Designing an Impactful Construction Ordering Structure” to solve corporate issues.

The target of construction projects, whether for individuals, businesses, or investors, is to increase return on investment (ROI) to solve problems.

Return on investment (ROI) = profit ÷ investment. The higher the profit and the lower the investment, the higher the ROI.

Therefore, we would like to consider the characteristics of “construction costs” that have a significant impact on investment efficiency. Construction costs are relative and vary not only by the construction company but also by trends in the construction market, even if the content of the building is the same.
The way the project is conducted and the process of construction order can greatly affect the outcome.

There are three main options for construction ordering

  1. “Lump-sum order for design and construction to the general contractor.
  2. “Separate order with the design firm for design and the general contractor for construction.
  3. “Design or basic design is done by the design company, and the general contractor is ordered from the implementation design.

However, the reality is that few companies have the technical team in place to select the most appropriate order format for the project target before selecting the order method, and they lack the experience, know-how, and resources to do so.

In conclusion, it is best to have a construction project expert “building producer”, who is neither a designer nor a builder, design and manage the project from the project strategy to its structure together with the project owner.

To understand order clearly, we would like to refer to the process of purchasing goods.
For example, the matching business between suppliers and users that has become commonplace recently, such as hotel accommodations, airline tickets, and other EC purchases of products, can be used as a reference.
Trivago,” a hotel reservation service, will find the best sales site by searching for the same accommodation conditions.
In such matching sites, the system constructed by the operating portal company allows users to obtain specific products they want at the lowest price at that moment, and to purchase necessary products and contents while comparing and examining “what users want” in parallel.

Let us apply this perspective to construction projects.
First, the buildings produced by the design and construction of a house builder or general contractor are ready-made products that meet the construction methods and standard specifications of XX manufacturer’s product brand or XX general contractor brand. They are the products of their respective companies, and each cannot be supplied and sold by other companies. In other words, “products that exceed the user’s requirements” are sold as if they were “products that the user wants,” which includes contents and costs for maintaining the product brand, in other words, unnecessary for the client.
In the same way, buildings designed by designers often have drawings that are ‘beyond the user’s requirements’ as if they were ‘what the user wants,’ which also contain contents and costs that are unnecessary for the client, i.e., client risk.

Thus, the project stakeholders’ proposals often include content that the client does not have to bear, which is a negative factor when considering ROI.

In any case, the discomfort that the client may have with the contractor’s proposal is often due to this type of construction ordering mechanism.

Regardless of whether design and construction are integrated or separated, the system provided by our architectural production company is a system that reads risks invisible to the client, compares and examines quotes from various companies based on an order book optimized for what is truly needed by the user, and purchases the best proposal.

This system generates a return on investment (ROI) that neither the designer nor the contractor can achieve. The system works from the preliminary stage of selecting the three options for the construction order, which increases the efficiency of the project.

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