Just in time

The Model T Ford, the first vehicle mass-produced on an assembly line

What is it?

Just In Time (JIT) manufacturing is an approach to manufacturing that reduces the stockpiling of parts and products to an absolute minimum, instead fabricating them only as required. This methodology necessitates a tightly integrated workflow of all aspects of production, yet reduces the cost of carrying unsold goods, increases the efficiency of production and ultimately increases profits. First used in the late 1950s by an engine supplier to Ford, it is now used extensively throughout modern manufacturing processes.

The key benefit of JIT manufacturing is clearly its ability to reduce costs: when Steve Jobs returned to Apple in the late 1990s, the company “had more than two months’ worth of inventory sitting in warehouses, more than any other tech company. As computers have a short shelf life, this amounted to at least a $500 million hit to profits.” Apple now maintains a JIT manufacturing process with as little as two days’ worth of stockpiled product.

However, there is also a significant drawback to the JIT approach, best demonstrated by its recent appearance in the Australian news.

When CMI Industrial, a car parts manufacturer for Ford, stopped paying its rent, then failed to meet the terms of an agreed payment plan, and eventually tallied up a backlog of over $100,000 in unpaid rent, the landlord took matters into its own hands and last week locked CMI out of the premises.

The next morning, the 80 Campbellfield employees of CMI arrived at work only to be informed the factory had been shut down. The day after, the Dana Australia factory, via which the CMI parts make their way to Ford, was also closed. With no parts coming in, the day after that, so too were both the Broadmeadows and Geelong factories of Ford itself. All up, almost 2,000 employees were stood down.

What do we think?

The drama unfolding right now in the lives of 2,000 Ford employees provides an unsettling mirror through which we can see all of modern civilisation. More than anything else, our systems of production, consumption, politics, education, the environment, even war, have one thing in common: co-dependency.

Ford cannot make motor vehicles without CMI Industrial supplying the components. Dutch tourists cannot travel without a sky clear of volcanic ash over Iceland. Melburnians cannot eat at restaurants without functional gas plants in Gippsland. A child cannot study anywhere in the world without Google’s million plus computer servers. We cannot go to war in Afghanistan without the eyes of military satellites hurtling through space.

Nowhere is this enmeshing of parts better exhibited than in our cities. So finely tuned are a city’s systems, and so reliant on them are its inhabitants, the city is the canary in the coal mine, the place to look for the first signs of impending failure.

It doesn’t take much: a broken down car on the Monash Freeway causes a traffic jam on Dandenong Road. Carlton and Essendon play at the MCG and the entire city grid of mobile telecommunication networks is clogged. A deluge of rain causes stormwater drains to overflow and streets to flood, while a string of hot days in summer causes rail lines to buckle and hundreds of train services to be cancelled.

Day after day, without even realising it we test the limits of our infrastructure. What will happen when something truly catastrophic occurs?

In our global civilisation, our reliance on one another, and on barely-understood processes run by invisible organisations, is greater than it has ever been before. We are so tightly co-dependent that when any part fails, the entire system crashes. The cascading closure of Ford and its parts manufacturers reveals to us just how precarious our comfortable existence is, how little buffer we have between us and utter chaos.

The architectural fee

What is it?

Over recent months, the architectural fee has surfaced as a topic in a number of unrelated conversations, strangely arriving at us from varied directions, in varied circumstances and with varied foci.

Nic Granleese advised that the Australian Institute of Architects (AIA) are investigating the reinstatement of their architectural fee guide. We attended an AIA seminar run by (the awkwardly named) Blue Turtle Management and Consulting exploring the psychology of fee negotiation. Shae Parker-McCashen queried up-front deposits over one dinner. A lawyer friend suggested the division of fees into fixed and hourly components over another. And finally, Andrew Maynard and Justine Clark discussed industry-wide mandatory fees on Twitter.

What do we think?

Or rather, what can we make of this disparate yet complimentary interest in the architectural fee?

It might have something to do with our ages and the ages of our friends and colleagues, many of whom have recently started their own architectural practices. For new business owners, fees and income are inevitably going to feature heavily in conversation. Perhaps it also has something to do with the market shifts that have taken place over the past five years thanks to the global financial crisis, the federal government’s $42b stimulus package and the ongoing aftermath of these events. And finally, it might have something to do with the general consensus that architects get paid relatively little for the work we do.

The truth behind the simultaneous interest in the architectural fee probably owes much to each of these explanations. Be it consciously or subconsciously, we and our colleagues are responding to the most significant question of all: how can we earn a decent living doing what we love? In order to flesh out our feelings on the matter, we’d like to further explore two of the issues raised with us: the psychology of fee negotiation, and the industry-wide mandatory fee.

The psychology of fee negotiation

Blue Turtle Management and Consulting (BTMC) are a consulting firm specialising in architectural fee proposals, contracts and negotiations. Their recent seminar explored these concepts from both practical and theoretical paradigms. The practical discussion was interesting, if a little drawn out, however the theory was deeply fascinating. It introduced ideas like anchoring and mental accounting, and offered remarkably demonstrable observations like; People will make personal financial sacrifices in order to punish those they think have wronged them and; People place different values on identical items based on the way they are presented.

Ultimately, both theoretical and practical sections of the seminar boiled down to a single, central recommendation: fee options. That is, a fee proposal broken down into a handful of options (basic, expanded and premium services) with a checklist of tasks like those favoured by car manufacturers. For example, the basic service may include only one sketch design proposal, while the expanded service provides one design with minor revisions and the premium service allows unlimited changes.

The central purpose of this recommendation is to empower the client to choose between spending a little or spending a lot, thereby increasing the likelihood they sign on the dotted line. Additional benefits include creating a clear link between the fee and the scope of works; providing multiple points of negotiation; and establishing which services are excluded from the fee.

We think all are important considerations for any architectural practice, and without doubt utterly fundamental to a young practice such as our own. However, we remain unconvinced by the method.

Our objections are not many, but they are central to the way we work:

  • We are legally bound by the Architects Act 1991 to provide a competent level of architectural service.
  • We want to work on projects with a full scope of architectural contribution.

We do not run a business that happens to provide architectural services (though could easily provide legal advice or sell flowers). We run a business because it is the only way we can do what we love: make architecture. And our passion for architecture means that the only sort of service we are interested in providing is a full one. We want to offer our clients the opportunity to tweak our designs. We want to make architectural models. We want to attend as many site meetings during constructions as necessary. Only in doing so will our buildings be the best they can be.

We understand and respect that BTMC wish to show that being an architect doesn’t have to exclude also being a businessperson, however we would love to hear how they suggest we can do that without compromising our core service and our core values.

The industry-wide mandatory fee

In short, this idea is a uniform fee schedule nationally implemented across the entire architectural profession. Fees are set, collected and administered by a central authority (for instance the AIA) and redistributed to architects. The intention is to establish an environment in which architects compete on ideas, not fees.

Many countries, including Australia, used to set mandatory architectural fees. By the 1990s they were all abolished for their inherently anti-competitive nature: in a free-market economy, money is the common language, the one constant understood by all. Ideas are not universally negotiable, but what one pays for a service is.

But are mandatory fees really so bad? Competing with other architects based only on our ideas, not our fees, certainly has an alluring ring to it. Then again, our small architecture practice is more likely to thrive in the future if it can complete more projects now. And one of the ways we’re going to achieve that is by not having to compete with established architects and their widespread reputations. The freshness and energy we can bring to a project is one string in our bow; our ability to charge low fees is another. And believe us when we say we need every string we can get.

In fact, the disparity between our fees and those of an established practice protects the master as much as it does the apprentice. Twenty years from now, when we have two decades of (hopefully) great architectural works behind us, we will be charging significantly more than we do now. One reason will be to cover what are likely to be far higher overheads, another will be because we will want more money – to afford private schooling, to pay off our mortgage, to travel, to save for retirement, to buy beautiful things. As an established practice, we will be in a position to satisfy this desire thanks to a clientele prepared to pay for our good ideas. Say what you like of it, the free-market economy does tend to reward those who have in small supply what others want with great demand.

The free market values great design by paying for it.

There is another, more sinister, reason for avoiding a centrally-administered fee. Orwell may have been remarkably prescient in a number of areas, but thankfully so far we are still able to charge what we can for the work we do. Do we really want to relinquish yet another liberty? It’s bad enough that our federal government decides what to do with our taxes and our local councils decide what to do with our streets, having the AIA decide how much we’re allowed to earn gives us the outright willies.

Regulating sustainability

What is it?

A proposal is currently before the Victorian State government that recommends abandoning mandatory 6-star thermal efficiency requirements for housing as part of a broader agenda to cut government red tape. Documents obtained by The Age newspaper reveal state Treasurer Kim Wells has suggested that “consideration could be given to a voluntary thermal efficiency scheme that enables builders to choose an appropriate standard”. This standard would be based on consumer demand, reaching a compromise between “optimal thermal efficiency and building costs”.

The proposal draws heavily on a Master Builders Association (MBA) report from July 2010, which argued that compelling people to build houses with higher star ratings may cost more than it delivers in energy savings. It is under consideration despite the Baillieu government’s 2010 election platform promising support for the 6-star standard for all residential and commercial buildings.

First heard on Jon Faine’s ABC radio program this morning and read on The Age online, here.

What do we think?

This issue is a thorny one for us, existing as it does at the juncture between environmental sustainability, one of our dearest passions, and regulation, one of our most hated evils. On the one hand, we believe vehemently in the value of environmental sustainability, yet on the other we despise the pervasiveness of regulations in Victoria. Where does the balance between these two forces lie?

If we follow the MBA argument, we would conclude that environmental sustainability is not worth the imposition of regulation, that the free market should decide what it does or doesn’t want to build.

Specifically, the MBA argues that the requirement for 6-star thermal efficiency levies an unacceptable financial burden on potential home owners, estimating that increasing the efficiency of a house from 5-stars to 6 increases its build cost by around $5,000. It argues that owners should be given the choice whether or not to invest in green technologies, just as they can choose whether or not to install marble benchtops or timber floorboards.

Alas, we cannot follow this argument. It is totally and unconscionably false.

The nominal $5,000 it takes to improve the thermal efficiency of a house is not at fault for the current issues with housing affordability at large. We can blame the poorly-implemented State urban densification strategies, the reliance instead on isolated, car-dependent outer suburbs and supersized building footprints for that. If Mr. and Mrs. Average are really complaining about the $5,000, perhaps they might like to consider leaving out the home theatre room or even just the television destined for it.

Choosing environmental sustainability is not akin to choosing a material for the kitchen benchtop. It has the heavy importance of fire safety or structural integrity. The payoff may be measured in decades instead of years, but to our minds, environmental sustainability really is a matter of life or death.

Finally, we need only take a brief look at the houses in which the vast majority of Victorians choose to live to determine that the free market can absolutely not be trusted to know what it’s doing. They are located in the wrong areas, face the wrong direction, are too big and are built too poorly. Even with mandatory thermal efficiency requirements, most Victorian houses are totally unsuited to our climate and totally unsuited to egalitarian urban planning.

267sqm Zanthe house design by A.V. Jennings. Australia has the largest average house size in the world, three times larger than Great Britain, and larger even than the United States, the birthplace of the supersize.

We shudder to imagine a housing industry left to its own devices in determining whether or not to invest in green technologies. Like it or not, educating the general public about the value in environmental sustainability is a process best undertaken via the arduous process of implementing it across our built environment. If we are successful in this endeavour, we will all be rewarded by watching our children grow up in cities where water tanks, double glazing and roof-mounted photovoltaic panels are simply a way of life, where sustainability is simply a way of life.

What should the State government learn?

We may not like regulations in general and we certainly do not like the way they curb the creativity possible at the forefront of architectural design. However, we understand their irreplaceable value in ensuring the trailing edge of the housing industry at least has decent insulation in its walls and windows facing the right way.

The State government should be ashamed at even thinking about relaxing thermal efficiency requirements in the built environment. Amongst reductions in education spending, threatened healthcare upheavals and an absurd investment in brown coal, this would have to be one of the most outrageously irresponsible acts yet undertaken by the Baillieu government.

A Day Made of Glass

What is it?

A short film released a few years ago by Corning, speculating on how a day in the near future may look, if it can be augmented by the interactive capabilities of high-tech glass. Corning is the manufacturer behind Gorilla Glass, the high-durability glass that fronts approximately 600 million iPhones, iPads and other digital devices.

What do we think?

The film is intended to suggest future possibilities of interactive glass, all of which are mesmerising. However even more exciting is the realisation that within the glossy, futuristic world proposed by Corning are a whole array of ideas and technologies that already exist.

What follows below is a chronological list of those technologies, tied to the time code of A Day Made of Glass.

0:21 Photosensitive glass is used by Transitions for eyewear that automatically adjusts its opacity to suit the ambient lighting conditions. Quantum Glass manufacture privacy glass that can be switched between clear and frosted states via the application of an electrical current.

0:27 Sony Bravia LCD televisions use LED backlighting to achieve screens less than 30mm thick.

1:09 Induction cooktops by Fisher & Paykel use magnetic pulses to heat saucepans, permitting the instant temperature control of a gas cooktop. Other than transferred heat from the saucepan back to the cooktop, the glass surface does not heat up while cooking.

1:24 The electronic interface on Fisher & Paykel refrigerators permits fine control of internal temperature settings, including a rapid chill function for bottles of beer.

1:39 The iPhone introduced the world to smartphones dominated by a glass-fronted screen. The traditional hardware buttons of old phones are replaced by a touch-sensitive screen with adaptable software keyboards that reconfigure themselves to suit the application.

1:49 The iPhone used to sync with its parent computer only when the two devices came into close proximity. With the advent of iCloud and full integration across computing, tablet, television and smartphone devices, all are synched continuously and seamlessly.

2:07 Audi vehicles come with Comfort Key technology that permits keyless entry and engine ignition. If this technology has not yet been further adapted to permit automatic driver recognition and preferences configuration, it can’t be far off.

2:12 Garmin produces devices that utilise various satellite navigation capabilities for automotive, fitness, hiking, marine and aviation applications.

2:25 The Maybach range of limousines offers an electrotransparent glass roof that incorporates photovoltaic cells and an inner glass layer that can be electronically darkened.

2:36 Though primitive, notification screens populate the Citylink, Eastlink and freeway routes, informing drivers of predicted travel times, collisions and scheduled roadworks.

2:46 Yarra Trams’ tramTRACKER is an iPhone app and website that uses realtime positioning technology in each tram to predict the arrival times of the next three trams at any stop within their network.

3:25 Digital Interactive Table produces a horizontal work surface with multitouch-sensitive screen. The technology is in its infancy, though is becoming more advanced and affordable all the time.

4:02 Location-based services in airports and cinemas push advertising and notifications to customers’ smartphones upon entry.

4:12 The ongoing Prada In-store Technology project by OMA explores active technological applications in the flagship New York, Los Angeles and San Francisco stores. Applications include mirrors in change rooms that show customers video feedback from multiple angles; interactive displays that provide information on garments; and screens embedded into the fabric of the store that play branding, advertising and sales content.

4:30 Samsung are rumoured to be releasing the Galaxy Skin later this year, a smartphone that incorporates a flexible LED screen into its design.

5:01 3D projections may be a while off production, but many new televisions, including the Sony Bravia, come 3D-enabled and are capable of showing the same films produced for 3D cinema.

5:09 e-Book readers like the iPad and Kindle may not yet have flexible screens, though already they are to the book industry what the iPod was to the music industry: an entire library on your bedside table.

The future is closer than we think.