Michael Chusid
Building Safety
Building Safety

Building Types

Cruise Ships: a Building Product Market

It could be time for you to put to sea as the cruise ship industry continues to grow. From 2015 to 2016, 17 more new cruise ships will come online, with more to follow.
Many of these are gigantic vessels capable of carrying thousands of passengers plus crew, dwarfing existing craft.
It is probable that vessels will grow in size until they are better compared to small cities or at-sea resort towns that do not put into port but will be tended by smaller ships and aircraft landing on the top deck.

The cost of the structural, motive, and infrastructure systems of these vessels is enormous, and require innovative construction techniques such as this covered dry dock.

The investment in facades, furnishings, lighting, decor, equipment, elevators, and other "building products" will be similarly titanic. Many are replete with shopping, theaters, dining, fitness facilities, and accommodations that would make a Las Vegas hotel seem modest in comparison.

More, older ships will be refurbished to compete.

While there will always be cramped interior cabins and crew quarters, there is also a focus is on elegant suites for those with the resources.

One reason for this tread is that rising sea levels make investment in coastal resorts a risky proposition.  This accounts for the interest in floating platforms that are not necessarily designed for cruising. As population distributions shift in response to global warming, the platform can be towed to more attractive locations.

Beyond the recreational market, plans -- both serious and theoretical -- are underway for floating cities. Part of the appeal is the perception that these private islands are havens from social unrest, regulations, ecological apocalypse, and taxation.

At the (somewhat) smaller end of the spectrum, many personal yachts are now being supersized, as this recent design by Zaha Hadid suggests.

Her's is not the only A/E/C firms have entered the market. They also are active in the development of ports and landside facilities in emerging markets and to accommodate larger ships.

Some terminals will become destinations in their own right with profound implications for the future of travel, conventions, business meetings, and more.

SO NOW WHAT?

Contrary to the maxim, a rising tide does not float all ships, only the businesses that are prepared.

This is a competitive global market. Many existing architectural products will require modification (or at least additional testing) to prove seaworthy. The decision making process, buyer behavior, contractual and legal implications, and many other business factors are different than land based construction.

Call me to discuss your strategy launching into this growth market. 

Michael Chusid
+1 818 219 4937
michael@chusid.com

Prefabrication

The most recent accomplishment in rapid building in China is getting a lot of press coverage and internet traffic.  "30-story building built in 15 days" is a short, slick video that includes time-lapse photography of a slender, 30-story hotel being erected very quickly.  The video includes a wealth of claims about the efficiency and sustainability of the building, the safety of the construction process, and the speed.


It is a remarkable achievement, as it was designed to be.  The claims bear close scrutiny - the meaning of "20 times more purer air" is not entirely clear, for example – but the basic achievement is still impressive.  In fact, one almost suspects that the projects was designed more for the impression than anything else.


The video subtly implies that the 15 days of erection is the same thing as 15 days of construction.  Prefabricated floor sections are seen being built, shipped, and installed, but that was almost certainly not the case.   


What the editing eliminates is the foundation which must have taken a number of days if not weeks to excavate and pour, not to mention 28 days (hopefully) to cure before the video begins.  It also eliminates the prefabrication time, which was doubtless considerable.


In a way, it's a pity they left out most of the pre-fabrication process.  It may be the most interesting aspect of this project.  One of its best lessons from the project is the power of pre-fabrication

Mining Data from Illustrations

Forgive the pun title for this post -- but it this illustrations brings two topics to mind.

1. Mining is a huge market for construction materials! It is frequently overlooked by building product manufacturers more tuned into above ground construction. Mining -- particularly underground mining -- requires concrete and other structural materials, lighting and communications, plumbing and ventilation, tools and equipment, and more.

Most products used underground have to meet severe service conditions including dust, moisture, physical abuse, and fire/explosion resistance. Yet many of our clients have found that, with appropriate product modifications and a disciplined sales and marketing effort, new opportunities can open beneath their feet.

2. A good illustration is an invaluable sales tool. When I had had to learn about the mining business in a hurry, I realized I was in over my head. It began opening to me when I found this illustration, in Shotcrete magazine. Within minutes, I was able to grasp important mine construction concepts and familiarize myself with terminology.
zazzle.com

Of course words are also important in marketing. Sometimes a single phrase can change a person's entire attitude. It happened to me when I saw this phrase:

 I can dig it!






Trend: Stilted Construction

In an attempt to minimize flood damage from hurricanes, some communities on the East Coast are promoting construction on stilts. Elevating buildings allows storm surges to flow underneath structures rather than hitting them broadside.

West Coast communities are starting to get into (onto?) stilts for another reason: to avoid damage and deaths due to tsunami.  A small town in coastal Oregon has broken ground for a new municipal structure on stilts.


Communities in the Midwest that are prone to flooding rivers might also consider this technique of construction. Flooding will likely become more common due to climate change, deforestation, paving of otherwise permeable soil, and population pressures that will drive people to build in flood plains.

Stilt-construction may open markets for new building products manufacturers who anticipate demand and develop solutions.

Consider products such as:
  • Increased demand for railings and stairs.
  • Elevators and lifts.
  • Improved methods for bringing utilities up to building.
  • Soffits for underside of building.
  • More efficient ways to build and brace elevated framing.
  • Furnishings, lighting, and pavings for under building.
  • Increased insulation due to exposure of building underside.
  • Scour-resistant foundations.
  • Frangible links that allow auxiliary parts of structures to wash away without damaging critical structures.
Contact me if you want to brainstorm how stilted construction might impact your business.

The Six Construction Industries

Fundamental to marketing is the concept of segmenting markets. The construction industry is too large and diverse to be dealt with as a whole. This excerpt from an presentation in 1984 offers insight into how to segment construction:

The Six Construction Industries
Here in Washington we often choose to talk about the ‘building industry,’ and discuss issues like changes in the levels of employment, changes in quality and safety, changes in productivity, changes in opportunities and risks from foreign competition, as if it were a single industry. I don’t think this makes much sense.

In many ways the building industry is no more monolithic than the transportation industry. The transportation industry includes the airlines industry, the railroad industry, the trucking industry, and the shipping industry. There is little crossover between the organizations, the institutions, the skilled manpower, the technologies, and the R&D base that are utilized by those sectors of the transportation industry.

Practically no Federal policy can affect each of the separate industries within transportation. But since you don’t want too many units that report to the president, you can create a Department of Transportation and lump all of those things that have to do with movement under it. It also is useful to talk about a transportation industry for economists who want to make measures of the national economic sectors. It avoids having that many more pages of statistics if you can somehow or other have a number that represents the contribution of the transportation industry to the gross national product.

The building industry, or the building industries, as I prefer to call them, are combined for much the same reason. It makes sense to look at the several building industries if what one wants to identify is expected changes in the industry.

For our purposes, it seems to me there are six industries which react quite differently to those kinds of issues:

• The first is the housing industry (Architect as product designer) – the collection of organizations, technologies, skills and financial mechanisms whose purpose is to convert raw land, usually purchased on a speculative basis, into dwelling units that can be sold or rented to individuals and families. The major distinction for the purpose of analysis is that this process is begun before there is a buyer in mind. The builder of these houses builds a house against a potential market, not against clients who come to them and say “These are our needs, and we want a house of this kind.” Very few houses in the country are done that way, and I put those in the fourth category.

• The second is what I call the manufactured building industry. I call this a separate industry because it is a collection of organizations, technology, labor and financial mechanisms whose purpose is not to convert land into buildings, but rather to manufacture off-site units that are anywhere from the whole unit to subassemblies, which can be transported to the site. A few companies like the Ryland Corporation own house manufacturing capabilities, as well as build conventionally, and I’m sure we can find all kinds of exceptions at the margin for each of these.

• The third industry I call the commercial developers. I mean by this people who buy raw land and convert it into buildings other than housing – people who develop industrial parks, people who develop shopping centers, or people who develop office buildings. Again, the character of this industry is that there is no client in advance. There’s a prospective market out there, and there’s land, and there’s investment to be made in building something on this land which will eventually be leased or sold to a set of users which will emerge.

• The fourth industry, is the one that most of us think about when we talk about ‘the building industry.’ It is the conventional collection of organizations, design and engineering firms, banking institutions, general contractors and subcontractors, regulatory bodies, etc. that build buildings for specific clients: an agency of the Government, a private client, or sometimes a wealthy family. The client sets the requirements, decides on where they’re going to locate, usually purchase their own land, and then enter into a process in which a design is created for them that’s eventually put out to competitive bids. The ‘building industry’ listed here is the only industry in which competitive bidding occurs. It is practically the only industry of building where there will be a major change if there is a technological breakthrough. It’s the one building industry where bidding can reflect market conditions as a result of change in prices.

None of the industries listed above really have much competitive bidding. Sometimes market competition works in the housing industry, but only over a long period of time. The major impact of the housing industry, as we’ve mentioned already this morning, is what it cost to buy the land, and what is the mortgage rate that they have to pay? We used to speculate we could practically build a house for nothing, and it wouldn’t change the price which people would pay for housing, because the market price for housing was determined by a whole lot of factors other than the technology of building.

• The fifth industry, the remodeling industry, is one we sometimes forget. Of the $250 billion that represent s our 10 percent of the gross national product, is included almost $50 billion in this remodeling industry. This probably does not include rehabilitation of existing buildings in the sense that an architect and contractor might do it, nor does it include rehabilitation of the kind that homebuilders do. It means the remodeling industry that sells things from aluminum storm sash, to screen doors, to new store fronts for small businesses; that is financed by short-term financing rather than increases in mortgages. It is not regulated by the building codes, by and large. For a long time, it could be characterized by the blue suede shoe type of salesman.

• The sixth industry, and the one that OTA chose not to cover in this workshop, is what I call the heavy construction industries. These industries build highways, dams and facilities. Their clients are primarily public agencies and utilities.

Chusid Associates uses a similar methodology when we begin segmenting the construction industry as part of a marketing plan for our clients. Of course, there are additional segments such as DIY and the Operations and Maintenance business. And there are other ways to segment the "industries". But we will save them for future posts.

By John P. Eberhard, former Executive Director of the Advisory Board on the Built Environment at the National Academy of Sciences. From: Technology & the Future of the U.S. Construction Industry, AIA Press, 1986. The entire report is available online.

The Six Construction Industries

"The construction industry is like a great big gray glob. Just when you think you have your arms around it, it squeezes out somewhere else."
My mentor, Harold Simpson, PE, was fond of saying this. His point was that every building product marketing strategy has to begin by segmenting the industry so you know where to aim.

For example, John Eberhard says what we typically call the building "industry" should really be thought of as the building "industries," and describes six different industries or segments:

1. HOUSING INDUSTRY: Converts raw land, usually purchased on a speculative basis, into dwelling units that can be sold or rented.

2. MANUFACTURED BUILDING INDUSTRY: Manufactures off-site units that can be anywhere from whole units to sub-assemblies which can be transported to the site.

3. COMMERCIAL DEVELOPERS: Buys raw land and converts it into buildings other than housing, without having a client in advance.

4. "THE BUILDING INDUSTRY": All the institutions and actors that builds a building for a specific client. The client determines the requirements, usually purchases the land, then selects the designers and builders through bidding or another process.

5. THE REMODELING INDUSTRY: Characterized, in many cases, as work done with short-term financing. While Eberhard does not go into detail on this sector, remodeling can be further subdivided into residential and non-residential, DIY, and maintenance services.

6. HEAVY CONSTRUCTION: Highways, dams, railroads, utilities, etc.

Eberhard was Executive Director of Advisory Board on the Built Environment at the National Academy of Sciences. He describes these industries in Chapter 11 of Technology and the Future of the US Construction Industry, Congress of the United States Office of Technology Assessment, 1986.  I highly recommend this short essay. It is available on Google Books and as a PDF download.

Where will your next great marketing idea come from?

If you are reading only the design and construction trade publications, you will usually be following the market rather than creating them.

I was thinking about this while reading Journal of Healthcare Protection Management, Vol 25 No 2, a journal published by International Association of Healthcare Safety and Security. Its articles are written mostly by healthcare facility management professionals and discuss concerns that may still be below the radar of designers and the building product manufacturers that serve the industry.

For example, an article by David Corbin, "Designing a 'Safe Room' on a Medical Nursing Unit Floor" describes an experiment at Faulkner Hospital, Boston. They observed an increase in violence by "at risk" patients. Following
extensive planning, they remodeled a patient room so it could be used with patients deemed to be a security risk, but without the sterility of a prison or psych hospital room. The table below identifies some of the changes. (Click to enlarge.)Note that it the changes affect hardware, cabinetry, communication systems, plumbingware, specialties, and other types of building materials. While this was one room in one hospital, it could mark a trend that may expand to include the hardening of walls, lighting, finishes, etc.

Another article in the same issue, "The SEO (Security Entrance Officer): A Wave of the Future of Healthcare Security," by Edward Panell, describes efforts by a hospital in Seattle to provide better control of entry into its facility. By the time a phenomenon becomes a TLA (Three Letter Acronym), it may well be on its way towards becoming a wave. While the Seattle Hospital solved its problems with aggressive staffing, it is possible to imagine that future hospitals may require different types of entrances, hardware, controls, monitoring equipment, and other building products.

When Chusid Associates did an extensive healthcare market research project in the 1980s, it was a time when the trend was to make hospitals "warmer" and more accessible. Perhaps the pendulum is swinging. One of our clients is already profiting from the increased security in healthcare.

Trends like these are occurring in all building types. Building product manufacturers who want to be leaders in their market segments should monitor leading indicators, and conduct fresh market research on a regular basis.