Ibbs_CE167_Lecture 2 - Lecture 2 Characteristics of the EPC...

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8/21/2011 1 CE 167 Lecture 2 EPC Industry Characteristics Professor William Ibbs 1 Professor William Ibbs Lecture 2 Characteristics of the EPC Industry Design-Procure-Construct Architecture-Engineer-Construct Why is it important? How does it affect you? 2 Professor William Ibbs 3 Characteristics One-off Projects • Complex Owner • Capital Intensive 4 The Construction Industry construction includes all immobile structures largest single production activity in the US more than $800 billion/year in new construction expenditures = 7-11% of Gross Domestic Product (GDP) about 6% of industrial work force = 5-6 million workers 4% of workers in agriculture 1% of workers in steel industry 1% of workers in auto industry
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8/21/2011 2 5 Engineering-Procurement-Construction (EPC) Industry Characteristics Large, complex, custom-built projects Multi-faceted and highly fragmented industry Low barriers to entry into construction ° relatively easy licensing ° low capital requirements ° basic skills needed upon entry ° quick response to economic shifts Little absolute cost or profit advantage for established firms Employees are key asset 6 EPC Industry Characteristics Construction is local Market demand Subsurface conditions Environmental condition including climate Laws and regulations Labor, equipment, and materials availability 7 EPC Industry Characteristics Largest single production activity in the American economy Categorized by: Low productivity compared to other industries. It’s different! Custom-built projects. R&D expenditures < 0.4% of value of industry. other U.S. industries spend 2% on R&D foreign construction industries spend 2.5% on R&D 8 Classification of Production Systems [Shtub. Figure 1-1]
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8/21/2011 3 9 Is AEC Industry Progressive? serve public interest + maintain public safety reputation for slow adoption of innovations BUT industry innovates ALL THE TIME! Construction Innovation Forum (CIF) - www.cif.org Civil Engineering Research Foundation (CERF) technology page - www.cenet.org Construction Industry Institute (CII) http://www.construction-institute.org/ Fully Integrated and Automated TECHnology (FIATECH) http://www.fiatech.org/ Lean Construction Institute (LCI) http:// www.leanconstruction.org Project Production Systems Laboratory (P2SL) at UC Berkeley! http://p2sl.berkeley.edu/events.htm Please send Prof. Tommelein an email if you would like to participate! 11 Who is involved?
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