Having headhunted within the Building Product industry for 16 years Collingwood’s Mark Goldsmith jumped at the chance to speak with Finishes & Interior Sector (FIS) CEO and Vice Chairman of the Construction Products Association (CPA) Iain Mcllwee.
Having worked within the industry, to include representing various membership bodies, for over 20 years, Mark was keen to gain a deeper understanding of the value Iain brings to the industry and what he views as the current opportunities for the coming year. Here’s what they discussed:
Mark: Clearly the industry outlook is likely to dramatically change in the second half of 2020 and into 2021. What product categories do you feel will come out of this period in good shape and what markets can you see doing well?
Iain: What we face at the moment is a perfect storm of uncertainty and I believe we are really only starting to scratch the surface of the impact of COVID-19. The bigger challenge perhaps is that when we start to get our heads round this, we have Brexit looming very quickly on the horizon.
In construction, if we set aside the impact of this uncertainty on private sector investment, there are likely to be changes to the fundamental way in which we use space. Big open plan offices and presenteeism could well be fading into the background as we look to more experiential workspaces – this will drive investment in products that facilitate breaking up, flexible usage and enhancing the experience of our working hubs – ventilation, acoustics and partitioning are likely to be the winners here. The future of the High Street has long been discussed, but again habits will have changed in recent weeks, perhaps forever, how will this space need to be configured to attract the post COVID consumer or re-purposed to solve the housing crisis?
Government will be looking carefully at stimulus options and construction is a vital driver for growth. Beyond the fact around 10% of the UK workforce are employed in construction, key to recovery will be investment in infrastructure. Beyond major reforms to the transport network, schools, housing and building safety would seem to be sensible areas to invest public sector funds.
Mark: And what about manufacturers not selling in these markets, how can they best future proof their position and what do you hear the more dynamic manufacturers doing to combat any decline in revenues?
Iain: The businesses that thrive in uncertainty are those that can scale and respond flexibly to changing customer requirements. We’ve already seen companies diversifying into products that support the COVID Securing of space to support social distancing.
Beyond this it is about solving real problems. Construction has historically used labour supply as the accelerator to throttle up when projects fall behind, with limited numbers on site we need to rethink this, we need products that can be easily manouvered and rapidly installed.
One thing I do think we all need to do is look ahead at what we want our businesses will look like in the New Normal. This period may well go down in history as the great re-set. I know there are some behaviours that in construction we want to consign to the dark ages, not least siloes in the supply chain. Social distancing creates new challenges on construction sites, but it also gives us a huge opportunity to pull together to accelerate automation, off-site and digital solutions
Mark: Developing this question, irrespective of the situation the industry currently finds itself in, what common mistakes do you see manufacturers making when taking their products to market and what are some of the quick wins in solving these?
Iain: For me the big change for construction is about thinking beyond the products to the building. Ultimately the end-product is the building and the focus for components must be compatibility to ensure that the construction process is more consistently repeatable. It needs to be less about solving a problem in a test rig and more about making it as easy as possible to assemble a building on a construction site.
Mark: The FIS work closely with the supply chain in driving process improvements. With work often viewed as cumbersome, what improvements do you think the industry can adopt off the back of the good work completed in record time on the Nightingale projects and others?
Iain: The Nightingale projects had a very clear and tangible goal, all of the objectives were aligned and the need to get the job done united the supply chain. My fear at times for construction is that the supply chain doesn’t unite anywhere near well enough often enough, objectives are not always well enough aligned and the building is designed to be built as cheaply as possibly not considering whole life cost. Added to this, the way in which we work is overly contractual and this is more about avoiding risk to your business than managing it out of the project.
I think when we step back and we look at the Building Safety Review, the impact of COVID and the profound effect that PFI projects have had on the way ownership of quality issues is viewed there is no escaping that manufacturers and specialist contractors need to be involved from the outset. Buildings need to be designed, engineered then built – not partly designed, started, re-engineered and then completed. So much knowledge sits in the domain of the manufacturer and specialist we need to unlock this earlier in the process.
Mark: And how do manufacturers and the rest of the supply chain ensure these processes and framework improvements stick in the long term?
Iain: I think better contracts within construction would be a good start. In 1931 we started The Joint Contracts Tribunal (JCT) to help apportion risk fairly through a suite of standard contracts - nowadays the amendments are often longer than the original contract! As a result the money we spend on legal fees as a construction industry outstrips proportionally almost all other parts of the economy – this is absolutely bonkers! We need to return to first principle here, align contracts, apportion risk fairly throughout. I’d be keen to see a move to project insurance too, I am certain this would drive better and earlier collaboration.
Mark: A lot has been made about the fact that building material manufacturers aren’t taking advantage of the R&D tax breaks available. How is the FIS and CPA working with their members to ensure such funding is taken up, along with much needed training funding?
Iain: Particularly now when cash is tight, this is something that all businesses should look at. I do think there is a lot more investment going on than industry gets credit for, but it is internalised and the cost hidden. Beyond the cash, I honestly believe the process of reviewing your operation for potential to claim helps you to audit, isolate and hopefully accelerate where and how you are innovating as a business. We’ve run a number of workshops now and the feedback and potential to claim is very encouraging.
Mark: Having graduated with a Masters in Material Science & Engineering you quickly moved into the construction products sector. What do you love about the industry?
Iain: For the engineer in me construction will always be exciting and interesting. It is, without doubt up there with the most complex of all industries, particularly when you think of the logistics. I often hear “why can’t construction be more efficient like the automotive sector”, but they don’t have to come round my house and do it in the rain! From the buildings and infrastructure that make our daily lives possible to the landmarks that take our breath away, construction is at the core of the economy and at the heart of who we are and how we live as a society, being part of that certainly gives me a reason to get out of bed in the morning!
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