Business Leader Interview: Building a better future

August 16, 2017

 

Bruce Dickson was appointed Regional Director of BAM Construction last August. Here, he gives his thoughts on the current condition of the industry in characteristically forthright fashion

 

Hello Bruce, what are your thoughts on our current situation?

That's a good question – how long have you got? I desperately feel we need to become better and do things differently. But if projects aren’t procured properly by clients in the first place, the industry can’t heal itself because our product is too much at the mercy of our client base. So, if the problem starts right at the top, there’s no amount of trying to legislate between the lower parties and the supply chains that are going to make life an awful lot better for anyone.

 

Sometimes we need to stand back and look at what the actual problems affecting the industry are, rather than fighting amongst each other. The other thing that concerns me is so-called ‘suicide bids’, which Tier 1 contractors put in because they feel it’s the only way to survive. In Scotland, many public sector employers are still procuring on the basis of lowest cost and are therefore willing to accept these ‘abnormally low tenders’ because in their view they are making best use of limited public finances.   

 

Has this always been the case, or is it something new?

No it’s been historic, since my first day in the industry. If you could set a level playing field where people couldn’t circumvent it, you’d get better procedures and behaviours, but that has to come from the very top, from clients saying ‘I want good behaviours in my supply chain’.

 

There are so many examples of Tier 1s not being paid or getting retentions and it then becomes a very difficult issue. By definition, they think, ‘Well if my client’s doing it to me, it’s fair for me to drop it down the supply chain.’ It kicks off this cascading chain of behaviours that almost gets depressing at times. We’ve still got exactly the same problems, despite all the legislation.

 

So what are the main obstacles to change?

Funding is a huge one, as well as the fact that construction isn’t seen by many clients as a critical industry. We’re dirty and have a reputation for being late, expensive, adversarial and over budget, so it’s difficult. If you think about today’s society, people like to go on a computer, click a button and get something delivered in 12 hours. Construction doesn’t work like that and our whole process isn’t very client-friendly; you have to wait for what you want and then pay for it up front. The other challenge is that we’re a very low margin industry and always have been.

 

As long as you can work with somebody else’s cash – whether it be client advanced payments or your supply chain – you can play in construction, which sets the barrier low for entry. And clients know the lower they can set that barrier, the lower the price that they’ll be given. It’s very difficult to improve on that when everybody is driven by cost.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

So how could things change?

I’ve said it multiple times on many stages – we are probably the only industry in the world doing things exactly the way we did them 2,000 years ago. To change that, you need working capital and funding, but you also need someone to say, ‘I’m prepared to invest heavily in modular offsite construction’. The housing market baffles me – I still can’t understand why the sector is still about block work, first fix, second fix, plumbing etc, all done on-site. The housing industry could be the biggest instigators for change but for some reason they just keep doing things the way they’ve always done them.

 

Are there viable alternatives they could use?

At the moment the problem is cost. We’re in this horrendous catch-22 with offsite construction because big investment is needed to make it work. People want quick returns, but these products are initially very expensive. So they do their sums, then turn round and say, ‘Why should I buy bathroom pods when I can build them cheaper on-site?’ It’s always going to be a problem in this industry because we’re short-term thinkers. It’s all about limited cash, limited margins and making as much money as you can when the sun shines. There are so many blockers to change and they all come back to finance.

 

What about other countries? How do they manage?

We do a lot more kit housing in Holland, but I wouldn’t say it’s a better model because they also have their own issues with the housing market and boom and bust. The other thing is, house builders say they’d love to do kit builds, but people just think prefab – and prefab in the UK has got such a dirty name: ‘No I want bricks and mortar.’ That’s just the British mentality.

 

So what new techniques excite you?

I remember when we went from drawing boards to AutoCAD it seemed seamless. One minute it was huge offices with drawing boards and pencils and pens and then suddenly it was all on computers. People went, ‘Yeah that makes total sense, we’ll do that.’ I had the same thought when I saw first building information modelling (BIM). I remember thinking, ‘This will change the industry – everybody’s going to say this is brilliant.’ Yet eight years on, people are still scared of it. We’ve still got consultants refusing to design in BIM and still doing 2D AutoCAD. I don’t remember anything like this level of reluctance to move from paper and pen to AutoCAD, yet there’s a really slow uptake of BIM and I don’t understand why. You’d think everyone would be keen to see the advantages of a better, faster and more productive industry.

 

So what advances would you like to see?

A fleet of robot bricklayers would be brilliant, but nobody is looking at that kind of thing. It’s fascinating, I was at a robotics lecture last year and someone said there’s been more cash invested in a robot that can make the perfect barista coffee than in one that can work for the construction industry. That tells you all you need to know.

 

Would you say you’re confident about the future?

I’m always slightly concerned when anyone in construction says they’re confident. I think there are more unknowns than knowns and the availability of public sector funding is massive. If the Scottish Government makes funds available to build new schools, colleges, hospitals and infrastructure projects, and those funds are at least the same as what’s come before, I think things will be stable. But then again, Brexit and the ongoing Indyref saga is a worry. Scotland’s always at the end of the wave, so it starts big in London, washes up through the Midlands, and finally money arrives in Edinburgh and Glasgow in the last ripple. We were just seeing signs of more commercial development up here and then suddenly we had double uncertainty, which I don’t think anyone would disagree is bad for business. We’re not exactly looking at a beautiful economic and political picture at the moment.

 

And finally, how do you feel about the electrical sector in particular?

I’ve always held the electrical sector in high regard because of its focus on training and apprenticeships – it’s an industry that’s actually interested in developing itself. The bigger companies are also at the forefront of the supply chain on the BIM path, and the technical trades were certainly the first into modular building. So the level of professionalism has improved continuously.

 

 

 

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