early contractor involvement and project productivity ...... · early contractor involvement and...
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Early Contractor Involvement and Project Productivity -Don't forget the people
12 November 2019
Jonathan Ralph
www.curriebrown.com 2
A little about me…
Jonathan RalphConsultant with Currie & Brown
Chartered quantity surveyor
30 years in construction
29 years with contractors
15 years’ commercial leadership in
complex multidisciplinary major station
redevelopments
St Pancras
King’s Cross Northern Ticket Hall
Blackfriars
London Bridge
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Consensus, consensus and more consensus
Productivity in construction
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The impact of poor productivity
Client: Funding uncertainty
Contractor: Margin instability
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100%100%
Award
Completion
Commence construction
120%
Design/procurement
‘Design to budget’ ‘Build to budget’
Construction period
100% 80% 90%
Award
Commence construction Completion
Cost growth modelled from recent major station redevelopment
Representation of industry productivity challenge
How does this play out on projects?
www.curriebrown.com 6
One strategy is the advent of early, early contractor involvement
Encompasses services traditionally undertaken by consultants
Contractors move further into an environment that is not business as usual
How is the industry responding?
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Improved team working with integrated contractor and
designer
Develops greater understanding of requirements
Improved support of stakeholder management, contractor,
designer and key supply chain innovation
Enables companies to plan for the recruitment, training
and retention of personnel
Appoint key supply chain partners; and source long-lead
items
Reduced cost
/
/
Expected result…and the likely
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Time pressure
Key staff availability
Staff populated by availability, not necessarily suitability
Exposes lack of standardised process and procedure
Late supply chain mobilisation
Behaviours – ECI a hurdle to get to construction
ECI = value engineering
Project management/Margin protection strategy is a low priority
Reality of ECI phases
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Why don’t contractors focus on protecting tendered margin?
Investment in tendering not delivery
Client behaviour
No incentive to invest in lessons learnt
Optimism bias
Moving risk down the supply chain
Disproportionate focus on the technical engineering challenge
Every project is unique but the problems are the same
Why, when the business is full of professionals/experts?
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So how do we get improvement in project delivery?
Procurement for value
Presumption for off-site
Embracing new technology and digitisation
…there is one missing ingredient in the mix: people
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What about the people?
Constructing Excellence Productivity Workshop (25/10/19) results
0% 10% 20% 30% 40% 50% 60% 70%
People
Organisation
Process and methods
Technology
Importance of the four pillars of productivity improvement
Critical Important Moderately Important Little Importance Unimportant
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How are people considered?
Everyone is a professional
Investment in apprentices
Culture of fear – industry works very hard to discourage innovation
Pride in crisis recovery creates a self-fulfilling prophecy
Absence of thinking time
...low and behold you get what you’ve always got
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What is it going to take to create the future state?
The future
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Future state productivity model
The future state model is based upon the modelling of a likely project outcome based on a set of key discipline and/or trade problem statements using:
Experiential major
infrastructure learning
Extensive benchmarking
data
Disciplines:
Design management
Procurement
Preliminaries
Handback
Superstructure
Fixtures, fittings and equipment
MEP
Planning
Supply chain management
Quality
Project controls
Commercial management
Risk opportunity
Change management and estimating
Independent commercial assurance
Stakeholder management
HSE
Sustainability
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Future state productivity model
Stage OwnerProblem
statement(s)Validation
1. Remove the
optimism bias
Senior leadership
team
Discipline is
consistently over
budget
Apply historic data to
determine the cost
2. Refine the
challengeDiscipline leads
Discipline exceeds
budget because
1……..
2…………
3……….
Apply data to map the
current state
1……….
2……….
3……….
3 Create the
future stateSpecialist team(s)
Develop innovative
solutions
1……..
2…………
3……….
Cost/benefit analysis
revert to SLT for approval
1……….
2……….
3……….
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Future state productivity model
Step 3: Creating the future stateSpecialist team
Form the specialist team, undertake a detailed data analysis of the target statement,
develop the solutions, produce a cost benefit analysis, submit to SLT for approval.
Mapping the
current state
Develop
solution(s)
Cost /benefit
analysis
Create future
state modelSLT approval/
mobilisationData analysis
Specialist
team selection
Risk/
opportunity
fixed/ variable
cost
Innovation
Supply chain
partners
Assessment
KPI’s/dashboard
Tier 2/3 suppliers
Off-site manufacture
Attitude to Innovation
Lesson learnt
Other projects
Future thinking
Vertical groups
Intellectual ref’s
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Future state productivity model
Model was developed as an ECI and construction
phase tool
Don’t try to eat the whole elephant - keep investment
low and provide controlled incremental benefits
Offers a combined commercial and business
improvement process
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Contractors - ready, willing or able?
To move forward you have to be willing to recognise and accept your frailties
The concept of projecting your best self in work winning doesn’t encourage
weakness, it values historic performance
Moving into ECI clients requires the contractor to deliver the tendered vision
If the client is collaborative, clear in its vision with shared risk and outcome there
will be improvement but not of the magnitude to deliver the required improvements
in productivity
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Exciting time on the cusp of massive change
Timeline is uncertain
More will fall and some will succeed
Agility and resilience is key for all -
individuals/consultants/contractors
The outlook
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Questions and answers
These are my views based upon my experience and I
welcome your views and challenges