Effect of stakeholder collaborative management on off-site construction cost performance

Abstract

Off-site construction (OSC) has been a hot issue in the construction industry. However, high cost was an important factor that hinders the OSC development. This study attempts to explore how stakeholder collaborative management and OSC cost performance relate to each other. Semi-structured interviews were conducted to explore and verify the quantitative indicators that measure stakeholder collaborative management and cost performance. Interaction frequency, emotional intensity, familiarity, and reciprocity were selected as the metrics to measure stakeholder collaborative management. Unilateral cost and production cost of precast components were used to depict OSC cost performance. Meanwhile, social network analysis (SNA) was adopted to obtain density, network centralization and centrality to estimate the network relationship. This study attained the adjacency matrix by a survey, and then developed an OSC collaborative project management primary framework (OSCCPMPF) through SNA to explore the evolution process of collaboration among stakeholders. Hypotheses were developed. Then, multiple case studies were conducted. This study found that stakeholder collaborative management positively affects cost performance. Meanwhile, cost performance was the most important driver for stakeholder collaborative management. Network relationship had a positive impact on cost performance. Additionally, differential strategies can be adopted to promote the OSC development. The findings are useful for setting up a benchmark framework for cost management and project management mode in OSC.

Introduction

The off-site construction (OSC) method includes many innovations in the construction and building industry. The benefits of OSC include but are not limited to: reduction in waste (Perera et al., 1999, Yusof et al., 2017), time (Chen et al., 2010), labor, cost (Mao et al., 2016), health and safety (HS) risks, and environmental pollution (Fan et al., 2016, Law et al., 2017, Matic et al., 2015); as well as improved profits, predictability, and life-cycle performance (Polat, 2008, Samani et al., 2017). However, the development of OSC has not been optimistic (Rahman, 2014). There were some hindrances to OSC such as high cost, lack of standards, over-reliance on traditional on-site mode, and poor quality problems (Hwang et al., 2017, Polat, 2008, Rieckhof et al., 2015). Among these hindrances, high cost has been seen as the most important factor hindering the OSC development (Mao et al., 2016). 85% of the clients refused to choose the OSC method due to the high cost (Dainty, 2012). The government has formulated specific polices to buffer price difference, such as area exemption, pre-sale, and tax relief, etc. (Tam et al., 2007, Winch, 2010). However, the cost of OSC was still 10%–20% higher than traditional on-site construction (Chen et al., 2010) and the cost issue of OSC has not been effectively solved (Zhang et al., 2011). Exploring cost-saving strategy has become one of the most important step to OSC development.

However, Polat (2010) revealed that 93% of the contractors achieved cost savings due to collaboration. The stakeholders can form long-term cooperation or alliance relations for benefits in project management by communication and cooperation (Kishna et al., 2017, Safford et al., 2009). Based on communication and coordination, stakeholders set up network relationships. Information and resources are transferred through network relationships among the stakeholders. Information flow, and resource sharing positively tend to affect project management and reduce cost in OCS (Yang et al., 2009). Collaborative management mode derives from information and resources sharing among stakeholders (Sánchez, 2015, van Popering-Verkerk and van Buuren, 2017). Stakeholders further explore collaborative management modes to achieve information exchange and resource sharing (Park et al., 2011), and then improve cost performance for OSC. Hence, exploring the effect of stakeholder collaborative management on cost performance of OSC is a successful way to solve the high cost problem of OSC, which can further promote the OSC development. Although the collaborative management among stakeholders is conducive to OSC cost management, few studies have explored the stakeholder collaborative management relating to clients, contractors, designers, supervisor, and PC manufacturers in a systematic way. Meanwhile, the effect of stakeholder collaborative management on OSC cost performance has not been quantitatively studied by actual cases of OSC. Our study aims to explore the inherent relationship between stakeholder collaborative management and cost performance of OSC through interviews and case studies. The research objectives are to combine network relationships with stakeholder collaborative management for quantitative analysis, and explore the relationship between stakeholder collaborative management and cost performance of OSC.