Early Contractor Involvement and Project Productivity - Don't forget - - PowerPoint PPT Presentation

Early Contractor Involvement and Project Productivity - Don't forget the people

12 November 2019 Jonathan Ralph

www.curriebrown.com

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A little about me…

Jonathan Ralph

Consultant 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?

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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

• f 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 Owner Problem statement(s) Validation

• 1. Remove the
• ptimism bias

Senior leadership team Discipline is consistently over budget Apply historic data to determine the cost

• 2. Refine the

challenge Discipline leads Discipline exceeds budget because 1…….. 2………… 3………. Apply data to map the current state 1………. 2………. 3………. 3 Create the future state Specialist 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 state Specialist 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 model SLT approval/ mobilisation Data analysis Specialist team selection Risk/

• pportunity

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