS method (Kamar et al. 2009 and
Hashim et al. 2009). Leadership and commitment to IBS from the
management ensures the right motivation from the whole team and the
right resources to be allocated to the team (Kamar et al. 2009).
Leadership and support from the management ensures better

understanding of the change process and the strategy to steer through
constraints, avoiding the temptation to return to traditional methods at the
first difficulties (Pasquire and Connolly, 2002). It is also a vital element to deal
with cultural barriers and expedite effort to change to IBS (Kamar et al. 2009
and Hashim et al. 2009).
IBS needs to be driven by enthusiasm with good leadership and it requires

motivation from the management in the ways and means to drive down
cost, eliminate waste and increase effectiveness to add value to all
operations in the project (BSRIA, 1998). This leads to a management
approach that is open and supportive to innovation, encourages new
technology and makes significant leaps forward in performance against the
backdrop of an increasingly competitive marketplace (Mann, 2006).
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Furthermore, elevating IBS knowledge and the processes involved in its life
cycle to the boardroom members seems to create company success in
implementing the IBS method (Mann, 2006).
6.1.2 Business Strategy
The development of a business model that suits IBS adoption is critical to the
adopters. According to Malik (2006), IBS companies need to establish a
specific business model and to position themselves in the new playing field.
This may include an open collaborative environment to do business. Malik
(2006) also highlighted that the adopters should create a value-driven
business process to penetrate mainstream construction. This business process
needs a clear business need statement, supported by a long-term strategic
plan (Malik, 2006).
Another important aspect is the cost control element in project decision

making (Pan et al. 2008 and Pasquire and Connolly, 2002). The adopters of
IBS need to identify the cost driver and adopt a cost leadership strategy in
each project (Buildoffsite, 2008 and Chiang et al. 2006). This incorporates
prudent cost management and financial detail calculation on initial cost
and investment projection (Kamar et al. 2009). The adopters require
thorough investment planning in order to spend funds on production
facilities, product development and third-party accreditation on products
and systems, which requires huge amount of resources.
Project risks such as unpredictable planning decisions and faulty design are
significant problems to the adoption of IBS (National Audit Office Report,
2005 and Hassim et al. 2009). According to Hassim et al. (2008), the risks in IBS
projects are mainly a result of design information, impractical design,
inconsistent information among design documents and coordination
88
problems between design disciplines. Risk strategy, mitigation and

management are important in IBS projects as compared to conventional
build projects (Housing Forum, 2002).
On a project level, risk assessment will help the adopters to take responsibility
for the safety performance of the project, seeking alternative, safer methods
of installation and designing out unnecessary risks (BSRIA, 1998). On a
strategic level, risk assessment and mitigation is needed to cope with
decision making during the trial and error stage which normally happens
when the company first wants to adopt IBS (Kamar et al. 2009). Risk
management also covered contingency arrangement to cover unplanned
events and delays caused by improper project planning (BSRIA, 1998). By
assessing the potential cause of delays and disruption at all stages of the
supply chain, contingency measures can be planned to minimise the effect
(Kamar et al. 2009).
6.1.3 Procurement and Contract
Gibb (1999) and Blissmas et al. (2006) suggested that IBS should not be used
as an afterthought, or as a late solution to shorten construction time, but
rather as an integral part of the design from the earliest possible stage of the
project. In order to reap the maximum benefit from IBS, it is often essential
that IBS is selected as a method of construction at the early stage of the
project (Kamar et al. 2009). There is no real benefit, if IBS is to be introduced
in the design detail, manufacture or only at the assembly stage. Neala et al.
(1993) highlighted that the best way to design IBS is for designers to proceed
no further than outlining the design and preparing performance
specifications, before inviting prospective IBS contractors and manufacturers
to contribute their expertise to produce detailed design (Neala et al. 1993).
As a consequence, IBS requires the type of contract route that allows
89
adopters to be involved at the beginning such as in Design and Build (D&B),

direct negotiation and turnkey contract route. The corollary of this is that the
decision to use IBS has to be made at an early stage due to its implication
on the design, manufacture and assembly programme (Neala et al. 1993).
Improvement in the procurement of materials is also significant, where all the

components to be used in the IBS project need to be identified as early as
possible (Kamar et al. 2009). It is predicted that the building procurement
system will be slightly different from the conventional one, which includes
purchasing of materials and components in advance before the actual site
progresses. As identified by BSRIA (1998), IBS requires a procurement strategy
that can clearly identify supplier, manufacturer and sub-contractor not only
with low costs but with the right capability, competence and capacity.
Whelan (2008) highlighted that the selection of material suppliers and

specialist sub-contractors should not be made by lowest price alone. It may
include the ability to add value to the project and contribute to the project
team based on previous track record. Only specialist contractors with a
successful track record in similar projects should be considered for
appointment and the specialist contractors should be involved in the
projects as early as possible to realise the full potential of IBS (Neala et al.
1993).
Malik (2006) suggested that IBS should move forward towards a centralised
procurement approach in order to be cost competitive instead of isolation
orders. Sanderson (2003) underlined the fact that careful monitoring of cost
through the whole procurement process is crucial to ensure that the prices
quoted are those being delivered.
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6.1.4 Project Management
The design, manufacture, assembly and other related processes in an IBS

project require a more coherent structure of process planning and control at
site, transportation and machineries in order to reduce defects and errors
(Gibb, 2001 and Warszawski, 1999). Project planning is an integral part of
project management to deal with the schedule of processes. Planning in IBS
projects requires a thorough arrangement of detail design, work delivery
schedule, and the most cost-effective methods of installation and logistics
(BSRIA, 1998; Pan et al. 2008; Lessing, 2006; SCRI, 2006; Neala et al. 1993;
Oostra and Johnson, 2007 and Haas and Fangerlund, 2002).
With a short duration and a lack of decision-making opportunities onsite,

more stress is put into IBS construction in organising the construction works
offsite, which is often carried out to a tight deadline, and it is imperative for
planners to improve planning and scheduling and optimum use of resources
(BSRIA, 1998).
According to Neala et al. (1993), planning and scheduling activities include

site planning and logistics. The roads to the site may have to be adjusted
and access or loading platform constructed. In the installation phase,
contractors need to determine the best routes and time to the site, ground
conditions and size of the site before installation works can begin (CIDB, 2008
and Ahmad, 2005). Where access is very restricted in some sites, the building
itself may have to be designed so that components are located where they
can be installed easily. In addition, a tighter and longer period of planning is
required to allow for the design, logistics and installation planning,
procurement and approval procedures, and should be completed well in
advance which leads to better project performance, coordination, better
91
scope control and ensures a smooth project sequence (Haas and

Fangerlund, 2002).
The construction schedule must also be agreed upon before the fabrication
starts (Neala et al. 1993). However, it is important to note that planning and
scheduling is an interrelated process. One can observe that an IBS
construction may shorten the site construction phase but not necessarily the
overall project duration, from inception to completion. As such, it is
impossible for adopters to achieve quick assembly by using IBS techniques
but still to maintain a traditional programme and scheduling (Sanderson,
2003). One can argue that a well-managed delivery phasing and
scheduling by considering the planning and deliveries to enable smooth
flow of work onsite will avoid waste in labour and logistics. Furthermore,
detailed scheduling and programming leads to cost-effective installation
with minimum unproductive time (BSRIA, 1998).
It is recommended that Just in Time (JIT) and Lean Construction is applied to

the logistic management of IBS projects (BSRIA, 1998; Ogden, 2005 and
Lessing et al. 2006). Lean Construction by definition is a way of designing
production systems to minimise waste of materials, time, and effort in order
to generate the maximum possible amount of value (Lessing et al. 2006). JIT
is defined as a philosophy of manufacturing based on planned elimination
of all waste and continuous improvement of productivity (Ahmad, 2005).
Both concepts are important methods for IBS construction for pulling work
forward from one process to the next just when the successor needs it
(Ballard and Howell, 1997). The benefits of JIT are: reduction of the work in
progress inventory, reduction of working capital, reduction of the production
cycle time, reduction of flow variations and contribution to continuous
improvement (Ballard and Howell, 1997). JIT helped in the production and
installation process through efficient components handling. According to
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Peng and Chuan (2001), whenever JIT is in place, materials can be delivered
to site on the actual day of the use or just the day before, thus reducing the
inventory and storage. Peng and Chuan (2001) highlighted that a long-term
relationship and partnership with suppliers is one of the fundamental pillars to
adopt JIT and Lean Construction in the construction industry.
Given the increase of coordination involved in IBS projects, effective

communication is highly important. Communication is not limited to verbal
interaction but also includes information and documentation flows in the
project (data, document, and drawing) (Blissmas, 2007). It is clearly stated in
literatures that an effective communication channel across the supply chain
is needed in order to coordinate processes and deal with critical scheduling
from the beginning until project completion (Pan et al. 2008; Blissmas, 2007
and BSRIA, 1998). According to Blissmas (2007) and NHBC (2006), a greater
communication effort is required during the early phase of the project where
thorough planning and design harmonisation are essential. Haas and
Fangerlund (2002) suggested that effective communication incorporates
distribution of information regarding decisions, designs, transportation
requirements, and schedules. Malik (2006) underlined that during the
construction phase, good communication channels support vital real-time
information between the factory and project site to ensure correct
manufacturing provision and timely delivery of components to site. In this
regard, BSRIA (1998) suggested that the use of Information and
Communication Technology (ICT) will significantly aid the communication
and information flows.
Project management also focuses on coordinating and managing the

interface between elements, systems and organisations (Gibb, 1999).
Coordination is important in the design, manufacture, transportation,
tracking and installation processes as these are critical factors contributing
93
to successful implementation (Haas and Fangerlund, 2002; Li, 2006; Vrijhoef

et al. 2002 and Lessing, 2006). Gibb (1999) underlined that coordination is
important in managing the interface between each element and the
components of the building, or between each organisation involved in the
construction process. Further coordination may be required for materials
management and supply chain scheduling. The coordination is required to
find the correct matching of components with the installation system in terms
of performance, capacity and spatial arrangement (BSRIA, 1998).
Haas and Fangerlund (2002) suggested that standardisation of construction

processes could help to simplify things and further reduce the overall cost
and schedule. This may include standard building products, standard forms
of contract, standard details, design or specifications and standard
processes, procedures or techniques (Gibb and Pendlebury, 2005). If the
process is standardised, the resources can be used in the most efficient
manner.
6.1.5 Design Management and Integration
Design management is critical to establish and encourage forward thinking

in planning, particularly in the issue of transportation and installation, and to
deal with the issue of manufacturability and constructability. In the
construction industry, designs with poor integration, accompanied by
inadequate detailing and incompetent communication, not only create
problems for the constructor, but are also costly and time consuming for
both clients and designers (Alshawi and Underwood, 1996). It is widely
acknowledged that in the construction industry, the decision that has the
greatest effect on the overall cost of a project occurs during the conceptual
design stage (Tizani, 1996). Implementing IBS requires an integrated team to
generate the most value, thus delivering the project on time and within
94
budget (Buildoffsite, 2008). There is a consensus among IBS scholars that IBS
specialists should be involved during the design stages, working with the
designers, to ensure that the design is not taken to a stage where it restricts
the benefits that can be brought through the use of IBS (Pan et al. 2008;
Blismas, 2007; Sanderson, 2003 and Gibb, 2001). Expert advice on
transportation and installation should be sought at the earliest opportunity
by the designer (Gibb, 1999). In addition, obtaining manufacturing input at
an early stage of the project is essential to IBS design (Pan et al. 2008). Pan
et al. (2008) highlighted that it is vital for contractors to involve the project
team in the project’s decision making and design as early as possible to
ensure that their input on the issue of manufacturing, design harmonisation
and constructability are captured. A change in design, particularly in the
construction phase, is often not favourable to IBS. Later design changes are
difficult to implement without influencing the production schedule and
extending the overall time (National Audit Office Report, 2005). Alshawi and
Underwood (1996) discussed the information required to improve the
constructability of the design and they suggested a framework which led to
the development of an integrated object-oriented tool for designers to use
without affecting the flexibility and creativity of the current design methods.
The paper highlighted the aspects of object oriented analysis (OOA) and its
structured methodology, along with a brief explanation of the
implementation of the used methodology.
According to a report by Buildoffsite (2008), it is beneficial to introduce the

concept of a design freeze principle into the schedule as this will help to
mitigate the effects of any late design changes, which may not be as easy
to incorporate when using IBS. Furthermore, the communication during the
design process, especially in the early design stage, has a major bearing on
the overall cost and quality of the completed project with knock-on effects
on downstream issues spanning all stages of the project (Tizani, 1998).
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The other important aspect in design management is the concept of

standardisation. Standardisation is the process of developing and agreeing
upon technical standards. A standard is a document that establishes
uniform engineering or technical specifications, criteria, methods, processes,
or practices. In IBS construction, standardisation incorporates the extensive
use of components, methods or processes in which there is regularity,
repetition and a background of successful practice. IBS requires emphasis
on standardisation and more effective use on the concept of repetition
where the product is documented in a systematic way to ensure that
everything is repeated in the same manner for installation (Mole, 2001 and
National Audit Office Report, 2005). The relation between unit cost and unit
repetition is depicted in Figure 6.1 (Gibb, 1999).
Figure 6.1: Relationship between unit cost and repetition (Gibb, 1999)
The figure shows that the unit cost will be greatly reduced if the unit of
repetition is increased. Design standardisation which allows some degree of
repetition is crucial to obtain economies of scale in production (Pan et al.
2008). Standard sizes and similar layouts occurring frequently across the
project means that it can be treated almost identically as the elimination of
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the learning curve adds significantly to the productivity (BSRIA, 1998).

Therefore, one can observe that the amount of repetition, the choice of
standard materials and overall dimension are critical factors to determine
the viability of IBS construction (Neala et al. 1993).
6.1.6 Management of Supply Chain
Supply chain by definition is the system of organisations, people, technology,

activities, information and resources involved in moving a product or service
from suppliers to customers (Hong-Minh et al. 2001). In general, the current
industry relationship is comparable to that of master-servant where there is a
lack of togetherness and the information protectionism is widespread over
the industry (Malik, 2006). As a consequence, the current state of the supply
chain in the construction industry is fragmented and underpinned by poor
communication, adverse relationships and lack of trust and commitment
(Hong-Minh et al. 2001) and the relationship between parties has been
driven by the cost agenda (Wood and Ellis, 2005). Nonetheless, contractors
are still required to integrate the key business processes in the supply chain
from the end user as a result of high demands on logistical activities in IBS
construction (Hong-Minh et al. 2001; Venables et al. (2004) and Goodier and
Gibb, 2004). The management of the supply chain will solve the problem
related to complex interfacing between systems and ensure efficient
process sequences (Pan et al. 2007; Lu, 2007; Lu and Liska, 2008; Haas and
Fangerlund, 2002 and Hsieh, 1997).
Malik (2006) suggested that the supply chain needs to be constructed in a

manner that allows the constructors full control of the process with the
intention to improve efficiencies and competitiveness. It consists of planning
and management of all activities including procurement, conversion,
logistics and coordination between contractors, suppliers, intermediaries
97
and third party solution providers within and across the company structure
(Malik, 2006). BSRIA (1998) recommended that the supply chain effort
includes attention to detail management of all stages, enabling correct and
timely information to be available. It should extend beyond the simple
exchange of materials or services (commodity supplier) and instead act as a
strategic partner to integrate the design, distribution, marketing and
knowledge exchange (BSRIA, 1998).
The strategic alliance and partnering on the supply chain providers were the
strategies which have been adopted to address the fragmented supply
chain in the construction industry (Pan et al. 2006). With this approach, all
the key suppliers and contractors are employed by clients or developers for
a number of years, and/or for several projects (Kamar et al. 2009; National
Audit Office Report (2005); Pan et al. 2008; Pan et al. 2007 and Gibb, 1999).
Partnering with suppliers and manufacturers from the early stages was
significant to ensure efficient and timely delivery of components at site
(BSRIA, 1998; SCRI, 2003 and Sanderson, 2003). It enables early involvement
from contractors, specialist subcontractors and manufacturers to achieve
the agreed objective through a team effort (BSRIA, 1998).
Nonetheless, the competitive tendering system seems to be the barrier to

partnering where the contract price is the overriding feature and frequently
it leads to an inability to offer repeat business (Chen and Chen, 2007). As a
consequence, the developer tends to be independent and chooses the
lowest tender bid to achieve competitiveness. Therefore, certain
requirements must be met for partnering to be successful, including a
collaborative team culture, long-term quality focus, consistent objectives
and resource sharing (Chen and Chen, 2007). Partnering in IBS requires a
huge effort to reach an agreement in the first place (Gibb, 1999). It will only
work if all the project teams are subject to the same objective, goal and
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form of contract. It should also cover the mutually agreed objective,

openness and trust, agreed dispute procedures and effective feedback
mechanism (BSRIA, 1998). Partnering is also implemented in the form of a
joint venture arrangement with the more established overseas partners who
have acquired technology and expertise in IBS (Kamar et al. 2009). Through
this type of partnering, knowledge and technologies on IBS were transferred
and shared.
6.1.7 Information Technology (IT)
Eichert and Kazi (2007) and Hervas and Ruiz (2007) have pointed out that IT is
a vital and reliable support tool to improve tendering, planning, monitoring,
distribution, logistics and cost comparison processes by establishing
integration, accurate data and effective dealing with project documents in
IBS projects. Given an increase of coordination involved in IBS project,
effective communication and information flow is necessary. It is a reliable
support tool to improve communication between the project team and
suppliers and as a medium for quality control of the overall IBS project
deliveries (Oostra and Jonson, 2007). The aim of the IT implementation is to
enable more joined-up information management and to help people to be
able to share it at an earlier stage (Oostra and Jonson, 2007).
IT tools and applications include the use of a virtual environment to create

prototype or model solutions, Computer Aided Design (CAD), Computer
Aided Manufacturing (CAM), material database, decision support software
and management system that will significantly aid communication and
coordination between parties (BSRIA, 1998; Gibb, 1999 and CIDB, 2003).
Mass customisation is one of the added values of IBS to increase product
variety (Manubuild, 2007). The mass customisation is made possible by the
modular platform design and the computer-controlled logistics of the
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assembly process, the IT link between computer-aided design (CAD) data

and computer-aided manufacturing (CAM) command, the design platform,
in conjunction with complex production, process management supported
by production planning and scheduling and capturing data by a factory
data recorder (CIB, 2010). Nonetheless, one major drawback to IT
implementation is the common perception of higher initial cost to implement
the technology and also the capability issues. Abderrahim et al. (2008) has
pointed out that the development and implementation of the system
requires highly skilled personnel and high investment which will strongly
discourage the adopters. Alshawi (2007) highlighted the importance of an
organisation’s soft issues, and the role they play in influencing the outcome
of IT investment.
Design integration and realisation is also critical in IBS, as well as in the

conventional construction. Tizani and Smith (2003) proposed incremental
virtual prototyping as an IT tool for civil engineering project models. The
research claimed that an obvious improvement for IT in the construction
industry is to attempt to integrate the design processes of as many aspects
as possible in order to allow for the simultaneous consideration of their
design constraints.
Virtual prototyping is an effective design technique that consists of designing

and developing a virtual model which represents a real-life scenario and
allows testing designs for compliance and performance through a series of
virtual tests. A virtual prototype of the building system can thus be formed
from major components and its performance tested both globally and
locally for each of the specialist aspects generated from the prototype. The
virtual prototype should be able to simulate its own behaviour, provide an
indication of its performance against set criteria and check its compliance
with set constraints at the appropriate level. The implementation of such a
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multi-disciplinary model representing a complete prototype requires an

incremental approach, where all parties involved in design, construction
and life cycle management of the facility can input requirements to and
output solutions from a single virtual model in a sequential or concurrent
fashion.
6.1.8 Continuous Improvement
Continuous improvement is a management process whereby delivery

processes are constantly evaluated and improved in the light of efficiency,
effectiveness and flexibility. As opposed to traditional construction, the
repetition process each time a project is implemented in IBS allows
continuous improvement in the technique and processes to be
implemented for better project performance (Treadway, 2006; Sanderson,
2003 and Pasquire and Connolly, 2002).
Treadway (2006) highlighted that continuous learning can improve the

company’s understanding on the processes and the key principle behind it
as the knowledge will multiply as experience mounts up. Pan et al. (2008)
advised adopters to stimulate innovation related to process improvement
and to continuously review the latest technologies available in market.
Blissmas (2007) highlighted the importance of capturing project experiences

and being prepared to disseminate this information in a structured manner
as it also allows improvement in the process time cycle. Benchmarking and
technology transfer initiatives can be a tool for continuous learning by
encouraging learning from own projects and from the industry’s best
practices in IBS (Pan et al. 2008 and Pan et al. 2005).
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6.1.9 Skills
Migration from conventional construction to IBS requires new skills and

knowledge such as integration, planning, and monitoring and managing the
supply chain (Hamid et al. 2008). This argument, in turn, leads to the
recommendation that skilled and experienced workforces are critical to IBS.
It is imperative that contractors employ appropriately skilled operators at
site, or enable a range of tasks to be undertaken by fewer but multi-skilled
operators (Kamar et al. 2008). Warszawski (1999) highlighted that IBS requires
an experienced workforce capable of high-level planning, organising and
controlling functions with respect to production, coordination and
distribution of components. Large production output and standardisation of
precast elements allow a high degree of labour specialisation and design
and installation of components should be done by expert, well-trained and
fully competent personnel (Nawi et al. 2006; Ogden, 2005; NHBC, 2006;
Ahmad, 2005; Badir et al. 2002).
Furthermore, management personnel must be capable of managing and

controlling offsite and onsite activities (Gibb, 1999). It is worth noting that the
reduction of skilled labour in IBS is offset by the need to develop new skills
and competencies among the IBS workforce. Mole (2001) argued that
experienced and skilled human capital supported by quality training at all
levels is essential to success in IBS as compared to traditional forms of
construction. BURA (2005) underlined that failure to have a competent
workforce will undermine the benefits and create more problems at site.
6.1.10 Training and Education
Training can be considered as an integral part of an organisation’s learning

and change. Training often embraces adult learning and development,
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experiential learning and cognitive abilities, and can also considered as a

management tool and instrument for addressing skill deficiencies
(Manubuild, 2007). The primary rationale for training is to adapt employees’
qualifications to job requirements (Manubuild, 2007). Although IBS is used to
address skill shortage problems in the construction industry, evidence
suggests that a skilled workforce in specific skill areas such as integration,
coordination and component installation becomes more important than in
conventional methods due to different undertaken roles and project
methods (Pan et al. 2008; Mole, 2001 and Goodier and Gibb, 2007).
To address this problem, the literatures highlighted the importance of an

education and training programme of trades, especially to people involved
in design, handling, positioning and erecting the finished product (BSRIA,
1998 and Thanoon, 2003). Goodier and Gibb (2007) suggested that for the
low level of industrialisation, the skill required was the same, but for the more
advanced and mechanised system in IBS, it requires more skills as compared
with the equivalent products constructed traditionally. Gibb (1999) argued
that labourers need to be retrained and re-skilled to fit IBS skill sets.
A broader and more comprehensive training programme must be taken on

board to cater to vast demand in these specialised skills (Clark, 2002; Pan et
al. 2005; Pan et al. 2008; Palmer et al. 2003 and Goodier and Gibb, 2004).
The training should include both the management team and site labour
(National Audit Office Report, 2005). BSRIA (1998) identified that it is
imperative that the team receives appropriate and thorough training in new
or unfamiliar methods in advance of site installation. The training equips the
workers with a clear understanding on issues related to implementation,
monitoring, handling and installation of building components (BSRIA, 1998).
In some cases, the installation team is trained by the manufacturing
company to familiarise them with IBS technologies (DTI, 2004). Information
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Technology (IT) can play an important part in a successful training

programme. According to Wall and Ahmed (2007), simulation games can
play a very effective role in the delivery of lifelong learning opportunities
aimed at the construction industry.
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CHAPTER 7: CASE STUDIES ON SUCCESSFUL IBS

CONTRACTORS IN MALAYSIA
7.1 Introduction
Contractors are the stakeholders dealing with project management and

solving issues in construction on a day-to-day basis. They are responsible for
the means and methods to be used in the construction execution of the
project, in accordance with the contract documents, and for the supplying
of all materials, labour, equipments (engineering vehicles and tools) and
services necessary for the construction of the project. In many cases, the
main contractors will delegate portions of the contract work to
subcontractors. As in a common rule, contractors will provide direct labour
for civil aspects of a construction project, such as placement of concrete
and carpentry with specialty areas, such as mechanical and electrical
construction furnished by specialty subcontractors.
There is a general consensus that contractors among the wide range of

industry stakeholders hold a very important position to ensure the success of
IBS application. The total number of IBS contractors in Malaysia is 894. 334 of
contractors are G7 contractors which represent the largest type of
contractors involved in IBS (Hamid et al. 2008). Contrary to popular belief
that IBS is client driven, the study by Abdul Aziz (2007) revealed that the
contractors play an important role in IBS adoption. This is supported by
Buildoffsite’s study compiled by Mann (2006). The study revealed that
contractors are the main driver for total adoption of offsite in the UK. In this
regard, effort towards total industry adoption to IBS from conventional
methods largely depends on readiness and maturity of contractors which
will coordinate processes involved in IBS life cycle. As a consequence,
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perspective and the role played by the contractors in IBS needs to be

scrutinised.
Despite acknowledging its benefits, contractors are still not rapidly

embracing IBS. For contractors, the construction industry is an established
industry with many deep-seated and culturally-embedded practices, so the
introduction of anything perceived as new or different faces barriers. IBS
Survey 2003 stated only 15 % of construction projects used IBS in Malaysia (IBS
Survey, 2003). IBS Mid Term Review in 2007 indicated that approximately only
10% of the complete projects used IBS in the year 2006 as compared to
forecasting IBS usage of 50 % in 2006 and 70% in year 2008 as projected in
the roadmap (Hamid et al 2008). While the IBS survey 2008 that had carried
out from June 2008 to December 2008. There measured four aspects
including (a) the awareness on the IBS system IBS (b) the actual usage of IBS
(c) the perception on the ease of IBS usage and (d) perception on the
usefulness of IBS. The t-test of the average percentage difference shows that
all the respondents consisting of class contractors (G7, G6, G5 and G4) have
strong agreement on the IBS actual use (problems faced in using IBS), the
awareness on IBS and the IBS actual use (promotion of IBS by the
government through CIDB) with 0.63%, 3.98% and 4.06% respectively. But
there are disagreement in perceived IBS usefulness, the perceived ease of
IBS usage and the actual use of IBS (the benefits of using IBS in construction)
vis-à-vis 12.74%, 10.06% and 6.54%. This shows that all the contractors are
facing the common problems in using IBS. However, they are highly aware of
the importance of IBS in the construction industry as well as the need to
overcome the problems in using IBS. They appreciate the role of CIDB to
promote IBS in the Malaysian construction industry. In contrast, there is doubt
on IBS actual use in the context of benefit, perceived ease of IBS use and
perceived IBS usefulness from the all the correspondents consisting of
contractors, where the t-test on items shows that G7 have strong agreement
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on the usage of IBS with their acceptance of the IBS system as compared to
other class of contractors (G6, G5, G4).
A survey in 2010 revealed that the most popular and widely used system by
the contractor is a formwork system (31%). It is in the form of aluminium,
metal and plastic formwork which are proved to be flexible and cost
effective. The precast and steel frame system also gained substantial
popularity at 26 % and 23 % respectively. Only 7% of the respondents had
ever used timber frame systems which indicate lack of knowledge on the
system.
Figure 3 shows the most important drivers for contractors to use IBS were
achieving high quality (13.5%), gaining speed of construction (13%),
minimising on site duration (10.4%), client’s demand (8.7%), and addressing
skill shortage (7.4%). Factors such as energy saving (1.3%), building’s
regulation (2.2%), and dealing with adverse weather condition (3%) appear
to have been overlooked by the contractors.
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Figure 3: Driver to IBS as perceived by Malaysian G7 contractor
While Figure 4 shows the most significant barriers restricting the use of IBS
among contractors were considered to be higher construction cost (14.3%),
high capital investment (11.5%), difficulties in achieving economies of scale
(9.3%), inability to freeze design early and complex interfacing (7.7%), and
lack of knowledge in IBS (7.7%). Other factors related to level of Information
Technology (IT) (1.1%), building regulation (1.7%) and code and standard
(1.7%) however, were not considered relevant by the contractors. The survey
reveals that the main attribute to the lack of contractors embracing IBS are
rarely purely technical in origin. They are more related to the organisational
strategy and soft issues which underpin the capability of organisation to
successfully implement IBS. This led to the identification that IBS is best
handled as a holistic process and it requires a total synchronisation on
construction, manufacturing and design processes.
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Figure 4: Barriers to IBS as perceived by Malaysian G7 contractor
There were a number of cases where the use of IBS had not led to total
satisfaction and may have actually been less productive than conventional
methods. IBS has been associated in the past with low-quality buildings,
leakages, abandoned projects and other such drawbacks delivered by
contractors (CIDB, 2006). There were also cases where building projects were
awarded and constructed by the contractor using IBS but contributed to the
project delays and bad qualities (CIDB, 2010 and Kamar et al. 2009).
Contractors also produce poor workmanship, particularly in applying
waterproofing materials and column and beam alignment (CIDB, 2010).
Contractors also suffered from poor productivity and financial performance
(CIDB, 2010). This is due to the fact that contractors have to pay the supplier
upfront to purchase components. It is a high capital investment where 30%
of the value of the project is to be paid upfront (CIDB, 2010). A delay in the
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payment means a delay in the components’ delivery, which eventually

affects the productivity of the projects.
It is worth noting that in 2008, the Malaysian government made the use of IBS
compulsory in all newly constructed public building. Since then, the
importance of capable contractors to construct public building has
increased. Nonetheless, there are still limited numbers of contractors in
Malaysia specialising in IBS that can undertake IBS jobs (Haron et al. 2005). In
order to be a specialist in IBS, contractors need to furnish themselves with the
necessary knowledge in implementing IBS. Their organisations also require
some changes with regards to their process, practices, procedure and
administration to embrace IBS (Abdul Aziz, 2007). As discussed previously, the
main barriers for total IBS adoption are rarely purely technical in origin. They
are more often related to the organisation’s soft issues and strategy which
underpin the capability of the organisation to successfully implement IBS.
Nonetheless, there is a lack of systematic and rigorous study on the strategic
aspect and a lack of identification of the factors that contribute to the
success of IBS. A wider understanding of the characteristics and what is
involved in IBS is needed to support the transformation of contractors to IBS.
The following depicted case studies of successful IBS contractors in Malaysia.
7.2 Case 1
Development of a housing scheme in town centres and surrounding suburbs

had become increasingly critical in the 1980s due to the large number of
middle income groups, urbanisation and as a result of stable economic
conditions. To solve the problem, the government has established a joint
venture agreement with a German construction firm (Praton Haus) to
produce pre-fabricated houses on plots of land provided by the
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government. As a result, Company A was formed on 18th March 1981 to

undertake this task under the management and purview of the Selangor
Economic Development Corporation (SEDC).
The company headquarters is located in Shah Alam, the capital city of

Selangor. It is situated about 40 kilometres from downtown Kuala Lumpur.
Led by its managing director, the company has five primary divisions which
are finance and administration, business development, contract,
construction, and safety and environment. The company is governed by the
chairman and an independent board of directors. The management is
supported by the advisory council to advise the company in terms of
strategic direction on behalf of the SEDC. The company growth strategy has
been achieved through the construction and development of a housing
and township development scheme for the SEDC. Through this process, the
company has grown into one of the most successful construction companies
having an annual turnover approaching RM 35 million (£7 million) in 2009.
They currently employ 40 permanent staff from technical and managerial
backgrounds. The construction division is the largest with 23 personnel. The
company is a registered G7 contractor and a registered B04 IBS contractor
with the Construction Industry Development Board (CIDB). It also obtained
multiple qualifications and is registered under several specialisation trades in
Malaysia.
At the beginning of their inception in 1981, their business was primarily

involved in the construction of low- and medium-cost houses and
apartments and high-end bungalows in designated plots of land by the
government. All projects were handed to them by their parent company,
under the Design and Build (D&B) contract route, which allowed them to be
involved from the design stage until the completion. The company has
expanded their construction activities into the development of houses and
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commercial buildings in the new townships including Shah Alam, Klang, Kota
Damansara and Bandar Baru Bangi. Today, the company business model is
designed to offer a service spread throughout numerous fields and with the
highest qualifications in related areas including:
• Civil Engineering and Building Contractor

• Turnkey Contractor
• Manufacturer of Prefabricated Concrete Components for
Residential and Commercial Buildings
• Roof Tiles Distributor
• Industrialised Building System (IBS) Specialist
• Project Management Consultant
From 1981 until 1991, they built and operated a very modern prefabrication
yard at Shah Alam using Praton Haus’s belt conveyor and semi-automatic
precast production. The overall investment was worth in the region of RM
12.0 million which was considered a relatively huge upfront investment at
that time. The investment was made possible by the willingness of the
chairman and the boardroom to consider the use of advanced
prefabrication technology. The top management strongly believes the
technology would have an impact and influence the future in the
development of houses and the new township in Malaysia. They also
wanted to be to be in line with the government intention to promote IBS in
order to reduce dependency on the use of foreign labour from
neighbouring countries.
Their intervention to the IBS market at that time was relatively pioneering,
due to the fact that almost all construction in Malaysia uses conventional
methods. Although IBS was first introduced in the 1960s in Malaysia, the
adoption by the industry was never sustained. Failure of early closed
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fabricated systems had resulted in the industry avoiding change of their

construction method to IBS. Some of the foreign systems that were
introduced during the late 60s and 70s were also found to be unsuitable with
Malaysia’s climate and social practices. The clear wishes, leadership and
strong intentions of the management of the company and the SEDC to
adopt IBS has become a significant driving force for the company. This is
critical to ensure sustainability in business and continuity in technology
advancement.
Within the Praton Haus system, architects are employed to merge the
technology into the architectural requirements of the client. The core skills
required under the Design and Build scheme are in the areas of design, sub-
contract manufacture, construction and project management. The
company initiated designs which can accommodate different types of
building to ensure that the construction is flexible and the solution is cost-
effective. Construction of a Praton Haus building is particularly quick but,
since it uses a systems approach, it is also of a predictable, predetermined
standard. The system also yields lower defects in the finished building than
many competing products. Part of the reason for this is that less fabrication is
done on site and it is on site where defects are most likely to happen. These
are key, unique product strengths for Praton Haus. With a comprehensive
system in place, the operation runs almost on autopilot with clockwork
precision. Everything is systemised and everyone is aware of the system
requirements. The production team conducted trial runs of the production
and handling of components to prevent mistakes.
Erection began immediately when the in situ foundations had been placed.
The erection process had a very low tolerance, typically a couple of
millimetres, requiring precision in the on-site and off-site elements fabrication,
thorough shop drawing coordination, and accurate survey and set-out
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work. Due to the weight of the components, choosing the right crane of 30,
40, 50 or 100 tonnes to be used is critical to ensure smooth operation and
also to eliminate risks related to health and safety. Full compliance and
adherence to the system including the application and use of relevant forms
and procedures is mandatory.
Personnel are, however, encouraged to be creative and innovative but

within the system’s boundary. Up to 1991, the company had successfully
built and completed various types of pre-fabricated houses totaling 7,000
units. Depending on design, the amount that can be saved on a wall as
compared to a conventional system can range from between 10% - 30%
with an additional advantage in time reduction and less foundation cost. To
embrace a high level of technology in the Praton Haus system, the
company has looked carefully at its skills and training requirements. To speed
up their learning curve, Praton Haus has provided the local team with
expertise and training. The knowledge had been transferred to the local
workers through hands-on training, and on the job technology transfer
between both companies during the span of their joint venture agreement.
Despite succeeding in constructing a huge number of houses using the

Praton Haus technology, the company aborted the joint venture agreement
with Praton Haus in late 1991. As opposed to simpler forms of IBS, the use of
Praton Haus contributed to huge overheads in their operation cost. The
company struggled to deal with the operation of the factory which needs
high investment in terms of maintenance and factory equipment. The
change in the board of management also contributed to this decision. The
migration from advanced to more modest technology was also due to
unstable demand at that time and small market volume in Malaysia. The
investment in equipment, human resources and facilities can be justified
economically only when large production volume is observed. The use of
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Praton Haus technology ended in late 1991 after 10 years in operation and
the prefabrication yard ceased operation at the same time. The company
was now fully owned locally in 1991 with a paid up capital of RM 6.0 million
of the total RM 10.0 million authorised capital.
From 1991 to 1997, the company adopted a simpler IBS system developed
by Taisei Marubumi – a large panel is cast in a factory using the tilt-up
system, Hazama system and Ingeback system, which is a Swedish system
using large panels in a vertical battery mould and a tilt-up table mould. The
company has also diversified its business towards producing its own supplies.
On 31st March 1990, the company successfully set up a factory to
manufacture roof tiles in Salak Tinggi, Sepang – under the Estee Tiles
trademark – for the supply of their housing construction. In 1993, the
company established P & M Concrete Sdn Bhd, a joint venture with Mega
Pascal Bhd to produce ready-to-use concrete. The establishment of these
companies is important in closing the loop in the supply chain.
The company suffered but successfully overcame the Asian financial crisis in
1997 and 1998 when the demand of housing was in decline and work was
very limited. No workers were made redundant and the operation was at a
normal pace. This is perhaps due to their links with the government through
their parent company, the SEDC. After the economic crisis, the company
preference was shifted into matured and trusted solutions. The company
adopted the formwork system as the most economical and efficient type of
high-rise building construction. The initial investment cost for formwork is
much lower than the precast system, having taken the aspects required to
complete the shell structure of the buildings. The company also adopted
steel framing system for roof trusses and a blockwork system which is similar
to the LEGO concept. The blockwork is designed in modular coordination to
improve constructability. It can be applied as a load bearing wall by
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incorporating the columns and beams as an integral part of the wall for all
types of house.
By this time the company had successfully managed all types of IBS system
available depending on type, location and scale. Throughout the period,
they had acquired the pros and cons of each system which will is highly
importance for IBS implementation success. They shifted from a highly
innovative system to a modest, matured and flexible technology in the form
of formwork and block work systems. The concept of ‘appropriate
technology’ was adopted and the implementation of IBS is more viable to
the company as the cost does not depend much on economy of scale in
terms of production.
The management team at this time is mostly from an engineering or other

technical background. The managing director is an engineer who has
worked with the company since its inception in 1981. He has acquired vast
experience of various IBS methods, particularly of Praton Haus which he has
been involved with directly in the past. The survival of the company depends
on his leadership and decision making regarding the systems, operation,
procurement and human capital. His vast experience has allowed the
company to develop human capacity, adopt IT and improve their
processes. In the year 2000, the company upgraded its Estee Tiles factory in
Salak Tinggi to increase volumes to fulfill growing demand. The company
successfully achieved the ISO9001:2000 certification on 22nd July 2003. By the
end of 2005, the company had successfully built and completed 51,000
houses using IBS from 1981. It was a huge milestone for the company.
The company once again survived yet another economic downturn in 2008
and 2009. Again, the support from their parent company is massive to their
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survival. However, this does not prove that the company is recession proof.
Due to the restructuring activities, the strength of human capital was
reduced from 125 to only 40 permanent staff. Many of the construction
activities were sub-contracted to other companies and their factory is
managed by another subsidiary in the SEDC group. Like other main
contractors, the company subcontracts a substantial part of the work.
However, it has a comprehensive system to pre-qualify its subcontractors
and suppliers. Once they are pre-qualified, successful subcontractors will be
chosen based on price consideration, and it is normally the lowest that gets
selected.
After economic recovery, the appointment of the new SEDC’s chairman

brought a new dimension to the development of the company. Instead of
focusing on houses and township development, the SEDC shifted their
interest onto high end development projects in strategic locations. In this
regard, the company will take a larger responsibility in providing high-end
buildings and infrastructure development. Examples of ongoing and future
projects in the next five to ten years are the design and construction of PJ
Elevated City, PJ Central Garden City, Kelana Sport City, Selangor Science
Park 2 and PJ Health City. The developments have a Gross Development
Value of RM 5 billion.
The company takes care of its staff well. The fundamental success factor to
IBS success is to secure competent project managers, engineers and design
team. The company is managed and operated by an experienced and
dedicated management team who in total has years of experience in the
building and construction industry. Project team members stand to gain
higher benefits and incentives if they deliver the projects as planned. Staff
turnover is low and bright career development is offered to promising and
talented personnel. A newcomer will also undergo the routine introductory
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courses and be supplied with a job manual. After a while, the company felt
the age profile was wrong, particularly at managerial level, and that
younger, more specialist staff with new ideas and a can-do mentality were
recruited. Today, the company is still one of the most respected and
reputable IBS contractors and solution providers in Malaysia. They have won
several awards to acknowledge their contribution to pioneering IBS
technology in Malaysia. The observations on the critical success factors for
the company are as follows:
• It was observed that leadership and strong support from the top
management is the key for IBS success. Leadership was critical in
terms of investment planning and approval, selection of systems,
development of human capital and resource allocation. It is also
critical for ensuring business stability and sustainability.
• The management personnel of this company are mainly from an
engineering background with a high level of technical
experience. They are involved directly in IBS processes, solving
problems and are involved in the project’s decision making. This
understanding of technical difficulties and problems of adopting
IBS has ensured the business decisions were aligned with IBS.
• Leadership and commitment to IBS from the top management
enabled the company to implement various types of IBS, even
though there was no assurance as to whether the systems would
work successfully in their later projects. This allowed them to select
and implement the best systems available for their project.
• The establishment of the company was based on government
needs to construct prefabricated houses in Malaysia. This effort
was due to be in line with the encouragement policies to use IBS
and to get quality housing in a shorter time as compared to
conventional methods.
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• The company is part of a larger group of companies set up by the

government under a purview of SEDC. The holding company
(SEDC) is involved in various businesses including property
development.
• Business activities and planning in the company is mostly tailored
to SEDC’s requirements. The group company is able to determine
areas to be developed and the type of houses to be constructed.
The determined volume of work allows the company to use and
invest on the systems.
“Our company is a subsidiary of a state government agency,

which is a developer. A sustained demand of IBS is granted
by our parent company. Guaranteed demand is critical to
cover set-up costs for an IBS factory and to venture on
technology enhancement”
• The company was involved in a full circle of the IBS life cycle. They
engaged the project from the design, manufacturing and
construction phases. The close supply chain loop allowed the
company to maximise profits and to deliver output much faster
since they are independent from the supplier’s manipulation and
price hike.
• According to the management team, strategic investment is vital
in IBS. Investment and capital costs involved in setting up the
factory are the governing factor in total IBS costs as compared to
conventional methods.
“Strategic investment is vital. Investment and capital costs

involved to set up the factory is the governing factor in total
IBS cost as compared to conventional means. Sustainability
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in IBS business is also absolutely vital; we need to find long-

term demand for IBS so we can build up capacity and
channel the resources. IBS should be planned as a long-term
strategy.”
• The company has a comprehensive system to pre-qualify its

subcontractors and suppliers which determines only experienced
and knowledgeable suppliers and sub-contractors to be selected.
A feasibility study to determine appropriate suppliers and sub-
contractors was conducted first.
• All projects were procured under the Design and Build (D&B)
route. The D&B contract allowed the company to effectively
select and implement the best technologies for their project and
facilitated integration of design.
“IBS is involved in the Design and Build (D&B) direct

negotiation type of construction contract. From my view, we
must start from the beginning in the design stage. More IBS
benefits can be achieved if we can involve it at the onset of
the project. This includes better planning and integration of
design”
• According to the project team, planning on utilising machineries is

an important task at sites. It has been observed during the site
visits that lifting of components is a critical and complex process in
the installation process. It requires competent personnel, closes
monitoring of the activities and advanced planning. The erection
process had a very low tolerance, typically a couple of
millimetres, requiring precision in the on-site and off-site elements
fabrication, thorough shop drawing coordination, and accurate
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survey and set-out work. Pre-planning the work also resulted in

cost benefits from the time saved on site.
“Planning on machinery is important. Choosing the right

crane of 30, 40, 50 or 100 to be used at site is vital. Lifting is a
critical job in IBS. It requires competent personnel, close
monitoring and planning”
• Coordination of activities between factory and site was significant

to the project management. In this case, the factory was flexible
in following the speed and rhythm of the installation process.
“Balance between factory and site is critical. The factory must

be flexible to follow the construction process. Flexibility and
balance between these two is important. When works at site
are stopped, casting at factory shall also stop. This is to
prevent double handling and problems with storage”
• Unlike the more traditional construction, the decision on IBS

cannot be left to a late stage in the process, such as relying on
the tradesmen to resolve design details on site or allowing late
design changes. IBS requires planning, coordination and greater
communication between the parties to solve problems as early as
possible.
“We need to study and initiate a proper site, labour and

resource planning much better than conventional
construction. The use of machinery, especially a tower crane,
is critical to IBS panel installation. Failure to plan properly
means the works will be delayed and even stopped. That also
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affects our factory production, so that is very critical.

Furthermore, proper study and planning are important to
chart the transportation route for transporting panels to the
site to avoid any delays”
• The production of components from mould to truck had to be

determined by the sequences of the installation process at site.
“Production of components from mould to truck is determined

by the sequences of the installation process at site. This
affects the process of loading and unloading of components
at factory. The first panel to be installed at site is the last panel
to be loaded on the truck. It is a painful job unless we initiate
a proper planning and process coordination. The use of IT and
computer simulation perhaps can help the coordination
process by the pressing of a button”
• Managing the supply chain is important to the construction team.

Suppliers with a long-term relationship will give better price and
guarantee supplies. The company highlighted that collaborative
initiatives are critical as there is no single company or supplier that
can produce all types of IBS component. Working together with all
stakeholders within the project team gives greater efficiency and
leads to more economical buildings.
• Though the company had not formally set any partnering
initiatives at the company level, it did maintain long-term strategic
relationships with a number of specialists through partnering and
joint ventures at the project level.
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“Managing the supply chain is important. Suppliers with a

long-term relationship will give better quoting in pricing and
guarantee the supplies. However, we did not practised any
formalise partnering agreement with them”
• According to the project team, at an early stage of the project,

the construction team, designers and manufacturers and
architects sat together and discussed the details of the project. It
was claimed that input from the project team members is critical.
“Design should be incorporated with production and

construction issues. This is to ensure smooth project
sequences and error-free construction. Mistakes made at the
drawing stage may not have been discovered until the item
was installed on site. The consequences of mistakes are more
significant”
• A design oversight in the components, nonetheless failed to

recognise the need for access to electrical conduits running
through internal hollow space. As a result, significant production
delays were encountered while rectifying the design fault. This has
proven that integration of design from the beginning is critical to
IBS success.
• The company also initiates designs which can accommodate
different types of building to ensure that the construction is flexible
and that the solution is cost-effective.
“Design management is important. We try to design IBS which

accommodates different types of building to ensure a flexible
and cost-effective solution”
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• The design team has to think ahead about transportation

coordination during the design phase in order to avoid any
problems during transportation of panels.
“We think about transportation issues during the design phase

to avoid problems during the panel transportation.
Components with horizontal joints need proper consideration
of how it will be transported to the site. We have to make sure
it is in good condition during transportation. The cost of
repairing is high and will affect overall productivity of the
project and also the time”
• The company claimed that continuous improvements have been

adopted in project management. It encouraged efficient
processes, particularly during panel installation. In this case, the
utilisation of IBS allows the company to optimise and shorten the
construction learning curve since the processes involved in the IBS
method were mainly repetitive.
“It seems that those values from the manufacturing sector are
important to be developed and embraced. I think, venturing
into IBS, we need to innovate and continue learning to be a
success”
• Continuous improvement is mainly on an intuitive, voluntary basis

and uses local initiative rather than being clearly stated in the
company’s policy.
• Skills are the key to the success of IBS. The success is extremely
dependent on technical competence and design competence.
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It was observed that the company has developed a strong

engineering and project management skills base which enables it
to operate efficiently.
• The fundamental success to IBS is to secure competent project
managers, engineers and design team. The company is
managed and operated by an experienced and dedicated
management team who in total has spent years in the building
and construction industry.
“The company is managed and operated by an experienced

and dedicated management team who in total has years of
experience in the building and construction industry. Our
personnel have great attitudes and maintain the highest level
of workmanship. We ensure their work is of the highest quality
by developing an action plan that is previously agreed upon
by our client, and followed by on-site training by
management”
• Large production output and standardisation of components

allow a high degree of labour specialisation. Ironically, it was
observed that the workforce was equipped with multiple skills to
undertake various different tasks in IBS from production until the
installation at site.
• Continuous education and training activities were provided to
enhance the employees’ knowledge, skills and abilities both at
project and management level. It involved hands-on and on-the-
job labour training, particularly for the installation of components
and panel jointing systems.
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“Training would be beneficial to our staff as different

manufacturers adopt different systems, so we should be
knowledgeable and competent to handle the systems”
• The Praton House, as their international collaborators, had

provided the local team with the necessary expertise and training.
The knowledge had been transferred to the local workers through
hands-on training, and on-the-job technology transfer between
both companies during the span of their joint venture agreement.
• The use of Information Technology (IT) and computer simulation
helped the coordination processes. The company claimed that IT
would probably play a major role in the implementation of IBS in
the future. It is an enabling factor of all IBS processes.
• According to the project team, a wider use of IT includes tools for
a comprehensive cost database, work method statements, clients
and consultant profiles, subcontractors and suppliers pricing and
performance and reusable drawing components, and many
others should be implemented.
• They also highlighted that IT is a useful tool to assist in projects in
terms of communication and tracking of IBS components at
factory and at site. For example, some elements of IBS in a
formwork system can be computerised to increase flexibility and
versatility.
“Some elements of IBS in a formwork system can be

computerised to increase flexibility and versatility. The
flexibility of the system is more cost-effective and we do not
require huge volumes to be succeeded. ICT plays a very
critical part in this”
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• It was observed nonetheless that the company has yet to fully

utilise IT in logistics and project management. IT usage is limited to
design tools and simple office communication.
• The company believes that the selection and implementation of
correct technology in IBS projects is perhaps the key to IBS
success.
• Despite succeeding in constructing a huge number of houses
using “conveyor belt mass production” of Praton Haus
technology, it was reported that the company had moved from
advanced technology (precast technology with automation and
robotics) to more modest IBS solutions due to unstable demand
and small market volume in Malaysia.
“Simplicity of production dictates the type of technologies we

used. Using appropriate technology is critical to IBS due to a
huge investment to set up an IBS factory. The decision making
on IBS needs to consider viability issues and future forecasting
demand of our components”
• The formwork system is the most economical and efficient type of

high-rise building construction. The initial investment cost for
formworks and moulds are much less than a precast system,
having taken into consideration aspects required to complete the
shell structure of the buildings.
“Selection of appropriate technology is important. Currently,

the formwork system is preferred by most IBS practitioners due
to its flexibility and low set-up cost compared to a precast
system”
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7.3 Case 2
Company B was incorporated in August 2001 and made its first modest
business forays in the trading of fertilizer and supplying products to the
government and private organisations. From 2006 until today, the company
has risen to bigger challenges with a diversified business into roads, oil and
gas, power, and technology, as well as engineering and construction
activities. The company headquarters are based in Kuala Lumpur and it has
a workforce of 80 personnel with an annual turnover of RM 10 million. The
company’s authorised capital is RM 10 million, of which RM 6.0 million is fully
paid up.
The idea of adopting the IBS method and developing the capacity and
capability on it was first mooted by the chairman of the company based on
the necessity to win government tenders to construct public buildings and
houses (The chairman was once a high-ranking officer in one of the
government ministries until 2001). However, they quickly realised that one of
the biggest challenges of the company to embark on IBS was its human
capital. It needed people with skill sets that suited the IBS method and its
processes. In 2006, the company initiated a quantum leap to enhance the
level and content of its human resource pool by bringing in a selected
group of qualified and experienced personnel. They recruited an expert in
IBS business from a wide pool of human resources and from their
competitors. After having these selected people on board, the company
redefined its business vision, objectives and strategies, enlarging its scope
and depth tremendously. Clearly, their human resource strength is vital to
embrace construction as their core business. In this restructuring process,
they have set up Global Prefab System Sdn Bhd. to manufacture IBS parts.
The company’s business philosophy is designed around providing a quality
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service that will meet the customers’ business objectives, underpinned by

the trademark of the company’s teamwork culture. The new policies of the
company are:
• Commitment to continuous improvement

• Quality management systems which underpin all company activities
• Commitment to ISO 9001 for design and manufacture
• Health and safety of all personnel and processes being a number
one priority that is never compromised
• Training, including behaviour-based training, of all employees
• CAD-CAM manufacturing line with the most advanced technology
Since then, the company has embarked on the construction of government

building projects using IBS and has built and operated prefabrication yards
located at Pulau Meranti, Cyberjaya and in Segamat, Johor. The company
adopted a modest system by Taisei Marubumi, a system whereby large
panels are cast in factory using a tilt-up system. Their factory uses an open
and liner system. They also have the capability to set up a mobile factory at
site. The majority of construction takes place on the factory floor, moving
much of the labour off-site and drastically cutting down vehicle movement
as deliveries can be scheduled to arrive on base coinciding with immediate
requirements by using ‘just-in-time’ logistics. Just-in-time deliveries reduce or
even eliminate the need for on-site storage of products and materials. Not
only does this improves site logistics but also reduces the risk of damage to
products stored on site. The company is committed in advanced
manufacturing assembly line philosophy and continuous improvement. That
ethos has delivered significant cost improvements from a combination of
improved practices and better use of processes by adopting lean
manufacturing techniques.
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Most of the components are prefabricated in the contractor’s yard and

transported to the sites where they are installed. The cost of prefabrication
accounts for 50% of the construction costs. They have a range of machines
including cutters, benders, rollers, shearers, and welding machines and
therefore easily fabricate the components. However, the processes are not
automated, meaning that people still have to control and operate the
machines and load them. The components are moved from one machine
to another. The concrete frames are heavy, hence the need to use cranes
to handle them most of the time, although men are also used to handle the
lighter sections. They have low-bed trucks for transporting the components
to sites and a crane for lifting purposes among other major plants. There is no
use of robots at all. About 30% of the components manufactured are
standard. The rest are made on orders made by customers.
The company would like to describe itself as a one-stop centre for IBS,
providing a wide range of products and services, though not necessarily
end-to-end kinds of service. Utilising its in-house resources, including over 50
tradesmen who cover the full range of construction skills, it is capable of
handling single projects up to the value of RM 50 million. In 2010 the
company expanded its operations and now has offices in the state of Johor
and Sarawak. An example of its current business includes a joint
development for the new Aminuddin Baki academy project with the Ministry
of Education in Kuching district, Sarawak. The academy building is a very
modern high institution in the east coast of Malaysia. The new factory will be
built and operated at the site and this project will be constructed through a
joint venture agreement with a local company in the state of Sarawak. The
company has worked closely with their joint venture partner and with the
client, the Ministry of Education, to develop a long-term relationship that has
resulted in significant supply chain improvements when it comes to
manufacture and construction.
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Their other project is a construction project to deliver a five-storey building

which will be the headquarters for the Ministry of Agriculture in Putrajaya. The
design of the building is an odd shape and requires many curved
components to be fabricated. This provides a challenge to the company to
balance between the need to accommodate this type of design and to get
effective usage of the mould. A key part of the construction will be the
inclusion of offsite assembled panel systems to the external building facades,
which will reduce waste and enhance safety, quality and the speed of
erection. Sixty-five per cent of the services are complete at factory. The
ductwork, cabling and pipework are also nearly finished at factory.
Nonetheless, the company faced difficulties in transforming the
conventional design to IBS ones. The projects discussed above were
tendered via a conventional route and was designed based on a
conventional method. However, during the tender stage the clients wanted
it to be constructed using IBS. The conventional design did not consider
modularity and manufacturability. IBS is best implemented if designers
consider IBS elements at the beginning of the design phase and contractors
can be involved in the design stage, rather than producing an alternative
design. Therefore, the company is always in favour of the Design and Build
(D&B) contract route where they can be involved from the beginning of the
construction process.
Due to the lack of IBS knowledge among architects and clients, they often
require the design to be changed to suit their needs at any time during the
project. This is not possible in IBS construction. The company highlighted the
importance of applying the design freeze principle to architects and clients.
The design freeze is implemented after a certain period, before the
prefabrication and installation take place. The key strategy was in
processing the design early and involving the suppliers early. The technical
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team nonetheless was fully aware that minor changes of design are
sometimes unavoidable, so the design freeze was only adopted for the
super structure design.
The company recognises the importance of its people and strives to provide
them with the necessary tools to carry out their roles effectively. Emphasis
was put on the delivery of effective training prior to construction
commencing to ensure the successful transfer of knowledge and health and
safety best practice from the factory floor to the construction site. A
standardised Performance Management System is adopted throughout its
group company to review and improve the performance of each
employee, which adds to their ability to operate and monitor systems of
control effectively. This system is supported by a comprehensive employee
database that serves as a guide for planning the manpower needs of the
group. In addition, the company through its group has implemented a
Balanced Scorecard to measure and evaluate the performance of
management. Annual increments, bonuses and other incentives are
provided to employees on the basis of their performance, subject to their
financial performance and ability.
The company is also committed to continuously developing strategies to

attract and retain a high quality of staff and encourage continual
professional training and development through the fostering of a supportive
culture and lifelong learning. It was claimed that the yearly staff turnover is
relatively low and bright career development is offered to promising and
talented personnel. The company saves 50% of what the cost of labour
would have been by prefabricating the components. The company spends
about 0.1% of its annual turnover on Research and Development. There is no
experimentation coupled with production, as it is regarded as an
unnecessary cost.
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IT is an important and reliable support tool for the company. The company
has fully utilised IT as an important support tool for design. IBS requires
precision and the design must be properly planned to avoid mistakes. Thus
this issue can be solved by having design visualisation. It can be better
viewed using 3D modeling rather than 2D. In 2010 they acquired better
software for information integration management such as Building
Information Modeling (BIM) to track the panel and visualise the end
products, and to support other existing IT tools for design including AutoCAD
and SteadPro. The observations on the critical success factors for the
company are as follows:
• The idea of using IBS was mooted by the chairman of the
company based on the necessity to win government building
contracts which need to be constructed using the IBS method.
• The chairman’s commitment and his vision to IBS is important to
drive the company forward, particularly in terms of investment
planning and approval, human capital, corporate strategy and
resources allocation.
“I can say that our chairman support is very important; on a

scale of 1 to 10, it is 10 out of 10. Top management will realise
the vision to embark IBS and will allocate resources and also
investment to move forward. It is not easy to get a forward-
thinking businessman who would invest much capital into the
development of capacity in IBS”
• Strong leadership is important to ensure long-term sustainability in

business and to make sure the company does not change its
practices back to the conventional.
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“Business is about profit and what benefits we would have.

Our management thinks that IBS can give some advantages
to us. I agree that a strong understanding and vision on IBS
from the top decision maker is vital to drive our company
forward”
• According to the company, IBS requires new skills, procedure,

business approach, investment planning and careful financial
planning. To implement IBS construction, the company has built
and operated the fabrication yard and has developed strong
capability in IBS design. They claimed that the company has
moved from its role as a pure contractor to a total solution
provider for clients in using IBS. The company is involved in the
design and production of shop drawings, construction and
consultancy on planning and project management.
“In Malaysia, many companies focus on construction only but

IBS actually involves all design, manufacturing and
construction. The design part is the most important and takes
time, effort and most of our resources. For us, design,
manufacturing and construction are the most important things
and should be together. In our project, we will design our
buildings, we produce the components and we do the
installation”
“We take the lead in pre-planning, liaisons with the designer

in terms of finalisation of dimensions and interfacing work.
Actually, we have moved from our role as contractor to be
more like a total solution provider in IBS” – Project Engineer
134
“Our business model is to offer a wide variety of services. We

welcome partnership or JV agreement with conventional
contractors who do not have the capability to produce IBS
but have to do it since it was mandated by the government. I
view it as a win-win situation where we can deliver our
expertise in design and actually produce IBS. Only recently,
we initiated a JV agreement with a contractor in East
Malaysia. The contractor had won several tenders to
implement an IBS project but they do not acquire IBS
knowledge until we come and approach them”
• The volume of work was important for the company as IBS

construction requires repetitive and continuous projects to be
profitable. To address this issue, the company has penetrated
public projects as their main target market. The huge volume and
repetitive design in public buildings would literally pay off their
earlier investment to set up prefabrication facilities.
“Obtaining repeat business and better client satisfaction

through quality control is an ethos to our company
particularly on the system and production. Volume is
important to IBS in order for it to take off. In business, we need
repetitive and continuous projects to survive”
• The company faced difficulties in the past to transform

conventional design to IBS.
“The company had planned to commence preliminary

design soon after the issuance of the Letter of Award,
however change by the local authorities was given after the
135
letter has been awarded. As a result of the changes from

conventional to IBS, we have to make architectural redesign
of the entire building, redesign and reconfigure the transfer
beam, redesign M&E room, redesign piling works to suit
revised layout plan and changes to M&E works such as
lighting layouts, sanitary and plumbing”
• They were more favourable to Design and Build (D&B) and the
direct negotiation contract route as the design optimisation and
integration can be implemented. It was preferable to this
company to negotiate and award the contract to a builder early
as this allows better coordination and earlier commencement of
off-site works. If the company was only involved during the
implementation stage, they could only use IBS without any
opportunity to grasp the benefit of it based on design
optimisation.
“In a conventional contract, contractors have no say at the

beginning. IBS is best implemented if consultants consider IBS
elements at the beginning of the design phase and
contractors can be involved in the design stage rather than
produce an alternative design”
“IBS is more favourable to the Design and Build (D&B) direct

negotiation type of construction contract. We must start from
the beginning. More IBS benefits can be achieved if we can
be involved at the onset of the project. If we are only involved
during implementation, we can just adopt IBS without any
opportunity to grasp the benefits based on design
management and optimisation”
136
• IBS construction requires proper coordination to reduced trade

conflict and allows different trades to be present at any time
without competing for common workspaces. The conventional
approach would have required a large infrastructure of platforms
and scaffolding to be set up.
“Coordination between processes is essential to IBS. To have

an ability to coordinate, players must have a certain degree
of knowledge in design, manufacturing and installation”
• According to the project team, the company controlled the

balance between manufacturing and casting with actual
activities on site. They had closely monitored these two works to
establish a good synchronisation of activities. As observed and
highlighted by the construction team during the case study
interviews, the company planned on specific details and
sequences of the project from production to installation.
“Design, manufacturing and construction must not be

separate. This is essential to IBS adopters. We must have
control of the manufacturing rhythm and balance between
casting and actual activity on site. We must closely monitor
these two to establish a good synchronization of activities”
“Design, factory and site must be integrated and closely

monitored. We must have control of it. If we depend on
manufacture to coordinate, it will affect our overall
performance in logistics and installation. Many IBS projects
fail due to isolation of work between design, manufacturing
137
and construction. They only purchase components from

manufacturers to be installed in their projects. Designer and
installer do not have any knowledge or comprehensive
understanding of IBS at all. It is important to have knowledge
to integrate design, manufacture and construction”
• It was highlighted that IBS requires meticulous planning and

detailed control of the processes. The technical team needs to
foresee issues in advance in terms of site management and
logistics. It was observed during the site visit that the installation of
panels was based on sequence; panel markings, erections,
concreting works and Mechanical and Electrical (M&E) works. All
works were done by a team of installers with proper coordination
by initiating advance planning at the onset of the project.
“The most important aspect of IBS implementation is proper

planning and process coordination. Project planning needs to
be initiated early and in advance. We must foresee issues in
advance in terms of site management and logistics”
“We practised pre-planning and forward thinking one step

ahead. We advised the clients to minimise waste and the best
way to implement IBS”
“We initiate the process we call erecting floor cycle.

Installation is based on sequence, panel marking, erection,
concreting and M&E. All work is done by one team, all in
proper synchronisation by initiating advance planning at the
onset of the project”
138
• It was also claimed that the company had established a good

working condition with suppliers of windows, doors and other
building elements which were not produced in house. Although
the company would not interfere with the supplier’s aspiration
and creativity, the company would still give them advice in terms
of constructability and modularity.
“We work very closely with suppliers to ensure minimum

material stocks are held in the factory to support the
production without shortages and stock out. We certainly
work with certain suppliers until another supplier comes out
with a better solution to the company”
• Whenever possible, the construction team tries to implement Just-

in-Time delivery and installation.
• Communication between construction and factory and with
external suppliers is therefore vital to the construction team.
• The key strategy to achieve integration is to be involved in a
complete project life cycle starting from design, manufacturing
and construction. In this chain of processes, design realisation and
optimisation is the most critical and requires time, effort and most
of the company’s resources. By controlling the design, panels are
incorporated with the services and the architect’s features. The
M&E services have to be installed into the precast elements in
factory as the hacking process of precast elements on site is not
cost-effective and should be prevented. The design integration
may allow the technical team to identify potential problems
related to manufacturing and installation in advance and to solve
them earlier too.
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“Everything must be decided earlier. Power points, for

example, we cannot decide or change during construction
when panels have been casted. So it is highly important to
coordinate at some point”
“IBS design depends heavily on vertical loading, any

optimization and benefit depends on designing IBS to
accommodate vertical loading. Conventional design
normally does not consider this as important. Therefore, as
much as I can say, the benefit of IBS can only be materialised
by proper design management. You must take action earlier
on in IBS. You must think in advance and must incorporate
M&E services input in design and manufacturing”
• It was observed that the company had placed serious emphasis

on understanding and improving their manufacturing process to
reduce defects and services coordination by improving design
management. It was observed that the design team had used
modular coordination and standardisation to achieve their aims.
They called the concept ‘design for production’.
• It was highlighted by the head of the design team that the
company was not in favour to convert a conventional design to
IBS.
• The company believes that they would not be able to achieve
the benefit of IBS by just casting and installing the components
based on a conventional design.
• The company also highlighted the importance of applying the
design freeze principle to architects and clients. In this regard,
close attention should be put into sanitary and cold water
140
services, especially on pipes as these require big openings both

on slab and precast elements.
“Design freeze is the most important, we cannot

accommodate any changes during the fabrication and
installation. We introduce the design freeze concept to clients
only for super-structure. IBS always allows minor changes at
site. All the planning and coordination are done during the
construction period. For example, when we start piling the
foundations, simultaneously we plan the mould and start
casting at factory. This will reduce the overall construction
time”
• Lift service and type should also be confirmed much earlier as

problems can be incurred if the lift shaft is too narrow or too big.
The opening must be confirmed early before panel casting. It was
observed that there were specific sections in the company
looking into design, manufacturing and installation works. These
sections were interrelated and coordinated with each other and
any late corrections and changes during construction have been
addressed effectively.
• It was also stated that continuous improvement has been
adopted in projects, particularly on panel installation and design.
In this case, the utilisation of IBS allows the company to optimise
and shorten the construction learning curve since the processes
involved are repetitive.
• The repetitiveness and standardisation of IBS allows efficient
installation and potentially reduces some waste along the way.
The process will gradually improve when experience and
knowledge are accumulated. It was reported that the utilisation
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of standard components allowed the workers to learn and

improve from one project to another.
• It was observed that the company realised the need for skills and
experience to implement an IBS project. They adopted a very
radical way of improving their human capital. Rather than training
their staff and dealing with the learning curve, the company
employed the very best brains in the industry to work with them.
• The company believes in attracting, developing and retaining the
most talented people available to build a knowledgeable
workforce and to ensure that their business objectives are met.
“There are no such things as overnight successes in IBS.

Knowledge in IBS is essential. We need talented people in our
company. Our people are competent and very familiar with
the system”
• Annual increments, bonuses and other incentives are provided to

employees on the basis of their performance, subject to their
financial performance and ability. The company is also
committed to continuously developing strategies to attract and
retain high-quality staff and encourage continual professional
training and development through the fostering of a supportive
culture and lifelong learning. Attractive incentives and reward
systems are important to attract the best brains to fill these
positions.
• It is important to the company to make sure that the technical
people in the design office and at the factory are competent and
very familiar with the system. The workers practised on-the-job
training, action-based training (competency based), coaching
and self-directed learning. Possessing design knowledge,
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particularly on the aspect of optimisation and realisation, is

important to the technical team.
“We sent them on training. They will continuously use the

system until they are really good at it. It (training and
adjustment) requires time, effort and also money”
“The training is mostly hands-on. In the case of software

design training, we do the real construction drawings. We
don’t have time and we must fully utilise whatever we had at
maximum level. The senior staff also train their junior staff
during the project span” er
• The company also embarked on an apprentice programme. They

trained up to 10 fresh graduates a year in IBS skills. All apprentices
were paid during the programme and were guaranteed a job
upon completing it.
“At the current stage, we have 8 professional engineers who

work with us in design. Using IT, all the engineers do multi-
tasking work where they design and initiate the drawings.
Therefore, we certainly need very good and knowledgeable
workers. We also prefer to employ young, fresh graduates. We
actually conduct an apprenticeship programme for them. This
batch of relatively young engineers is more eager to learn
things, particularly if related to new software and IT solutions”
• It was claimed that IT was substantially implemented in all of the

projects. By using the tools, the team will have better views,
realisation and understanding of buildings constructed using IBS.
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The company uses design software such as AutoCAD, Esteem,

Staad Pro, Orion and Tekla to support the design process.
“IT is an important support tool to visualise drawing of IBS so

designers and implementers will have a better view and
understanding of buildings constructed using IBS”
“IT is an important support tool particularly for design. We use

software such as AutoCAD, Esteem, Staad Pro 2005, Orion and
Tekla”
• The company acquired better software for information integration

management such as Building Information Modeling (BIM) to track
the panels and visualise the end products. IT products available in
the market such as for Building Information Modeling (BIM) and nD
applications will also significantly boost the capability of the
company to use IBS in the future.
“IBS requires precision, particularly in installation, to avoid

mistakes and clashing with services. Thus this issue can be
solved by having design visualisation. It can be better viewed
using 3D modeling rather than 2D. Visualisation is the key. The
software must be customised to the company’s requirements”
• Technology selection is critical due to the supply-demand factor.

Appropriate strategies and technology have to be implemented
for a project to be profitable or to break even. It was observed
that the company used simple production technologies in the
form of an open factory and linear system.
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• It was stressed that the company was not a relatively big

contractor and component producer and therefore it
endeavoured to simplify its design processes and to achieve
maximum repeatable designs using the same moulds. At present,
the company uses a flexible mould design to optimise and fully
utilise resources.
“Our moulds are very flexible. One mould can be changed

up to 40 times to cater for different types of project. High initial
cost to purchase the mould can be covered by full utilisation
of moulds”
• The company claimed that a fully automated factory is not ideal

for now as it is not business viable. The company had decided to
focus on a cost-effective IBS solution. To use a higher level of IBS,
the adopters require a huge volume of works to break even on
the investment. Although it creates more value to construction, it
is literally a more expensive option due to the paid up capitals
and maintenance of machineries.
“Our company uses appropriate technology at the time, so

we use a linear system. We are not using a fully automated
factory at the moment because it is not business viable”
• The company also established a temporary production plant

onsite. The set-up of the temporary production plant was highly
successful, producing components to a very high standard, at a
rate exceeding demand, and to a lower cost than anticipated.
The case clearly demonstrated that IBS options were not restricted
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to fixed, long-term facilities, but rather were more about

understanding the concepts of production and manufacture.
“Our philosophy is "Simple is Best". We are using the

appropriate technology. It means good technology which is
commercially viable and low risk. We do not want to be
advanced in that sense. An automated system is costly
particularly on maintenance of machineries. We want to show
to the public that IBS can be cost-effective. With the budget
given we can successfully complete a project with a high
quality of end product”
7.4 Case 3
Founded in 1996, Company C comprises five divisions: construction,

property, precast system, manufacturing and interior design and their
annual turnover is in excess of RM 10 million. The company headquarters is in
Klang, about 70 km west of Kuala Lumpur, near Port Klang, and their
prefabrication yard is located at Rasa Industrial Park, 60 km north of Kuala
Lumpur. The company is governed by the chairman and independent
board of directors. From its inception in 1996, the company has been
reputed as a progressive infrastructure contractor in Malaysia. It produces
and installs precast elements for highways, fly-overs and bridges. There are
50 locally recruited workers and 30 of them are skilled while the rest are semi-
skilled and unskilled. That implies that the skilled workers comprise 60% of the
workforce.
In 2000, the company embarked on an expansion plan to transform it into a

holding company with diversified interests in construction, property,
development, manufacturing and machinery. By the end of 2001, the
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company had started expending the potential use of IBS method in

buildings. The idea came from the top management to start finding solutions
for housing that give clients the best possible value throughout the entire
construction process. This step is also to cater demand to use more IBS
components in the construction of public buildings. In the beginning, they
used the system developed by another manufacturer – the O-Stable –
through sub-licensing. However, they claimed to have found themselves on
the losing end while using this system. This was because the price of using the
system was totally controlled by the manufacturer.
With their wide knowledge of precast components in their past infrastructure

projects, the company has developed their owned proprietary precast
system. In 2006, the HC precast system was developed, tested and used in
projects. The HC precast system is a very innovative and revolutionary
method of developing and implementing precast a panel and building
system which provides easy standardisation, speedier construction, cost-
effectiveness, high quality finish and enhanced facade design.
The patent has been approved in US under US 6,829,870B2. The company

received its patent MY-124213-A in Malaysia in 2006. The system comprises of
a series of precast wall panels, which are generally designed as a load
bearing wall system, and interconnected with cast in-situ joints or columns.
The in-situ joints are reinforced in accordance with structural requirements
and they provide stability to the building, and at the same time eliminate the
possibility of ingress of water. These in-situ joints can also act as columns to
support heavily loaded beams and allow a hybrid system of conventional
and precast structural systems to be achieved. The thickness of the precast
wall panels can be varied, depending on the structural engineering
requirements, by changing the height of the side formwork. The size of the
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wall panels can be adjusted in terms of both height and width to satisfy
architectural requirements and the functional purpose of the building and
the wall panels are cast in the specially designed mould. The edge of the
precast wall panels is cast with a shear key joint. This shear key, coupled with
starter bars, provides very strong interlocking and strength after the columns
have been cast. Various column or joint shapes are formed as a result of the
intersection of the different wall panels. The columns are formed by basically
clamping the various wall panels with specially designed moulds. The
column moulds consist of a series of standard module design of moulds
interlocked and assembled to form various shapes of columns required.
The slab can be either carried out as an in-situ construction of precast planks
with concrete topping. The use of vertical moulds worked exceptionally well.
The space occupied by the vertical moulds, casting up to 56 panels per
day, was greatly reduced by implementing the vertical mould design.
Precast elements have four 60 metre moulds, and can make different length
plates by using adjustable end plates. Using these moulds, it has the
capacity to make up to 24 plates a day. Steel reinforcements were laid and
tensioned in the moulds before pouring the concrete. The connection
systems and fasteners, together with stencils for product identification, were
cast into the product allowing easy installation and product identification. To
speed up the production process, quick-curing high-strength concrete was
used.
By acquiring the system and establishing a prefabrication factory in March

2008, the company is moving from the contractor role and producer role to
become a total solution provider for clients to use IBS. The business is set up
to target the immediate and anticipated demand for high quality,
functional and innovative single-storey and double-storey bungalows. They
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established themselves as a one-stop centre for IBS providing a wide range

of products and services from design to installation with the capability of
providing turnkey services. The company provides the following engineering
services:
• Design and build.

• A system design service based on HC Precast System to the
developer or main contractor. Furnishes the client with a complete
system design and installation details and drawings.
• Renting the moulds.
The company is trying to get their system to be flexible to accommodate

different projects. The innovativeness of their system is in the use of an
aluminium mould system. This mould system is clean, safer and uses less
labourers as compared to conventional methods, yet is flexible enough to
cater for immediate changes of requirements and can be reused in many
projects. Based on their strong partnership with the service specialist and the
fact that the components and design are produced in house, 65% of service
works were installed at the factory. This includes cabling, ductwork and
pipework that are in a nearly finished state before arriving at site.
The designs for buildings and other civil engineering structures are carried
out by consultants and thus there is minimum reproduction of the projects in
total from one project to another. Most of the construction contracts are of
a traditional type where design is separate from the construction. The
company saves 40% of what would have been the cost by prefabricating
the components. However, they still spend about 30% of the gross project
costs on labour.
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The products are for use on the projects undertaken by the contractor and
the surplus for sale to other contractors. In addition, the contractor
fabricates the other building components within the yard, which are later
transported to the sites for installation. The value of prefabricated
components is about 60% of the company sales. However, work at the sites is
not automated. There are no robots used at all on their sites. However, 70%
of the components that they make are standard and reproducible. The
market is mainly comprised of government departments and most jobs are
won through the public tender process. Most of the work is financed by the
contractor and payment is made by the client upon certification. The
traditional form of contract is mostly used.
The company has used AutoCAD, Esteem 7, Stead Pro and Orion and the
company is still looking to adopt IBS software that suits their design
requirements and is localised to Malaysian standards. The control of
inventory was therefore an area that could be improved, perhaps with the
use of electronic tracking devices. It was claimed that the potential use of
Radio Frequency Identification (RFID) technology was investigated during
the start-up phase, and was abandoned due to the high cost.
During this change period, labour competency and skills are the critical
areas to be developed. The fundamental success factor to IBS is to secure
competent project managers and engineers to implement and coordinate
works at site and factory. Attractive incentive and reward systems are
important to attract the best brains to fill these positions. The trade
classifications in the company are very specific. Labourers are specialists in
certain tasks and they became masters of that trade. To address skills issues,
the company had conducted continuous training sessions at their factory to
improve the skills and to avoid any mistakes at site. Hands-on training is also
critical for IBS to obtain capability and reduce onsite problems. The site
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erection team was required to work on their Rasa production line to gain a
full understanding of the product. They then had to erect a trial building
under controlled conditions on a prototype construction site so they could
familiarise themselves with the actual construction process prior to arrival at
site.
The project management team gives specialist sub-contractors working on

the services utilities, interior finishes and an uninterrupted working area. The
idea is to minimise the interruptions and interdependence between trades,
where a lot of conflict and problems could happen. However, this approach
required an extensive and thorough planning of the project sequence and
partnership agreement between parties involved in the project.
The company construction activities have benefited from participation in
niche selected property development opportunities with joint venture
partners. In 2007, the company embarked on a partnership agreement
client to construct 2,000 units of bungalows in Shah Alam over a period of
three years. The construction will commence in three phases. This partnership
is important to secure sufficient demands and volume to justify their
investment in IBS. Ability to discuss options and aspects with clients
throughout the project is also highly beneficial. This allows the company to
plan in advance and optimise their production.
In 2008, they were awarded two contracts to construct public buildings

based on an open tender. Since almost all public projects in Malaysia were
designed in a conventional way at that time, they had to convert the design
from conventional to IBS. They had faced many difficulties in the design
phase to accommodate the change and to get approval from the
authorities thereafter. This is because the conventional design did not
consider the modularity and manufacturability of components. They believe
that the decision to use IBS must be initiated from the beginning.
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In March 2008, the company acquired a 21-acre piece of land in Rasa and
set up their manufacturing facility. Phase 1 of the complex was completed
within four months and production of the precast concrete components
commenced in September 2008. The remaining phases were completed in
early 2009. The current facility is able to produce 2,000 units of single-storey
houses a year.
The recent IBS projects constructed by the company have been awarded
the Malaysian Construction Industry Excellence Award (MCIEA) for two
consecutive years in 2007 and 2008 for their collaborative approach and
commitment to innovation. These projects were successful in delivering
added value in terms of life cycle cost, programme duration, quality, safety
and heath and sustainability.
Third-party technical endorsement has always been an important aspect in

bringing the company’s products and services to the market, and giving
clients and other stakeholders’ confidence in their technical performance
and risk limitation. It is a challenge to provide not only robust technology
and predictable performance but also a reduction of project risk. In 2010,
the company had their products endorsed and certified by the Standard
Malaysia and the CIDB under the Verification, Validation, Testing and
Certification (VVTC) scheme. The observations on the critical success factors
for the company are as follows:
• It was highlighted that the commitment and vision on IBS came

from the top management. This corporate leadership on IBS had
driven this company forward in terms of investment and resource
utilisation. IBS is also treated as a strategic approach to improving
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business efficiency rather than pure use of a construction

technique.
“Our vision and commitment in construction is to be in line

with government policy to reduce foreign workers through
IBS. Perhaps other contractors are just thinking of the bottom
line but the management of our company embark in IBS has
a strong vision which is to sustain IBS business and to support
the government agenda”
“We are very much agreed that involvement in IBS must

come from the top down. Commitment and vision is
important. I'm very much agreed on this point”
• In the earlier days, the company had started by using systems

developed by other manufacturers through sub-licensing and
over time they learnt the trade and invented their own system.
“The design, manufacturing and construction are actually

linked together. If we purchased and sub-contracted the
technology, we will always found ourselves on the losing end.
The price of the overall system is expensive. Furthermore, we
do not have any control on design. We cannot optimise our
design and processes, so we decide to develop our capacity
in design and manufacturing. We think this is important for IBS
adopters in general to embrace in IBS business”
• To position itself in the market, the company is indeed moving

from a contractor role and producer role to be a total solution
provider for clients to use IBS.
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“We are different. We design, produce and install it. We are

involved in the construction process. We can improve on
quality by closely monitoring every aspect involved in the
processes”
• The company also embarked on a partnership agreement with

clients.
“We partner ourselves with the regional development agency

(client), in order to secure projects in their region of
development, and work very close. Partnering and strategic
collaboration in this context make us understand developers’
needs and requirements and at the same time will ensure
continuous demand”
• It was also highlighted by the management team that they had

faced difficulties to get approval on design from the authorities
when the design had to be converted from conventional means.
“We faced difficulties to get approval of our IBS design when

we converted it from the conventional. The decision to use IBS
must start from the beginning. We have two ongoing projects,
one with Design and Build (D&B), and the other is in
conventional bidding. We prefer D&B. It is straightforward
when we design it from the beginning with IBS. Then later, we
faced problem in changing the requirement and design
during construction and this must not happen in IBS”
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• The difficulties in converting conventional design to IBS ones can

be avoided if IBS is chosen as a preferred mode of construction
early during the tendering stage. The company prefers Design &
Build projects when they have full control of the project life cycle.
• It was observed during the case study that coordination between
on-site and off-site operations was difficult, particularly on
coordination of panel delivery to site. Some large panel sections
were made and stored, but were not required as stated on the
original production schedules until much later in the project.
Furthermore, panels were stored on top of other panels due to
storage area shortages. Access to particular components
became problematic.
• Safe site erection of precast concrete depends on the pre-
planning process. Although the risks may be small, the
consequences of a failure can be death, serious injury or damage
to the building or equipment. The builder must determine that the
erection platform (floor slab, footing, suspended slab or
surrounding ground) can support the construction and erection
load and provide verification to the crane operator prior to the
commencement of the works.
• To cope with the problem, the company developed a system to
coordinate the construction process. The project team used a
numbering system where the panels are marked with numbers
and the installation procedure is compiled in a simple
documentation. During the installation, labourers follow the easier
step-by-step procedure to erect the panels and cast the columns.
The numbering system is a simple yet effective way to control and
coordinate activities at site. Clarity and simplicity of
communication flows can be translated into the error-free
construction.
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“Our workers are trained to get use of our numbering systems.

It is so easy to understand. It is how we communicate with
them. Simple and precise”
“The planning process must take into account; site limitation,

element sizes, crane size configuration, casting sequences,
overhead obstruction”
• The logistics, site installation, loading and unloading of panels

have to be coordinated smoothly through pre-planning and clear
guidelines that the team had set at the beginning of the projects.
• In the supply chain, the company strategy is to closely manage
the entire supply chain activities in a close system, including the
design, manufacturing activities, installation and manufacturing of
the moulds. The design, manufacturing and construction
processes need to be managed together.
“We control everything, even on manufacturing of the mould.

By controlling the supply-chain, we can easily control quality
or make necessary adjustments to our system to suit our
needs”
• Nonetheless, construction activities still have to involve many

parties. The company has to deal with manufactures of doors,
windows and other components suppliers which have not been
manufactured in-house. The company looks for a corporate
model that creates benefits for both parties involved in the supply
chain exchange of materials and services.
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“We practice business tie ups, which means we do not have

partners per se but we collaborate with others to ensure
success implementation”
• It was difficult for the company to change design or requirements

during the construction phase. It was claimed that the design
team has practised design freeze principles to clients.
• Pre-planning needs to be initiated as early as possible which
involves accurate measurement of M&E’s locations and the types
of components to be used. The design team has to design the
components for ease of manufacturing and installation and
everything must be decided early in the project during the design
stage.
“To reduce cost, our system considers the application of pre-

assembly during casting. We try to incorporate the window
frame, door frame and M&E part of the panel in the factory
before transporting it to site whenever possible and practical.
However, it is important to coordinate between the design
and M&E in order to confirm the power point location before
actual casting takes place at the factory. It will reduce and
eliminate hacking at site”
• Design integration and realisation are critical because the

construction team could not simply hack a defect panel at site
due to the additional cost to rectify the problem.
• To obtain a competitive advantage over their competitors, the
company promotes continuous improvement in its product and
process and adopts an innovative solution. In contrast to what
had been used in other systems, the design team has created a
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system that starts with panel installation followed by casting of

columns. This is really a innovative and unusual construction
practice. The slabs are then casted on site using an aluminium
mould system. This has improved the structural performance of the
buildings and its connections.
“In this industry, we need to be innovative. We install the

panel first and it is then followed by beams and columns. Our
walls are precast and both our beams and columns use
aluminium moulds. We innovate through time and continue
improving our systems”
• Labour competency is one of the critical areas to IBS according

to the company.
• The fundamental success factor to IBS is to secure competent
project managers and engineers to implement and coordinate
works at site and factory.
• It was claimed that the company had come upon the use of IBS
based on their past experience and knowledge obtained from
their precast infrastructure projects in the past. The knowledge
piled up from the past hands-on experiences in IBS.
“We came upon the use of IBS based on our past experience.
We utilised and used our past experience and knowledge
obtained from our precast infrastructure projects. We started
to use other systems (sub-licensed) but we learnt and moved
forward to invent our own system. We learnt from our
experiences and also learnt from our mistakes”
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“The design team is the brain behind the system and

implementation. The knowledge piles up from the past hand-
on experiences in IBS”
• To address skills issues, the company had conducted continuous

training sessions at their factory to improve the skills and avoid any
mistakes at site.
• All site personnel and office staff have to attend the course to
have a better understanding of the system.
“Our system is very detailed as labourers can do it straight

away. We used a numbering system. However, we still
conduct training at our factory to improve the skills and avoid
any mistakes at site. In-house training is being practised in
our organisation. All site and office staffs attend the course to
have a better understanding of the system. We even teach
our sub-trade installer to install our system and we provide
training to any company interested in using our system in their
projects”
• The installation team was required to work on the factory

production line to gain a full understanding of the products.
• Information Technology (IT) is an important and reliable support
tool to the company. The application of Computer Aided Design
(CAD) software is very critical to the design team. There is still a
lack of IT adoption in logistics and project management.
• The company is trying to get their system to be flexible to
accommodate different projects. The innovativeness of their
system is in the use of an aluminium mould system. This mould
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system is cleaner, safer and requires less labour than conventional

methods, yet it is flexible enough to cater for immediate changes
of requirement and can be reused in many projects. Thus, the
company can cope with the issue of demand and volume in IBS.
“We try to get our system to be flexible to accommodate

different projects. The uniqueness and innovativeness of our
system is the ability to reduce or increase the ceiling level.
This is done by using aluminium mould systems. It is still clean,
safer and uses less labourers as compared to conventional
methods, yet is flexible to cater for immediate changes of
requirement and can be reused in many projects. As such,
we can cater for smaller projects and are not too dependent
on production volume”
7.5 Case 4
Company D is a wholly owned subsidiary of a group of companies which is

one of the leading property developers in Malaysia. The group of companies
specialise in delivering high-end quality housing, apartments and buildings
and developing new townships. They are well known for promoting
innovative dwellings and incorporating green building design. The aim of the
company is to change the way housing is procured and delivered, creating
mixed tenure, inclusive and integrated communities. The group has a
deserved reputation for professionalism, corporation, value, quality and
excellence of services and a pre-tax profit of RM 125 million in the year 2009.
Company D was established by the group back in 1982 when the group
teamed up with the top precast builders in Japan, Taisei Prefab and
Marubeni of Japan to undertake mass construction of prefabricated houses.
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The present authorised and issued and fully paid-up share capital of the
company as a subsidiary comprises RM 10 million, employs 200 people and
has an annual turnover in excess of RM 80 million. The company’s long-term
partnership with Taisei U-Lec (formerly known as Taisei Prefab) enables them
to leverage on their counterpart's vast experience in engineering, research
and development to establish their reputation as one of the top IBS builders
in Malaysia. Utilising its in-house resources, including some 100 tradesmen
who cover the full range of construction skills, it is capable of handling single
projects up to the value of RM 50 million. In addition, its flexible procurement
approach provides options for full 'design and build' facilities or traditional
turnkey packages. In September 2001, the group bought over the shares
held by Taisei Prefab, making Company D a private company. The
company continues to maintain close relations with Taisei Prefab through
technical cooperation and exchange. To date, the company has built more
than 35,000 units of prefabricated residential units in the country including
about 5,000 units of government apartments in Putrajaya.
They have also built and operated prefabrication yards. The USJ Subang
prefabrication yard is strategically located at the junction of three major
highways – Shah Alam Expressway (KESAS), Damansara-Puchong Expressway
(LDP) and Central Link Expressway (ELITE) – developed on 10 acres of land.
The production capacity is 2,000 apartments/year, 60,000 m3/year or 7,500
components/year. They operate seven 10-tonne gantry cranes and four
assembly lines covering 3,802 m. The Bandar Sri Alam prefabrication yard is
the latest precast yard located at S P Setia Group's largest property
development in the Klang and Shah Alam area. It is served by the North
Klang Valley Expressway (NKVE), the Federal Highway and the nearby
Guthrie Corridor Expressway. It operates on 11 acres of land. The production
capacity is 2,500 apartments/year or 75,000 m3/year or 9,500
components/year. They operate seven 10-tonne gantry cranes and four
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assembly lines covering 5,000m. Finally, the Bandar Setia Alam yard is the
batching plant consisting of one set of wet-mix plant and two sets of dry-mix
plant to supply for the whole development of Bandar Setia Alam, Setia Eco-
Park and the precast yard. It produces 1,200 m2 of ready mix concrete a
day. The production activity in a factory-controlled environment allows the
company to ensure consistent quality and uniformity.
The company has built a recognisable presence as the leader in

prefabricated construction with successful large-scale construction
schemes. The use of IBS is treated as a strategic approach to improving
business efficiency, in this case providing quality housing rather than just pure
use of a construction technique. The company has to be selective in
implementing projects that are only suitable to IBS and its application. The
company had some negative experiences due to the instability of the
housing market during the 1998 and 2008 economic crises and therefore
desired to improve time predictability in terms of delivery through the use of
IBS. This effect was more significant for building apartments than for
individual houses, and for urban regeneration schemes than for suburban
developments, as claimed by the company.
From its inception until now, all projects turn out to be a turn-key type of
project awarded by the parent company. Their involvement from the
beginning of the project ensures that the design considered construction
and manufacturing input which in return were the key success factors of the
company. The management team observed that IBS should be selected as
the preferable construction method right from the conceptual stage. The
company has a fully fledged in-house team that provides turnkey services
for every stage from contract, design, and production to construction. Their
local team has the expertise to procure, conceive and re-engineer a
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conventional building into one that is buildable using precast technology

without alternating the architect's desired facade and layout.
Most projects were carried out using the tilt-up method of precast
construction. Where it is impossible to use this system of construction, the
design team resorts to a combination with other systems, such as in situ
concrete walls at the higher level where the key plan of the floor is different
from the typical one. Although they have secured the repetitive market
through their holding company, they still need to relate back their
investment to the volume of works. The company had to be selective and
implement a project that is only suitable to IBS. The location of projects also
affects the decision to use IBS as the company needs to consider
transportation and logistics costs. The company focused on the construction
of high-rise apartment projects. IBS can be beneficial to that sort of building
due to the repetitive nature of the design. For low-rise buildings, the
company had to deliver it in conventional ways.
SGS Yarsley United Kingdom has certified that the company has met the ISO
9002 Standards for its Quality Management System in the construction of
residential units using precast technology since August 1999. In 2002, the
company quality certification was upgraded to ISO 9001. Following this, the
scope of the ISO 9001 certification was extended to cover the
manufacturing of ready-mix concrete in 2004. On 20 September 2005, the
company’s quality certification was successfully upgraded to ISO9001:2000
as a testament to its high quality standards.
In 2003, they teamed up with clients to establish a company to undertake

construction of building works at Putrajaya. This partnering exercise ensures
the success of IBS implementation and reduces potential risks related to
finance and work delivery. In this exemplary project, the company
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coordinated the activities of the precasting yard and the construction site
very closely so that the erection of the precast modules was not disrupted
due to unavailable components.
The company was the winner of the major scale project category of the
Malaysian Construction Industry Excellence Awards 2005 (MCIEA 2005)
organised by the Construction Industry Development Board (CIDB). The
company won the award based on its success in employing IBS in the
construction of the Putrajaya Parcel 8 Project involving two blocks of 684
apartment units and a public amenity building in Precinct 9, Putrajaya. The
company was also the recipient of the OSH (Occupational Safety and
Health) Excellence Award for Contractor 2005 given by the Malaysian
Occupational Safety and Health Professionals’ Association (MOSHPA) and
the Social Security Organisation (SOCSO). These awards underscore the
company’s commitment as the frontrunner of the construction industry,
especially in answering the government's call to actively adopt IBS
technologies in line with efforts to modernise the sector.
In late 2008, the company also spearheaded a life-long learning and

training programme towards continued improvement under their corporate
programme of SPPQ (the Service, Product and People Quality programme).
The company is emphasising quality assurance and control in all aspects of
construction. This had been partly achieved through the implementation of
the international standard procedures in the course of work. The next step is
to inculcate quality as a culture within the company, and with this the
company is hoping to be a leader in quality construction works.
Development of human capital is also critical for the company. Even though
the IBS method of construction enables the company to reduce manpower
usage by up to 30%, they are, nevertheless, affected by the availability of
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labour. In certain trades where the labourer headcount cannot be met, the
workers were required to work longer hours to meet the targeted completion
date. The fundamental success factor to the company is to secure
competent project managers, engineers and tradesmen to implement site
works. The challenge for this company was the retirement of a number of
senior managers and business directors scheduled to occur over the
comparatively short period of time. The succession plan has been
established which includes recruitment of IBS experts from outside the
company and internal promotions.
The company is very committed to training. The workers have to do things

the correct way, first time, to avoid unnecessary problems onsite and of
course to improve the quality of products and installation. The company is
also strengthening their R&D section on the application of IBS in other areas
of construction such as precast retaining walls, precast pilecaps and half
cast slabs. These works, which were previously done conventionally, can
now be carried out in a more efficient and cost-effective way. The company
will strive to find new ways of construction using IBS so that the resulting
product will be of better quality and more cost competitive, including
collaborations with local institutions of higher learning.
The company is focused on strategic business growth over the next five
years and innovative use of Information Technology will play the role in
enabling the company to retain its competitive advantages. Recently, the
company upgraded from a 2D Auto-CAD system to embrace 3D building
design modeling. Computer-Aided Engineering (CAE) and Finite Element
Analysis (FEA) are used to validate concept designs for new projects. The
company also introduced an e-procurement system in 2009 which aims to
provide a paperless, transparent and efficient procurement management
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system. The observations on the critical success factors for the company are
as follows:
• It was claimed that the company’s managing director had

played a role in setting the direction on implementation of IBS.
Under his leadership, IBS has been aligned with the company’s
vision and strategies.
“Our Managing Director plays a role in setting the direction on

implementation of IBS. IBS is chosen as a preferred mode to
our construction due to labourer shortage issues and the
speed of construction offered by IBS”
• The leadership is critical to enable investment in technology and

improvement in processes.
• The company is part of a large group of companies with diversity
of businesses including some in property development.
• The company positioned itself as a one-stop centre for IBS
specialising in building high-rise apartments utilising precast
technology.
• The company’s long-term partnership with one of the top precast
builders in Japan, Taisei U-Lec (formerly known as Taisei Prefab)
• The company has a fully fledged in-house team that provides
turnkey services for every stage from contract, design and
production to construction.
“Our company designs, produces, and constructs. We aim to

be a total solution provider of IBS or a one-stop centre to the
industry. A one-stop centre is a place where design,
manufacturing and construction are under one roof. By
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controlling the design elements, we control the design to suit

the developer’s requirements and adopt repetition and
standardisation. Having control in manufacturing and
construction, we can ensure a sustainable supply of
components and quality and fast installation”
• The company has to be selective in implementing projects that

are only suitable to IBS. The success story of IBS implementation is
due to the coordination between groups of company that help
each other. Due to this close system, the design team prepares
the working design for precast component, production team
prepares the fabrication of components and the construction
team installs the components at project site.
• The company also initiates partnering with clients.
• The company is also strengthening their R&D section.
• It was an interesting observation that most of the company’s
projects turn out to be a turn-key type of project. Changing
design from conventional to IBS is time consuming and not
practical.
“It is the best decision to use IBS in early stage. Changing

design from conventional to IBS is time-consuming. Because
of this, in an open tender, IBS construction normally cannot
beat conventional construction in terms of cost”
• Early planning has been implemented in all of the IBS projects

under the company. Every detail of the design and construction is
finalised and will be monitored during the construction.
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“We need to study and initiate proper site, labour and

resource planning much better than conventional
construction. The use of machinery, especially tower cranes,
is critical to IBS panel installation. Failure to plan properly
means the works will be delayed and even stopped. That also
affects our factory production, so that is very critical.
Furthermore, proper study and planning are important to
chart the transportation route for transporting panels to the
site to avoid any delays”
• Proper coordination in installation between panels and services

are important. To address this issue, the company has established
a simple and systematic labeling of components. Systematic
numbering and standardised information is created to avoid
double handling. All parties involved in the construction and
factory will understand the same information.
“It is important to have simple and systematic labeling of

components as it is easy to manage and easy for workers to
install the components. Proper coordination in installation
between panels, load bearing and non-load bearing and
also coordination with M&E are important”
• One of the most frequent sources of errors and misunderstandings

in this project is miscommunication. Too often the other person
does not hear or interpret the information the way it was
intended. Communication maybe oral (both speaking and
listening). In each instance it is important that clear, coherent and
efficient communication skills exist to ensure successful work by all
project participant.
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• Sequencing is of utmost important in order to facilitate erection of

the structure. Prior to the manufacture of precast members, the
erection and job sequence should mutually agreed upon by the
contractor, precast concrete manufacturer and the erector.
Once a sequence is agreed upon, it should be strictly adhered to
unless severe unforeseen problems dictate a sequence change.
• The supply chain involves proper planning and scheduling. The
construction team divided labour trade into groups with
specialised tasks, work in different sections at one time, through a
rotation system. This is to create good working conditions where
coordination between trades is being practised. Failure to
effectively manage the coordination of processes will increase
the construction cost and contribute to the project delays.
“Tradesmen must work in separate locations, not to interfere

with each other. It involves proper planning and scheduling.
We divided the labour trade into groups with specialised
tasks, work in different sections at one time, through some
kind of rotation system. This is to create good working
conditions where coordination between trades is being
practised”
• The company tried to push for just-in-time erection whenever

possible. This will reduce handling and storage, optimise the use of
cranes and improve the overall speed of construction.
“We try to push for Just in Time erection. This will reduce
handling and storage, optimise the use of cranes and
improve the overall speed of construction. Proper planning is
needed for smooth installation”
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• The company has initiated a partnering agreement with the

developer to improve project performance.
“In terms of partnering, we have teamed up with the

developer to establish a company named Setia Putrajaya
Sdn. Bhd. to undertake works at Putrajaya. This (partnering
with client) will ensure the success of IBS implementation.
They know our capability and we know their needs. Risk on
the project was also shared”
• Integration and design management was also highlighted during

the interviews as being critical to the company. At early stages,
the construction team, designers and manufacturers and
architects sit together and discuss on the project.
“We finalised the drawing early. Everything must be planned

early in advance. Input from M&E services is important at the
onset of the project”
• The input from the project team is critical to the design team. This
is to ensure smooth project sequences and error-free construction.
“We need to identify type of sanitary and other services very

early. We cannot make any changes during construction.
Input from M&E engineers and designers is vital to the
manufacturing team. All aspects of construction must be
confirmed at the onset of the project. Cost of changes during
construction is very high and will offset the benefit of
implementing IBS”
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• The company has also spearheaded a life-long learning and

training programme towards continued improvement.
• Continuous improvement also allows designers, planners and
project managers to learn from building and allows total
improvement in processes, designs, assembling sequences and
the time taken to assemble.
• The company had learnt from their mistakes in their previous
projects in the 80’s on the design and processes and improved
themselves since then.
“We learnt from our mistakes in the 80’s. At that time, we had
vertical and horizontal panels to be prefabricated at site, but
we faced leakage problems between these two elements. So,
we learnt from that. Our vertical element is now cast in-situ to
solve homogeneous issues between panels”
• IBS requires a different skill set from the conventional method

which includes a full range of pre-planning works, liaison with the
consultants to the finalisation of all the dimensions, features and
fittings, design of the precast components and the interface of in-
situ and precast into detailed shop drawings.
“An experienced workforce will improve the quality of

workmanship. It is important to develop workers with an IBS
skill set. It involves on-the-job training, particularly on
component installation and panel jointing systems”
• The fundamental success factor to the company is to secure

competent project managers, engineers and tradesmen to
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implement the site works. The challenge of this company was the
retirement of senior managers and directors over a comparatively
short time.
“We must train and choose the tradesman properly. Only a

competent person will be allowed to handle component
installation and operate the tower crane”
• The company is very committed to training.

• The company trains people until they are able to do it and keep
retraining them until they are comfortable with the job. The
training system in the company is very specific and is tailor-made
to the trades.
“Training must be specific to the trade. We give hands-on

training to site labourers for specific task, so they will become
competent in that particular job. This is the type of training
given for IBS labourers, because all the processes involved in
IBS are rather repetitive but require skills”
• They also encourage hands-on training to site workers for specific

tasks, so the workers can become competent in that particular
job.
• Information Technology (IT) has become an important support
tool for design.
• The company has installed an e-procurement system which aims
to provide paperless, transparent and efficient procurement
management systems. Unfortunately most of its existing
subcontractors and suppliers do not have similar computing
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capabilities and facilities. Once in place, the system should be

able to call for bids, pre-qualify subcontractors and suppliers,
evaluate bids and issue the necessary formal documentations.
• Selection of technology is very critical to IBS success. It was
claimed that IBS requires continuous demand and is not to be
applied in low volume of works. To break even in setting up a
prefabrication factory, the company requires 2,000 units of
housing apartments to be built in a year.
“To break even in setting up factory, our company requires

2,000 units of housing apartments to be built a year. If we
invest in one particular system, if the volume is low, IBS is not
profitable. We are fortunate as we are also a developer. So,
we can ensure sufficient demand in a certain period of time
in order for the factory to survive”
• As for now, the company has been focused on high-rise

apartment projects. IBS can be beneficial to that sort of building
due to the repetitive nature of the design.
7.6 Case Study Analysis
Table 7.1: Case study analysis
Factor Case 1 Case 2 Case 3 Case 4

Corporate • Top-Down • The chairman’s • Top management • Top-down
Leadership • Ideas to establish commitment to derive investment • Company MD has
company focus secure • IBS is aligned with strong willingness
on IBS come from investment into the company vision and commitment
top production and strategies • Ideas to establish
management • Ideas to establish • Ideas to establish company focus on
• Top company focus company focus on IBS come from top
management on IBS come from IBS come from management
derives top management experience but top • Vision of the
investment • Drivers from senior management is company to excel
• IBS is aligned with management committed to it through IBS
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the company team

vision and • IBS is aligned with
strategies the company
• IBS is more vision and
wanting than strategies
viability
Business • Established as • Total solution • Evolved from • Subsidiary of
Strategy one-stop centre provider to IBS. infrastructure property
• Offer wide End-to-end contractor to IBS developer. Starts
service. Not service system provider and when first
necessarily end • Penetrate public contractor company embarks
to end building works • Invent and invest on in property
• Established and • Emphasis on new system • Strong linkages
still subsidiary of coordination • Penetrates public with parent
the state between design, building and company.
developing manufacturing residential works Activities tailored
agency and construction • One-stop centre on to parent
• Activities tailored • Newly established IBS company’s needs.
to parent company. • Offer wide range of • Volume allows the
company’s • People are IBS solutions. End-on- company to
needs. recruited directly end kind of service evolve on system
• Volume allows from more • JV works closely with and technology
company to established firms state government • One-stop IBS
evolve system • In-house developing agency centre. Offer wide
and technology capability in • In-house capability range of services
• Start as JV with design and in design and • JV with
international firm manufacturing manufacturing international firm
(Praton Haus) • Offers value to • No specific risk (Taisei)
• In-house customer. Fast strategy • Marketing and
capability in completion, branding
design and quality and blend • Investment
manufacturing IBS with creativity. planning
but also Better solution to • In-house capability
outsourcing attract clients in design and
• Rely on the • No specific risk manufacturing
importance of strategy • Value to customer
investment and • No specific risk
ROI planning strategy
• No specific risk
strategy
Procurement • Comprehensive • More favorable • IBS should be • Favourable to
and Contract system to pre- to Design and initiated from the turnkey project
qualify its Build (D&B) beginning under the
subcontractors project or direct • Prefer D&B project subsidiaries. Having
and suppliers negotiation • No significant control in design
• Prefer to be • Facing difficulties change on and manufacturer
involve in the in converting procurement • Changing design
conception conventional • Facing difficulties in from conventional
stage design to IBS converting to IBS is time
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• All projects are • No significant conventional design consuming and

turnkey and D&B improvement in to IBS not practical
• No significant procurement • No significant
improvement in system improvement in
procurement procurement. Use
system the same system
Project • Heavily rely on • Heavily rely on • Coordination • Try to push on JIT
Management advanced advanced between on-site and lean logistics
planning planning and off-site to reduce waste
• Avoid double • Good • Easy system to • Rotation system
handing synchronisation of coordinate and • Coordination and
• Crane selection activities communicate synchronisation
• Control rhythm of • Plans on specific • Simplicity in through planning
installation details and communication • Simple and
• Coordinate sequences • Planning systematic labeling
factory and site • Reduce costly • No JIT of components
• Try to push on JIT mistakes • Create a good
and lean logistic • Try to push on JIT working condition
to reduce waste and lean logistic
to reduce waste
• Simple and
systematic
labeling of
components
Supply Chain • Dynamic • All processes are • Supply chain • Coordination of
relationship in-house. Close coordination multiple suppliers
• Long term monitor the • Many processes are • All processes are
relationship supply chain in-house. Easy to in-house. Close
• Working closely • Good working coordinate monitoring of the
with parent condition with • Corporation model supply chain
company and other suppliers with suppliers. No • Proper planning
other subsidiaries • Try to implement specific JV or and scheduling in
• JV with Just in Time (JIT) partnering supply chain
subcontractor delivery and • Site and factory
installation communication
• Improve • JV in project-
communication based Setia-
• No specific Putrajaya
partnering effort
Design • Incorporate • Conventional • Conventional • Construction team,
Management issues of contract under contract under designers and
and construction in open tender not open tender not manufacturers and
Integration design allows integration allows integration even architects sit
• Turnkey and D&B • Try best in • Try best in together and
type of contract incorporate M&E incorporate M&E discuss on the
under parent and services and services project
company allows • Applying design • Applying design • Turnkey and D&B
integration freeze principal freeze type of contract
• Thinking of to clients under parent
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transportation company allows

issue during integration
design
Continuous • Adopted in • Adopted in panel • For competitive • Continued
Improvement installation installation advantages improvement in all
process • Reduce time of • Simulation at factory aspects of service,
• Reduce time of completion to reduce time in people and
completion • No clear installation product quality
• No clear instruction or • Applying pre-
instruction or policy assembly to reduce
policy time. Improvement
to the old processes
• Embedded in policy
Skills • Create labour • Recruiting service • Utilised and used • Very structured
forces that is for senior and past experiences organisation
highly specialised experience and knowledge structure
in their skills workers from obtained from • Labour
• Secure other precast competency. The
competent organisation infrastructure workers have to do
project • Better salary projects in the past things the correct
managers, scheme • Utilised hands on way, first time, to
engineers and • Recruiting only experiences in IBS. avoid unnecessary
design team experience • Single-skilled problems onsite
• Multi-skilled designers and workforce • Single-skilled
workforce project managers environment workforce
environment • Multi-skilled • Labourers are environment
workforce specialists in one • Labourers are
environment trade specialists in one
trade
Training and • Training with multi • On-the-job • On-the-job training • Very committed
Education skills which will training • Simulation and on training
beneficial to • Coaching and practical trial at • Hands-on training
multi tasking self directed factory to site workers into
environment learning • Course and formal specific task,
• Hands on and on • No formal training workers become
the job training learning competent in job
• Enhance the • No simulation • On-the-job training
employees’ • Simulation and
knowledge, skills practical trial at
and abilities both factory
in project level
and
management
• No formal
learning
• No simulation
Information • Enabling factor • Enabling factor • Enabling factor • Enabling factor
Technology • Use in design • Used mainly as a • Used mainly in • Important support
(IT) • Important design tool design tool in design
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support tool in • AutoCAD, • AutoCAD, Esteem, • Upgraded from 2D

the future Esteem, Staad Staad Pro, Orion Auto-CAD
• Not fully utilised in Pro, Orion and and Tekla computer aided
project Tekla • Not used in logistics design system to
• Will implement and project embrace 3D
BIM in the future management building design
• Not applied in modeling.
project • Computer-Aided
management Engineering (CAE)
and Finite Element
Analysis (FEA) are
used to validate
concept design for
new projects.
• Lack of IT in
logistics and
planning
Selection of • Must be • Focus on cost- • Innovative • Very efficient
Technology commercially effective IBS • Use own system coordinated
viable solutions • No robotic and factories
• Use appropriate • Set up own automation. Uses • Use only
technology prefab yard simple production appropriate
• Able to make • No robotics and technologies in the technology
comparisons in automation. Uses form of open factory • No robotic and
each IBS system simple production and linear system automation. Uses
• Start with the technologies in • Get their system to simple production
‘state of the art the form of open be flexible to technologies in the
factory’ and factory and linear accommodate form of open
automation at systems different projects factory and linear
first but moves • Must be • Use new materials system
from advanced commercially • Flexible • Use combination of
technology to viable • Mobile factory onsite conventional and
more modest IBS • Fully utilised mould IBS
solutions • Set up temporary • Linear and open
production plant factory
onsite
7.7 Strategy
1. The structure of the company and its positioning in the market is very
important. It can be concluded that the more successful companies
are either subsidiaries of property developers, or they directly owned
by the government agency. The companies were established to
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focus on IBS construction. This is important and perhaps a decisive

factor which determines IBS success. Their parent or holding
company has normally initiated a target plan or estimation plan on
the volume of construction. In many cases, they guarantee a volume
of construction to be constructed by the company. This huge
guaranteed volume or critical mass allows contractors to plan for
investment and helps them in terms of production continuity. This has
also allowed innovation to take place. Other benefits of this set-up
are the ability to share know-how and risk sharing in terms of trying
untested processes and systems. The parent or holding company
also acts as a safety net for the company during the economic
downturn. The companies which are a standalone entity have faced
difficulties in planning for investment or in embracing IBS production
since the critical mass is not guaranteed.
2. Successful IBS contractors as observed are not a user of technology

or limit its role as project manager and assembler. Most successful IBS
contractors (in this case G7 contractor) have an in-house
manufacturing and design capacity. They also invest in and
sometimes invent systems, and so do not just depend on existing
manufacturers. The in-house production capability to supply in their
project is important and is perhaps also a decisive factor, since profit
distribution is not the same as in the conventional method. Unlike in
the conventional project, an IBS contractor operating without the
manufacturing capability is required to purchase components from
other manufacturers and this has put away a huge amount of the
contract sum from them. As a result, the contractor was left to work
on a very thin profit margin. The price of components was also easily
manipulated by the suppliers. By acquiring manufacturing capability,
one can have control of the process, and the wealth distribution can
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be adjusted accordingly across IBS projects embarked upon by the

company. However, an effort to develop one’s own system requires
project continuity and guaranteed volume. This also needs
knowledge and the contractors acquire them by having a
partnership or joint venture agreement with more established
companies. On the other hand, the capacity and capability in
design is important as IBS can be profitable if one can
accommodate a design which is preferable to their own system. For
example, the shear wall system is best at accommodating the
vertical load, so the designers can make use of it to their benefit. The
design team can find ways to gain benefits by thinking of the best
possible way that buildings can be constructed using the system and
perhaps can accommodate it with pre-assembly principles.
3. Corporate leadership: as observed in all cases, IBS requires a radical

and substantial change from a traditional building process towards a
manufacturing process. It is a massive transformation since
construction is a conventional industry with plenty of deep-seated
practices and it is a fragmented industry. As observed in the case
studies, IBS construction requires strong vision and corporate
motivation to lead the way forward. This finding was previously
highlighted by Kamar et al. (2009), Mann (2006) and BSRIA (1998).
Good leadership attributes are also important to deal with cultural
issues, internal resistance to use IBS, and during the introduction of
collaborative work at site and in the design office. Moreover, due to
limited demand and volume in IBS, it was reported that sometimes
adoption is based on the company’s pure intention to use IBS rather
than the commercial judgments alone. This means leadership and
top management decisions are extremely important to an IBS
venture. The leadership ensures the right motivation and
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commitment from the whole team. The top leaders in organisations

would normally begin by setting a new vision and strategy. They
attract the right people to the company and get rid of the wrong
people. The corporate leaders also maintain unwavering faith to IBS
that they can and will prevail in the end, regardless of the difficulties,
and at the same time have discipline to confront the greatest
difficulties in implementing IBS.
4. Business strategy: IBS requires a new business approach, investment

planning and careful financial planning. In all cases, business models
specific to IBS were implemented including effective combination of
cost control and selection of projects that give enough volume. This
finding was previously highlighted in Kamar et al. (2009), Pan et al.
(2008), Malik (2006), Pasquire and Connolly (2002) and BSRIA (1998).
In all cases, the contractors focused on government tenders since
the use of IBS is made mandatory for the construction of public
buildings in Malaysia. It is a huge market given that the government is
still the main construction client in the country. Successful IBS
contractors mostly started to use IBS at the beginning of their
inception. They start their trade by doing a joint venture or
partnership agreement with international firms. This has accelerated
the company’s learning curve. Others have come from an
infrastructure background and have utilised their precast expertise
and knowledge in the building industry. In one of the case
companies, the management had to recruit the entire design and
construction team directly from the competitors.
5. It was also observed in all case companies that the key strategies for
those companies are the ability to get volume and the ability and
knowledge to manage the design, manufacturing and construction
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under one roof. To position well in the market, all case companies
are indeed moving from the contractor roles towards becoming a
total solution provider to clients. They claimed that they were an IBS
one-stop centre, providing a wide range of products and services
from design to installation with the capability of providing turnkey
services for every stage, from contract, design, and production to
construction. This is important if they are to capture a larger market
for the entire project’s value chain since not many in the industry are
knowledgeable in IBS processes and implementation. It can be
argued that the main business strategy is to monopolise. The case
companies or their subsidiaries play the role of designer, producer
and installer of an IBS proprietary system across the supply chain. This
can only be done by having all the activities to be conducted in-
house, in one link of subsidiary companies and in a close system. IBS is
not well accepted by the construction companies because of the
failure to adequately deal with risks in the IBS projects. In order to
reduce risks, a careful risk strategy is very important. Sub-contracting
and establishing IBS subsidiaries can reduce some risk based on
contractual risk transfer solution. In addition the contractor can
attempt to own the prefabrication technology by devising a special
relationship with one or more prefabrication sub-contractors, such as
project – based joint venture, vertical integration or even
internalisation.
7.8 Process
1. Technology selection: selection of technology is a new finding

derived from the case studies. The factor had not been mentioned
earlier in the literatures, but in all cases, it was highlighted in case
studies as being highly critical for business continuity. It was observed
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from the case companies that successful contractors mostly avoid

rushing into technological fads and jumping on bandwagons, yet
they become pioneers in the application of carefully selected
technologies at the time. They use IBS as an accelerator of
momentum, not a creator of it. None of the cases began their
transformation with pioneering technology, yet they all became
pioneers in the application of technology once they grasped how it
fitted their construction systems. They also prefer more mature and
trusted technology. On a negative note, lack of R&D activities was
observed in the case companies. Several case companies
established partnerships with foreign companies to acquire
knowledge in IBS. But over time, they bought back their share and
operated as their own. It is important to note that IBS may not
suitable in every project. The technology used has to be selected
according to the volume, type of buildings and type of projects. The
case companies are mostly aware of their capabilities and they
could identify a particular system that suits the project. In Cases 1, 2
and 3, a simple, linear and open factory is preferred, whilst in Cases 1
and 2, a mobile factory was also used in the project. Even in the pilot
case, they reverted from semi-automated production towards a
simple production system and onsite formwork systems due to cost
issues and lack of volume. Inconsistency of volume over time and
lack of business continuity resulted in the investment in latest
innovation not being commercially sustainable. There is a need to
realise that precast concrete IBS is not suitable for every project. If
more people were aware of its capabilities, they could identify
particular projects that suited the system.
2. Procurement and contract: the construction team in all case

companies had worked across all procurement methods, but has
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found that when it is involved in the project from the conception

stage, it has proven more beneficial to the whole project. This issue
was previously mentioned in Gibb (1999) and Neale et al. (1993). The
suggestion of improving procurement has also been proposed by
Venables et al. (2004) and Goodier and Gibb (2004). Effective ways
of bringing specialist knowledge holders into the design process at
an earlier stage should be established (Palmer et al. 2003). Ironically,
almost all projects involving the company were awarded in the D&B
route. The companies claimed that IBS can only be a benefit if the
decision to use it can be decided as early as possible, not as an
afterthought during the project. This practice will allow the project
teams, including the manufacturers, sub-contractors and M&E
specialists, to get involved and share their knowledge early during
the design stage. Translating conventional design to IBS
shopdrawings for manufacturing and construction as observed in
Cases 1 and 2 were painstaking activities and did not benefit
adopters in all case companies. It is also observed in all cases that
the contractors applied procurement strategies that clearly identify
suppliers with the right capability, competence and capacity. The
interviews also indicated that the implementation of the IBS still using
the adversarial relationship mode in their projects. There is a
desperate need of a new approach of procurement using strategic
partnering in the construction delivery system. Among the benefits of
partnering includes the access to new technologies, the ability to
provide a wider range of product and services, economy of scale in
R&D and production, access to knowledge beyond firm’s boundaries
sharing of risks and access to complementary skills (Powell, 1987).
3. Project management: all case companies placed emphasis on good

project management practice. Planning in IBS requires a thorough
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arrangement of detailed design, work delivery schedule, and the

most cost-effective methods for installation and logistics. It was
observed in all case companies that a well-managed delivery
phasing and scheduling by carefully considering the planning and
deliveries enabled smooth flow of work on-site and avoided waste in
labour and logistics. Detailed planning and meticulous attention to
detail results in the most cost-effective installation with minimum
unproductive time. Tighter and longer periods of planning are
required to allow for the design, logistics and installation planning,
procurement and approval procedures. Communication is also vital.
In the case companies, communication is established in the simplest
way possible. Extensive planning must be completed well in advance
which leads to better project performance, coordination, better
scope control and smooth project sequences. The importance of
project management in IBS was previously highlighted by Gibb
(2001), Warszawski (1999), BSRIA, (1998), Pan et al. (2008), Lessing
(2006), SCRI (2006), Neala et al. (1993) Oostra and Johnson (2007)
and Haas and Fangerlund (2002).
4. Supply chain: all case companies were putting emphasis on good

supply chain management practice. With all of the case companies
reported above, the integration of components or modules into the
building requires various parties and supply chains to cooperate
closely. This was previously highlighted in Malik (2006), BSRIA (1998),
and Pan et al. (2007) and Pan et al. (2008). Management of supply
chain requires very careful definitions and management of interfaces
between contractors and suppliers and good communication
channels. This includes attention to detail from management during
all stages of the supply chain, enabling correct and timely
information to be available. As observed in all case companies,
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partnering with suppliers and sub-contractors from the earliest project

stages can be vital to ensure efficient and timely delivery of
components and services. The idea of partnering was first mentioned
in Pan et al. (2007), Lu (2007), Lu and Liska (2008) and Haas and
Fangerlund (2002). Partnering will ease communication problems
between parties. Partnering empowers designers, managers and
specialists to do their best work by establishing communication links
and feedback systems. Partnering assists stakeholders in fully
understanding other interests as well as their own during IBS
implementation. Any dispute will be easier to resolve in the minimum
time. Partnering in the supply chain will ensure better coordination
and smooth flow of production and installation. Both the pilot case
and Case 2 have close linkages with the government agency. In
Case 3, the company has established a JV partnership at project
level with a township developer to establish a new company. This
company operated well in delivering the project efficiently within
time.
5. Design management and integration: all case companies

emphasised good design management practice and adopted
design integration. Initiating a good working collaboration between
design team, manufacturer and project coordinator can identify
and deal with problems early and push forward improvements in
productivity and quality. Design management also established
forward thinking in planning, particularly on the issue of transportation
and installation and particularly on the issue of manufacturability and
constructability. This was done to reduce any cost of repair and reap
the maximum benefits for implementing IBS. The importance of the
design being integrated was previously highlighted in Pan et al.
(2008), Blismas (2007), Sanderson (2003), Gibb (2001) and Gibb
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(1999). It is important to note that with all of the case companies,

they have claimed that IBS can be best implemented where aspects
that can benefit the projects including standardisation, pre-
assembly, manufacturability and constructability can be
incorporated through the design. The design freeze principle has
been introduced to clients and architects into the programme as it
will help to mitigate the effects of any late design changes, which
may not be as easy to incorporate when using IBS.
6. Continuous improvement: all case companies emphasised

continuous improvement particularly on the management of
processes and particularly on component installation. This concept
was highlighted previously in Treadway (2006), Sanderson (2003) and
Pasquire and Connolly (2002). Continuous improvement is an
ongoing effort to improve products, services or processes. These
efforts can seek incremental improvements over time or
breakthrough improvements all at once. It was observed in all cases
that the repetitive nature of IBS processes allowed the company to
apply continuous improvements and shorten the learning curve. The
repetitiveness and standardising nature of IBS allowed efficient
installation through continuous improvements and potentially
reduced some waste along the way.
7.9 People
1. Skills: there is a consensus of opinion that the important factors in

successful project implementation lie in good site management,
planning and control of the overall process in a project’s life cycle.
This, in turn, leads to the recommendation that experienced and
well-trained labourers are critical (Kamar et al. 2009; Nawi et al. 2006;
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Ogden, 2005; NHBC, 2006; Ahmad, 2005 and Badir et al. 2002). All
case companies placed an emphasis on their people. People
development is the most important aspect in the organisations. If a
company has the right people, the problem of how to motivate and
manage people largely goes away. On the other hand, if the
company has the wrong people, it does not matter whether they
discover the right direction or not; it is still difficult for the company to
embrace change. Great vision without great people is irrelevant.
Good contractors’ organisations tend to have rigourous cultures,
cultures in which leadership consistently applies exacting standards
at all times and all levels, and good companies see their best people
as the biggest opportunity not the biggest problem. All the case
companies reported that they understand the truth that if the
company begins with “who” rather than “what”, they can more
easily adapt to IBS. Case 1 reported the above as a classic example
of the importance of the people factor in adopting new business.
Instead of training their staff in IBS, the company injected an endless
stream of talent directly into the veins of the company. The whole
team was recruited from established IBS construction companies
and, as a result, the company had sped up its learning curve. Skills
can also be acquired by establishing a joint venture and technology
transfer initiatives, as reported in the pilot case and Case 3.
2. Training and education: all case companies claimed that IBS requires
extensive training and continuous education of labourers and
professionals. Although IBS is used to address the skill shortage
problem in the construction industry, the evidence suggests that a
skilled workforce in specific skill areas such as integration,
coordination and component installation become more important
than in conventional methods due to a difference in the roles
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undertaken and the project methods. This has been highlighted in

Pan et al. (2008), Mole (2001) and Goodier and Gibb (2007).
Therefore, to address this problem, scholars in this field have
highlighted the importance of continuous education and the training
programme of trades, especially to people involved in design,
handling, positioning and erecting the finished product (BSRIA, 1998
and Thanoon et al. 2003), and adequate training of the trades,
especially people involved in handling, positioning and erecting the
finished pre-fabricated and pre-assembled products. Also, they
recognised the need for training labourers in innovative methods by
ensuring that the team receives appropriate and thorough training in
new and unfamiliar methods in advance of the installation.
However, the type of training was limited to hands-on and on-the-job
training. Only Case 2 had the formal training and installation
simulation at factory. In other cases, there is no formal training
adopted. In spite of this, all the case companies rely on the
government’s initiatives and programme to train their workforces.
3. Information Technology (IT): IT is an important enabling factor to IBS

contractors. Eichert and Kazi (2007) and Hervas and Ruiz (2007)
pointed out that IT is a vital and reliable support tool to improve
tendering, planning, monitoring, distribution, logistics and cost-
comparison processes by establishing integration, accurate data
and effective handling of project documents in IBS projects. Given
the increase of coordination involved in IBS projects, effective
communication and information flow are necessary. It is a reliable
support tool to improve communication between project team and
suppliers and as a medium for quality control of overall IBS project
deliveries (Oostra and Jonson, 2007). It was observed in all case
companies that IT is an important support tool for design purposes.
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Without proper IT capacity and capability, the manual process to

design and manage IBS will be more complicated and difficult. It
was observed that the design teams have used the latest design
software available in the market like Stead Pro and AutoCAD. It was
also observed that all case companies have yet to fully utilise IT at
the maximum level where the utilisation was only limited to
accommodate design activities. No IT tools have been observed to
have been used in either logistics or project management, except in
Case 3. Perhaps in future, the companies should utilise IT as a tool in
logistics, project management and procurement and acquire better
software for information integration management such as in Building
Information Modeling (BIM) to track the panel and visualise the end
products. Disciplines and processes need to be streamlined using
integrated IT systems, including development of IT-based project
management systems to coordinate subcontractors and integrate
the process. The contractors need to learn from systems from other
industries, from design through to production and actual construction.
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CHAPTER 8: THE TRANSFORMATION FRAMEWORK
8.1 Framework to transform traditional contractor to IBS
Transformation of contractors in Malaysia to be IBS-ready is important to

support nationwide agenda and policy on IBS. In order to use IBS, contractor
must change their modus operandi. It is important to move from existing
contracting role into IBS system integrator. Contractors should not only
depend on knowledge in construction/ installation. Contractors must build
up knowledge and capacity in design and construction. Whenever possible,
contractors are suggested to have their own prefabrication facilities. Further,
the critical factors to IBS lie in good site management, planning and control
of overall process in project life cycle. This in turn, leads to recommendation
that experienced and well-trained workers are the critical. Coordination IBS
processes is vital. Careful attention need to be paid to pre-planning and
scheduling. High demands also will be raised on the management of IBS
supply chain and logistic activities. Contractors need effective
management of supply chain. It needs to be constructed in a manner that
allows the contractors gain the full control of the process with the intention
to improve efficiencies and competitiveness. Successful IBS implementation
depends on organisation ability to expedite learning curve from one project
to another. Therefore, continues improvement and learning can develop
company understanding on the processes and the principal behind it as the
knowledge will multiply as experience mount up. Successful IBS
implementation also requires partnership and close relationship with suppliers
and sub-contractors from the early stage of project sequences
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In general, a strategic framework to transform traditional contractor

(particularly large and G7) to IBS ready proposed in this book is based on
nine critical success factors and two important enabling factors which have
been identified in the literatures and validated in the case studies. The
critical success factors have been categorised into four elements. The
elements are:
• Strategy (corporate leadership and business strategy)

• People (skills, training and education)
• Process (procurement and contract, project management,
technology selection, design management and integration, and
management of the supply chain)
• Enabler (Information Technology and continues improvement)
The framework is depicted in Figure 8.1:
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Capability Loop
• Corporate
Leadership STRATEGY
• Business
Strategy
E
N
A • Information
PEOPLE Technology
• Skills B • Improvement
• Training &
Education
L
E
R
PROCESS
Procurement Project
& Contract Managemen
Design
Technology Management Management of
Selection and supply chain
Integration
Figure 8.1: Transformation Framework
In general, the main causes of the lack of contractors embracing IBS are
rarely purely technical in origin. They are more related to the organisational
strategy and soft issues which underpin the capability of the organisation to
successfully implement IBS. The prerequisite of success depends to a large
extent on the establishment of strategy, meetings of human capability and
capacity and finally improved on the processes.
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First, contractors need to obtain full support from the top management and
align the business strategy, vision and mission with the desire to adopt IBS,
and these elements in return are important to convince the decision makers,
clients and their own organisation structure to use the IBS method. This
support and commitment shall drive the company forward in terms of
investment and resources allocation. Contractors need to develop and
adopt a specific model in their business and to position themselves in the
market. This includes diversifying of business, setting up a specific division to
deal with IBS and also offering a wide range of services in IBS from design,
production and installation. More or less, contractors with enough capability
can offer total solution or act as one stop centre for IBS.
The second element is the development of people capacity. People can be

considered as core drivers to business. As a collective force they can add
value to organisation. People development is the most important aspect in
the organisations. However, they must be in place to understand
organisational processes, implement change when necessary, and the use
of technology to accelerate their efforts. Migration from the conventional to
IBS requires new skills sets such as integration, design, planning and supply
chain which relate to IBS implementation. It is imperative for contractors to
employ appropriately skilled operators at site or enable a range of tasks to
be undertaken by fewer but multi-skilled operators. People must however be
led, the importance of leadership stems from its role in providing a clear
vision of the future and communicating the vision. It is therefore essential to
obtain optimal human capital and skills, which in turn is represented through
the selecting right people for the right jobs which could improve innovation
and creativity. If the company has the right people, the problem of how to
motivate and manage people largely goes away. On the other hand, if the
company has the wrong people, it does not matter whether or not they
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discover the right direction – it is still difficult for the company to embrace
change. Great vision without great people is irrelevant. Training can be
considered as an integral part of organisation change. The workers need to
be trained in IBS skill sets.
The third element is development and holistic improvement in process.

Contractors need to enhance their processes in procurement, project
management, technology selection, design integration and supply chain.
Selection of contract enables them to effectively select and implement
technology and facilitate better design integration. The improvement in
project management means adopting a better supply chain strategy and
enables design integration to take place.
The final element in the transformation from a conventional method to IBS is

the role of enablers such as Information Technology (IT) and continuous
improvement. IT can play an integral part in many IBS processes and would
be a reliable support tool for design and project management. Continuous
improvement ethos is also critical in embracing the IBS method. The
repetitive process each time the project is implemented in IBS allows
continuous improvement to take place for better project performance. Both
IT and continuous improvement are important enablers and support tools in
the development of strategy, people and process for IBS companies, as
depicted in the framework.
Based on the case study, successful IBS implementation in Malaysia is due to

a strong support, commitment, awareness, vision, knowledge and leadership
and capability to align IBS implementation with corporate strategy.
Therefore, the prerequisite of success in IBS depends to a large extent on the
establishment of the strategy first, followed by meetings of human capability
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and capacity and improvement to the processes as depicted in the final

framework (Figure 8.1).
However, implementing this framework is a monumental task for contractors.

Improvements in all of the above four elements are highly dependent on the
capability of the contractors. The capability and maturity is a major issue for
change progress and ensures IBS success. It was highlighted that the majority
of the contractors in Malaysia are not ready to embrace IBS. If the
contractors do not acquire the capability to change to IBS, they need to
embark on extensive development on people capacity. This is happen in
the case studies where one of the companies recruited experienced
personal right from those competitors which are more established on IBS. It
must be recognised in the first place that the transformation from
conventional methods to IBS stems not out of technology but people. The
development of human capital will enhance the overall organisation’s
capability in adopting IBS. Once the company has enough capability,
supported by highly knowledgeable IBS personnel, they will start again to
realign the overall company’s strategy to the IBS. This is described in the
framework as the capability loop. It is worth noting that the transformation
to IBS concerns change, and not just a routine change but a fundamental
change. Furthermore, the change from a conventional method to IBS is a
journey over time. As the environment changes, these external dynamic
must be matched as far as possible by internal change. There is a need to
evolve constantly. Highlighting a number of critical success factors which
underpin the framework will hopefully help contractors guide their own
organisations towards IBS success without having to learn these lessons the
hard way.
The readiness model should be developed in future to further enhance this

framework. In this context, an advanced state of organisation readiness is
195
needed for business to expend domestically and internationally, to compete

readily in the global open market and optimise the adoption of IBS. It is
therefore, imperative that organisations align their business strategies with IBS
strategies. Based on the readiness model, the level of readiness (both the
current and target) should be clear and indicative of the organisation’s
situation in terms of measurable attributes and maturity levels. By identifying
the current and the required organisation status, the readiness gap can be
determined and the route of transformation progress becomes visible.
Progress can be accomplished when the organisation moves through the
levels in sequential order. It is important to understand that the framework is
much suitable for large construction companies such as in G6-G7 to
transform from conventional to IBS ready. It is suggested that the G1-G2 shall
focus on installation and refurbishment works. The G3-G5 can be involved in
small production of IBS component (non-critical) particularly to support their
project’s requirement.
The government and CIDB in particular should conduct more seminar and
workshop or training course to increase the knowledge of contractor about
IBS. Knowledge is very important in order to make contractor interest to
involve in the IBS project. More workers should be trained of IBS knowledge.
The focus areas of training for contractor are as follows:
• Contractor Class G1-G3: Training on installation and refurbishment

works
• Contractor Class G4-G5: Training on low to medium technology on
prefabrication method and specialist installation
• Contractor Class G6 –G7: Training on the concept of Just in Time,
lean construction, Building Information Modeling (BIM), robotic,
automation and green technology
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CHAPTER 9: CONCLUSION AND FINAL REMARKS
9.1 Conclusion and Final Remarks
Industrialised Building System (IBS) is the term coined by the industry and the
government in Malaysia to represent the adoption of construction
industrialisation and the use of prefabrication of components in building
construction. IBS construction consists of precast component systems,
fabricated steel structures, innovative mould systems, modular block systems
and prefabricated timber structures as construction components.
Construction stakeholders have started to embrace IBS for attaining better
construction quality and productivity, reducing risks related to occupational
safety and health, alleviating issues of skilled workers and dependency on
manual foreign labour, and achieving the ultimate goal of reducing the
overall cost of construction.
Nonetheless, IBS and conventional construction are different in various

aspects. IBS lent itself to serious rethinking about how construction projects
are planned and executed (Arif and Egbu, 2010). It requires a new business
approach, investment, and financial planning, including effective
combination of cost control and selection of projects that give enough
volume to justify the investment (Pan et al. 2006; Malik, 2006; Pasquire and
Connolly, 2002 and BSRIA, 1998). In the design stage, the design engineers
have to incorporate input from the production and construction processes
and it should not be used as an afterthought, or as a late solution to shorten
construction time, but rather as an integral part of the design from the
earliest possible stage of the project (Blismas et al. 2006 and Gibb, 1999).
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Project management in IBS focuses on coordinating and managing the

interface elements, systems and organisations (Gibb, 1999). It requires a
different strategy on supply chain, planning, scheduling, and handling. The
IBS building procurement is slightly different from conventional construction
which includes purchasing of materials in advance before the actual site
progresses (Gibb, 1999). Furthermore, IBS requires different skill sets and
extensive exploitation of Information Technology (IT).
The IBS adoption requires fundamental structural change to the industry. IBS
change the way people in the building industry work, both in term of the
process and product. The real advantages of IBS can only be realised
through a thorough understanding on the principles underpinning
manufacturing, whilst also appreciating constrains and pitfalls that comes
with a fragmented construction industry. The assumption of market
intelligence dictates the current methods are adequate may be flawed.
Enough players in the industry are calling for a significant move towards IBS,
suggesting that sentiments in the market are changing quickly.
Despite being acknowledged for its benefits, the construction industry in the
case of Malaysia is traditionally very conservative, and the introduction of
anything perceived as new or different faces barriers. The main attribute to
the lack of contractors embracing IBS are rarely purely technical in origin.
They are more related to the organisational strategy and soft issues which
underpin the capability of the organisation to successfully implement IBS.
Researches in this field have also consistently shown that cost factors and
budget constraints along with availability of cheap foreign labourers in
Malaysia have encouraged the construction industry to favour labour-
intensive construction methods over the use of the IBS method (Hamid et al.
198
2008 and CIMP, 2007). It was highlighted that adoption hugely depends on
the readiness and maturity of contractors to implement IBS. In several cases,
the use of IBS by the contractors has not led to total satisfaction, and
actually has been less productive, lacking in quality and is more costly than
the conventional method. Therefore, rethinking old construction processes
by understanding the characteristics of IBS is critical if the industry desires to
move forward. Some of the important conclusions of this book are:
1. The contractors, among the wide range of industry stakeholders, hold

a very important position to ensure the success of IBS adoption. The
adoption of IBS is hugely dependent on readiness and maturity of
contractors as project implementers. In several cases, the use of IBS
by the contractors had not led to total satisfaction, and actually
caused it to be less productive, lacking quality and becoming more
costly than the conventional method.
2. The market share of IBS in Malaysia is represented by the current

usage measured by the government in three industry-wide surveys
on IBS. The figures hovered around 10 – 15% before the policy
mandating IBS in the public sector was announced. The current
estimation of IBS market share is around 50 – 55% of the total
construction volume having considered the fact that public sector
construction (already adopting IBS) represents 45% of total
construction.
3. The potential barriers to IBS adoption in Malaysia relate to the

availability of cheap foreign labour, cost of investment, ignorance
and changing attitudes, low standardisation of components, poor
human capital development, lack of integration and unstable
demand on IBS components. The low rate of adoption is mainly
199
contributed to the poor understanding on IBS by professionals and

designers in the industry – the fragmented industry does not help
either. The reluctance is due to the cost and no quick gains to
encourage the involvement. This will spark the issues of economic of
scale factor and the wider demand of IBS products and designs.
4. The chronology of IBS adoption in Malaysia highlighted the long

historical note, back in the adoption of precast elements in buildings
in the 1960s, to address the acute shortage of houses. However, the
introduction of IBS was never sustained in this period. As a result of
failure of early closed fabricated systems, the industry is avoiding
changing its construction method to IBS. Some of the foreign systems
that were introduced during the late 60s and 70s were also found to
be unsuitable with Malaysia’s climate and social practices. IBS has
regained its popularity in the present day due to the problem with
construction workforces where the industry has been relying for so
long on unskilled workers from the neighbouring countries.
5. The availability of cheap foreign workforce is identified as a major

stumbling block for IBS adoption in Malaysia. Labour is abundant at a
very cheap price of RM 30 – RM 40 per day. In this regard,
contractors always prefer labour-intensive construction methods over
the use of IBS to maximise profit. Nevertheless, the cheap labour rates
and huge supply in the local construction industry would not last
forever, and a disruption of the supply would generate huge
problems to the industry, as experienced in 2002.
6. Due to the small profit margin, the change from the conventional to
IBS for contractors was not feasible in Malaysia, unless more
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attractive incentive systems and benefits which can lure the

conventionalist to change to the IBS are in place.
7. IBS should not be seen as a threat to traditional methods. The failure

of IBS to penetrate the market is due to a misconception that it will
eventually replace the traditional sector, while it actually should work
closely in tandem to promote best practice in construction. The
sharing of best practice between the two approaches is essential for
the continued successful development of both construction sectors
8. The manufacturers of IBS components require business continuity in

producing components and continuous improvement in product
development. A soft loan for manufacturers should be created and
promoted by the government.
9. Successful implementations commonly have strong leadership,

support, commitment, awareness, vision, and knowledge of their
chief executive and the managing directors to use IBS. IBS was
observed as a top-down implementation and obtaining this kind of
commitment and support could be the key to IBS success.
10. IBS requires fresh thinking and ‘blue ocean’ strategy to capture new
demand, create new market space and offer customers a leap in
value. The blue ocean is an analogy to describe the wider, deeper
potential of market space that is not yet explored.
11. Business strategy is significant to implementers as companies need a

strategy for a better project approach and for the sustainability of
their business. It was observed that successful implementers are part
of larger holding companies in the corporate set-up which include
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manufacturing and design firms. The companies position themselves

as one-stop solutions for IBS and offer a wider range of services from
design, production, and installation.
12. Most adopters adopted simple and flexible technologies with low
capital investment and project-by-project cost strategy. There are no
real benefits to implementing the latest construction technologies,
without considering their capability and readiness to embrace in it.
The adopters prefer matured technologies which have been proven
and technologies which are not heavily dependent on the volume of
works. One such option is to adopt flexible and adjustable moulds, a
mobile factory and onsite casting.
13. As explained in the case studies, in order to optimise the benefit of

IBS, a project wide strategy on the systems and management
involves in it have to agreed and applied at the early stage of the
project. IBS shall be used as afterthought during the project.
However, the hierarchic tendering process in Malaysia includes the
system that divide and rule of main contractors and other
stakeholders. To solve this problem a number of procurement
methods have been proposed:
a. Strategic partnering
b. Two-stage tendering
c. Nominated suppliers
d. Management form of contract
e. Design and build and design and manage
14. IBS adopters in Malaysia are in favour of being involved in Design &
Build (D&B), direct negotiation or turn-key contracts rather than in a
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conventional contract route, as the IBS method requires a different

approach where obtaining input at an early stage of the project is
essential to design and integration.
15. Changes during construction should be avoided in IBS construction.

Design should be firm from the beginning, the design freeze principle
should be introduced and the statement of need must be very clear
from the clients and stakeholders. The design process has to be
integrated with the production and construction needs from the
beginning.
16. Improving the supply chain is the key in achieving the

implementation success. Partnering with suppliers and sub-
contractors from the earliest project stages is vital to ensure efficient
and timely delivery of components and services. Partnering with
established IBS companies at the beginning will cut the learning
curve and partnering with clients will significantly improve project
delivery.
17. Building construction using the IBS method requires thorough

coordination of design, delivery, installation and logistics. This requires
extensive planning to be completed well in advance which leads to
better project performance, coordination, better scope control and
ensures a smooth project sequence. Well manage delivery phasing
and scheduling by well considering the planning and deliveries to
enable smooth flow of work on-site, avoid wasteful in labour and
logistics. Detail planning and meticulous attention to detail results in
the most cost effective installation with minimum unproductive time.
The use of near just in time approach is also recommended.
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18. Skilled and well-trained workforces are very critical as IBS method
requires new skill sets and talents which are different from the
conventional method of construction. The new skills include design,
coordination, installation and extensive use of Information
Technology (IT).
19. The application of IBS requires a high level of techniques and

precision compared to the conventional method, and therefore
requires continuous trainings. Training at all levels of management is
highly important to facilitate change from conventional construction
to IBS. Adequate training of the trades especially people involved in
those handling, positioning and erecting the finished pre-fabricated
and pre-assembled products. Training labour in innovative method
by ensuring the team received appropriate and thorough training in
new and unfamiliar method in advance of the installation. Whenever
innovative or unfamiliar methods and material is used, operative
should be trained in the application preferably by the supplier or
manufacture before the installation start.
20. The repetitive process each time a project is implemented allows

continuous improvement and waste elimination to achieve better
performance. Continuous improvement has been identified as the
enabling factor to IBS. IBS can only benefit contractors if they can
adopt improvements in each repetitive process.
21. IT is an important and reliable support tool in IBS implementation.

Fundamental success of IBS project is the need for good
communication between all members of team at all level. Accurate
and timely information is essential to maximise the benefit of IBS. The
use of appropriate IT tools and software including CAD, CAM and
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Management information system will significantly aid communication

between parties. However, most contractors admitted that the level
of IT adoption was relatively low. The use of IT was limited to the
design purpose.
IBS indeed offers endless opportunities for the industry and one must no
longer feel threaten. It is time now to induce an open collaborative business
environment which can be mutually benefiting to the industry and the
nation as a whole. In addition, the competition in the public construction
market could be further maintained by the entry of specialist prefabrication
sub-contractors. When there is a need, a cluster of specialist contractors,
similar to others in especially the building services sector, would enter into
the market to compete for IBS works outsourced by the contractors who do
not have their own in-house plants to manufacture the modules. Instead,
one needs to start strategising and capitalise market positioning in this new
playing field that have been created to spur our growth. Further, the
Malaysian contractors need to venture oversea to tap on global market.
9.2 IBS and the Issue of Sustainability
Construction industry is a major consumer of non-renewable resources and a

massive producer of waste, and the operation of buildings is responsible for
around half of the total CO2 emissions. Based on recent study in developed
countries, 30-40% of natural resources were exploited by building industry,
50% of energy used for heating and cooling in buildings, almost 40% of world
consumption of materials converts to built environment and 30% of energy
use due to housing. The similar percentage is expected in the developing
countries including Malaysia. This is a huge amount of resources and energy
consume in the building life-cycle, let alone the usage of resources and
energy during the construction phase. It was recorded that more than six
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million tones of waste has been generated which quarter was produced in
the Klang Valley alone, the most affluent area in Malaysia and today, solid
waste issue is one of the biggest environmental problems in Malaysia. The
construction exploits natural resources such as forest for timber, housing and
industry without proper control contributes to the environmental problems.
Many of environmental issues that occur in this country are due to lack of
environmental considerations in the exploitation, development and
management of resources as well as lack of control of pollution resources.
These issues if not tackled strategically will further aggravate and exert
challenges towards sustainable construction in the following way. It was
observed that the Malaysian construction industry is still behind in waste
management, rainwater harvesting and reduction of carbon footprint as
compared to the developed nations.
The implementation and adoption of sustainable agenda lead by the

government is significant to construction industry which affects the whole
spectrum of the Malaysian economy. Sustainable construction in
construction industry aims at reducing the environmental impact of a
building over its entire lifetime, while optimising its economic viability and the
comfort and safety of its occupants. While standard building practices are
guided by short term economic considerations, sustainable construction is
based on best practices which emphasize long term affordability, quality
and efficiency. At each stage of the life cycle of the building, it increases
comfort and quality of life, while decreasing negative environmental
impacts and increasing the economic sustainability of the project.
Sustainable construction, which has inevitably been dubbed ‘green

construction’, describes the responsibility of the construction industry in
attaining sustainability. Sustainable construction aims to produce structures
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that enhance the quality of life and protect the environment efficiently and
profitably. It is all about maintaining a balance between the human need
for buildings for shelter and business operations and infrastructure for higher
quality of well-being at one hand, and preserving natural resources and
ecosystems, on which we and future generation depend at the other hand.
The sustainable construction agenda in construction industry includes
sustainable planning for construction, sustainable building design,
application of green technologies, creating building that use low energy
and utilize natural resources, applying the concept of 3R’s (Reuse, Reduce
and Recycle) and embarking on waste minimisation and recycling of
construction waste materials. There are several aspects of IBS that has the
potential of contributing to different aspects of sustainability and green
construction. Some of the major aspects are explained below:
1. Sustainability from Controlled Production Environment: IBS offers a

controlled manufacturing environment with the ability to reach
difficult nooks and corners, which are often inaccessible in regular in-
situ construction. With the availability of production tools, and
permanent jigs and fixtures, it is easier to control the workmanship of
construction, ensuring a tighter construction resulting in lot lesser
energy losses due to leakages (thermal leakage)
2. IBS and Waste: IBS traditionally has been known to minimize waste,
with the ability to reuse material from one module or product into
another, the sustainability agenda is supported through its use.
However, several aspects of planning both in terms of materials
management and production management have to be monitored
in order to achieve the waste minimization benefits promised by IBS.
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3. IBS and Building Materials: Several pre-fabricated technologies such

as Structural Insulated Panels (SIPS) etc offer great potential in terms
of fabrication of more energy efficient buildings. However, if
appropriate process control and planning are not implemented
these potential benefits could be lost due to expensive on-site
assembly processes. Therefore, it is important that the advent of new
technologies should be accompanied by proper process design for
on-site assembly.
4. IBS and Logistics: Some estimates recently have put the amount of
environmental impact from material transportation activities to be
one-third of total environmental impact on the entire construction
process. IBS offers another benefit, and that is the ability to order in
large quantities thus reducing the number of trips to be taken.
Despite this potential benefit, it is important that a detailed material
transportation and logistics plan be put in place.
5. IBS and Economic Sustainability: With Malaysian government’s

emphasis on reduction of reliance on foreign labour, and the ability
of IBS to deliver to this goal is well documented. However, for this to
succeed there is the need to develop a detailed training and
dissemination strategy for promoting IBS and preparing the workforce
for that.
Traditional construction processes are blamed to be un-sustainable in terms

of resource depletion due to the application of un-sustainable products and
construction processes. The decrease in on-site production will result in an
absolute decrease in waste production and the decrease in waste
generation. As for IBS, site deliveries were monitored over the construction
period. The solid waste such as spoiled materials from off-cuts and
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packaging can be stored for the purpose of selective process to identify the
material suitable for recycling and reuse. A proper storage system can lead
to efficiency gains by grouping the reusable solid waste and removing the
spoiled solid waste. However, the most important issues of sustainability and
Green are how to establish the renewable energy for the consumption of
artificial ventilation for the buildings. Energy saving materials to be applied
by designers by application of thermal insulation to the building envelope
was suggested such as roof insulation, wall insulation, insulated glass, and
floor insulation. Energy considerations are looking at the various aspects of
design as follows:
the orientation and natural ventilation of the building,

solar protection, and
Passive solar design.
Sustainability measures are usually considered in the early phases of new

construction projects whilst sustainable maintenance and demolition is often
still neglected. Therefore various innovative industrially produced
standardized building systems based on the life-cycle of the buildings which
IBS could play in driving up quality, value and increasing the lifespan of the
building and their components. There are three-pronged strategies to
innovate the IBS to achieve sustainability and Green construction as follows:
Industrial – to cut materials, costs & time and increase quality, e.g.
modular dimensioning and engineering details, prototype testing,
and clear assembly instructions
Flexibility – innovations for vertical and horizontal piping, providing
various possible locations for toilets, kitchens and bathrooms.
Demountability – separate replacement of components with various
life spans by the adjustability/adaptability of all parts in differing
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degrees such as structure (limited), installation (practically unlimited),

outer shell (limited and modular), interior finishing (practically
unlimited and modular).
This is mainly accomplished by designing in standardized materials and the

use of exact sizes of prefabricated components as follows:
Standardized building materials

Prefabricated elements
Recycled and renewable materials
Design for flexibility and dismantling
By focusing in design and project execution at standardized materials,

recycled and renewable materials, flexibility and dismantling of these and
the use of exact sizes of IBS components, the waste generation factor could
be decreased significantly. Meanwhile sustainability and Green
construction is understood to be more than only insulation and waste
reduction in construction industry. Hence these require innovative solutions
that go beyond the IBS generally accepted in Malaysia. Designers, building
material producers and contractors thus need to bring about design
concepts, building elements and components as well as adaptations in the
building processes by integrating the ecological aspects in order to achieve
the optimum application of the sustainability principles during all stages of
the life cycle of buildings.
As a conclusion, the construction industry in Malaysia have to turn their

direction towards considering IBS for sustainability and Green construction
by exploring a new paradigm in designing and construction process. New
business will emerge to utilise green technologies and captured market
share in construction industry. It includes construction firms that are
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specialised in providing consultancy services for clients which would like to

use green technology. In addition there are potential market for
manufacturer to produce innovative green product in the construction
such as panels, roof system, walls, rain-water harvesting system and solar
panel. The green technology initiative also creates multiplier effect for other
industry. More business can be created in the area of recycling, water
purification, air purification, environmental remediation, solid waste
management, renewable energy and energy conservation. Under Budget
2010, the government provides effective financial incentives through Green
Technology Financial Scheme (GTFS) in the amount of RM 1.5 billion to
explore green technology and adopt green practices. This fund will provide
soft loans to companies that supply and utilise green technology. For
suppliers, the maximum financing is RM 50 million and for consumers and
companies RM 10 million. In addition, the government is also considering
tax incentives such as tax deduction for contribution towards
environmental funds and tax breaks for buildings and designs that work
harmoniously with nature.
9.3 Open and Industrialised Building System
A closed system can be classified into two categories, namely production

based on client’s design and production based on manufacturer’s design.
The first category is designed to meet a spatial requirement of the client’s
that is the spaces required for various functions in the building as well as the
specific architectural design. In this instance, the client’s needs are
paramount and the manufacturer is always forced to produce a specific
component for a building. On the other hand, the production based on
manufacturer’s design includes designing and producing a uniform type of
building or a group of building variants, which can be produced with
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common assortments of component. Nevertheless, these types of building

arrangement can be justified economically only when the architectural
design observes large repetitive element and standardisation. In respect to
this, a novel prefabrication system can overcome the requirement of many
standardised elements by automating the design and production process
and sufficient demand for a typical type of building such as school so that a
mass production can be obtained. The beauty of the system is to allow
openness in its structure supplier where everybody can bid to produce lower
price. In addition, the manufacturer and installer will look for cooperation
models that will create benefit for both. Open Building System also provides
a high degree of design flexibility but required a maximum coordination
(Thanoon et al 2003). OBS also allows the precaster to produce a limited
number of elements with pre-determined range of product and at the same
time maintaining architectural aesthetic value. It also permitting hybrid
application and adaptable to standardization and Modular Coordination.
Open Building System (OBS) was first promoted during the rebuilding years of
post-war Netherlands. The rules for dimensions, positions and interfaces of
components are important elements of OBS. Several definitions on OBS are
listed as follows:
• An innovative approach to design and construction that enhances

the efficiency of the building process, while increasing the variety,
flexibility and quality of the product. The building is viewed as a well-
organised combination of systems and sub-systems, each of which
can be carefully coordinated to ensure a better process and
product for the owner and a parallel positive outcome for the
building professionals.
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• A building concept characterized by an explicit customer focus,

modular pre-engineered product system, and a sequential process
structure. It advocates a concept of modularity, which includes the
separation of different levels of decision-making, and the decoupling
of building parts within a modular system.
• A principle of organizing the building process along independent

levels of decision making, corresponding to the structure of technical
subsystems in order to create maximal flexibility and variety of the
object, while keeping the process systematically organized. OBS is
also based on the principal of using several different sub-systems to
reach a high flexible total structure responding to user needs.
• A creation of sub-system in building construction where interference

with other system is minimised.
• A system which is designed components or sub-systems that are

interchangeable with other building elements.
• A strategy to design, construct and operate the built environment

the user can relate to and is willing to maintain and defend.
Therefore the built environment needs to reflect the way it is
controlled. In order to prevent serious misfits it needs to be adaptable
to changing needs.
• An idea of distinct levels of intervention in the built environment, such

as those represented by 'support’ or ‘base building, and 'infill' or ‘fit-
out’, or by urban design and architecture. It also defined as the idea
that users may make design decisions as well as professionals
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• A method of organising the building industry on national and

international level which takes advantage of an open market of
building components that fit together, geometrically and functionally
for a wide variety of building types. It allows interchangeability of
components from variety of manufactures.
Open System approach building components could be combined in a

variety of individual building projects as a free interchangeability of
components of different products and technologies. The major systems
include the building site, the structural envelope, the division of space inside
the building, the plumbing, wiring, heating and cooling, and the cabinets,
furniture and other stuff that people put inside the building. By disentangling
the systems and subsystems from each other, opportunities are increased for
better organization, increased consistency, quality and more control and
flexibility for the homeowner. The key aspect of open building system is
dimensional coordination to allow flexibility in form of construction, and the
capacity to deal with differences in dimension and tolerance. In order to
obtain an optimal result, a high degree of coordination must exist between
various relevant parties such as designer, manufacturer, owner, and
contractor. This is achieved through an integrated system in which all these
functions are performed under a unified authority (Warszawski, 1999).
Therefore the subdivision of the building process needs to reflect the lines of
decision making and the definition of responsibilities between the parties.
This subdivision can then be translated into specifications for connections
between building parts. One of the most important aspects of any
organization is its communication structure. Good communication among a
team of architects and builders who have clearly defined roles is a rarity in
the building industry today. In the building industry good communication has
remained difficult to achieve because of the fractured nature of both the
industry and any given project. Information technology can take a
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significant part of development by providing a better communication

channel.
A partition between the structure and the infill system might give different
solutions for the level of customization and the level of prefabrication.
Separation according to building components could lead to new forms of
organizing the production using standardized elements. The organized and
accessible systems such as IBS will no longer be useful except the
competition of products is weak or nonexistent. Therefore, the coordination
of sizes is vital in IBS to avoid monopoly in the production of precast
concrete component in Malaysia construction industry. The Open System of
components is ease for construction and enhancing the ability to effectively
access, repair, and modify over the lifecycle of the building. Similarly, the
design in IBS construction and its components can be reconstructed in a
relatively straightforward manner as occupant living requirements change
over time. Thus, the specific standard could be applied in between two
different sectors of manufacturing and construction. And while these
standards are being discussed, in practice they are very much related to a
single design approach for IBS which may support the both simultaneously.
In fact, the ultimate goal of the IBS construction research is to develop
solutions that satisfy both of these sectors.
Other manufacturing sectors such as aerospace and automotive sectors in
comparison primarily rely on standardised components that can be
configured and assembled to provide a specific product or service.
Nevertheless, in construction industry the implementation faced
shortcomings due to its characterisation as a craft-based producing one of
a kind products and services (Eichert and Kazi, 2007). The ideal state of
having one common IBS Open System, based on the fundamentals of Open
Building, for the whole industry is very unlikely in the near future. This is
because the industry already has 138 IBS systems providers with 375 IBS
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products that cover precast concrete frames, panels and blocks, steel
frames, prefabricated timber frames as well as system formworks (CIDB, 2008
and Hamid et al. 2008). Each system provider has invested heavily and not
all systems or production facilities are easily adjustable or convertible.
Some important barriers for as industry wide exploration and take up of OBS,
which are the following:
• Sector specific: a very diverse group of stakeholders; which can have

very different objectives and requirement; disagreement between
stakeholders (Hervas et al 2007)
• Radical change is needed; traditional sector like construction is
reluctant or even resistant to change due to attitude, strong
regulation and lack of support for innovation (Hervas et al 2007)
• Lack of successful global recognize project on OBS using material
and product on available widely on open market (Hervas et al 2007)
• OBS is not guaranteed the aesthetics demanded by the end users
(Hervas et al 2007)
• Its adoption experience one major setback, joint and connection
problem. It occur when two element from different system are fixed
together. The standardization of joint and connection detail is
needed (Thanoon et al 2003).
• The adaptation required an extensive transfer of knowledge, skills
and technology in order to reorient change in business process
(Alshawi et al 2007).
• The existing structure and legal regulation of construction industry.
• Market monopolise by big manufacturing company of close system.
Globally, the OBS has been applied in Finland by SATO Corporation on their
residential project known as Finnish Plushome. The project which has
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successfully implemented was support by the Matura Infill System and

ManuBuild Consortium.
Matura Infill System
Matura Infill System is a fully prefabricated product, certified and approved

in the Netherlands and Germany. It has been used in a large housing
project in Berlin and has offered customized just-in-time residential units and
the short completion time for each unit (less than ten working days), provide
adaptability in design, quality control, the ability to offer fully customized
units and future changeability in concrete building. The software called
MaturaCADs utilizes product specification, graphic and accounting
principles which supports the process from design to real time cost
estimating, take-offs, sizing, labelling and packing. Matura Infill System is
organized in two subsystems. The lower system that uses two (2) patented
parts of the Baseboard Profile and the Matrix Tiles help to organize over 23
separate subsystems and thousand of parts already in the market. The
Matrix Tile is basically a modular floor panel that has grooves in it to provide
room for distribution of primary building services such as drains, water,
heating, electricity, and all kinds of pipes and wiring. The Baseboard is the
secondary distribution system that runs wires for appliances. Baseboard
Profile fits into the top grooves of the Matrix Tile, serving as partition bases
and electrical raceways. The base profile also allows wiring to be run up into
walls and under doorways as required, and also aiding the lower system in
accommodating off-the shelf ‘upper system’ components with standard
interfaces. These include partitions, cabinets, appliances, fixtures, and door
assemblies.
ManuBuild Project in Europe
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ManuBuild was started in April 2005 as an industry-led collaborative research

project involving 25 partners from ten (10) countries across Europe. The aim
is to meet the client requirements by transforming the construction sector
towards sustainability. The vision is to provide a higher quality building with a
high degree of design flexibility at a lower cost. Led by Corus Group (UK),
the initiative is endorsed by the European Network of Construction
Companies for Research and Development (ENORD1) and in line with the
European Construction Technology Platform (ECTP2) research agenda.
The strategic elements for Manubuild Project are outlined as the followings
(Eichert and Kazi, 2007):
• Building concept for efficient assembly of pre-manufacturing

buildings including the development of flexible system, smart
components and connection and interface enable plug and fix
assembly onsite
• Business process for customer and community involvement in
planning, design, configuration and customisation including the
development of performance driven production and delivery
processes, model for value driven business, organisation model and
service model covering the full life cycle of buildings
• Production technologies for efficient on-site and off-site
manufacturing and assembly including the development of mobile
factories, logistics system and lean handling, onsite assembly method
for rapid, safe and efficient handling and assembly and quality and
safety method for open building manufacturing
• Information and Communication Technology (ICT) support;
development of market analysis tools including the development of
intelligence components catalogue, interactive building
configuration and assessment tools and tool for logistic planning and
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monitoring for rapid re-planning and simulation of alternative

assembly sequences
• Training and education including the development of multicultural
and multidisciplinary training plan, training courses, implementation of
teaching facilities in real factory environment and development of
mobile and portable training simulator
These five strategic elements of Manubuild are supported by a series of

demonstration projects and dissemination activities involving full scale
projects, virtual sales office, newsletter, handbook and conferences. A
ManuBuild has been developing to enhance the value added of materials
and construction system. The system that utilized manufacturing to be Open
Building was well-planned to meet with the market as well as life-cycle
perspective. Owing the fact that buildings are site-related and technology
factory-related, the construction systems strategies was classified into three
i.e. the Site-intensive Kit-of-Parts, the Factory-made Module, and the Hybrid.
Raines Court and NEXT 21
The Raines Court which are the first multi-storey modular housing
development in the United Kingdom was completed in 2003, aimed to drive
forward the impetus for innovation and demonstrate improvements in speed
and efficiency. The housing features 53 shared ownership flats aimed at
local people in Hackney on moderate incomes and key workers, as well as
eight live/work units for sale on the open market. Raines Court was an
extended experiment for Peabody into the potential for delivering high
quality housing through off-site volumetric construction methods.
As Peabody's second modular housing development, it followed on from
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award-winning Murray Grove in 1999, and hailed by the government and

the construction industry as a breakthrough for innovative house building.
Much of what was achieved with Raines Court was an industry first and it
was the largest factory-assembled, affordable housing project in the country
at the time.
The NEXT 21 project was sponsored by the Osaka Gas Company and
completed in October 1993. The building consists of 18 individual housing
units, which were designed by 13 different architects. The construction
period lasted from May 1992 to September 1993, and the design of the units
continued until December 1993. Following a period of six months in which
the building was open to the public, the five-year experiment in occupancy
began in April 1994. Employees of the Osaka Gas Company and their
families became the occupants of the building, participating in the project
by beginning the five-year process of compiling data related to their living
experience. An innovative architectural system has been put into practice
at Raines Court and NEXT21. Basically, the component systems are divided
into five (5) groups according to the required life of each component and
production path as follows:
Structure, such as construction, connections and foundation

Infill, such as floors, walls and windows
Interior, such as wallpaper, curtains and chairs
Environment, such as experience, sound and light intensity
Outfit, such as roofing, balconies and facade
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i) Raines Court (view from ii) Raines Court (view from

main access road) courtyard)
i) NEXT21(view from main ii) NEXT 21(view from courtyard)

access road)
Figure 3: Raines Court at London and NEXT21 at Osaka
Based on these projects, in order for these subsystems to be compatible and

to harmoniously produce a well integrated building, three (3) types of
coordination are required:
Geometric coordination in terms of the size and shape of the building

components.
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Performance coordination of building equipment.

Job coordination in the process of construction
Steps proposed for the successful introduction of OBS in Malaysia:
• It is important to promote the development of a philosophy that

meets the expectation of the sectors. An important way to get to
know and understand that expectation of the sector is to involve
stakeholders (architect, construction companies, developers and
public administrators) from the beginning, gathering and analyzing
the requirement (Hervas et al 2007)
• OBS needs Life Cycle methods in order to state the requirement and
consider user needs, to be able to design for required performance
and life cycle, and to be able to make decisions between
alternative option, for instant, Life Cycle Assessment and Life Cycle
Costing
• An improved understanding of end-users and their needs, flexibility

and multifunctional requirement through consideration of activity
spaces and integration is also the key for OBS (Thomson, 2007).
Parametric components to create individuality rather than
component designs defining what is possible
• Increase customer-orientation, survey and investigation to catch

customer needs and priorities; or marketing orientation (Martinez et
al 2007)
• Uniform building regulation formulated based on functional

requirements and necessary to encourage industrialisation by
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establishing uniform requirement throughout the country. It is also

important that the regulation be administrated and interpreted
uniformly (Ghazali, 1997)
• Logistics; manufactures and site shall adopt just in time technique,

optimization of handling devise and tools and automation method to
achieve cost reduction
• ICT tools; development of software tools in order to help users for the
selection of adequate option, for instance, a dynamic catalogue
(Hervas et al 2007).
• Standardisation can be a good tool to speed up the implementation

of the principle of open building in the building market in order to
assure the reliability of the element, component and modules
manufactured
• Malaysian standard joints for IBS (wet or dry) must be designed and
made available for use by the industry (Hamid et al 2008).
Construction Research Institute of Malaysia (CREAM) is currently
developing a standard IBS joint system together with Public Works
Department (PWD), Universiti Teknologi Malaysia (UTM) and expert
from University of Nottingham.
• OBS must be competitive in terms of cost, performance and quality

as compared to proprietary system and conventional methods in
order to be sustainable in the construction market, thus enhanced
OBS concept in Malaysia (Hamid et al 2008).
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• A complete comprehensive study on IBS solutions encompassing the

entire value chain will ensure its success. These shall include
verification, validation and certification of process on IBS
components, fabricator, factory, erector and related skills of
specialization (Hamid et al 2008)
• Soft issues related to IBS such as marketing, social impact,

involvement of Bumiputera contractors in vendor development
program as highlighted in the roadmap should be taken on board
right at the early stage (Hamid et al 2008).
• Considerable investment for training, education and technology

transfer (Alshawi et. al 2007). The training must equip the professionals
with timely and relevant skills.
• OBM has to harmonize its approach, model and tools with the legal
regulation and standard.
• To harmonize OBS with Lean Production. Lean Production strives

towards zero inventory and just-in-time logistics
9.4 Partnering in IBS
Innovations which are the basis of competitive advance of construction

industry can be taken in many forms. Construction innovation encompasses
a wide range of stakeholders (an organisation of suppliers, consultants,
contractors, users, etc) within a ‘product system’. The nature of production
in the construction industry for innovation appears to be unavoidable and
arise because of custom. Therefore partnering in IBS is vital towards a
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success of innovation in construction. Strategic partnering has suited both

large and small firms allowing numerous opportunities to improve their
conduct of business such as wider diffusion of products without costly
physical presence in the markets, risk and reward sharing, resource pooling,
reduction in the coordination and transaction cost, ability to concentrate on
core competency and rapid response to market needs. Collaborative
working such as partnering is essential for construction to address the entire
lifecycle of the construction product and take account of not only primary
functionality but also productivity, buildability, serviceability and even
recyclability. To effect change in the culture of the project delivery process
is to use partnering agreements between supply chain organisations. Such
agreements were encouraged to make use of standardised and pre-
fabricated components such as IBS. Therefore, partnering can be
considered as one of an agreement with the purpose of easing works and
achieving common goals through knowledge manipulation process.
Partnering create opportunities for sharing knowledge and new innovative

ideas to be incorporated into new building systems of IBS in Malaysia.
Effective knowledge sharing is an important element in the knowledge
manipulation process in construction industry which has been identified as a
vehicle for technology transfer between foreign and local companies.
Although there are no direct transfers technologies to the partner company,
such partner could learns the transferred technology during construction
stage and later internalizes the knowledge learned into their own
organisation. However it is refer to the factors that affecting the
effectiveness of technology transfer such as personal relationships, trust,
organizational culture, etc. The interdisciplinary team work enabled the
transfer of knowledge acquired from partnering in IBS project operations into
new innovative designs and construction methods. In the case of partnering,
knowledge could be acquired and transferred mutually between venture
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partners, and was reflected in the creative designs and methods. Extensive
personal interactions can help to the transfer and share know-how
knowledge which is more likely to result in sustainable advantage. In
addition, partnering is critical for the success of sustainable construction
philosophies and to a building system like IBS. A partnering between a major
house builder and manufacturer in the UK optimizes the use of
manufactured components using the modules as the primary stabilizing
components. This creates a more open building technology which based
on real industrialization. A real industrialization means the greater part of a
building section is mass-produced in an automated process on specification
of the manufacturer. This in contrast with prefabrication where parts are
produced offsite based on requests of clients. Therefore the active
networking between stakeholders (local or international) is necessary to
realize the partnering in IBS. The need for strong financing amongst partners
is the most important criteria that need to be critically evaluated before they
can embark on a collaboration or partnership agreement. The other reason
for partnering is basically for the purpose of implementing new and
unfamiliar technological approach.
The IBS construction approach require a lot of knowledge in terms of

technological and innovation in the construction process. This factor is also
important to those industry players who are not familiar with the IBS to merge
with experienced contractors through a partnering approach. The other
factor is risk and profit sharing amongst partners could be shared in a
collaboration or partnership. Lastly, adopting a new management
technique in a collaboration or partnership is also crucial for new knowledge
strategy and future market investment for construction players in the
industry. The construction players are to embark on partnering in their
projects certainly requires a close connection between upstream and
downstream relationship. In IBS projects, to embark on strategic partnering
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concept is significantly important because this method of construction

requires just in time delivery of material on site and a good upstream and
downstream relationship between players. Without this, IBS projects may not
be able to be delivered on time, within the cost and at the stated quality. As
a conclusion, the knowledge sharing of technology in the IBS is critically
important between players in the industry. The need of capable contractors
and design team to share the technology between them is most crucial to
ensure the successful implementation of project using the IBS construction
approach. This approach need to be identified to enable such
development, planning and construction processes that incorporate design
and construction of building that include the life cycle oriented
performance and cost guarantees.
9.5 Mass-Customization and Automation: A Higher Level of IBS
Mass-customization is a production made of custom products but on a large

scale with simplified processing and systems of light prefabrication. This term
indicates a personalization of products which recognizing the importance of
the requirements for each single project. In construction industry this means
merging a custom but craft-hand approach to architecture, that has always
been the most suitable but the most expensive and time consuming, to a
rigid industrialized approach, fast, light but sometime unsuitable for
particular architectural solutions. Those new paradigms completely change
the perspective of professional practice, integrating in the design phase skills
to meet client and architects needs. New strategies and concepts are
necessary to empower the small scaled precast concrete companies as well
as local construction companies, architects and engineers to benefit from
industrialization concepts in the client’s value creating process. The
cooperative production network will enable IBS manufacturers to increase
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their automation level and implement mass-customization on a platform

basis.
The manufacturer must provide innovative, individual and cost-effective

elements and systems in order to compete for the future and to increase the
automation level of off-site production processes by adopting a platform-
based mass customization approach. Many systems of the building are
concerned by digital fabrication and mass customization process, from
structure to roof, but some of them seem to catalyze the major attention:
architectural envelope. In order to provide for mass customization the
building form must allow for much possible geometry. This is meant to meet
the needs of the average consumer, so providing for eccentric designs is not
necessary, and in fact should be avoided in order to keep the system as
simple as possible. The geometry must be rectilinear, because the
connector, which manages the beam to column interface, only allows
connections in six perpendicular directions. It may be possible to create non-
ninety-degree connectors, but for the initial introduction of the system only
the one connector would be provided for simplicity. Beams may be easily
created in any length because of the manufacturing process. As the
finished beam is pulled through the mold it may simply be cut at the desired
length. Because beams may be any length and panels may be any width
the beam must allow physical attachment anywhere. The implementation of
platform-based mass customisation could increase the competitiveness of
manufacturer in Malaysia. This approach will not ensure that manufacturer
follow the paradigm shift in the construction industry toward solution
provision instead of labour provision. Value competition is the key to
overcoming purely price orientated competition and creating added value.
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The cooperative production network within the manufacturer is a promising

approach for making mass customization accessible for IBS, allowing them
to benefit from the production advantages of stationary industries, such as
economies of scale, economies of scope, learning curve effects and
automation possibilities. The cooperative production network is therefore a
milestone toward becoming a solution oriented service provider. Some
developed countries such as France and Japan are making significant
efforts in automation. For instance the Japanese Misawa system for
production of exterior walls combines advanced production technology
with a high degree of automation. However the automation of precast
concrete industry within the European construction industry is using platform-
based or system-based mass customization. It is state of the art within the
timber construction industry to have an almost complete digital chain using
computer integrated manufacturing from the very early planning stage
through to manufacturing. Meanwhile, digital chain tools, such as the
Building Information Model (BIM), are developing further. BIM will change
the traditional planning process significantly and perfectly matches the mass
customization approach to manufacturing individual client solutions. The
manufacturer is still only just starting to make use of the information and
communication technologies and automation possibilities that are available
today. The benefits of automation are save manual labour, eliminate of
strenuous, dirty and dangerous work, and improve of quality. A very
important benefit of automation is the flexibility it gives to an otherwise rigid
mechanized process. The introduction automation could reduce the
duration for superstructure by 15% over the traditional construction method.
The technology enables robots to perform sequences of tasks onsite by
interaction with its environment through electronic sensors. Robots are also
being developed for site assembly of prefabricated components. The
research was being done in England to reduce the complexity and
variations of construction joints, so that robots can be used to join panels.
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The Japanese were developing robotized tools for the building site, and
installing rails on prefabricated panels to serve as guides for robot.
The concepts of ‘super construction factory’ automation into the building

site for steel structures were implemented in Japan. Building components
and materials were delivered to the floor under construction through
elevator and are lifted to the exact location of the floor by cranes. Robots
then carried out welding and fastening. Upon completion of one floor, the
factory is jacked up through an internal climbing system to commence work
on the next floor. However, this kind of factory requires substantial one-time
and ongoing investment.
The Shimizu Manufacturing System by Advanced Robotic Technology

(SMART) of Japan was the world’s first all-weather automatic system for high-
rise building. The system integrates technologies of climbing canopy,
prefabricated components, automated assembly and computerized
management systems. This system of construction technique ideally suited
to erection of prefabricated structure. Once the structural core of a building
is completed, a canopy or hat truss structure is assembled and mounted,
where it will be eventually become the top floor. The climbing equipment of
tower crane performs the rise of the canopy. Vertical movement of
materials to and from the working storey is by the use of lifts and horizontal
movement by hoist. The movement of the hoists is entirely automated to
improve work efficiently. Travelling cranes are attached on the underside of
the hat and used to handle and assemble prefabricated floor slabs, beams,
girders, and walls. The canopy also provides shelter or protection for the
floor under construction from adverse weather and environmental
conditions, preventing delays and improving working conditions and
construction quality.
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9.6 IBS and the issue of foreign workers
To cater huge demand of labours in construction sector in Malaysia, the

industry is relying heavily on foreign workers (migrant workers) from
neighbouring countries. In 2008, there were 306,873 registered foreign
workers, which made up 44% of total workers. This number is excluded from
the illegal workers and non-registered workers. CIDB has also made an
assumption that 600,000 out of 800,000 construction workers are foreign-
based which include the registered, non-registered and illegal workers.
The foreign workers in Malaysia have contributed to rapid growth of the

economy. In the past, foreign workers had helped to alleviate the problem
of labour scarcity and also kept labour costs relatively low. This enabled
producers to maintain their competitiveness against other low-cost
producing countries. During recession, they also served as a buffer and
helped to maintain a relatively low level of unemployment. Foreign workers
also contributed to increasing domestic demand through their expenditure
on food, transport and other consumption items.
The employment of foreign workers nonetheless has exerted several adverse

effects on the economy. Foreign workers have slowed down the growth in
productivity, displaced local workers in some industries, depressed wages,
released the pressure for upgrading of skill and technology, thus impeding
human capital development, and delayed economic transformation.
Consequently the economy is trapped in a middle-income state where it
continues to produce relatively low-skilled labour-intensive products.
Moreover foreign workers have affected the balance of payments
negatively via their huge remittances to the home countries and they also
caused social and safety problems in our society.
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Recently the issue of foreign workforce affects Malaysian diplomatic

relationship with neighbouring countries. Based on Amnesty International
report in 2010, Malaysian foreign worker are being exploited by Malaysian
employers. Foreign workers are often forced into labour or exploited in other
ways, such as having their passports confiscated by employers.
The dependency to foreign workers is due to certain causes such as poor

participation by local labour. The local are not interested in involving
themselves in construction sector due to unattractive payment structure and
service terms that do not guarantee job security. Local youth would rather
be unemployed instead of working in the construction industry. More people
are seeking for higher education in effort to secure more lucrative profession
and consequently to a better life standard than their parents had. It appears
that a stigma is being cast upon construction trades as dirty, dangerous and
difficult. The term construction worker embodied as the unskilled manual
labour, has negative impact for young people. Most commonly see that the
construction worker lacks of prestige, class and respectability.
Widespread contracting system in the construction sector has eliminated

security of tenure and casualties employment status. This has
understandably compelled locals to shun such insecure jobs. There is also
complete lack of coordination which leaves thousands without work in some
work sites and labour shortage elsewhere. The demand for foreign workers is
not due to the genuine shortage but due to desire of employers to pay low
wages.
Based on a research by CIDB in 2010, the largest portion of construction

workers in the construction sector is the local with 44.63% followed by
Indonesian (34.10%), others (13.71%) and finally Bangladeshi (7.56%). The
232
result shows that the foreign workforces dominate the construction sites in
Malaysia with cumulative percentage 55.37%. The top five trades dominated
by local workers are crane operation, street lighting, plant operation,
electrical work and air conditioning. For foreign workers, majority is working in
the stage of iron work, wood work, plastering, brick work and concrete work.
It concludes that the local workers are involved with skilled works while the
foreign workers are occupied in unskilled works.
As such, the effective way to reduce the number is to introduce innovation

and automation pre-fabrication construction in the form of Industrialised
Building Systems (IBS). This step can reduce manual job significantly. The dirty,
dangerous and difficult image might be vanish and encourage more local
to be participate in construction industry. A comprehensive system of quotas
and levies on foreign labour should be implemented. Quotas should be
determined by supply and demand for labour in construction industry. The
shortfall between the estimated demand and domestic supply would
represent the foreign labour requirement, which forms the basis of
determining the quota level. Levies should achieve the objective of
providing a strong incentive to use capital-intensive production or employ
local labour. In other words, the cost of employing foreign labour must be
raised to a level where there are no cost-saving benefits in employing them.
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CHAPTER 10: RECOMMENDATION
Throughout the process of this research, there were various issues that were
uncovered and highlighted, which thus led to the following
recommendations towards the improvement of IBS adoption in Malaysia:
10.1 Policy and Institutional Strengthening
1. Since the application of IBS involves many parties such as

manufacturers, installer, transporters and various government bodies,
there should be a governing body that is only in charge of the
legislations, training, financing, controlling, research and
development so that an effective strategy can be formulated that
applies to all the parties involved. The body is also responsible for
making necessary regulations, guidelines, legislations and looking
into an implementation plan that is feasible for all the parties
involved. Furthermore, rather than giving a levy to the contractors,
the body can offer flexible financing and tax reduction to
manufacturers and constructors to encourage IBS implementation in
the construction industry. In 2011, the amendment of the CIDB Act
shall allow CIDB to regulate IBS in both public and private sector. In
our view, a regulatory regime on IBS can only be effective and
workable if it is comprehensive. It should cover both the off-site stage
design, manufacture, production and construction but also the
onsite stage of use, installation and assembly. This is because the use
and installation or assembly of IBS on site must be done and carried
out in particular manner involving a particular procedure which is
predetermined at its design production and construction stage.
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2. A vendor development programme modeled along the lines of the

development of the national car industry should be established to
target delivery of building components for the construction. The
vendor program is to be accredited by existing government
agencies which can provide a vetting process not only to guarantee
consistent quality but also the achievement of structural capacity,
fire rating and other requirements. The selected vendor are to be
provided training, seed capital, components design, and selected
private sector consultant to start up production factories. The
location of this vendor’s manufacturing plant has to be located in
the areas with available labour. Based on educated assumption, the
expected investment requirement of RM 1.25 million is considered
within the reach of SMEs and small contractors displaced by the new
technology. A system is to be developed such that building
component accredited will be given green lane approval such that
technical and non-technical legislation that hinders implementation
of the new technology will be removed. The government can help
by conducting market research to ascertain market opportunities to
the vendors. The vendors also need inventory management
consultancy and advice and development of better tools and
infrastructures required for location of manufacturing plant.
3. Based on the case studies and an expert workshop within the

industry, it was highlighted that it is imperative to the government to
solve the issue of foreign labour. Availability of cheap foreign
labourers doing manual jobs is probably a root cause hindering IBS to
compete with conventional construction methods. Nevertheless, the
cheap labour rates and huge supply in the local construction
industry cannot last forever, and a disruption of the supply would
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generate huge problems to the industry, as experienced in 2002. The

solution can be achieved by restricting the number of foreign
workers employed on the construction industry or by imposing a high
levy on their employment, making the employment of skilled
construction workers mandatory. Because of this, it is important for
the industry to be ready for the transition. A systematic gradual
reduction of foreign labour policy must also be in place to support
the progress of migration from traditional based construction to IBS.
Local involvement on IBS should be encouraged and they need to
be trained to embrace IBS jobs.
4. The incentives for IBS are not sufficient. IBS requires more pull and
push factors from the government. Due to small profit margin, the
change from conventional to IBS was not feasible unless more
attractive incentive system and benefits, which can lure the
conventionalist to change to the IBS, are in place.
5. The CIDB and other related government organisation should play a

key role in encouraging large local construction companies to
establish strategic partnership to venture oversea markets using IBS
method. Partnership that clearly defines each partner’s roles and
responsibilities in terms of own niche and value will enhance the
value of the partnership in venturing overseas. Consortia of
contractors that bring together various expertise and integrated
solutions will enhance the capacity and capability of Malaysian
players in the overseas markets.
6. From a wider perspective, there is a good level of willingness among

industry and government to take things forward. However, there is
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reluctance among companies to take risks, which is mainly related to

the unstable market and hence a lack of investment. In this context,
the contractors might need to consider creating an IBS “economic
cluster” to boost the industry by creating a partnership between the
government and private sector when and where it is needed. This
approach will help to create a new environment within which IBS
can flourish in a much shorter time and it will also put Malaysian IBS
on the map. Economic clusters refer to all necessary components
that are required to get IBS off the ground. This could include (and
this is not an exhaustive list):
• IBS Association to create “one voice” for the industry and

hence better define and communicate their needs. This
cluster could also undertake the role of lobby group for IBS.
• Promote design and manufacturing as the core of the
industry.
• Develop SMEs to create the specialised supply chain to
the core business.
• Partially finance SMEs to establish the supply chain. Special
housing finance – a special “mortgage” facility to help
people buy the produced units, thus creating the market.
• IBS Regulatory Unit – to advise government and industry on
new and adjusted regulations to jump start this industry.
• Develop and promote Building Information Modeling
(BIM).
• Develop new materials and technologies for IBS.
• Facilitate a joint venture with semi-government bodies or
government-linked companies to develop housing using
IBS systems and joint ventures between local and
international IBS contractors.
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10.2 Implementation
1. To create a sustainable IBS business particularly in the

implementation of public construction project, it was suggested that
contractor class G7 should sub-contract part of the work only to
smaller class certified IBS contractors (under CIDB). The G7
contractors should also appoint 3 SME as their vendor to produce IBS
components. CIDB should vet through capable SME which are
ready to be the vendors.
2. To standardise the information, Bahasa Malaysia was suggested as a

medium of interaction and communication on the issue regarding IBS
and its implementation
3. Large and established IBS manufacturers need to create IBS vendor

via partnering with at least 5 SMEs before being listed as “Registered
IBS System Provider” and undertake government projects. This will
encourage standardisation, modular and open system
4. The government needs to study the most appropriate safety net that
can be instituted to motivate the contractors to be more innovative
in IBS and involved in high technology such as robotics and modular
building. Incentives and soft loans to adopters in these technologies
are highly recommended.
5. To study the state of readiness of all the professions involved in the IBS
value chain, in particular the architects, the engineering consultants,
the quantity surveyors, and those involved in the supply chain,
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including issues such as skilled manpower, suppliers and assemblers,

and in the linkage activities such as ICT and the authorities.
6. To provide quality assurance scheme that the IBS meets best

practice in the safe and competent delivery of IBS services. The
scheme is a process based assessment scheme designed to
benchmark IBS construction organisations against best practice in
terms of competency, methodology and safety. The scheme serves
as the vehicle for the standardisation of best practice across the IBS
industry. The scheme accredited contractor’s performance and will
investigate and respond rigorously to reports of poor performance.
This scheme ensures best practice within the IBS construction industry
in terms of the safe and competent delivery of a product or service
which meets client requirements. The scheme covers the design,
manufacture, construction and project management activities and
focuses on the process of delivery as well as the delivered product.
As such, Malaysian can benchmark itself with the best in the world in
providing such initiatives. One of the established accreditation
scheme in the UK for offsite manufactures is the Buildoffsite
Registration Scheme:
a. The scheme has been set up by Buildoffsite, the body that

campaigns for the greater uptake of off-site building solutions,
in association with Lloyds Register EMEA to standardise and
ensure best practice across all aspects of the off-site process,
from the submission of tenders through the awarding of
contracts to the specification, design, manufacture,
construction, handover and even the ongoing maintenance
of a completed building. It also integrates existing quality
239
assurance and environmental performance certification

under, for example, ISO 9001 and ISO 14001.
b. By choosing a supplier registered under the scheme, client

organisations can be confident of the assured levels of
competence, methodology and safe working from
companies that have standardised best practice for the
delivery of their products and services. It will give clients
greater confidence with regards to a company’s technical
competence, effective methodology and commitment to
safety.
c. The Buildoffsite Registration Scheme is operated in

collaboration with other organisations that may be able to
provide specialist focus, such as the British Board of
Agreement. Its operating philosophy is to evaluate the control
measures taken by a service provider to mitigate any risks to
the safe and competent delivery of their products and
services.
d. By taking this approach it focuses on the way the products

and services are delivered rather than laying down standards
for the products and services themselves. This provides the
flexibility to cover a wide range of different approaches whilst
still setting a benchmark for best practice
e. The benefits of the scheme are:
i. It provides client organisations with greater

confidence of delivery to time, cost and quality
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through the implementation of risk management best

practice
ii. It provides management and shareholders with the
assurance that their risk management, competency
management and configuration management
systems have been independently validated as
meeting best practice with the attendant likelihood of
costly mistakes minimised
iii. It represents a key element of the Buildoffsite Property
Assurance Scheme and will facilitate a route to
market for the offsite provider with recognition of the
scheme by all major lenders including RBS, Lloyd’s
Bank, Santander and Nationwide, together with RICS
and the valuer community
f. Methodology
i. The company will register under the scheme

ii. The company will be audited by the 5 criteria of the
success factors in offsite
iii. The company will me measure by benchmarking tools
and given the marks based on the control measures
taken by a service provider to mitigate any risks to the
safe and competent delivery of their products and
services.
iv. The successful company that received pass or
excellence marks will be given certification of
accreditation. The accreditation is recognise by all
major lenders including RBS, Lloyd’s Bank, Santander
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and Nationwide, together with RICS and the valuer

community
10.3 People (Human Capital)
1. A comprehensive preliminary study should be conducted by the

government to identify the skill gaps in the IBS sector in order to
create a comprehensive, holistic and systematic training
programme. The preliminary study will ensure that the training fits the
needs of IBS organisations and accommodates current skill shortages
in the market, particularly specialist skills such as design and
installation, based on information from real practice.
2. The mass construction workforce, especially the locals, needs to

upgrade their skills to be involved in IBS. The policy on labour focuses
on encouraging personnel to acquire skills in more than single trade.
This would add more value by providing a more skilled workforce
which would ultimately enhance the competitive advantage of the
industry in facing the issue of adoption from conventional to the IBS.
They must be equipped in design, installation and project
management skills which are critical to IBS. Therefore, the
government should introduce a better training module. The thesis
suggests that the government should adopt the training tools
developed by Manubuild. Manubuild has developed an advanced
factory training module and a flexible mobile site training simulator.
The training and simulation programme involves participation from
large manufacturers. The involvement of the government’s linked
companies and large contractors in Malaysia is critical for the
success of these training schemes. The government can play a
facilitating role and support the training by introducing training loans.
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3. The government should run a comprehensive IBS training course on

the ‘soft issues’ related to IBS. This would include a course on
developing and enhancing business and organisation strategy for
contractors and n order improve their readiness. This course target
participations are senior management of IBS companies and
entrepreneurs who are interested in setting up businesses related to
IBS. Poor performance of many IBS contractors suggest that
conventional project management has not always been able to
develop the level of teamwork needed to cope with the dynamics
of innovation in the new paradigm of IBS mainly because it has
largely failed to integrate project and business processes and
objective effectively. This implies that the knowledge and types of
skills needed by project managers have not kept in pace with the
radical changes related to IBS. Interdisciplinary design knowledge
and implementation skills are required to enable the more synergistic
coordination, integration and synchronisation of wide range of
stakeholders and specialist involved. New soft skills related to IBS are:
• Strategic planning
• Market analysis
• Deal structuring
• Design and engineering
• System integration
• Economic and business case assessment
• Inter-organisational relationship building
• Legal, financial and procurement
4. The government should also endorse and certify the Master of

Science (MSc) or Doctorate programme in Advanced
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Manufacturing in Construction to be performed by local universities.

This can be conducted by twinning with institutions that have
already established this programme, including the University of
Salford. In this regard, the government should provide scholarships or
soft loans to the potential candidates in order to encourage their
participation.
5. The book suggests that it is important to promote a multi-disciplinary

undergraduate and post-graduate degree and greater
commonality in professional education with a particular emphasis on
design, technology and basic management skills. A new education
framework should be developed which is founded on a common
core final year project and should involve active collaboration with
students from various academic backgrounds (e.g. engineers,
quantity surveyors, building technology and architects etc). The new
programme should be established to teach production and
manufacturing theory at this stage. Apart from working with
academia to enhance the curriculum for construction related fields,
the construction industry could further boost exposure, to working in
the industry by encouraging industrial placement (internship) for
students. By encouraging industrial placements, companies can
better ensure graduates will acquire specific skill sets that enhance
their value to employers.
10.4 Process and Operation
1. Based on the data from this study, the government should develop
the Construction Industry Standard (CIS) and Code of Practice
(COP) to implement IBS and migrate from conventional practices to
IBS. It covers aspects of project management and other soft issues
244
related to IBS. These standards will become an important reference

document for contractors in Malaysia, particularly to the Small
Medium Enterprises (SMEs), which previously have not had sufficient
knowledge to implement IBS method. There is also a need to
develop a series of standard construction components and pre-
approved building plans for the green lane approval programme by
local authorities.
2. The payment mechanism for IBS should be reviewed; the adopters

require safer and more reliable payment mechanism and contracts.
The industry should benchmark with other industry particularly in
manufacturing and automotive to understand mechanism that
works for IBS construction.
3. Further exploration in terms of enhancing collaborative efforts could

help the industry towards a more responsive environment. The thesis
suggests that partnering should be encouraged in IBS. Partnering
delivers significant improvements in performance by empowering
designers and specialist to do their best work. Other key objectives in
pursuing this approach include addressing opportunistic behaviour,
power imbalance and lack of equity, cost overruns, and contractual
and confrontational procurement strategies leading to disputes. The
partnering approach allows for a more consultative manner of
working and aims at achieving common goals driving at win-win
collaboration. The incorporation of strategic partnering in the IBS is
seen to be a value added and strong approach to its
implementation and project delivery. This is due to the nature of the
IBS construction itself that requires close integration and cooperation
among stakeholders with regard to the upstream and downstream
relationship of the project delivery system. Importance elements of
245
the successful implementation of partnering depends on the

following key features
• Common purpose and commitment leading to win-win

solutions
• Effective leadership
• Selecting the most appropriate partners and forms of
partnering
• Developing right organisation structure
• Motivating and empowering the team
• Monitoring the effectiveness of relationship
4. The book suggests that the Design and Build (D&B) contract route is
the most suitable for IBS. D&B encourages innovation and
improvement in the systems and processes. Other type of
procurement such as PPP and PFI actually a good platform to adopt
IBS.
5. The book suggests that whole-life costs need to be emphasised with

an understanding of value rather than purely direct costs. It helps the
industry understand true benefits of various IBS option. A system or
method is required to show and convince clients that IBS is beneficial.
6. Just in time delivery and right first time quality should be encouraged
coupled with strengthening planning and management techniques
to improve productivity and limit waste.
7. The customer’s needs and desires must be identified and addressed;

this will include the need for customisation and the offer of choice.
246
Mass customisation must replace mass production as technology

and IT can now deliver the choice of clients demand.
8. The use of system formwork (metal, aluminum and plastic etc.)

gained its popularity recently due to its flexibility (can be used in
many projects, recyclable at many phase of construction and can
be used in different types of design structure) and the use is not
dependent on economic of scale (cost viable). The method of
construction is not too differ from conventional, thus, can easily used
by the labour without additional training. However, one can argued
that the use of system formwork has a very limited impact on the
reduction of foreign workers and not to replace wet trades at site. As
low points given by implementing system formwork under CIDB’s IBS
Score is applauded but it is not enough. It was suggested that CIDB
should focus on promoting IBS systems that contribute to the
fulfillment of its main objective; reducing foreign workers. The use of
modular timber structure should be promoted and the pre-cast and
steel manufactures should be facilitated through appropriate
incentives.
10.5 Marketing and Branding
1. One of the steps that must be taken in coordinating IBS industry is to

develop and enhance the method of identifying targeted market for
IBS. As such, the CIDB should take the initiative to develop detailed
market selection that will facilitate the identification of targeted
market as well as provide assistance in addressing the needs and
enquiry of prospective local construction companies who wish to
venture to IBS. The selection matrix could be based on the followings:
247
• Opportunities: availability of projects

• Chances of securing project
• Business environment
• Funding - whether the projects are government funded,
multilateral agency funded or privately funded
• Level of risk, raging from security risk to infrastructure risk
• Ease of entry and exit
The CIDB needs to compile up to date on targeted market from

relevant sources and publish the result regularly.
2. IBS development in Scandinavian and Japan is closely associated

with strong customer focus and mass customisation, while in Europe
and the UK, IBS method is promoted as a solution for sustainability
and green construction. This is the time for the Malaysian
construction industry to re-brand the IBS industry. Current efforts to
brand IBS construction as a cheap and fast construction solution has
led to a relatively poor strategy as it has caused customers to
associate IBS with historical failure, poor workmanship and poor
design due to the cost reduction mentality. The strategy now is rather
to focus on customer pulls rather than technology pushes or cost
reduction. Most customers are interested in the end product but
rarely concerned about the processes involved. The term IBS which
carries the name of Industrialised Building System could be changed
to Intelligence Building Solutions, which reflects a more innovative
and better image. In an era when customers are more educated in
the issues of sustainability and green construction, IBS should be
branded as a value-for-money solution with a quality and
environmental-friendly solution. More showhouses must be
248
developed to showcase the building components and highlight its

feature as holistic sustainable building of dwellings for the future. This
will not only attract new buyers and create new market ranges but
will also improve the overall image of the construction industry
3. The government should launch a forum on a regular basis of

academics and associated practitioners active in IBS for exchange
of information and experience, development of new techniques and
advice on promotion and implementation of IBS. An online portal or
a dedicated section under 1bina.com is suggested to disseminate
international trends, products and processes associated with the IBS.
4. To solve the numerous problems faced by IBS, a number of pilot

projects using various forms of IBS must be developed. Although a
few pilot projects were implemented earlier, they were done without
the advantage of the added knowledge as of today. Pilot projects
are needed to change the mindset of practitioners and stakeholders,
and to convince them that what is preached is practicable. If the
pilot project is carefully chosen to include standard government
buildings such as schools and residential buildings, it may even be
able to generate economies of scale to the component producers.
The pilot project must demonstrate that better efficiency ratings due
to better dimensional tolerance in IBS are possible. Researchers from
local universities must also involve themselves in these pilot projects
so that appropriate prototypes of buildings using IBS that fulfils the
requirements of all parties can be developed.
Although the recommendations may seem broad, a strategy can be

formulated that could coordinate many of these aspect at national level
and to support IBS Roadmap 2011-2015.
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10.6 Future Research
The future researches recommended in this area are:
• A readiness model should be developed in the future to guide the

transformation of contractors to IBS. In the model, the level of
readiness (both the current and target) should be clear and
indicative of the organisation’s situation in terms of measurable
attributes and maturity levels. By identifying the current and the
required organisation statuses, the readiness gap can be
determined and the route of transformation progress becomes
visible. Progress can be accomplished when organisations move
through the levels in sequential order.
• All case companies selected in this research were established as

an IBS contractor or provider from their inception. They possessed
in-house capability in design, installation and manufacturing at
some point but also outsourced systems and implementation. The
selection cases at this point were based on the fact that, there is
still limited numbers of contractors which have been successfully
transformed from conventional to IBS-ready in Malaysia. To take
things forwards, future research should capture the success
elements from the organisations that have successfully moving
from conventional to IBS. The research should identify additional
factors that could be significant in the transformation process and
develop more realistic and robust framework for contractors.
• A study into how Small Medium Enterprises (SMEs) can benefit

from the transformation of large contractors in Malaysia to IBS
250
should be carried out. If the domination by a few companies can

be transferred to many SMEs, as was the case with the production
of precast culverts, columns and drains, and stumps and footings,
the economies of scale can be improved dramatically. This
research would thoroughly examine the role of SMEs and medium-
sized contractors in IBS to support the adoption such as to be a
product vendor or installer under umbrella system. It would
investigate the holistic value chain of IBS and how technology
transfer and benchmarking can expedite their learning curve. It is
also important to study in detail the business process involved in
the application of IBS in construction and the financial aspect, as
in the loan and payback system that can be implemented in the
current banking system.
• A research needs to be conducted to study the mechanisms and

characteristics of open systems in IBS. Open systems will be the
method of construction where customers will have more decision
making at the earliest possible stage. This includes understanding
of the economic standpoint of open systems and their implication
to the current propriety systems.
• The rising awareness of sustainability around the globe has put the
construction industry under immense pressure to improve project
efficiency and deliverables. IBS has the potential to promote
sustainability development and green construction. This may be
achieved from a controlled production environment,
minimisation of construction waste, extensive usage of energy-
efficient building materials, a safer and more stable work
environment, and possibly better investment for a long-term
251
project economy. A study to link and merge IBS and sustainability

should be the way forward.
• To evaluate and determine the impact of the application of the

plug and play concept on implementation of adaptable modular
manufactured homes of prefabricated volumetric components in
Malaysia. To address this goal, a comparative study about IBS
building in Malaysia and other countries such as Singapore,
Japan, Australia and some Scandinavian countries should be
carried out.
• To study the state of readiness of all the professions involved in the

IBS value chain, in particular the architects, the engineering
consultants, the quantity surveyors, and those involved in the
supply chain, including issues such as skilled manpower, suppliers
and assemblers, and in the linkage activities such as ICT and the
authorities.
• To study the most appropriate safety net that can be instituted to

motivate the contractors to be more innovative in IBS and
involved in high technology such as robotics and modular
building.
• To study the impact of using IBS on the traditional subcontracting

system of project management and to study the future impact of
using IBS on the craft industry in construction.
These are some researchable areas that can provide answers that will help
in the implementation of IBS.
252
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MARA, Malaysia
Abderrahim, M., Diez, R., Boudjabeur, S., Navarro-Suñer, J. M. and Balaguer,
C. (2005) An IT Infrastructure and safe collaboration in modern
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Robotics in Construction (ISARC 2005) Ferrara (Italy) September 11-14,
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Appendix A
IBS Workshop November 2009
Issues Points Captured During Discussion and Presentation

Incentive for IBS • The incentives for IBS are not sufficient. Incentives in terms of tax and levy
Adopters should be extended to all stakeholders. Clients and designers should also
be rewarded and the adoption requires more push and pull factors from
the government. This will create a better market for IBS contractors.
• Due to the small profit margin, the change from conventional to IBS for the
contractor was not feasible, unless more attractive incentive systems and
benefits which can lure the conventionalist to IBS are in place.
Foreign Labour • The availability of a cheap foreign workforce is a major stumbling block for
Issue IBS implementation in Malaysia. Labour is abundant at the very cheap
price of RM 30 – RM 40
• IBS adopters cannot compete in terms of cost with the conventional
contractors if one compares it literally (due to transportation, investment
and set-up costs). The government should at this time take drastic
measures to get rid of foreign workers.
Financial • The manufacturers of IBS components require business continuity in
Assistant producing components and an ethos of continuous improvement in
through Soft product development. As such, a soft loan for manufacturers should be
Loans created and promoted.
Reviewing IBS • The payment mechanism for IBS should be reviewed. The adopters require
payment safer and more reliable payment mechanisms and contracts. The
mechanism construction industry should benchmark with other industries, particularly in
manufacturing and automotive, to understand the mechanism that works
for IBS construction.
Promoting IBS • IBS should not be seen as a threat to traditional methods. The failure of IBS
Best Practice to penetrate the market is due to a misconception that it will eventually
replace the traditional sector, while it actually should work closely in
tandem to promote best practice in construction. The sharing of best
practice between the two approaches is essential for the continued
successful development of both construction sectors.
Promoting IBS to • IBS should provide the industry with good-quality products. Perhaps, in
Clients and End private sector projects, the implementation of IBS is contractor- and
Users manufacturer-driven rather than client-driven, as observed in the public
sector.
• Currently, clients still prefer traditional methods, which is due to costs
alone. Clients in Malaysia should be informed of the potential of IBS to
improve quality. IBS needs to be linked with quality end products which
can benefit clients and end-consumers.
Linking IBS with • Environment sustainability and green issues are the way forward, both in
Environment research and policy in IBS. The introduction of the Malaysian Green
Sustainability Building Index (GBI) aims to promote sustainability in the built environment
and raise awareness among the industry players about environment
issues.
• Building will be awarded GBI Malaysia’s rating score based on six key
criteria including energy efficiency, indoor environment quality,
sustainable site planning, material and resources, water efficiency and
innovation.
• GBI provides a fresh challenge for the construction industry to practise
sustainable development and at the same time provide the highest
quality of affordable building. IBS can be a potential solution to this. IBS
promoters should see this as an ample opportunity to promote a greater
use of IBS.
• Most importantly, more research should be conducted in this area to
create new innovation in IBS and to merge IBS with sustainability issues
which could possibly help the industry to successfully address GBI.
Recommendations Potential Actions to be taken by IBS Players

Increasing Volume • Focus on targeting market; high quality at low cost
and Demand by in both infrastructure and residential
Focusing the • Find solutions to raised volume in order to get low
Market Sector cost product
• To venture into niche market (specialization)
• Explore new market on IBS – Middle East country,
developing countries
Adopt Partnering • Finding strategic partner– joint venture contractor,
and Business manufacturer & developer or outsourcing
Strategic Alliances • To capitalise on existing manufacture with
production capability trough strategic partnering
and alliance
• To create vendor & supplier system comparable to
automotive sector
• Joint venture with semi-government bodies or state
GLC to develop housing using IBS system
• Joint Venture between local and international IBS
contractor
• Implement good practices in supply chain
management and business partnership
To be Innovative • Inculcate in Research & Development (R&D) culture
and embrace in and embrace continuous improvement ethos
Research & • Application, training, awareness to improve
Development knowledge and readiness on IT particularly on the
(R&D) and use of IBS software
Construction IT • Adopt and learn new technologies
• To embrace and innovate in high technology
manufacturing and automation
• To innovate and bring in new technology such as
new composite system
• Conduct more R&D on IBS System; particularly on
soft issue e.g. business strategy in IBS
• R&D on composite material with the ultimate aim to
reduce cost
• Utilisation of available local material and
technology in IBS i.e. oil palm shelves etc.
Increasing • Gaining capacity to manufacture own IBS
Capacity in component. Not depend on existing suppliers.
Design, Production Monopoly increase cost
and Capability in • To adopt and use flexible / adjustable mould,
Project mobile factory and onsite casting to save cost
Management • Establish mechanism in providing rental basis option
on system formwork
Tackling Cost Issue • To ensure cost of overall IBS should be reduced to
20% - 30% compared to conventional by any means
(waste reduction, time etc.)
• To adopt zero wastage in IBS
• To focus on cost control on site management
• Total project management that emphasis on cost;
reduce production time, produce highest volume of
IBS component
• Looking into potential of setting-up on-site factory
(casting yard – reduce transportation cost)
Focus on Quality • To introduce quality assurance at low cost by
End Product improving process & introduce surveillance quality
control at every step of the process
• Adopt good practice of Quality Control (QC),
Quality Assurance (QA)
Focus on • Implementing IBS as part of green initiative.
Customer Need Customer are now concern on green issue
• Adopt design flexibility – to meet customer’s
requirement e.g. renovation especially landed
property (customer oriented specification)
• Focus on after sales services approach – signing up
an agreement to change house
• Adopt innovative pigeon hole concept – total
layout changes/ interchangeable (focus on
customer)
Emphasis on • Design standardization: sizes & specification of IBS
Standardisation components. Architects should have IBS-friendly
design e.g. loading distribution, transporter. Pre-
designed components that can be mixed and
matched.
Training and • Continues training and education to staff to
Awareness embrace change
• Awareness on potential application of IBS in green
construction through GBI
• Continues training and awareness program for
consultants (Architects & Engineers) – CPD together
with IEM and ACEM / CCD at CIDB level
Financial Issue • To find innovative financing for IBS
• Develop finance strategy to capitalize PFI project
for government and GLC companies
Wrap-up session by Professor Mustafa Alshawi and Professor Ir. Dr. ZuhairiAbd
Hamid
• It is important for the industry and promoters to study how IBS can be
dealt during the economic downturn and how to seize opportunity in
economic recovery in the future
• Few parts of Manubuild’s innovation and best practices can be
explored and suit to Malaysian construction industry
• The stakeholders and promoters need to study the impact that IBS
can be played on recently announced Malaysian Green Building
Index (GBI). To study how IBS can be used to facilitate sustainability
initiative and gain incentives offered by GBI
• It is agreed by stakeholders that training, awareness and education is
highly important to IBS. Continues effort by the CIDB to established
better training scheme, CPD, CCD is vital. The new training module
should incorporate latest technology such as Virtual Reality training
simulation which is currently being developed in developed countries
• Identification of the CSFs are important for transformation of
company and the industry from conventional to IBS
• Transformation from conventional to IBS is also depends on the
maturity of the company. One step good in one company does not
necessary good to others. Currently, there is no tool available to
measure company maturity in IBS. Research in this area was
suggested.
• IBS requires political willingness and government policies. Input from
government agencies such as REHDA, KPKT, JKR, EPU and MOF are
important in the future workshop conducted by CIDB
• The industry need VVCT program (Verification, Validation,
Certification and Training) for IBS in which include assessment on 3P
(Product, People and Production)
• The need to change by-laws, make it easier to implement IBS
(implementation of standardisation and modular coordination)
• Currently IBS implementation is government driven. Industry,
nonetheless, must take lead on IBS. IBS must be industry-driven
gradually
Appendix B
IBS Workshop July 2009
Wrap-up session by Professor Charles Egbu and Dr. Mohammad Arif
• The need of R&D in social and sustainability i.e. the role of

professional people (which often overlooked in the past in adopting
IBS)
• Research need to look more on people aspect (how professional
which has been trained in conventional construction to use IBS)
• Research on motivation and cultural issues on IBS are needed
• The importance of sustainability aspect to be linked with IBS. Look
into IBS to address on sustainability issue (environmental, social and
economic)
• The issue of foreign labour should be addressed by research on how
to use the labour in a sustainability and optimal way yet not
jeopardising sensitivity and social economic aspect of it.
• IBS should be seen as integrated and multi-disciplinary effort that
brings various expertises in construction. The problem is that those
people have a different view, philosophical and way of works. So,
the researchers and promoters need to address this issue by
understand the sensitivity of stakeholders in IBS supply chain
• The transformation from conventional to IBS requires time and
technology improvement. It is a evolution rather than revolution of
the industry
Appendix C
IBS Workshop April 2011
Topic Discussion
Open System - The term open system must be clear and fully understood by the
industry and to guide the policy maker in Malaysia
- Open system is giving advantages to small and medium (SME)
companies to be involved in the IBS construction. On the other
hand, closed system is giving opportunities to IBS contractors to
improve their design and skills – this will improve a quality,
production, installation time and at the same time reduce
construction cost and energy usage.
- Open system has issue regarding the responsibility of project team
member in the case the structural failures which involved different
suppliers.
- How can we put incentive in construction industry – IBS subsidy on
open system
IBS for - The concept of sustainable is to manage resource that available
Sustainability and that are for all human being
Green - IBS probably did not solve sustainability problems directly but have
Construction a potential to improve sustainability in construction
- Sustainability in IBS is not only about environment, but also
economical, social value and institutional.
- IBS have a huge potential in reducing solid waste – This will result a
reduction of dumping area and land fill.
- IBS will minimise the social cost to community – illegal dumping and
unmanageable waste
- IBS will reduce area on site to storage and also minimise damages
to the construction materials
- As a strategy, come countries do impose tax to improve
sustainability. A mix construction waste will cause a higher fee to
contractors before they can dispose this waste
- The usage phase in IBS buildings should be investigated – energy
consumption for the next 20 years, insulation, solar energy and
Photovoltaic (PV) usage.
- Law and regulation on green should be needed
- Government can put pressure to the industry to implement green
and sustainable solution.
- Need to develop guideline for sustainable IBS
- Incentive is needed for the industry to embrace in sustainable
development and green construction
- IBS must be related to sustainable society and economy
- UK - recycling waste production from a precast plant is time
consuming and can be quite expensive, resulting in the cost of the
RCA being about the same as new aggregates.
Worldwide IBS Best - IBS have a lot of advantages if it used properly
Practices - In Europe, due to urbanisation, land become too expensive and
people need to live in the high rise. IBS method is needed for
construction
- Sekisui (a Japanese company) have a very good example in
providing one stop services for the housing buyer – its started with
buy land, select house (client brief) the generate bill of quantities
based on selected design and features and generate the total
price for the building. Finally, if client agree, the contract will be
signed.
- Good coordination between different trades is essential to ensure
the project success. For example, M & E contractors have difficulties
to install conduit and wiring.
- In Switzerland, the platform system is used to produce IBS
components such as wall panels, column and slab.
- The bottom-Up approach is a best practices which need to apply
in IBS construction for process improvement
- Normally, the manufacturers have their own in house consultant /
designer – this will minimise cost.
- Small and Medium (SME) companies should be given a proper
training and exposure about the available and the most efficient
technologies to implement IBS.
- Strict management of quality is important to create value to IBS.
Europe IBS company has to undergo product certification (product
reliability, CE standards)
- Best practice in Hong Kong highlighted coordination between
client and contractor at all stage
- IBS must be driven by open market
- IBS in Hong Kong is public sector driven. Private sector use
conventional
- Two stage tendering is practiced in HK public building project; first
stage technology tender and second stage- cost of construction
- Hong Kong - Matrix and measure the performance of the project
more at life cycle implementation
- Hong Kong – IBS is suitable for cities and regions with the problems
of dense population and with insufficient land for housing
development.
- UK - It has shown the key to success is to adopt an off-site
construction methodology from the outset, and not to try to modify
traditional insitu concrete solutions
- UK - attempts to fully incorporate building services into precast
elements date back to the 1950’s in Eastern Europe, where a lack of
accuracy and understanding of the requirements for tolerances,
workmanship, and future maintenance lead to failures.
Partnering in IBS - Partnering is important to reduce construction risk.
- Partnering will encourage early involvement among different
trades.
- The sustainability of IBS will be improved by partnering whereas
each stakeholder notifies their contribution in sustainable
deliverables of IBS.
- Integration supply chain is very important. How far contractor
could be brought in the early process
-Strong partnership with the people manufacturing the IBS parts
- Partnering can contribute effort toward the open system
- Business positioning is important in IBS
- Establishment of consortium – Europe
- Partnering can improve project delivery
Mass- - Developed by Toyota and manufacturing industry
Customisation and - Adopt in changing of lifestyle through adjustable housing
Automation - Europe – move towards mass customization rather than mass
prefab.
- Mass-customisation is opposite of standardisation
- Creating value for IBS
- Engage with end user needs
- Automation is needed to curb with the issue of expensive labour
cost
- The cooperative business model enables the Swiss construction
industry and players in other atomized construction markets to
increase prefabrication in construction, to implement mass
customization in the prefabrication industry and to introduce system
services in the clients’ solution finding process.
- The way forward for IBS in Europe
- Mass customisation also being practiced by SMEs
- SMEs can involve in automation consider the fact that investment
in Malaysia is much cheap compare in Europe
- Custom made of IBS; how to solve the problem when come to
wiring installation
- Researchers should come out with the new innovation on IBS
Building - Everyone has to take responsibility for their work & has to work
Information together
Modeling (BIM) - Should benchmark with automotive and aeronautical industry -
paperless
- IT can save cost
- Need to measure technology readiness in Malaysia
- 3D modeling of building services
- IT encourage commitment and integration between the people
&process
- IT is used to avoid waste
- BIM - simulate and predict and helping decision making, optimised
- BIM – develop inventory and as build drawing
- BIM - maintenance schedule and the capacity to BIM to capture
and manage knowledge
Topic Government/ Manufacturer Contractor Designer

Client
Awareness and - The industry is lack -Still lack of -IBS was just -IBS was just
implementation of of total awareness awareness from accepted accepted
IBS in local industry - Ignorance manufactures because of because of
- Reluctant to especially from mandatory by mandatory by
change SME and government government
-Government has Bumiputera - Current - The need for
to hold talk and entrepreneurs on awareness focuses certified engineer
detail explanation IBS mainly on precast (IBS qualified) to
on the technical -Not well concrete only. design
part to small distributed of IBS Therefore effort -To give more
contractor to give manufacturer in needs to be made awareness &
more several state to expand to other explanation to
understanding for - Ignorance category of IBS universities’
contractor - Lack of graduates
-Currently, the awareness in small - Incorporate IBS
contractors are not contractor. in higher learning
well brief on the IBS Therefore, institutions
implementation. - government need - CIDB should go
Not specifically to conduct more to the society, ask
detailed out scope awareness about users
of works to the trainings or perception
small contractor for briefings
construction - Lack of
implementation
due to lack of
demand
especially private
sector
- High initial and
capital cost
- Problem of
transportation and
handling
- Rapid change of
policy will affect
contractors and
contracting
businesses
- Cost issue
- Common issue
still exist; Problem
with installation-
crack, gap panel
to panel
Implementation of - Pre-approve - Open system can - Responsibility - Limited business
IBS in public and scheme create be implemented issues opportunities
private building : value - Pre-approved - Pre-approved - Pre-approved
pre-approved - Encourage scheme is system is good for scheme give
system vs. open innovation economical but public building opportunities to
system - Quality control limited design rather than private improve design &
- Issue of - Open system building concept, reduce
responsibility and should be - Contractor easy time in design
legal implemented with to find part and improve
- Pre-approve proper components if it is coordination.
scheme give standardisation of standardised Good to public
advantage for components - Large contractor project only
suppliers through modular should establish - Open system-
coordination vendor longer time in
- Pre-approve - Pre-approve design but it
scheme easy for scheme should be offers IBS flexibility
installation, less economical -Open system
problem at - Risk and safety should confirm
manufacturing net to contractor design at early
plant and at site which depends on stage of the
- Practically IBS is single project
not flexible manufacturer
IBS: The issues of - The industry has - IBS reduce in cost - Local labour is - Cost issue has
cost, foreign labour an easy and and labour vital little implication
and wealth cheap source theoretically but in - Cost comparison - The cost and
distribution foreign labour reality, cost between time saving as
- Issue of wealth depend on conventional and not per theory
distribution - situation IBS should be
manufacturer will - Need to employ highlighted and
have a bigger automation and promoted to small
chunk of the cake robotics contractor
- Depends on - Save in time, cost
demands still high
-The small project - Cost saving in
will increase the high-rise project
cost because of only
need higher - IBS encourage
volume of IBS local participation
material. - The cost and
- the cost and time time saving as not
saving as not per per theory
theory - Initial cost higher
to contractors
Barriers and drivers - Small contractor -Government - Limited labour - Lack of
to the fulfillment of should start should give more resources - Logistic experience,
IBS roadmap 2011 - somewhere i.e. set awareness to factor knowledge,
2015 up small scale relevant parties -Workers (ABM) acceptance
factory as a Lack of incentive, were not - Need new
beginning financial support channeled to the innovation
- To control the - Lack of appropriate - Designer should
execution need an manufacturer, organisation be innovative
expertise provider – lack of - Required more and more
supervision universal product trainers especially advanced in
- Lack of expert usage at ABM with clear terms of
and competent - Supplier controls career path. Offer technology and
personnel the product career direction creativity
- Less role of before complete
facilities the training.
management - Lack financial
- Need to create support
more profitable - Need more tax
and viable exemption
business - Need to create
environment profitable and
viable business
environment
- IBS
implementation
require holistic
implementation
and solution
- To implement
Bahasa Malaysia
as a medium of
interaction and
communication
regarding IBS
- End user need to
accept the IBS
Procurement and - Government has - Transparent - After tender, no -Will be easier to
tendering process in fixed tendering - To disband ‘lump price negotiation. the designer
public and private procedure sump’ concept in (very transparent) because the
building projects - The contractor Bill of Quantities - Classified tender detailing come
tendency to put - Transparent in IBS according to from
the lower price but requirement in different type of manufacturers
to the end failed to contract project; urgent, -Pre-approved
perform or selective etc. system-quite easy
completed the to designer
project
The role of G7 -G7 contractors - SME must take - Opportunity in - Expected
contractors and must accept the part in IBS business reduce
SMEs in IBS IBS concept components -Issue of tremendously in
-Provide training business competence profit margin
programme for - G7-select the personnel in IBS - Contractor must
manager and SMEs as a installer -Transformation of equip knowledge
worker - Partnering should contractors to IBS- on IBS
-Must participate in be encourage in ready
bidding and win-win situation - For the G7
tendering process - G7 to subcontractors there
for IBS project contract IBS works is no problem for
- G7 should sub to SMEs IBS adoption
only to smaller class - Small contractor
certified IBS is depending on
company the limited scope
- SMEs willing to of works and areas
upgrade IBS skilled
- G7 should
appoint 3 SME as
their vendor in the
implementation of
public construction
project
- CIDB should vet
through capable
SME which are
ready to be vendor
Know how and - Easy financial - IBS need -Small contractor -Designer should
know who business support scheme by additional cost required different know how the
opportunities the government and staff scope of work system will be
should be - CIDB to provide compared to big applied
introduced to extension training contractor - Know who is the
finance small scheme for -Politically linkage supplier, and
contractor to excellence to secure such contractor that to
venture in IBS contractors in projects even construct the
-Should have a implementing IBS price is project
Knowledge competitive
Management in IBS -Contractor should
- Eliminate know the method
guarantor of construction
requirement to -Contractor should
avoid “ali baba“ know who are
and blacklisted their IBS suppliers
happen
- Bureaucracy
problems and loose
procedures and
condition by
financial institutions
may hinder
contractors to carry
out works efficiently
The performance -Lacking of - Performance can - Chicken and -IBS was just
measurement of IBS standard method be measured by egg(monopoly) accepted
of measurement for analysis through - The project because of
the IBS survey and study, complete in time mandatory by
performance presently and not above government
- Standard conducted by the budget - Need to monitor
performance CIDB and JKR. - The quality of the process of
assessment in IBS - Result and product and the construction
construction outcome of the time of delivery - IBS component
- IBS was just implementation - The performance should be tested
accepted because was not is depends on and verified by
of mandatory by transparent nature of projects the authorised
government - CIDB to identify body
- The project the skill workforce
complete in time, requirement for IBS
not above the - Contractor to be
budget and responsible for
complies to the technical
specifications of requirement in IBS
the project project
(quality) - The payment
- To develop KPIs mechanism for IBS
for each aspect of should be
implementation reviewed
Technology Foresight
Author’s Profile
KamarulAnuarMohamadKamar
Dr. KamarulAnuarMohamadKamar holds a Ph.D degree from University of

Salford, United Kingdom under the Construction Industry Development Board
(CIDB)’s scholarship. His research work focusing on Strategic Implementation,
Organisation Readiness, Change Management and Benchmarking. He
serves Construction Research Institute of Malaysia (CREAM) since 2006. Prior
to joining CREAM, he was Project Engineer with Ranhill Engineers and
Constructors Sdn. Bhd. (RECSB). He is the editor of IBS Roundtable Workshop
Series (Vol. 1 -7) and co-editor of two books on IBS published by the CIDB. He
is also a member of IBS Technical Committee and published in various
journals and international conferences. He graduated with a bachelor
degree in Civil Engineering from University of Malaya (UM) and a master
degree from University of East London, United Kingdom.
ZuhairiAbd Hamid
Prof. Ir. Dr. ZuhairiAbd Hamid is Executive Director of CREAM and an adjunct
professor of University Tun Hussein Onn Malaysia (UTHM). He obtained his PhD
in IT Construction majoring in Healthcare Facilities Management from
University of Salford, United Kingdom and Masters in Structural Dynamic
Engineering from Kanazawa University, Japan under the prestigious
Monbusho’s scholarship. His area of interest is strategic IT, sustainable
construction, facilities management and earthquake structure. He has over
26 years of experience in the construction industry and started his
professional career as a civil and structural engineer with Public Works
Department of Malaysia in 1984. He has worked under various capacities as
road engineer, bridge engineer, building engineer, district engineer, and
assistant director of planning, forensic and structural design engineer.
Mustafa Alshawi
Professor Mustafa Alshawi holds several international advisory posts in various

countries and is a consultant for United Nation Habitat and World Bank
projects. He is also the editor in Chief of the International journal of
Construction Innovation: Information, Process and Management published
by Emerald and the author of a hundred publications in variety of fields
including database, IT strategies, CAD, planning automation and e-
readiness. He has recently published a book to provide a holistic view on the
readiness of organisations to successfully use IT in their work practices. The
title of the book is Rethinking IT in Construction and Engineering:
Organisation Readiness. He is Associate Dean of University of Salford and
involves directly in Manubuild program from 2004 to 2009.

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INDUSTRIALISED BUILDING SYSTEM (IBS):

STRATEGY, PEOPLE AND PROCESS

Copyright © 2011 by Construction Research Institute of Malaysia (CREAM)

No. Item Page

1.0 Industrialised Building System (IBS) 1

2.0 Revisiting the Issue of Definition and Classification 9

2.1 IBS Definition and Classification 9

2.2 Definition Issues 10

2.3 Industrialised Building System (IBS): Existing Definition 12

2.4 Other Terms to Represent Indusrtrialisation of Construction 15

2.5 Classification and Categorisation Issues 16

2.6 IBS: A product, process or system? 21

2.7 IBS as Innovation in Construction 22

2.8 A Working Definition on IBS 23

2.9 Rethinking IBS Definition and Classification 24

3.0 The Drivers and the Barriers to IBS Adoption 26

3.1 Driving Forces to IBS Adoption 26

3.2 Barriers to IBS Adoption 30

4.0 The Adoption of IBS in the Construction Industry 33

4.1 Global Adoption of IBS 33

5.0 The Adoption of IBS in Malaysia 39

5.2 Challenges of the Malaysian Construction Industry 42

5.3 The Modernising Effort to Construction Industry 45

5.4 Encouragement Policies on IBS 52

5.4.1 Early Initiatives through R&D (1984-1999) 53

5.4.2 Establishment of Steering Committee and IBS Strategic Plan 1999 54

5.4.3 IBS Roadmap 2003-2010 55

5.4.4 Introduction of Modular Coordination (MS 1064) 56

5.4.5 Budget Announcement 2004-2006 56

5.4.6 Construction Industry Master Plan 2006-2015 (CIMP) 57

5.4.7 Levy Exemption as Incentives to IBS Adopters 58

5.4.8 IBS Roadmap Reviews 2008 59

5.4.9 Treasury Circular (SSP 7/2008) 59

5.4.10 IBS Roadmap 2011-2015 60

5.4.11 Orange Book and IBS Score 62

5.5 The Chronology of IBS Adoption 65

5.5.1 The Adoption of IBS in post-independent Malaysia 66

5.5.2 Development in 1964 to 1970s 66

5.5.3 Development in 1970s to early 1980s 67

5.5.4 Development in 1980s to 1990s 68

5.5.5 Development in 1990s to 1998s 69

5.5.7 2008 to 2011 72

5.6 The Current Usage of IBS in Malaysia 73

5.6.1 IBS Survey 2003 73

5.6.2 IBS Survey 2005 (Architects and Designers) 74

5.6.3 IBS Roadmap Review Survey 2007 74

5.7 Registered IBS Contractors and Manufacturers in Malaysia 74

5.8 IBS Technologies in Malaysia 77

5.8.1 Pre-cast System 78

5.8.2 Formwork System 80

5.8.3 Steel Framing System 82

5.8.4 Prefabricated Timber Framing System 82

5.8.5 Block Work System 83

5.8.6 Innovative on-sieSysem 85

6.0 Critical Success Factors to IBS Adoption 86

6.1 Definition of Critical Success Factors 86

6.1.1 Critical Success Factors to IBS Adoption 87

6.1.2 Business Strategy 88

6.1.3 Procurement and Contract 89

6.1.4 Project Management 91

6.1.5 Design Management and Integration 94

6.1.7 Information Technology (IT) 99

6.1.8 Continuous Improvement 101

6.1.9 Skills 102

Ibs - People, Strategy & Process

Ibs - People, Strategy & Process