report 11th july 2006 colour (1)

7/27/2019 Report 11th July 2006 Colour (1)

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21st Century Construction Industry

Executive summary of meeting held on 11 th July 2006 at The Royal Society, London.

The essential points that were made by the speakers and in the subsequent discussions are as

follows.

Nick Fry and Graham Miller (Honda F1)

Honda operates its business under tight process control and cost management, which it appliedto the procurement of a new building to house a wind tunnel. They took a leading managementrole and made a considerable effort to make the whole project team share pride and commitment.In order to achieve this, they forced them all to spend a day together on Dartmoor. Theyinculcated in them the need for total perfection. ``That will do would never be good enough.There had to be 100% inspection, with no short cuts. The usual construction industry concept of``practical completion was not acceptable. Those who failed to buy into the philosophy werereplaced.

Above all else, buildings must be designed to serve their intended function; this must take priorityover making them beautiful and so an in-out design process must be followed.

Wesley Harris (MIT)

Wesley compared the aviation and construction industries. He said that the latter is concernedwith much the more complex system, and one that is much more diverse and adaptable. Theconstruction industry has much less support from technical enterprise. Nowadays, both industriesmust pay attention to life-cycle sustainability and maintenance, and to the needs of the end user.

He talked about outsourcing and the challenge to make components manufactured in separatelocations fit together perfectly. He stressed the importance of an information infrastructure.

John Lorimer (Manchester City Council)

John stressed the importance of working with end users. In the case of school buildings, theseare the children. There is a huge responsibility to deliver buildings capable of producing atransformational environment. This needs good design, both to make a visual impact and to makethe buildings fit for purpose. There needs to be an active effort to produce innovation, but it canalso come from quiet progression. One must not be ashamed to use other peoples ideas andone should be ready to share ones own ideas.

After the three talks, the meeting divided into three dialogue groups, where they discussed witheach speaker in turn. They also considered possible topics for new Action Clusters.

At the end of the meeting, it was agreed to set up three new Action Clusters, in addition to theone previously proposed on carbon management of buildings and businesses. Two of the newones will address issues concerned withportfolio management, and the third will focus on brandissues.

21st Century Construction IndustrySummary of meeting held on 11th July 2006 at The Royal Society, London.



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Attendees

Cross-Industry Group Organisers18 members of the21st Century ConstructionIndustry Group.

SpeakersNick Fry - CEO Honda F1Graham Miller Director of WTO Honda F1Prof Wesley Harris Head of Department of

Aerospace & Aeronautics MITJohn Lorimer Head of Capital ProgrammesManchester City Council

Carl Abbott (Salford)

Prof Peter Landshoff (CMI)

John Patman (CMI)

Facilitators

Ian Cooper

Fred Pink

Alan White

Academic Input

Prof Peter Barrett (Salford)

Prof James Powell (Salford)

Prof Fred Moavenzadeh (MIT)

Background

The workshop was the first Executive Group meeting devised in response to feedback from thetwo previous Group meetings.

Agenda

The agenda for the day was:

1) Introduction Peter Landshoff 2) Honda F1 Nick Fry and Graham Miller

3) World Class Processes Wesley Harris4) Collaborative Working John Lorimer5) Dialogue Groups6) Plenary Session Peter Barrett

Introduction Peter Landshoff

Peter Landshoff welcomed everybody to the Royal Society and expressed the hope that all wouldbe convinced of the value of the meeting and would be willing to commit time to future meetings.The theme of the day was to be

Partnership for radical innovationHe said that

- As a result of today's meeting it was expected that the group would create a series of ActionClusters, focusing on particular issues, that will add value to participants' businesses.

- A planning group (including Ernst & Young, RBS, Siemens, Serco and Thales) has been setup to advise us on our future plans.

- CMI and Salford have committed money and time to the project, but the initial funds havebeen exhausted and to continue we will have to devise a funding model.

He extended a particularly warm welcome to the speakers, and to Fred Moavenzadeh (MIT) andTony Purnell (formerly head of Jaguar Racing).



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Creating the Winning Formula

(Nick Fry & Graham Miller, Honda F1)

Nick Fry began by saying that the presentation is a calibration of what we do and how we do it.How quick the business moves. We will try and show how we have applied F1 thinking toconstruction of large project, such as a large wind tunnel where we test a full-size car.

- Formula 1 is really the pinnacle of technology.- Although we push things to the absolute limit the sport is still leading edge, not bleeding

edge.- From the outside it might seem like a bit of a circus, but while there is a certain amount of

profligacy in marketing, the engineering is very tight indeed.

Honda Racing was founded in 1997 and is one of the younger teams in F1. We work with hightechnology and with a lot of highly skilled people. Key decisions are made on the basis of will itmake the car go faster?.

To put the business into context Nick stated a few relevant facts:

80% of car designed and built in house

15,000 parts designed per year

Rate of development is immense

If you took the car you started the championship with and compared it with the one at the

end, the one at the end is 1.3 seconds per lap faster

80 product changes per day.

To achieve this Honda have to- work with tight process control and cost management- spend a lot of money but it is tightly controlled.

The average mainstream car industry would take 5 years to design a new car, whereas at HondaF1 they have a one-year cycle.

At this point Nick Fry handed over to Graham Miller

The subject of Grahams presentation wasHow we have taken what we have learned from F1 and implemented it in the constructionindustry.

The majority of Wind Tunnels built in the UK are late and over budget. Honda F1 are not expertsin the construction industry, but managed things in a positive way. Honda F1 believe from theirexperience that the Construction industry is behind in terms of attitude.

The project had a central architect and a principal contractor, but within the building was the windtunnel which was built by another contractor. This meant that a group of people were all fightingfor the same space. Honda took a heavy role in managing this.

Our working with the main contractor was somewhat unusual. The way that we do things atHonda, and in the racing industry, is different. In the racing industry we require that all give 100%.

Although this is a simple message, and Honda do not have any magic solutions: it comes down toattitude. Honda forced the construction guys to take one day out and took them to Dartmoor.Honda wanted every one to think that this project was special, so that they shared pride in it, and



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the end result was that they got that commitment. They created an environment that wascompetitive, educational and fun.

In the racing industry, recognition is important. Although there is only room on the winners'podium for three people, the Honda F1 car carries the name of every employee on the wing,which allows employees to be married to the product. In a similar vein Honda took time torecognise builders, brick layers, painters, by giving them tours and simple giveaways. They hadnever experienced that. A typical response was we have never engaged with the client like wehave with you, usually we never see the client , only when it's finished.

The pursuit ofperfection was felt to be important. Honda push people to fulfil their potential. Inracing, if you are competing for the split second advantage, every bit counts. This means thatHonda take a boundary and extend it, and believe in evolution intelligent changes that makethings better. The business can never stand still; that way every day moves closer to perfection.Honda wanted to instil this attitude in the construction industry. As a result the project wascompleted 3 months ahead of programme, an ambitious programme at that, because everyonehad bought in.

In Hondas business that'll do is not something that is accepted. The construction termPracticalCompletion was therefore an unacceptable expression. The main contractor

knew that Honda would not accept second best. To ensure this was understood Hondaembedded themselves within their business. Honda believe that in most projects, suppliersand sub-contractors are not managed well and that if we are going to get a world-classconstruction industry we need to address the attitude. This was exemplified by the notion of theOK Factory. The most commonly used word in the world is OK. But why innovate if OK is OK?Honda do not believe that OK is OK. What if the favourite word was what if?. What if theconstruction industry was on time, snag free?

That was Hondas journey, one ofAttitude. We completed early, within budget and believe we'llgo faster on the track for that.

The Official Opening of the facility is tomorrow.

Honda Dialogue Group 1

Honda had a fixed budget of 50m for their wind tunnel and it was crucial to finish it faster thanhad been done before. They had a very small group to take decisions and steam-roller thingsthrough over the egos of the design team.

Honda wanted the building to be functional above all else, though also attractive, unlikeMcLaren's Norman Foster building which is perhaps beautiful but less functional. Every buildinghas a function, so in-out design is the right approach.

Honda managed in house, because Nick had complete confidence in Graham as a projectmanager, even though he had no buildings experience. Nick involved himself only whennecessary. They required each month a cost report, and formal reports from each contributor.

The project was a success, unlike all previous wind tunnels.

Honda believe that good management information technology is lacking. Honda had to rely oneverybody's determination not to fail. There must be 100% inspection, with no short cuts and noexceptions to a detailed sign-off process. One should set objectives and allow people autonomyon how to achieve them. Innovation comes out of cooperation and everybody contributing to thethinking.



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Honda was ruthless about changing project managers when they failed to buy into theirphilosophy, even though this risked losing continuity. They involved the most senior people fromeach contractor, and made it clear that excuses would be unacceptable.


There were only 3 global choices to supply the wind tunnel, so timing was determinant.Experience also was critical; it is important to build on what you already know and do.In terms of innovation Honda cannot take the risk involved with experimentation. In their opinioninnovation is not the same as experimentation, they are more interested in evolutionary, quickand rapid change.

The F1 programme does have benefits for the ordinary motorist. Mainstream Honda engineersworking in the F1 teams feed back into the standard programmes. It is also a recruitment tool forthe best engineers, which ensures medium to long term benefit according to the Hondaphilosophy.

The reputation and cache of F1 was used to advantage in the project. Board level presentationswere made to the contractor who also showed a level of detail. This was also applied down thesupply chain to get commitment through factory tours and team buildin.

Honda are a repeat rather than rolling programme client and will require different facilities infuture, though they might use the same team. It was an important aspect of the project tochallenge norms and conventions, applying the same mindset as other product development.

Attitude change was a key aspect of the project. Those who were not able to comply wereremoved from the project. In Honda's opinion much of the construction industry does notrecognise what the client wants and is not sensitive to client needs.

Honda did interact with organizations down the supply chain. A key issue was stopping/startingthe main contractor to make space on site for other suppliers. On the soft side issue the importantaspect was relationships building.

Honda recognize that they have to be fair and reasonable as client. Some did not make a profiton the project but learnt a lot on the project.


Honda believe that recognition is important and that people at the lower end of their system areas important if not more than the guys at the top. Constant reinforcement of this message isimportant and there are many mechanisms in place to communicate thisI

The fact that Honda were unused to the construction business had plusses and minuses.Although they lacked experience their internal processes and substance of the organisation aretop line. Within this, soft issues are just as important as hard issues. Honda employ passionatepeople with the right attitude; at the end of the day that is what makes the difference.

Although Honda have an aspirational product, they believe that in terms of engaging people, itwould be the same if they built super stores. It is about getting people to buy into the sameobjectives.

In order to introduce change and flexibility the first thing Honda did was get people to understandtheir business. Board directors of their constructors were helped to understand what make Hondatick and why they are ruthless. Once they had ticked that box they could start relating it back to



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their business. The project had 3 project managers. The first one lasted a month. Number 2lasted three months. It is necessary to change the people if you cannot change them.

In F1 Honda have put together a new, dynamic, excited team which has glamour. Although costis important it is not the primary driver. NASA is the same and the aviation industry initially.Maybe this can be reproduced in construction by setting achievable goals. For example, athletesdo not benchmark a ten-year old against a world champion, but you can still motivate with smallincremental improvements. Give certain achievable goals and work with them to motivate them.Internally for Honda, the glamour only goes so far, in fact it is the same every fortnight. Fromoutside it looks glamorous but the jet lag and tiredness is not. Glamour wears off quickly andHonda are in a competitive engineering business.

90% of improvement in Honda is a grind, not R&D. This is exactly the same problem as inconstruction. Working to fix the broken bit. One thing that does work for Honda is to cascadedown your objectives to some kind of measurement. Go right back to guys on shop floor who feelsigned up to that measurement, and suddenly you get a step change because they feel engaged.But it has to involve realistic goals. And if you can include an incentive that is great. It is importantto bring people together and help people communicate to produce tight feedback groups. Inconstruction you get silos where people dont talk to each other.

Honda do adopt the newest technology but only when they are sure that it will work.At the end of the day the car has to finish the race. Its got to be safe and reliable. Get as closeas we can to go as fast as possible. We are all playing that balance. Theres always more thanone objective and you have to make that trade off. We dont have any different processes thanthe mainstream auto industry. Sign off processes are shorter, but the same, and they are almostabsolute.

Finally Honda do incentivise their workforce based on performance of the team.

Partnering for Radical Innovation: World Class Processes

(Wesley Harris, MIT)

Wesley Harris began by saying that today we are moving from racing cars to aircraft to the builtindustry. Depending on which dimensions you choose to examine, it is a continuum. In someaspects the racing car industry is in the lead, sometimes the built industry, and sometimesaviation.

Wesley posed a series of questions and then addressed each in turn:

What is aviation as we know it today?What are the processes that lead to these devices?What are the similarities between aviation and built industry and what are the differences?And what is transferable to the built industry which we believe is more complex than an

airplane?

What is aviation?

First, from the perspective of the machines themselves, whether commercial or military. Inaviation there are world-class processes in terms of manufacturing. In the old days, everythingwas done in house. Now major components are outsourced across the world and critical buyingdecisions need to be made. Major economic decisions have to be taken into account.Relationships are therefore important if we are to build a wing in Japan and be absolutely sure itwill fit in a plane in America.



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Without the end user, aviation does not work. No airplane is built without a customer base. Whatis transferable about the conversation between end user and manufacturer from aviation to thebuilt industry? An example is sustainment and maintenance. For example, Pratt & Whitney do notmake money on engines as such, the money is made in maintenance. Sustainment is based onthe quality of data not losing parts.

Wesley asserted that the complexity of the built industry far exceeds that in aviation. As anexample he cited the F15 fighter: it cannot be taken and turned it into an F22, because once youbuild the airframe you are locked. In aviation, adaptability is difficult. Against this the industry,which has now been around for a fairly long time, has the ability to eliminate waste and add valueto the end user. There has been a transformation, from delivering performance to creatinglifecycle value. These major considerations have led to new processes.

Wes likened the problem of a cab driver in Havana trying to fix a broken clutch on a 1949 Ford, tothat of the aerospace industry trying to sustain and maintain their fleet. To make a repair bothhave to deal with the following elements:

supplier

DLA

depot

transportation

base

flightline

However, in order to create todays sustainment environment which is made up of inconsistentmetrics, at MIT they have tried to harmonise these metrics in such a way as to have a balanced,customer-focused relationship. It is this balance that provides the difference, linking the elementsin a way that leads to clarity and performance.

Enterprise Integration System level.

Business Processes Business level

Sustainment Operations Shop Floor level

Connecting all of this is the information infrastructure. Clearly this is important and transferable.In aerospace, we can create lean value by doing the job right. Increase value in people and not

just processes.

Wesley characterized the built environment industry as being both integrative and adaptive.Additionally it is sparsely populated by technical enterprise and knowledge workers, educationaland scientific institutions, and supporting amenities and services. Similarities between aviationand the built environment industry are as follows:

Both are highly integrated

Both have enhancement of human capital

Value of spatial relationships

Collaborative dimensions

Differences between the two include:

Diversity, Type and Scale. Since 1945 and the invention of the jet engine planes haveessentially resembled a cigar with wings on them. In contrast the built environment industry hasmuch more diversity.

Value of information technology. The built environment industry needs to expand to enhanceits human capital in this respect.



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Sustainment processes No Boeing 747 will ever be in a hangar for more than 24 hoursneeding repairs. This is not the case with buildings and bridges.

Future Directions. Structure and dynamics will shape both the aviation and the built environmentindustry. Trust and respect are true constants here.

To move both industries from product to system design, we must think life-cycle sustainability.We need to shift from point design solutions to families of solution architectures and migrate fromtraditional processes of engineering for customers to users in the loop. In the built industry,suppliers are often customers too and we need to build collaborative network enterprisers.

To close Wesley once again stated that with respect to these challenges, compared withaerospace the 21st century built environment represents a greater order of magnitude ofcomplexity..

MIT Dialogue Group 1

Even though a construction project is more complicated than an aviation project, it has greater

tolerance. This allows greater scope for the enhancement of human capital over a longer lifetime,coping with changing user requirements. But there are obsolete buildings and a lot of energy isexpended on structures that are not used for very long. However, there are opportunities forrenovating and retrofitting old buildings, which is much cheaper than a new build.

Aerospace decides function and builds the form around it, with continual need for improvement.But buildings are much as they always were. Planes have to be built with the total enterprise inview including, for example, the capacity of roads to airports.

In many companies, staff spend a lot of time in the air, where their gadgets do not work atpresent. Rectifying this would be possible now, but at great cost.

Although people can nowadays avoid air travel, or indeed working in offices, they need face-to-face interaction. Maybe the younger generation will not agree. The building industry has to

respond to changes in technology, so maybe building design life should be reduced.


Wesley's only involvement with the built industry is as a user. He renovated the Guggenheimfacility.

There are 3 reasons why he believes that the Built Industry is more complex than aerospace

Human capital high requirement.

Multi-functionality of buildings with half life of 1000 years. Suppliers cannot cope with or

conceive of this level of complexity, even 20 years on. The reality is you can only go sofar.

Cannot change the turning circle on an F15 to match an F22. In contrast a 1920s buildingcan be gutted and re-fitted, giving flexibility advantage.

Similarity between aircraft / buildings include:

Over time, over budget.

Reason for product has changed but locked into design.

Once built, the purpose of an aircraft is largely fixed. However, in buildings there are challengesand opportunities to make the design more flexible.



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The aerospace industry has developed relationships with software suppliers no longer fly bywire. In buildings, software not debugged. How can we learn to manage IT.?90% of the cost of a plane is software (and risk) 100ms of lines of code but this is morecomplex in buildings, as aero has well-known, stated, tested functionalities for the softwareprocured.

Parallels between aero and buildings include:

Materials assembled in one place (in the past).

Trying to deliver frame of building with adaptability.

Offsite production more to be learned from aerospace here.

Automotive industry deliver frame with very different, tailored versions on top. Can we

provide the same frame for house and hospital? Missing trick here? Move towardscommon air / building frame?

Getting components to fit lessons to learn on integration from aerospace.CATIA software with common database allows construction in 3D precisely.Plane building is as much or more about economic issues than technology.


Trust and Respect between client and supplier is important to build these systems within time andbudget. At the highest level, you have to incentivise. To get elements to work together. This iseven possible in a litigious country like the USA.

The relationships between big and small company can vary in aerospace. Whilst the big companymay seem to call the shots, they can rely on small suppliers with specialist skills.

In aerospace 5 10 year contracts are typical. Boeing may need 2150 builds before it can makea profit, which engages suppliers. Is this a contrast with construction, where in the US, most ofthe contractors outsource and the supplier is very much constrained, rather than the contractor.

The real difference between old and new planes are the electronics. In contrast to somethingsuch as drag reduction, where a large investment will only make a small improvement,

companies are much more likely to change the electronics whereby capability can be improved.

The issue of trust and respect is complex and the starting point of a relationship is important andprestige can be an issue. A dictator who can command respect may make more progress thanthe also ran. But incentives really help get the job done. You must start with the leadership.

Construction industry not traditionally trustworthy. Disconnect between guys that build and guysthat run it. Blame culture kicks in. Consequential liability that no one has factored into the gameplan.

Collaborative Working: Stifles or Encourages Innovation?

(John Lorimer, Manchester City Council)

John started his presentation by saying that the Council are at the early stages of collaborationeven though they have been working through this for the last three years. The background toJohns first slide was a picture of a group of toddlers, which he said was one of the council's usergroups, as the Council's capital programme is in the order of 280 million p/a, and a huge amountof it being spent on education. Under the Building Schools for the Future programme the Councilhave 30 secondary schools in Manchester. By the end of the programme (2011), 50% of thesewill be renewed and the rest will be refurbished. This is unprecedented for the council and in thecountry generally.



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Many stakeholders are involved in the Council's consultations. Through that process ofconsultation and delivery, a lot of good practice and innovations can get stifled. We need todeliver buildings capable of delivering a transformational environment as good schools enablepeople to bring their kids into the city to live

This huge responsibility has taken them to the delivery model they now have. There is a certaintythat good design impacts visually and ensures a facility is fit for its purpose. To support this thecouncil has actively to harness innovation, not go out and just expect people to innovate. Thereare many ways in which this can happen. Quiet progression can be innovation. The council arenot precious about using other peoples good ideas, likewise they are happy to share theirs.Within these objectives, the council try to ensure that everybody can play a part.

As an example, the delivery team (contractors, council, architects) explored what with the kidswanted from the building. An example is bullying in the toilets, which can be crucial to how youmanage the building. Where do you put innovation there? In the end the solution of see-throughtoilets that eliminate corners where children can get bullied was devised. It was liberating to beable to work collaboratively like that as in old world of procurement it was impossible

The BSF challenge is to: standardise, simplify, centralise and optimise. The key element for the

Council is developing a kit of parts. They are working with developers and contractors and hopeto roll it out across the Council. An example of a problem being tackled was that the Council lose1,000s of escutcheons every year because kids pick them off. Through that discussion withconstructors they realised that there are loads of things sat around in these companies that youcould consider an innovation. What the Council also have to do is recognise how to facilitate theinnovation. To this end they are focused on working in project teams.

One of the things the Council are doing, simple but innovative, is making their facilities availableas a test bed. They are trying to control the level of CO2. High CO2 levels create tiredness. For ayear, they have been monitoring physical conditions and are getting very positive results.

In order to harness innovation MCC are really keen to work with suppliers and designers. One ofthe most interesting projects is a recent primary school they have built where they have installed

dynamic lighting, whereby three times a day the lighting changes. They are working with BREwho are measuring psychological aspects to verify if it does actually work. If it does work thispresents a problem as these lights are twice as expensive as the standard. The budget is fixed,so the problem will be how can they accommodate this innovation? The answer being that theywill have to trim elsewhere.

John closed by saying that what they are doing is running trials, which is what other industrieshave done for years. This benefits MCC generally as they are definitely saving money, anddelivering fasterwhat can be termed fit for purpose facilities. A final example was given of arecently delivered sports hall. On completion the project team received a letter back from theDeputy Head expressing gratitude for what they had got from being involved from the beginning.

MCC Dialogue Group 1The end-user of a school building is the child. It is a real challenge to test success of a schoolbuilding. The government has indicators, while building people have cost and defect criteria; howdoes one join them up? There is a need to devise benchmarks that include both educational andsocial considerations. One quick indicator is school attendance.

The money being offered towards achieving low carbon has little impact. There is a need tounderstand the built environment, bring in enthusiastic architects and combine with financial andother considerations, such as the number of trucks needed to transport biomass if that is to beused.



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Building schools for the future requires social objectives to be combined with building challenges.Different adacemic disciplines are needed to make progress. Informed clients are important. Onemust study the integrated output of a building, which is not necessarily best done by bringing allthe stakeholders together. Rather, one should build something that is flexible. The hardest thingto incorporate into a flexible design is theM & E.

There is no proper way to measure plant obsolescence. Should one aim to try to increase its life?Good procurement through economies of scale is just beginning, but data are still lacking.

Authorities share information reasonably openly, but not enough and there are dangers whenCEOs learn that others do things more cheaply. It might be valuable to study IKEA's procurementprocedures. Manchester would like to find a private-sector partner that is doing it well, but how dothey find the best one?

One must be risk aware but not risk averse. One should try to get more advice from people whosolve a given problem every day.

MCC Dialogue Group 2

MCC use Transformation Teams as drivers for change. These can include clients, users, staffand children. This provides non-hierarchical access to end users and stakeholders and createsdifferent thinking and access to people. This feeds into the design brief but translators areneeded into building terms within time constraints.

There is a need to drive process improvement over MCCs current 5 year 450m programme. Tothis end the council have moved away from individual projects to working with stable deliveryteam. In doing so, they need to look at results, eg impact on educational attainment (outcome),but also social issues eg attendance. The issue of measurement is complex and MCC dont yetknow what they will be measuring but educational service metrics are well established but yet tobe linked to buildings. For example, it is difficult to differentiate between the impact of physicalassets teaching style or the role of leadership from the head. For this reason the PFI sector hasrejected such measures because of the difficulty to differentiate.

To co-ordinate this centrally there needs to be reporting against headlines rather than theimposition of prescriptive templates and procurement routes. MCC believe that they can ensuretheir new buildings are nowfit for purpose because they can deliver to time and cost.Comparisons have been made with other LEAs, which requires data and benchmarking. Butthere is a question with regard to how to measure this and share it? Including the issue of addedadded value.

To guarantee delivery on budget and on time MCC work with 3 preferred contractors with ownteams including designers. The projects follow a design, develop and construct route withtargeted costs. Initially the reaction of architects and engineers was to challenge the sharing ofinformation as they thought they might lose advantage as a result. The framework needs to buildconfidence over time to overcome this.

The minimum 25 year lifetime of new buildings requires long-term planning, particularly wherepre-fabrication is used. This is the biggest single financial problem. However it does give theclient the opportunity to engage and influence down through supply/value chain and the councilare now moving to working with manufacturers.

MCC Dialogue Group 3

In order to control their very large programmes MCC have two constructor groups. Theyappointed two because they do not like exclusivity, although seemingly now under EU rules you



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can have 1 or 3 partners but not 2. The council act as a programme integrator and have justtaken on an IT supplier. They manage it with an integrated project team. Originally the frameworkstarted with two pillars but is more integrated now. Overall responsibility sits with Chief Executive.Right decisions taken in planning group. No equity involved in joint projects.

The projects run with NEC target costs. The council take the development risks. Whatever formof contract is used, the council take the development risk anyway, so they are upfront about it.There have been a few instances where contractors have gone through the target cost, but it isgoing to be superfluous soon, as a better understanding of costs is developing..

MCC work closely with suppliers, eg their window suppliers. The client has the ability to influencethings here. Once you become involved with the supply chain and feel confident it is possible todraw on expertise. Continuity is important for this.

Although MCC's contractors are working with others, they may not win work in a cost onlyenvironment. Theres always someone out there that will bid lower, thinking they will get it backover the course of the contract. Whereas MCC want the contract to be clear and on the tablebecause they think it can helps. They looking at contractors books once a month as it about beingfair not friendly and the right culture is vital. They started with quite heavy person-to-personmarking but now people feel empowered. Staff have embraced that but it has taken 2 years.

They do not have exclusive arrangements; they share everything with all of the frameworkers.This change of mindset is important especially of constructors. An example was given of ascheme that came in 36 weeks early and 1million under budget because of particular innovation.Both contractor and client share in the savings. In the old way they would have just carried on.

Examples were given of how cluster groups were used to tackle problems such as lifts and rollershutters. In the framework groups themselves, groups are starting to come together and shareinformation. The big challenge is to get 12 contractors to buy into shared innovation.

Finally the issue of standardization was raised. At the moment MCC do not have the right level ofaccess to providers to flush out opportunities, but do see this coming. They believe that the key isdelivering better fitness for purpose by getting closer to manufacturers.

Plenary Session Professor Peter Barrett

In the plenary session each of the three groups brought back their key insights from the dialoguegroups to share with the whole group. The following are the key insights:

Group 1 Insights

1. Trust, transparency, leadershipcollaboration with suppliers

2. Portfolio Management3. Shared sense of purpose -

momentum4. Full systems view for example

o Where is the boundary?o Who is the user

o What does the user need?

o Deal making is needed to

achieve it5. Clear outcomes, objectives, roles

andresponsibilities ability to drive

throughand- how do you measure success?

Group 2 Insights

1. Prefabrication2. Culture of Tolerance3. Portfolio Management

4. Developing CommonLanguage

5. Versatile Frames6. Risk Management



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Group 3 Insights

Trust- Between all parties- In the supply chain, and how to

influence- At the top -> the bottom develops

relationships and fosterspartnerships

- Length of contracts (opportunity topartner)

Team- Shared responsibilities and

incentives- Work with the Do-ers not the Sales

people

Build- Recognition-

Communication- Incentives and disincentives

Industry- Developing leadership,

motivation,superstars - Developing industry image / brand- Reflects on recruitment- Over arching image of the builder as

Hairy-arsed or Bob the

- Lack of R&D

Proposed Action ClustersAfter sharing their key insights the plenary discussion moved onto which of these areas wereworthy of taking further through action clusters. The following were the initial suggestions:

Group 1 Suggested Action Cluster

Portfolio Management monitoring andassessment tools and techniques

Will produce benefits we would nototherwise see because building isso very focused

All the team / chain will understand

and be motivated by the common

purpose and goal It will help with handling inevitable

change of use

It will facilitate long term planning

Group 2 Suggested Action Cluster

Portfolio Management Leadership Competency levels for

PROGRAMME management



14/15

Professionalising the culture ofprocurement

Breaking down the barriers betweenpublic & private sectors

Group 3 Suggested Action Clusters

Improving the brand- To attract the best

-

To promote R&D- Culture Change

Other suggestions:- Case studies of best &

leading edge pratice- Rethinking the

processes



15/15

Having shared the insights and potential Action Clusters there followed a straw poll to gaugeinterest in taking the Action Clusters forward. There were 12 volunteers to work in clusters onPortfolio management and six to work in a cluster on Brand Issues.


report 11th july 2006 colour (1)

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