early contractor involvement and project productivity ...... · early contractor involvement and...

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

12 November 2019

Jonathan Ralph

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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?

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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