Multi-criteria decision-making prototype for the 4th construction revolution implementation readiness using intellectual capital perspective

Abstract

The fourth industrial revolution, so-called Industry 4.0 has transformed the decision-making process by increasing the use of information and digitisation technologies, which resulted in improving the performance and structuring the management process to the industry. Thus, in recent years, the implementation level of information and digitisation technologies in the construction industry, termed as ‘Construction 4.0 (CR4.0)’, has increased rapidly. However, the construction industry has been unable to translate its acquired knowledge into actionable, transformational and strategic goals towards CR4.0. CR4.0 has changed the nature of competitive resources by reshaping the structure and way construction firms work. Construction firms face various technological, human, and process-related challenges. The starting point for this research was based on exploring the potentials in reskilling and upskilling knowledge through the development of Intellectual Capital (IC) of the construction firms. As a result, based on the Resource-based View theory, CR4.0 implementation process has been approached as a knowledge-based innovation which occurred with the development of three IC capitals: Human Capital (HC), Relationship Capital (RC) and Structure Capital (SC ). Hence, this research aims to develop a Multi-Criteria Decision-Making (MCDM) prototype, used to support decision-making in CR4.0 readiness, named as the 'Construction Firm's Industry 4.0 Readiness MCDM (ConFIRM)’. The first objective is to identify the critical criteria of IC that may affect the CR4.0 implementation readiness. The process involved Systematic Literature review and semi-structured interviews. The second objective is to investigate the significant level of IC affecting CR4.0 implementation readiness through Analytical Hierarchy Process (AHP) technique. The third objective is to derive the weightage of criteria and sub-criteria of ConFIRM through Decision-Making Trial and Evaluation Laboratory (DEMATEL) and Analytic Network Process (ANP). The fourth objective is to develop a prototype called as ConFIRM that comprising of 3 main criteria, 16 sub-criteria and 92 super sub-criteria according to their significance weightage in achieving CR4.0 implementation readiness. The MCDM results indicated HC (37%) to be the most critical CR4.0 main criteria, followed by SC (34%), and RC (29%) respectively. The HC represented the cumulative tacit knowledge within the organisation, and it would be the main generator of intangibles. For the sub-criteria level, the results indicated that “Management Capital (12%)” has been considered the most critical CR4.0 sub-criteria. The second most critical sub-criteria would be the “Experience Capital (10%)”, followed by “Process Capital (8%)”. On the other hand, the “Sustainable Capital (2%)” was the least critical sub-criteria. Then, the weightages were formulated into automated MCDM prototype, where the scores were calculated using the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS), indicating the CR4.0 implementation readiness. As for the fourth objective, ConFIRM was adopted in real case studies and evaluated based on the judgement of five experts to determine its applicability and validity in evaluating CR4.0 readiness of contracting firms in Malaysia. In the case studies, the experts recognised the performance and effectiveness of ConFIRM as the novel method for CR4.0 readiness evaluation. ConFIRM would be able to add value to the development of CR4.0 strategies by identifying the corrective/preventive actions needed, based on the readiness assessment, before the start of the implementation process.