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Data will be essential to grow the construction industry

2 Shocking Data On Construction Defect Numbers

We might not realise it but, during our daily life, we generate countless data that someone else will collect, analyse and use to design their next marketing campaign or to realize their next product.

Wherever there is technology data are generated and collected. The challenge comes in when “data collectors” have these huge quantities of data and don’t use them because they cannot see or “understand” how beneficial they could be to businesses, daily life, cost management and much more.

The Data based Success story of Grab is a perfect example of how data, used smartly, can help your business growth

The Grab Success Story

A confirmation of the importance of data and their consequent analysis can be seen and analyzed, in terms of power of data, by looking at Grab. Started in 2012 as a digital way of booking a taxi, in less than 4 years, leveraging on data analysis, has managed to enter in most of the ASEAN countries. Analyzing data on consumer behaviors Grab started first with introduction of motorbikes in Vietnam and e-taxi (using EV) in Singapore as data were showing a growing interest for motorbike transportation in Vietnam (less expensive and faster) while Singaporeans showed a high interest in low carbon emission solutions such as EV.

Later on, still through consumer behaviors data, Grab introduced delivery of parcels and later on again Grab food which, somehow, has enormously benefitted from the pandemic and consequent lockdowns.

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Grab has been using data all the way through, to take strategic decisions on the future direction and the type of services that were the most requested in the market. In 8 years Grab moved from a less than USD100,000 startup in 2012 to a multibillion USD public company in 2020….all this thanks to a proper use of consumer behaviours data to further developer the business while resolving pain points of the people!

Data And The Construction Industry

Data are the commodity of the 20th century but, we are just using an infinitesimal part of them! What about two quite typical “brick & mortar” type of industries such as construction and property development?

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Data could be used extensively in these two industries in terms of pre-construction studies of actual demand, Propenomy model is a good example of this possible application, construction, with data helping in the design and building information modeling, BIM could generate historical data series helping to identify best materials, suppliers and more and, also, during the last part of the construction, using data could help improving enormously the quality of the final outcome.

Quality, or better its lack, has been causing developers loss of image and damage of brands in the recent years. There is a never calculated cost of non-quality which could be easily reduced or even eliminated through a widespread collection and analysis of data, starting from a full communication between the intermediate stage of a project and its last step.

I’m talking about a full range collection of data on claims of defects in residential units, which in Malaysia are covered by law with a 24 months warranty period (defect liability period), their classification and use to take future decisions on design, fittings, materials, sub-contractors and main contractor.

Analysing The Construction Defect Origin

With a great help from ProSales data team, we have done a first analysis of data received from 19 development projects (9 landed and 10 Highrise projects) out of 6 developers with a total of 4,817 units. The outcome, as for the moment very superficial analysis, is quite astonishing and, even more, I’ve been surprised by the fact that no public data have ever been made available to the public!

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As I was saying above, data are just sitting there and not really serving the multiple scopes they might be able to either because no one is actually collecting and analysing them or because of fear of the outcome, jealously kept in the drawers of the originators.

In the next few paragraphs, we’ll walk through each outcome and try to interpret it in a constructive way for contractors, consultants, developers and, for sure, property buyers. I have written few articles about management of defects which can be read here

As first let’s have a general view to the “size of the quality issue. Any idea of how many defects have been “recorded” out of the 4,817 residential units, how many per project and per developer? Impressive numbers, as showed in the few tables below. First necessary comment is, in full respect of developers’ and construction industry players’ commitment to quality, I must recognize that these numbers have no historical comparative analysis which might be telling us, whether in the past, the situation was worse than today.

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But then, when we calculate simple averages and find out that each units has been counting 31 defect, we must also say that there is plenty of room for improvement to be brought in considering the whopping total of almost 150,000 defects.

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The second information we can derive from the data is understand which locations are more prone to high defects detection and the table above illustrates quite well the lion share in this by bedroom and bathroom both above 7 defects per unit.

If I wear for a second, the developer’s quality control manager’s hat I would like to go deeper and see what this big number is all about and put as much attention as possible in the future projects to avoid as much as possible these issues. It all goes back to the architects’ drawing table as first, then comes in the contractor and eventually I will end up to the sub-contractor.

I will definitely go and check the choice of materials, the appointment guidelines used by the main contractor to choose his subcontractors and definitely I’ll have a chat with the quality inspector from the contractor side to find out what could be improved and how to make it happen.

The Cost Of Non-Quality

Plenty of people keep on saying that quality has a cost, and I couldn’t agree more. However, let me ask the reverse question of how much is the cost of non-quality! I’m pretty sure that, once calculated with precision, my “hypothetical” table below might be looking too conservative.

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Can we see the cost impact for non-quality and relate it to the big issue that affordable housing is, not only in Malaysia, and do something about it? When talking about affordable housing, too often we argue about income, purchasing power, construction costs, compliance costs and so on. I’ve never heard of anyone mentioning about cost of non-quality and now, let the numbers tell us the bitter truth and let’s start looking into possible solutions.

Conclusions And Defect Reporting

The ProSales team, with full cooperation by Propenomist, is working on a residential projects’ quality report which will be ready in few months. We are going to analyze all defect data from the past 18 months or so, interview developers, contractors and subcontractors to define “non-quality costing” and eventually open a roundtable discussion to find possible solutions to this old issue of the property industry.

To attract more participants into this research project, ProSales has designed a special offer for those developers willing to take up the “quality challenge”. All those interested, please drop us a short email at [email protected]  and we will let you know the details.

We really hope to being able in helping our construction and property industries to move forward towards the adoption of a “zero defect” target. This will push Malaysia to be looked at as a prime market for investment from foreigner and ultimately push up the sales of all!

Like, comment and share. Stay safe and healthy and see you soon for additional quality updates.

About The Author

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The opinions expressed in this article are solely of the author, Dr Daniele Gambero.

Dr Gambero has been an expatriate to Malaysia from Italy, since 1998 and has more than 35 years of real estate experience. He is the co-founder and group CEO of REI Group of Companies, the Co-founder of Propenomy.com and the deputy president of the Malaysia Proptech Association.

In the past 10 years Daniele, as international and TEDX speaker, has engaged several hundreds thousand people talking about Property, Economy, Propenomy, Digital Marketing and Motivation. He is also a bestselling author and columnist on several magazines and main stream media. You can reach him directly through his LinkedIn page here

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