Integration Theory ‘By the Book’

Posted on June 27, 2011

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If the idea of integrated design and construction procurement still has a funny ring to it, I can sympathize with the position:  “I want the benefits and truth in black and white”.  Let’s take a look inside the concept from the approach of a consultant. Pulling excerpts from Production and Operations Analysis, Fifth Edition by Steven Nahmias, a business school textbook on operations management, we get these nuggets:

  1. ‘Integration provides additional value and offers a competitive advantage as a market differentiator.’  This means the client receives additional benefits, and the integrated firm stands out among its competition, which makes it easier for potential clients to see how that firm works differently.
  2. ‘Integrated production provides:  reduced costs, more reliability, a reduction in the number of suppliers, and advances in quality’.  Firms that integrate do it to provide a superior product or service for clients.  Enough said.
  3. ‘An integrated system stands out against commodity products.’  The firm that takes it upon itself to provide more through integration (design-builder) has figured out how to avoid competing as a service everyone else provides (general contractor).
  4. ‘Integration avoids separate parts and separate suppliers.’ Implicit in the separate-parts-and-pieces discussion is that, without integration, the buyer (hospital) is responsible for managing the separate parts and separate suppliers (architect, engineers, specialty consultants, contractor) into a final product (team).

Life without integration sounds tiresome and risky. No wonder everything from computers to online travel  is integrated.

In fact, products and services that are not integrated these days are the ones that stick out. Healthcare comes to mind. You can pick them out because when someone engages in that activity they think two things:  this could be done a lot cheaper and this should be a lot more pleasant an experience.  Reading between the lines, the message is:  if they did x and y for me, it would make more sense and I would be willing to pay them for it.

Building a building is not an easy, worry-free endeavor on a good day. If you could, why wouldn’t you purchase integrated design and construction?

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