What have we learned from the experience of Constructing Excellence in the UK? Don Ward Chief...
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What have we learned from the experience of Constructing Excellence in the UK? Don Ward Chief Executive Constructing Excellence [email protected] www.constructingexcellence.org.uk
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Transcript of What have we learned from the experience of Constructing Excellence in the UK? Don Ward Chief...
What have we learned from the experience of Constructing Excellence in the UK?
Don WardChief Executive
Constructing Excellence
[email protected] www.constructingexcellence.org.uk
What have we learned from the experienceof Constructing Excellence in the UK?
• Organisation• Funding
– Membership– governmental support– project financing– information etc.
• Operation towards members and industry• Co-operation with the Government• What was critical in different phases?• What would you have done differently?
1994 1998 2001 2003 2005 2006
DBF
Our purpose is to
Improve industry performance
The outcome will be
A demonstrably better built environment
UK construction 2007: €170 billion
• 8-9% GDP
• 2.3 million people employed – 9% women
• 192,000 construction firms + 30,000 professional services firms
• 93% small firms, <1% large firms – SMEs and Large firms both do c.50% of work
Norway UK
Turnover (€ B)
Employees (‘000)
Companies (‘000)
Proportion small firms
31
320
43
97%
170
2,300
220
95%
What is the UK experience?
In the beginning…
• Joint Government-industry initiative 1993-94
• Problems– Conflict – Litigation– Poor profitability– Poor safety– Poor productivity – Poor competitiveness
• Interim report “Trust and Money”
Two main reports:
1994 Latham 1998 Egan
• Client focus, partnering, award on quality and price
• target 30% productivity/cost improvement in 5 years
• legislation for fair contracts - adjudication– Construction Industry
Board (now Strategic Forum for Construction)
• ‘Rethink’ – what if construction were like
manufacturing?
– lean thinking: value not waste
• target 10-20% improvement per year– Movement for Innovation
etc (now Constructing Excellence)
Product
development
Production of
components
Project
implementation
Partnering
the
supply chain
Committed leadership
Focus on the customer
Product Team Integration
Quality driven agenda
Commitment to people
5 Key drivers for change 4 Key project processes 7 Targets for improvement
Capital cost
Construction time
Predictability
Defects
Accidents
Productivity
Turnover & profits
-10%-10%
-10%10%
+20%20%
-20%
-20%
+10%10%
+10%10%
The ‘Egan’ vision for change- to be a “winner”
Strategic Forum for ConstructionOver 140 trade and professional bodies under one umbrella
Similar to the Federation of Norwegian Construction Industry (BNL)?
Consultants
Main contractors
Specialist contractors
Manufacturers and suppliers
Clients
Government
Construction IndustryKey Performance Indicators
Construction Industry Key Performance Indicators
• Client satisfaction– Product – Service
• Defects
• Predictability– Cost – Time
• Profitability
• Productivity
• Safety
• Construction Cost
• Construction Time
13541271
1318
1217
10971172
1023
901946
865
0
500
1000
1500
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Reportable accidents per 100,000 employed (Industry AIR)
Safety
Better
72% 73% 72% 73%78%
80%83% 84%
82% 83%
50%
60%
70%
80%
90%
100%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Client satisfaction – product and service
Scoring 8/10 or better
58%63% 63% 65%
71%74%
77% 79%75% 77%
50%
60%
70%
80%
90%
100%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
4.4%5.1% 5.2% 5.4%
7.0%8.1% 7.9% 8.2%
9.6%
0%
5%
10%
15%
2000 2001 2002 2003 2004 2005 2006 2007 2008
Profitability: Median profit on turnover (%)
Profitability
Pioneering projects
• BAA: Pavement Team, Genesis, mid 1990s onwards– After 7 years, frameworks save 55% on time and 60% on design
and management costs
• GlaxoWellcome: Fusion, mid-late 1990s– 3 projects worth total of £50M saved £8.75M of cost and saved
13 (7+6) months worth £2.25M
• MOD– Building Down Barriers, late 1990s– MOD Andover North
Demonstration Programme
• Implementing the principles of Rethinking Construction– 525 Projects since 1998, incl. 203 housing sector
• Value £13bn– 430 completed, 95 live– Involvement of 1176 organisations UK-wide– 176 case histories– 63 associated reports and publications
Innovators
Early Adopters
Early Majority
Late Majority
Laggards
Demonstration Performance 2006compared to Industry Performance 2006
7700
0
50
100
150
200
250
300
350
Client S
atis
fact
ion -
Product
Client S
atis
fact
ion -
Servi
ce
Defec
ts
Enviro
nmen
tal I
mpac
t Pro
duct
Enviro
nmen
tal I
mpac
t Pro
cess
Safet
y *
Safet
y - A
ll Com
panie
s *
Safet
y - C
ompan
ies
T/O >
£10
m *
Predic
tabili
ty C
ost -
Desig
n
Predic
tabili
ty C
ost -
Constru
ctio
n
Predic
tabili
ty T
ime
- Des
ign
Predic
tabili
ty T
ime
- Const
ruct
ion
Profit
abili
ty **
Product
ivity
Constru
ctio
n Cost
Constru
ctio
n Tim
e
Emplo
yee
Satis
fact
ion
Staff
Turnove
r
Qualifi
catio
ns & S
kills
2006 pan-industry performance = 100
CE 2006 Industry 2006 = 100
Demonstration Performance 2006compared to Industry Performance 2006
CE 2006 Industry 2006 = 100
7700
0
50
100
150
200
250
300
350
Client S
atis
fact
ion -
Product
Client S
atis
fact
ion -
Servi
ce
Defec
ts
Enviro
nmen
tal I
mpac
t Pro
duct
Enviro
nmen
tal I
mpac
t Pro
cess
Safet
y *
Safet
y - A
ll Com
panie
s *
Safet
y - C
ompan
ies
T/O >
£10
m *
Predic
tabili
ty C
ost -
Desig
n
Predic
tabili
ty C
ost -
Constru
ctio
n
Predic
tabili
ty T
ime
- Des
ign
Predic
tabili
ty T
ime
- Const
ruct
ion
Profit
abili
ty **
Product
ivity
Constru
ctio
n Cost
Constru
ctio
n Tim
e
Emplo
yee
Satis
fact
ion
Staff
Turnove
r
Qualifi
catio
ns & S
kills
2006 pan-industry performance = 100
Some successes (up to 2007)
• Collaborative working• Safety• Design quality• Profitability and certainty of profit• Benchmarking and performance measurement• Adjudication• Public-private partnership and Private Finance Initiative
Industry change Industry change - maintaining momentum- maintaining momentum
1994.........................................................2008
What have we learned from the experienceof Constructing Excellence in the UK?
What have we learned from the experienceof Constructing Excellence in the UK?
• Organisation• Funding
– Membership– governmental support– project financing– information etc.
• Operation towards members and industry• Co-operation with the Government• What was critical in different phases?• What would you have done different?
BREAKDon Ward
Chief ExecutiveConstructing Excellence
[email protected] www.constructingexcellence.org.uk
What have we learned from the experienceof Constructing Excellence in the UK?
• Organisation• Funding
– Membership– governmental support– project financing– information etc.
• Operation towards members and industry• Co-operation with the Government• What was critical in different phases?• What would you have done different?
Organisation
1994 1998 2001 2003 2005 2006
DBF
Strategic Forum - over 140 trade and professional bodies under one umbrellaSimilar to the Federation of Norwegian Construction Industry (BNL)?
Consultants
Main contractors
Specialist contractors
Manufacturers and suppliers
Clients
Government
Member forums 2007-8 2009-10
Governance
Funding
Three income streams
Funding
How much?• UK started with €15M
– divided between several organisations
• Today €4-5M would suffice
Who?• Probably Government grant to pump-prime• Can you organise big clients to support?• Federation of Norwegian Construction Industry (BNL)?• Aim is industry-led sustainability
Operation towards members and industry
Core business activities‘Must dos’ that add distinctive value forour customers
Core improvement themes
Collaborative working key principlesLeadership
Vision
Processes‘Hard’
measures
People‘Soft’ issues
Collaborative working Critical success factors• Early involvement• Selection by value• Common processes and tools• Measurement of performance } continuous• Long-term relationships } improvement• Modern commercial arrangements
Leadership
People
Policy & strategy
Partnerships& resources
Peopleresults
Customerresults
Societyresults
ProcessesKey
performanceresults
Enablers Results
Innovation and learning
The EFQM [Business] Excellence Model
Co-operation with the Government
HM Government policy interests
• Competitiveness – skilled/trained workforce
• Sustainability– environment– communities
• Consumer protection • Public expenditure drivers
– “Delivery” – health, education, defence, crime etc
– Value for money– 3-year financial planning– Private Finance
Government
• Some characteristics– Bureaucratic, risk averse, process-driven
• As a client of the industry – procure ‘as one’, allow the industry to innovate, learn from the
private sector
• As a legislator or ‘sponsor’ of the industry – Intervene where there is market failure– Facilitate and encourage innovation, training etc– But do not prescribe
DEVELOPMANAGE LIFE
CYCLE
CONSULT
CONSTRUCT
DESIGN
The whole life-cycle of construction
How the built environment adds value
• Workplace productivity• Competitiveness of investments• Effectiveness of public services• Locational value• Social benefits• Environmental quality
Design £100K
Construction
What the customerreally needs
“£200M”
Business Costs
“£5M”“£1M”
Operation and Maintenance
Process Push
User Pull
Outcomes“£250-£2000M”?
What was critical in different phases?
Drivers for change
• Why should people change?– The business case– Clients– Commercial threats - survival issues?
• Compare with the North Sea in the 1980s?
• Economic recession
‘Survival’ issues today
• Sustainability– a sustainable industry?
• environmental, social, economic• “is our ‘license to trade’ threatened?”• “[How] can we survive the recession?”
• Procurement practice, supply chain relations• “how can we deliver better value for the customer/end-user?”
• People and image– safety, health, welfare
– recruitment, retention, respect• “how can we ensure we get our fair share of good people?”
What do clients want?
Clients driving change
• Retail: Asda, Marks and Spencer, Sainsbury, Sommerfield, Tesco, Boots
• Developers: Stanhope, Slough Estates, Land Securities• Corporates: BT, BBC, Abbey National, Barclays• Utilities: BAA, all water companies• Central government: highways, defence, health• Local government: “Best Value”• Social housing: Registered Social Landlords
What would you have done differently?
Barriers and challenges include
• Too many people see the old way as “the way we and our customers have always done things”…
• … and do not have time or the inclination to change their processes…
• .. or to invest in re-training their people….• as there has been enough work around for everyone
We have overcome some of these barriers by• providing evidence• utilising client ‘pull’• working with the willing and able
Targeting the market
Capture ideas
Best practi
ce in
formatio
n
Customer le
verage
Legislatio
n
Lessons learned
• How?– People
• ownership, buy-in, engagement, passion, commitment
• Formal training
– “Initiative overload”– ICT as a driver and enabler– Keep evolving – people ‘get it’ at different speeds
Recommendations
What have we learned from the experience of Constructing Excellence in the UK?
Don WardChief Executive
Constructing Excellence
[email protected] www.constructingexcellence.org.uk
